INTELSAT S.A. (Form: 10-Q, Received: 08/01/2012 13:05:24)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-50262

INTELSAT S.A.

(Exact Name of Registrant as Specified in Its Charter)


Luxembourg		98-0346003
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4, rue Albert Borschette Luxembourg		L-1246
(Address of Principal Executive Offices)		(Zip Code)

+352 27-84-1600

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x *

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of July 30, 2012, 5,000,000 common shares, par value $1.00 per share, were outstanding.

The registrant is not required to file this Quarterly Report on Form 10-Q pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, but has filed all reports during the preceding 12 months that would have been required pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of December 31, 2011 and June 30, 2012 (Unaudited)		5
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2012		6
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2011 and 2012		7
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2012		8
	Notes to the Condensed Consolidated Financial Statements (Unaudited)		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		55
Item 4.	Controls and Procedures		56

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		58
Item 1A.	Risk Factors		58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		58
Item 3.	Defaults upon Senior Securities		58
Item 4.	Mine Safety Disclosures		58
Item 5.	Other Information		58
Item 6.	Exhibits		58

SIGNATURES			60

INTRODUCTION

In this Quarterly Report, unless otherwise indicated or the context otherwise requires, (1) the terms “we,” “us,” “our”, “the Company” and “Intelsat” refer to Intelsat S.A. and its subsidiaries on a consolidated basis, (2) the term “Intelsat Global” refers to Intelsat Global S.A., (3) the term “Intelsat Global Subsidiary” refers to Intelsat Global Subsidiary S.A., (4) the term “Intelsat Holdings” refers to Intelsat S.A.’s direct parent, Intelsat Holdings S.A., (5) the term “Intelsat Luxembourg” refers to Intelsat (Luxembourg) S.A., Intelsat S.A.’s direct wholly-owned subsidiary, (6) the term “Intelsat Jackson” refers to Intelsat Jackson Holdings S.A., Intelsat Luxembourg’s direct wholly-owned subsidiary, (7) the term “Intermediate Holdco” refers to Intelsat Intermediate Holding Company S.A., Intelsat Jackson’s former direct wholly-owned subsidiary, (8) the term “Intelsat Sub Holdco” refers to Intelsat Subsidiary Holding Company S.A., Intermediate Holdco’s former indirect wholly-owned subsidiary, (9) the term “Intelsat Corp” refers to Intelsat Corporation, Intelsat Jackson’s indirect wholly-owned subsidiary, and (10) the term “Intelsat General” refers to Intelsat General Corporation, our government business subsidiary.

In this Quarterly Report, unless the context otherwise requires, all references to transponder capacity or demand refer to transponder capacity or demand in the C-band and Ku-band frequencies only.

FINANCIAL AND OTHER INFORMATION

Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report are to, and all monetary amounts in this Quarterly Report are presented in, U.S. dollars. Unless otherwise indicated, the financial information contained in this Quarterly Report has been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Certain monetary amounts, percentages and other figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

In this Quarterly Report, we refer to and rely on publicly available information regarding our industry and our competitors. Although we believe the information is reliable, we cannot guarantee the accuracy and completeness of the information and have not independently verified it.

FORWARD-LOOKING STATEMENTS

Some of the statements in this Quarterly Report constitute forward-looking statements that do not directly or exclusively relate to historical facts. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements as long as they are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements.

When used in this Quarterly Report, the words “may,” “will,” “might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information.

The forward-looking statements made in this Quarterly Report reflect our intentions, plans, expectations, assumptions and beliefs about future events. These forward-looking statements speak only as of the date of this Quarterly Report and are not guarantees of future performance or results and are subject to risks, uncertainties and other factors, many of which are outside of our control. These factors could cause actual results or developments to differ materially from the expectations expressed or implied in the forward-looking statements and include known and unknown risks. Known risks include, among others, the risks discussed in Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2011, the political, economic and legal conditions in the markets we are targeting for communications services or in which we operate, and other risks and uncertainties inherent in the telecommunications business in general and the satellite communications business in particular.

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

•

risks associated with operating our in-orbit satellites;

•

satellite launch failures, satellite launch and construction delays and in-orbit failures or reduced performance;

•

potential changes in the number of companies offering commercial satellite launch services and the number of commercial satellite launch opportunities available in any given time period that could impact our ability to timely schedule future launches and the prices we pay for such launches;

•

our ability to obtain new satellite insurance policies with financially viable insurance carriers on commercially reasonable terms or at all, as well as the ability of our insurance carriers to fulfill their obligations;

•

possible future losses on satellites that are not adequately covered by insurance;

•

U.S. and other government regulation;

•

changes in our contracted backlog or expected contracted backlog for future services;

•

pricing pressure and overcapacity in the markets in which we compete;

•

inadequate access to capital markets;

•

the competitive environment in which we operate;

•

customer defaults on their obligations to us;

•

our international operations and other uncertainties associated with doing business internationally; and

•

litigation.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee our future results, level of activity, performance or achievements. Because actual results could differ materially from our intentions, plans, expectations, assumptions and beliefs about the future, you are urged not to rely on forward-looking statements in this Quarterly Report and to view all forward-looking statements made in this Quarterly Report with caution. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

INTELSAT S.A.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	As of December 31, 2011			As of June 30, 2012
				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	294,700		$	254,086
Restricted cash		94,131			118,032
Receivables, net of allowance of $20,830 in 2011 and $23,792 in 2012		331,371			309,867
Deferred income taxes		26,058			25,927
Prepaid expenses and other current assets		42,934			59,336

Total current assets		789,194			767,248
Satellites and other property and equipment, net		6,142,731			6,326,877
Goodwill		6,780,827			6,780,827
Non-amortizable intangible assets		2,458,100			2,458,100
Amortizable intangible assets, net		742,868			696,977
Other assets		447,686			435,291

Total assets	$	17,361,406		$	17,465,320


LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	143,097		$	160,305
Taxes payable		11,764			—
Employee related liabilities		43,315			32,228
Accrued interest payable		359,336			365,467
Current portion of long-term debt		164,818			238,955
Deferred satellite performance incentives		17,715			18,224
Deferred revenue		64,609			83,670
Other current liabilities		76,460			86,433

Total current liabilities		881,114			985,282
Long-term debt, net of current portion		15,837,512			15,900,718
Deferred satellite performance incentives, net of current portion		113,974			120,515
Deferred revenue, net of current portion		724,413			796,452
Deferred income taxes		265,181			283,315
Accrued retirement benefits		305,902			289,437
Other long-term liabilities		322,735			283,546
Redeemable noncontrolling interest		3,024			5,412
Commitments and contingencies (Note 11)

Shareholder’s deficit:
Ordinary shares, $1.00 par value, 100,000,000 shares authorized and 5,000,000 shares issued and outstanding at December 31, 2011 and June 30, 2012		5,000			5,000
Paid-in capital		1,571,855			1,571,606
Accumulated deficit		(2,608,702	)		(2,717,160	)
Accumulated other comprehensive loss		(111,528	)		(106,808	)

Total Intelsat S.A. shareholder’s deficit		(1,143,375	)		(1,247,362	)
Noncontrolling interest		50,926			48,005

Total liabilities and shareholder’s deficit	$	17,361,406		$	17,465,320

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012			Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Revenue	$	642,446		$	638,668		$	1,282,634		$	1,282,838
Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		101,059			99,307			206,082			204,316
Selling, general and administrative		55,147			53,421			106,746			104,388
Depreciation and amortization		194,354			188,628			389,356			375,500
Losses on derivative financial instruments		20,522			15,756			18,808			25,614

Total operating expenses		371,082			357,112			720,992			709,818

Income from operations		271,364			281,556			561,642			573,020
Interest expense, net		325,861			326,691			674,651			638,122
Loss on early extinguishment of debt		(157,953	)		(43,383	)		(326,183	)		(43,383	)
Loss from previously unconsolidated affiliates		(4,589	)		—			(4,469	)		—
Other income (expense), net		3,291			(1,906	)		7,167			997

Loss before income taxes		(213,748	)		(90,424	)		(436,494	)		(107,488	)
Provision for (benefit from) income taxes		734			(6,797	)		(6,253	)		407

Net loss		(214,482	)		(83,627	)		(430,241	)		(107,895	)
Net (income) loss attributable to noncontrolling interest		1,114			(382	)		1,275			(563	)

Net loss attributable to Intelsat S.A.	$	(213,368	)	$	(84,009	)	$	(428,966	)	$	(108,458	)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012			Six Months Ended June 30, 2011			Six Months Ended June 30, 2012

Net loss	$	(214,482	)	$	(83,627	)	$	(430,241	)	$	(107,895	)
Other Comprehensive income (loss), net of tax:
Defined benefit retirement plans:
Reclassification adjustment for amortization of unrecognized prior service credits included in net periodic pension costs, net of tax of $0.02 million and $0.03 million for the three and six months ended June 30, 2011, respectively, and $0.02 million and $0.03 million for the three and six months ended June 30, 2012, respectively		(27	)		(28	)		(54	)		(56	)
Reclassification adjustment for amortization of unrecognized actuarial loss included in net periodic pension costs, net of tax of $0.6 million and $1.3 million for the three and six months ended June 30, 2011, respectively, and $1.4 million and $2.8 million for the three and six months ended June 30, 2012, respectively		1,082			2,279			2,164			4,558
Gains (losses) on investments, net of tax of $0.01 million and $0.1 million for the three and six months ended June 30, 2011, repectively, and ($0.05) million and $0.1 million for the three and six months ended June 30, 2012, respectively		20			(86	)		197			218

Other comprehensive income		1,075			2,165			2,307			4,720

Comprehensive loss		(213,407	)		(81,462	)		(427,934	)		(103,175	)
Comprehensive (income) loss attributable to noncontrolling interest		1,114			(382	)		1,275			(563	)

Comprehensive loss attributable to Intelsat S.A.	$	(212,293	)	$	(81,844	)	$	(426,659	)	$	(103,738	)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Cash flows from operating activities:
Net loss	$	(430,241	)	$	(107,895	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		389,356			375,500
Provision for doubtful accounts		1,703			5,554
Foreign currency transaction (gain) loss		(3,920	)		2,293
Loss on disposal of assets		5			46
Share-based compensation expense		4,644			3,328
Deferred income taxes		(14,677	)		(7,275	)
Amortization of discount, premium, issuance costs and other non-cash items		35,957			29,039
Interest paid-in-kind		23,130			4,949
Loss on early extinguishment of debt		326,183			43,383
Share in loss from previously unconsolidated affiliates		4,469			—
Unrealized (gains) losses on derivative financial instruments		(20,418	)		709
Other non-cash items		3,342			2,601
Changes in operating assets and liabilities:
Receivables		(31,471	)		(8,117	)
Prepaid expenses and other assets		(17,220	)		(3,547	)
Accounts payable and accrued liabilities		12,001			(28,531	)
Deferred revenue		178,664			87,901
Accrued retirement benefits		(14,453	)		(16,465	)
Other long-term liabilities		(3,893	)		(826	)

Net cash provided by operating activities		443,161			382,647

Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		(412,710	)		(476,761	)
Capital contributions to previously unconsolidated affiliates		(6,105	)		—
Other investing activities		2,261			—

Net cash used in investing activities		(416,554	)		(476,761	)

Cash flows from financing activities:
Repayments of long-term debt		(6,114,894	)		(1,350,372	)
Proceeds from issuance of long-term debt		5,918,923			1,471,000
Debt issuance costs		(69,307	)		(19,444	)
Payment of premium on early retirement of debt		(171,047	)		(39,475	)
Capital contribution from noncontrolling interest		—			6,105
Dividends paid to noncontrolling interest		—			(4,673	)
Noncontrolling interest in New Dawn		1,558			—
Principal payments on deferred satellite performance incentives		(6,891	)		(7,348	)

Net cash provided by (used in) financing activities		(441,658	)		55,793

Effect of exchange rate changes on cash and cash equivalents		3,920			(2,293	)

Net change in cash and cash equivalents		(411,131	)		(40,614	)
Cash and cash equivalents, beginning of period		692,930			294,700

Cash and cash equivalents, end of period	$	281,799		$	254,086


Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	602,101		$	599,656
Income taxes paid, net of refunds		14,793			18,222
Supplemental disclosure of non-cash investing activities:
Accrued capital expenditures	$	59,965		$	105,707
Restricted cash received		—			23,901

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2012

Note 1 General

Basis of Presentation

The accompanying condensed consolidated financial statements of Intelsat S.A. and its subsidiaries (“Intelsat,” “we,” “us” or “our”) have not been audited, but are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification (“ASC” or the “Codification”). The unaudited condensed consolidated financial statements include all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of these financial statements. The results of operations for the periods presented are not necessarily indicative of operating results for the full year or for any future period. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 on file with the Securities and Exchange Commission.

On March 30, 2012, Intelsat Global S.A. (“Intelsat Global”), our former indirect parent, and certain of its subsidiaries engaged in a series of transactions that resulted in Intelsat Global Holdings S.A. (“Intelsat Global Holdings”), a new holding company, acquiring all of the outstanding shares of Intelsat Global. As a result, Intelsat Global became a wholly owned subsidiary of Intelsat Global Holdings, and all of Intelsat Global Holdings’ equity is now beneficially owned by the former shareholders of Intelsat Global in the same proportions as such shareholders’ former ownership in Intelsat Global.

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of these condensed consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. Accordingly, ultimate results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. The reclassifications had no effect on previously reported results of operations, cash flows or retained earnings.

Recently Adopted Accounting Pronouncements

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). Beginning in the first quarter of 2012, ASU 2011-05 eliminated the option that had previously allowed us to present the components of other comprehensive income as part of the statement of changes in shareholder’s equity. Beginning in the first quarter of 2012, we have included a separate condensed consolidated statement of comprehensive loss in our financial statements. The majority of our other comprehensive loss and our accumulated other comprehensive loss is related to our defined benefit retirement plans. ASU 2011-05 does not change whether items are reported in net loss or in other comprehensive income and does not change whether and when items of other comprehensive income are reclassified to net loss.

Note 2 Fair Value Measurements

FASB ASC Topic 820, Fair Value Measurements and Disclosure (“FASB ASC 820”) defines fair value, establishes a market-based framework or hierarchy for measuring fair value and provides for certain required disclosures about fair value measurements. The guidance is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value, but does not require any new fair value measurements.

The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels as follows:

•

Level 1—unadjusted quoted prices for identical assets or liabilities in active markets;

•

Level 2—quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and

•

Level 3—unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.

We have identified investments in marketable securities, interest rate financial derivative instruments and a redeemable noncontrolling interest that meet the criteria of the disclosure requirements and fair value framework of FASB ASC 820.

The following tables present assets and liabilities measured and recorded at fair value in our condensed consolidated balance sheets on a recurring basis and their level within the fair value hierarchy (in thousands), excluding long-term debt (see Note 8—Long-Term Debt). We did not have any transfers between Level 1 and Level 2 fair value measurements during the six months ended June 30, 2012.


			Fair Value Measurements at December 31, 2011
Description	As of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities ⁽¹⁾	$	5,418	$	5,418	$	—	$	—

Total assets	$	5,418	$	5,418	$	—	$	—


Liabilities
Undesignated interest rate swaps ⁽²⁾	$	95,518	$	—	$	95,518	$	—
Redeemable noncontrolling interest ⁽³⁾		3,024		—		—		3,024

Total liabilities	$	98,542	$	—	$	95,518	$	3,024


			Fair Value Measurements at June 30, 2012
Description	As of June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities ⁽¹⁾	$	5,507	$	5,507	$	—	$	—

Total assets	$	5,507	$	5,507	$	—	$	—


Liabilities
Undesignated interest rate swaps ⁽²⁾	$	95,197	$	—	$	95,197	$	—
Redeemable noncontrolling interest ⁽³⁾		5,412		—		—		5,412

Total liabilities	$	100,609	$	—	$	95,197	$	5,412

(1)

The valuation measurement inputs of these marketable securities represent unadjusted quoted prices in active markets and, accordingly, we have classified such investments within Level 1 of the fair value hierarchy. The cost basis of our available-for-sale marketable securities was $5.9 million at December 31, 2011 and $5.6 million at June 30, 2012. We sold marketable securities with a cost basis of $0.3 million during the six months ended June 30, 2012 and recorded a loss on the sale of $0.03 million, which was included within other income, net in our condensed consolidated statement of operations.

(2)

The fair value of our interest rate financial derivative instruments reflects the estimated amounts that we would pay or receive to terminate the agreement at the reporting date, taking into account current interest rates, the market expectation for future interest rates and current creditworthiness of both the counterparties and ourselves. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments, if any, associated with our derivatives utilize Level 3 inputs, such as the estimates of the current credit spread, to evaluate the likelihood of default by us or our counterparties. We also considered the existence of offset provisions and other credit enhancements that serve to reduce the credit exposure associated with the asset or liability being valued. We have assessed the significance of the inputs of the credit valuation adjustments to the

overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

(3)

We estimated the fair value of the redeemable noncontrolling interest in our indirect subsidiary, New Dawn Satellite Company, Ltd. (“New Dawn”), utilizing the income approach valuation technique, with Level 3 inputs such as discounted cash flows and a weighted average cost of capital of 18.0%. A fifty basis point change in the discount rate applied would impact the valuation by approximately $0.4 million.

The following tables present the activity for those items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in FASB ASC 820 (in thousands):


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Redeemable Noncontrolling Interest ⁽¹⁾			Embedded Derivative			Total
Balance at December 31, 2010	$	18,621		$	4,295		$	22,916
Contributions		1,734			—			1,734
Mark to market valuation adjustment		(15,090	)		(4,295	)		(19,385	)
Net loss attributable to noncontrolling interest		(2,241	)		—			(2,241	)

Balance at December 31, 2011	$	3,024		$	—		$	3,024


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Redeemable Noncontrolling Interest ⁽¹⁾			Embedded Derivative		Total
Balance at December 31, 2011	$	3,024		$	—	$	3,024
Mark to market valuation adjustment		(268	)		—		(268	)
Net loss attributable to noncontrolling interest		(658	)		—		(658	)

Balance at March 31, 2012		2,098			—		2,098

Mark to market valuation adjustment		3,845			—		3,845
Net loss attributable to noncontrolling interest		(531	)		—		(531	)

Balance at June 30, 2012	$	5,412		$	—	$	5,412

(1)	In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity (“FASB ASC 480”), regarding the classification and measurement of redeemable securities, we mark to market the fair value of the noncontrolling interest in our joint venture investment in New Dawn.

Note 3 Share-Based and Other Compensation Plans

On May 6, 2009, the board of directors of Intelsat Global adopted the amended and restated Intelsat Global, Ltd. 2008 Share Incentive Plan (the “2008 Share Plan”). The 2008 Share Plan was adopted by our new parent holding company, Intelsat Global Holdings, by an amendment effective as of March 30, 2012. The 2008 Share Plan provides for a variety of equity-based awards with respect to Class A common shares (the “Class A Shares”), and Class B common shares (the “Class B Shares” and, together with the Class A Shares, the “Common Shares”), including non-qualified share options, incentive share options (within the meaning of Section 422 of the United States Internal Revenue Service Tax Code), restricted share awards, restricted share unit awards, share appreciation rights, phantom share awards and performance-based awards.

Due to the expiration of certain repurchase features that are contained within the 2008 Share Plan, we changed the classification of certain executive officers’ awards from liability classified awards to equity classified awards in the first quarter of 2011. The change was accounted for in a manner similar to that of a modification in accordance with FASB ASC Topic 718, Compensation – Stock Compensation , and did not have a material impact on our condensed consolidated balance sheet.

During the six months ended June 30, 2012, Intelsat Global Holdings repurchased 14,231 vested Class A share options and 16,482 vested Class B common shares. Intelsat Global Holdings did not grant any Common Shares under the 2008 Share Plan during the six months ended June 30, 2012. We recorded compensation expense of $4.6 million and $3.3 million during the six months ended June 30, 2011 and 2012, respectively, related to our share-based awards.

Note 4 Retirement Plans and Other Retiree Benefits

(a) Pension and Other Postretirement Benefits

We maintain a noncontributory defined benefit retirement plan covering substantially all of our employees hired prior to July 19, 2001. The cost of providing benefits to eligible participants under the defined benefit retirement plan is calculated using the plan’s benefit formulas, which take into account the participants’ remuneration, dates of hire, years of eligible service, and certain actuarial assumptions. In addition, as part of the overall medical plan, we provide postretirement medical benefits to certain current retirees who meet the criteria under the medical plan for postretirement benefit eligibility.

The defined benefit retirement plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. We expect that our future contributions to the defined benefit retirement plan will be based on the minimum funding requirements of the Internal Revenue Code and on the plan’s funded status. Any significant decline in the fair value of our defined benefit retirement plan assets or other adverse changes to the significant assumptions used to determine the plan’s funded status would negatively impact its funded status and could result in increased funding in future periods. The impact on the funded status as of October 1, the plan’s annual measurement date, is determined based upon market conditions in effect when we completed our annual valuation. During the six months ended June 30, 2012, we made cash contributions to the defined benefit retirement plan of $18.3 million. We anticipate that we will make additional contributions of approximately $11.8 million to the defined benefit retirement plan during the remainder of 2012. We fund the postretirement medical benefits throughout the year based on benefits paid. We anticipate that our contributions to fund postretirement medical benefits in 2012 will be approximately $4.5 million.

Included in accumulated other comprehensive loss at June 30, 2012 is $176.9 million ($108.2 million, net of tax) that has not yet been recognized in net periodic pension cost, which includes the unrecognized prior service credits and unrecognized actuarial losses.

Net periodic pension benefit costs included the following components (in thousands):


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012			Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Service cost	$	775		$	803		$	1,550		$	1,606
Interest cost		5,015			4,765			10,030			9,530
Expected return on plan assets		(4,932	)		(5,141	)		(9,864	)		(10,281	)
Amortization of unrecognized prior service credit		(43	)		(43	)		(86	)		(86	)
Amortization of unrecognized net loss		1,715			3,498			3,430			6,995

Net periodic costs	$	2,530		$	3,882		$	5,060		$	7,764

Net periodic other postretirement benefit costs included the following components (in thousands):


	Three Months Ended June 30, 2011		Three Months Ended June 30, 2012		Six Months Ended June 30, 2011		Six Months Ended June 30, 2012
Service cost	$	113	$	89	$	226	$	177
Interest cost		1,267		1,240		2,534		2,480
Amortization of unrecognized net loss		—		172		—		344

Total costs	$	1,380	$	1,501	$	2,760	$	3,001

(b) Other Retirement Plans

We maintain two defined contribution retirement plans, qualified under the provisions of Section 401(k) of the Internal Revenue Code, for our employees in the United States. We recognized compensation expense for these plans of $3.5 million and $3.3 million during the six months ended June 30, 2011 and 2012, respectively. We also maintain other defined contribution retirement plans in several non-U.S. jurisdictions, but such plans are not material to our financial position or results of operations.

Note 5 Satellites and Other Property and Equipment

(a) Satellites and Other Property and Equipment, net

Satellites and other property and equipment, net were comprised of the following (in thousands):


	As of December 31, 2011			As of June 30, 2012
Satellites and launch vehicles	$	7,825,259		$	8,301,053
Information systems and ground segment		480,002			506,616
Buildings and other		284,742			289,632

Total cost		8,590,003			9,097,301
Less: accumulated depreciation		(2,447,272	)		(2,770,424	)

Total	$	6,142,731		$	6,326,877

Satellites and other property and equipment are stated at cost, with the exception of satellites that have been impaired. Satellites and other property and equipment acquired as part of an acquisition are based on their fair value at the date of acquisition.

Satellites and other property and equipment, net as of December 31, 2011 and June 30, 2012 included construction-in-progress of $1.5 billion and $1.6 billion, respectively. These amounts relate primarily to satellites under construction and related launch services. Interest costs of $60.6 million and $70.6 million were capitalized during the six months ended June 30, 2011 and 2012, respectively.

We have entered into launch contracts for the launch of both specified and unspecified future satellites. Each of these launch contracts may be terminated at our option, subject to payment of a termination fee that increases as the applicable launch date approaches. In addition, in the event of a failure of any launch, we may exercise our right to obtain a replacement launch within a specified period following our request for re-launch.

(b) Satellite Launches

On March 25, 2012, we successfully launched our IS-22 satellite into orbit. This satellite establishes long-term capacity at the 72° east longitude orbit location most recently occupied by our IS-709 satellite. IS-22 provides capacity for media, government and network services in Africa, Asia, Europe and Middle East via C-band and Ku-band platforms. In addition, IS-22 hosts a specialized UHF communications payload. This satellite entered into service in May 2012.

On June 1, 2012, our IS-19 satellite was launched into orbit. During launch operations, IS-19 experienced damage to its south solar array. Although both solar arrays are deployed, the power available to the satellite is less than is required to operate 100% of the payload capacity. Failure Review Boards were established to determine the cause of the anomaly. As of June 30, 2012, a final conclusion had not been reached as to the most likely cause of the anomaly. In-orbit testing on IS-19 is complete and the satellite is drifting to a 166° east longitude orbital location. This satellite replaces IS-8 at 166° east longitude and will provide C- and Ku- band capacity for media, government and network services customers in the western United States and the Asia-Pacific region, including hosting video neighborhoods with global programmers.

In accordance with our policy and the guidance provided for under FASB ASC Topic 360, Property, Plant and Equipment , we review our long-lived assets for impairment whenever events and circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. The recoverability of an asset or asset group held and used is measured by a comparison of the carrying amount of the asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. When a satellite experiences an anomaly or other health related issues, we believe the lowest level of identifiable cash flows exists at the individual satellite level. Accordingly, in the second quarter of 2012, we performed an impairment review of our IS-19 satellite and determined that there was no impairment. We have indicated to our insurers that, due to the damage to the south solar array, it is reasonably likely that we will file a partial loss claim.

Note 6 Investments

We have ownership interests in a number of entities which met the criteria of a Variable Interest Entity (“VIE”), including Horizons Satellite Holdings, LLC (“Horizons Holdings”) and WP Com, S. de R.L. de C.V. (“WP Com”). We have a greater than 50% controlling ownership and voting interest in New Dawn and therefore consolidate the New Dawn joint venture. Horizons Holdings, as well as WP Com, are discussed in further detail below, including our analyses of the primary beneficiary determination as required under FASB ASC Topic 810, Consolidation (“FASB ASC 810”).

(a) Horizons Holdings

We have a joint venture with JSAT International, Inc. (“JSAT”), a leading satellite operator in the Asia-Pacific region. The joint venture is named Horizons Satellite Holdings, LLC, and consists of two investments: Horizons-1 Satellite LLC (“Horizons-1”) and Horizons-2 Satellite LLC (“Horizons-2”). Horizons Holdings borrowed from JSAT a portion of the funds necessary to finance the construction of the Horizons-2 satellite (the “Horizons 2 Loan Agreement”). We provide certain services to the joint venture and utilize capacity from the joint venture.

We have determined that this joint venture meets the criteria of a VIE under FASB ASC 810. On September 30, 2011, Intelsat and JSAT amended the joint venture agreement relating to their investment in Horizons Holdings (the “Horizons Amendment”), and as a result, we re-evaluated the primary beneficiary determination. Pursuant to the Horizons Amendment, the Horizons-2 satellite was relocated to 85° east longitude in early 2012 and decisions relating to any future relocation of the Horizons-2 satellite will be effectively controlled by us. We believe satellite location is the most significant driver of Horizons Holdings’ economic performance. Additionally, the Horizons-1 satellite is the less significant asset of the joint venture. As a result, we determined that we became the primary beneficiary of Horizons Holdings as of September 30, 2011. In accordance with FASB ASC 810, as the primary beneficiary, we consolidated Horizons Holdings within our condensed consolidated financial statements, net of eliminating entries, beginning on September 30, 2011. Total assets and liabilities of Horizons Holdings were $171.2 million and $73.6 million as of December 31, 2011, respectively, and $153.2 million and $61.4 million as of June 30, 2012, respectively.

In accordance with FASB ASC 810, the initial consolidation of a VIE that is a business is considered a business combination and should be accounted for in accordance with the provisions in FASB ASC Topic 805, Business Combinations . Determining the fair values of the net assets of Horizons Holdings required us to make significant estimates and assumptions. In order to develop the fair value estimates, we utilized the income approach. Our estimates included assumptions about projected growth rates, cost of capital, effective tax rates and industry and economic trends. While we believe that the estimates and assumptions underlying the valuation methodology were reasonable, different assumptions could have resulted in different market values. We recorded the assets, liabilities and the noncontrolling interest in Horizons Holdings at fair value upon consolidation at September 30, 2011. The $49.3 million fair value of the Horizons Holdings noncontrolling interest at the initial date of consolidation is included in the equity section of our condensed consolidated balance sheet at December 31, 2011 and June 30, 2012 in accordance with FASB ASC 810.

Prior to the consolidation of Horizons Holdings on September 30, 2011, under the equity method of accounting, our 50% share of the results of the joint venture was a loss of $4.5 million for the six months ended June 30, 2011, which is included in earnings (loss) from previously unconsolidated affiliates in the accompanying condensed consolidated statements of operations.

We also have a revenue sharing agreement with JSAT related to services sold on the Horizons satellites. We are responsible for billing and collection for such services and we remit a portion of the revenue, less applicable fees and commissions, to JSAT. Under the Horizons Amendment, we agreed to guarantee to JSAT certain minimum levels of annual gross revenues for a three-year period beginning on the date that the Horizons-2 satellite is relocated to 85° east longitude. This guarantee could require us to pay JSAT a maximum potential amount ranging from $7.8 million to $10.3 million per year over the three-year period, less applicable fees and commission. We currently do not expect to incur any losses under this guarantee, and we will continue to assess this on a quarterly basis. In addition, we guaranteed JSAT certain minimum levels of revenue on the Horizons-2 satellite prior to the arrival at 85° east longitude. Amounts payable to JSAT related to the revenue share, net of applicable fees and commissions, from the Horizons Satellites were $2.2 million and $3.8 million as of December 31, 2011 and June 30, 2012, respectively.

In connection with the Horizons Holdings investment in Horizons-2, we and JSAT entered into a capital contribution and subscription agreement in August 2005, which requires both us and JSAT to fund 50% of the amount due from Horizons Holdings under the Horizons 2 Loan Agreement. As of June 30, 2012, we had a receivable of $30.5 million from JSAT representing the total remaining future payments to be received from JSAT to fund their portion of the amount due under the Horizons 2 Loan Agreement, $12.2 million of which is included in receivables, net and the remainder of which is included in other assets on our condensed consolidated balance sheet as of June 30, 2012.

(b) New Dawn

In June 2008, we entered into a project and shareholders’ agreement (the “New Dawn Project Agreement”) with Convergence SPV, Ltd. (“Convergence Partners”) pursuant to which New Dawn, a Mauritius company in which we have a 74.9% indirect ownership interest and Convergence Partners has a 25.1% noncontrolling ownership interest, launched a satellite in April 2011 to provide satellite transponder services to customers in Africa.

We and Convergence Partners agreed to make certain capital contributions to New Dawn in proportion to our respective ownership interests in New Dawn to fund a portion of the cost of construction and launch of the New Dawn satellite. Total equity contributions during the six months ended June 30, 2011 were $6.2 million, of which $4.6 million were attributable to us with the remaining $1.6 million contributed by Convergence Partners. There were no equity contributions made during the six months ended June 30, 2012. New Dawn and its subsidiaries are unrestricted subsidiaries for purposes of applicable indentures and credit agreements of ours and our wholly-owned subsidiaries.

Convergence Partners has at its option the ability to require us to buy its ownership interest at fair value subsequent to the operations of New Dawn’s assets for a period as defined in the New Dawn Project Agreement. As a result of this option, as of each balance sheet date, we have reflected within mezzanine equity the estimated amount that we would pay to Convergence Partners if the option was exercised. This amount reflects the fair value analysis we performed at June 30, 2012, which resulted in a year-to-date increase of $3.6 million in the fair value of the option, increasing it to $5.4 million. The $3.6 million change in fair value is shown as a decrease in our paid-in capital at June 30, 2012.

We consolidate New Dawn within our condensed consolidated financial statements, net of eliminating entries. Additionally, we account for the percentage interest in New Dawn owned by Convergence Partners as a noncontrolling interest according to the guidance provided under FASB ASC 480 specifically related to the classification and measurement of redeemable securities.

(c) WP Com

We have formed a joint venture with Corporativo W. Com S. de R.L. de C.V. (“Corporativo”) named WP Com, S. de R.L. de C.V. We own 49% of the voting equity shares and 88% of the economic interest in WP Com and Corporativo owns the remaining 51% of the voting equity shares. PanAmSat de Mexico, S. de R.L. de C.V. (“PAS de Mexico”) is a subsidiary of WP Com, 99.9% of which is owned by WP Com, with the remainder of the equity interest split between us and Corporativo. We formed WP Com to enable us to operate in Mexico, and PAS de Mexico acts as a reseller of our satellite services to customers in Mexico and Ecuador. Profits and losses of WP Com are allocated to the joint venture partners based upon the voting equity shares.

We have determined that this joint venture meets the criteria of a VIE under FASB ASC 810. In accordance with FASB ASC 810, we evaluated this joint venture to determine the primary beneficiary. We have concluded that we are the primary beneficiary because we influence the underlying business drivers of PAS de Mexico, including by acting as the sole provider for satellite services that PAS de Mexico resells. Furthermore, we have modified our pricing for these services to ensure that PAS de Mexico continues to operate in the Mexican market. Corporativo does not fund any of the operating expenses of PAS de Mexico. Thus, we consolidate WP Com within our condensed consolidated financial statements and we account for the percentage interest in the voting equity of WP Com owned by Corporativo as a noncontrolling interest, which is included in the equity section of our condensed consolidated balance sheet in accordance with FASB ASC 810.

(d) Equity Attributable to Intelsat and Noncontrolling Interests

The following tables present changes in equity attributable to Intelsat and equity attributable to our noncontrolling interests, which is included in the equity section of our condensed consolidated balance sheet (in thousands):


	Intelsat S.A. Shareholder’s Deficit			Non-redeemable Noncontrolling Interest			Total Shareholder’s Deficit
Balance at January 1, 2011	$	(698,941	)	$	1,902		$	(697,039	)
Net income (loss)		(432,888	)		1,136			(431,752	)
Liabilities assumed by parent and other contributed capital		8,385			—			8,385
Consolidation of Horizons Holdings		—			49,263			49,263
Dividends paid to noncontrolling interests		—			(1,375	)		(1,375	)
Mark to market adjustment for redeemable noncontrolling interest		15,090			—			15,090
Pension/postretirement liability adjustment		(35,080	)		—			(35,080	)
Other comprehensive income		59			—			59

Balance at December 31, 2011	$	(1,143,375	)	$	50,926		$	(1,092,449	)


	Intelsat S.A. Shareholder’s Deficit			Non-redeemable Noncontrolling Interest			Total Shareholder’s Deficit
Balance at January 1, 2012	$	(1,143,375	)	$	50,926		$	(1,092,449	)
Net income (loss)		(24,449	)		839			(23,610	)
Liabilities assumed by parent and other contributed capital		1,062			—			1,062
Dividends paid to noncontrolling interests		—			(2,255	)		(2,255	)
Mark to market adjustment for redeemable noncontrolling interest		268			—			268
Pension/postretirement liability adjustment		2,251			—			2,251
Other comprehensive income		304			—			304

Balance at March 31, 2012	$	(1,163,939	)	$	49,510		$	(1,114,429	)

Net income (loss)		(84,009	)		913			(83,096	)
Liabilities assumed by parent and other contributed capital		2,266			—			2,266
Dividends paid to noncontrolling interests		—			(2,418	)		(2,418	)
Mark to market adjustment for redeemable noncontrolling interest		(3,845	)		—			(3,845	)
Pension/postretirement liability adjustment		2,251			—			2,251
Other comprehensive loss		(86	)		—			(86	)

Balance at June 30, 2012	$	(1,247,362	)	$	48,005		$	(1,199,357	)

Note 7 Goodwill and Other Intangible Assets

The carrying amounts of goodwill and acquired intangible assets not subject to amortization consist of the following (in thousands):


	As of December 31, 2011		As of June 30, 2012
Goodwill	$	6,780,827		6,780,827
Trade name		70,400		70,400
Orbital locations		2,387,700		2,387,700

We account for goodwill and other non-amortizable intangible assets in accordance with FASB ASC Topic 350, Intangibles—Goodwill and Other , and have deemed these assets to have indefinite lives. Therefore, these assets are not amortized but are tested on an annual basis for impairment during the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

The carrying amount and accumulated amortization of acquired intangible assets subject to amortization consist of the following (in thousands):


	As of December 31, 2011							As of June 30, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Backlog and other	$	743,760	$	(456,604	)	$	287,156	$	743,760	$	(488,405	)	$	255,355
Customer relationships		534,030		(78,318	)		455,712		534,030		(92,408	)		441,622
Technology		2,700		(2,700	)		—		2,700		(2,700	)		—

Total	$	1,280,490	$	(537,622	)	$	742,868	$	1,280,490	$	(583,513	)	$	696,977

Intangible assets are amortized based on the expected pattern of consumption. We recorded amortization expense of $52.7 million and $45.9 million for the six months ended June 30, 2011 and 2012, respectively.

Note 8 Long-Term Debt

The carrying values and fair values of our notes payable and long-term debt were as follows (in thousands):


	As of December 31, 2011					As of June 30, 2012
	Carrying Value			Fair Value		Carrying Value			Fair Value
Intelsat S.A.:
6.5% Senior Notes due November 2013	$	353,550		$	354,434	$	353,550		$	367,692

Unamortized discount on 6.5% Senior Notes		(51,471	)		—		(38,925	)		—

Total Intelsat S.A. obligations		302,079			354,434		314,625			367,692


Intelsat Luxembourg:
11.25% Senior Notes due February 2017		2,805,000			2,706,825		2,805,000			2,903,175
11.5% / 12.5% Senior PIK Election Notes due February 2017		2,502,986			2,340,292		2,502,986			2,584,333

Total Intelsat Luxembourg obligations		5,307,986			5,047,117		5,307,986			5,487,508


Intelsat Jackson:
11.25% Senior Notes due June 2016		1,048,220			1,103,251		603,220			631,149
Unamortized premium on 11.25% Senior Notes		4,286			—		2,246			—
9.5% Senior Notes due June 2016		701,913			733,499		—			—
8.5% Senior Notes due November 2019		500,000			527,500		500,000			551,900
Unamortized discount on 8.5% Senior Notes		(3,545	)		—		(3,385	)		—
7.25% Senior Notes due October 2020		1,000,000			1,011,300		2,200,000			2,304,360
Unamortized premium on 7.25% Senior Notes		—			—		20,673			—
7.25% Senior Notes due April 2019		1,500,000			1,530,000		1,500,000			1,569,450
7.5% Senior Notes due April 2021		1,150,000			1,173,000		1,150,000			1,211,870
Senior Unsecured Credit Facilities due February 2014		195,152			182,468		195,152			190,762
New Senior Unsecured Credit Facilities due February 2014		810,876			758,169		810,876			792,631
Senior Secured Credit Facilities due April 2018		3,233,750			3,217,581		3,217,500			3,209,456
Unamortized discount on Senior Credit Facilities		(14,349	)		—		(13,340	)		—
Senior Secured Revolving Credit Facility		—			—		75,000			75,000

Total Intelsat Jackson obligations		10,126,303			10,236,768		10,257,942			10,536,578


New Dawn:
Senior Secured Debt Facility due 2017		109,625			109,625		112,017			112,017
Mezzanine Secured Debt Facility due 2019		82,580			82,580		85,555			85,555
10.5% Note Payable to Convergence Partners		502			502		502			502

Total New Dawn obligations		192,707			192,707		198,074			198,074


Horizons Holdings:
Loan Payable to JSAT		73,255			73,255		61,046			61,046

Total Horizons Holdings obligations		73,255			73,255		61,046			61,046


Total Intelsat S.A. long-term debt		16,002,330		$	15,904,281		16,139,673		$	16,650,898


Less:
Current portion of long-term debt		164,818					238,955

Total long-term debt, excluding current portion	$	15,837,512				$	15,900,718

The fair value for publicly traded instruments is determined using quoted market prices, and for non-publicly traded instruments, fair value is based upon composite pricing from a variety of sources, including market leading data providers, market makers, and leading brokerage firms. Substantially all of the inputs used to determine the fair value of our debt are classified as Level 1 inputs within the fair value hierarchy from FASB ASC 820, except our senior secured credit facilities, the inputs for which are classified as Level 2. The fair values of the New Dawn obligations and the Horizons Holdings obligations approximate their respective book values.

Senior Secured Credit Facilities

On January 12, 2011, Intelsat Jackson Holdings S.A. (“Intelsat Jackson”), a wholly-owned subsidiary of Intelsat S.A., entered into a secured credit agreement (the “Intelsat Jackson Secured Credit Agreement”), which includes a $3.25 billion term loan facility

maturing in April 2018 and a $500.0 million revolving credit facility with a five year maturity, and borrowed the full $3.25 billion under the term loan facility. The term loan facility requires regularly scheduled quarterly payments of principal equal to 0.25% of the original principal amount of the term loan beginning six months after January 12, 2011, with the remaining unpaid amount due and payable at maturity on April 2, 2018. Up to $350.0 million of the revolving credit facility is available for issuance of letters of credit. Additionally, up to $70.0 million of the revolving credit facility is available for swingline loans. Both the face amount of any outstanding letters of credit and any swingline loans reduce availability under the revolving credit facility on a dollar for dollar basis. Intelsat Jackson is required to pay a commitment fee for the unused commitments under the revolving credit facility, if any, at a rate per annum of 0.375%. As of June 30, 2012, Intelsat Jackson had $75.0 million outstanding under its revolving credit facility and $387.3 million (net of standby letters of credit) of availability remaining thereunder.

New Dawn Credit Facilities

On December 5, 2008, New Dawn entered into a $215.0 million secured financing arrangement with an eight-year maturity that consists of senior and mezzanine term loan facilities. The credit facilities are non-recourse to New Dawn’s shareholders, including us and our wholly-owned subsidiaries, beyond the shareholders’ scheduled capital contributions. The senior facility provides for a commitment of up to $125.0 million. The interest rate on term loans under the senior facility is the aggregate of the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin between 3.0% and 4.0% and certain costs, if incurred. The mezzanine facility provides for a commitment of up to $90.0 million. The interest rate on term loans under the mezzanine facility is the aggregate of LIBOR plus an applicable margin between 5.3% and 6.3% and certain costs, if incurred. New Dawn is required to pay a commitment fee at a rate per annum of between ³ / ₈ % and ¹ / ₂ % on any unused commitments under the credit facilities. New Dawn had aggregate outstanding borrowings of $197.6 million under its credit facilities as of June 30, 2012.

Subsequent to the launch of the Intelsat New Dawn satellite in April 2011, which experienced an anomaly resulting in the failure to deploy the C-band antenna reflector, the New Dawn joint venture filed a partial loss claim with its insurer. The claim was finalized and agreed to during 2011, resulting in total insurance recoveries of $118.0 million. At December 31, 2011 and June 30, 2012, $94.1 million and $118.0 million, respectively, were received from the insurers and held in a specific insurance proceeds account reflected as restricted cash in the accompanying condensed consolidated balance sheets. In July 2012, New Dawn entered into an agreement with its lenders to use the New Dawn insurance proceeds held as restricted cash to prepay certain of its debt obligations, along with associated interest and fees. Subsequent to this prepayment, New Dawn had aggregate outstanding borrowings of $83.9 million under its debt agreements.

Intelsat Luxembourg Senior PIK Election Notes due 2017

In August 2012, we made an election to pay interest on the Intelsat Luxembourg Senior PIK Election Notes due 2017 entirely in cash for the interest period August 15, 2012 through February 15, 2013. For the interest periods beginning February 16, 2013, we are required to make all interest payments in cash.

2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

On April 26, 2012, Intelsat Jackson completed an offering of $1.2 billion aggregate principal amount of its 7 ¹ / ₄ % Senior Notes due 2020 (the “2020 Jackson Notes”). Intelsat Jackson had previously issued $1.0 billion aggregate principal amount of the 2020 Jackson Notes on September 30, 2010. The net proceeds from the 2012 offering were used by Intelsat Jackson to repurchase $49.5 million aggregate principal amount of Intelsat Jackson’s outstanding 9 ¹ / ₂ % Senior Notes due 2016 (the “2016 Jackson 9 ¹ / ₂ % Notes”) and $10.1 million aggregate principal amount of Intelsat Jackson’s 11 ¹ / ₄ % Senior Notes due 2016 (the “2016 Jackson 11 ¹ / ₄ % Notes”) in tender offers launched on April 12, 2012 and completed on May 10, 2012. On June 15, 2012, Intelsat Jackson redeemed the remaining $652.4 million aggregate principal amount outstanding of the 2016 Jackson 9 ¹ / ₂ % Notes and an additional $434.9 million aggregate principal amount of the 2016 Jackson 11 ¹ / ₄ % Notes.

In connection with these tender offers and redemptions, we recognized a loss on early extinguishment of debt of $43.4 million during the second quarter of 2012, consisting of the difference between the carrying value of the aggregate debt repurchased or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt premium and debt issuance costs.

Financing Commitment for Intelsat S.A. Senior Notes due 2013

On April 12, 2012, Intelsat S.A. obtained agreements from affiliates of Goldman, Sachs & Co. and Morgan Stanley to provide unsecured term loan commitments sufficient to refinance in full its 6 ¹ / ₂ % Senior Notes due 2013 (the “Intelsat S.A. Notes”) on or immediately prior to their maturity date, in the event that Intelsat S.A. does not otherwise refinance or retire the Intelsat S.A. Notes. These term loans will have a maturity of two years from funding, and the funding thereof is subject to various terms and conditions.

2011 Reorganization and 2011 Secured Loan Refinancing

On January 12, 2011, certain of our subsidiaries completed a series of internal transactions and related steps that reorganized the ownership of our assets among our subsidiaries and effectively combined the legacy businesses of Intelsat Subsidiary Holding Company S.A. (“Intelsat Sub Holdco”) and Intelsat Corporation (“Intelsat Corp”) in order to simplify our operations and enhance our ability to transact business in an efficient manner (the “2011 Reorganization”). Also on January 12, 2011, Intelsat Jackson entered into the Intelsat Jackson Secured Credit Agreement as discussed above, and borrowed $3.25 billion under the term loan facility. Part of the net proceeds of the term loan, amounting to $2.4 billion, were contributed or loaned to Intelsat Corp, which used such funds to repay its existing indebtedness under Intelsat Corp’s senior secured facilities and to redeem Intelsat Corp’s 9 ¹ / ₄ % Senior Notes due 2016. Separately, Intelsat Corp also redeemed all of its 9 ¹ / ₄ % Senior Notes due 2014 and its 6 ⁷ / ₈ % Senior Secured Debentures due 2028. In addition, Intelsat Jackson contributed approximately $330.2 million of the net proceeds of the new term loan to Intelsat Sub Holdco to repay all existing indebtedness under Intelsat Sub Holdco’s senior secured credit facilities. The entry into the Intelsat Jackson Secured Credit Agreement, the repayment of the existing indebtedness of Intelsat Corp and the repayment of all the secured existing indebtedness of Intelsat Sub Holdco are referred to collectively as the “2011 Secured Loan Refinancing”. In connection with the 2011 Secured Loan Refinancing, certain of our interest rate swaps were assigned by Intelsat Sub Holdco and Intelsat Corp to Intelsat Jackson, and are now secured by a first priority security interest in the collateral that also secures obligations under the Intelsat Jackson Secured Credit Agreement. Additionally, in connection with the 2011 Secured Loan Refinancing, we recognized a loss on early extinguishment of debt of $87.9 million during the first quarter of 2011, which consists of the difference between the carrying value of the Intelsat Corp and Intelsat Sub Holdco debt repaid and the total cash amount paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs.

2011 Notes Redemptions

On March 18, 2011, Intelsat S.A. redeemed all of the $485.8 million aggregate principal amount outstanding of its 7 ⁵ / ₈ % Senior Notes due 2012. Additionally, on March 18, 2011, Intelsat Sub Holdco redeemed $225.0 million aggregate principal amount outstanding of its 8 ¹ / ₂ % Senior Notes due 2013 (the “2013 Sub Holdco Notes”). In connection with these redemptions, we recognized a loss on early extinguishment of $80.3 million during the first quarter of 2011, which consists of the difference between the carrying value of the Intelsat S.A. and Intelsat Sub Holdco debt repaid and the total cash paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs.

2011 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

On April 5, 2011, Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of senior notes (the “2011 Intelsat Jackson Notes Offering”), consisting of $1.5 billion aggregate principal amount of 7 ¹ / ₄ % Senior Notes due 2019 (the “7 ¹ / ₄ % 2019 Jackson Notes”) and $1.15 billion aggregate principal amount of 7 ¹ / ₂ % Senior Notes due 2021 (the “2021 Jackson Notes” and collectively, the “New Jackson Notes”). The net proceeds from the sale of the New Jackson Notes were primarily used to repurchase all of the following notes in tender offers launched on March 21, 2011 and completed on April 15, 2011, and to subsequently redeem the remaining outstanding amounts of such notes on May 5, 2011:

•

$481.0 million aggregate principal amount outstanding of the Intermediate Holdco 9 ¹ / ₂ % Senior Discount Notes due 2015;

•

$625.3 million aggregate principal amount outstanding of the 2013 Sub Holdco Notes, after giving effect to the March 2011 partial redemption of the 2013 Sub Holdco Notes, as discussed above;

•

$681.0 million aggregate principal amount outstanding of the Intelsat Sub Holdco 8 ⁷ / ₈ % Senior Notes due 2015;

•

$400.0 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B;

•

$55.0 million aggregate principal amount outstanding of the Intelsat Jackson 9 ¹ / ₄ % Senior Notes due 2016; and

•

$284.6 million aggregate principal amount outstanding of the Intelsat Jackson 11 ¹ / ₂ % Senior Notes due 2016.

As a result, all of the above series of notes were paid off in full and no third party debt remained outstanding at Intermediate Holdco and Intelsat Sub Holdco as of May 5, 2011. Additionally, in connection with the above transactions, we recognized a loss on early extinguishment of debt of $158.0 million during the three months ended June 30, 2011, which consists of the difference between the carrying value of the debt repaid or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs.

Note 9 Derivative Instruments and Hedging Activities

Interest Rate Swaps

We are subject to interest rate risk primarily associated with our variable-rate borrowings. Interest rate risk is the risk that changes in interest rates could adversely affect earnings and cash flows. Specific interest rate risk includes: the risk of increasing interest rates on short-term debt; the risk of increasing interest rates for planned new fixed long-term financings; and the risk of increasing interest rates for planned refinancing using long-term fixed-rate debt. We have entered into interest rate swap agreements to reduce the impact of interest rate movements on future interest expense by converting substantially all of our floating-rate debt to a fixed rate.

In connection with the 2011 Secured Loan Refinancing, certain of our interest rate swaps were assigned by Intelsat Sub Holdco and Intelsat Corp to Intelsat Jackson, and are now secured by a first priority security interest in the collateral that also secures obligations under the Intelsat Jackson Secured Credit Agreement (see Note 8 — Long Term Debt).

On December 22, 2011, we amended our interest rate swap agreements with an aggregate notional amount of $448.5 million between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events.

During the first quarter of 2012, we amended our interest rate swap agreements with an aggregate notional amount of $1.2 billion between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events.

As of June 30, 2012, we held interest rate swaps with aggregate notional amounts of $731.4 million and $1.6 billion which mature in March 2013 and January 2016, respectively. These swaps were entered into as further described below to economically hedge the variability in cash flow on a portion of the floating-rate term loans under our senior secured and unsecured credit facilities, but have not been designated as hedges for accounting purposes. On a quarterly basis, we receive a floating rate of interest equal to the three-month LIBOR and pay a fixed rate of interest. On the interest rate reset date of June 14, 2012, the interest rate which the counterparties utilized to compute interest due to us was determined to be 0.47%.

Additionally, as of June 30, 2012, New Dawn had a floating-to-fixed interest rate swap to hedge future interest payments on its senior and mezzanine term loan facilities. The interest rate swap has an effective date of July 7, 2011, maturing on July 7, 2014, with a notional amount of $65.5 million for the mezzanine loan and varying notional amounts for the senior loan. We receive an interest rate of three-month LIBOR and pay a fixed coupon of 3.72%. On the interest rate reset date of April 5, 2012, the interest rate which the counterparties utilized to compute interest due to us was 0.47%. This swap was undesignated as a hedge for accounting purposes. In July 2012, in conjunction with the prepayment of New Dawn debt, we settled $69.0 million notional amount under the New Dawn interest rate swap associated with the senior term loan facilities (see Note 8 — Long-Term Debt — New Dawn Credit Facilities).

The counterparties to our interest rate swap agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swaps, our exposure is limited to the interest rate differential on the notional amount at each quarterly settlement period over the life of the agreement. We do not anticipate non-performance by the counterparties.

All of our interest rate swaps were undesignated as of June 30, 2012. The swaps are marked-to-market quarterly with any change in fair value recorded within (gains) losses on derivative financial instruments in our condensed consolidated statements of operations. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements of our derivatives. The fair value measurement of derivatives could result in either a net asset or a net liability position for us. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting arrangements as applicable and necessary. When the swaps are in a net liability position for us, the credit valuation adjustments are calculated by determining the total expected exposure of the derivatives, incorporating the current and potential future exposures and then applying an applicable credit spread to the exposure. The total expected exposure of a derivative is derived using market-observable inputs, such as yield curves and volatilities. The inputs utilized for our own credit spread are based on implied spreads from traded levels of our debt. Accordingly, as of June 30, 2012, we recorded a non-cash credit valuation adjustment of approximately $5.8 million as a reduction to our liability.

As of December 31, 2011 and June 30, 2012, $14.8 million and $27.0 million was included in other current liabilities, respectively, and $80.7 million and $68.2 million was included in other long-term liabilities, respectively, within our condensed consolidated balance sheets related to the interest rate swaps.

Put Option Embedded Derivative Instrument

On the date of issuance of Intelsat Sub Holdco’s 8 ⁷ / ₈ % Senior Notes due 2015 (the “2015 Intelsat Sub Holdco Notes, Series B”), we determined that these debt instruments contained a contingent put option clause within the host contract, which afforded the holders of the notes the option to require the issuer to repurchase such notes at 101% of their principal amount in the event of a change

of control, as defined in the indenture governing the notes. In our evaluation of the financing arrangement, we concluded that the contingent put option required bifurcation in accordance with current accounting standards under FASB ASC Topic 815, Derivatives and Hedging . We therefore bifurcated the contingent put option and carried it as a derivative liability at fair value. We estimated the fair value of the derivative on the date of inception using a standard valuation technique, which places the most significant emphasis upon the estimated date and probability of a change of control and incorporated the issue price, maturity date and change of control put price. We subsequently revalued the derivative at the end of each reporting period, recognizing any change in fair value through earnings. The fair value of the embedded derivative was calculated as $4.3 million at December 31, 2010. As of May 5, 2011, we redeemed the entire $400 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B. Therefore, we derecognized the embedded derivative liability and the value at December 31, 2011 was $0. We recorded a gain of $4.3 million included in losses on derivative financial instruments in our condensed consolidated statement of operations during the six months ended June 30, 2011 to adjust the fair market value of the put option embedded derivative to $0.

The following table sets forth the fair value of our derivatives by category (in thousands):


		Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2011		June 30, 2012
Undesignated interest rate swaps	Other current liabilities	$	14,828	$	27,045
Undesignated interest rate swaps	Other long-term liabilities		80,690		68,152

Total derivatives		$	95,518	$	95,197

The following table sets forth the effect of the derivative instruments on the condensed consolidated statements of operations (in thousands):


Derivatives not designated as hedging instruments	Presentation in Statements of Operations	Three Months Ended June 30, 2011		Three Months Ended June 30, 2012		Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Undesignated interest rate swaps	Losses on derivative financial instruments	$	20,522	$	15,756	$	23,103		$	25,614
Put option embedded derivative	Losses on derivative financial instruments		—		—		(4,295	)		—

Total losses on derivative financial instruments		$	20,522	$	15,756	$	18,808		$	25,614

Note 10 Income Taxes

The majority of our operations are located in taxable jurisdictions, including Luxembourg, the United States and the United Kingdom. Our Luxembourg companies that file tax returns as a consolidated group generated a loss for the six months ended June 30, 2012. Due to our cumulative losses in recent years, and the inherent uncertainty associated with the realization of future taxable income in the foreseeable future, we recorded a full valuation allowance against the net operating losses generated in Luxembourg. The difference between tax expense (benefit) reported in the condensed consolidated statements of operations and tax computed at statutory rates is attributable to the valuation allowance on losses generated in Luxembourg, the provision for foreign taxes, which were principally in the United States and the United Kingdom, as well as withholding taxes on revenue earned in many of the foreign markets in which we operate.

Cash paid for income taxes, net of refunds, totaled $14.8 million and $18.2 million for the six months ended June 30, 2011 and 2012, respectively.

As of December 31, 2011 and June 30, 2012, our gross unrecognized tax benefits were $64.8 million and $67.9 million, respectively (including interest and penalties), of which $46.6 million and $49.2 million, respectively, if recognized, would affect our effective tax rate. As of December 31, 2011 and June 30, 2012, we had recorded reserves for interest and penalties in the amount of $8.6 million and $10.3 million, respectively. We continue to recognize interest and, to the extent applicable, penalties with respect to the unrecognized tax benefits as income tax expense. Since December 31, 2011, the change in the balance of unrecognized tax benefits consisted of an increase of $1.4 million related to prior period tax positions and an increase of $1.8 million related to current tax positions.

We operate in various taxable jurisdictions throughout the world and our tax returns are subject to audit and review from time to time. We consider Luxembourg, the United States and the United Kingdom to be our significant tax jurisdictions. Our Luxembourg, U.S. and U.K. subsidiaries are subject to income tax examination for periods after December 31, 2003.

Within the next twelve months, we believe that there are no jurisdictions in which the outcome of unresolved tax issues or claims is likely to be material to our results of operations, financial position or cash flows.

On March 7, 2011, Intelsat Holding Corporation, the former parent of Intelsat Corp, was notified by the Internal Revenue Service of its intent to initiate an audit for the tax years ending December 31, 2008 and 2009. We do not currently expect the result of this audit to have a material impact on our provision for income taxes.

In May 2012, India enacted new legislation that defines payments for satellite services as “royalties for the use of a process”. Due to the law’s retroactive application, and because it is contrary to recent Delhi High Court rulings as well as model commentaries issued by international tax bodies, we are likely to appeal any assessments we may receive as a result of the new law and we believe that it is more likely than not that we would be successful with such appeals. As a result, we do not expect this new law to have a material impact on our provision for income taxes.

Prior to August 20, 2004, Intelsat Corp, joined with The DIRECTV Group and General Motors Corporation in filing a consolidated U.S. federal income tax return. In April 2004, Intelsat Corp entered into a tax separation agreement with The DIRECTV Group that superseded four earlier tax-related agreements among Intelsat Corp and its subsidiaries, The DIRECTV Group and certain of its affiliates. Pursuant to the tax separation agreement, The DIRECTV Group agreed to indemnify Intelsat Corp for all federal and consolidated state and local income taxes a taxing authority may attempt to collect from Intelsat Corp regarding any liability for the federal or consolidated state or local income taxes of General Motors Corporation and The DIRECTV Group, except those income taxes Intelsat Corp is required to pay under the tax separation agreement. In addition, The DIRECTV Group agreed to indemnify Intelsat Corp for any taxes (other than those taxes described in the preceding sentence) related to any periods or portions of such periods ending on, or prior to, the day of the closing of the PanAmSat Corporation recapitalization, which occurred on August 20, 2004, in amounts equal to 80% of the first $75.0 million of such other taxes and 100% of any other taxes in excess of the first $75.0 million. As a result, Intelsat Corp’s tax exposure after indemnification related to these periods is capped at $15.0 million, of which $4.0 million has been paid to date. The tax separation agreement with The DIRECTV Group is effective from August 20, 2004 until the expiration of the statute of limitations with respect to all taxes to which the tax separation agreement relates. As of December 31, 2011 and June 30, 2012, we had a tax indemnification receivable of $2.3 million.

Note 11 Commitments and Contingencies

(a) Litigation and Claims

We are subject to litigation in the ordinary course of business. Management does not believe that the resolution of any pending proceedings would have a material adverse effect on our financial position or results of operations.

(b) LCO Protection

Most of the customer service commitments entered into prior to our privatization were transferred to us pursuant to novation agreements. Certain of these agreements contain provisions, including provisions for lifeline connectivity obligation (“LCO”) protection, which constrain our ability to price services in some circumstances. Our LCO contracts require us to provide customers with the right to renew their service commitments covered by LCO contracts at prices no higher than the prices charged for those services on the privatization date. Under some circumstances, we may also be required by an LCO contract to reduce the price for a service commitment covered by the contract. LCO protection may continue until July 18, 2013. As of June 30, 2012, we had approximately $92.4 million of backlog covered by LCO contracts and to date we have not been required to reduce prices for our LCO-protected service commitments. There can be no assurance that we will not be required to reduce prices in the future under our LCO commitments.

(c) Loss Contingency

Our indirect parent, Intelsat Global Holdings, has entered into an agreement pursuant to which an independent third party has made an investment commitment to us. This commitment is subject to certain terms and conditions and has a fixed duration. We had previously loaned $10 million to Intelsat Global Holdings in connection with a fee paid to the third party under this agreement. In the event that the commitment expires and the investment is not consummated, we will record a $20 million pretax charge as early as the third quarter of 2012, consisting of the $10 million previously loaned to Intelsat Global Holdings and an additional $10 million that would become due to the third party upon expiration of the commitment.

Note 12 Business and Geographic Segment Information

We operate in a single industry segment in which we provide satellite services to our communications customers around the world. Revenue by region is based on the locations of customers to which services are billed. Our satellites are in geosynchronous orbit, and consequently are not attributable to any geographic location. Of our remaining assets, substantially all are located in the United States.

agreements also cover services that we procure from third parties and resell, which we refer to as off-network services. These services can include transponder services and other satellite-based transmission services in frequencies not available on our network. Under the category off-network and other revenues, we also include revenues from consulting and other services.

The geographic distribution of our revenue based upon billing region of the customer was as follows:


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012
North America		47	%		47	%
Europe		16	%		16	%
Africa and Middle East		17	%		16	%
Latin America and Caribbean		14	%		15	%
Asia Pacific		6	%		6	%

Approximately 4% of our revenue was derived from our largest customer during each of the three months ended June 30, 2011 and 2012. Our ten largest customers accounted for approximately 26% of our revenue for each of the three months ended June 30, 2011 and 2012.


	Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
North America		46	%		47	%
Europe		16	%		16	%
Africa and Middle East		17	%		16	%
Latin America and Caribbean		14	%		15	%
Asia Pacific		7	%		6	%

Approximately 4% of our revenue was derived from our largest customer during each of the six months ended June 30, 2011 and 2012. Our ten largest customers accounted for approximately 26% of our revenue for each of the six months ended June 30, 2011 and 2012.

Our revenues were derived from the following services, with Off-Network and Other Revenues shown separately from On-Network Revenues (in thousands, except percentages):


	Three Months Ended June 30, 2011				Three Months Ended June 30, 2012				Six Months Ended June 30, 2011				Six Months Ended June 30, 2012
On-Network Revenues
Transponder services	$	474,722	74	%	$	480,803	75	%	$	942,005	73	%	$	960,762	75	%
Managed services		70,350	11	%		67,205	11	%		141,297	11	%		133,177	10	%
Channel		26,723	4	%		23,461	4	%		54,019	4	%		47,281	4	%

Total on-network revenues		571,795	89	%		571,469	90	%		1,137,321	89	%		1,141,220	89	%
Off-Network and Other Revenues
Transponder, MSS and other off-network services		56,679	9	%		55,388	9	%		116,148	9	%		119,822	9	%
Satellite-related services		13,972	2	%		11,811	2	%		29,165	2	%		21,796	2	%

Total off-network and other revenues		70,651	11	%		67,199	11	%		145,313	11	%		141,618	11	%

Total	$	642,446	100	%	$	638,668	100	%	$	1,282,634	100	%	$	1,282,838	100	%

Note 13 Related Party Transactions

(a) Shareholders Agreements

The shareholders of Intelsat Global entered into shareholders agreements on February 4, 2008. The shareholders agreements were assigned to Intelsat Global Holdings by an amendment effective as of March 30, 2012. The shareholders agreements and the articles of incorporation of Intelsat Global Holdings provide, among other things, for the governance of Intelsat Global Holdings and its subsidiaries and provide specific rights to and limitations upon the holders of Intelsat Global Holdings’ share capital with respect to shares held by such holders.

(b) Monitoring Fee Agreement

Intelsat Luxembourg, our direct wholly-owned subsidiary, has a monitoring fee agreement dated February 4, 2008 (the “2008 MFA”) with BC Partners Limited and Silver Lake Management Company III, L.L.C. (together, the “2008 MFA Parties”), pursuant to

which the 2008 MFA Parties provide certain monitoring, advisory and consulting services to Intelsat Luxembourg. We recorded expense for services associated with the 2008 MFA of $12.4 million and $12.5 million during the six months ended June 30, 2011 and 2012, respectively.

(c) Ownership by Management

Certain directors, officers and key employees of Intelsat Global Holdings and its subsidiaries hold restricted shares, options and SCAs of Intelsat Global Holdings (see Note 3—Share-Based and Other Compensation Plans). In the aggregate, these shares and arrangements outstanding as of June 30, 2012 provided for the issuance of approximately 12.3% of the voting equity of Intelsat Global Holdings on a fully diluted basis.

(d) Horizons Holdings

We have a 50% ownership interest in Horizons Holdings as a result of a joint venture with JSAT (see Note 6—Investments).

(e) New Dawn

We have a 74.9% ownership interest in New Dawn as a result of the New Dawn Project Agreement with Convergence Partners (see Note 6—Investments).

(f) WP Com

We have a 49% ownership interest in WP Com as a result of a joint venture with Corporativo (see Note 6—Investments).

(g) Receivable from Parent

We had a receivable from Intelsat Global as of December 31, 2011 and June 30, 2012 of $16.8 million and $22.5 million, respectively.

Note 14 Subsequent Events

In July 2012, Intelsat Global Service LLC, our indirect subsidiary, entered into an agreement to sell our U.S. administrative headquarters office building in Washington, D.C. (the “U.S. Administrative Headquarters Property”), and to assign our Amended and Restated Lease Agreement with the U.S. Government (the “Ground Lessor”) relating to the U.S. Administrative Headquarters Property, to the purchaser for a purchase price of $85.0 million in cash (the “U.S. Administrative Headquarters Sale”). Upon the closing of the U.S. Administrative Headquarters Sale, we expect to enter into an agreement under which we will temporarily lease from the purchaser a portion of the U.S. Administrative Headquarters Property. The closing of the U.S. Administrative Headquarters Sale is contingent upon the Ground Lessor’s approval, together with other customary closing conditions. We are currently in the process of selecting a location for our new permanent U.S. administrative headquarters office.

Note 15 Supplemental Consolidating Financial Information

On February 4, 2008, Intelsat Jackson issued approximately $1.3 billion of the 2016 Jackson 11 ¹ / ₄ % Notes. The 2016 Jackson 11 ¹ / ₄ % Notes are fully and unconditionally guaranteed, jointly and severally, by Intelsat S.A. and Intelsat Luxembourg. The 2016 Jackson 11 ¹ / ₄ % Notes are not guaranteed by any of Intelsat Jackson’s direct or indirect subsidiaries.

In addition, on June 27, 2008, Intelsat Luxembourg issued approximately $2.8 billion of 11 ¹ / ₄ % Senior Notes due 2017 and approximately $2.3 billion of 11 ¹ / ₂ % / 12 ¹ / ₂ % Senior PIK Election Notes due 2017, which are fully and unconditionally guaranteed, jointly and severally, by Intelsat S.A.

Separate financial statements of Intelsat S.A., Intelsat Luxembourg and Intelsat Jackson are not presented because management believes that such financial statements would not be material to investors. Investments in Intelsat Jackson’s subsidiaries in the following condensed consolidating financial information are accounted for under the equity method of accounting. Consolidating adjustments include the following:

•

elimination of investment in subsidiaries;

•

elimination of intercompany accounts; and

•

elimination of equity in earnings (losses) of subsidiaries.

Other comprehensive income for the three months ended June 30, 2011 and 2012, was $1.1 million and $2.2 million, respectively. Other comprehensive income for the six months ended June 30, 2011 and 2012, was $2.3 million and $4.7 million, respectively. Other comprehensive income is fully attributable to the subsidiaries of Intelsat Jackson.

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson		Intelsat Jackson Subsidiaries (Non- Guarantors)		Consolidation and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	735		$	41		$	32,044	$	221,266	$	—		$	254,086
Restricted cash		—			—			—		118,032		—			118,032
Receivables, net of allowance		45			3			390		309,429		—			309,867
Deferred income taxes		—			—			—		25,927		—			25,927
Prepaid expenses and other current assets		—			12,531			257		46,680		(132	)		59,336
Intercompany receivables		—			677			—		4,553,049		(4,553,726	)		—


Total current assets		780			13,252			32,691		5,274,383		(4,553,858	)		767,248

Satellites and other property and equipment, net		—			—			—		6,326,877		—			6,326,877
Goodwill		—			—			—		6,780,827		—			6,780,827
Non-amortizable intangible assets		—			—			—		2,458,100		—			2,458,100
Amortizable intangible assets, net		—			—			—		696,977		—			696,977
Investment in affiliates		(390,464	)		5,086,629			19,485,369		1,010		(24,181,534	)		1,010
Other assets		7,012			92,262			103,204		231,803		—			434,281


Total assets	$	(382,672	)	$	5,192,143		$	19,621,264	$	21,769,977	$	(28,735,392	)	$	17,465,320


LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	3,175		$	—		$	795	$	188,695	$	(132	)	$	192,533
Accrued interest payable		3,830			227,953			131,575		2,109		—			365,467
Current portion of long-term debt		—			—			107,500		131,455		—			238,955
Deferred satellite performance incentives		—			—			—		18,224		—			18,224
Other current liabilities		—			—			17,789		152,314		—			170,103
Intercompany payables		495,055			—			4,058,671		—		(4,553,726	)		—


Total current liabilities		502,060			227,953			4,316,330		492,797		(4,553,858	)		985,282
Long-term debt, net of current portion		314,625			5,307,986			10,150,442		127,665		—			15,900,718
Deferred satellite performance incentives, net of current portion		—			—			—		120,515		—			120,515
Deferred revenue, net of current portion		—			—			—		796,452		—			796,452
Deferred income taxes		—			—			—		283,315		—			283,315
Accrued retirement benefits		—			—			—		289,437		—			289,437
Other long-term liabilities		—			45,811			67,863		169,872		—			283,546

Noncontrolling interest		—			—			—		5,412		—			5,412

Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,473		23,388		(5,014,897	)		5,000
Other shareholder’s equity (deficit)		(1,204,357	)		(1,058,643	)		764,156		19,461,124		(19,166,637	)		(1,204,357	)


Total liabilities and shareholder’s equity (deficit)	$	(382,672	)	$	5,192,143		$	19,621,264	$	21,769,977	$	(28,735,392	)	$	17,465,320

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson		Intelsat Jackson Subsidiaries (Non- Guarantors)		Consolidation and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	511		$	908		$	2,269	$	291,012	$	—		$	294,700
Restricted cash		—			—			—		94,131		—			94,131
Receivables, net of allowance		41			—			—		331,330		—			331,371
Deferred income taxes		—			—			—		26,058		—			26,058
Prepaid expenses and other current assets		551			16			37		42,330		—			42,934
Intercompany receivables		—			6,249			—		897,410		(903,659	)		—


Total current assets		1,103			7,173			2,306		1,682,271		(903,659	)		789,194

Satellites and other property and equipment, net		—			—			—		6,142,731		—			6,142,731
Goodwill		—			—			—		6,780,827		—			6,780,827
Non-amortizable intangible assets		—			—			—		2,458,100		—			2,458,100
Amortizable intangible assets, net		—			—			—		742,868		—			742,868
Investment in affiliates		(303,483	)		5,177,192			15,832,505		1,010		(20,706,214	)		1,010
Other assets		5,356			99,680			95,708		246,280		(348	)		446,676


Total assets	$	(297,024	)	$	5,284,045		$	15,930,519	$	18,054,087	$	(21,610,221	)	$	17,361,406


LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,484		$	(10	)	$	450	$	195,252	$	—		$	198,176
Accrued interest payable		3,831			227,953			125,714		1,838		—			359,336
Current portion of long-term debt		—			—			32,500		132,318		—			164,818
Deferred satellite performance incentives		—			—			—		17,715		—			17,715
Other current liabilities		—			—			3,195		137,874		—			141,069
Intercompany payables		487,031			—			416,628		—		(903,659	)		—

Total current liabilities		493,346			227,943			578,487		484,997		(903,659	)		881,114
Long-term debt, net of current portion		302,079			5,307,986			10,093,802		133,645		—			15,837,512
Deferred satellite performance incentives, net of current portion		—			—			—		113,974		—			113,974
Deferred revenue, net of current portion		—			—			—		724,413		—			724,413
Deferred income taxes		—			—			—		265,181		—			265,181
Accrued retirement benefits		—			—			—		305,902		—			305,902
Other long-term liabilities		—			49,673			81,038		192,372		(348	)		322,735

Noncontrolling interest		—			—			—		3,024		—			3,024

Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,473		9,576,008		(14,567,517	)		5,000
Other shareholder’s equity (deficit)		(1,097,449	)		(970,593	)		854,719		6,254,571		(6,138,697	)		(1,097,449	)


Total liabilities and shareholder’s equity (deficit)	$	(297,024	)	$	5,284,045		$	15,930,519	$	18,054,087	$	(21,610,221	)	$	17,361,406

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	20,528		$	638,674		$	(20,534	)	$	638,668


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			—			119,834			(20,527	)		99,307
Selling, general and administrative		1,006			6,279			513			45,630			(7	)		53,421
Depreciation and amortization		—			—			17,104			171,524			—			188,628
Losses on derivative financial instruments		—			—			15,520			236			—			15,756


Total operating expenses		1,006			6,279			33,137			337,224			(20,534	)		357,112


Income (loss) from operations		(1,006	)		(6,279	)		(12,609	)		301,450			—			281,556
Interest (income) expense, net		15,661			152,660			268,643			(110,273	)		—			326,691
Loss on early extinguishment of debt		—			—			(43,383	)		—			—			(43,383	)
Subsidiary income (loss)		(67,343	)		93,968			418,610			—			(445,235	)		—
Other income (expense), net		1			—			(7	)		(1,900	)		—			(1,906	)

Income (loss) before income taxes		(84,009	)		(64,971	)		93,968			409,823			(445,235	)		(90,424	)
Benefit from income taxes		—			—			—			(6,797	)		—			(6,797	)

Net income (loss)		(84,009	)		(64,971	)		93,968			416,620			(445,235	)		(83,627	)
Net income attributable to noncontrolling interest		—			—			—			(382	)		—			(382	)


Net income (loss) attributable to Intelsat S.A.	$	(84,009	)	$	(64,971	)	$	93,968		$	416,238		$	(445,235	)	$	(84,009	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	—		$	642,449		$	(3	)	$	642,446


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			—			101,059			—			101,059
Selling, general and administrative		669			6,519			320			47,639			—			55,147
Depreciation and amortization		—			—			—			194,354			—			194,354
Losses on derivative financial instruments		—			—			17,801			2,721			—			20,522


Total operating expenses		669			6,519			18,121			345,773			—			371,082


Income (loss) from operations		(669	)		(6,519	)		(18,121	)		296,676			(3	)		271,364
Interest expense, net		14,177			152,451			160,333			(1,100	)		—			325,861
Loss on early extinguishment of debt		—			—			(28,963	)		(128,990	)		—			(157,953	)
Subsidiary income (loss)		(198,519	)		(36,238	)		171,179			—			63,578			—
Loss from previously unconsolidated affiliates		—			—			—			(4,589	)		—			(4,589	)
Other income, net		—			—			—			3,291			—			3,291

Income (loss) before income taxes		(213,365	)		(195,208	)		(36,238	)		167,488			63,575			(213,748	)
Provision for income taxes		—			—			—			734			—			734

Net income (loss)		(213,365	)		(195,208	)		(36,238	)		166,754			63,575			(214,482	)
Net loss attributable to noncontrolling interest		—			—			—			1,114			—			1,114


Net income (loss) attributable to Intelsat S.A.	$	(213,365	)	$	(195,208	)	$	(36,238	)	$	167,868		$	63,575		$	(213,368	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	20,528		$	1,282,844		$	(20,534	)	$	1,282,838


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			—			224,843			(20,527	)		204,316
Selling, general and administrative		2,055			12,705			974			88,661			(7	)		104,388
Depreciation and amortization		—			—			17,104			358,396			—			375,500
Losses on derivative financial instruments		—			—			24,776			838			—			25,614


Total operating expenses		2,055			12,705			42,854			672,738			(20,534	)		709,818


Income (loss) from operations		(2,055	)		(12,705	)		(22,326	)		610,106			—			573,020
Interest (income) expense, net		31,160			305,259			419,325			(117,622	)		—			638,122
Loss on early extinguishment of debt		—			—			(43,383	)		—			—			(43,383	)
Subsidiary income (loss)		(75,242	)		247,981			733,024			—			(905,763	)		—
Other income (expense), net		(1	)		(1	)		(9	)		1,008			—			997

Income (loss) before income taxes		(108,458	)		(69,984	)		247,981			728,736			(905,763	)		(107,488	)
Provision for income taxes		—			—			—			407			—			407

Net income (loss)		(108,458	)		(69,984	)		247,981			728,329			(905,763	)		(107,895	)
Net income attributable to noncontrolling interest		—			—			—			(563	)		—			(563	)


Net income (loss) attributable to Intelsat S.A.	$	(108,458	)	$	(69,984	)	$	247,981		$	727,766		$	(905,763	)	$	(108,458	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	—		$	1,282,637		$	(3	)	$	1,282,634


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			—			206,082			—			206,082
Selling, general and administrative		1,594			12,845			576			91,731			—			106,746
Depreciation and amortization		—			—			—			389,356			—			389,356

(Gains) losses on derivative financial instruments		—			—			20,337			(1,529	)		—			18,808


Total operating expenses		1,594			12,845			20,913			685,640			—			720,992


Income (loss) from operations		(1,594	)		(12,845	)		(20,913	)		596,997			(3	)		561,642
Interest expense, net		43,624			307,387			293,269			30,371			—			674,651
Loss on early extinguishment of debt		(78,960	)		—			(28,963	)		(218,260	)		—			(326,183	)
Subsidiary income (loss)		(304,785	)		22,359			365,504			—			(83,078	)		—
Loss from previously unconsolidated affiliates		—			—			—			(4,469	)		—			(4,469	)
Other income, net		—			—			—			7,167			—			7,167

Income (loss) before income taxes		(428,963	)		(297,873	)		22,359			351,064			(83,081	)		(436,494	)
Benefit from income taxes		—			—			—			(6,253	)		—			(6,253	)

Net income (loss)		(428,963	)		(297,873	)		22,359			357,317			(83,081	)		(430,241	)
Net loss attributable to noncontrolling interest		—			—			—			1,275			—			1,275


Net income (loss) attributable to Intelsat S.A.	$	(428,963	)	$	(297,873	)	$	22,359		$	358,592		$	(83,081	)	$	(428,966	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Cash flows from operating activities:	$	(11,362	)	$	(324,917	)	$	230,778		$	488,148		$	—		$	382,647

Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			—			(476,761	)		—			(476,761	)
Disbursements for intercompany loans		—			—			—			(75,756	)		75,756			—
Investment in subsidiaries		(4,203	)		—			(10,829	)		—			15,032			—
Dividend from affiliates		13,990			338,040			—			—			(352,030	)		—

Net cash provided by (used in) investing activities		9,787			338,040			(10,829	)		(552,517	)		(261,242	)		(476,761	)

Cash flows from financing activities:
Repayments of long-term debt		—			—			(1,338,163	)		(12,209	)		—			(1,350,372	)
Proceeds from issuance of long-term debt		—			—			1,471,000			—			—			1,471,000
Proceeds from intercompany borrowing		1,800			—			73,956			—			(75,756	)		—
Debt issuance costs		—			—			(19,444	)		—			—			(19,444	)
Payment of premium on early retirement of debt		—			—			(39,475	)		—			—			(39,475	)
Principal payments on deferred satellite performance incentives		—			—			—			(7,348	)		—			(7,348	)
Capital contribution from parent		—			—			—			15,032			(15,032	)		—
Dividends to shareholders		—			(13,990	)		(338,040	)		—			352,030			—
Capital contribution from noncontrolling interest		—			—			—			6,105			—			6,105
Dividends paid to noncontrolling interest		—			—			—			(4,673	)		—			(4,673	)

Net cash provided by (used in) financing activities		1,800			(13,990	)		(190,166	)		(3,093	)		261,242			55,793

Effect of exchange rate changes on cash and cash equivalents		(1	)		—			(8	)		(2,284	)		—			(2,293	)

Net change in cash and cash equivalents		224			(867	)		29,775			(69,746	)		—			(40,614	)
Cash and cash equivalents, beginning of period		511			908			2,269			291,012			—			294,700

Cash and cash equivalents, end of period	$	735		$	41		$	32,044		$	221,266		$	—		$	254,086

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Intelsat Jackson Subsidiaries (Non- Guarantors)			Consolidation and Eliminations			Consolidated

Cash flows from operating activities:	$	(30,136	)	$	(255,417	)	$	(20,132	)	$	748,846		$	—		$	443,161

Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			—			(412,710	)		—			(412,710	)

Repayment from (disbursements for) intercompany loans		—			—			(113,206	)		1,480			111,726			—

Capital contribution to previously unconsolidated affiliates		—			—			—			(6,105	)		—			(6,105	)
Investment in subsidiaries		(3,100	)		—			(4,993,408	)		—			4,996,508			—
Dividend from affiliates		550,844			797,373			405,170			—			(1,753,387	)		—
Other investing activities		—			—			—			2,261			—			2,261

Net cash provided by (used in) investing activities		547,744			797,373			(4,701,444	)		(415,074	)		3,354,847			(416,554	)

Cash flows from financing activities:
Repayments of long-term debt		(485,841	)		—			(339,630	)		(5,289,423	)		—			(6,114,894	)
Proceeds from issuance of long-term debt		—			—			5,883,750			35,173			—			5,918,923
Proceeds from (repayment of) intercompany borrowing		—			—			(1,480	)		113,206			(111,726	)		—
Debt issuance costs		—			—			(69,307	)		—			—			(69,307	)
Payment of premium on early retirement of debt		(36,770	)		—			(26,114	)		(108,163	)		—			(171,047	)
Principal payments on deferred satellite performance incentives		—			—			—			(6,891	)		—			(6,891	)
Capital contribution from parent		—			—			—			4,996,508			(4,996,508	)		—
Dividends to shareholders		—			(550,844	)		(797,373	)		(405,170	)		1,753,387			—
Noncontrolling interest in New Dawn		—			—			—			1,558			—			1,558

Net cash provided by (used in) financing activities		(522,611	)		(550,844	)		4,649,846			(663,202	)		(3,354,847	)		(441,658	)

Effect of exchange rate changes on cash and cash equivalents		—			(1	)		—			3,921			—			3,920

Net change in cash and cash equivalents		(5,003	)		(8,889	)		(71,730	)		(325,509	)		—			(411,131	)
Cash and cash equivalents, beginning of period		7,315			10,017			126,605			548,993			—			692,930

Cash and cash equivalents, end of period	$	2,312		$	1,128		$	54,875		$	223,484		$	—		$	281,799

(Certain totals may not add due to the effects of rounding)

On April 5, 2011 Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of senior notes, consisting of $1.5 billion aggregate principal amount of the 7 ¹ / ₄ % 2019 Jackson Notes and $1.15 billion aggregate principal amount of the 2021 Jackson Notes. The 7 ¹ / ₄ % 2019 Jackson Notes and the 2021 Jackson Notes are fully and unconditionally guaranteed, jointly and severally, by Intelsat S.A., Intelsat Luxembourg and certain wholly-owned subsidiaries of Intelsat Jackson ( the “Subsidiary Guarantors”).

Separate financial statements of Intelsat S.A., Intelsat Luxembourg, Intelsat Jackson and the Subsidiary Guarantors are not presented because management believes that such financial statements would not be material to investors. Investments in Intelsat Jackson’s subsidiaries in the following condensed consolidating financial information are accounted for under the equity method of accounting. Consolidating adjustments include the following:

•

elimination of investment in subsidiaries;

•

elimination of intercompany accounts; and

•

elimination of equity in earnings (losses) of subsidiaries.

Other comprehensive income for the three months ended June 30, 2011 and 2012 was $1.1 million and $2.2 million, respectively. Other comprehensive income for the six months ended June 30, 2011 and 2012 was $2.3 million and $4.7 million, respectively. Other comprehensive income is fully attributable to the Jackson Subsidiary Guarantors, which are consolidated within Intelsat Jackson as well.

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson		Jackson Subsidiary Guarantors		Non-Guarantor Subsidiaries		Consolidation and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	735		$	41		$	175,645	$	143,602	$	77,665	$	(143,602	)	$	254,086
Restricted cash		—			—			—		—		118,032		—			118,032
Receivables, net of allowance		45			3			218,591		218,202		91,228		(218,202	)		309,867
Deferred income taxes		—			—			23,812		23,812		2,115		(23,812	)		25,927
Prepaid expenses and other current assets		—			12,531			27,824		27,567		22,171		(30,757	)		59,336
Intercompany receivables		—			677			553,202		4,611,873		—		(5,165,752	)		—


Total current assets		780			13,252			999,074		5,025,056		311,211		(5,582,125	)		767,248

Satellites and other property and equipment, net		—			—			6,067,435		6,067,435		276,288		(6,084,281	)		6,326,877
Goodwill		—			—			6,780,827		6,780,827		—		(6,780,827	)		6,780,827
Non-amortizable intangible assets		—			—			2,458,100		2,458,100		—		(2,458,100	)		2,458,100
Amortizable intangible assets, net		—			—			696,977		696,977		—		(696,977	)		696,977
Investment in affiliates		(390,311	)		5,086,782			207,758		207,758		10		(5,110,987	)		1,010
Other assets		7,012			92,262			297,931		194,726		30,848		(188,498	)		434,281


Total assets	$	(382,519	)	$	5,192,296		$	17,508,102	$	21,430,879	$	618,357	$	(26,901,795	)	$	17,465,320


LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	3,175		$	—		$	170,424	$	169,629	$	22,124	$	(172,819	)	$	192,533
Accrued interest payable		3,830			227,953			132,810		1,235		874		(1,235	)		365,467
Current portion of long-term debt		—			—			107,500		—		131,455		—			238,955
Deferred satellite performance incentives		—			—			16,792		16,792		1,432		(16,792	)		18,224
Other current liabilities		—			—			148,854		131,065		22,581		(132,397	)		170,103
Intercompany payables		495,055			—			—		—		58,823		(553,878	)		—

Total current liabilities		502,060			227,953			576,380		318,721		237,289		(877,121	)		985,282
Long-term debt, net of current portion		314,625			5,307,986			10,150,442		—		127,665		—			15,900,718
Deferred satellite performance incentives, net of current portion		—			—			118,020		118,020		2,495		(118,020	)		120,515
Deferred revenue, net of current portion		—			—			803,320		803,320		8,462		(818,650	)		796,452
Deferred income taxes		—			—			255,114		255,114		22,005		(248,918	)		283,315
Accrued retirement benefits		—			—			289,437		289,437		—		(289,437	)		289,437
Other long-term liabilities		—			45,811			228,607		160,745		9,128		(160,745	)		283,546

Noncontrolling interest		—			—			—		—		5,412		—			5,412

Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,518		23,388		44		(5,014,986	)		5,000
Other shareholder’s equity (deficit)		(1,204,204	)		(1,058,490	)		764,264		19,462,134		205,857		(19,373,918	)		(1,204,357	)


Total liabilities and shareholder’s equity (deficit)	$	(382,519	)	$	5,192,296		$	17,508,102	$	21,430,879	$	618,357	$	(26,901,795	)	$	17,465,320

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson		Jackson Subsidiary Guarantors		Non-Guarantor Subsidiaries		Consolidation and Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	511		$	908		$	240,175	$	237,906	$	53,106	$	(237,906	)	$	294,700
Restricted cash		—			—			—		—		94,131		—			94,131
Receivables, net of allowance		41			—			217,082		217,082		114,248		(217,082	)		331,371
Deferred income taxes		—			—			23,944		23,944		2,114		(23,944	)		26,058
Prepaid expenses and other current assets		551			16			27,985		27,949		15,216		(28,783	)		42,934
Intercompany receivables		—			6,249			523,329		939,957		—		(1,469,535	)		—


Total current assets		1,103			7,173			1,032,515		1,446,838		278,815		(1,977,250	)		789,194

Satellites and other property and equipment, net		—			—			5,869,027		5,869,027		291,182		(5,886,505	)		6,142,731
Goodwill		—			—			6,780,827		6,780,827		—		(6,780,827	)		6,780,827
Non-amortizable intangible assets		—			—			2,458,100		2,458,100		—		(2,458,100	)		2,458,100
Amortizable intangible assets, net		—			—			742,868		742,868		—		(742,868	)		742,868
Investment in affiliates		(303,383	)		5,177,292			218,048		218,048		10		(5,309,005	)		1,010
Other assets		5,356			99,680			293,032		197,322		42,728		(191,442	)		446,676


Total assets	$	(296,924	)	$	5,284,145		$	17,394,417	$	17,713,030	$	612,735	$	(23,345,997	)	$	17,361,406


LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,484		$	(10	)	$	168,577	$	168,126	$	27,960	$	(168,961	)	$	198,176
Accrued interest payable		3,831			227,953			126,646		932		906		(932	)		359,336
Current portion of long-term debt		—			—			32,500		—		132,318		—			164,818
Deferred satellite performance incentives		—			—			16,339		16,339		1,376		(16,339	)		17,715
Other current liabilities		—			—			121,327		118,131		21,074		(119,463	)		141,069
Intercompany payables		487,031			—			—		—		42,547		(529,578	)		—

Total current liabilities		493,346			227,943			465,389		303,528		226,181		(835,273	)		881,114
Long-term debt, net of current portion		302,079			5,307,986			10,093,802		—		133,645		—			15,837,512
Deferred satellite performance incentives, net of current portion		—			—			110,982		110,982		2,992		(110,982	)		113,974
Deferred revenue, net of current portion		—			—			731,560		731,560		8,850		(747,557	)		724,413
Deferred income taxes		—			—			244,216		244,216		14,785		(238,036	)		265,181
Accrued retirement benefits		—			—			305,902		305,902		—		(305,902	)		305,902
Other long-term liabilities		—			49,673			265,274		184,237		8,136		(184,585	)		322,735

Noncontrolling interest		—			—			—		—		3,024		—			3,024

Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,518		9,576,008		24		(14,567,586	)		5,000
Other shareholder’s equity (deficit)		(1,097,349	)		(970,493	)		854,774		6,256,597		215,098		(6,356,076	)		(1,097,449	)


Total liabilities and shareholder’s equity (deficit)	$	(296,924	)	$	5,284,145		$	17,394,417	$	17,713,030	$	612,735	$	(23,345,997	)	$	17,361,406

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non-Guarantor Subsidiaries			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	571,440		$	571,444		$	177,032		$	(681,248	)	$	638,668


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			64,066			84,593			145,045			(194,397	)		99,307
Selling, general and administrative		1,006			6,279			34,282			33,772			11,854			(33,772	)		53,421
Depreciation and amortization		—			—			178,879			161,775			10,065			(162,091	)		188,628
Losses on derivative financial instruments		—			—			15,519			—			237			—			15,756


Total operating expenses		1,006			6,279			292,746			280,140			167,201			(390,260	)		357,112


Income (loss) from operations		(1,006	)		(6,279	)		278,694			291,304			9,831			(290,988	)		281,556
Interest (income) expense, net		15,661			152,660			154,231			(114,413	)		4,139			114,413			326,691
Loss on early extinguishment of debt		—			—			(43,383	)		—			—			—			(43,383	)
Subsidiary income (loss)		(67,325	)		93,986			6,068			6,068			—			(38,797	)		—
Other income (expense), net		1			—			1,292			1,299			(2,866	)		(1,632	)		(1,906	)

Income (loss) before income taxes		(83,991	)		(64,953	)		88,440			413,084			2,826			(445,830	)		(90,424	)
Benefit from income taxes		—			—			(5,546	)		(5,546	)		(1,251	)		5,546			(6,797	)

Net income (loss)		(83,991	)		(64,953	)		93,986			418,630			4,077			(451,376	)		(83,627	)
Net income attributable to noncontrolling interest		—			—			—			—			(382	)		—			(382	)


Net income (loss) attributable to Intelsat S.A.	$	(83,991	)	$	(64,953	)	$	93,986		$	418,630		$	3,695		$	(451,376	)	$	(84,009	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non-Guarantor Subsidiaries		Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	572,799		$	572,800		$	163,948	$	(667,101	)	$	642,446


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			61,888			61,888			133,468		(156,185	)		101,059
Selling, general and administrative		669			6,519			34,625			34,304			13,334		(34,304	)		55,147
Depreciation and amortization		—			—			187,233			187,233			7,121		(187,233	)		194,354
Losses on derivative financial instruments		—			—			17,801			—			2,721		—			20,522


Total operating expenses		669			6,519			301,547			283,425			156,644		(377,722	)		371,082


Income (loss) from operations		(669	)		(6,519	)		271,252			289,375			7,304		(289,379	)		271,364
Interest (income) expense, net		14,177			152,451			157,397			(2,936	)		1,836		2,936			325,861
Loss on early extinguishment of debt		—			—			(157,953	)		(128,991	)		—		128,991			(157,953	)
Subsidiary income (loss)		(198,418	)		(36,137	)		9,459			9,459			—		215,637			—
Loss from previously unconsolidated affiliates		—			—			(4,589	)		(4,589	)		—		4,589			(4,589	)
Other income, net		—			—			1,215			1,217			2,176		(1,317	)		3,291

Income (loss) before income taxes		(213,264	)		(195,107	)		(38,013	)		169,407			7,644		55,585			(213,748	)
Provision for (benefit from) income taxes		—			—			(1,876	)		(1,876	)		2,610		1,876			734

Net income (loss)		(213,264	)		(195,107	)		(36,137	)		171,283			5,034		53,709			(214,482	)
Net loss attributable to noncontrolling interest		—			—			—			—			1,114		—			1,114


Net income (loss) attributable to Intelsat S.A.	$	(213,264	)	$	(195,107	)	$	(36,137	)	$	171,283		$	6,148	$	53,709		$	(213,368	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non-Guarantor Subsidiaries			Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	1,136,571		$	1,136,575		$	358,691		$	(1,348,999	)	$	1,282,838


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			131,576			152,103			285,163			(364,526	)		204,316
Selling, general and administrative		2,055			12,705			64,668			63,698			24,960			(63,698	)		104,388
Depreciation and amortization		—			—			356,108			339,004			20,023			(339,635	)		375,500
Losses on derivative financial instruments		—			—			24,776			—			838			—			25,614


Total operating expenses		2,055			12,705			577,128			554,805			330,984			(767,859	)		709,818


Income (loss) from operations		(2,055	)		(12,705	)		559,443			581,770			27,707			(581,140	)		573,020
Interest (income) expense, net		31,160			305,259			293,002			(126,324	)		8,701			126,324			638,122
Loss on early extinguishment of debt		—			—			(43,383	)		—			—			—			(43,383	)
Subsidiary income (loss)		(75,189	)		248,034			11,678			11,678			—			(196,201	)		—
Other income (expense), net		(1	)		(1	)		3,588			3,595			(1,922	)		(4,262	)		997

Income (loss) before income taxes		(108,405	)		(69,931	)		238,324			723,367			17,084			(907,927	)		(107,488	)
Provision for (benefit from) income taxes		—			—			(9,710	)		(9,710	)		10,101			9,726			407

Net income (loss)		(108,405	)		(69,931	)		248,034			733,077			6,983			(917,653	)		(107,895	)
Net income attributable to noncontrolling interest		—			—			—			—			(563	)		—			(563	)


Net income (loss) attributable to Intelsat S.A.	$	(108,405	)	$	(69,931	)	$	248,034		$	733,077		$	6,420		$	(917,653	)	$	(108,458	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non-Guarantor Subsidiaries		Consolidation and Eliminations			Consolidated

Revenue	$	—		$	—		$	1,142,766		$	1,142,767		$	326,914	$	(1,329,813	)	$	1,282,634


Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		—			—			126,105			126,105			267,020		(313,148	)		206,082
Selling, general and administrative		1,594			12,845			66,766			66,190			25,541		(66,190	)		106,746
Depreciation and amortization		—			—			375,061			375,061			14,295		(375,061	)		389,356

(Gains) losses on derivative financial instruments		—			—			15,876			(4,461	)		2,932		4,461			18,808


Total operating expenses		1,594			12,845			583,808			562,895			309,788		(749,938	)		720,992


Income (loss) from operations		(1,594	)		(12,845	)		558,958			579,872			17,126		(579,875	)		561,642
Interest expense, net		43,624			307,387			321,321			28,052			2,319		(28,052	)		674,651
Loss on early extinguishment of debt		(78,960	)		—			(247,223	)		(218,259	)		—		218,259			(326,183	)
Subsidiary income (loss)		(304,684	)		22,460			24,543			24,543			—		233,138			—
Loss from previously unconsolidated affiliates		—			—			(4,469	)		(4,469	)		—		4,469			(4,469	)
Other income, net		—			—			1,099			1,099			6,169		(1,200	)		7,167

Income (loss) before income taxes		(428,862	)		(297,772	)		11,587			354,734			20,976		(97,157	)		(436,494	)
Provision for (benefit from) income taxes		—			—			(10,873	)		(10,873	)		4,620		10,873			(6,253	)

Net income (loss)		(428,862	)		(297,772	)		22,460			365,607			16,356		(108,030	)		(430,241	)
Net loss attributable to noncontrolling interest		—			—			—			—			1,275		—			1,275


Net income (loss) attributable to Intelsat S.A.	$	(428,862	)	$	(297,772	)	$	22,460		$	365,607		$	17,631	$	(108,030	)	$	(428,966	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidation and Eliminations			Consolidated

Cash flows from operating activities:	$	(11,362	)	$	(324,917	)	$	653,965		$	389,995		$	64,961		$	(389,955	)	$	382,647

Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			(471,475	)		(471,475	)		(5,286	)		471,475			(476,761	)
Repayment from (disbursements for) intercompany loans		—			—			8,888			(31,820	)		—			22,932			—
Investment in subsidiaries		(4,203	)		—			292			292			—			3,619			—
Dividend from affiliates		13,990			338,040			15,198			15,198			—			(382,426	)		—

Net cash provided by (used in) investing activities		9,787			338,040			(447,097	)		(487,805	)		(5,286	)		115,600			(476,761	)

Cash flows from financing activities:
Repayments of long-term debt		—			—			(1,338,163	)		—			(12,209	)		—			(1,350,372	)
Proceeds from issuance of long-term debt		—			—			1,471,000			—			—			—			1,471,000
Proceeds from (repayment of) intercompany borrowing		1,800			—			—			—			(10,688	)		8,888			—
Debt issuance costs		—			—			(19,444	)		—			—			—			(19,444	)

Payment of premium on early retirement of debt		—			—			(39,475	)		—			—			—			(39,475	)
Principal payments on deferred satellite performance incentives		—			—			(6,907	)		(6,907	)		(441	)		6,907			(7,348	)
Capital contribution from parent		—			—			—			10,775			3,911			(14,686	)		—
Dividends to shareholders		—			(13,990	)		(338,040	)		—			(15,198	)		367,228			—
Capital contribution from noncontrolling interest		—			—			—			—			6,105			—			6,105
Dividends paid to noncontrolling interest		—			—			—			—			(4,673	)		—			(4,673	)

Net cash provided by (used in) financing activities		1,800			(13,990	)		(271,029	)		3,868			(33,193	)		368,337			55,793

Effect of exchange rate changes on cash and cash equivalents		(1	)		—			(369	)		(362	)		(1,923	)		362			(2,293	)

Net change in cash and cash equivalents		224			(867	)		(64,530	)		(94,304	)		24,559			94,304			(40,614	)
Cash and cash equivalents, beginning of period		511			908			240,175			237,906			53,106			(237,906	)		294,700

Cash and cash equivalents, end of period	$	735		$	41		$	175,645		$	143,602		$	77,665		$	(143,602	)	$	254,086

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in thousands)


	Intelsat S.A.			Intelsat Luxembourg			Intelsat Jackson			Jackson Subsidiary Guarantors			Non-Guarantor Subsidiaries			Consolidation and Eliminations			Consolidated

Cash flows from operating activities:	$	(30,136	)	$	(255,417	)	$	744,129		$	769,167		$	(20,007	)	$	(764,575	)	$	443,161

Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			(365,287	)		(365,287	)		(47,736	)		365,600			(412,710	)
Repayment from intercompany loans		—			—			—			1,479			787			(2,266	)		—
Capital contributions to previously unconsolidated affiliates		—			—			(6,105	)		(6,105	)		—			6,105			(6,105	)
Investment in subsidiaries		(3,100	)		—			—			(4,661	)		—			7,761			—
Dividend from affiliates		550,844			797,373			13,175			13,175			—			(1,374,567	)		—
Other investing activities		—			—			2,261			2,261			—			(2,261	)		2,261

Net cash provided by (used in) investing activities		547,744			797,373			(355,956	)		(359,138	)		(46,949	)		(999,628	)		(416,554	)

Cash flows from financing activities:
Repayments of long-term debt		(485,841	)		—			(5,629,053	)		(5,289,423	)		—			5,289,423			(6,114,894	)
Proceeds from issuance of long-term debt		—			—			5,883,750			—			35,173			—			5,918,923
Proceeds from (repayment of) intercompany borrowing		—			—			(787	)		112,419			—			(111,632	)		—
Debt issuance costs		—			—			(69,307	)		—			—			—			(69,307	)
Payment of premium on early retirement of debt		(36,770	)		—			(134,277	)		(108,163	)		—			108,163			(171,047	)
Principal payments on deferred satellite performance incentives		—			—			(6,685	)		(6,685	)		(206	)		6,685			(6,891	)
Capital contribution from parent		—			—			—			4,993,408			7,761			(5,001,169	)		—
Dividends to shareholders		—			(550,844	)		(797,373	)		(405,170	)		(13,175	)		1,766,562			—
Noncontrolling interest in New Dawn		—			—			—			—			1,558			—			1,558

Net cash provided by (used in) financing activities		(522,611	)		(550,844	)		(753,732	)		(703,614	)		31,111			2,058,032			(441,658	)

Effect of exchange rate changes on cash and cash equivalents		—			(1	)		—			(244	)		4,165			—			3,920

Net change in cash and cash equivalents		(5,003	)		(8,889	)		(365,559	)		(293,829	)		(31,680	)		293,829			(411,131	)
Cash and cash equivalents, beginning of period		7,315			10,017			595,472			468,867			80,126			(468,867	)		692,930

Cash and cash equivalents, end of period	$	2,312		$	1,128		$	229,913		$	175,038		$	48,446		$	(175,038	)	$	281,799

(Certain totals may not add due to the effects of rounding)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and their notes included elsewhere in this Quarterly Report. See “Forward-Looking Statements” for a discussion of factors that could cause our future financial condition and results of operations to be different from those discussed below.

Overview

We operate the world’s largest satellite services business, providing a critical layer in the global communications infrastructure. We generate more revenue, operate more satellite capacity, hold more orbital location rights, contract more backlog, serve more commercial customers and deliver services in more countries than any other commercial satellite operator. We provide diversified communications services to the world’s leading media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications, multinational corporations and ISPs. We are also the leading provider of commercial satellite capacity to the U.S. government and other select military organizations and their contractors.

Our network solutions are a critical component of our customers’ infrastructures and business models. Our customers use our global network for a broad range of applications, from global distribution of content for media companies to providing the transmission layer for unmanned aerial vehicles to enabling essential network backbones for telecommunications providers. In addition, our satellite solutions provide higher reliability than is available from local terrestrial telecommunications services in many regions and allow our customers to reach geographies that they would otherwise be unable to serve.

2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

In connection with these tender offers and redemptions, we recognized a loss on early extinguishment of debt of $43.4 million in the second quarter of 2012, consisting of the difference between the carrying value of the aggregate debt repurchased or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt premium and debt issuance costs.

Results of Operations

Three Months Ended June 30, 2011 and 2012

The following table sets forth our comparative statements of operations for the periods shown with the increase (decrease) and percentage changes, except those deemed not meaningful (“NM”), between the periods presented (in thousands, except percentages):


							Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2012
	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012			Increase (Decrease)			Percentage Change
Revenue	$	642,446		$	638,668		$	(3,778	)		(1	)%
Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		101,059			99,307			(1,752	)		(2	)
Selling, general and administrative		55,147			53,421			(1,726	)		(3	)
Depreciation and amortization		194,354			188,628			(5,726	)		(3	)
Losses on derivative financial instruments		20,522			15,756			(4,766	)		(23	)

Total operating expenses		371,082			357,112			(13,970	)		(4	)

Income from operations		271,364			281,556			10,192			4
Interest expense, net		325,861			326,691			830			—
Loss on early extinguishment of debt		(157,953	)		(43,383	)		114,570			73

Loss from previously unconsolidated affiliates		(4,589	)		—			4,589			NM
Other income (expense), net		3,291			(1,906	)		(5,197	)		NM

Loss before income taxes		(213,748	)		(90,424	)		123,324			58
Provision for (benefit from) income taxes		734			(6,797	)		(7,531	)		NM

Net loss		(214,482	)		(83,627	)		130,855			61	%
Net (income) loss attributable to noncontrolling interest		1,114			(382	)		(1,496	)		NM

Net loss attributable to Intelsat S.A.	$	(213,368	)	$	(84,009	)	$	129,359			61	%

Revenue

We earn revenue primarily by providing services over satellite transponder capacity to our customers. Our customers generally obtain satellite capacity from us by placing an order pursuant to one of several master customer service agreements. Our master customer service agreements offer different service types, including transponder services, managed services, and channel, which are all services that are provided on, or used to provide access to, our global network. We refer to these services as on-network services. Our customer agreements also cover services that we procure from third parties and resell, which we refer to as off-network services. These services can include transponder services and other satellite-based transmission services sourced from other operators, often in frequencies not available on our network. Under the category Off-Network and Other Revenues, we also include revenues from consulting and other services.

The following table sets forth our comparative revenue by service type, with Off-Network and Other Revenues shown separately from On-Network Revenues, for the periods shown (in thousands, except percentages):


	Three Months Ended June 30, 2011		Three Months Ended June 30, 2012		Increase (Decrease)			Percentage Change
On-Network Revenues
Transponder services	$	474,722	$	480,803	$	6,081			1	%
Managed services		70,350		67,205		(3,145	)		(4	)
Channel		26,723		23,461		(3,262	)		(12	)

Total on-network revenues		571,795		571,469		(326	)		(0	)
Off-Network and Other Revenues
Transponder, MSS and other off-network services		56,679		55,388		(1,291	)		(2	)
Satellite-related services		13,972		11,811		(2,161	)		(15	)

Total off-network and other revenues		70,651		67,199		(3,452	)		(5	)

Total	$	642,446	$	638,668	$	(3,778	)		(1	)%

Total revenue for the three months ended June 30, 2012 decreased by $3.8 million, or 1%, as compared to the three months ended June 30, 2011. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

•

Transponder services— an aggregate increase of $6.1 million, primarily due to a $10.0 million increase in revenue from growth in capacity sold to media customers mainly in the Latin America and Caribbean, the Europe and the Asia-Pacific regions, as well as a $1.3 million increase in revenue from capacity sold by our Intelsat General business, partially offset by an aggregate $5.2 million decrease in revenue from network services customers, reflecting a decline in the Europe region for services in Africa, but an increase in the Latin America and Caribbean region.

•

Managed services— an aggregate decrease of $3.1 million, largely due to a decrease in revenue from network services customers for international trunking primarily in Africa, a trend which we expect will continue due to the migration of services in this region to fiber optic cable.

•

Channel— an aggregate decrease of $3.3 million related to a continued decline from the migration of international point-to-point satellite traffic to fiber optic cable, a trend which we expect will continue.

Off-Network and Other Revenues:

•

Transponder, MSS and other off-network services— an aggregate decrease of $1.3 million, primarily due to declines of $1.8 million in mobile satellite services (“MSS”) revenue and $2.5 million in off-network transponder services for network services and media customers. The decreases were partially offset by a $2.9 million increase in off-network transponder services related to contracts being implemented by our Intelsat General business.

•

Satellite-related services— an aggregate decrease of $2.2 million, primarily due to lower professional fees earned for providing government professional services and flight operations support for third-party satellites as compared to the second quarter of 2011.

Operating Expenses

Direct Costs of Revenue (Exclusive of Depreciation and Amortization)

Direct costs of revenue decreased by $1.8 million, or 2%, to $99.3 million for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. The decrease was primarily due to a $3.1 million decline in costs attributable to purchases of off-network FSS capacity services and other third party services and a $1.5 million reduction in the cost of MSS capacity purchased related to solutions sold by our Intelsat General business, partially offset by a net increase of $2.8 million in staff related and other miscellaneous expenses.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $1.7 million, or 3%, to $53.4 million for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. The decrease was primarily due to $1.9 million of lower professional fees and $1.5 million of lower non-cash stock compensation costs associated with the amended and restated Intelsat Global, Ltd. 2008 Share Incentive Plan (the “2008 Share Plan”), partially offset by a $1.7 million increase in bad debt expense.

Depreciation and Amortization

Depreciation and amortization expense decreased by $5.7 million, or 3%, to $188.6 million for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. This decrease was primarily due to the following:

•

a net decrease of $8.4 million in depreciation expense due to the timing of certain satellites becoming fully depreciated and changes in estimated remaining useful lives of certain satellites;

•

a decrease of $4.5 million in depreciation expense due to the timing of ground and other assets placed in service or becoming fully depreciated; and

•

a decrease of $3.4 million in amortization expense primarily due to changes in the expected pattern of consumption of amortizable intangible assets as these assets primarily include acquired backlog, which relates to contracts covering varying time periods that expire over time, and acquired customer relationships for which the value diminishes over time; partially offset by

•

an increase of $11.0 million in depreciation expense resulting from the impact of satellites placed into service during 2011 and the first quarter of 2012.

Losses on Derivative Financial Instruments

Losses on derivative financial instruments were $15.8 million for the three months ended June 30, 2012 compared to $20.5 million for the three months ended June 30, 2011. The losses on derivative financial instruments are related to the net loss on our interest rate swaps, which reflects interest expense accrued on the interest rate swaps as well as the change in fair value.

Interest Expense, Net

Interest expense, net consists of the gross interest expense we incur less the amount of interest we capitalize related to capital assets under construction and less interest income earned. As of June 30, 2012, we also held interest rate swaps with an aggregate notional amount of $2.3 billion to economically hedge the variability in cash flow on a portion of the floating-rate term loans under our senior secured and unsecured credit facilities. The swaps have not been designated as hedges for accounting purposes. Interest expense, net increased by $0.8 million to $326.7 million for the three months ended June 30, 2012, as compared to $325.9 million for the three months ended June 30, 2011. The increase in interest expense, net was principally due to the following:

•

a net increase of $9.7 million in interest expense, principally reflecting $11.3 million of higher interest expense resulting from the period during which the newly issued 2020 Jackson Notes were outstanding but the 2016 Jackson 9 ¹ / ₂ % Notes and the 2016 Jackson 11 ¹ / ₄ % Notes had not been fully redeemed or repurchased in our 2012 notes refinancing (see—Liquidity and Capital Resources—Long-Term Debt—2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions); partially offset by

•

a decrease of $5.1 million in interest expense resulting from our refinancing transactions, redemptions and offerings in 2011 (see—Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions); and

•

a decrease of $4.9 million from higher capitalized interest resulting from increased levels of satellites and related assets under construction.

Non-cash items in total interest expense, net were $18.6 million for the three months ended June 30, 2012 and included $4.0 million of payment-in-kind interest expense and $14.6 million primarily associated with the amortization of deferred financing fees incurred as a result of new or refinanced debt and the amortization and accretion of discounts and premiums.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt was $43.4 million for the three months ended June 30, 2012 as compared to $158.0 million for the three months ended June 30, 2011. The 2012 loss related to the repayment of debt in connection with the 2012 Intelsat Jackson tender offers and redemptions (see Liquidity and Capital Resources—Long-Term Debt—2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions). In the three months ended June 30, 2012, Intelsat Jackson repurchased or redeemed $1,146.9 million of its debt for $1,186.2 million, excluding accrued and unpaid interest and related fees of $57.7 million. The loss of $43.4 million was primarily driven by a $39.5 million difference between the carrying value of the debt repurchased or redeemed and the total cash amount paid (including related fees), together with a write-off of $3.9 million of unamortized debt premium and debt issuance costs.

The 2011 loss on early extinguishment of debt of $158.0 million related to the repayment of debt in connection with the 2011 refinancings, redemptions and tender offers (see Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions). In April and May 2011, we redeemed or repurchased $2,527.0 million of Intelsat Sub Holdco, Intelsat Jackson and Intermediate Holdco notes for $2,604.4 million, excluding accrued and unpaid interest of $58.1 million. The loss of $158.0 million was driven by a $77.4 million difference between the carrying value of the debt repurchased or redeemed and the total cash amount paid (including related fees), together with a write-off of $80.6 million of unamortized debt discounts and debt issuance costs.

Loss from Previously Unconsolidated Affiliates

Loss from previously unconsolidated affiliates was $4.6 million for the three months ended June 30, 2011 with no comparable amount for the three months ended June 30, 2012, due to the consolidation of the Horizons Holdings joint venture on September 30, 2011 (see Note 6(a)—Investments—Horizons Holdings).

Other Income (Expense), Net

Other expense, net was $1.9 million for the three months ended June 30, 2012 as compared to other income, net of $3.3 million for the three months ended June 30, 2011. The decrease was primarily due to a $3.3 million exchange rate loss during the three months ended June 30, 2012, as compared to a $2.0 million exchange rate gain for the three months ended June 30, 2011, primarily related to our business conducted in Brazilian reais and euros. The 2012 exchange rate loss is partially offset by $1.4 million in miscellaneous other income.

Provision for (Benefit from) Income Taxes

Our benefit from income taxes was $6.8 million for the three months ended June 30, 2012 as compared to a provision for income taxes of $0.7 million for the three months ended June 30, 2011. The difference was principally due to higher pre-tax losses in certain taxable jurisdictions.

Cash paid for income taxes, net of refunds, totaled $7.4 million and $4.2 million for the three months ended June 30, 2011 and 2012, respectively.

Six Months Ended June 30, 2011 and 2012


							Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2012
	Six Months Ended June 30, 2011			Six Months Ended June 30, 2012			Increase (Decrease)			Percentage Change
Revenue	$	1,282,634		$	1,282,838		$	204			—	%
Operating expenses:
Direct costs of revenue (exclusive of depreciation and amortization)		206,082			204,316			(1,766	)		(1	)
Selling, general and administrative		106,746			104,388			(2,358	)		(2	)
Depreciation and amortization		389,356			375,500			(13,856	)		(4	)
Losses on derivative financial instruments		18,808			25,614			6,806			36

Total operating expenses		720,992			709,818			(11,174	)		(2	)

Income from operations		561,642			573,020			11,378			2
Interest expense, net		674,651			638,122			(36,529	)		(5	)
Loss on early extinguishment of debt		(326,183	)		(43,383	)		282,800			87

Loss from previously unconsolidated affiliates		(4,469	)		—			4,469			NM
Other income, net		7,167			997			(6,170	)		(86	)

Loss before income taxes		(436,494	)		(107,488	)		329,006			75
Provision for (benefit from) income taxes		(6,253	)		407			6,660			NM

Net loss		(430,241	)		(107,895	)		322,346			75	%
Net (income) loss attributable to noncontrolling interest		1,275			(563	)		(1,838	)		NM

Net loss attributable to Intelsat S.A.	$	(428,966	)	$	(108,458	)	$	320,508			75	%


	Six Months Ended June 30, 2011		Six Months Ended June 30, 2012		Increase (Decrease)			Percentage Change
On-Network Revenues
Transponder services	$	942,005	$	960,762	$	18,757			2	%
Managed services		141,297		133,177		(8,120	)		(6	)
Channel		54,019		47,281		(6,738	)		(12	)

Total on-network revenues		1,137,321		1,141,220		3,899			0
Off-Network and Other Revenues
Transponder, MSS and other off-network services		116,148		119,822		3,674			3
Satellite-related services		29,165		21,796		(7,369	)		(25	)

Total off-network and other revenues		145,313		141,618		(3,695	)		(3	)

Total	$	1,282,634	$	1,282,838	$	204			0	%

Total revenue for the six months ended June 30, 2012 increased by $0.2 million as compared to the six months ended June 30, 2011. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

•

Transponder services— an aggregate increase of $18.8 million, primarily due to a $22.5 million increase in revenue from growth in capacity sold to media customers mainly in the Latin America and Caribbean, the Europe, the Asia-Pacific and the North America regions, as well as a $5.1 million increase in revenue from capacity sold by our Intelsat General business, partially offset by an aggregate $8.8 million decrease in revenue from network services customers, reflecting a decline in the Europe region for services in Africa, but an increase in the Latin America and Caribbean region.

•

Managed services— an aggregate decrease of $8.1 million, largely due to a decrease in revenue from network services customers for international trunking primarily in Africa, a trend which we expect will continue due to the migration of services in this region to fiber optic cable.

•

Channel— an aggregate decrease of $6.7 million related to a continued decline from the migration of international point-to-point satellite traffic to fiber optic cable, a trend which we expect will continue.

Off-Network and Other Revenues:

•

Transponder, MSS and other off-network services— an aggregate increase of $3.7 million, primarily due to an increase of $7.4 million in off-network transponder services revenue largely related to contracts being implemented by our Intelsat General business and a $5.0 million increase in customer premises equipment revenue, partially offset by a $4.8 million decline in off-network transponder and media services revenue and a $3.9 million decrease in MSS revenue.

•

Satellite-related services— an aggregate decrease of $7.4 million, primarily due to lower professional fees earned for providing government professional services and flight operations support for third-party satellites as compared to the six months ended June 30, 2011.

Operating Expenses

Direct Costs of Revenue (Exclusive of Depreciation and Amortization)

Direct costs of revenue decreased by $1.8 million, or 1%, to $204.3 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. The decline was primarily due to a net $5.8 million decrease in costs related to earth station operations and costs attributable to purchases of off-network FSS capacity and other third party services and a $3.3 million decrease in the cost of MSS capacity purchased related to solutions sold by our Intelsat General business, partially offset by a $3.9 million increase in costs of equipment and a net $3.4 million increase in staff related and other miscellaneous expenses.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $2.4 million, or 2%, to $104.4 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. The decrease was primarily due to a $5.9 million decrease in professional fees and $2.5 million of lower non-cash stock compensation costs associated with the 2008 Share Plan, partially offset by a $3.9 million increase in bad debt expense and a net $2.1 million increase in staff related and other miscellaneous expenses.

Depreciation and Amortization

Depreciation and amortization expense decreased by $13.9 million, or 4%, to $375.5 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. This decrease was primarily due to the following:

•

a net decrease of $18.3 million in depreciation expense due to the timing of certain satellites becoming fully depreciated and changes in estimated remaining useful lives of certain satellites;

•

a decrease of $9.7 million in depreciation expense due to the timing of ground and other assets placed in service or becoming fully depreciated; and

•

a decrease of $6.8 million in amortization expense primarily due to changes in the expected pattern of consumption of amortizable intangible assets as these assets primarily include acquired backlog, which relates to contracts covering varying time periods that expire over time, and acquired customer relationships for which the value diminishes over time; partially offset by

•

an increase of $21.3 million in depreciation expense resulting from the impact of satellites placed into service during 2011 and the first quarter of 2012.

Losses on Derivative Financial Instruments

Losses on derivative financial instruments were $25.6 million for the six months ended June 30, 2012 compared to $18.8 million for the six months ended June 30, 2011. The losses on derivative financial instruments related to the net loss on our interest rate swaps, which reflects interest expense accrued on the interest rate swaps as well as the change in fair value.

Interest Expense, Net

Interest expense, net decreased by $36.5 million, or 5%, to $638.1 million for the six months ended June 30, 2012 as compared to $674.7 million for the six months ended June 30, 2011. The decrease in interest expense, net was principally due to the following:

•

a net decrease of $35.6 million in interest expense resulting from our refinancing transactions, redemptions and offerings in 2011 (see—Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions);

•

a decrease of $10.1 million from higher capitalized interest resulting from increased levels of satellites and related assets under construction; partially offset by

•

a net increase of $9.7 million in interest expense, principally reflecting $11.3 million of higher interest expense resulting from the period during which the newly issued 2020 Jackson Notes were outstanding but the 2016 Jackson 9 ¹ / ₂ % Notes and the 2016 Jackson 11 ¹ / ₄ % Notes had not been fully redeemed or repurchased in our 2012 notes refinancing (see—Liquidity and Capital Resources—Long-Term Debt – 2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions).

Non-cash items in interest expense, net were $34.0 million for the six months ended June 30, 2012 and included $5.0 million of payment-in-kind interest expense and $29.0 million primarily associated with the amortization of deferred financing fees incurred as a result of new or refinanced debt and the amortization and accretion of discounts and premiums.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt was $43.4 million for the six months ended June 30, 2012 as compared to $326.2 million for the six months ended June 30, 2011. The 2012 loss related to the repayment of debt in connection with the 2012 Intelsat Jackson tender offers and redemptions (see Liquidity and Capital Resources—Long-Term Debt—2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions). In the three months ended June 30, 2012, Intelsat Jackson repurchased or redeemed $1,146.9 million of its debt for $1,186.2 million, excluding accrued and unpaid interest and related fees of $57.7 million. The loss of $43.4 million was primarily driven by a $39.5 million difference between the carrying value of the debt repurchased or redeemed and the total cash amount paid (including related fees), together with a write-off of $3.9 million of unamortized debt premium and debt issuance costs.

The 2011 loss on early extinguishment of debt of $326.2 million related to the repayment of debt in connection with the 2011 refinancings, redemptions and tender offers (see Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions). In January 2011, we repurchased $2,849.3 million of Intelsat Corp and Intelsat Sub Holdco debt for $2,906.1 million, excluding accrued and unpaid interest and related fees of $8.7 million. In March 2011, we redeemed $710.8 million of Intelsat S.A. and Intelsat Sub Holdco debt for $747.6 million, excluding $19.1 million of accrued and unpaid interest. In April and May 2011, we redeemed or repurchased $2,527.0 million of Intelsat Sub Holdco, Intelsat Jackson and Intermediate Holdco notes for $2,604.4 million, excluding accrued and unpaid interest of $58.1 million. The loss of $326.2 million was driven by a $171.1 million difference between the carrying value of the debt repurchased, redeemed or repaid and the total cash amount paid (including related fees), together with a write-off of $155.1 million of unamortized debt discounts and debt issuance costs.

Loss from Previously Unconsolidated Affiliates

Loss from previously unconsolidated affiliates was $4.5 million for the six months ended June 30, 2011 with no comparable amount for the six months ended June 30, 2012, due to the consolidation of the Horizons Holdings joint venture on September 30, 2011 (see Note 6(a)—Investments—Horizons Holdings).

Other Income, Net

Other income, net was $1.0 million for the six months ended June 30, 2012 as compared to $7.2 million for the six months ended June 30, 2011. The decrease was primarily due to a $2.3 million exchange rate loss during the six months ended June 30, 2012, as compared to a $3.9 million exchange rate gain for the six months ended June 30, 2011. The 2012 exchange rate loss is offset by $3.3 million in miscellaneous other income.

Provision for (Benefit from) Income Taxes

Our provision for income taxes was $0.4 million for the six months ended June 30, 2012 as compared to a benefit from income taxes of $6.3 million for the six months ended June 30, 2011. The difference was principally due to a release of withholding tax liabilities resulting from certain sales in the Asia-Pacific region as well as the refinancing expenses and changes in the balance of deferred taxes as a result of a 2011 reorganization, both recorded in the three months ended March 31, 2011, and due to a 2012 internal subsidiary merger which caused a remeasurement of our deferred taxes in the three months ended March 31, 2012.

Cash paid for income taxes, net of refunds, totaled $14.8 million and $18.2 million for the six months ended June 30, 2011 and 2012, respectively.

EBITDA

EBITDA consists of earnings before net interest, gain (loss) on early extinguishment of debt, taxes and depreciation and amortization. Given our high level of leverage, refinancing activities are a frequent part of our efforts to manage our costs of borrowing. Accordingly, we consider (gain) loss on early extinguishment of debt an element of interest expense. EBITDA is a measure commonly used in the fixed satellite services sector, and we present EBITDA to enhance the understanding of our operating performance. We use EBITDA as one criterion for evaluating our performance relative to that of our peers. We believe that EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. However, EBITDA is not a measure of financial performance under U.S. GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA should not be considered as an alternative to operating income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.

A reconciliation of net loss to EBITDA for the periods shown is as follows (in thousands):


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2012			Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Net loss	$	(214,482	)	$	(83,627	)	$	(430,241	)	$	(107,895	)
Add (Subtract):
Interest expense, net		325,861			326,691			674,651			638,122
Loss on early extinguishment of debt		157,953			43,383			326,183			43,383
Provision for (benefit from) income taxes		734			(6,797	)		(6,253	)		407
Depreciation and amortization		194,354			188,628			389,356			375,500

EBITDA	$	464,420		$	468,278		$	953,696		$	949,517

Intelsat S.A. Adjusted EBITDA

In addition to EBITDA, we calculate a measure called Intelsat S.A. Adjusted EBITDA to assess the operating performance of Intelsat S.A. Intelsat S.A. Adjusted EBITDA consists of EBITDA of Intelsat S.A. as adjusted to exclude or include certain unusual items, certain other operating expense items and certain other adjustments as described in the table and related footnotes below. Our management believes that the presentation of Intelsat S.A. Adjusted EBITDA provides useful information to investors, lenders and financial analysts regarding our financial condition and results of operations because it permits clearer comparability of our operating performance between periods. By excluding the potential volatility related to the timing and extent of non-operating activities, such as

impairments of asset value and gains (losses) on derivative financial instruments, our management believes that Intelsat S.A. Adjusted EBITDA provides a useful means of evaluating the success of our operating activities. We also use Intelsat S.A. Adjusted EBITDA, together with other appropriate metrics, to set goals for and measure the operating performance of our business, and it is one of the principal measures we use to evaluate our management’s performance in determining compensation under our incentive compensation plans. Adjusted EBITDA measures have been used historically by investors, lenders and financial analysts to estimate the value of a company, to make informed investment decisions and to evaluate performance. Our management believes that the inclusion of Intelsat S.A. Adjusted EBITDA facilitates comparison of our results with those of companies having different capital structures.

Intelsat S.A. Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and may not be comparable to similarly titled measures of other companies. Intelsat S.A. Adjusted EBITDA should not be considered as an alternative to operating income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of our operating performance, as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.

A reconciliation of net loss to Intelsat S.A. EBITDA and Intelsat S.A. EBITDA to Intelsat S.A. Adjusted EBITDA is as follows (in thousands):


	Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Net loss	$	(430,241	)	$	(107,895	)

Add (Subtract):
Interest expense, net		674,651			638,122
Loss on early extinguishment of debt		326,183			43,383
Provision for (benefit from) income taxes		(6,253	)		407
Depreciation and amortization		389,356			375,500

Intelsat S.A. EBITDA		953,696			949,517

Add (Subtract):
Compensation and benefits (1)		4,857			3,538
Management fees (2)		12,433			12,531
Loss from previously unconsolidated affiliates (3)		4,469			—
Losses on derivative financial instruments (4)		18,808			25,614
Non-recurring and other non-cash items (5)		6,230			(2,483	)

Intelsat S.A. Adjusted EBITDA (6)	$	1,000,493		$	988,717

(1)	Reflects non-cash expenses incurred relating to our equity compensation plans and a portion of the expenses related to our defined benefit retirement plan and other postretirement benefits.

(2)	Reflects expenses incurred in connection with the monitoring fee agreement with BC Partners Limited and Silver Lake Management Company III, L.L.C. to provide certain monitoring, advisory and consulting services to our subsidiaries.

(3)	Represents gains and losses under the equity method of accounting relating to our investment in Horizons Holdings prior to the consolidation of Horizons Holdings on September 30, 2011.

(4)

Represents (i) the changes in the fair value of the undesignated interest rate swaps, (ii) the difference between the amount of floating rate interest we receive and the amount of fixed-rate interest we pay under such swaps and (iii) the change in the fair value of our put option embedded derivative related to Intelsat Sub Holdco’s 8 ⁷ / ₈ % Senior Notes due 2015, Series B (the “2015 Intelsat Sub Holdco Notes, Series B”), all of which are recognized in operating income.

(5)

Reflects certain non-recurring gains and losses and non-cash items, including costs associated with the 2011 Reorganization and expense for services on the Galaxy13/Horizons-1 and Horizons-2 satellites prior to the consolidation of Horizons Holdings, partially offset by non-cash income related to the settlement of a dispute concerning our investment in WildBlue Communications, Inc. and non-cash income related to the recognition of deferred revenue on a straight-line basis of certain prepaid capacity contracts.

(6)	Approximately $7.8 million of the Intelsat S.A. Adjusted EBITDA for the six months ended June 30, 2012 was attributable to our New Dawn Satellite Company Ltd. (“New Dawn”) subsidiary.

Liquidity and Capital Resources

Overview

We are a highly leveraged company and our contractual obligations, commitments and debt service requirements over the next several years are significant. At June 30, 2012, our total indebtedness was $16.1 billion. Our interest expense for the six months ended

June 30, 2012 was $638.1 million, which included $34.0 million of non-cash interest expense. We also expect to make significant capital expenditures in 2012 and future years, as set forth below in —Capital Expenditures. Our primary source of liquidity is and will continue to be cash generated from operations as well as existing cash. At June 30, 2012, cash and cash equivalents were approximately $254.1 million, excluding restricted cash of $118.0 million relating to proceeds received from a New Dawn insurance claim, which we subsequently used to prepay New Dawn debt in July 2012 in accordance with the terms of an agreement entered into with New Dawn’s lenders (see Note 8—Long-Term Debt—New Dawn Credit Facilities). In addition, Intelsat Jackson had $75.0 million outstanding under its $500.0 million revolving credit facility and an additional $387.3 million of available borrowing capacity (net of $37.7 million of letters of credit outstanding) under that revolving credit facility at June 30, 2012.

We currently expect to use cash on hand, cash flows from operations and borrowings under our senior secured revolving credit facility to fund our most significant cash outlays, including debt service requirements and capital expenditures, in the next twelve months and beyond, and expect such sources to be sufficient to fund our requirements over that time and beyond. In past years, our cash flows from operations and cash on hand have been sufficient to fund our interest expense obligations ($1.38 billion and $1.31 billion in 2010 and 2011, respectively) and significant capital expenditures ($982.1 million and $844.7 million in 2010 and 2011, respectively). Additionally we have been able to refinance significant portions of our debt at favorable rates and on favorable terms. Total capital expenditures are expected to range from $775 million to $850 million in 2012, $550 million to $625 million in 2013 and $525 million to $600 million in 2014. In addition, we expect to receive significant customer prepayments under our customer service contracts. Significant prepayments received in the first half of 2012 totaled $115.9 million. Prepayments are currently expected to range from $150 million to $200 million in 2012, $150 million to $200 million in 2013 and $100 million to $150 million in 2014. However, an inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance our obligations on commercially reasonable terms, would have an adverse effect on our business, financial position, results of operations and cash flows, as well as on our and our subsidiaries’ ability to satisfy their obligations in respect of their respective debt. We also continually evaluate ways to simplify our capital structure and opportunistically extend our maturities and reduce our costs of debt. In addition, we may from time to time retain any future earnings to purchase, repay, redeem or retire any of our outstanding debt securities in privately negotiated or open market transactions, by tender offer or otherwise.

In July 2012, Intelsat Global Service LLC, our indirect subsidiary, entered into an agreement to sell our U.S. administrative headquarters office building in Washington, D.C. (the “U.S. Administrative Headquarters Property”), and to assign our Amended and Restated Lease Agreement with the U.S. Government (the “Ground Lessor”) relating to the U.S. Administrative Headquarters Property to the purchaser, for a purchase price of $85.0 million in cash (the “U.S. Administrative Headquarters Sale”). Upon the closing of the U.S. Administrative Headquarters Sale, we expect to enter into an agreement under which we will temporarily lease from the purchaser a portion of the U.S. Administrative Headquarters Property. The closing of the U.S. Administrative Headquarters Sale is contingent upon the Ground Lessor’s approval, together with other customary closing conditions. We expect to use the proceeds from the U.S. Administrative Headquarters Sale for general corporate purposes, which could include prepayment of existing debt.

Cash Flow Items

Our cash flows consisted of the following for the periods shown (in thousands):


	Six Months Ended June 30, 2011			Six Months Ended June 30, 2012
Net cash provided by operating activities	$	443,161		$	382,647
Net cash used in investing activities		(416,554	)		(476,761	)
Net cash provided by (used in) financing activities		(441,658	)		55,793
Net change in cash and cash equivalents		(411,131	)		(40,614	)

Net Cash Provided by Operating Activities

Net cash provided by operating activities decreased by $60.5 million during the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. During the six months ended June 30, 2012, cash flows from operating activities reflected an $87.9 million cash inflow related to deferred revenue for amounts received from customers for long-term service contracts, partially offset by a $28.5 million cash outflow related to accounts payable and accrued liabilities largely due to tax and staff related payments and a $16.5 million cash outflow related to accrued retirement benefits due to employer contributions to our retirement plan.

Net Cash Used in Investing Activities

Net cash used in investing activities increased by $60.2 million during the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. This increase in investing cash outflow was primarily related to an increase in capital expenditures of $64.1 million in 2012.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities increased by $497.5 million during the six months ended June 30, 2012 as compared to the six months ended June 30, 2011, from a cash outflow of $441.7 million in 2011 to a cash inflow of $55.8 million in 2012. During the six months ended June 30, 2012, cash flows from financing activities reflected the 2012 Intelsat Jackson notes offering and the 2012 Intelsat Jackson tender offers and redemptions, as discussed in— 2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions below. Net cash used in financing activities during the six months ended June 30, 2012 also included a $39.5 million payment of a premium related to the debt transactions noted above and $19.4 million of debt issuance costs related to these debt transactions.

Long-Term Debt

Senior Secured Credit Facilities

On January 12, 2011, Intelsat Jackson, a wholly-owned subsidiary of Intelsat S.A., entered into the Intelsat Jackson Secured Credit Agreement, which includes a $3.25 billion term loan facility maturing in April 2018 and a $500.0 million revolving credit facility with a five year maturity, and borrowed the full $3.25 billion under the term loan facility. The term loan facility requires regularly scheduled quarterly payments of principal equal to 0.25% of the original principal amount of the term loan beginning six months after January 12, 2011, with the remaining unpaid amount due and payable at maturity on April 2, 2018. Up to $350.0 million of the revolving credit facility is available for issuance of letters of credit. Additionally, up to $70.0 million of the revolving credit facility is available for swingline loans. Both the face amount of any outstanding letters of credit and any swingline loans reduce availability under the revolving credit facility on a dollar for dollar basis. The revolving credit facility is available for five years on a revolving basis. Intelsat Jackson is required to pay a commitment fee for the unused commitments under the revolving credit facility, if any, at a rate per annum of 0.375%. As of June 30, 2012, Intelsat Jackson had $75.0 million outstanding under its revolving credit facility and $387.3 million (net of standby letters of credit) of availability remaining thereunder.

The Intelsat Jackson Secured Credit Agreement includes two financial covenants. Intelsat Jackson must maintain a consolidated secured debt to consolidated EBITDA ratio of less than or equal to 3.50 to 1.00 at the end of each fiscal quarter as well as a consolidated EBITDA to consolidated interest expense ratio of greater than or equal to 1.75 to 1.00 at the end of each fiscal quarter, in each case as such financial measures are defined in the Intelsat Jackson Secured Credit Agreement. Intelsat Jackson was in compliance with these financial maintenance covenant ratios with a consolidated secured debt to consolidated EBITDA ratio of 1.54 to 1.00 and a consolidated EBITDA to consolidated interest expense ratio of 2.77 to 1.00 as of June 30, 2012. In the event Intelsat Jackson were to fail to comply with these financial maintenance covenant ratios and were unable to obtain waivers, Intelsat Jackson would default under the Intelsat Jackson Secured Credit Agreement, and the lenders under the Intelsat Jackson Secured Credit Agreement could accelerate our obligations thereunder, which would result in an event of default under our existing notes and the Intelsat Jackson senior unsecured credit agreements.

New Dawn Credit Facilities

On December 5, 2008, New Dawn entered into a $215.0 million secured financing arrangement with an eight-year maturity that consists of senior and mezzanine term loan facilities. The credit facilities are non-recourse to New Dawn’s shareholders, including us and our wholly-owned subsidiaries, beyond the shareholders’ scheduled capital contributions. As of June 30, 2012, New Dawn had aggregate outstanding borrowings of $197.6 million under its credit facilities. In July 2012, New Dawn entered into an agreement with its lenders to use the New Dawn insurance proceeds held as restricted cash to prepay certain of its debt obligations, along with associated interest and fees. Subsequent to this prepayment, New Dawn had aggregate outstanding borrowings of $83.9 million under its debt agreements. During the six months ended June 30, 2012, New Dawn revenue was $15.4 million and approximately $7.8 million of the Intelsat S.A. Adjusted EBITDA was attributable to New Dawn.

Intelsat Luxembourg Senior PIK Election Notes due 2017

2012 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

On April 26, 2012, Intelsat Jackson completed an offering of $1.2 billion aggregate principal amount of the 2020 Jackson Notes. Intelsat Jackson had previously issued $1.0 billion aggregate principal amount of the 2020 Jackson Notes on September 30, 2010. The net proceeds from the 2012 offering were used by Intelsat Jackson to repurchase $49.5 million aggregate principal amount of the 2016 Jackson 9 ¹ / ₂ % Notes and $10.1 million aggregate principal amount of the 2016 Jackson 11 ¹ / ₄ % Notes in tender offers launched on

April 12, 2012 and completed on May 10, 2012. On June 15, 2012, Intelsat Jackson redeemed the remaining $652.4 million aggregate principal amount outstanding of the 2016 Jackson 9 ¹ / ₂ % Notes and an additional $434.9 million aggregate principal amount of the 2016 Jackson 11 ¹ / ₄ % Notes.

Financing Commitment for Intelsat S.A. Senior Notes due 2013

2011 Debt Transactions

2011 Reorganization and 2011 Secured Loan Refinancing

On January 12, 2011, certain of our subsidiaries completed a series of internal transactions and related steps that reorganized the ownership of our assets among our subsidiaries and effectively combined the legacy businesses of Intelsat Sub Holdco and Intelsat Corp in order to simplify our operations and enhance our ability to transact business in an efficient manner. Also on January 12, 2011, Intelsat Jackson entered into the Intelsat Jackson Secured Credit Agreement as discussed above, and borrowed $3.25 billion under the term loan facility. Part of the net proceeds of the term loan, amounting to $2.4 billion, were contributed or loaned to Intelsat Corp, which used such funds to repay its existing indebtedness under Intelsat Corp’s senior secured credit facilities and to redeem Intelsat Corp’s 9 ¹ / ₄ % Senior Notes due 2016. Separately, Intelsat Corp also redeemed all of its 9 ¹ / ₄ % Senior Notes due 2014 and its 6 ⁷ / ₈ % Senior Secured Debentures due 2028. In addition, Intelsat Jackson contributed approximately $330.2 million of the net proceeds of the new term loan to Intelsat Sub Holdco to repay all existing indebtedness under Intelsat Sub Holdco’s senior secured credit facilities. The entry into the Intelsat Jackson Secured Credit Agreement, the repayment of the existing indebtedness of Intelsat Corp and the repayment of all of the secured existing indebtedness of Intelsat Sub Holdco are referred to collectively as the “2011 Secured Loan Refinancing”. In connection with the 2011 Secured Loan Refinancing, certain of our interest rate swaps were assigned by Intelsat Sub Holdco and Intelsat Corp to Intelsat Jackson, and are now secured by a first priority security interest in the collateral that also secures obligations under the Intelsat Jackson Secured Credit Agreement.

2011 Notes Redemptions

On March 18, 2011, Intelsat S.A. redeemed all of the $485.8 million aggregate principal amount outstanding of its 7 ⁵ / ₈ % Senior Notes due 2012. Additionally, on March 18, 2011, Intelsat Sub Holdco redeemed $225.0 million aggregate principal amount outstanding of its 8 ¹ / ₂ % Senior Notes due 2013 (the “2013 Sub Holdco Notes”). On April 8, 2011, Intermediate Holdco redeemed all of the $4.5 million aggregate principal amount outstanding of its 9 ¹ / ₄ % Senior Discount Notes due 2015.

2011 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

On April 5, 2011, Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of senior notes, consisting of $1.5 billion aggregate principal amount of 7 ¹ / ₄ % Senior Notes due 2019 and $1.15 billion aggregate principal amount of 7 ¹ / ₂ % Senior Notes due 2021 (collectively, the “New Jackson Notes”). The net proceeds from the sale of the New Jackson Notes were primarily used to repurchase all of the following notes in tender offers launched on March 21, 2011 and completed on April 15, 2011, and to subsequently redeem the remaining outstanding amounts of such notes on May 5, 2011:

•

$481.0 million aggregate principal amount outstanding of the Intermediate Holdco 9 ¹ / ₂ % Senior Discount Notes due 2015;

•

$625.3 million aggregate principal amount outstanding of the 2013 Sub Holdco Notes, after giving effect to the March 2011 partial redemption of the 2013 Sub Holdco Notes, as discussed above;

•

$681.0 million aggregate principal amount outstanding of the Intelsat Sub Holdco 8 ⁷ / ₈ % Senior Notes due 2015;

•

$400.0 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B;

•

$55.0 million aggregate principal amount outstanding of the Intelsat Jackson 9 ¹ / ₄ % Senior Notes due 2016; and

•

$284.6 million aggregate principal amount outstanding of the Intelsat Jackson 11 ¹ / ₂ % Senior Notes due 2016.

As a result, all of the above series of notes were paid off in full and no third party debt remained outstanding at Intermediate Holdco and Intelsat Sub Holdco as of May 5, 2011.

Contracted Backlog

We have historically had and currently have a substantial contracted backlog, which provides some assurance regarding our future revenue expectations. Contracted backlog is our expected future revenue under customer contracts, and includes both cancelable and non-cancelable contracts. Approximately 87% of our total contracted backlog as of June 30, 2012 related to contracts

that were non-cancelable and approximately 10% related to contracts that were cancelable subject to substantial termination fees. In certain cases of breach for non-payment or customer bankruptcy, we may not be able to recover the full value of certain contracts or termination fees. Our contracted backlog includes 100% of the backlog of our consolidated ownership interests, which is consistent with the accounting for our ownership interests in these entities. Our contracted backlog was approximately $10.6 billion as of June 30, 2012. This backlog reduces the volatility of our net cash provided by operating activities more than would be typical for a company outside our industry.

Capital Expenditures

Our capital expenditures depend on our business strategies and reflect our commercial responses to opportunities and trends in our industry. Our actual capital expenditures may differ from our expected capital expenditures if, among other things, we enter into any currently unplanned strategic transactions. Levels of capital spending from one year to the next are also influenced by the nature of the satellite life cycle and by the capital-intensive nature of the satellite industry. For example, we incur significant capital expenditures during the years in which satellites are under construction. We typically procure a new satellite within a timeframe that would allow the satellite to be deployed at least one year prior to the end of the service life of the satellite to be replaced. As a result, we frequently experience significant variances in our capital expenditures from year to year.

Payments for satellites and other property and equipment during the six months ended June 30, 2012 were $476.8 million. In March 2012, IS-22 was successfully launched into orbit and entered into service in May 2012. On June 1, 2012, IS-19 was launched into orbit. During launch operations, IS-19 experienced damage to its south solar array. Although both solar arrays are deployed, the power available to the satellite is less than is required to operate 100% of the payload capacity. Failure Review Boards were established to determine the cause of the anomaly. As of June 30, 2012, a final conclusion had not been reached as to the most likely cause of the anomaly. In-orbit testing on IS-19 is complete and the satellite is drifting to a 166° east longitude orbital location. We have indicated to our insurers that, due to the damage to the south solar array, it is reasonably likely that we will file a partial loss claim.

Our capital expenditure guidance for the periods 2012 through 2014 (the “Guidance Period”) forecasts capital expenditures during those periods for ten satellites. Of these, two satellites were launched, as discussed above, six satellites are currently in development and two further satellites are expected to be ordered during the Guidance Period. We expect our 2012 total capital expenditures to range from approximately $775 million to $850 million. Capital expenditures are expected to range from $550 million to $625 million in 2013 and $525 million to $600 million in 2014. Our capital expenditures guidance includes capitalized interest. The annual classification of capital expenditure payments could be impacted by the timing of achievement of satellite manufacturing and launch contract milestones.

During the Guidance Period, we expect to receive significant customer prepayments under our existing customer service contracts. We also anticipate that prepayments will be received under customer contracts to be signed in the future. Significant prepayments received during the six months ended June 30, 2012 totaled $115.9 million. Prepayments are currently expected to range from $150 million to $200 million in 2012, all under existing customer contracts. Prepayments are currently expected to range from $150 million to $200 million in 2013 and $100 million to $150 million in 2014, with the majority of these payments coming from existing customer contracts. We intend to fund our capital expenditure requirements through cash on hand, cash provided from operating activities and, if necessary, borrowings under our senior secured revolving credit facility.

Disclosures about Market Risk

See Item 3—Quantitative and Qualitative Disclosures About Market Risk.

Recently Adopted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). Beginning in the first quarter of 2012, ASU 2011-05 eliminated the option that had previously allowed us to present the components of other comprehensive income as part of the statement of changes in shareholder’s equity. Beginning in the first quarter of 2012, we have included a separate condensed consolidated statement of comprehensive loss in our accompanying financial statements. The majority of our other comprehensive loss and our accumulated other comprehensive loss is related to our defined benefit retirement plans. ASU 2011-05 does not change whether items are reported in net loss or in other comprehensive income and does not change whether and when items of other comprehensive income are reclassified to net loss.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are primarily exposed to the market risk associated with unfavorable movements in interest rates and foreign currencies. The risk inherent in our market risk sensitive instruments and positions is the potential loss arising from adverse changes in those factors. In addition, with respect to our interest rate swaps as described below, we are exposed to counterparty credit risk, which we seek to minimize through credit support agreements and the review and monitoring of all counterparties. We do not purchase or hold any derivative financial instruments for speculative purposes.

Interest Rate Risk

The satellite communications industry is a capital intensive, technology driven business. We are subject to interest rate risk primarily associated with our borrowings. Interest rate risk is the risk that changes in interest rates could adversely affect earnings and cash flows. Specific interest rate risks include: the risk of increasing interest rates on short-term debt; the risk of increasing interest rates for planned new fixed-rate long-term financings; and the risk of increasing interest rates for planned refinancings using long-term fixed-rate debt.

Excluding the impact of our outstanding interest rate swaps, approximately 72%, or $11.6 billion, of our debt as of June 30, 2012 was fixed-rate debt, compared to 72% as of December 31, 2011. Based on the level of fixed-rate debt outstanding at June 30, 2012, a 100 basis point decrease in market rates would result in an increase in fair value of this fixed-rate debt of approximately $571.9 million.

As of June 30, 2012, we held interest rate swaps with an aggregate notional amount of $2.3 billion, with maturities ranging from 2013 to 2016. These swaps were entered into to economically hedge the variability in cash flow on a portion of the floating rate term loans under our senior secured and unsecured credit facilities. On December 22, 2011, we amended our interest rate swap agreements with an aggregate notional amount of $448.5 million between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events. During the first quarter of 2012, we amended our interest rate swap agreements with an aggregate notional amount of $1.2 billion between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events. On a quarterly basis, we receive a floating rate of interest equal to the three-month London Inter-Bank Offered Rate and pay a fixed rate of interest. On June 30, 2012, the rate we paid averaged 2.5% and the rate we received averaged 0.5%. In comparison, at December 31, 2011, the rate we paid averaged 3.3% and the rate we received averaged 0.5%.

These interest rate swaps have not been designated for hedge accounting treatment in accordance with the FASB Accounting Standards Codification Topic 815, Derivatives and Hedging , as amended and interpreted, and the changes in fair value of these instruments will be recognized in earnings during the period of change. Assuming a one percentage point decrease in the prevailing forward yield curve (or less, to the extent that the points on the yield curve are less than one percent) the fair value of the interest rate swap liability, excluding accrued interest, would increase to a liability of approximately $131.3 million from $93.0 million.

We perform interest rate sensitivity analyses on our variable-rate debt, including interest rate swaps, and cash and cash equivalents. These analyses indicate that a one percentage point change in interest rates would have a minimal impact on our condensed consolidated statements of operations and cash flows as of June 30, 2012. While our variable-rate debt may impact earnings and cash flows as interest rates change, it is not subject to changes in fair values.

Foreign Currency Risk

We do not currently use foreign currency derivatives to hedge our foreign currency exposures. There have been no material changes to our foreign currency exposures as discussed in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We periodically review the design and effectiveness of our disclosure controls and procedures worldwide, including compliance with various laws and regulations that apply to our operations. We make modifications to improve the design and effectiveness of our disclosure controls and procedures, and may take other corrective action, if our reviews identify a need for such modifications or actions. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of June 30, 2012. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2012.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

We are subject to litigation in the ordinary course of business, but management does not believe that the resolution of any pending proceedings would have a material adverse effect on our financial position or results of operations.

Item 1A.

Risk Factors

No material changes in the risks related to our business have occurred since we filed our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

None.

Item 5.

Other Information

On July 26, 2012, Mr. Edward Kangas was appointed as a member of our board of directors. Mr. Kangas was also appointed as a member of the Company’s Audit Committee and Compensation Committee.

Item 6.

Exhibits


Exhibit No.		Document Description

4.1		Fourth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2020, dated as of April 25, 2012, among Intelsat Jackson Holdings S.A., Intelsat Subsidiary (Gibraltar) Limited, Intelsat New Dawn (Gibraltar) Limited and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on May 8, 2012).

4.2		Registration Rights Agreement, dated as of April 26, 2012 by and among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, the subsidiary guarantors named there in and Goldman, Sachs & Co., as Representative of the several initial purchasers named on Schedule I thereto (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on April 26, 2012).

4.3		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 8 ¹ / ₂ % Senior Notes due 2019, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

4.4		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2020, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

4.5		Second Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2019 and 7 ¹ / ₂ % Senior Notes due 2021, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

10.1		Purchase and Sale Agreement, dated July 18, 2012, between Intelsat Global Service LLC and SL 4000 Connecticut LLC.*

10.2		Supplement No. 2 to Guarantee, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.ar.l. and Bank of America, N.A.*

10.3		Agreement for the Adherence by Intelsat Luxembourg Investment S.àr.l. and Intelsat Corporation to the Luxembourg Shares and Beneficiary Certificates Pledge Agreement dated January 12, 2011 and for the Amendment of the Pledge Agreement, dated July 31, 2012 between the Pledgors listed therein and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*



10.4		Supplement No. 2 to Security and Pledge Agreement, dated as of July 31, 2012, among Intelsat Luxembourg Investment S.a r.l., as New Guarantor, Bank of America, N.A., as Administrative Agent and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*

10.5		Collateral Agency and Intercreditor Joinder, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.a r.l. and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*

10.6		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.a r.l., Intelsat Jackson Holdings S.A. and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as Administrative Agent.*

10.7		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.a r.l., Intelsat Jackson Holdings S.A. and Bank of America N.A., as Administrative Agent.*

31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.*

31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.*

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350.*

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*

101.INS		XBRL Instance Document.**

101.SCH		XBRL Taxonomy Extension Schema Document.**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.**

*	Filed herewith.

Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following formatted in Extensible Business Reporting Language (“XBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements. In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise this Exhibit 101 shall be deemed “furnished” not “filed”.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	INTELSAT S.A.

Date: August 1, 2012	By	/ S / D AVID M C G LADE
		David McGlade
		Deputy Chairman and Chief Executive Officer

	INTELSAT S.A.

Date: August 1, 2012	By	/ S / M ICHAEL M C D ONNELL
		Michael McDonnell
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX


Exhibit No.		Document Description

4.1		Fourth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2020, dated as of April 25, 2012, among Intelsat Jackson Holdings S.A., Intelsat Subsidiary (Gibraltar) Limited, Intelsat New Dawn (Gibraltar) Limited and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on May 8, 2012).

4.2		Registration Rights Agreement, dated as of April 26, 2012 by and among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, the subsidiary guarantors named there in and Goldman, Sachs & Co., as Representative of the several initial purchasers named on Schedule I thereto (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on April 26, 2012).

4.3		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 8 ¹ / ₂ % Senior Notes due 2019, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

4.4		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2020, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

4.5		Second Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 ¹ / ₄ % Senior Notes due 2019 and 7 ¹ / ₂ % Senior Notes due 2021, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.ar.l. and Wells Fargo Bank, National Association, as Trustee.*

10.1		Purchase and Sale Agreement, dated July 18, 2012, between Intelsat Global Service LLC and SL 4000 Connecticut LLC.*

10.2		Supplement No. 2 to Guarantee, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.ar.l. and Bank of America, N.A.*

10.3		Agreement for the Adherence by Intelsat Luxembourg Investment S.àr.l. and Intelsat Corporation to the Luxembourg Shares and Beneficiary Certificates Pledge Agreement dated January 12, 2011 and for the Amendment of the Pledge Agreement, dated July 31, 2012 between the Pledgors listed therein and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*

10.4		Supplement No. 2 to Security and Pledge Agreement, dated as of July 31, 2012, among Intelsat Luxembourg Investment S.a r.l., as New Guarantor, Bank of America, N.A., as Administrative Agent and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*

10.5		Collateral Agency and Intercreditor Joinder, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.a r.l. and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee.*

10.6		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.a r.l., Intelsat Jackson Holdings S.A. and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Island Branch), as Administrative Agent.*

10.7		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.a r.l., Intelsat Jackson Holdings S.A. and Bank of America N.A., as Administrative Agent.*

31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.*

31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.*

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350.*

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*

101.INS		XBRL Instance Document.**

101.SCH		XBRL Taxonomy Extension Schema Document.**



101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.**

*	Filed herewith.

Exhibit 4.3

FIFTH SUPPLEMENTAL INDENTURE (this “ Fifth Supplemental Indenture ”), dated as of July 31, 2012, among INTELSAT JACKSON HOLDINGS S.A. (f/k/a Intelsat Jackson Holdings, Ltd.), a société anonyme existing under the laws of Luxembourg (the “ Issuer ”), INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg (the “ New Guarantor ”) and a subsidiary of the Issuer, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Issuer and the existing Guarantors have heretofore executed and delivered to the Trustee an Indenture (as amended, supplemented or otherwise modified, the “ Indenture ”), dated as of October 20, 2009, providing for the issuance of the Issuer’s 8 ¹ / ₂ % Senior Notes due 2019 (the “ Notes ”), initially in the aggregate principal amount of $500,000,000;

WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuer is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Issuer’s obligations under the Notes pursuant to a Guarantee on the terms and conditions set forth herein; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Fifth Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

1. Defined Terms . As used in this Fifth Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “ Holders ” in this Fifth Supplemental Indenture shall refer to the term “ Holders ” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Fifth Supplemental Indenture refer to this Fifth Supplemental Indenture as a whole and not to any particular section hereof.

2. Agreement to Guarantee . The New Guarantor hereby agrees, jointly and severally with all existing Guarantors, to unconditionally guarantee the Issuer’s obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes applying to a Guarantor and to perform all of the obligations and agreements of a Guarantor under the Indenture.

3. Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 11.02 of the Indenture.

4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Fifth Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

5. Governing Law . THIS FIFTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Fifth Supplemental Indenture.

7. Counterparts . The parties may sign any number of copies of this Fifth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the date first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:		/s/ Flavien Bachabi
		Name: Flavien Bachabi
		Title: Manager

INTELSAT JACKSON HOLDINGS S.A.

By:		/s/ Phillip Spector
		Name: Phillip Spector
		Title: Deputy Chairman and Assistant Secretary

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

By:		/s/ Yana Kislenko
		Name: Yana Kislenko
		Title: Vice President

Exhibit 4.4

FIFTH SUPPLEMENTAL INDENTURE (this “ Fifth Supplemental Indenture ”), dated as of July 31, 2012, among INTELSAT JACKSON HOLDINGS S.A., a société anonyme existing under the laws of Luxembourg (the “ Issuer ”), INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg (the “ New Guarantor ”) and a subsidiary of the Issuer, and Wells Fargo Bank, National Association, a national banking association, as trustee under the indenture referred to below (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Issuer and the existing Guarantors have heretofore executed and delivered to the Trustee an Indenture (as amended, supplemented or otherwise modified, the “ Indenture ”), dated as of September 30, 2010, providing for the issuance of the Issuer’s 7 ¹ / ₄ % Senior Notes due 2020 (the “ Notes ”), initially in the aggregate principal amount of $1,000,000,000;

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Fifth Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

3. Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 11.02 of the Indenture.

5. Governing Law . THIS FIFTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND FOR THE AVOIDANCE OF DOUBT, THE APPLICABILITY OF ARTICLE 86 TO 94-8 OF THE AMENDED LUXEMBOURG LAW ON COMMERCIAL COMPANIES SHALL BE EXECUTED.

6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Fifth Supplemental Indenture.

7. Counterparts . The parties may sign any number of copies of this Fifth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the date first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:		/s/ Flavien Bachabi
		Name: Flavien Bachabi
		Title: Manager

INTELSAT JACKSON HOLDINGS S.A.

By:		/s/ Phillip Spector
		Name: Phillip Spector
		Title: Deputy Chairman and Assistant Secretary

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

By:		/s/ Yana Kislenko
		Name: Yana Kislenko
		Title: Vice President

Exhibit 4.5

Execution Copy

SECOND SUPPLEMENTAL INDENTURE (this “ Second Supplemental Indenture ”), dated as of July 31, 2012, among INTELSAT JACKSON HOLDINGS S.A., a société anonyme existing under the laws of Luxembourg (the “ Issuer ”), INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg (the “ New Guarantor ”) and a subsidiary of the Issuer, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Issuer and the existing Guarantors have heretofore executed and delivered to the Trustee an Indenture (as amended, supplemented or otherwise modified, the “ Indenture ”), dated as of April 5, 2011, providing for the issuance of $1,500,000,000 aggregate principal amount of 7 ¹ / ₄ % Senior Notes due 2019 (the “ 2019 Notes ”) and $1,150,000,000 aggregate principal amount of 7 ¹ / ₂ % Senior Notes due 2021 (the “ 2021 Notes ” and, together with the 2019 Notes, the “ Notes ”);

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Second Supplemental Indenture.

1. Defined Terms . As used in this Second Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “ Holders ” in this Second Supplemental Indenture shall refer to the term “ Holders ” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Second Supplemental Indenture refer to this Second Supplemental Indenture as a whole and not to any particular section hereof.

3. Notices . All notices or other communications to the New Guarantor shall be given as provided in Section 11.02 of the Indenture.

4. Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Second Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

5. Governing Law . THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND FOR THE AVOIDANCE OF DOUBT, THE APPLICABILITY OF ARTICLE 86 TO 94-8 OF THE AMENDED LUXEMBOURG LAW ON COMMERCIAL COMPANIES SHALL BE EXECUTED.

6. Trustee Makes No Representation . The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture.

7. Counterparts . The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the date first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:		/s/ Flavien Bachabi
		Name: Flavien Bachabi
		Title: Manager

INTELSAT JACKSON HOLDINGS S.A.

By:		/s/ Phillip Spector
		Name: Phillip Spector
		Title: Deputy Chairman and Assistant Secretary

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

By:		/s/ Yana Kislenko
		Name: Yana Kislenko
		Title: Vice President

Exhibit 10.1

S ALE OF THE L EASEHOLD I NTEREST

AND I MPROVEMENTS L OCATED AT

4000 C ONNECTICUT A VENUE , NW

W ASHINGTON , DC

* * *

P URCHASE AND S ALE A GREEMENT

B ETWEEN

INTELSAT GLOBAL SERVICE LLC,

AS S ELLER

AND

SL 4000 CONNECTICUT LLC,

AS P URCHASER

* * *

E FFECTIVE D ATE : J ULY 18, 2012

TABLE OF CONTENTS


		Page

ARTICLE 1 PURCHASE AND SALE OF PROPERTY			5

1.1	Land		5
1.2	Ground Lease		5
1.3	Improvements		5
1.4	Personal Property		5
1.5	Leases		6
1.6	Security Deposits		6
1.7	Guaranties		6
1.8	Contracts		6
1.9	Permits		6
1.10	Intangibles		6

ARTICLE 2 PURCHASE PRICE AND DEPOSIT			6

2.1	Payment		6
2.2	Deposit		7

ARTICLE 3 TITLE AND SURVEY			7

3.1	State of Title to be Conveyed		7
3.2	Title Commitment and Survey		7

ARTICLE 4 PROPERTY INFORMATION			7

4.1	Property Information		7

ARTICLE 5 INSPECTIONS OF THE PROPERTY; “AS IS”			8

5.1	Purchaser’s Inspections		8
5.2	As Is, Where Is		10

ARTICLE 6 REPRESENTATIONS AND WARRANTIES			11

6.1	Seller’s Representations and Warranties		11
6.2	Purchaser’s Representations and Warranties		14
6.3	Knowledge		15
6.4	Survival		15

ARTICLE 7 COVENANTS OF SELLER PRIOR TO CLOSING			15

7.1	Operation of Property		15
7.2	Governmental Notices		16
7.3	Litigation		17
7.4	Insurance		17
7.5	Estoppel Certificates		17

ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING			18

8.1	Conditions Precedent to Purchaser’s Obligation to Close		18
8.2	Conditions Precedent to Seller’s Obligation to Close		19
8.3	Failure of a Condition		19

-i-

TABLE OF CONTENTS

(continued)


		Page

8.4	Representations and Warranties		20

ARTICLE 9 CLOSING			20

9.1	Closing Date		20
9.2	Seller’s Obligations at the Closing		21
9.3	Purchaser’s Obligations at the Closing		22
9.4	Escrow		23
9.5	Costs and Adjustments at Closing		23

ARTICLE 10 DAMAGE AND CONDEMNATION			27

10.1	Damage		27
10.2	Condemnation and Eminent Domain		27

ARTICLE 11 REMEDIES AND ADDITIONAL COVENANTS			28

11.1	Seller Default At or Before Closing		28
11.2	Seller Default From and After Closing		28
11.3	Purchaser Default		29
11.4	Delivery of Materials		29

ARTICLE 12 BROKERAGE COMMISSION			29

12.1	Brokers		29
12.2	Indemnity		30

ARTICLE 13 NOTICES			30

13.1	Written Notice		30
13.2	Method of Transmittal		30
13.3	Addresses		30

ARTICLE 14 ASSIGNMENT			31

ARTICLE 15 MISCELLANEOUS			32

15.1	Entire Agreement		32
15.2	Modifications		32
15.3	Gender and Number		32
15.4	Captions		32
15.5	Successors and Assigns		32
15.6	Controlling Law		32
15.7	Exhibits		32
15.8	No Rule of Construction		32
15.9	Severability		32
15.10	Time of Essence		32
15.11	Business Days		33
15.12	No Memorandum		33
15.13	Press Releases		33
15.14	Attorneys’ Fees and Costs		33

-ii-

TABLE OF CONTENTS

(continued)


		Page

15.15	Counterparts and Expiration of Offer		33
15.16	Waiver of Jury Trial		33
15.17	Confidentiality		33
15.18	Jurisdiction and Service of Process		34
15.19	Exculpation		34

-iii-

Exhibits and Schedules

Exhibits


Exhibit A –		Legal Description
Exhibit B –		Escrow Agreement
Exhibit C –		Form of Tenant Estoppel Certificate
Exhibit D –		Form of Assignment and Assumption of Ground Lease
Exhibit E –		Form of Bill of Sale
Exhibit F –		Form of Assignment and Assumption Agreement
Exhibit G –		Form of Certificate of Non-Foreign Status
Exhibit H –		Form of Tenant Notification Letter
Exhibit I –		Form of Owner’s Affidavit
Exhibit J –		Form of Post-Closing Intelsat Lease

Schedules


Schedule 1.4(iii) –		Seller’s Retained Property
Schedule 1.5 –		Leases
Schedule 1.6 –		Security Deposits
Schedule 1.8 –		Contracts
Schedule 3.1 –		Permitted Exceptions
Schedule 6.1.3 –		Litigation
Schedule 6.1.9 –		Lease Defaults
Schedule 6.1.9(A) –		Rent Roll
Schedule 6.1.9(B) –		Rent Abatements
Schedule 6.1.10 –		Leasing Commissions and Tenant Allowances
Schedule 6.1.11 –		Violations of Law

-iv-

PURCHASE AND SALE AGREEMENT

This PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made and entered into as of the date set forth on the cover page hereof (the “ Effective Date ”), by and between INTELSAT GLOBAL SERVICE LLC , a Delaware limited liability company (“ Seller ”), and SL 4000 CONNECTICUT LLC , a Delaware limited liability company (“ Purchaser ”).

ARTICLE 1 PURCHASE AND SALE OF PROPERTY

On the terms and conditions stated in this Agreement, Seller hereby agrees to sell to Purchaser and Purchaser hereby agrees to purchase from Seller all of the following described property (collectively, the “ Property ”):

1.1 Land . Seller’s leasehold interest in and to all of that certain tract of land situated in the District of Columbia, and described more particularly in Exhibit A attached hereto and incorporated herein by reference, together with all leasehold rights and appurtenances pertaining to such land as referenced in the Ground Lease (as defined in Section 1.2 below) (collectively, the “ Land ”).

1.2 Ground Lease . Seller’s interest as tenant under that certain Amended and Restated Lease Agreement dated June 18, 2010, by and between the Government of the United States of America (“ Ground Lessor ”), as lessor, and Intelsat Global Service Corporation, predecessor-in-interest to Seller, as lessee, for the Land, as memorialized by that certain Memorandum of Ground Lease dated as of June 18, 2010, recorded June 29, 2010, as Instrument No. 2010058804 (the “ Ground Lease ”).

1.3 Improvements . Subject to the terms of the Ground Lease, fee simple title to a commercial office building (including the below grade-parking structure) situated at 4000 Connecticut Avenue, NW (also known as 3400 International Drive, NW) in Washington, DC, and all other improvements and structures constructed on the Land (collectively, the “ Improvements ”).

1.4 Personal Property . All of Seller’s right, title and interest in and to the following (collectively, the “ Personal Property ”):

1.4.1 mechanical systems, fixtures, machinery and equipment comprising a part of or attached to or located upon the Improvements and used exclusively in connection with the operation of the Improvements;

1.4.2 maintenance equipment and tools, if any, owned by Seller and used exclusively in connection with, and located in or on, the Improvements;

1.4.3 site plans, surveys, plans and specifications, manuals and instruction materials, marketing materials and floor plans in Seller’s possession which relate to the Land or Improvements; and

1.4.4 other tangible personal property owned by Seller and used exclusively in connection with, and located in or on, the Land or Improvements as of the Effective Date and as of the Closing (as hereinafter defined).

The term “Personal Property” shall not include, and Seller shall not convey to Purchaser, (i) any property owned by tenants under Leases; (ii) furniture, fixtures, equipment or other personal or other property used by Seller or any one or more affiliates of Seller in connection with the conduct of Seller’s or such affiliates’ business or other operations within the Improvements, or (iii) the personal property listed on Schedule 1.4(iii) attached hereto (collectively, “ Seller’s Retained Property ”).

1.5 Leases . Seller’s right, title and interest as sublandlord in all leases with tenants or other persons or entities leasing all or any portion of the Improvements (the “ Leases ”), as referenced on Schedule 1.5 .

1.6 Security Deposits . Seller’s right, title and interest in all security deposits, if any, held by Seller in connection with the Leases and not applied pursuant to the terms thereof, as referenced on Schedule 1.6 .

1.7 Guaranties . Seller’s right, title and interest in any and all guaranties of the Leases, if any.

1.8 Contracts . Subject to Section 7.1.3 hereof, Seller’s right, title and interest in all contract rights related to the Land, Improvements, Personal Property or Leases that will remain in existence after Closing, to the extent assignable, including, without limitation, Seller’s interest in the following: parking, management, maintenance, construction, commission, architectural, supply or service contracts, utility agreements, plans and specifications, surveys, warranties, guarantees and bonds, energy supply contracts and other agreements related to the Land, Improvements, Personal Property, or Leases (collectively, the “ Contracts ”), as referenced on Schedule 1.8 .

1.9 Permits . Seller’s right, title and interest in all permits, licenses, certificates of occupancy, entitlements and governmental approvals which relate to the Land, Improvements, Personal Property, Leases, or Contracts, to the extent assignable (collectively, the “ Permits ”).

1.10 Intangibles . Seller’s right, title and interest, if any, in all names, trade names, street numbers, telephone numbers, e-mail addresses, marks, other symbols and general intangibles, which relate to the Land or the Improvements (collectively, the “ Intangibles ”).

ARTICLE 2 PURCHASE PRICE AND DEPOSIT

2.1 Payment . The purchase price for the Property (the “ Purchase Price ”) is Eighty-Five Million and 00/100 Dollars ($85,000,000.00). The cash due at Closing on account of the Purchase Price shall be subject to adjustment as set forth in this Agreement. The Purchase Price including the Deposit (as defined below) shall be paid by wire transfer of immediately available funds at the Closing.

2.2 Deposit . Simultaneously with the Effective Date, Purchaser shall deposit with First American Title Insurance Company (the “ Escrow Agent ” and the “ Title Company ”) by bank wire transfer the sum of Eight Million and 00/100 Dollars ($8,000,000.00), as a non-refundable deposit (except as otherwise expressly provided in this Agreement) to assure Purchaser’s performance hereunder (together with all interest thereon if any, the “ Deposit ”). Prior to Purchaser’s making the Deposit, Seller, Purchaser and the Escrow Agent shall enter into an escrow agreement substantially in the form of Exhibit B attached hereto (the “ Escrow Agreement ”). Escrow Agent shall place the Deposit in an interest-bearing escrow account at a federally-insured commercial bank acceptable to both Seller and Purchaser. The Escrow Agent shall hold the Deposit in accordance with this Agreement and the Escrow Agreement. At Closing, Escrow Agent shall deliver the Deposit to Seller and credit the Deposit against the Purchase Price.

ARTICLE 3 TITLE AND SURVEY

3.1 State of Title to be Conveyed . Leasehold title to the Property shall be conveyed to Purchaser at Closing pursuant to an Assignment and Assumption of Ground Lease, free and clear of any and all liens, mortgages, deeds of trust, security interests and other encumbrances, except for the following (collectively, the “ Permitted Exceptions ”): (i) the exceptions set forth on Schedule 3.1; (ii) the state of facts disclosed on the survey performed by KCI Technologies, dated March 28, 2012 (the “ Survey ”), and any additional state of facts that a subsequent accurate survey of the Property would show, provided that such additional state of facts does not materially and adversely affect the present use or operation of the Property as an office building; (iii) the standard printed exclusions from coverage contained in the 2006 ALTA form of owner’s title policy; (iv) the lien of real property taxes, BID taxes, if any, and municipal and other charges not yet due and payable (which shall be subject to adjustment as provided in Section 9.5.2 ); (v) any laws, rules, regulations, statutes, ordinances, orders or other legal requirements affecting the Property, and (vi) the rights and interests held by tenants under the Leases in effect at Closing and others claiming by, through or under such Leases, as tenants only.

3.2 Title Commitment and Survey . Purchaser hereby acknowledges receipt of (i) a commitment for owner’s title insurance policy for the Property, issued by First American Title Insurance Company, with an effective date of June 1, 2012 (the “ Title Commitment ”), together with copies of all instruments giving rise to any liens, encumbrances, defects or other exceptions to title noted therein; and (ii) the Survey, identifying no exceptions to title other than the Permitted Exceptions.

ARTICLE 4 PROPERTY INFORMATION

4.1 Property Information . Seller shall make available to Purchaser, either at the Property in a designated location or via a due diligence website maintained by Seller’s Broker (as defined below), certain materials related to the Property in Seller’s possession (collectively, the “ Property Information ”); provided, however , Seller shall not deliver or make available to Purchaser Seller’s internal memoranda, attorney-client privileged materials, appraisals, economic evaluations of the Property, organizational documents or such other financial information that Seller deems confidential. Purchaser shall keep such Property Information confidential, subject

to Purchaser’s right to disseminate Property Information to or among the parties listed in Section 15.17 of this Agreement, and subject to the restrictions set forth in Section 15.17 . Seller makes no representation or warranty as to the truth or accuracy of the Property Information provided to Purchaser, except as otherwise expressly provided in this Agreement.

ARTICLE 5 INSPECTIONS OF THE PROPERTY; “AS IS”

5.1 Purchaser’s Inspections

5.1.1 Subject to the provisions of this Section and the terms of the Ground Lease, Purchaser and its agents, employees, consultants, inspectors, lenders, investors, members, appraisers, engineers and contractors (collectively “ Purchaser’s Representatives ”) shall have the right, through the Closing Date (hereinafter defined), from time to time, upon the advance notice required pursuant to this Section 5.1 , to enter upon and pass through the Property during normal business hours to examine and inspect the Property. Notwithstanding any such inspection, or anything to the contrary contained herein, Purchaser’s obligations hereunder shall not be limited or otherwise affected as a result of any fact, circumstance or other matter of any kind discovered following the date hereof in connection with any such inspection, access or otherwise, unless such matter constitutes a breach of one or more of Seller’s express representations contained herein; it being agreed that Seller is permitting Purchaser such right of inspection and access as a courtesy to Purchaser in its preparation for taking title to the Property. Without limiting the generality of the foregoing, (i) Purchaser agrees that it shall not have the right to terminate this Agreement or obtain a reduction of the Purchase Price as a result of any such fact, circumstance or other matter so discovered (including, without limitation, relating to the physical condition of the Property, the operations of the Property or otherwise, unless such matter constitutes a breach of one or more of Seller’s express representations contained herein), and (ii) Purchaser shall have no right to terminate this Agreement or obtain a return of the Deposit except as expressly provided in this Agreement.

5.1.2 In conducting any inspection of the Property or otherwise accessing the Property, Purchaser shall at all times comply with the Ground Lease and all laws and regulations of all applicable governmental authorities, and neither Purchaser nor any of Purchaser’s Representatives shall (i) contact or have any discussions with any of Seller’s employees, agents or representatives, or with any tenants (including, without limitation, conducting tenant interviews or having any contacts whatsoever with tenants, including but not limited to telephone conversations or electronic mail messages) at, or contractors providing services to, the Property, unless in each case Purchaser obtains the prior written consent of Seller (which may be given via electronic mail), such consent not to be unreasonably withheld, conditioned or delayed, it being agreed that all such contacts or discussions shall, pending any such approval, be directed to Robert Lambert via electronic mail (at robert.lambert@intelsat.com ), (ii) interfere with the business of Seller (or any of its tenants) conducted at the Property or disturb the use or occupancy of any occupant of the Property; (iii) damage the Property, or (iv) contact any local or Federal governmental agency or department regarding the Property including, but not limited to, the United States Department of State (subject to the provisions of Section 7.6 ) (except that Purchaser shall have the right to conduct routine inquiries of applicable governmental authorities for the purpose of seeking written confirmation as to the zoning category of the Property and the absence of violations). In conducting any inspection of the Property or otherwise accessing the

Property, Purchaser and Purchaser’s Representatives shall at all times comply with, and shall be subject to, the rights of the tenants under the Leases (and any persons claiming by, under or through such tenants). Seller may from time to time establish reasonable rules of conduct for Purchaser and Purchaser’s Representatives in furtherance of the foregoing. Purchaser shall schedule and coordinate all inspections, including, without limitation, any environmental tests, and other access with Seller and shall give Seller at least two (2) Business Days’ (as hereinafter defined) prior notice thereof. Seller shall be entitled to have a representative present at all times during each such inspection or other access. Purchaser agrees to pay to Seller on demand the cost of repairing and restoring any damage or disturbance which Purchaser or Purchaser’s Representatives shall cause to the Property. All inspection fees, appraisal fees, engineering fees and other costs and expenses of any kind incurred by Purchaser or Purchaser’s Representatives relating to such inspection and its other access shall be at the sole expense of Purchaser. Purchaser shall keep all information obtained during its inspections and access to the Property confidential, subject to the provisions of Section 15.17 . If the Closing shall not occur for any reason whatsoever, Purchaser shall: (A) promptly deliver to Seller, at no cost to Seller, and without representation or warranty, the originals or copies of all tests, reports and inspections of the Property, made and conducted by Purchaser or Purchaser’s Representatives or for Purchaser’s benefit that are in the possession or control of Purchaser or Purchaser’s Representatives; (B) promptly return to Seller or destroy all copies of all due diligence materials, including, without limitation, any Property Information and copies thereof in any form whatsoever (including electronic form), delivered by Seller to Purchaser; and (C) promptly destroy all copies and abstracts of the materials referenced in (A) and (B) above; provided, however, in the event of any pending litigation between Seller and Purchaser, Purchaser shall be permitted to retain copies of such materials, tests and reports as are necessary in connection with such litigation. Purchaser and Purchaser’s Representatives shall not be permitted to conduct borings of the Property or drilling in or on the Property, or any other invasive, intrusive or destructive testing in connection with the preparation of an environmental audit or in connection with any other inspection of the Property without the prior written consent of Seller, which Seller may give or withhold in its sole discretion (and, if such consent is given, Purchaser shall be obligated to pay to Seller on demand the cost of repairing and restoring any damage as aforesaid).

5.1.3 Prior to conducting any physical inspection or testing at the Property (besides routine visual inspections), Purchaser and Purchaser’s Representatives shall obtain, and during the period of such inspection or testing shall maintain, at their expense: (i) commercial general liability (“ CGL ”) insurance, issued on a form at least as broad as Insurance Services Office (“ ISO ”) Commercial General Liability Coverage “occurrence” form CG 00 01 10 01 or another “occurrence” form providing equivalent coverage, including contractual liability and personal injury liability coverage, with limits of not less than Two Million Dollars ($2,000,000) for any one occurrence and Five Million Dollars ($5,000,000) in the aggregate; (ii) comprehensive automobile liability insurance (covering any automobiles owned or operated by Purchaser or Purchaser’s Representatives) issued on a form at least as broad as ISO Business Auto Coverage form CA 00 01 07 97 or other form providing equivalent coverage; (iii) worker’s compensation insurance or participation in a monopolistic state workers’ compensation fund, and (iv) employer’s liability insurance or (in a monopolistic state) Stop Gap Liability insurance. Such automobile liability insurance shall be in an amount not less than One Million Dollars ($1,000,000) for each accident. Such worker’s compensation insurance shall carry minimum

limits as defined by the law of the jurisdiction in which the Property is located (as the same may be amended from time to time). Such employer’s liability insurance shall be in an amount not less than One Million Dollars ($1,000,000) for each accident, One Million Dollars ($1,000,000) disease-policy limit, and One Million Dollars ($1,000,000) disease-each employee. Seller shall be covered as additional insureds on the CGL and automobile liability insurance policies with respect to liability arising out of the named insured’s acts or omissions relating to the Property. The insurer and the terms and conditions of all the foregoing policies shall be acceptable to Seller. Prior to making any entry upon the Property to conduct the testing requiring insurance coverage, as provided above, Purchaser shall furnish to Seller a certificate of insurance evidencing the foregoing coverages, which certificate of insurance shall be in form and substance satisfactory to Seller.

5.1.4 [Intentionally deleted]

5.1.5 Purchaser hereby agrees to indemnify, defend, and hold harmless Seller, its partners, members, affiliates, officers, directors, agents, employees, and representatives (collectively, the “ Indemnified Parties ”) from and against any and all liens, claims, or damages of any kind or nature, including any demands, actions or causes of action, assessments, losses, reasonable costs, expenses, liabilities, interest and penalties, and reasonable attorneys’ fees suffered, incurred, or sustained by any of the Indemnified Parties directly caused by Purchaser or Purchaser’s Representatives with respect to any due-diligence activities at the Property pursuant to this Agreement, except any arising from the discovery of preexisting conditions (so long as Purchaser does not exacerbate any such condition).

5.2 As Is, Where Is

5.2.1 Except as provided in the express representations and warranties of Seller set forth in Section 6.1 and Article 12 of this Agreement and in Seller’s Assignment and Assumption of Ground Lease, the Bill of Sale and the FIRPTA Certificate (all as defined below) (collectively, the “ Express Representations ”), Seller does not, by the execution and delivery of this Agreement, and Seller shall not, by the execution and delivery of any document or instrument executed and delivered in connection with the Closing, make any representation or warranty, express or implied, of any kind or nature whatsoever, with respect to the Property, and all such warranties are hereby disclaimed.

5.2.2 Without limiting the generality of the foregoing, other than the Express Representations, Seller makes, and shall make, no express or implied warranty as to matters of title, zoning, acreage, tax consequences, physical or environmental condition (including, without limitation, laws, rules, regulations, orders and requirements pertaining to the use, handling, generation, treatment, storage or disposal of any toxic or hazardous waste or toxic, hazardous or regulated substance), valuation, governmental approvals, governmental regulations or any other matter or thing relating to or affecting the Property (collectively, the “ Disclaimed Matters ”).

5.2.3 Notwithstanding anything to the contrary set forth in this Agreement, but subject to the Express Representations and Seller’s obligations set forth in Section 7.1 of this Agreement, and subject to Article 10 hereof, the Property, including without limitation the roofs, all structural components, all heating, ventilating, air conditioning, mechanical, plumbing, and

electrical systems, fire and life safety and all other parts of the Improvements constituting a portion of the Property, shall be conveyed to Purchaser, and Purchaser shall accept same, in their “AS IS” “WHERE IS” condition on the Closing Date (subject only to normal wear and tear between the Effective Date and the Closing Date), “WITH ALL FAULTS” and “SUBJECT TO ALL DEFECTS.” Purchaser acknowledges that Seller’s willingness to sell the Property to Purchaser at the Purchase Price has been induced, in part, by the agreement of Purchaser to purchase the Improvements and the Personal Property in such “AS IS” condition. Purchaser hereby acknowledges, represents and warrants that it is not in a disparate bargaining position with respect to Seller in connection with the transaction contemplated hereby, that Purchaser freely and fairly agreed to the waivers and conditions of this Section 5.2.3 as part of the negotiations of this Agreement, and Purchaser has been represented by adequate legal counsel in connection herewith and has conferred with such legal counsel concerning the waivers and other conditions of this Section 5.2 .

5.2.4 Without in any way limiting any provision of this Section 5.2 , Purchaser specifically acknowledges and agrees that, except with respect to the Express Representations and the obligations of Seller set forth in Section 7.1 of this Agreement, and subject to Article 10 hereof, and Purchaser hereby waives, releases and discharges any claim it has, might have had or may have against Seller with respect to (i) the Disclaimed Matters, (ii) the condition of the Property as of the Closing Date, (iii) the past, present or future condition or compliance of the Property with regard to any environmental protection, pollution control or land use laws, rules, regulations, orders or requirements, including, without limitation, CERCLA (as hereinafter defined), or (iv) any other state of facts that exists with respect to the Property. The waiver, release and discharge set forth in this Section 5.2.4 shall survive the Closing or any termination of this Agreement.

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

6.1 Seller’s Representations and Warranties . Seller represents to Purchaser as of the Effective Date as follows:

6.1.1 Organization . Seller is a Delaware limited liability company, duly formed, validly existing and in good standing under the laws of Delaware and the District of Columbia.

6.1.2 Authority/Consent . Seller possesses all requisite power and authority, and has taken all actions required by its organizational documents and applicable law, to execute and deliver this Agreement and will by Closing have taken all actions required by its organizational documents and applicable law, to consummate the transactions contemplated by this Agreement.

6.1.3 Litigation . Except as may be disclosed on Schedule 6.1.3 attached hereto, no material action, suit or other proceeding (including, but not limited to, any condemnation action or real estate tax appeal) is pending or, to Seller’s knowledge, has been threatened in writing that concerns or involves the Property, or Seller’s authority to convey the Property pursuant to this Agreement.

6.1.4 Bankruptcy . No bankruptcy, insolvency, reorganization or similar action or proceeding, whether voluntary or involuntary, is pending, or, to Seller’s knowledge, threatened, against Seller.

6.1.5 Other Sales Agreements . Seller has not entered into any other contract to sell the Property or any part thereof which is currently in effect.

6.1.6 Options or Rights of First Refusal . Neither Seller nor any predecessor to Seller has granted any option, right of first refusal or first opportunity to any party to acquire any interest in the Property or any portion thereof.

6.1.7 Contracts . Except for the Contracts referenced on Schedule 1.8 , there are no current material contracts of construction, employment, parking, maintenance, commission, management, service, or supply in effect and entered into by Seller which will affect the Property after Closing. Seller has provided Purchaser with true, correct and complete copies of all Contracts, including all amendments and modifications thereof, prior to the execution of this Agreement by Purchaser and Seller.

6.1.8 Employees . Seller has no employees.

6.1.9 Leases . Except for the Ground Lease, the Leases referenced on Schedule 1.5 , the Licenses referenced on Schedule 1.6 , the leases, amendments or other occupancy agreements which may be entered into by Seller pursuant to Section 7.1 of this Agreement, and the Post-Closing Intelsat Lease (hereinafter defined), there are no leases, rental agreements, licenses, license agreements or other occupancy agreements with anyone in effect which will affect the Property after Closing. To Seller’s knowledge, each Lease is in full force and effect, and, except as otherwise set forth in the Rent Roll (hereinafter defined), no rent has been paid more than one month in advance. To Seller’s knowledge, except as may be described in Schedule 6.1.9 attached hereto, there exists no material default by Seller or, to Seller’s knowledge, any tenant under any of the Leases. Seller has provided Purchaser with true, correct and complete copies of all Leases, including all amendments and modifications thereto, prior to the execution of this Agreement by Purchaser and Seller. The rent roll attached hereto as Schedule 6.1.9(A) (the “ Rent Roll ”) is true and accurate in all material respects. Schedule 6.1.9(B) identifies all free rent accruing under the Leases from and after the Effective Date. Schedule 1.8 identifies all security deposits held by Seller, as landlord, under the Leases. Except as otherwise indicated on Schedule 6.1.9 , (a) Seller has not received any written notice from any tenant under any currently effective Lease that Seller is in default in any material respect of any material obligations of Seller to such tenant, which default has not been cured; (b) Seller has not delivered any written notice to a tenant that such tenant is in default in any material respect of any material obligations of such tenant under such Lease that has not been cured; (c) Purchaser will have no obligation to pay brokerage commissions after Closing either upon any extension or renewal of any Lease that is currently in effect, or upon the exercise of any option to lease additional premises, (d) no tenant has entered into any subleases of all or any portion of its premises, and (e) no tenant is entitled to any free rent for any periods of time after Closing.

6.1.10 Leasing Commissions and Tenant Allowances . Schedule 6.1.10 attached hereto identifies all outstanding and deferred leasing commissions payable with respect to the Leases, and all tenant improvements allowances payable or to become payable with respect to the Leases.

6.1.11 Violations of Law . Except as set forth on Schedule 6.1.11 , and to Seller’s knowledge, Seller has not received written notice from any governmental authority of any material violation of any federal or municipal laws, ordinances, orders, regulations and requirements affecting the Property or any portion thereof (including the conduct of business operations thereon), including federal and municipal laws and ordinances regulating the use of hazardous substances, which are unresolved. In addition, except as may be included in the Property Information or otherwise disclosed in writing to Purchaser, and to Seller’s knowledge, Seller has not received any written notice from any governmental authorities with respect to (i) any special assessments or proposed increases in the assessed value of the Property: (ii) any condemnation or eminent domain proceedings affecting the Property; or (iii) any violation of any zoning, health, fire safety or other law, regulation or code applicable to the Property which remains outstanding.

6.1.12 Foreign Person . Seller is not a “foreign person,” “foreign trust” or “foreign corporation” within the meaning of the United States Foreign Investment in Real Property Tax Act of 1980 and the Internal Revenue Code of 1986, as subsequently amended.

6.1.13 Ground Lease . A true, correct and complete copy of the Ground Lease has been delivered to Purchaser as part of the Property Information. To Seller’s knowledge, the Ground Lease is in full force and effect, and Seller has performed all of its material obligations under the Ground Lease (including the payment of all amounts due to Ground Lessor thereunder and to third parties as required by the Ground Lease) as of the Effective Date. Except for the Leases and Licenses, Seller has not assigned, transferred or subleased any of its rights under the Ground Lease. Ground Lessor has not provided Seller with any written notice of default under the Ground Lease, and to Seller’s knowledge, there exists no event which with the giving of notice or the passage of time would constitute a material default under the Ground Lease (the “ Liability Cap Increase Representation ”). Seller is the only holder of the leasehold interest created by the Ground Lease. Seller has obtained Ground Lessor’s consent for all Leases to the extent required under the Ground Lease; provided, however , with respect to the Leases with the Broadcasters Child Development Center and the Embassy of Honduras, the foregoing representation shall be limited to Seller’s knowledge.

6.1.14 No Conflicts . The execution and delivery of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby will not: (i) violate any judgment, order, injunction, or decree to which Seller or the Property is subject, or (ii) conflict with, result in a breach of, or constitute a default under the organic documents of Seller or any lease, mortgage, loan agreement, covenant, or other agreement or instrument to which Seller is a party or by which Seller or the Property may be bound.

6.1.15 District of Columbia Soil Characteristic . The characteristic of the soil of the Property, as described by the Soil Conservation Service of the U.S. Department of Agriculture in the Soil Survey Book of the District of Columbia (area 11) published in July, 1976, and as shown on the Soil Maps of the District of Columbia at the back of that publication, is Urban Land. For further information, Purchaser may contact a soil testing laboratory, the

District of Columbia Department of Environmental Services or the Soil Conservation Service of the U.S. Department of Agriculture. The foregoing is given pursuant to requirements of the District of Columbia Code and is not intended, and shall not be construed as, limiting the conditions set forth herein with respect to Purchaser’s right to make investigations, tests and studies satisfactory to Purchaser.

6.1.16 District of Columbia Underground Storage Tank Disclosure Notice . In accordance with the requirements of Section 3(g) of the District of Columbia Underground Storage Tank Management Act of 1990, as amended by the District of Columbia Underground Storage Tank Management Act of 1990 Amendment Act of 1992 (the “ Act ”), Seller has informed Purchaser, and hereby re-informs Purchaser, that except as referenced in that certain Phase I Environmental Site Assessment issued by Advantage Environmental Consultants, LLC, dated May 8, 2012, a copy of which has been provided to Purchaser as part of the Property Information, Seller has no knowledge of the existence or removal, during Seller’s ownership of the Property, of any underground storage tanks at or from the Property, as that term is defined in the Act. This disclosure notice was provided to Purchaser prior to entering into this Agreement as required by the Act.

6.2 Purchaser’s Representations and Warranties . Purchaser represents to Seller, as of the Effective Date, as follows:

6.2.1 Organization . Purchaser is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware.

6.2.2 Authority/Consent . Purchaser possesses all requisite power and authority, has taken all actions required by its organizational documents and applicable law, and has obtained all necessary consents, to execute and deliver this Agreement and will by Closing have taken all actions required by its organizational documents and applicable law, to consummate the transactions contemplated in this Agreement.

6.2.3 Prohibited Transaction . Neither Purchaser nor any person, group, entity or nation that Purchaser is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, and Purchaser is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating the transactions contemplated by this Agreement, directly or indirectly, on behalf of, any such person, group, entity or nation. Purchaser is not engaging in the transactions contemplated by this Agreement, directly or indirectly, in violation of any laws relating to drug trafficking, money laundering or predicate crimes to money laundering. None of the funds of Purchaser have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Purchaser is prohibited by law or that the transactions contemplated by this Agreement or this Agreement is or will be in violation of applicable law. Purchaser has and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to Closing.

6.3 Knowledge . For purposes of this Agreement, the phrase “to Seller’s knowledge” means the present, actual knowledge of Robert Lambert (the “ Seller Knowledge Individual ”), which employee is in the primary position of responsibility with respect to the Property, having made appropriate review of files relating to the Property. In no event shall the Seller Knowledge Individual have any personal liability hereunder.

6.4 Survival . All of the representations and warranties set forth in this Article 6 shall survive the Closing for a period of one hundred twenty (120) days, subject to the provisions of Section 11.1 of this Agreement.

ARTICLE 7 COVENANTS OF SELLER PRIOR TO CLOSING

7.1 Operation of Property . From the Effective Date until the earlier of (i) the termination of this Agreement, and (ii) Closing, Seller shall operate the Property in accordance with the terms of this Section 7.1 .

7.1.1 From the Effective Date until the Closing, Seller shall continue to operate, maintain and repair the Property in the ordinary course of business, but shall not take any of the following actions without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed (provided that if Seller desires to enter into a new lease or license following the Effective Date, Purchaser may withhold its consent to such lease or license in its sole and absolute discretion): (a) make or permit to be made any material alterations to or upon the Property, (b) enter into any contracts for the provision of services and/or supplies to the Property which are not terminable without premium or penalty by Purchaser upon thirty (30) days’ prior written notice following the Closing, or amend or modify the Contracts in any manner, unless such Contract as amended may be terminated without premium or penalty upon thirty (30) days’ prior written notice, or knowingly fail to timely perform its material obligations under the Contracts (provided that in the case of emergency or other exigent circumstances, Seller shall have the right to enter into contracts to perform repairs or replacements without Purchaser’s consent), (c) enter into any leases or licenses with respect to the Property or any part thereof, or extend, modify, cancel or otherwise alter any one or more of the Leases (unless required by the terms of any Lease), collect rent thereunder for more than one month in advance, apply any security deposits held in accordance with the Leases or the Licenses, or fail to timely perform its obligations under the Ground Lease, the Leases or the Licenses, in each case whether or not such action is taken in the ordinary course of business, (d) materially reduce or change the level of maintenance to the Property, (e) encumber, sell or transfer the Property or any interest therein or actively negotiate with any third party respecting the sale of the Property or any interest therein or otherwise dispose of the Property or any part thereof or interest therein, or alter or amend the zoning classification of the Land or Improvements, (f) remove or permit the removal of any Personal Property from the Property, except when replaced with items of equal or greater quality and value, and except for the use and consumption, which shall be replenished by Seller prior to Closing, of inventory, office and other supplies and spare parts, and the replacement of worn out, obsolete and defective tools, equipment and appliances, in each case in the ordinary course of business, or (g) settle,

compromise, withdraw or terminate any real estate tax appeal or proceeding affecting the Property other than any relating solely to periods prior to Tax Year 2013 (which Seller retains the full and unfettered right to settle or compromise, and any refunds applicable to such period shall belong solely to Seller). Seller shall not modify the Ground Lease in any respect. In addition, and notwithstanding the foregoing, Seller shall have the right, without Purchaser’s consent, to continue to perform improvements to the Property, and make alterations thereto, which are expressly required under the Leases. Whenever in this Section Seller is required to obtain Purchaser’s consent with respect to any proposed action or transaction, Purchaser shall, within five (5) Business Days after receipt of Seller’s receipt of request therefor, notify Seller of its approval or disapproval of same and, if Purchaser fails to notify Seller in writing of its disapproval within said five (5) Business Day period, Purchaser shall be deemed to have approved same.

7.1.2 Except as may be required by the terms of any Lease or the Ground Lease, Seller shall have no obligation to Purchaser to (i) bring the Property into compliance with any laws or regulations applicable to the Property, or (ii) make or perform any capital repairs or replacements.

7.1.3 Purchaser shall review the Contracts within ten (10) days after the Effective Date to determine, among other things, whether such Contracts are terminable, and to determine whether Purchaser desires to assume any of such agreements. Not later than fifteen (15) days after the Effective Date, Purchaser shall deliver a notice to Seller setting forth which of such Contracts, if any, that Purchaser elects to have Seller attempt to terminate; provided, however , that Purchaser shall not have the right to terminate the following Contracts: (i) Natural Gas, Electric Power Supply Service and Green-E ( ^® ) Certified Renewable Energy Credits Purchase and Sales Base Agreement dated October 28, 2010, by and between Washington Gas Energy Services, Inc. (“ Washington Gas ”), and Intelsat Global Service Corporation (predecessor to Seller), as amended and supplemented (the “ Energy Supply Contract ”), and (ii) food management service agreement between Seller and Sodexo Management, Inc. (the “ Sodexo Contract ”), copies of which was provided to Purchaser as part of the Property Information. Seller shall seek to obtain the consent of Washington Gas under the Energy Supply Contract to the assumption of Seller’s obligations thereunder as provided in Section VII(F) thereof, and confirmation from Washington Gas as to whether all amounts due thereunder from Seller have been paid. Purchaser acknowledges that Purchaser will not have the right to assume that certain Master Services Agreement dated December 8, 2011, by and between Intelsat Corporation and Ryan, LLC and, subject to the terms of the Post-Closing Intelsat Lease, the Sodexo Contract. Seller will deliver such notices of termination at Closing as to all such Contracts timely designated by Purchaser, it being understood that any termination or similar fees associated therewith shall be paid by Seller, and Purchaser shall have no responsibility or liability therefor. At Closing, Seller shall assign to Purchaser, and Purchaser shall assume, the Contracts (as identified on Schedule 1.8 hereto), including the Energy Supply Contract, but excluding any Contract Purchaser elects to terminate pursuant to this Section 7.1.3 , pursuant to the Bill of Sale and Assignment and Assumption Agreement.

7.2 Governmental Notices . Promptly after receipt, Seller shall provide Purchaser with copies of any written notices that Seller receives with respect to (i) any special assessments or proposed increases in the valuation of the Property; (ii) any condemnation or eminent domain

proceedings affecting the Property; or (iii) any violation of any Environmental Law or any zoning, health, fire, safety or other law, regulation or code applicable to the Property. In addition, Seller shall deliver or cause to be delivered to Purchaser, promptly upon receipt thereof by Seller, copies of any written notices of default given or received by Seller under any of the Leases or the Ground Lease.

7.3 Litigation . Seller will advise Purchaser promptly of any litigation, arbitration proceeding or administrative hearing which concerns or affects Seller or the Property and which is instituted after the Effective Date.

7.4 Insurance . Prior to Closing, Seller will maintain Seller’s existing insurance coverage with respect to the Property.

7.5 Estoppel Certificates . Seller shall use good faith business efforts to obtain and deliver to Purchaser, not later than the date that is five (5) Business Days prior to the Closing Date, an estoppel certificate in substantially the form of Exhibit C attached hereto from each tenant at the Property (or in the form required by each tenant’s lease) (collectively, the “ Lease Certificates ”). Seller’s obligation to use good faith business efforts to obtain Lease Certificates from all tenants shall be deemed to require Seller only to make requests therefor and to follow up on a commercially reasonable manner, but shall not include the payment of any money, issuance of any default notices or any other extraordinary action by Seller.

7.6 Ground Lessor Consent . From and after the Effective Date, Seller shall use good faith business efforts to obtain the following from Ground Lessor, in form and substance reasonably satisfactory to Seller and Purchaser: (A) Ground Lessor’s written consent, in accordance with the terms of Article 7-1(B) of the Ground Lease, to both (I) the assignment of Seller’s interest, as lessee, under the Ground Lease to Purchaser, and (II) the Post-Closing Intelsat Lease (as defined below), and (B) Ground Lessor’s written confirmation that (i) Seller shall have no liability under the Ground Lease on account of any act, occurrence or omission that occurs from and after Closing, in accordance with a “novation agreement” or similar document; (ii) Ground Lessor has not sent Seller any written notice of default under the Ground Lease that has not been cured and, to the best of Ground Lessor’s knowledge, Seller is in compliance with all of Seller’s monetary and material non-monetary obligations as ground lessee under the Ground Lease; (iii) Purchaser shall have no liability under the Ground Lease for acts, occurrences, omissions or obligations that accrued or occurred prior to the Closing (except for acts, occurrences or omissions of a continuing nature, provided that Purchaser’s liability shall be limited to acts, occurrences or omissions accruing from after the Closing), and (iv) from and after the Closing, to the best of Ground Lessor’s knowledge, fee simple title to the Improvements will vest in Purchaser. The consent and confirmation described in the immediately preceding sentence are referred to collectively as the “ Ground Lessor Consent .” It is understood that in the event the Ground Lessor does not confirm the matters set forth in clauses (ii) and (iii) above (the “ Ground Lessor No Default Confirmation ”), then Purchaser shall rely exclusively on the Liability Cap Increase Representation, and the failure by the Ground Lessor to confirm the absence of defaults by Seller shall not, by itself, result in a failure of the conditions precedent set forth in Sections 8.1.1 and 8.2.1 . Further, Ground Lessor’s failure to include the confirmation set forth in clause (iv) above shall not, by itself, result in a failure of the conditions precedent set forth in Sections 8.1.1 and 8.2.1 . If required by Ground Lessor, Seller and Purchaser shall

provide to Ground Lessor any and all information or certifications requested by Ground Lessor in connection with obtaining Ground Lessor’s consent to the assignment of the Ground Lease and the Post-Closing Intelsat Lease, including, but not limited to, (i) financial statements of Purchaser and Purchaser’s direct and indirect managing members and general partners and each of Purchaser’s passive investors, if any, owning at least a direct or indirect five percent (5%) equity interest in Purchaser (it being acknowledged that in no event shall Purchaser’s passive investors owning less than five percent (5%) equity in Purchaser be required to deliver financial statements to Ground Lessor), and, to the extent publicly available, Purchaser’s mortgage and mezzanine lenders providing debt financing to enable Purchaser to close the transactions contemplated hereby; and (ii) any and all documents, information and materials in the possession of Seller or Purchaser, or both, that Ground Lessor, the United States General Services Administration or their respective counsel may request with respect to (a) security or safety concerns of the Ground Lessor, or (b) Purchaser’s intended use, development and occupation of the Property. In addition, Seller and Purchaser agree to make such modifications to the Assignment and Assumption of Ground Lease in the form of Exhibit D hereto as may be requested by Ground Lessor, so long as such modifications do not increase the additional rent, management fee, parking fee or other financial obligations of the ground lessee under the Ground Lease, or impose any new financial obligations on the ground lessee, except for regularly scheduled increases of such amounts as provided in the Ground Lease), shorten the existing or renewal terms of the Ground Lease, impose any additional material restrictions on Purchaser’s right to assign or mortgage its interest in the Ground Lease or sublet the Improvements (or any portion thereof), or otherwise materially and adversely affect or limit Purchaser’s rights or materially increase Purchaser’s other obligations under the Ground Lease or impose any additional material liability or expense on Purchaser. Seller will promptly forward to Purchaser copies of any official notices or correspondence between Ground Lessor and Seller pertaining to the request for Ground Lessor’s Consent, it being understood that routine communications (such as, for example, electronic mail messages attempting to schedule meetings or calls) may not be provided to Purchaser.

ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING

8.1 Conditions Precedent to Purchaser’s Obligation to Close . Purchaser’s obligation to purchase the Property is subject to satisfaction on or before the Closing Date (as such date may be extended as provided herein) of the following conditions, any of which (except for the condition referenced in Section 8.1.1 ) may be waived in writing by Purchaser in Purchaser’s sole and absolute discretion.

8.1.1 Ground Lessor Consent . Ground Lessor shall have issued the Ground Lessor Consent.

8.1.2 Covenants . Seller shall have performed and observed, in all material respects, all covenants of Seller under this Agreement.

8.1.3 Representations and Warranties . Subject to Section 8.4 of this Agreement, all representations and warranties of Seller set forth in this Agreement shall be true and correct in all material respects as if made on the Closing Date

8.1.4 Title . The Title Company shall be prepared to issue to Purchaser, at standard rates, an ALTA Form B (2006) leasehold owner’s title insurance policy in the amount of the Purchase Price, insuring that the leasehold estate to the Property (including fee title interest to the Improvements) is vested in Purchaser, subject only to the Permitted Exceptions, matters caused by Purchaser or its activities on the Property, or other matters approved in writing by Purchaser.

8.1.5 Delivery of Closing Documents . Seller shall have delivered each of the Closing Documents required to be delivered under Section 9.2.1 of this Agreement.

8.2 Conditions Precedent to Seller’s Obligation to Close . Seller’s obligation to sell the Property is subject to satisfaction, on or before the Closing Date (as such date may be extended or postponed as provided herein) of the following conditions, any of which (except for the condition referenced in Section 8.2.1 ) may be waived in writing by Seller, in Seller’s sole and absolute discretion:

8.2.1 Ground Lessor Consent . Ground Lessor shall issued the Ground Lessor Consent.

8.2.2 Covenants . Purchaser shall have performed and observed, in all material respects, all covenants of Purchaser under this Agreement.

8.2.3 Representations and Warranties . All representations and warranties of Purchaser set forth in this Agreement shall be true and correct in all material respects as if made on the Closing Date.

8.2.4 Delivery of Closing Documents . Purchaser shall have delivered each of the Closing Documents required to be delivered under Section 9.2.2 of this Agreement.

8.3 Failure of a Condition

8.3.1 In the event that any condition precedent to Closing has not been satisfied on or before the Closing Date, then the party whose conditions to Closing have not been satisfied (the “ Unsatisfied Party ”) shall give notice to the other party of the condition or conditions which the Unsatisfied Party asserts are not satisfied. If the conditions specified in such notice are not satisfied within ten (10) Business Days after receipt of such notice, then the party whose condition precedent was not satisfied may terminate this Agreement, whereupon neither party shall have any further rights or obligations hereunder (other than any obligations of either party that expressly survive termination) and the Deposit shall be returned to Purchaser; provided, however , that if such failure of a condition is due to a default by one of the parties, the disposition of the Deposit shall be governed solely by Article 11 of this Agreement and not by this Section 8.3.1 . Notwithstanding anything contained herein to the contrary, if any of the conditions precedent to Purchaser’s obligation to close, as set forth in Section 8.1 of this Agreement, are not satisfied within the ten (10) Business Day period specified above and the same are reasonably susceptible of being cured (as reasonably determined by Seller), then Seller and Purchaser shall each have the right to extend such period in which to satisfy the unsatisfied condition for a period of up to thirty (30) additional days, by giving notice thereof to the other party within such ten (10) Business Day period. Further, Purchaser shall have the right to waive

the unsatisfied condition or conditions, by notice to Seller within five (5) Business Days after expiration of the applicable satisfaction period, without satisfaction having occurred, in which event the Closing Date shall be the date which is five (5) Business Days after Seller’s receipt of Purchaser’s waiver notice. It is understood and agreed that the failure of any condition set forth in Section 8.1 of this Agreement (except for Section 8.1.5 ) shall not constitute a default, breach of a covenant or other failure to perform by Seller hereunder. Further, and notwithstanding anything to the contrary contained herein, in no event shall the conditions set forth in Sections 8.1.1 and 8.2.1 be waived by either Purchaser or Seller, respectively.

8.3.2 If the transaction contemplated by this Agreement closes, the parties shall be deemed to have waived any and all unmet or unsatisfied conditions, other than any unmet or unsatisfied conditions arising out of a breach by either party of any of its representations and warranties hereunder of which the other party has no actual knowledge as of Closing.

8.4 Representations and Warranties . All representations and warranties made by Seller in this Agreement shall be true and correct in all material respects as of the Closing Date, except to the extent the facts and circumstances underlying such representations and warranties may have changed between the Effective Date and Closing; provided, however, that if on the Closing Date any such representations and warranties are not true and correct in all material respects or Seller has not performed any material covenants required to be performed by Seller pursuant to this Agreement, Purchaser shall in any event be required to close hereunder and pay the Purchase Price to Seller without any reduction or credit; unless the breach of any representations and warranties or covenants will have, in the aggregate, a “material adverse effect” and in such event, Seller shall be entitled, at its option and in its sole discretion, to credit to Purchaser such amount on account of such breach as will cause the same to no longer have a “material adverse effect,” in which event Purchaser shall be required to close hereunder. As used herein, a “material adverse effect” shall be deemed to have occurred if by reason of such misrepresentation or breach of covenant the fair market value of the Property is decreased by an amount exceeding Eight Hundred Fifty Thousand Dollars ($850,000.00). For purposes hereof, a representation or warranty shall not be deemed to have been breached if the representation or warranty is not true and correct in all material respects as of the Closing Date by reason of changed facts or circumstances which (i) pursuant to the terms of this Agreement are permitted to have occurred or (ii) are not within the reasonable control of Seller.

ARTICLE 9 CLOSING

9.1 Closing Date . The consummation of the transaction contemplated hereby (the “ Closing ”) will take place at the office of Seller’s counsel in Washington, DC via an escrow closing, on the date that is ten (10) days after issuance of the Ground Lessor Consent (with time being of the essence with respect thereto), or such earlier date as Seller and Purchaser may mutually agree upon in writing, but in no event earlier than sixty (60) days following the Effective Date (the “ Closing Date ”), and in no event shall the Closing Date occur after November 28, 2012 (the “ Outside Closing Date ”) (with time of the essence as to both the Closing Date and the Outside Closing Date). If, as of the Outside Closing Date, the Ground Lessor Consent has not been issued, then either Purchaser or Seller shall have the right, each in its sole and absolute discretion, to terminate this Agreement, in which event the Deposit shall be

returned promptly to Purchaser, whereupon neither party shall have any further rights, duties or obligations hereunder, other than the obligations and rights set forth here that expressly survive the termination of this Agreement. Purchaser and Seller agree to finalize and execute all documents necessary for the consummation of the transaction contemplated herein, including but not limited to the settlement statement, and to deliver all such documents to the Title Company in escrow not later than the end of the Business Day immediately preceding the Closing Date in order to ensure the orderly and timely transfer of all funds necessary for Closing by not later than 3:00 p.m. (local Washington, DC time) on the Closing Date.

9.2 Seller’s Obligations at the Closing . At the Closing, Seller will do, or cause to be done, the following:

9.2.1 Closing Documents . Seller shall execute, acknowledge (if necessary) and deliver originals of the following documents:

9.2.1.1 Assignment and Assumption of Ground Lease in the form of Exhibit D hereto, subject to Section 7.6 of this Agreement;

9.2.1.2 Bill of Sale in the form of Exhibit E hereto;

9.2.1.3 Assignment and Assumption Agreement in the form of Exhibit F hereto;

9.2.1.4 Certificate of Non-Foreign Status in the form of Exhibit G hereto (the “ FIRPTA Certificate ”);

9.2.1.5 Letters to each tenant under the Leases in the form of Exhibit H hereto, notifying tenants of the conveyance of the Property to Purchaser and advising them that, following the Closing Date, all future payments of rent are to be made in the manner set forth therein;

9.2.1.6 Settlement statement showing all of the payments, adjustments and prorations provided for in Section 9.5 and otherwise agreed upon by Seller and Purchaser;

9.2.1.7 Such transfer tax forms as may be required as a condition to the recordation of the Assignment and Assumption of Ground Lease;

9.2.1.8 Subject to Section 8.4 , a certificate stating that each of Seller’s representations and warranties contained in this Agreement is true and correct in all material respects as of the Closing Date, including an updated Rent Roll dated within five (5) Business Days of the Closing Date, which certificate shall permit Purchaser’s mortgagee to rely upon the representations and warranties made by Seller pursuant to Section 6.1.9 of this Agreement, subject to Section 11.2 of this Agreement;

9.2.1.9 An Owner’s Affidavit in the form of Exhibit I attached hereto (the “ Owner’s Affidavit ”). Seller shall also deliver to the Title Company and the Purchaser such evidence as may be reasonably required by the Title Company with

respect to the authority of the person(s) executing the Assignment and Assumption of Ground Lease and the other documents required to be executed by Seller on behalf of Seller;

9.2.1.10 Such documents as may be required to effectuate the Ground Lessor Consent;

9.2.1.11 Evidence of the termination of Seller’s existing property management agreement and copies of notices of termination of such other service agreements and contracts that Purchaser elected to have terminated in accordance with Section 7.1.3 ;

9.2.1.12 The Lease Agreement, by and between Purchaser, as landlord, and Seller, as tenant, in the form of Exhibit J hereto (the “ Post-Closing Intelsat Lease ”); and

9.2.1.13 The Lease Certificates, to the extent received.

9.2.2 Original Property Information Documents . Seller will deliver to Purchaser originals within Seller’s possession or control of all items constituting the Property Information referenced in Article 4 , including, (i) to the extent in Seller’s possession, an original counterpart of the Ground Lease and original counterparts of the Leases, (ii) plans and specifications for the Improvements, and (iii) Seller’s lease files.

9.2.3 Possession . Seller will deliver to Purchaser possession of the Property, subject to the Leases.

9.2.4 Keys . Seller will deliver to Purchaser all keys in the possession or subject to the control of Seller, including, without limitation, master keys as well as combinations, card key inventory and unused cards for the security systems, if any.

9.2.5 Costs . Seller will pay all costs allocated to Seller pursuant to Section 9.5 of this Agreement.

9.3 Purchaser’s Obligations at the Closing . At the Closing, Purchaser will do, or cause to be done, the following:

9.3.1 Closing Documents . At Closing, Purchaser shall execute, acknowledge (if necessary) and deliver originals of the following documents:

9.3.1.1 Assignment and Assumption Agreement in the form of Exhibit F hereto, subject to Section 7.6 of this Agreement;

9.3.1.2 Settlement statement showing all of the payments, adjustments and prorations provided for in Section 9.5 and otherwise agreed upon by Seller and Purchaser;

9.3.1.3 Such transfer tax forms as may be required as a condition to the recordation of the Assignment and Assumption of Ground Lease;

9.3.1.4 Such evidence as may be reasonably required by the Title Company with respect to the authority of the person(s) executing the documents required to be executed by Purchaser on behalf of Purchaser;

9.3.1.5 A certificate stating that each of Purchaser’s representations and warranties contained in this Agreement is true and correct in all material respects;

9.3.1.6 The Post-Closing Intelsat Lease; and

9.3.1.7 Such documents as may be required to effectuate the Ground Lessor Consent.

9.3.2 Payment of Consideration . Purchaser will pay to Escrow Agent by bank wire transfer of immediately available funds at Closing the Purchase Price in accordance with Article 2 of this Agreement (subject to the credits, prorations and adjustments provided hereby). The net closing proceeds due to Seller shall be wire transferred to such account or accounts as Seller may designate, and actually received in such account or accounts, not later than 3:00 p.m. (local Washington, DC time) on the Closing Date (the “ Wiring Deadline ”), with time being strictly of the essence with respect thereto.

9.3.3 Costs . Purchaser will pay all costs allocated to Purchaser pursuant to Section 9.5 of this Agreement.

9.4 Escrow . The delivery of the documents and the payment of the sums to be delivered and paid at the Closing shall be accomplished through an escrow with the Escrow Agent.

9.5 Costs and Adjustments at Closing

9.5.1 Expenses . Subject to the provisions of Section 9.1 of this Agreement, the local recordation and transfer taxes and recording fees imposed upon or payable in connection with the recordation of the Assignment and Assumption of Ground Lease, and any closing or escrow fees of the Escrow Agent shall be paid one-half by Purchaser and one-half by Seller. Seller shall pay all costs and fees for Seller’s representatives and consultants lien releases and related title company charges. Purchaser shall pay all costs and fees for title examination, title insurance and related title company charges, the Survey of the Property and all of Purchaser’s due diligence studies and investigations. Seller and Purchaser shall each pay its respective attorney’s fees.

9.5.2 Real Estate and Personal Property Taxes . The taxes imposed pursuant to District of Columbia Code § 47-1005.01, which is commonly referred to as the District of Columbia Possessory Interest Tax, real estate taxes and any personal property taxes for the year in which the Closing occurs will be prorated between Seller and Purchaser as of the Apportionment Time on the basis of actual bills therefor, if available. If such bills are not available, then such taxes and other charges shall be prorated on the basis of the most currently

available tax bills and, thereafter, promptly re-prorated upon the availability of actual bills for the period. All rebates or reductions in taxes received subsequent to Closing, net of costs of obtaining the same, shall be prorated as of the Apportionment Time, when received. The current installment of all special assessments, if any, which are a lien against the Property at the time of Closing and which are being or may be paid in installments shall be prorated as of the Apportionment Time. As used herein, the term “ Apportionment Time ” shall mean 11:59 p.m. local Washington, DC time on the date immediately prior to the Closing Date. No portion of the Purchase Price shall be allocated to the Personal Property conveyed to Purchaser at Closing.

9.5.3 Lease Security Deposits and Rents . Seller shall pay to Purchaser, as a credit against the Purchase Price, the amount of any cash security deposits actually received by Seller pursuant to the Leases and not yet refunded to tenants. All rents, common area charges, real estate taxes and other costs or charges paid by tenants under the Leases shall be prorated as of the Apportionment Time, to the extent actually collected by Seller. With respect to any rent or charges that is delinquent at Closing, Seller shall have the right to pursue all rights and remedies against the tenants to recover such delinquencies; provided, however , that Seller shall not be entitled to dispossess such tenants. Purchaser shall promptly remit to Seller any rent or payments for any charges received by Purchaser subsequent to Closing which are attributable to periods prior to Closing, to the extent such rent or payments were not credited to Seller at Closing; provided, however , that such amounts received from tenants after Closing will first be applied to such charges as are then due and then applied in their reverse order of accrual until applied in full; it being acknowledged that rent payable pursuant to the Lease with the District of Columbia is paid in arrears and the amount payable pursuant to any such Lease for the month in which Closing occurs shall be apportioned by Seller and Purchaser upon receipt of such rent after the Closing. With respect to any security deposits which are other than cash, Seller shall deliver to Purchaser at the Closing the original documentation related thereto with such transfer documentation as may be necessary, and prior to the time on which any letter of credit is finally transferred, Seller shall, at Purchaser’s request, make draws thereon if permitted pursuant to a Lease, and remit the proceeds to Purchaser.

9.5.4 Utilities . Water, sewer, electric, fuel (if any) and other utility charges, other than those for which tenants under Leases are responsible directly to the provider, shall be prorated as of the Apportionment Time. If consumption of any of the foregoing is measured by meter, Seller shall, prior to the Closing Date, endeavor to obtain a reading of each such meter and a final bill as of the Closing Date. If there is no such meter or if the bill for any of the foregoing shall have not been issued as of the Closing Date, the charges therefor shall be adjusted as of the Apportionment Time on the basis of the charges of the prior period for which such bills were issued and shall be further adjusted between the parties when the bills for the correct period are issued. Seller and Purchaser shall cooperate to cause the transfer of utility accounts from Seller to Purchaser, if required by the utility. Seller shall be entitled to retain any utility security deposits to be refunded. At Closing, Purchaser shall post substitute utility security deposits to replace those previously paid by Seller or, if the utility provider will not refund such deposits to Seller, Seller shall be reimbursed therefor by Purchaser at Closing.

9.5.5 Insurance Policies . Premiums on insurance policies will not be adjusted. As of the Closing Date, Seller will terminate its insurance coverage and Purchaser will effect its own insurance coverage.

9.5.6 Commissions . Seller shall be responsible for the payment of all Commissions (as defined below); Purchaser shall be responsible for the payment of all Future Commissions (as defined below). For purposes hereof, the term “ Commissions ” shall mean the leasing commissions payable in connection with the Leases and the Licenses in effect as of the Effective Date. For purposes hereof, the term “ Future Commissions ” shall mean (i) any leasing commissions which become due and payable after the Effective Date and arise from and by reason of the exercise of any renewal option, extension option, expansion option, lease of additional space, right of first offer, right of first refusal or similar right or option in any such Lease, which is first exercised after the Effective Date, and (ii) all leasing commissions which may become due and payable (whether before or after the Closing Date) in connection with any new Lease entered into between the Effective Date and the Closing Date, in each case which have been approved (or deemed approved) by Purchaser to the extent required by the terms hereof. If as of the Closing Date Seller shall have not paid any Commissions for which Seller is responsible pursuant to the foregoing provisions, then (a) Purchaser shall receive a credit against the Purchase Price in an amount equal to such unpaid Commissions, (b) Purchaser shall thereby assume the obligation of Seller to pay such Commissions, and (c) Seller shall no longer be responsible for the payment of such Commissions.

9.5.7 Tenant Inducement Costs . Seller shall be responsible for the payment of all Tenant Inducement Costs (as defined below), other than Future Tenant Inducement Costs (as defined below). Purchaser shall be responsible for the payment of all Future Tenant Inducement Costs. For purposes hereof, the term “ Tenant Inducement Costs ” shall mean any out-of-pocket payments required under a Lease to be paid by the landlord thereunder to or for the benefit of the tenant thereunder which is in the nature of a tenant inducement or concession including, without limitation, tenant improvement costs, design, refurbishment and other work allowances, lease buyout costs, and moving allowances; provided, however , that “Tenant Inducement Costs” shall not include loss of income resulting from any free rental period (it being agreed that Seller shall bear such loss resulting from any free rental period with respect to the period prior to the Closing Date and that Purchaser shall bear such loss with respect to the period from and after the Closing Date). For purposes hereof, the term “ Future Tenant Inducement Costs ” shall mean (i) any Tenant Inducement Costs which may become due and payable, whether before or after the Closing Date, arising from, relating to or in connection with the exercise after the Effective Date of any renewal option, extension option, expansion option, lease of additional space, right of first offer, right of first refusal or similar right or option or the lapse or waiver of any right of cancellation expressly set forth and contained in any of the Leases in effect as of the Effective Date), and (ii) all Tenant Inducement Costs which may become due and payable in connection with the execution and delivery between the Effective Date and the Closing Date of any new Lease, in each case which have been approved (or deemed approved) by Purchaser to the extent required by the terms hereof. If as of the Closing Date Seller shall have not paid any Tenant Inducement Costs for which Seller is responsible pursuant to the foregoing provisions, then (a) Purchaser shall receive a credit against the Purchase Price in an amount equal to such unpaid Tenant Inducement Costs, (b) Purchaser shall thereby assume the obligations of Seller to pay such Tenant Inducement Costs pursuant to the Assignment and Assumption Agreement in the form of Exhibit F hereto, and (c) Seller shall no longer be responsible for the payment of such Tenant Inducement Costs.

9.5.8 Closing Statement . Not later than two (2) Business Days prior to the Closing, Seller or its agents or designees shall prepare, and promptly thereafter, Seller and Purchaser shall jointly agree upon, a closing statement (the “ Closing Statement ”) that will show the net amount due either to Seller or to Purchaser as the result of the adjustments and prorations provided for in this Agreement, and such net due amount shall be added to or subtracted from the cash balance of the Purchase Price to be paid to Seller at the Closing, as applicable. Not later than the date that is one hundred eighty (180) days after the Closing Date, Seller and Purchaser shall jointly prepare a final closing statement reasonably satisfactory to Seller and Purchaser in form and substance (the “ Final Closing Statement ”) setting forth the final determination of the adjustments and prorations provided for herein and setting forth any items that are not capable of being determined at such time (and the manner in which such items shall be determined and paid). The net amount due Seller or Purchaser, if any, by reason of adjustments to the Closing Statement as shown in the Final Closing Statement, shall be paid in cash by the party obligated therefor within five (5) Business Days following that party’s receipt of the approved Final Closing Statement. The adjustments, prorations and determinations agreed to by Seller and Purchaser in the Final Closing Statement shall be conclusive and binding on the parties hereto except for any items that are not capable of being determined at the time the Final Closing Statement is agreed to by Seller and Purchaser, which items shall be determined and paid promptly as soon as they are capable of being determined and except for other amounts payable hereunder pursuant to provisions which survive the Closing. Prior to and following the Closing Date, each party shall provide the other with such information as the other shall reasonably request (including, without limitation, access to the books, records, files, ledgers, information and data with respect to the Property during normal business hours upon reasonable advance notice) in order to make the preliminary and final adjustments and prorations provided for herein.

9.5.9 Ground Lease Payments . The Ground Lease Payments (hereinafter defined) shall be prorated between Purchaser and Seller as of the Apportionment Time. Seller shall be responsible for any Ground Lease Payments or other payments due and owing to Ground Lessor under the Ground Lease for the time prior to the Apportionment Time; and Purchaser shall be responsible for any Ground Lease Payments or other payments due and owing to Ground Lessor under the Ground Lease for the time after the Apportionment Time. As used herein, the term “ Ground Lease Payments ” shall mean (i) the additional rent payments payable pursuant to Article 3-2 of the Ground Lease; (ii) the management fee payable pursuant to Article 3-3 of the Ground Lease, and (iii) the parking fee payable pursuant to Article 3-4 of the Ground Lease. The Ground Lease Payments shall not include the sum referenced in Article 3-1 of the Ground Lease.

9.5.10 No Financing Contingency . Notwithstanding anything contained herein (or implied) to the contrary, it is expressly acknowledged by Purchaser (i) that the Closing of the transactions contemplated by this Agreement is not subject to any financing contingency and Purchaser agrees that the ability or inability of Purchaser to obtain debt, equity investments or other financing in order to pay all or any part of the Purchase Price shall not be a contingency or condition to any of Purchaser’s obligations under this Agreement, and (ii) Seller shall have no obligation whatsoever to assist or cooperate with Purchaser in connection with obtaining any financing unless otherwise expressly agreed to herein; provided, however , that at Purchaser’s request, Seller will distribute to any tenants designated by Purchaser a form of subordination, non-disturbance and attornment agreement requested by Purchaser’s mortgage lender, and seek

the tenants’ cooperation in the execution thereof, but failure by any one or more tenant to cooperate or execute such documents shall not constitute a default by Seller or constitute a failure of a condition to Closing.

9.5.11 Survival . The provisions of this Section 9.5 shall survive Closing or a termination of this Agreement.

ARTICLE 10 DAMAGE AND CONDEMNATION

10.1 Damage . If, prior to the Closing, all or any portion of the Property is damaged by fire or any other cause whatsoever, Seller shall promptly give Purchaser written notice of such damage. Seller shall comply with the requirements of the Ground Lease with respect to any casualty that occurs from and after the Effective Date, notwithstanding anything to the contrary contained in this Agreement.

10.1.1 Minor Damage . If the cost for repairing such damage is less than or equal to Four Million Dollars ($4,000,000.00) (as determined by Seller’s independent insurer), then Purchaser shall have the right at Closing to receive the amount of the deductible plus all insurance proceeds received by Seller as a result of such loss, or an assignment of Seller’s rights to such insurance proceeds, and this Agreement shall continue in full force and effect with no reduction in the Purchase Price, and Seller shall have no further liability or obligation to repair such damage or to replace the Property.

10.1.2 Major Damage . If the cost for repairing such damage is greater than Four Million Dollars ($4,000,000.00) (as determined by Seller’s independent insurer), then Purchaser shall have the option, exercisable by written notice delivered to Seller within ten (10) Business Days after Seller’s notice of damage to Purchaser, either (i) to receive the amount of the deductible plus all insurance proceeds received by Seller as a result of such loss, or an assignment of Seller’s rights to such insurance proceeds, and this Agreement shall continue in full force and effect with no reduction in the Purchase Price, and Seller shall have no further liability or obligation to repair such damage or to replace the Property; or (ii) to terminate this Agreement. If Purchaser elects to terminate this Agreement, Purchaser shall give notice to Seller thereof, the Deposit shall be returned to Purchaser, and thereafter neither party will have any further rights or obligations hereunder, except for any obligations that expressly survive termination. If Purchaser fails to notify Seller within such ten (10) Business Day period of Purchaser’s election to terminate this Agreement, then Purchaser shall be deemed to have elected option (i), and Purchaser and Seller shall proceed to Closing in accordance with the terms and conditions of this Agreement.

10.2 Condemnation and Eminent Domain . In the event that any condemnation proceedings are instituted, or notice of intent to condemn is given, with respect to all or any portion of the Property, Seller shall promptly notify Purchaser thereof, in which event Purchaser shall have the right, at its sole option, to terminate this Agreement by written notice to Seller and Escrow Agent within ten (10) days after receipt of written notice of such action, in which event the Deposit shall be returned to Purchaser, whereupon neither party shall have any further rights, duties or obligations hereunder other than the obligations and rights set forth herein that expressly survive the termination of this Agreement. If Purchaser does not elect to terminate this

Agreement, then Purchaser shall consummate the purchase of the Property without reduction of the Purchase Price, and the right to collect any condemnation award or compensation for such condemnation shall be assigned by Seller to Purchaser at Closing.

ARTICLE 11 REMEDIES AND ADDITIONAL COVENANTS

11.1 Seller Default At or Before Closing . If Seller is in breach or default of any of its obligations or agreements hereunder when performance is required on or prior to the Closing Date, or if any of the representations contained in Section 6.1 should be false in any material respect (subject to the provisions of Section 8.4 ), and Purchaser shall become actually aware of same on or prior to the Closing Date and Purchaser shall not have waived its claims with regard to same pursuant to this Agreement, then Purchaser shall give Seller written notice of such breach or default on or prior to the Closing Date and Seller shall have ten (10) Business Days from the date of receipt of such notice to cure such breach or default and the Closing Date shall be extended accordingly. If Seller fails to cure such breach or default within such ten (10) Business Day period, then Purchaser shall have the right, at its sole option and as its sole remedy, and Purchaser hereby waives its right to pursue any other remedy at law or in equity, and as Purchaser’s sole and exclusive remedy, Purchaser shall either (i) to terminate this Agreement by written notice to Seller and the Escrow Agent, in which event the Deposit shall be returned to Purchaser, whereupon neither party shall have any further rights, duties or obligations hereunder other than the obligations and rights set forth herein that expressly survive the termination of this Agreement, or (ii) to pursue specific performance of the obligations of Seller hereunder. As a condition precedent to Purchaser’s exercising any right it may have to bring an action for specific performance hereunder, Purchaser must commence such action for specific performance within forty-five (45) days after the scheduled Closing Date. Purchaser agrees that its failure to timely commence such an action for specific performance within such forty-five (45) day period shall be deemed a waiver by it of its right to commence an action for specific performance as well as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of pendency of action or similar notice against the Property. In no event shall Purchaser seek, or Seller be liable for, any damages to Purchaser, including, without limitation, punitive or consequential damages.

11.2 Seller Default From and After Closing.

11.2.1 If Seller is in breach or default of any of its obligations or agreements hereunder that survive the Closing when performance is required or if any of the Express Representations should be false in any material respect and Purchaser shall first become actually aware of same after the Closing Date, then Purchaser shall give Seller written notice of such breach or default of such obligation, agreement or representation hereunder prior to the expiration of the applicable survival period of such breach or default and Seller shall have thirty (30) days from the date of receipt of such notice to cure such breach or default. If Seller fails to cure such breach or default within such thirty (30) day period, and the reasonably estimated losses or damages sustained as a result of Seller’s failure or inability to perform any of its obligations, agreements or Express Representations hereunder exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) (the “ Floor ”), then Seller shall be liable for the actual direct damages suffered by Purchaser due to such uncured breach or default from the first dollar of loss. Notwithstanding anything to the contrary contained herein, (i) in no event shall Seller be

liable to Purchaser for damages under this Section in an aggregate amount in excess of One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00) (the “ Liability Cap ”), except as otherwise set forth in Section 11.2.2 below, (ii) Seller’s inability to satisfy a condition of this Agreement shall not be considered a default by Seller hereunder unless such inability results from the breach of any of Seller’s representations set forth in Section 6.1 or the breach of Seller’s express covenants and obligations hereunder, and (iii) if Purchaser has knowledge of a default by Seller on the Closing Date and Purchaser elects to close the transaction contemplated herein, Purchaser shall be deemed to have irrevocably waived such default and Seller shall not have any liability with respect to such default.

11.2.2 In the event the Ground Lessor does not deliver the Ground Lessor No Default Confirmation, the Liability Cap shall be increased by an amount equal to One Million Seven Hundred Fifty Thousand and 00/100 Dollars ($1,750,000.00) (the “ Liability Cap Increase ”) (i.e., $3,000,000 in the aggregate), which Liability Cap Increase shall solely apply to damages suffered by Purchaser as a result of a breach by Seller of the Liability Cap Increase Representation.

11.3 Purchaser Default . The parties acknowledge and agree that Seller should be entitled to compensation for any detriment suffered if Purchaser fails to consummate the purchase of the Property if and when required to do so under the terms of this Agreement, but agree that it would be extremely difficult to ascertain the extent of the actual detriment Seller would suffer as a result of such failure. Consequently, if Purchaser fails to consummate the purchase of the Property on the Closing Date, then, as Seller’s sole remedy, Seller shall be entitled to terminate this Agreement by giving written notice thereof to Purchaser prior to or at the Closing, in which event the Deposit shall be paid to Seller as fixed, agreed and liquidated damages, and, after the payment of the Deposit to Seller, neither Seller nor Purchaser will have any further rights or obligations under this Agreement, except for any obligations that expressly survive termination.

11.4 Delivery of Materials . Notwithstanding anything contained in this Agreement to the contrary, if this Agreement is terminated for any reason whatsoever, then Purchaser shall promptly deliver to Seller all Property Information provided to Purchaser by Seller, including copies thereof in any form whatsoever, including electronic form, along with copies of any and all tests results and studies of the Property performed by or on behalf of Purchaser pursuant to Article 5 , excluding any confidential or proprietary information or financial modeling. The obligations of Purchaser under this Section 11.4 shall survive any termination of this Agreement.

ARTICLE 12 BROKERAGE COMMISSION

12.1 Brokers . Seller represents and warrants to Purchaser that Seller has not contacted or entered into any agreement with any real estate broker, agent, finder, or any party in connection with this transaction, except for CBRE, Inc. (“ Seller’s Broker ”) and that Seller has not taken any action which would result in any real estate broker’s or finder’s fees or commissions being due and payable to any party other than Seller’s Broker with respect to the transaction contemplated hereby. Seller will be solely responsible for the payment of Seller’s Broker’s commission in accordance with the provisions of a separate agreement. Purchaser hereby represents and warrants to Seller that Purchaser has not contracted or entered into any

agreement with any real estate broker, agent, finder, or any party in connection with this transaction and that Purchaser has not taken any action which would result in any real estate broker’s or finder’s fees or commissions being due or payable to any party with respect to the transaction contemplated hereby.

12.2 Indemnity . Each party hereby indemnifies and agrees to hold the other party harmless from and against any loss, liability, damage, cost, or expense (including, without limitation, reasonable attorneys’ fees) paid or incurred by the other party by reason of a breach of the representation and warranty made by such party under this Article 12 . Notwithstanding anything to the contrary contained in this Agreement, the indemnities set forth in this Section 12.2 shall survive the Closing or earlier termination of this Agreement.

ARTICLE 13 NOTICES

13.1 Written Notice . All notices, demands and requests which may be given or which are required to be given by either party to the other party under this Agreement must be in writing.

13.2 Method of Transmittal . All notices, demands, requests or other communications required or permitted to be given hereunder must be sent (i) by United States certified mail, postage fully prepaid, return receipt requested, (ii) by hand delivery, (iii) by UPS or a similar nationally recognized overnight courier service, or (iv) by facsimile with both telephonic confirmation and a confirmation copy delivered by another method set forth in this Section. All such notices, demands, requests or other communications shall be deemed to have been given for all purposes of this Agreement upon the date of receipt or refusal, except that whenever under this Agreement a notice is either received on a day which is not a Business Day or is required to be delivered on or before a specific day which is not a Business Day, the day of receipt or required delivery shall automatically be extended to the next Business Day.

13.3 Addresses . The addresses for proper notice under this Agreement are as follows:


*As to Seller:*		Intelsat Global Service LLC 3400 International Drive, NW Washington, DC 20008 Attn: Robert A. Lambert Fax: (202) 944-6899

*With copies to:*		Intelsat Global Service LLC 3400 International Drive, NW Washington, DC 20008 Attn: General Counsel Fax: (202) 944-7529

		- and -

		DLA Piper LLP (US) 500 Eighth Street, NW Washington, DC 20004 Attention: Frederick L. Klein Fax: (202) 799-5101



*As to Purchaser:*		SL 4000 Connecticut LLC 601 W. 26th Street, Suite 1275 New York, NY 10001 Attention: Mark Karasick Fax: (646) 365-0059

*With a copy to:*		Gerstein Strauss & Rinaldi LLP 57 West 38th Street, Ninth Floor New York, NY 10018 Attention: Victor Gerstein Fax: (212) 575-2387

*And to:*		Levy Holm Pellegrino & Drath LLP 950 Third Avenue, Suite 3101 New York, NY 10022 Attention: Steven I. Holm Fax: (212) 759-9390

*As to Escrow Agent:*		First American Title Insurance Company 2750 Chancellorsville Drive Tallahassee, FL 32312 Attn: Jason Jones Fax: 850-668-0312

Either party may from time to time by written notice to the other party designate a different address for notices. Notices sent to or from an address outside of the continental United States shall be sent only by one of the methods specified in clauses (ii), (iii) or (iv) of this Section 13.3 .

ARTICLE 14 ASSIGNMENT

Purchaser shall not have the right to assign its rights or delegate its duties under this Agreement without the prior written consent of Seller, which consent may be granted or withheld in Seller’s sole and absolute discretion. For purposes hereof, an assignment shall include a transfer, directly or indirectly, of any of the ownership, membership or other legal or beneficial interests in Purchaser, and shall also include any transfer that could affect the Ground Lessor Consent in any manner. Within twenty (20) days following the Effective Date, Purchaser shall provide written notice to Seller specifying the names of each entity and individual owning at least a direct or indirect five percent (5%) equity interests in Purchaser.

ARTICLE 15 MISCELLANEOUS

15.1 Entire Agreement . This Agreement embodies the entire agreement between the parties and cannot be varied except by the written agreement of the parties and supersedes all prior agreements and undertakings.

15.2 Modifications . This Agreement may not be modified except by the written agreement of the parties.

15.3 Gender and Number . Words of any gender used in this Agreement will be construed to include any other gender and words in the singular number will be construed to include the plural, and vice versa, unless the context requires otherwise.

15.4 Captions . The captions used in connection with the Articles, Sections and Subsections of this Agreement are for convenience only and will not be deemed to expand or limit the meaning of the language of this Agreement.

15.5 Successors and Assigns . This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.

15.6 Controlling Law . This Agreement will be construed under, governed by and enforced in accordance with the laws of the District of Columbia (without reference to conflicts of laws principles).

15.7 Exhibits . All exhibits, attachments, schedules, annexed instruments and addenda referred to herein will be considered a part hereof for all purposes with the same force and effect as if set forth verbatim herein.

15.8 No Rule of Construction . Seller and Purchaser have each been represented by counsel in the negotiations and preparation of this Agreement; therefore, this Agreement will be deemed to be drafted by both Seller and Purchaser, and no rule of construction will be invoked respecting the authorship of this Agreement.

15.9 Severability . In the event that any one or more of the provisions contained in this Agreement (except the provisions relating to Seller’s obligations to convey the Property and Purchaser’s obligation to pay the Purchase Price, the invalidity of either of which shall cause this Agreement to be null and void) are held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had not been contained herein; provided, however , that the parties hereto shall endeavor in good faith to rewrite the affected provision to make it (i) valid, and (ii) consistent with the intent of the original provision.

15.10 Time of Essence . Time is important to both Seller and Purchaser in the performance of this Agreement, and both parties have agreed that TIME IS OF THE ESSENCE with respect to any date set out in this Agreement.

15.11 Business Days . “ Business Day ” means any day on which business is generally transacted by banks in the District of Columbia, but shall not include the holidays of Rosh Hashanah (September 17 and 18, 2012), Yom Kippur (September 26, 2012) and Succoth (October 1, 2, 8 and 9, 2012). If the final date of any period which is set out in any paragraph of this Agreement falls upon a day which is not a Business Day, then, and in such event, the time of such period will be extended to the next Business Day.

15.12 No Memorandum . Purchaser and Seller agree not to record this Agreement or any memorandum hereof.

15.13 Press Releases . Prior to Closing, any release to the public of information with respect to the matters set forth in this Agreement will be made only in the form approved by Purchaser and Seller and their respective counsel.

15.14 Attorneys’ Fees and Costs . In the event either party is required to resort to litigation to enforce its rights under this Agreement, the prevailing party in such litigation will be entitled to collect from the other party all costs, expenses and reasonable attorneys’ fees incurred in connection with such action.

15.15 Counterparts and Expiration of Offer . This Agreement may be executed in multiple counterparts (which counterparts may be executed by facsimile) which shall together constitute a single document. However, this Agreement shall not be effective unless and until all counterpart signatures have been obtained. An unsigned draft of this Agreement shall not be considered an offer by either party to purchase or sell the Property.

15.16 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE RELATIONSHIP OF SELLER AND PURCHASER HEREUNDER, PURCHASER’S OWNERSHIP OR USE OF THE PROPERTY, AND/OR ANY CLAIMS OF INJURY OR DAMAGE RELATED TO THE PROPERTY.

15.17 Confidentiality

15.17.1 Except as provided otherwise in this Section 15.17 , Purchaser and Seller, for the benefit of each other, hereby agree that neither of them will release or cause or permit to be released to the public any press notices, publicity (oral or written) or advertising promotion relating to, or otherwise publicly announce or disclose or cause or permit to be publicly announced or disclosed, in any manner whatsoever, the terms, conditions or substance of this Agreement or the transactions contemplated herein, without first obtaining the consent of the other party hereto, which may be granted or withheld in the sole discretion of the other party. However, each party consents to any disclosure of this Agreement which the other party reasonably believes is required by law or which is recommended in good faith by counsel to such other party.

15.17.2 It is understood that the foregoing shall not preclude any party from discussing the substance or any relevant details of the transactions contemplated in this Agreement on a confidential basis with any of its attorneys, accountants, professional

consultants, financial advisors, rating agencies, or potential lenders, as the case may be, or prevent any party hereto from complying with applicable laws, including, without limitation, governmental regulatory, disclosure, tax and reporting requirements. Notwithstanding the foregoing, Purchaser shall have the right to deliver such information to Purchaser’s potential investors and potential lenders, in each case on a need-to-know basis after the recipients have been informed of the confidential nature of such information and directed not to disclose such information except in accordance with this Section 15.17 . The aforementioned shall not preclude the disclosure to potential investors of the proposed purchase price, the net operating income of the Property and the approximate rate of return on the investment.

15.17.3 In addition to any other remedies available to Seller and Purchaser, Seller and Purchaser shall each have the right to seek equitable relief, including, without limitation, injunctive relief or specific performance, against the other party or its representatives in order to enforce the provisions of this Section 15.17 .

15.17.4 Notwithstanding any other provision of this Agreement, the provisions of Section 15.17 shall survive the termination of this Agreement for one (1) year following the Effective Date, but shall not survive Closing.

15.17.5 Nothing contained in this Section 15.17 shall be construed to modify, or terminate, the terms and conditions of the Confidentiality Agreement dated March 26, 2012, executed by Shimshon Klugman, on behalf of Purchaser (the “ Confidentiality Agreement ”); provided, however , in the event of any express conflict between the terms of this Section 15.17 and the Confidentiality Agreement, the terms of this Section 15.17 shall control.

15.18 Jurisdiction and Service of Process . The parties hereto agree to submit to personal jurisdiction in the District of Columbia in any action or proceeding arising out of this Agreement and, in furtherance of such agreement, the parties hereby agree and consent that without limiting other methods of obtaining jurisdiction, personal jurisdiction over the parties in any such action or proceeding may be obtained within or without the jurisdiction of any court located in the District of Columbia and that any process or notice of motion or other application to any such court in connection with any such action or proceeding may be served upon the parties by certified mail to or by personal service at the last known address of the parties, whether such address be within or without the jurisdiction of any such court. Purchaser hereby irrevocably designates its counsel, Steven I. Holm, as its agent for service of process in connection with any matter relating to this Agreement. Any legal suit, action or other proceeding by one party to this Agreement against the other arising out of or relating to this Agreement (other than any dispute which, pursuant to the express terms of this Agreement, is to be determined by arbitration) shall be instituted only in the Superior Court of the District of Columbia, or the United States District Court for the District of Columbia, and each party hereby waives any objections which it may now or hereafter have based on venue and/or forum non-conveniens of any such suit, action or proceeding and submits to the jurisdiction of such courts. The provisions of this Section 15.18 shall survive the Closing or the termination hereof.

15.19 Seller’s Exculpation. Purchaser agrees that it does not have and will not have any claims or causes of action against the Seller Knowledge Individual or any disclosed or undisclosed officer, director, employee, trustee, shareholder, member, manager, partner,

principal, parent, subsidiary or other affiliate of Seller, including, without limitation, any officer, director, employee, trustee, shareholder, partner or principal of any such parent, subsidiary or other affiliate (collectively, “ Seller’s Affiliates ”), arising out of or in connection with this Agreement or the transactions contemplated hereby. Purchaser agrees to look solely to Seller’s interest in the Property or the proceeds received by Seller at Closing for the satisfaction of any liability or obligation arising under this Agreement or the transactions contemplated hereby, or for the performance of any of the covenants, warranties or other agreements contained herein, and further agrees not to sue or otherwise seek to enforce any personal obligation against any of Seller’s Affiliates with respect to any matters arising out of or in connection with this Agreement or the transactions contemplated hereby. Without limiting the generality of the foregoing provisions of this Section 15.19 , Purchaser hereby unconditionally and irrevocably waives any and all claims and causes of action of any nature whatsoever it may now or hereafter have against Seller’s Affiliates, and hereby unconditionally and irrevocably releases and discharges Seller’s Affiliates from any and all liability whatsoever which may now or hereafter accrue in favor of Purchaser against Seller’s Affiliates, in connection with or arising out of this Agreement or the transactions contemplated hereby. The provisions of this Section 15.19 shall survive the termination of this Agreement and the Closing.

15.20 Purchaser’s Exculpation . Notwithstanding anything appearing to the contrary in this Agreement, no direct or indirect partner, member or shareholder of Purchaser (or any officer, director, agent, member, manager, personal representative, trustee or employee of any such direct or indirect partner, member or shareholder) shall be personally liable for the performance of the obligations of, or in respect of any claims against, Purchaser arising under this Agreement. No personal judgment shall be sought or obtained against any of the foregoing in connection with this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement as of the date first written above.


SELLER :

INTELSAT GLOBAL SERVICE LLC , a Delaware limited liability company

By:		/s/ Michelle V. Bryan
Name:		Michelle V. Bryan
Title:		Senior Vice Pres. - Human Resources and Corporate Services

PURCHASER :

SL 4000 CONNECTICUT LLC , a Delaware limited liability company

By:		/s/ Steven I. Holm
Name:		Steven I. Holm
Title:		Authorized Signatory

EXHIBIT J

POST-CLOSING INTELSAT LEASE

LEASE AGREEMENT

B ETWEEN

SL 4000 CONNECTICUT LLC

(“ L ANDLORD ”)

AND

INTELSAT GLOBAL SERVICE LLC

(“ T ENANT ”)

* * *

3400 I NTERNATIONAL D RIVE , NW

( ALSO KNOWN AS 4000 C ONNECTICUT A VENUE , NW)

W ASHINGTON , DC 20008

E FFECTIVE D ATE : , 2012

TABLE OF CONTENTS


1.	DEMISED PREMISES	1
2.	TERM	1
3.	USE	1
4.	RENT	2
5.	OPTION TO RENEW	2
6.	PARKING	3
7.	CONDITION OF PREMISES	4
8.	MAINTENANCE	4
9.	ALTERATIONS	5
10.	ENVIRONMENTAL	6
11.	TERMINATION RIGHT	7
12.	RESPONSIBILITY FOR DAMAGE TO DEMISED PREMISES	7
13.	LIABILITY OF LANDLORD	8
14.	SIGNS AND FURNISHINGS	8
15.	SERVICES AND UTILITIES	9
16.	ENTRY FOR HOUSEKEEPING, REPAIRS AND INSPECTIONS	10
17.	TENANT’S EQUIPMENT	11
18.	INDEMNITY AND INSURANCE	11
19.	FIRE AND OTHER CASUALTY DAMAGE TO DEMISED PREMISES	12
20.	DEFAULT OF TENANT	13
21.	WAIVER	15
22.	ATTORNMENT	16
23.	CONDEMNATION	17
24.	RIGHT OF LANDLORD TO CURE TENANT’S DEFAULT; LATE PAYMENTS	17
25.	NO PARTNERSHIP	18
26.	NO REPRESENTATIONS BY LANDLORD	18
27.	BROKERS	18
28.	NOTICES	18
29.	ESTOPPEL CERTIFICATES	19
30.	COVENANTS OF LANDLORD	20
31.	SURRENDER OF DEMISED PREMISES	21
32.	HOLDING OVER	21
33.	UNDERLYING LEASE	21
34.	ASSIGNMENT AND SUBLETTING	22
35.	CONSENTS, COMPLIANCE WITH EXECUTIVE ORDER, ETC	23
36.	GENDER/HEADINGS	23
37.	BENEFIT AND BURDEN	23
38.	GOVERNING LAW	23
39.	WAIVER OF TRIAL BY JURY	24
40.	CERTIFICATION OF THE PARTIES	24
41.	ASSIGNMENT	24
42.	ENTIRE AGREEMENT	24
43.	FORCE MAJEURE	24
44.	PROHIBITION AGAINST RECORDING	24


LIST OF EXHIBITS

EXHIBIT A:		Demised Premises

EXHIBIT B:		Additional Landlord Services and Maintenance Obligations

EXHIBIT C:		Non-Renewal Premises

EXHIBIT D:		Parking Rights

EXHIBIT E-1:		Data Room

EXHIBIT E-2:		Control Center

EXHIBIT E-3:		Network Operations Center

EXHIBIT F:		Form of Letter of Credit

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into this , 2012 [Note: Closing Date to be Inserted] (this “ Lease ”), by and between SL 4000 Connecticut LLC , a Delaware limited liability company (“ Landlord ”) and Intelsat Global Service LLC , a Delaware limited liability company (“ Tenant ”).

In consideration of the agreements hereinafter set forth, the parties hereto mutually agree as follows:

1.	DEMISED PREMISES

Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the rentable area of the Building (hereinafter defined) depicted on Exhibit A attached hereto (the “ Demised Premises ”). Landlord and Tenant acknowledge that the rentable area of the Demised Premises is 350,237 rentable square feet and in no event shall either party have the right to remeasure the rentable area of the Demised Premises. As used herein, the term “ Building ” shall mean the building located at 4000 Connecticut Avenue, NW (also known as 3400 International Drive, NW), Washington, DC 20008. Landlord grants Tenant the non-exclusive right, together with other occupants of the Building and their agents, employees and invitees, to use the common areas of the Building, and Landlord shall maintain such common areas in accordance with the terms of this Lease, including, without limitation, Exhibit B attached hereto.

TERM

The “ Lease Commencement Date ” shall be the first date set forth above, which shall be the date Landlord acquires all of Tenant’s right, title and interest in and to the Building. The term of this Lease (the “ Term ”) shall be for a period beginning on the Lease Commencement Date and shall expire on , 2014 (i.e. the last day of the eighteenth (18th) full calendar month following the Lease Commencement Date) (the “ Scheduled Lease Expiration Date ”), unless such Term is extended or earlier terminated in accordance with the terms hereof. The “Term” shall also include any renewal or extension of the Term, if applicable.

USE

Tenant shall use and occupy the Demised Premises solely for its business purposes as currently conducted (the “ Permitted Use ”). Tenant will not knowingly use or occupy the Demised Premises for any unlawful, disorderly, or hazardous purpose, or in any manner that constitutes waste, nuisance or unreasonable annoyance to Landlord or any tenant of the Building. Tenant shall comply, at its expense, in all material respects, with all applicable present and future laws, ordinances, regulations and orders of all governmental authorities having jurisdiction over the Demised Premises; provided, however, in no event shall Landlord or Tenant have any obligation to make any changes, upgrades or other improvements to the Demised Premises in order to comply with any present or future laws, ordinances, regulations or orders of any governmental authorities having jurisdiction over the Demised Premises, subject to Section 18 of this Lease. Use of the Demised Premises is subject to all covenants, conditions and restrictions of record, provided that Landlord shall not voluntarily impose any future covenants, conditions

or restrictions of record that will prohibit Tenant’s use of the Demised Premises for the Permitted Use. As used herein, “ International Center ” shall have the same meaning ascribed to it in the Underlying Lease (hereinafter defined).

RENT

A. Beginning on the Lease Commencement Date, Tenant covenants and agrees to pay as “ Base Rent ” for the Premises the following amounts set forth in this Section 4 and as otherwise provided in this Lease. “ Additional Rent ” shall mean such costs, expenses, charges and other payments to be made by (or on behalf of) Tenant to Landlord (or to a third party if required under this Lease) pursuant to the terms of this Lease, whether or not the same be designated as such. “Rent” or “rent” shall mean all Base Rent and Additional Rent due hereunder.

B. Commencing on the Lease Commencement Date and thereafter during the Term Year, Tenant shall pay the annual Base Rent in the amount of Nine Million and 00/100 Dollars ($9,000,000.00) (the “ Annual Base Rent ”), subject to the provisions of this Lease. Annual Base Rent shall be payable in equal monthly installments in the amount of Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) (the “ Monthly Base Rent ”), in advance, without set off, deduction or demand, on the first (1st) day of each calendar month during the Term. The first (1st) monthly installment of Monthly Base Rent shall be due and payable by Tenant upon the Lease Commencement Date (including any Monthly Base Rent due for the partial month in which the Lease Commencement Date occurs, if applicable). If the Lease Commencement Date shall be a day other than the first day of a calendar month, the Monthly Base Rent for such partial month shall be the prorated amount of the Monthly Base Rent, which proration shall be based upon the actual number of days of such partial month. All payments of Monthly Base Rent shall be wired to the Landlord’s account, in accordance with wiring instructions provided by Landlord. Annual Base Rent and Monthly Base Rent for the Renewal Period (hereinafter defined) shall be determined in accordance with Section 5 below.

C. In no event shall Tenant have any obligation to reimburse Landlord for any operating expenses or real estate taxes (including, without limitation, the taxes imposed pursuant to District of Columbia Code § 47-1005.01, which is commonly referred to as the District of Columbia Possessory Interest Tax) that are incurred by Landlord during the Term, except as otherwise expressly set forth in this Lease.

5.	OPTION TO RENEW

A. Provided that there does not then exist an outstanding, uncured monetary or material non-monetary Event of Default (as hereinafter defined), Tenant shall have and is hereby granted one option to renew or extend (the “ Renewal Option ”) the Term for the Renewal Period (hereinafter defined). Subject to the provisions of this Section 5 , the Renewal Option shall be exercisable by Tenant giving irrevocable written notice (the “ Renewal Notice ”) to Landlord of the exercise of such Renewal Option at least four (4) months prior to the expiration of the Term; provided, however, that the Renewal Notice shall be delivered not less than six (6) months prior to the expiration of the Term if Tenant elects a Renewal Period of seven (7) months or longer, time being of the essence with respect to Tenant’s delivery of the Renewal Notice. The Renewal

Notice shall specify the length of the Renewal Period (not less than three (3) months and not to exceed twelve (12) months), which notice shall include the date of surrender of the Demised Premises (the “ Renewal Period ”).

B. Except as otherwise set forth in Section 5.C. below, all terms and conditions of this Lease shall remain in full force and effect during the Renewal Period; provided, however, during the Renewal Period, Tenant shall pay Annual Base Rent in the amount of Ten Million Five Hundred Thousand and 00/100 Dollars ($10,500,000.00) (the “ Annual Base Rent ”). Annual Base Rent shall be payable in equal monthly installments in the amount of Eight Hundred Seventy Five Thousand and 00/100 Dollars ($875,000.00) (the “ Monthly Base Rent ”), and otherwise in accordance with Section 4 of this Lease.

C. Notwithstanding anything to the contrary contained in this Lease, if Tenant exercises the Renewal Option in accordance with the provisions of this Section 5 , Tenant shall surrender to Landlord approximately 40,000 rentable square feet of the Demised Premises, the location of which shall be approximately the area depicted on Exhibit C attached hereto (the “ Non-Renewal Premises ”), on or before the Scheduled Lease Expiration Date. The Non-Renewal Premises shall be specified in the Renewal Notice and shall be subject to Landlord’s approval, not to be unreasonably withheld, conditioned or delayed. From and after the Scheduled Lease Expiration Date, Landlord and Tenant shall each be released from any obligations or liabilities arising under this Lease with respect to the Non-Renewal Premises, excepting those provisions that would naturally survive the expiration or earlier termination of this Lease. The costs of segregating the Non-Renewal Premises and the remaining Demised Premises shall be paid one-half (1/2) by Landlord and one-half (1/2) by Tenant.

PARKING

A. During the Term, Landlord shall provide to Tenant for use by Tenant’s employees and invitees the parking spaces described in Exhibit D attached hereto, at no additional charge to Tenant. Notwithstanding the foregoing, during the Renewal Period, the number of spaces allocated to Tenant shall be proportionately reduced to reflect the return of the Non-Renewal Premises.

B. Tenant agrees that it and its employees shall observe reasonable safety precautions in the use of the parking garage, and shall at all times abide by all rules and regulations reasonably promulgated by Landlord or the parking operator governing the use of the parking garage. Landlord reserves the right to establish rates and fees for the use of such parking areas for visitors and to establish and modify or amend reasonable rules and regulations governing the use of such parking areas. Landlord shall have the right to revoke a user’s parking privileges in the event such user fails after two or more warnings to abide by the rules and regulations governing the use of such parking areas. Tenant shall be prohibited from using such parking areas for purposes other than for parking registered vehicles. The storage or repair of vehicles in such parking areas shall be prohibited.

C. Landlord reserves the right to institute a valet parking system or a magnetic card access system or any other parking or permit system Landlord deems reasonably appropriate.

D. Notwithstanding any other provision of this Lease, Landlord shall not be liable for any damage or loss to any automobile (or property therein) parked in, on or about such parking areas, or for any injury sustained by any person in, on or about such areas, except to the extent caused by Landlord’s negligence or intentional misconduct.

7.	CONDITION OF PREMISES

Landlord shall deliver the Demised Premises to Tenant in its “as is” condition. Landlord is under no obligation to make any improvements of any nature to the Demised Premises. Tenant acknowledges that it is completely familiar with the Demised Premises and legally permissible uses thereon. Accordingly, Tenant accepts possession of the Demised Premises in its “as is” condition as of the Lease Commencement Date. Landlord makes no warranty or representation, express or implied, with respect to the Demised Premises, either as to its fitness for use, its design or condition, or any particular use or purpose to which the Demised Premises may be fit, or otherwise, or as to the quality of the material or workmanship therein, or the existence of any defects, latent or patent, it being agreed that all such risks are borne by Tenant.

8.	MAINTENANCE

A. Subject to Section 8.B below, Tenant shall keep the Demised Premises and the fixtures and equipment therein in clean, safe and good operating condition, ordinary wear and tear excepted, and shall at its sole cost and expense, promptly make all repairs and perform all maintenance, in and to the Demised Premises that are necessary to keep the Demised Premises in good order and repair and in a safe and rentable condition, ordinary wear and tear excepted, but Tenant shall not be responsible for maintenance items expressly assumed by Landlord under the terms of this Lease or maintaining the Demised Premises in a manner that is inconsistent with Tenant’s maintenance standards for the Demised Premises prior to the Effective Date. In no event shall Landlord or Tenant have any obligation to make any changes, upgrades or other improvements to the Demised Premises in order to comply with any present or future laws, ordinances, regulations or orders of any governmental authorities having jurisdiction over the Demised Premises, subject to Section 18 of this Lease. In the event Tenant fails to maintain the Demised Premises in good order, condition and repair, ordinary wear and tear excepted, Landlord may (but shall not be obligated to) give Tenant notice to do such acts as are reasonably required to so maintain the Demised Premises. In the event that after such notice Tenant shall fail to promptly commence such work and diligently prosecute it to completion, then Landlord shall have the right to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so reasonably expended by Landlord shall be paid by Tenant, as Additional Rent, promptly after demand with interest at the Default Interest Rate defined in Section 24 of this Lease. Landlord shall have no liability to Tenant for any damage, inconvenience, or interference with respect to Tenant’s use of the Demised Premises as a result of performing any such work, unless caused by the negligence or willful misconduct of Landlord, its employees, agents or contractors. Maintenance and repair of special tenant areas, facilities, kitchen/galley/coffee equipment, air-conditioning equipment servicing the Demised Premises only and all other furniture, finishes and equipment of Tenant and any Alterations (hereinafter defined) made by Tenant shall be the sole responsibility of Tenant. In the event that Tenant requests that Landlord and/or its agents perform such work and Landlord agrees to do so, Tenant shall reimburse Landlord promptly for the actual cost of the same.

B. Landlord shall repair and maintain (and replace as necessary, subject to the terms of this Lease) the following in good order, condition and repair in a manner that is comparable to the Building’s current condition: (a) the base Building systems serving the Demised Premises; (b) the common areas of the Building (including but not limited to the parking garage); (c) the foundations, and (d) exterior walls and roof of the Building. In addition, Landlord shall comply with the operational and maintenance standards and services set forth on Exhibit B attached hereto.

9.	ALTERATIONS

Tenant will not make or permit anyone to make any alterations, additions or improvements, structural or otherwise (hereinafter referred to as “ Alterations ”), in or to the Demised Premises or the Building, without the prior written consent of Landlord, which consent may be granted or withheld in Landlord’s sole and absolute discretion. Notwithstanding the foregoing, provided that no Event of Default by Tenant exists beyond any applicable notice and cure period, Landlord shall not unreasonably withhold its consent to any non-structural Alteration which Tenant may desire to make to the Demised Premises; provided, however, that Landlord shall retain sole and absolute discretion to withhold its consent to any Alteration, whether structural or non-structural, which will, in the reasonable opinion of Landlord, exceed the capacity of, hinder the effectiveness of, interfere with, or be connected to the electrical, mechanical, heating, ventilating, air conditioning, or plumbing systems of the Demised Premises or the Building or be visible from the exterior of the Demised Premises, or which would result in a violation of any governmental regulation or the Underlying Lease. Notwithstanding anything to the contrary contained in this Lease, Tenant shall be permitted to conduct any Alterations Tenant reasonably deems necessary in connection with surrendering a portion of the Demised Premises pursuant to Sections 5 and 11 of this Lease, without the prior written consent of Landlord. Any Alteration which Landlord permits Tenant to make shall be made: (a) in a good, workmanlike, first-class and prompt manner; (b) using new (or like-new), building standard materials only; (c) by a contractor and in accordance with plans and specifications reasonably approved in writing by Landlord; (d) in accordance with legal requirements (including, without limitation, the obtaining of all necessary permits and licenses) and requirements of any insurance company insuring the Building; (e) after obtaining a workmen’s compensation insurance policy meeting the requirements of this Lease; (f) promptly after completion of such Alteration, delivering to Landlord written, unconditional waivers of mechanics’ and materialmen’s liens against the Demised Premises, Building and the land on which the Building is situated (the “ Land ”) from all proposed contractors, subcontractors, laborers and material suppliers for all work and materials in connection with such Alteration; and (g) in compliance with such other reasonable requirements as Landlord might impose. All Alterations made or permitted to be made by Tenant shall be at Tenant’s sole cost and expense. If any mechanic’s lien is filed against the Demised Premises, the Building, and/or the Land, for work or materials done for, or furnished to, Tenant (other than for work or materials supplied by Landlord), such mechanic’s lien shall be discharged by Tenant within twenty (20) days thereafter, at Tenant’s sole cost and expense, by the payment thereof or by the filing of any bond required by law. If Tenant shall fail to discharge any such mechanic’s lien, Landlord may, at its option, discharge the same and treat the cost thereof as Additional Rent hereunder, payable with the installment of Monthly Base Rent next becoming due. Landlord’s consent to the making of an Alteration shall not be deemed to constitute Landlord’s consent to subject its interest in the Demised Premises, Building or the

Land to liens which may be filed in connection therewith. Tenant will indemnify and hold Landlord harmless from and against any and all actual expenses, liens, claims, or damages to person or property which may or might arise by reason of the making of any Alterations. If any Alteration is made without the prior written consent of Landlord, Landlord may correct or remove same, and Tenant shall be liable for all actual costs and expenses so incurred by Landlord.

10.	ENVIRONMENTAL

Neither Tenant nor any invitee, agent, employee, subtenant, assignee, contractor, client, family member, licensee, customer or guest of Tenant (collectively “ Invitee ”) shall (either with or without negligence) generate, use, store, or cause or permit the escape, disposal or release of any Hazardous Materials (hereinafter defined) in or about the Building or the Land or the International Center. Notwithstanding the foregoing, Tenant may bring such materials or substances into the Demised Premises that Tenant customarily uses in connection with the Permitted Use, provided that such materials do not violate any governmental laws, rules or regulations. “ Hazardous Materials ” shall mean (a) those substances included within the definitions of “hazardous substance,” “hazardous material,” “toxic substance,” or “solid waste” in the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq.) (“ CERCLA ”), as amended by Superfund Amendments and Reauthorization Act of 1986 (“ SARA ”), (b) the Resource Conservation and Recovery Act of 1976 (“ RCRA ”), (c) the Solid Waste Disposal Act and the Hazardous Materials Transportation Act, (d) the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., (e) the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., (f) the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., (g) the Emergency Planning and Community Right-To-Know Act, 42 U.S.C. § 1101 et seq., (h) the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. and in the regulations promulgated pursuant to said laws, all as amended; (i) those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto); (j) any material, waste or substance which is (A) petroleum; (B) asbestos; (C) polychlorinated biphenyl; (D) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. §1251 et seq. (33 U.S.C. §1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. §1317); (E) flammables or explosives; or (F) radioactive materials, and (K) any substance whose presence in Landlord’s reasonable judgment could be detrimental to the Building or the Land or the International Center or hazardous to health or the environment. If any lender or governmental agency requires testing of the Demised Premises during the Term to ascertain whether or not there has been any release of Hazardous Materials, and it is determined that Tenant is in violation of this Section 10 , then the actual costs thereof shall be reimbursed by Tenant to Landlord within thirty (30) days of demand therefor as Additional Rent. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord’s reasonable request concerning Tenant’s best knowledge and belief regarding the presence of Hazardous Materials in the Demised Premises. In all events, Tenant shall indemnify Landlord and its lenders in the manner elsewhere provided in this Lease from any release of Hazardous Materials in the Demised Premises occurring while Tenant is in possession of the Demised Premises, or elsewhere if caused by Tenant or persons acting under Tenant. These covenants shall survive the expiration or earlier termination of the Term.

11.	TERMINATION RIGHT

A. Provided that there does not then exist an outstanding, uncured monetary or material non-monetary Event of Default, at any time after the earlier to occur of (a) the date which is five hundred forty (540) days following the Lease Commencement Date, or (b) April 30, 2014, Tenant shall have the right to terminate this Lease upon sixty (60) days prior written notice to Landlord. In addition, at any time and from time to time during the Term, Tenant shall have the right to terminate this Lease with respect to any Demised Premises Component (hereinafter defined) upon thirty (30) days prior written notice to Landlord with respect to such Demised Premises Component. As used herein, the term “ Demised Premises Component ” shall mean any of the following portions of the Demised Premises: (i) the data room, containing approximately 7,895 rentable square feet depicted on Exhibit E-1 attached hereto (the “ Data Room ”); (ii) the control center facility and support space, containing approximately 46,493 rentable square feet depicted on Exhibit E-2 attached hereto (the “ Control Center ”), (iii) the network operations center, containing approximately 10,994 rentable square feet depicted on Exhibit E-3 attached hereto (the “ Network Operations Center ”), and (iv) up to 20,000 contiguous rentable square feet of the office portion of the Demised Premises (i.e. the remaining area of the Demised Premises, other than the Data Room, the Control Center and the Network Operations Center). In the event Tenant terminates this Lease with respect to a Demised Premises Component, Tenant shall be entitled to a pro rata reduction of the Monthly Base Rent (based on the rentable area of the Demised Premises Component). In the event of a termination of this Lease with respect to a Demised Premises Component, the costs of segregating the Demised Premises Component and the remaining Demised Premises shall be the sole responsibility of Tenant.

B. Upon any termination of this Lease pursuant to this Section 11 , neither party shall have any further obligations under the Lease with respect to the portion of the Demised Premises that has been terminated, excepting those provisions which would naturally survive the expiration or earlier termination of this Lease, from and after the effective date of such termination. Nothing contained in this Section 11 shall be deemed to waive any claims that Landlord may have against Tenant for obligations accruing under the Lease prior to the effective date of any such termination.

12.	RESPONSIBILITY FOR DAMAGE TO DEMISED PREMISES

All injury or damage to the Demised Premises or the Building caused by the act or omission of Tenant or any Invitee, shall be repaired promptly by Tenant at Tenant’s sole cost and expense, and in no event shall Landlord be liable for any such injury or damage caused by the act or omission of Tenant or any Invitee, except as otherwise set forth in Sections 18.C and 20 of this Lease. If Tenant shall fail to so repair, Landlord shall have the right to make such repairs or replacements and any reasonable cost or expense so incurred by Landlord shall be paid by Tenant, in which event such reasonable cost and expense shall become Additional Rent due and payable with the installment of Monthly Base Rent next becoming due under the terms of this Lease. All injury or damage to the Demised Premises or the Building caused by the act or omission of Landlord, or any of its agents, employees, contractors or invitees, shall be the responsibility of Landlord and shall be repaired with due diligence and as soon as practicable, at Landlord’s sole cost and expense, and in no event shall Tenant be liable for any such injury or

damage caused by the act or omission of Landlord or any of its agents, employees, contractors or invitees, except as otherwise set forth in Section 18.C . In no event shall Landlord be required to repair or restore any Alteration made by Tenant.

13.	LIABILITY OF LANDLORD

A. All personal property of Tenant and its Invitees in or about the Demised Premises shall be and remain at their sole risk. Landlord shall not be liable for any damage to or loss of such personal property arising from any act or omission of any person, or from any cause other than any damage or loss resulting directly and solely from the negligence or willful misconduct of Landlord or any of its agents, employees, contractors or invitees. Landlord shall not be liable for any personal injury, including death, to Tenant or any of its Invitees, arising from the use, occupancy or condition of the Demised Premises other than that arising directly and solely from the gross negligence or willful misconduct of Landlord or any of its agents, employees, contractors or invitees. Landlord shall indemnify and hold harmless Tenant from and against any actual loss, damage, liability, claim, cost or expense (including reasonable attorneys’ fees) incurred by Tenant solely to the extent caused directly by the negligence or willful misconduct of Landlord or any of its agents, employees, contractors or invitees.

B. Landlord, its employees and agents shall not be liable to Tenant, any invitee or any other person or entity for any damage (including indirect and consequential damage), injury, loss or claim (including claims for the interruption of or loss to business) based on or arising out of any cause whatsoever (except as otherwise provided in this Section 13 ), including without limitation the following: repair to any portion of the Demised Premises or the Building; interruption in the use of the Demised Premises or any equipment therein (except as otherwise provided in this Lease); any accident or damage resulting from any use or operation (by Landlord, Tenant or any other person or entity) of elevators or heating, cooling, electrical, sewerage, or plumbing or mechanical equipment or apparatus; termination of this Lease by reason of damage to the Demised Premises or the Building; fire, robbery, theft, vandalism, mysterious disappearance or any other casualty; actions of any other tenant of the Building or of any other person or entity; failure or inability to furnish any service specified in this Lease (except as otherwise provided in this Lease); and leakage in any part of the Demised Premises or the Building from water, rain, ice, snow or other cause that may leak into, or flow from, any part of the Demised Premises or the Building or the Land, or from drains, pipes or plumbing fixtures in the Demised Premises or the Building or the Land.

14.	SIGNS AND FURNISHINGS

A. No sign, advertisement or notice shall be inscribed, painted, affixed or displayed by Tenant on any part of the outside or the inside of the Building except as approved in advance by Landlord in writing, and if any such sign, advertisement or notice is exhibited, without Landlord’s approval, Landlord shall have the right to remove the same and Tenant shall be liable for any and all costs and expenses incurred by Landlord by said removal. Except by United States mail, Tenant shall not distribute any advertisement or notices within the Building. Tenant shall not place a load upon any floor exceeding the floor load per square foot area which such floor was designed to carry, as set forth in the Building operational documents in Landlord’s possession. Any and all damage or injury to the Demised Premises or the Building caused by

moving the property of Tenant into or out of the Demised Premises, or due to the same being on the Demised Premises, shall be repaired by and at the sole cost and expense of Tenant. Tenant agrees to remove promptly from the sidewalks adjacent to the Building any of Tenant’s furniture, machinery, equipment or other property.

B. The parties agree that the existing signs, which are located on or about the Building on July 18, 2012, comply with the terms of this Lease, and Tenant shall be permitted to retain such signs in their existing location throughout the Term. All of Tenant’s exterior Building signage shall be removed by Tenant, at Tenant’s sole cost and expense, upon expiration of the Term, and Tenant, at Tenant’s sole cost and expense, shall repair any damage caused by such removal, ordinary wear and tear excepted.

15.	SERVICES AND UTILITIES

A. Landlord shall provide the following facilities and services to Tenant without additional charge to Tenant (except as otherwise provided herein), in accordance with the standards maintained by Tenant at the Building prior to the Effective Date:

(1) Landlord will provide restroom facilities and necessary lavatory supplies, including hot and cold running water, at those points of supply provided for general use of other tenants in the Building.

(2) Landlord will provide heating, ventilation and air conditioning (HVAC) services Monday through Friday from 8:00 A.M. to 7:00 P.M., and Saturday from 9:00 A.M. to 1:00 P.M. (excepting federal holidays in which federal office buildings in Washington, D.C. are closed) on an all year round basis.

(3) Landlord will provide hot and cold running water on a full-time twenty-four hour a day basis, subject to such reasonable regulations as Landlord may impose. Landlord will maintain the building plumbing system, as well as the interior plumbing within the Demised Premises, in proper and efficient operating condition. In the event that a problem with the building plumbing system or the interior plumbing within the Demised Premises is caused by an act or omission of Tenant, Landlord will correct such problem at Tenant’s sole cost and expense.

(4) Landlord will provide electrical energy which Tenant requires in the Demised Premises for lighting purposes and for operation of electrical, machinery and other property used in connection with the Permitted Use.

(5) Landlord will provide after-hours HVAC services upon payment by Tenant of Landlord’s actual cost of providing such HVAC services for each hour (or a portion thereof) of after-hours usage (but in no event shall the hourly charge per pod exceed $50.00); provided, that Tenant shall give notice to Landlord prior to 1:00 P.M. on the day such service is required in the case of after-hours service on weekdays, prior to 2:00 P.M. on the Friday preceding the day such service is required in the case of after hours service on weekends, and prior to 1:00 P.M. on the last business day preceding the holiday on which such service is required in the case of after-hours service on a federal holiday.

(6) Landlord will provide after hours Monday through Friday (excepting federal holidays in which federal office buildings in Washington, D.C. are closed) maintenance and housekeeping services, including replacement of fluorescent bulbs, glass cleaning, dusting, sweeping, vacuuming, and removal of trash.

(7) In addition, Landlord will provide the services set forth in Exhibit B attached hereto. In the event of any inconsistency between the services to be provided by Landlord pursuant to Sections 15.A.(1)-(5) and the services to be provided pursuant to Exhibit B attached hereto, Exhibit B shall prevail.

B. Except as otherwise set forth in this Section 15.B , any failure by Landlord to furnish the foregoing services as a result of governmental restrictions, energy shortages or from any cause beyond the control of Landlord shall not render Landlord liable in any respect for damages to either person or property, or loss of Tenant’s business, nor be construed as an eviction of Tenant, nor work as an abatement of rental, nor relieve Tenant from Tenant’s obligations hereunder. If the Building equipment should cease to function properly, Landlord shall use reasonable diligence to repair the same to the extent Landlord is required to repair same pursuant to this Lease. If the services to be provided by Landlord described in this Section 15 are interrupted for a period of more than five (5) consecutive business days, and such interruption renders more than twenty percent (20%) of the rentable area of the Demised Premises untenantable and Tenant actually ceases the use of such rentable area, then Tenant shall be entitled to a pro rata abatement of the Monthly Base Rent (based on the portion of the Demised Premises rendered untenantable) for the period beginning on the sixth (6 ^th ) consecutive business day that the foregoing conditions exist and continuing until the restoration of such services to such portion of the Demised Premises. If the services to be provided by Landlord described in this Section 15 are interrupted for a period of more than thirty (30) days, and such interruption renders more than twenty percent (20%) of the rentable area of the Demised Premises untenantable and Tenant actually ceases the use of such rentable area, then Tenant shall have the right to terminate this Lease effective immediately upon written notice to Landlord, as Tenant’s sole remedy.

16.	ENTRY FOR HOUSEKEEPING, REPAIRS AND INSPECTIONS

Tenant will permit Landlord, or its representatives, to enter the Demised Premises, at all reasonable times and upon reasonable prior notice, without diminution of the rental payable by Tenant, to examine, inspect, protect and maintain the same, to make such alterations and/or repairs as in the judgment of Landlord may be deemed reasonably necessary, to perform housekeeping chores, and, during the last three hundred sixty-five (365) days of the Term, to exhibit the Demised Premises to prospective tenants, lenders and purchasers; provided however, it is understood and agreed that certain areas of the Demised Premises, as determined by Tenant in its sole and absolute discretion, may not be shown to prospective tenants, lenders and purchasers. Landlord shall use commercially reasonable efforts to exercise its rights under this Section 16 in such manner as is required to minimize the disturbance or interruption of the business of Tenant or of Tenant’s use, enjoyment and occupancy of the Demised Premises. Landlord shall coordinate any entry into the Demised Premises with a representative of Tenant designated in writing from time to time by Tenant (a “ Tenant Supervisor ”) by giving oral notice to such Tenant Supervisor at least twenty-four (24) hours prior to any entry into the Demised

Premises by Landlord and Tenant shall be afforded the right to accompany Landlord when entering the Demised Premises; provided, however, Landlord shall not be required to coordinate entry into the Demised Premises in the following circumstances: (i) for providing regularly scheduled cleaning services in accordance with this Lease, or (ii) in the event of an emergency within the Demised Premises or casualty to the Building.

17.	TENANT’S EQUIPMENT

Tenant will not install or operate in the Demised Premises any electrically operated equipment, except for equipment customarily used in connection with the Permitted Use and other standard office equipment, and any special equipment approved in writing by Landlord, without first obtaining the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed. Tenant shall not install any other property of any kind or nature whatsoever which may necessitate any changes, replacements or additions to, or in the use of, the water, heating, plumbing, air conditioning, or electrical systems of the Building without first obtaining the prior written consent of Landlord.

18.	INDEMNITY AND INSURANCE

A. Tenant will indemnify and hold harmless Landlord from and against any actual loss, damage, liability, claim, cost or expense (including reasonable attorneys’ fees) incurred by or claimed against Landlord occasioned by or resulting from any default of Tenant hereunder or the negligence or intentional misconduct of Tenant or any Invitee or arising from or in connection with Tenant’s use or occupancy of the Demised Premises or which relates to the business of Tenant. Tenant shall obtain and maintain in effect at all times during the Term a policy or policies of commercial general liability insurance, naming Landlord and any property management company and/or mortgagee of the Building as additional insureds, protecting Landlord, Tenant and any such mortgagee against any liability for bodily injury, death or property damage occurring upon, in or about any part of the Building, the grounds, or the Demised Premises arising from any of the items set forth in this Section 18 against which Tenant is required to indemnify Landlord, with such policy or policies to include Premises/Operations and Products and Completed Operations to the limit of not less than $2,000,000 each occurrence, $2,000,000 general aggregate, $2,000,000 products/completed operations aggregate and Comprehensive Automobile Liability Insurance with $1,000,000 each occurrence for bodily injury liability/property damage. Auto insurance shall apply to all owned, non-owned, and hired automobiles. Tenant shall obtain and maintain property insurance coverage upon all tenant improvements and personal property owned or leased by Tenant in an amount equal to full replacement cost and Business Income Insurance that will cover Tenant’s rent under this Lease for a period of six (6) months. Tenant shall also obtain and maintain in effect at all times during the Term a policy or policies for Worker’s Compensation Insurance as required under applicable law and Employer’s Liability in the amount of $1,000,000. All insurance policies shall be issued by a carrier authorized to do business in the District of Columbia and having an “A.M. Best” rating of A- VII or better. A certificate of insurance evidencing the issuance of such insurance policies shall be delivered to Landlord prior to the Lease Commencement Date. Each insurance policy required to be carried hereunder by or on behalf of Tenant shall provide (and any certificate evidencing the existence of each insurance policy shall certify) that such insurance policy shall not be canceled unless Landlord shall have received twenty (20) days’ prior written

notice. Neither the issuance of any insurance policy required under this Lease, nor the minimum limits specified herein with respect to Tenant’s insurance coverage, shall be deemed to limit or restrict in any way Tenant’s liability arising under or out of this Lease.

B. Landlord shall procure and maintain in full force and effect at all times during the Term hereof the following minimum insurance coverages: (1) all risk property insurance on the Building in amounts sufficient to prevent Landlord from becoming a co-insurer within the terms of the applicable policies, and in any event in an amount equal to the full replacement cost of the Building (exclusive tenant improvements and alterations); and (2) commercial general liability insurance (with limits of not less than $2,000,000 each occurrence and $2,000,000 general aggregate), which shall be in addition to, and not in lieu of, insurance required to be maintained by Tenant.

C. Notwithstanding anything to the contrary in this Lease, Landlord and Tenant each hereby waives any and all right to recover against the other (or against their respective officers, directors, trustees, partners, joint venturers, employees or agents) for any loss or damage to such waiving party arising from any cause covered by any insurance required to be carried by such party pursuant to this Lease. Landlord and Tenant shall secure appropriate waivers of subrogation from their respective insurance carriers; and each party will, upon request, deliver to the other a certificate evidencing such waiver of subrogation by the insurer.

19.	FIRE AND OTHER CASUALTY DAMAGE TO DEMISED PREMISES

A. If the Demised Premises shall be damaged by fire or other cause, Landlord shall as soon as reasonably practicable after such damage occurs (taking into account the time necessary to effectuate a satisfactory settlement with any insurance company, removal of debris, preparation of plans and issuance of all required governmental permits) repair the Demised Premises to substantially the condition originally furnished by Landlord on the Lease Commencement Date, at the sole cost and expense of Landlord, and the rental shall be reduced in proportion to the extent the Demised Premises are rendered untenantable until such repairs are completed. Landlord shall not be obligated to restore any alterations, additions or improvements to the Demised Premises, it being expressly agreed and understood that Tenant shall carry insurance to cover such alterations, additions and improvements and Landlord shall not be required to insure such alterations, additions and improvements under such insurance as Landlord may carry upon the Demised Premises. No compensation will be paid by Landlord by reason of inconvenience, annoyance, or injury to business arising from the necessity of repairing the Demised Premises or any portion of the Building or the grounds.

B. If the Demised Premises shall be damaged by fire or other casualty and, in the reasonable judgment of Landlord’s architect, restoration is not feasible within ninety (90) days following such casualty, Landlord and Tenant shall each have the right to terminate this Lease by delivering written notice thereof to Landlord within thirty (30) days after the date of such casualty, in which event this Lease and the tenancy hereunder shall terminate as of the date of such notice.

20.	DEFAULT OF TENANT

A. If (a) Tenant shall fail to pay any installment of Monthly Base Rent or fail to timely make any other payment required by the terms and provisions hereof and such failure to pay shall continue for more than seven (7) business days after written notice thereof to Tenant by Landlord; or (b) Tenant shall violate or fail to perform any of the other terms, conditions, provisions, covenants or agreements herein made by Tenant, and if such violation or failure shall continue for a period of thirty (30) days after written notice thereof to Tenant by Landlord, provided, however, that if the nature of such violation or failure is not reasonably capable of being cured within such thirty (30) day period, then the period in which Tenant may cure such failure shall be extended to a total of up to one hundred twenty (120) days, provided Tenant promptly commences the cure of such violation or failure within the initial thirty (30) day period and thereafter continually and diligently pursues the cure of such violation or failure; or (c) an Event of Bankruptcy (as specified in Section 20.D below) shall occur; or (d) Tenant’s dissolution or liquidation shall occur; or (e) any subletting, assignment, transfer, mortgage or other encumbrance of the Demised Premises or this Lease not permitted by Section 34 , then and in any of said events (each such event, following expiration of the applicable notice and cure period is referred to as an “ Event of Default ”), Landlord shall have the right, at its election, then or at any time thereafter while such Event of Default shall continue, either:

(1) To give Tenant written notice of its intent to terminate this Lease on the date of such notice or on any later date specified therein, and on the date specified in such notice Tenant’s right to possession of the Demised Premises shall cease and this Lease shall thereupon be terminated; or

(2) Subject to all applicable laws, with or without terminating this Lease, to reenter and take possession of the Demised Premises, or any part thereof, and repossess the same as of Landlord’s former estate and expel Tenant and those claiming through or under Tenant and remove the effects of both or either, by summary proceedings, or by action at law or in equity or by force (if necessary) or otherwise, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rental or breach of covenant.

If this Lease is terminated or Landlord recovers possession of the Premises before the expiration of the Term by reason of Event of Default by Tenant in accordance with this Section 20 , Landlord shall take all reasonable steps to relet the Premises for such rent and upon such terms as are not unreasonable under the circumstances.

B. If Landlord terminates this Lease pursuant to this Section 20 , Tenant shall remain liable (in addition to accrued liabilities) for (i) the rental and all other sums provided for in this Lease which would have been due and payable to Landlord had such termination not occurred, or any and all reasonable costs and expenses incurred by Landlord in reentering the Demised Premises, repossessing the same, making good any Event of Default of Tenant, reletting the same (including any and all reasonable attorney’s fees and disbursements and brokerage fees incurred in so doing), and any and all reasonable costs and expenses which Landlord may incur during the occupancy of any new tenant or subtenant; less (ii) the net proceeds of any reletting prior to the date when this Lease would have expired if it had not been terminated. Tenant

agrees to pay to Landlord the difference between items (i) and (ii) to the foregoing sentence with respect to each month during the Term, at the end of such month. Any suit, action or proceeding brought by Landlord to enforce collection of such difference for any one month shall not prejudice Landlord’s right to enforce the collection of any difference for any subsequent month. Landlord shall use commercially reasonable efforts to relet the whole or any part of the Demised Premises for the whole of the unexpired Term, or longer, or from time to time for shorter periods, on commercially reasonable terms, giving such concessions of rental and making such special repairs, alterations, improvements, additions, decorations and paintings for any new tenant as Landlord, in its sole and absolute discretion, may deem advisable. If Landlord terminates this Lease pursuant to this Section 20 , Landlord shall have the right, at any time, at its option, to require Tenant to pay to Landlord, on demand, as liquidated and agreed final damages in lieu of Tenant’s liability for damages hereunder, the rental and all other charges which would have been payable from the date of such demand to the date when this Lease would have expired if it had not been terminated, minus the fair rental value of the Demised Premises for the same Upon payment of such liquidated and agreed final damages, Tenant shall be released from all further liability under this Lease with respect to the period after the date of such demand. For purposes of this Section 20 , the term rental shall include fixed monthly rental, additional rental and all other charges to be paid by Tenant under this Lease. All rights and remedies of Landlord under this Lease shall be cumulative and shall not be exclusive of any other rights and remedies provided to Landlord under applicable law. Landlord’s exercise of any such right or remedy shall not prevent the concurrent or subsequent exercise of any other right or remedy. Landlord’s delay or failure to exercise or enforce any of Landlord’s rights or remedies or Tenant’s obligations shall not constitute a waiver of any such rights, remedies or obligations. In no event shall Tenant have any liability under this Lease for any other indirect losses or consequential damages.

C. In the event of any action or proceeding brought by either party against the other under this Lease, the prevailing party shall be entitled to recover from the other party the fees of its attorneys in such action or proceeding in such amount as the court may judge to be reasonable for such attorneys’ fees.

D. An Event of Bankruptcy is: (a) Tenant’s becoming insolvent, as that term is defined in Title 11 of the United States Code (the “ Bankruptcy Code ”), or under the insolvency laws of any state (the “ Insolvency Laws ”); (b) appointment of a receiver or custodian for any property of Tenant, or the institution of a foreclosure or attachment action upon any property of Tenant; (c) filing of a voluntary petition by Tenant under the provisions of the Bankruptcy Code or Insolvency Laws; (d) filing of an involuntary petition against Tenant as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (1) is not dismissed within ninety (90) days after filing, or (2) results in the issuance of an order for relief against the debtor; (e) Tenant’s making or consenting to an assignment for the benefit of creditors or a composition of creditors; (f) a material and adverse change in the financial condition or status of Tenant; or (g) an admission by Tenant of its inability to pay debts as they become due.

E. Upon occurrence of an Event of Bankruptcy, Landlord shall have all rights and remedies available pursuant to this Section 20 ; provided, however, that while a case (the “ Case ”) in which Tenant is the subject debtor under the Bankruptcy Code is pending, Landlord’s right to

terminate this Lease shall be subject, to the extent required by the Bankruptcy Code, to any rights of Tenant or its trustee in bankruptcy (collectively, “ Trustee ”) to assume or assign this Lease pursuant to the Bankruptcy Code. Trustee shall not have the right to assume or assign this Lease unless Trustee promptly (a) cures all Event of Defaults under this Lease, (b) compensates Landlord for all damages incurred as a result of such Event of Defaults, (c) provides adequate assurance of future performance on the part of Tenant as debtor in possession or Tenant’s assignee, and (d) complies with all other requirements of the Bankruptcy Code. If Trustee fails to assume or assign this Lease in accordance with the requirements of the Bankruptcy Code within sixty (60) days after the initiation of the Case, then Trustee shall be deemed to have rejected this Lease. Adequate assurance of future performance shall require that, at a minimum, all of the following minimum criteria be met: (1) Tenant’s gross income (as defined by generally accepted accounting principles) during the thirty (30) days preceding the filing of the Case must be greater than ten (10) times the next installment of Monthly Base Rent; (2) Both the average and median of Tenant’s monthly gross income (as defined by generally accepted accounting principles) during the seven (7) months preceding the filing of the Case must be greater than ten (10) times the next installment of the Monthly Base Rent; (3) Trustee must pay its estimated pro rata share of the cost of all services performed or provided by Landlord (whether directly or through agents or contractors and whether or not previously included as part of the Base Rent) in advance of the performance or provision of such services; (4) Trustee must agree that Tenant’s business shall be conducted in a first-class manner, and that no liquidating sale, auction or other non-first-class business operation shall be conducted in the Demised Premises; (5) Trustee must agree that the use of the Demised Premises as stated in this Lease shall remain unchanged and that no prohibited use shall be permitted; (6) Trustee must agree that the assumption or assignment of this Lease shall not violate or affect the rights of other tenants in the Building and the International Center; (7) Trustee must pay at the time the next monthly installment of the Base Rent is due, in addition to such installment, an amount equal to the installments of Monthly Base Rent due for the next six (6) months thereafter, such amount to be held as a security deposit; (8) Trustee must agree to pay, at any time Landlord draws on such security deposit, the amount necessary to restore such security deposit to its original amount; and (9) All assurances of future performance specified in the Bankruptcy Code must be provided.

21.

WAIVER

If under the provisions hereof Landlord shall institute proceedings and a compromise or settlement thereof shall be made, the same shall not constitute a waiver of any covenant herein contained nor of any Landlord’s rights hereunder. Landlord shall not be deemed to have waived any Event of Default unless such waiver expressly is set forth in an instrument signed by Landlord. No waiver by Landlord of any breach of any term, covenant, provision, condition or agreement herein contained shall operate as a waiver of such term, covenant, provision, condition, or agreement itself, or of any subsequent breach thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the stipulated installments of Base Rent or Additional Rent shall be deemed to be other than on account of the earliest stipulated Base Rent or Additional Rent, respectively, nor shall any endorsement or statement on any check or letter accompanying a check for payment of rental or any other amounts owed to Landlord be deemed an accord and satisfaction and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rental or other amount owed or to pursue any other remedy provided in this Lease. No reentry by Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered an acceptance of a surrender of this Lease.

22.	ATTORNMENT

A. This Lease is subject and subordinate to the lien, provisions, operation and effect of the ground lease, the first mortgage, deed of trust, or other security instrument which may now or hereafter encumber the Building or the Land, to all funds and indebtedness intended to be secured thereby, and to all renewals, extensions, modifications, recastings or refinancings thereof. The ground lessor and the holder of any deed of trust to which this Lease is subordinate shall have the right at any time to declare this Lease to be superior to the lien, provisions, operation and effect of such ground lease or deed of trust and Tenant shall execute, acknowledge and deliver all confirming documents required by such holder. In the event of (a) a transfer of Landlord’s interest in the land or Building, (b) the termination of any ground or underlying lease of the land or Building, or (c) the purchase of the Building or Landlord’s interest therein at a foreclosure sale or by deed in lieu of foreclosure under any first mortgage or pursuant to a power of sale contained in any first mortgage, then in any of such events Tenant, at the request of the Transferee, shall attorn to and recognize the transferee or purchaser of Landlord’s interest or the lessor under the terminated ground or underlying lease, as the case may be, as Landlord under this Lease for the balance of the then remainder of the term, and thereafter this Lease shall continue as a direct lease between such person, as Landlord, and Tenant, and such lessor, transferee or purchaser shall not be liable for any act or omission of Landlord prior to such person’s succession to title, nor be subject to any offset, defense or counterclaim, accruing prior to such lease termination or prior to such person’s succession to title, nor be bound by any amendment of this Lease made without the consent of the ground lessor or the holder of any deed of trust existing as of the date of such amendment, nor be bound by any payment of fixed monthly rental or additional rental prior to such lease termination or prior to such person’s succession to title for more than one (1) month in advance. Tenant agrees that, within five (5) days after written request therefor, it will, from time to time, execute and deliver any instrument or other document required by any mortgagee, transferee, purchaser or other interested person to confirm such attornment and/or such obligation to attorn. If Tenant fails to execute same within ten (10) days after request therefor, and such failure continues for a period of five (5) days following a second notice thereof from Landlord, Tenant appoints Landlord as Tenant’s attorney-in-fact to execute any such document for Tenant if Tenant fails to execute same within ten (10) days after request therefor. Tenant waives the provisions of any statute or rule of law now or hereafter in effect which may give or purport to give Tenant any right to terminate or otherwise adversely affect this Lease or Tenant’s obligations in the event any such foreclosure proceeding is prosecuted or completed or in the event the Land, the Building or Landlord’s interest therein is sold at a foreclosure sale or by deed in lieu of foreclosure.

B. Notwithstanding the provisions of Section 22.A above, it shall be a condition to the subordination of this Lease to any deed of trust that encumbers the Demised Premises that Landlord shall have delivered to Tenant a subordination, non-disturbance and attornment agreement, executed and acknowledged by the holder of such deed of trust, as lender, in favor of Tenant, in a commercially reasonable form approved by Tenant, which approval shall not be unreasonably withheld, conditioned or delayed.

23.	CONDEMNATION

If the whole or a substantial part of the Demised Premises shall be taken or condemned by any governmental authority for any public or quasi-public use or purpose, then the Term shall cease and terminate as of the date when title vests in such governmental authority, and the rental shall be abated on such date. If less than a substantial part of the Demised Premises is taken or condemned by any governmental authority for any public or quasi-public use or purpose, the rental shall be equitably adjusted on the date when title vests in such governmental authority and this Lease shall otherwise continue in full force and effect. For purposes hereof, a substantial part of the Demised Premises shall be considered to have been taken if fifteen percent (15%) or more of the Demised Premises are unusable by Tenant. In the case of any such taking or condemnation, whether or not involving the whole or a substantial part of the Demised Premises, Tenant shall have no claim against Landlord or the condemning authority for any portion of the amount that may be awarded as damages as a result of such taking or condemnation or for the value of any unexpired Term, and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award; provided, however, that Tenant may assert any claim that it may have against the condemning authority for compensation for any trade fixtures, equipment and machinery owned by Tenant and for any relocation expenses compensable by statute, and receive such award therefor as may be allowed in the condemnation proceeding if such award shall be made in addition to and stated separately from the award made for the land and the Building or the part thereof so taken, and will in no way reduce the potential award to Landlord. Notwithstanding anything herein to the contrary, if any portion of the Land or the Building is condemned, and the nature, location or extent of such condemnation is such that Landlord elects, in its sole and absolute discretion, to demolish the Building, then, so long as Landlord terminates all other leases in the Building for tenants similarly situated to Tenant, Landlord may terminate this Lease by giving sixty (60) days prior written notice of such termination to Tenant so long as Landlord delivers such notice within sixty (60) days after such condemnation in which event this Lease shall terminate on the date specified in such notice and rent shall be adjusted to such date.

24.	RIGHT OF LANDLORD TO CURE TENANT’S DEFAULT; LATE PAYMENTS

If Tenant defaults in the making of any payment or in the doing of any act herein required to be made or done by Tenant, then after ten (10) business days’ notice from Landlord, Landlord may, but shall not be required to, make such payment or do such act, and the actual amount of the cost and expense thereof, if made or done by Landlord, with interest thereon at the Default Interest Rate (hereafter defined) from the date paid by Landlord, shall be paid by Tenant to Landlord and shall constitute Additional Rent hereunder due and payable with the next installment of Monthly Base Rent; but the making of such payment or the doing of such act by Landlord shall not operate to cure such default or to stop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled. If Tenant fails to pay any installment of rental on or within five (5) business days after the day when such installment is due and payable, such unpaid installment shall bear interest at the rate of the Default Interest Rate from the date which is five (5) days after the date when such installment became due and payable to the date of payment thereof by Tenant. In addition, Tenant shall pay to Landlord, as a “late charge,” four percent (4%) of any payment herein required to be made by Tenant which is more than ten (10) days late to cover the costs of collecting amounts past due. Such interest and late charge shall constitute Additional Rent hereunder due and payable with the next installment of Monthly Base

Rent. Notwithstanding the foregoing, Landlord agrees to waive such late charge and interest on one (1) occasion in any calendar year so long as Tenant remits payment of such past due Rent in full to Landlord within five (5) business days after written notice from Landlord that such Rent is past due. For purposes hereof, the Default Interest Rate shall refer to the prime rate on corporate loans quoted in the Wall Street Journal (the “ Prime Rate ”) plus two percent (2%).

25.	NO PARTNERSHIP

Nothing contained in this Lease shall be deemed or construed to create a partnership or joint venture of or between Landlord and Tenant or to create any other relationship between the parties hereto other than that of Landlord and Tenant and in no event shall Tenant be deemed to be an agent of Landlord in connection with this Lease.

26.	NO REPRESENTATIONS BY LANDLORD

Neither Landlord nor any agent, employee or representative of Landlord has made any representations or promises with respect to the Demised Premises or the Building except as herein expressly set forth, and no rights, privileges, easements or licenses are granted to Tenant except as herein set forth.

27.

BROKERS

Landlord and Tenant each represent and warrant to the other that no broker or agent has been employed or engaged by either Landlord or Tenant in carrying on any negotiations relating to this Lease, other than CBRE, Inc., on behalf of Tenant (“ Tenant’s Broker ”). Landlord shall have no liability for the payment of any commission to Tenant’s Broker.

28.

NOTICES

All notices or other communications hereunder shall be in writing and shall be deemed duly given if delivered in person or sent by recognized overnight mail, certified or registered mail, return receipt requested, first class, postage prepaid,

(i)

if to Landlord, at:

c/o 601 W Companies

601 W. 26th Street, Suite 1275

New York, NY 10001

Attention: Mark Karasick

with a copy to:

Gerstein Strauss & Rinaldi LLP

57 West 38th Street, Ninth Floor

New York, NY 10018

Attention: Victor Gerstein

and to:

Levy Holm Pellegrino & Drath LLP

950 Third Avenue, Suite 3101

New York, NY 10022

Attention: Steven I. Holm

(ii)

if to Tenant, at:

Intelsat Global Service LLC

3400 International Drive, NW

Washington, DC 20008

Attn: Director Corporate Services

with a copy to:

Intelsat Global Service LLC

3400 International Drive, NW

Washington, DC 20008

Attn: General Counsel

and to:

DLA Piper LLP (US)

500 Eighth Street, NW

Washington, DC 20004

Attn: Frederick L. Klein

Either party may change its address for the giving of notices by notice given in accordance with this Section 28 .

29.	ESTOPPEL CERTIFICATES

A. Tenant agrees, at any time and from time to time, upon not less than ten (10) business days prior written notice by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing (i) certifying that this Lease has been unmodified since its execution and is in full force and effect (or if there have been modifications, that this Lease is in full force and effect, as modified, and stating the modifications), (ii) stating the dates, if any, to which the Base Rent and Additional Rent hereunder have been paid by Tenant, (iii) stating whether or not to the knowledge of Tenant, there are then existing any Events of Default under this Lease (and, if so, specifying the same), (iv) stating the address to which notices to Tenant should be sent, (v) that Tenant has accepted the Demised Premises and all work, if any, has been completed (or specifying the incomplete work), and (vi) such other matters as Landlord may reasonably request. Any such statement delivered pursuant hereto may be relied upon by Landlord or any prospective purchaser, mortgagee of the land and/or Building or any part thereof or estate therein, or any mezzanine lender.

B. Landlord agrees, at any time and from time to time, upon not less than ten (10) business days prior written notice by Landlord, to execute, acknowledge and deliver to Tenant a statement in writing (i) certifying that this Lease has been unmodified since its execution and is in full force and effect (or if there have been modifications, that this Lease is in full force and effect, as modified, and stating the modifications), (ii) stating the dates, if any, to which the Base Rent and Additional Rent hereunder have been paid by Tenant, (iii) stating whether or not to the knowledge of Landlord, there are then existing any Events of Default under this Lease (and, if so, specifying the same), (iv) stating the address to which notices to Landlord should be sent, and (v) such other matters as Tenant may reasonably request. Any such statement delivered pursuant hereto may be relied upon by Tenant or any prospective purchaser or lender of Tenant.

30.	COVENANTS OF LANDLORD

A. Landlord covenants that it has the right to make this Lease, and that so long as no Event of Default by Tenant exists beyond any applicable notice and cure period, Tenant shall, during the Term, freely, peaceably and quietly occupy and enjoy possession of the Demised Premises without molestation or hindrance by Landlord or any party claiming through or under Landlord. In the event of any sale or transfer of Landlord’s interest in the Demised Premises, Landlord shall be freed and relieved of all covenants and obligations of Landlord hereunder accruing after the date of such sale or transfer.

B. Landlord reserves the right to: (a) grant to anyone the exclusive right to conduct any particular business in the Building or the International Center not inconsistent with the Permitted Use; (b) install and display signs, advertisements and notices on any part of the exterior or interior of the Building, provided, however, that Landlord may not install signage on the exterior of the Building identifying any other tenant prior to the expiration or earlier termination of the Lease, except that Landlord shall be permitted to provide one tenant of the Building signage at the Tilden Street entrance to the Building; (c) install such access control systems and devices as Landlord deems appropriate so long as the Demised Premises remain accessible; (d) create easements over the Land and in the entrances, aisles and stairways of any parking areas for utilities, telephone lines, sanitary sewer, storm sewer, water lines, pipes, conduits, drainage ditches, sidewalks, pathways, emergency vehicles, and ingress and egress for the use and benefit of others, without Tenant joining in the execution thereof and the Lease shall automatically be subject and subordinate thereto so long as Tenant’s use and occupancy of the Demised Premises is not adversely affected and so long as the Demised Premises remains accessible; and (e) alter the site plan, landscaping, walkways and common areas outside the Building within the context of general site improvements, repairs and maintenance. In exercising any rights pursuant to this Section 30 , (1) Landlord shall use commercially reasonable efforts to minimize disruption to Tenant’s business operations, (2) Tenant shall have access to the Demised Premises and the parking areas, without material diminution of Tenant’s parking allocation, (3) the common areas shall remain in keeping with the Building’s current standards, and (4) any installations within the Demised Premises shall be above ceilings or behind walls, and upon completion Landlord shall repair any damage to the Demised Premises with the same finishes.

31.	SURRENDER OF DEMISED PREMISES

Upon the expiration or termination of the Term, including pursuant to Section 5 and 11 of this Lease, Tenant shall quit and surrender to Landlord the Demised Premises (or applicable portion thereof), in the condition existing as of the Lease Commencement Date, ordinary wear and tear and acts of God excepted, and Landlord shall have the right to reenter and resume possession of the Demised Premises (or applicable portion thereof); provided, however, nothing in this Section 31 shall be construed to impair Tenant’s rights in its personal property, and its trade fixtures, machinery and equipment. Tenant shall have the right, but not the obligation, to remove any and of its personal property, trade fixtures, machinery and equipment at any time during, or upon the expiration of, the Term. Landlord hereby waives any statutory or other lien rights Landlord may have with respect to Tenant’s personal property. The Demised Premises shall be returned in broom clean condition with all Alterations undertaken after the Lease Commencement Date removed; provided, however, upon Tenant’s written request made at the time Tenant requests Landlord’s approval of any Alterations, Landlord agrees to notify Tenant in writing which Alterations, if any, Tenant shall not be required to remove at the end of the Term and Tenant shall not be required to remove those Alterations which Landlord has so stated will not need to be removed at the end of the Term.

32.	HOLDING OVER

If Tenant (or anyone claiming through Tenant) does not immediately surrender the Demised Premises or any portion thereof upon the expiration or earlier termination of the Term in the condition required by Section 31 of this Lease, then the rent shall be increased to one hundred fifty percent (150%) of the Monthly Base Rent payable during the last month of the Term for the first ninety (90) days of such holdover, and thereafter two hundred percent (200%) of the Monthly Base Rent payable during the last month of the Term. Such rent shall be computed by Landlord on a per diem basis. Notwithstanding any other provision of this Lease, Landlord’s acceptance of such rent shall not in any manner adversely affect Landlord’s other rights and remedies, including Landlord’s right to evict Tenant and to recover all damages; provided, however, that Tenant shall not be liable for consequential damages. Any holdover shall be deemed to be a tenancy-at-sufferance and not a tenancy-at-will or tenancy from month-to-month. In no event shall any holdover be deemed a permitted extension or renewal of the Term, and nothing contained herein shall be construed to constitute Landlord’s consent to any holdover or to give Tenant any right with respect thereto.

33.	UNDERLYING LEASE

Tenant acknowledges that it has been advised of that certain Amended and Restated Lease Agreement between the Government of the United States, as Lessor and Landlord, as Lessee, dated June 18, 2010, as the same may be further amended, modified or supplemented from time to time, the “ Underlying Lease .” Notwithstanding anything to the contrary set forth in this Lease, Tenant agrees that it will not intentionally do or cause to be done anything which would constitute a breach of obligations of Landlord as Lessee under said Underlying Lease. Landlord shall notify Tenant in writing of any future amendments thereto, which would reasonably be considered to affect Tenant’s obligations under this Section 33 .

34.	ASSIGNMENT AND SUBLETTING

A. Tenant may not assign, transfer, mortgage or encumber this Lease, nor sublet the Demised Premises, or any part thereof, nor shall any assignment or transfer of this Lease be effectuated by operation of law or otherwise, without first obtaining any required jurisdictional approvals (including, but not limited to, the U.S. Department of State) and the prior written consent of Landlord (whose consent shall not be unreasonably withheld, conditioned or delayed). Any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be wholly void and shall confer no rights upon any third parties. The consent of Landlord to any assignment, transfer, or subletting to any third party shall not be construed as a waiver or release of Tenant from the terms of any covenant or obligation under this Lease, nor shall the collection or acceptance of rental from any such assignee, transferee, subtenant or occupant constitute a waiver or release of Tenant of any covenant or obligation contained in this Lease, nor shall any assignment, transfer or subletting be construed to relieve Tenant from obtaining the consent in writing of Landlord to any further assignment or subletting. During the pendency of an existing, outstanding Event of Default hereunder, Tenant hereby assigns to Landlord the rental due from any subtenant of Tenant and hereby authorizes each such subtenant to pay said rental directly to Landlord. Except with respect to a subletting or assignment permitted pursuant to Section 34.B below, Tenant shall reimburse Landlord for its reasonable attorneys’ fees and expenses incurred in reviewing any requested consent whether or not such consent is granted.

B. Notwithstanding the above restrictions on subletting and assignments, Landlord’s prior consent shall not be required for any assignment or subletting to an Affiliate of Tenant (as defined below), a Parent of Tenant (as defined below) or the International Telecommunications Satellite Organization, provided (1) that such assignee or subtenant agrees in writing to be bound by the terms and conditions of this Lease and to assume all of the obligations and liabilities of Tenant under this Lease, (2) that such assignee or subtenant shall use the Demised Premises for the Permitted Use, and (3) that Tenant provides Landlord with written notice of such assignment or sublease no later ten (10) days prior to the effective date of such assignment or sublease. For purposes of this Section 34.B , an “ Affiliate of Tenant ” shall mean any corporation, professional corporation, limited liability company, limited liability partnership, association, trust or partnership (1) that Controls (as herein defined) Tenant, (2) that is under the Control of Tenant, through stock ownership or otherwise, (3) that is under common Control with Tenant, or (4) which results from the merger or consolidation with Tenant, or acquires all or substantially all of the assets of and interest in Tenant. For the purposes hereof, a “ Parent of Tenant ” shall mean any corporation, limited liability company, association, trust, or partnership (A) that Controls Tenant, or (B) that owns more than fifty percent (50%) of the issued and outstanding voting securities of Tenant. The terms “ Control ” or “ Controls ” as used in this Section 34.B shall mean the power to directly or indirectly influence the direction, management, or policies of Tenant or such other entity.

C. Any permitted sublease, assignment or other transfer of occupancy of all or any part of the Demised Premises must contain a waiver of claims against Landlord by the subtenant, assignee or other transferee identical to the waivers given by Tenant hereunder, and, further, must require the subtenant, assignee or transferee’s insurer to issue waiver of subrogation rights endorsements to all policies of insurance carried in connection with the Demised Premises or the contents thereof. All waivers shall be in form and substance reasonably acceptable to Landlord.

D. If it is established by a court or body having final jurisdiction that Landlord has been unreasonable in withholding its consent to any subletting of the Demised Premises or assignment or other transfer of this Lease, the sole effect of such finding shall be that Landlord shall be deemed to have given its consent or approval, but Landlord shall not be liable to Tenant in any respect for money damages or expenses incurred by Tenant by reason of Landlord having withheld its consent.

35.	CONSENTS, COMPLIANCE WITH EXECUTIVE ORDER, ETC.

Tenant represents and warrants that prior to executing this Lease it has obtained all necessary consents and approvals that Tenant is required to obtain in connection with signing this Lease. Landlord represents and warrants that prior to executing this Lease it has obtained all necessary consents and approvals that Landlord is required to obtain in connection with signing this Lease. Landlord and Tenant each hereby represents and warrants to the other its compliance with all applicable laws, including, without limitation, the anti-money laundering laws, USA Patriot Act, and the laws administered by the United States Treasury Department’s Office of Foreign Assets Control, including, without limitation, Executive Order 13224 (“ Executive Order ”). Landlord and Tenant each further represent and warrant (i) that it is not, and it is not owned or controlled directly or indirectly by any person or entity, on the SDN List published by the United States Treasury Department’s Office of Foreign Assets Control and (ii) that it is not a person otherwise identified by government or legal authority as a person with whom a U.S. Person is prohibited from transacting business. As of the date hereof, a list of such designations and the text of the Executive Order are published under the internet website address www.ustreas.gov/offices/enforcement/ofac .

36.	GENDER/HEADINGS

Feminine or neuter pronouns shall be substituted for those of the masculine form, and the plural shall be substituted for the singular, in any place or places herein in which the context may require such substitution. Headings are used for convenience and shall not be considered when construing this Lease.

37.	BENEFIT AND BURDEN

The provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and each of their permitted successors and assigns. Landlord may freely and fully assign its interest or delegate its obligations hereunder.

38.	GOVERNING LAW

It is the intention of the parties hereto that this Lease (and the terms, conditions, provisions and covenants hereof) shall be construed and enforced in accordance with the laws of the District of Columbia. Landlord and Tenant each hereby waives any objection to the venue of any action filed by either party in any court situated in the District of Columbia and each party further waives any right, claim or power, under the doctrine of forum non conveniens or otherwise, to transfer any such action filed by any party to any other court.

39.	WAIVER OF TRIAL BY JURY

Each party hereby waives all right to trial by jury in any claim, action, proceeding or counterclaim by either party against the other on any matters arising out of or in any way connected with this Lease, the relationship of the parties, Tenant’s use or occupancy of the Demised Premises and/or any claim of injury or damage.

40.	CERTIFICATION OF THE PARTIES

The parties affixing their signature hereafter do certify that all conditions necessary to the valid execution and delivery of this Lease on their part have been complied with and that all things necessary to constitute this Lease as a valid, binding and legal agreement on the terms and conditions and for the purposes set forth herein have been done and performed, and that the execution and delivery of this Lease on their part have been authorized in accordance with their respective laws.

41.	ASSIGNMENT

Should Landlord sell, transfer or assign this Lease (other than a conditional assignment as security for a loan), then Landlord, as transferor, shall be relieved of any and all obligations on the part of Landlord accruing under this Lease from and after the date of such transfer and Landlord’s successor in interest shall be deemed to have assumed such obligations from and after such date. Written notice of any such transfer shall be given to Tenant.

42.	ENTIRE AGREEMENT

This Lease, including all exhibits, schedules and addenda attached hereto, constitutes the entire agreement of the parties hereto, and supersedes all prior representations, inducements, or agreements, oral or otherwise, between the parties with respect to the subject matter hereof. No addition to, deletion of or deviation from the provisions of this Lease shall be binding unless in writing and duly signed by the party against whom the same is sought to be enforced.

43.	FORCE MAJEURE

If either party is in any way delayed or prevented from performing any obligation hereunder (other than as set forth below) due to fire, act of God, act of terror or terrorism, governmental act or failure to act, labor dispute, inability to procure materials or any cause beyond such party’s reasonable control (whether similar or dissimilar to the foregoing events) (each, a “ Force Majeure ”), then the time for performance of such obligation shall be excused for the period of such delay or prevention and extended for the time necessary to compensate for the period of such delay or prevention, provided that nothing in this Section 43 shall affect (i) the time frames for Tenant’s monetary obligations under this Lease, or (ii) Tenant’s obligation to comply with the cure periods set forth in Section 20 hereof.

44.	PROHIBITION AGAINST RECORDING

Neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord’s election.

45.	EXCULPATION

No direct or indirect partner, member or shareholder of Landlord or Tenant (or any officer, director, agent, member, manager, personal representative, trustee or employee of any such direct or indirect partner, member or shareholder) shall be personally liable for the performance of the obligations of, or in respect of any claims against, Landlord or Tenant arising under this Agreement. No personal judgment shall be sought or obtained against any of the foregoing in connection with this Lease.

46.	CONFERENCE CENTER

In the event that any other tenant of the Building has rights to the conference center located in the Demised Premises pursuant to such tenant’s lease as of the Effective Date, Tenant agrees to provide such tenant access to such conference center, as required under such tenant’s lease, in order to permit Landlord to honor its obligations under such lease (subject to the terms of Exhibit B attached hereto); provided, however, Tenant shall not be liable to Landlord for any damage, injury, loss or claim based on or arising out of any other tenant’s use of the conference center, and, to the extent such tenant is liable to Landlord for such damage, injury or loss pursuant to such tenant’s lease, Landlord shall indemnify and hold harmless Tenant from and against any loss, damage, liability, claim, cost or expense (including reasonable attorneys’ fees) incurred by or claimed against Tenant based on or arising out of any other tenant’s use of the conference center.

47.	SECURITY DEPOSIT

A. Upon the Lease Commencement Date, Tenant shall deliver to Landlord a security deposit in the amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) (the “ Security Deposit ”) to be held by Landlord during the Term as collateral security (and not prepaid rent), for the payment of Annual Base Rent and Additional Rent and for the faithful performance by Tenant of all other covenants, conditions and agreements of this Lease. Landlord shall not be obligated to hold the Security Deposit in a separate account. Landlord shall not be required to pay any interest on the Security Deposit. If an Event of Default occurs hereunder, then Landlord, at its option, may apply all or part of the Security Deposit to compensate Landlord for the payment of Annual Base Rent or Additional Rent, or any loss or damage sustained by Landlord as a result of an Event of Default to the extent permitted by this Lease. Tenant shall restore the Security Deposit to the original sum deposited immediately upon Landlord’s demand, subject to Section 47.C. below. Landlord shall return the Security Deposit to Tenant (except to the extent of any portion of the Security Deposit which has been applied by Landlord and not restored by Tenant) within thirty (30) days after the expiration or earlier termination of this Lease.

B. The Security Deposit shall be in the form of an evergreen, irrevocable letter of credit in the amount of the Security Deposit (the “ Letter of Credit ”) issued by Bank of America Merrill Lynch (the “ Initial Bank ”). Tenant shall from time to time have the right to replace such

Letter of Credit with a new Letter of Credit issued by a Replacement Bank (hereinafter defined) in the same amount and upon the same terms. As used herein, the term “ Replacement Bank ” shall mean any of the following: (i) JPMorgan Chase & Co., (ii) Citigroup, Inc, (iii) Wells Fargo & Company, and (iv) any other bank reasonably acceptable to Landlord that has a Standard & Poor’s commercial paper rating of at least A-1. As used herein, the term “ Bank ” shall mean the current issuer of the Letter of Credit. The form of Letter of Credit shall be substantially similar to the form attached hereto as Exhibit F or on such other form customarily used by the Bank so long as such form is materially consistent with the form attached hereto as Exhibit F . If an Event of Default occurs, the Letter of Credit (and any replacement thereof) may be drawn upon by Landlord under the terms and conditions provided in this Section 47 .

C. Provided no Event of Default shall have occurred and remain uncured, on the first anniversary of the Lease Commencement Date, the Security Deposit shall be reduced by Seven Hundred Fifty Thousand Dollars ($750,000.00). Provided no Event of Default shall have occurred and remain uncured, Landlord shall instruct the Bank that the Letter of Credit may be reduced by $750,000.00. In no event shall the Letter of Credit be reduced to less than $1,500,000.00.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, on the day and year first hereinabove written, the undersigned have executed this Lease Agreement.


LANDLORD :

SL 4000 CONNECTICUT LLC , a Delaware limited liability company

By:
Name:
Title:

TENANT :

INTELSAT GLOBAL SERVICE LLC , a Delaware limited liability company

By:
Name:
Title:

Exhibit 10.2

SUPPLEMENT NO. 2 (this “ Supplement ”) dated as of July 31, 2012 to the GUARANTEE dated as of January 12, 2011 (the “ Guarantee ”), among each of the subsidiaries of INTELSAT JACKSON HOLDINGS S.A., a société anonyme existing under the laws of Luxembourg and registered with the Luxembourg trade and companies’ register under number B149.959 (the “ Borrower ”), from time to time party to the Guarantee (each such subsidiary individually, a “ Guarantor ” and, collectively, the “ Guarantors ”) and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”).

A. Reference is made to a Credit Agreement, dated as of January 12, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among INTELSAT (LUXEMBOURG) S.A. a société anonyme incorporated under the laws of Bermuda and existing under the laws of the Grand-Duchy of Luxembourg and registered with the Luxembourg trade and companies’ register under number B149.942, the Borrower, the lending institutions from time to time parties thereto (the “ Lenders ”), the Administrative Agent, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, CREDIT SUISSE SECURITIES (USA) LLC and J.P. MORGAN SECURITIES LLC, as joint lead arrangers, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, CREDIT SUISSE SECURITIES (USA) LLC, J.P. MORGAN SECURITIES LLC , BARCLAYS CAPITAL INC., DEUTSCHE BANK SECURITIES INC., MORGAN STANLEY & CO. INCORPORATED and UBS SECURITIES LLC, as joint bookrunners, CREDIT SUISSE SECURITIES (USA) LLC and J.P. MORGAN SECURITIES LLC, as Co-Syndication Agents, BARCLAYS BANK PLC and MORGAN STANLEY SENIOR FUNDING, INC., as Co-Documentation Agents and BANK OF AMERICA, N.A., as a Letter of Credit Issuer.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guarantee.

C. The Guarantors have entered into the Guarantee in order to induce the Administrative Agent, Syndication Agents, Joint Lead Arrangers and the Lenders, Documentation Agents and the Letter of Credit Issuers to enter into the Credit Agreement and to induce the Lenders and the Letter of Credit Issuers to make their respective Extensions of Credit to the Borrower under the Credit Agreement and to induce one or more Lenders or affiliates of Lenders to enter into Hedge Agreements with the Credit Parties. Section 9.11 of the Credit Agreement provides that additional Subsidiaries may become Guarantors under the Guarantee by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the “ New Guarantor ”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guarantee in order to induce the Lenders and the Letter of Credit Issuers to make additional Extensions of Credit and as consideration for Extensions of Credit previously made.

Accordingly, the Administrative Agent and the New Guarantor agree as follows:

SECTION 1. In accordance with Section 18 of the Guarantee, the New Guarantor by its signature below hereby becomes a Guarantor under the Guarantee with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guarantee applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the Guarantee shall be deemed to include the New Guarantor. The Guarantee is hereby incorporated herein by reference.

SECTION 2. The New Guarantor represents and warrants to the Administrative Agent and the other Guaranteed Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity and subject to mandatory Luxembourg law provisions.

SECTION 3. This Supplement may be executed by one or more of the parties to this Supplement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Supplement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. This Supplement shall become effective as to the New Guarantor when the Administrative Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of such New Guarantor and the Administrative Agent.

SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 6. Any provision of this Supplement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and in the Guarantee, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7. All notices, requests and demands pursuant hereto shall be made in accordance with Section 14.2 of the Credit Agreement. All communications and notices hereunder to the New Guarantor shall be given to it in care of the Borrower at the Borrower’s address set forth in Section 14.2 of the Credit Agreement.

SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent for its out-of-pocket expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel for the Administrative Agent.

IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed this Supplement to the Guarantee as of the day and year first above written.


NEW GUARANTOR

INTELSAT LUXEMBOURG INVESTMENT
S.A R.L., as a New Guarantor

By:	/s/ Flavien Bachabi
	Name:	Flavien Bachabi
	Title:	Manager

BANK OF AMERICA, N.A., as Administrative Agent

By:	/s/ Paley Chen
	Name:	Paley Chen
	Title:	Vice President

Exhibit 10.3

AGREEMENT

FOR THE ADHERENCE BY

INTELSAT LUXEMBOURG INVESTMENT S.ÀR.L.

AND

INTELSAT CORPORATION

TO THE

LUXEMBOURG SHARES AND BENEFICIARY CERTIFICATES PLEDGE AGREEMENT

DATED 12 JANUARY 2011

AND

FOR THE AMENDMENT OF THE PLEDGE AGREEMENT

31 July 2012

This Agreement for the Adherence by Intelsat Luxembourg Investment S.àr.l. and Intelsat Corporation to the Luxembourg Shares and Beneficiary Certificates Pledge Agreement dated 12 January 2011 and for the Amendment of the Pledge Agreement, dated 31 July 2012 (the “ Agreement ”), has been entered by and,

BETWEEN:

(1)	The Pledgors set forth in Schedule 1 (together the “ Pledgors ” and each a “ Pledgor ”);

AND

(2)	Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Collateral Trustee for the Secured Parties together with its successors and assigns in such capacity (the “ Collateral Trustee ” or the “ Pledgee ”);

IN THE PRESENCE OF:

(3)	The Companies set forth in Schedule 2 (together the “ Companies ” and each a “ Company ”);

WHEREAS:

(A)	On 12 January 2011, the Borrower, the Lenders and Bank of America, N.A. as Administrative Agent, and other agent parties party thereto, entered into the Credit Agreement.

(B)	In relation to the Credit Agreement, a shares and beneficiary certificates pledge agreement has been entered into on 12 January 2011 by inter alia the Pledgors and the Pledgee in the presence of the Companies (each as defined therein) (the “ Pledge Agreement ”).

(C)

On 31 May 2012, by way of a series of mergers in cascade, SubHoldco was merged into Phoenix, Phoenix was merged into Intermediate and Intermediate was merged into Jackson, and each of the Absorbed Companies ceased to exist and all of their assets and liabilities were ipso jure transferred to, ultimately, Jackson. As a consequence, the Absorbed Companies are no longer party to the Pledge Agreement and the Pledge Agreement shall be amended as set forth herein.

(D)	It is intended that with effect on or about 1 August 2012, Finance will be absorbed by Lux Investment and cease to exist (the “ Merger ”) so that with effect from the Merger, Finance will no longer be a Party to the Pledge Agreement.

(E)

Lux Investment is the wholly-owned subsidiary of Gibco and all shares in issue in Lux Investment are held by Gibco (the “ New Shares ”). The New Shares shall be pledged by Gibco to the Pledgee pursuant to the Pledge Agreement and therefore the Pledge Agreement shall be amended as set forth herein and Lux Investment shall become a party thereto as “Company”. Gibco in its capacity as sole shareholder of Lux Investment, wishes Lux Investment to adhere to the Pledge Agreement in order to inter alia pledge all New Shares it holds in Lux Investment under such terms and conditions as set forth in the Pledge Agreement, and the Pledgors expressly acknowledge and the Pledgee agrees to such adherence.

(F)	Intelsat Corp shall acquire shares (the “ OP Shares ”) and Beneficiary Certificates (the “ OP Beneficiary Certificates ”) of Intelsat Operations and therefore shall become a party to the Pledge Agreement as “Pledgor”.

NOW THEREFORE IT IS AGREED as follows:

Clause 1.

DEFINITIONS AND INTERPRETATION

1.1.	Capitalized terms used herein as defined terms shall have the meaning given thereto in the Pledge Agreement and/or the Credit Agreement, unless otherwise defined in the present Agreement, and:


Absorbed Companies		Means SubHoldco, Phoenix and Intermediate;

Finance		Means Intelsat (Luxembourg) Finance Company S.à r.l, a société à responsabilité limitée under the laws of Luxembourg and registered at the RCS under number RCS Luxembourg B117.304 and which will be merged into Lux Investment on or about 1 August 2012;

Gibco		Means Intelsat (Gibraltar) Limited, a private limited liability company incorporated under the laws of Gibraltar having its registered office at Suite 1 Burns House, 19 Town Range, Gibraltar, registered with the Gibraltar Trade and Companies Register under number 96556;

Intelsat Corp		Means Intelsat Corporation, a corporation incorporate under the laws of Delaware having its registered office at 2711 Centerville Road Suite 400, Wilmington, New Castle County 19808, Delaware State, United States of America registered with the Division of Corporations of the State of Delaware under number 2664446;

Intelsat Lux		Means Intelsat (Luxembourg) S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and registered at the RCS under number RCS Luxembourg B149.942;

Intelsat Operations		Means Intelsat Operations S.A., a société anonyme incorporated under Luxembourg law having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and being registered at the RCS under number RCS Luxembourg B 156.669;

Intermediate		Means Intelsat Intermediate Holding Company S.A., a société anonyme under the laws of Luxembourg previously registered at the RCS under number RCS Luxembourg B149.957 and which has been merged into Jackson on 31 May 2012;

Jackson or the Borrower		Means Intelsat Jackson Holdings S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and registered at the RCS under number RCS Luxembourg B149.959;


Lux Investment		Means Intelsat Luxembourg Investment S.àr.l., a société a responsabilité limitée incorporated under Luxembourg law having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and being registered at the RCS under number RCS Luxembourg B 169.491;

Phoenix		Means Intelsat Phoenix Holdings S.A. a société anonyme under the laws of Luxembourg and previously registered at the RCS under number RCS Luxembourg n° B 156667 and which has been merged into Intermediate on 31 May 2012;

RCS		Means the Registre de Commerce et des Sociétés of Luxembourg;

SubHoldco		Means Intelsat Subsidiary Holding Company S.A., a société anonyme under the laws of Luxembourg and previously registered at the RCS under number RCS Luxembourg B149.894 and which has been merged into Phoenix on 31 May 2012.

1.2.	The recitals and Schedules to this Agreement form an integral part thereof.

1.3.	The Pledgee shall not be responsible for the sufficiency of any terms used herein or any of the reorganization transactions as set out in the recitals of this Agreement.

Clause 2.

ADHERENCE, PLEDGE ON NEW SHARES

2.1.	Lux Investment hereby becomes a party to the Pledge Agreement as “Company” and Intelsat Corp hereby becomes a party to the Pledge Agreement as “Pledgor”.

2.2.

Gibco, in its capacity as sole shareholder of Lux Investment and as a Pledgor under the Pledge Agreement, pledges, and confirms the pledge, on all New Shares as Pledged Shares and all Related Assets relating thereto pursuant to the terms and conditions of the Pledge Agreement and the Pledgee acknowledges and accepts.

2.3.	Lux Investment hereby acknowledges the Pledge over the New Shares and Related Assets, and undertakes to deliver a copy of its share register showing the inscription of the Pledge (in conformity with schedule 3 of the Pledge Agreement) on the New Shares to the Pledgee.

2.4.

Intelsat Corp pledges, with effect upon its acquisition of the OP Shares and the OP Beneficiary Certificates, as Pledged Shares respectively Pledged Beneficiary Certificates and all Related Assets relating thereto pursuant to the terms and conditions of the Pledge Agreement and the Pledgee acknowledges and accepts.

2.5.

Intelsat Operations hereby acknowledges the Pledge over the OP Shares and the OP Beneficiary Certificates and Related Assets, and undertakes, upon the acquisition by Intelsat Corp of the OP Shares and the OP Beneficiary Certificates to deliver a copy of its Register of Shareholders respectively BC Register showing the inscription of the Pledge (in conformity with schedule 3 of the Pledge Agreement) on the OP Shares respectively OP Beneficiary Certificates to the Pledgee.

Clause 3.

AMENDMENT PLEDGE AGREEMENT

The parties hereto agree that the Pledge Agreement shall be amended so that (i) the list of Pledgors, (ii) the list of Companies and (iii) the list of shares and beneficiary certificates issued are updated and consequentially schedule 1 thereto is amended and replaced by Schedule 1 of this Agreement, schedule 2 thereto is amended and replaced by Schedule 2 of this Agreement, and schedule 4 thereto is amended and replaced by Schedule 3 of this Agreement.

Clause 4.

ADDITIONAL PROVISIONS

The parties hereto agree that Clauses 1.2, 15 to 19 of the Pledge Agreement are included by way of reference into the present Agreement.

Clause 5.

COUNTERPARTS

This Agreement may be executed in any number of counterparts and by way of facsimile or scanned PDF exchange of executed signature pages, all of which together shall constitute one and the same Agreement.

Schedule 1

The Pledgors


(1)		Intelsat (Luxembourg) S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered at the RCS under number RCS Luxembourg B149.942;

(2)		Intelsat Jackson Holdings S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered at the RCS under number RCS Luxembourg B149.959;

(3)		Intelsat (Gibraltar) Limited , a company established and having its registered office at Suite 1 Burns House, 19 Town Range, Gibraltar, registered number 96556;

(4)		Intelsat Corporation , a corporation incorporated under the laws of Delaware having its registered office at 2711 Centerville Road Suite 400, Wilmington, New Castle County 19808, Delaware State, United States of America registered with the Division of Corporations of the State of Delaware under number 2664446.

Schedule 2

The Companies


(1)		Intelsat Jackson Holdings S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered at the RCS under number RCS Luxembourg B149.959;

(2)		Intelsat Operations S.A., a société anonyme under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered at the RCS under number RCS Luxembourg B156669;

(3)		Intelsat Luxembourg Investment S.àr.l., a société a responsabilité limitée incorporated under Luxembourg law having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg, and being registered at the RCS under number B 169.491;

(4)		Until the Merger, Intelsat (Luxembourg) Finance Company S.à r.l. , a société à responsabilité limitée under the laws of Luxembourg with registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered at the RCS under number RCS Luxembourg B117.304.

Schedule 3

Shares and Beneficiary Certificates issued

at the time of this Agreement


*Company*	*Shares*		Beneficiary Certificates
Intelsat Jackson Holdings S.A.		18,473,209		13,315,428

Intelsat Operations S.A.		6,145,666		0

Intelsat Luxembourg Investment S.à r.l.		200		NA

Until the Merger, Intelsat (Luxembourg) Finance Company S.à r.l.		3,124,235		NA

Signature Page – Agreement for the Adherence to and Amendment of Pledge Agreement

IN WITNESS THEREOF the parties hereto have executed this Agreement in one or multiple original counterparts, all of which together evidence the same Agreement, on the day and year first written above.


The Pledgors:

Intelsat (Luxembourg) S.A.

By:		/s/ Phillip Spector
Name: Phillip Spector
Title: Deputy Chairman and Assistant Secretary

Intelsat Jackson Holdings S.A.

By:		/s/ Phillip Spector
Name: Phillip Spector
Title: Deputy Chairman and Assistant Secretary

Executed as a deed by
Intelsat (Gibraltar) Limited
And signed by 2 Directors

By:		/s/ Louis B. Triay
Name: Louis B. Triay
Title: Director

By:		/s/ Tristan Cano
Name: Tristan Cano
Title: Director

Intelsat Corporation

By:		/s/ Phillip Spector
Name: Phillip Spector
Title: Executive Vice President and General Counsel

Signature Page – Agreement for the Adherence to and Amendment of Pledge Agreement


The Pledgee:

Wilmington Trust, National Association, as Pledgee

By:	/s/ Renee Kuhl	By:	/s/ Jared Grunig

Name: Renee Kuhl		Name: Jared Grunig

Title: Vice President		Title: Vice President

Signature Page – Agreement for the Adherence to and Amendment of Pledge Agreement

Intelsat Luxembourg Investment S.à r.l. (as a new Company) acknowledges and expressly accepts, and each of the Companies (other than Intelsat Luxembourg Investment S.à r.l.) hereby confirms its acknowledgment and acceptance of, (i) the security interest constituted by the Pledge Agreement, (ii) the terms of clause 2.2 of the Pledge Agreement and (iii) the directions contained in clauses 3.2.1 and 3.2.2 of the Pledge Agreement. Intelsat Luxembourg Investment S.à r.l. (as a new Company) confirms and each of the Companies (other than Intelsat Luxembourg Investment S.à r.l.) re-confirms (i) that it will provide the required assistance in respect of the perfection of the Pledge to the extent required under the Agreement and requested by the Pledgee and (ii) that upon the occurrence of a Triggering Event that is continuing, it shall perform as directed by the Pledgee to the extent required under the Pledge Agreement.


The Companies

Intelsat Luxembourg Investment S.à r.l.

By:		/s/ Flavien Bachabi
Name: Flavien Bachabi
Title: Manager

Intelsat Jackson Holdings S.A.

By:		/s/ Phillip Spector
Name: Phillip Spector
Title: Deputy Chairman and Assistant Secretary

Intelsat Operations S.A.

By:		/s/ Phillip Spector
Name: Phillip Spector
Title: Deputy Chairman and Assistant Secretary

Intelsat (Luxembourg) Finance Company S.à r.l.

By:		/s/ Simon Van De Weg
Name: Simon Van De Weg
Title: Manager

Exhibit 10.4

SUPPLEMENT NO. 2 dated as of July 31, 2012 to the Security and Pledge Agreement dated as of January 12, 2011 (this “ Supplement ”), among INTELSAT JACKSON HOLDINGS S.A. a société anonyme incorporated under the laws of Bermuda and existing under the laws of the Grand-Duchy of Luxembourg and registered with the Luxembourg trade and companies’ register under number B149.959 (the “ Borrower ”), each subsidiary of the Borrower from time to time party thereto (each such subsidiary individually a “ Subsidiary Grantor ” and, collectively, the “ Subsidiary Grantors ”; the Subsidiary Grantors and the Borrower are referred to collectively herein as the “ Grantors ”), BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”) and WILMINGTON TRUST, NATIONAL ASSOCIATION (as successor by merger with WILMINGTON TRUST FSB), as collateral trustee (together with its successors and assigns, in such capacity, the “ Collateral Trustee ”).

WHEREAS, the Borrower is party to a Credit Agreement dated as of January 12, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) among the Borrower, Intelsat (Luxembourg) S.A. (“ Holdings ”), the financial institutions or entities from time to time party thereto as lenders (the “ Lenders ”), the Administrative Agent and the other agent parties party thereto;

WHEREAS, pursuant to the Credit Agreement, (a) the Lenders have severally agreed to make Loans to the Borrower and the Letter of Credit Issuers have agreed to issue Letters of Credit for the account of the Borrower (collectively, the “ Extensions of Credit ”) upon the terms and subject to the conditions set forth therein and (b) one or more Lenders or affiliates of Lenders may from time to time enter into Hedge Agreements with, or provide cash management services to, the Borrower;

WHEREAS, (i) pursuant to the terms of the Credit Agreement, Holdings guaranteed the payment and performance of the Obligations of the Borrower to the Secured Parties and (ii) pursuant to the Guarantee, dated as of January 12, 2011 (as amended, supplemented or otherwise modified from time to time, the “ Guarantee ”), among the Subsidiary Guarantors party thereto and Administrative Agent, the Subsidiary Guarantors guaranteed the payment and performance of the Obligations of the Borrower to the Secured Parties;

WHEREAS, it is a condition precedent to the obligation of the Lenders and Letter of Credit Issuers to make their respective Extensions of Credit to the Borrower under the Credit Agreement, and to induce one or more Lenders or affiliates of Lenders to enter into Hedge Agreements with, or provide cash management services to, the Borrower, that the Grantors shall have executed and delivered the Security and Pledge Agreement, dated as of January 12, 2011 (as amended, supplemented or otherwise modified from time to time, the “ Security and Pledge Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Security and Pledge Agreement), among the Grantors, the Administrative Agent and the Collateral Trustee, to the Collateral Trustee for its benefit and the ratable benefit of the other Secured Parties; and

WHEREAS, the Grantors would also like to induce other creditors to make available from time to time First Lien Debt (other than as described above) subject to the terms of the Collateral Agency and Intercreditor Agreement.

WHEREAS, Section 9.11 of the Credit Agreement and Section 10.13 of the Security and Pledge Agreement provide that each Subsidiary of the Borrower that is required to become a party to the Security and Pledge Agreement pursuant to Section 9.11 of the Credit Agreement shall become a Grantor, with the same force and effect as if originally named as a Grantor therein, for all purposes of the Security and Pledge Agreement upon execution and delivery by such Subsidiary of an instrument in the form of this Supplement. The undersigned Subsidiary (the “ New Grantor ”) is executing this Supplement in accordance with the requirements of the Security and Pledge Agreement to become a Subsidiary Grantor under the Security and Pledge Agreement in order to induce the Lenders and the Letter of Credit Issuer to make additional Extensions of Credit and as consideration for Extensions of Credit previously made.

NOW THEREFORE, in consideration of the above premises, the Collateral Trustee, the Administrative Agent and the New Grantor agree as follows:

SECTION 1. In accordance with Section 10.13 of the Security and Pledge Agreement, the New Grantor by its signature below becomes a Grantor under the Security and Pledge Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security and Pledge Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct in all material respects with respect to such New Grantor on and as of the date hereof. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Obligations, does hereby bargain, sell, convey, assign, set over, mortgage, pledge, hypothecate and transfer to the Collateral Trustee, for its benefit and the ratable benefit of the other Secured Parties, and hereby grants to the Collateral Trustee, for its benefit and the ratable benefit of the other Secured Parties, a Security Interest in all of the Collateral of the New Grantor, in each case whether now or hereafter existing or in which now has or hereafter acquires an interest. Each reference to a “Grantor” in the Security and Pledge Agreement shall be deemed to include the New Grantor. The Security and Pledge Agreement is hereby incorporated herein by reference.

SECTION 2. The New Grantor represents and warrants to the Collateral Trustee and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity subject to mandatory Luxembourg law provisions.

SECTION 3. This Supplement may be executed by one or more of the parties to this Supplement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Supplement signed by all the parties shall be lodged with the Collateral Trustee, the Administrative Agent and the Borrower. This Supplement shall become effective as to the New Grantor when the Collateral Trustee and the Administrative Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor, the Collateral Trustee and the Administrative Agent.

SECTION 4. The New Grantor hereby represents and warrants that (a) Annex I hereto sets forth (i) the legal name of the New Grantor, (ii) the jurisdiction of incorporation or organization of the New Grantor, (iii) the true and correct location of the chief executive office and principal place of business and any office in which it maintains books or records relating to Collateral owned by it, (iv) the identity or type of organization or corporate structure of the New Grantor and (v) the Federal Taxpayer Identification Number and organizational number of the New Grantor and (b) as of each Closing Date (i) Schedule I hereto sets forth all of the New Grantor’s Copyright Licenses, (ii) Schedule II hereto sets forth, in proper form for filing with the United States Copyright Office, all of the New Grantor’s Copyrights (and all applications therefor), (iii) Schedule III hereto sets forth all of the New Grantor’s Patent Licenses, (iv) Schedule IV hereto sets forth, in proper form for filing with the United States Patent and Trademark Office, all of the New Grantor’s Patents (and all applications therefor), (v) Schedule V hereto sets forth all of the New Grantor’s Trademark Licenses, (vi) Schedule VI hereto sets forth, in proper form for filing with the United States Patent and Trademark Office, all of the New Grantor’s Trademarks (and all applications therefor) and (vii) Schedule VII sets forth all Pledged Collateral of the New Grantor.

SECTION 5. Except as expressly supplemented hereby, the Security and Pledge Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. Any provision of this Supplement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and in the Security and Pledge Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8. All notices, requests and demands pursuant hereto shall be made in accordance with Section 14.2 of the Credit Agreement. All communications and notices hereunder to the New Grantor shall be given to it in care of the Borrower at the Borrower’s address set forth in Section 14.2 of the Credit Agreement.

SECTION 9. The New Grantor agrees to reimburse the Collateral Trustee for its respective reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Trustee.

IN WITNESS WHEREOF, the New Grantor, the Collateral Trustee and the Administrative Agent have duly executed this Supplement to the Security and Pledge Agreement as of the day and year first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L., as New Grantor


By:		/s/ Flavien Bachabi
Name:		Flavien Bachabi
Title:		Manager

BANK OF AMERICA, N.A., as Administrative Agent

By:		/s/ Paley Chen
Name:		Paley Chen
Title:		Vice President

WILMINGTON TRUST, NATIONAL ASSOCIATION (as successor by merger with WILMINGTON TRUST FSB), as Collateral Trustee

By:		/s/ Renee Kuhl
Name:		Renee Kuhl
Title:		Vice President

Exhibit 10.5

COLLATERAL AGENCY AND INTERCREDITOR JOINDER

Reference is made to the Collateral Agency and Intercreditor Agreement dated as of January 12, 2011 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “ Collateral Agency and Intercreditor Agreement ”) among INTELSAT (LUXEMBOURG) S.A., a public limited liability company ( société anonyme ) existing as société anonyme under the laws of the Grand Duchy of Luxembourg, having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered with the Luxembourg trade and companies’ register under number B149.942 (“ Holdings ”), INTELSAT JACKSON HOLDINGS S.A., a public limited liability company ( société anonyme ) existing as société anonyme under the laws of the Grand Duchy of Luxembourg, having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg and registered with the Luxembourg trade and companies’ register under number B149.959 (the “ Company ”), the other Grantors from time to time party hereto, BANK OF AMERICA, N.A., as Administrative Agent under the Existing Credit Agreement, the other First Lien Representatives and Second Lien Representatives from time to time party thereto, and WILMINGTON TRUST, NATIONAL ASSOCIATION (as successor by merger with WILMINGTON TRUST FSB), as Collateral Trustee (in such capacity and together with its successors in such capacity, the “ Collateral Trustee ”). Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Collateral Agency and Intercreditor Agreement. This Collateral Agency and Intercreditor Joinder is being executed and delivered pursuant to Section 8.18 of the Collateral Agency and Intercreditor Agreement as a condition precedent to the debt for which the undersigned is acting as agent being entitled to the benefits of being additional secured debt under the Collateral Agency and Intercreditor Agreement.

The undersigned, INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg and registered with the Luxembourg trade and companies’ register under number B169.491 (the “ Grantor ”), hereby agrees to become party as a Grantor under the Collateral Agency and Intercreditor Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Collateral Agency and Intercreditor Agreement as fully as if the Grantor had executed and delivered the Collateral Agency and Intercreditor Agreement as of the date thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Agency and Intercreditor Joinder to be executed by their respective officers or representatives as of July 31, 2012.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:		/s/ Flavien Bachabi
Name:		Flavien Bachabi
Title:		Manager

The Collateral Trustee hereby acknowledges receipt of this Collateral Agency and Intercreditor Joinder and agrees to act as Collateral Trustee with respect to the Collateral pledged by the new Grantor:


WILMINGTON TRUST, NATIONAL ASSOCIATION (as successor by merger with WILMINGTON TRUST FSB), as Collateral Trustee

By:		/s/ Renee Kuhl
Name:		Renee Kuhl
Title:		Vice President

Exhibit 10.6

Execution Copy

GUARANTEE (this “ Guarantee ”) dated as of July 31, 2012, made between INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg (the “ New Guarantor ”), a subsidiary of INTELSAT JACKSON HOLDINGS S.A. (f/k/a Intelsat Jackson Holdings, Ltd.), a société anonyme existing under the laws of Luxembourg (the “ Borrower ”), and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (f/k/a CREDIT SUISSE, CAYMAN ISLANDS BRANCH), as administrative agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the Borrower is party to a Senior Unsecured Credit Agreement (the “ Credit Agreement ”), dated as of July 1, 2008, among the Borrower, Intelsat (Luxembourg) S.A. (f/k/a Intelsat (Bermuda), Ltd.), the lending institutions from time to time parties thereto (each a “ Lender ” and, collectively, the “ Lenders ”), the Administrative Agent, Banc of America Bridge LLC, as Syndication Agent, Morgan Stanley Senior Funding, Inc., as Documentation Agent, and Credit Suisse Securities (USA) LLC, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Bookrunners, pursuant to which the Lenders have severally agreed to make Loans to the Borrower (collectively, the “ Extensions of Credit ”) upon the terms and subject to the conditions set forth therein;

WHEREAS, Intelsat Subsidiary Holding Company S.A. (f/k/a Intelsat Subsidiary Holding Company, Ltd.), Intelsat Holdings LLC, Intelsat LLC, Intelsat Global Sales & Marketing Ltd., Intelsat USA Sales Corp., Intelsat USA License Corp., Intelsat Global Service Corporation and Intelsat UK Financial Services Ltd. (collectively, the “ Initial Guarantors ”) have heretofore executed and delivered to the Administrative Agent a Guarantee dated as of July 1, 2008 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (the “ Initial Guarantee ”);

WHEREAS, Intelsat Subsidiary (Gibraltar) Limited and Intelsat New Dawn (Gibraltar) Limited have heretofore executed and delivered to the Administrative Agent a Guarantee dated as of December 11, 2009 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (the “ December 2009 Guarantee ”);

WHEREAS, Intelsat (Gibraltar) Limited, Intelsat (Luxembourg) Finance Company S.a r.l., Intelsat Operations S.A., Intelsat Phoenix Holdings S.A. and the other guarantors named therein have heretofore executed and delivered to the Administrative Agent a Guarantee dated as of January 12, 2011 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (the “ January 2011 Guarantee ”);

WHEREAS, Intelsat (Poland) Sp. z o.o. (together with the Initial Guarantors, Intelsat Subsidiary (Gibraltar) Limited, Intelsat New Dawn (Gibraltar) Limited, Intelsat (Gibraltar) Limited, Intelsat (Luxembourg) Finance Company S.a r.l., Intelsat Operations S.A., Intelsat Phoenix Holdings S.A. and the other guarantors named

in the January 2011 Guarantee, the “ Existing Guarantors ”, and the Existing Guarantors together with the New Guarantor, the “ Guarantors ”) has heretofore executed and delivered to the Administrative Agent a Guarantee dated as of April 12, 2011 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (such Guarantee, together with the Initial Guarantee, the December 2009 Guarantee and the January 2011 Guarantee, the “ Existing Guarantees ”);

WHEREAS, the New Guarantor desires to execute and deliver to the Administrative Agent a Guarantee pursuant to which it shall unconditionally guarantee all of the Borrower’s obligations under the Credit Agreement pursuant to a Guarantee on the terms and conditions set forth herein;

WHEREAS, the New Guarantor acknowledges that it will derive substantial direct and indirect benefit from the making of the Extensions of Credit; and

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the New Guarantor hereby agrees with the Administrative Agent, for the benefit of the Lenders, as follows:

1. Defined Terms .

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

(b) As used herein, the term “ Obligations ” means the collective reference to (i) the due and punctual payment of (x) the principal of and premium, if any, and interest at the applicable rate provided in the Credit Agreement (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (y) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower or any other Credit Party to any of the Lenders under the Credit Agreement and the other Credit Documents, (ii) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Borrower under or pursuant to the Credit Agreement and the other Credit Documents and (iii) the due and punctual payment and performance of all the covenants, agreements, obligations and liabilities of each other Credit Party under or pursuant to this Guarantee or the other Credit Documents.

(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and Section references are to Sections of this Guarantee unless otherwise specified. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

2. Guarantee .

(a) Subject to the provisions of Section 2(b), the New Guarantor, jointly and severally with the Existing Guarantors, hereby unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, to the Administrative Agent, for the benefit of the Lenders, the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.

(b) Anything herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of the New Guarantor hereunder and under the other Credit Documents shall in no event exceed the amount that can be guaranteed by the New Guarantor under applicable laws relating to the insolvency of debtors.

(c) The New Guarantor further agrees to pay any and all expenses (including all reasonable fees and disbursements of counsel) that may be paid or incurred by the Administrative Agent or any other Lender in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, the New Guarantor under this Guarantee.

(d) The New Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of the New Guarantor hereunder without impairing this Guarantee or affecting the rights and remedies of the Administrative Agent or any other Lender hereunder.

(e) No payment or payments made by the Borrower, the New Guarantor, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Lender from the Borrower, the New Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the New Guarantor hereunder, which shall, notwithstanding any such payment or payments other than payments made by the New Guarantor in respect of the Obligations or payments received or collected from the New Guarantor in respect of the Obligations, remain liable for the Obligations up to the maximum liability of the New Guarantor hereunder until the Obligations under the Credit Documents are paid in full and the Commitments are terminated, or otherwise satisfied in accordance with the terms of the Credit Agreement (including Section 2 thereof).

(f) The New Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any other Lender on account of its liability hereunder, it will notify the Administrative Agent in writing that such payment is made under this Guarantee for such purpose.

3. Right of Contribution . The New Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder and under the Existing Guarantees, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder and under the Existing Guarantees who has not paid its proportionate share of such payment. The Guarantor’s right of contribution shall be subject to the terms and conditions of Section 5 hereof. The provisions of this Section 3 shall in no respect limit the obligations and liabilities of the New Guarantor to the Administrative Agent and the Lenders, and the New Guarantor shall remain liable to the Administrative Agent and the Lenders for the full amount guaranteed by the New Guarantor hereunder.

4. Right of Set-off . In addition to any rights and remedies of the Lenders provided by law, the New Guarantor hereby irrevocably authorizes each Lender at any time and from time to time following the occurrence and during the continuance of an Event of Default without notice to the New Guarantor or any other Guarantor, any such notice being expressly waived by the New Guarantor, upon any amount becoming due and payable by the New Guarantor hereunder (whether at stated maturity, by acceleration or otherwise) to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender to or for the credit or the account of the New Guarantor. Each Lender shall notify the New Guarantor promptly of any such set-off and the appropriation and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.

5. No Subrogation . Notwithstanding any payment or payments made by the New Guarantor hereunder or any set-off or appropriation and application of funds of the New Guarantor by the Administrative Agent or any Lender, the New Guarantor shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Obligations, nor shall the New Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by the New Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Credit Parties on account of the Obligations are paid in full, the Commitments are terminated and no Letters of Credit shall be outstanding. If any amount shall be paid to the New Guarantor on account of such subrogation rights at any time when all the Obligations shall not have been paid in full, such amount shall be held by the New Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of the New Guarantor, and shall, forthwith upon receipt by the New Guarantor, be turned over to the Administrative Agent in the exact form received by the New Guarantor (duly indorsed by the New Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether due or to become due, in such order as the Administrative Agent may determine.

6. Amendments, etc. with Respect to the Obligations; Waiver of Rights . The New Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the New Guarantor and without notice to or further assent by the New Guarantor, (a) any demand for payment of any of the Obligations made by the Administrative Agent or any Lender may be rescinded by such party and any of the Obligations continued, (b) the Obligations, or the liability of any other party upon or for any part thereof, or any guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Lender, (c) the Credit Agreement and any other documents executed and delivered in connection may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, as the case may be) may deem advisable from time to time, and (d) any guarantee or right of offset at any time held by the Administrative Agent or any Lender for the payment of the Obligations may be sold, exchanged, waived, surrendered or released.

7. Guarantee Absolute and Unconditional .

(a) The New Guarantor waives any and all notice of the creation, contraction, incurrence, renewal, extension, amendment, waiver or accrual of any of the Obligations, and notice of or proof of reliance by the Administrative Agent or any Lender upon this Guarantee or acceptance of this Guarantee. The Obligations or any of them shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended, waived or accrued, in reliance upon this Guarantee, and all dealings between the Borrower and the New Guarantor, on the one hand, and the Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guarantee. The New Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Obligations. The New Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement, any other Credit Document, any of the Obligations or, if applicable, any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by the Borrower against the Administrative Agent or any Lender or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or the New Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, or of the New Guarantor under this Guarantee, in bankruptcy or in any other instance.

(b) This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the New Guarantor and the successors and assigns thereof and shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors, indorsees, transferees and assigns until all the Obligations (other than any contingent indemnity obligations not then due) shall have

been satisfied by payment in full and the Commitments thereunder shall be terminated, or otherwise satisfied in accordance with the terms of the Credit Agreement (including Section 2 thereof).

(c) Notwithstanding the other provisions of this Guarantee, a Guarantee as to any Guarantor that is a Subsidiary shall terminate and be of no further force or effect and such Guarantor shall be deemed to be automatically released from all obligations under this Guarantee upon:

(i) (A) the sale, disposition or other transfer (including through merger, amalgamation or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Guarantor is no longer a Restricted Subsidiary), or all or substantially all the assets, of the applicable Guarantor if such sale, disposition or other transfer is made in compliance with this Guarantee and the Credit Agreement and (B) such Guarantor being released from its guarantees, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower, or

(ii) the Borrower designating such Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 10.2 of the Credit Agreement and the definition of “Unrestricted Subsidiary,” or

(iii) in the case of any Restricted Subsidiary which after the Closing Date is required to guarantee the Notes pursuant to Section 10.7 of the Credit Agreement, the release or discharge of the guarantee by such Restricted Subsidiary of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock, in each case, which resulted in the obligation to guarantee the Loans, or

(iv) the Borrower’s repayment (or other satisfaction (including pursuant to Section 2 of the Credit Agreement)) in full of all Obligations under the Credit Agreement in accordance with the terms of the Credit Agreement.

(d) Notwithstanding the other provisions of this Guarantee, a Guarantee also shall be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof. In addition, the Guarantees of the Subsidiary Guarantors shall be suspended during any Suspension Period, as provided in Section 10.9 of the Credit Agreement.

(e) Notwithstanding the other provisions of this Guarantee, any Guarantee given by any Parent of the Borrower may be released at any time upon written notice to the Administrative Agent from such Parent of the Borrower.

(f) In connection with the release of the New Guarantor from its obligations hereunder in accordance with the terms of this Guarantee and the Credit Agreement, the Administrative Agent shall, at the expense of the Borrower and the other Credit Parties, execute such reasonable documents and take such other reasonable actions as the Borrower or any Credit Party may request to evidence such release.

8. Reinstatement . This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

9. Payments . The New Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Administrative Agent’s Office.

10. [RESERVED]

11. [RESERVED]

12. Notices . All notices, requests and demands pursuant hereto shall be made in accordance with Section 14.2 of the Credit Agreement. All communications and notices hereunder to any Guarantor shall be given to it in care of the Borrower at the Borrower’s address set forth in Section 14.2 of the Credit Agreement.

13. Counterparts . This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Guarantee signed by all the parties shall be lodged with the Administrative Agent and the Borrower.

14. Severability . Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

15. Integration . This Guarantee represents the agreement of the New Guarantor and the Administrative Agent with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.

16. Amendments in Writing; No Waiver; Cumulative Remedies .

(a) This Guarantee may be waived, amended, supplemented or otherwise modified only (i) by a written instrument executed by the New Guarantor and the Administrative Agent, (ii) to give effect to amendments, supplements or modifications to the Credit Agreement or (iii) by the New Guarantor in circumstances where the Borrower would be permitted to amend, supplement or modify the Credit Agreement.

(b) Neither the Administrative Agent nor any Lender shall by any act (except by a written instrument pursuant to Section 16(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Administrative Agent or any Lender would otherwise have on any future occasion.

(c) The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

17. Section Headings . The Section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

18. Successors and Assigns . This Guarantee shall be binding upon the successors and assigns of the New Guarantor and shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors and assigns except that the New Guarantor may not, subject to Section 16 above, assign, transfer or delegate any of its rights or obligations under this Guarantee without the prior written consent of the Administrative Agent.

19. Additional Guarantors . Each Subsidiary of the Borrower that is required to become a party to this Guarantee pursuant to Section 10.7 of the Credit Agreement shall become a Guarantor, with the same force and effect as if originally named as a Guarantor herein, for all purposes of this Guarantee upon execution and delivery by such Subsidiary of a Guarantee. The execution and delivery of any instrument adding an additional Guarantor as a party to this Guarantee shall not require the consent of any other Guarantor hereunder. The rights and obligations of the New Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Guarantee.

20. WAIVER OF JURY TRIAL . THE NEW GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

21. Submission to Jurisdiction; Waivers . The New Guarantor hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Guarantee and the other Credit Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the New Guarantor at its address referred to in Section 12 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right of the Administrative Agent or any Lender to effect service of process in any other manner permitted by law or shall limit the right of the Administrative Agent or any Lender to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 21 any special, exemplary, punitive or consequential damages.

22. GOVERNING LAW . THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:	/s/ Flavien Bachabi
	Name:	Flavien Bachabi
	Title:	Manager


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (f/k/a CREDIT SUISSE, CAYMAN ISLANDS BRANCH), as Administrative Agent

By:		/s/ Bill O’Daly
		Name: Bill O’Daly
		Title: Director

By:		/s/ Tyler R. Smith
		Name: Tyler R. Smith
		Title: Associate

Exhibit 10.7

Execution Copy

GUARANTEE (this “ Guarantee ”) dated as of July 31, 2012, made between INTELSAT LUXEMBOURG INVESTMENT S.À R.L., a société à responsibilité limitée organized under the laws of Luxembourg (the “ New Guarantor ”), a subsidiary of INTELSAT JACKSON HOLDINGS S.A. (f/k/a Intelsat Jackson Holdings, Ltd.), a société anonyme existing under the laws of Luxembourg (the “ Borrower ”), and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”).

WITNESSETH :

WHEREAS, the Borrower is party to a Senior Unsecured Credit Agreement (the “ Credit Agreement ”), dated as of February 2, 2007, among the Borrower (as successor to Intelsat (Bermuda), Ltd.), Intelsat S.A. (f/k/a Intelsat, Ltd.), the lending institutions from time to time parties thereto (each a “ Lender ” and, collectively, the “ Lenders ”), the Administrative Agent and the other parties thereto, pursuant to which the Lenders have severally agreed to make Loans to the Borrower (collectively, the “ Extensions of Credit ”) upon the terms and subject to the conditions set forth therein;

WHEREAS, Intelsat Subsidiary Holding Company S.A. (f/k/a Intelsat Subsidiary Holding Company, Ltd.), Intelsat Holdings LLC, Intelsat LLC, Intelsat Global Sales & Marketing Ltd., Intelsat USA Sales Corp., Intelsat USA License Corp., Intelsat Global Service Corporation and Intelsat UK Financial Services Ltd. (collectively, the “ Initial Guarantors ”) have heretofore executed and delivered to the Administrative Agent a Guarantee dated as of February 2, 2007 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (the “ Initial Guarantee ”);

WHEREAS, Intelsat (Luxembourg) S.A. (f/k/a Intelsat (Bermuda), Ltd.) has heretofore executed and delivered to the Administrative Agent a Guarantee dated as of February 4, 2008 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (the “ February 2008 Guarantee ”);

WHEREAS, Intelsat (Poland) Sp. z o.o. (together with the Initial Guarantors, Intelsat (Luxembourg) S.A., Intelsat Subsidiary (Gibraltar) Limited, Intelsat New Dawn (Gibraltar) Limited, Intelsat (Gibraltar) Limited, Intelsat (Luxembourg) Finance

Company S.a r.l., Intelsat Operations S.A., Intelsat Phoenix Holdings S.A. and the other guarantors named in the January 2011 Guarantee, the “ Existing Guarantors ”, and the Existing Guarantors together with the New Guarantor, the “ Guarantors ”) has heretofore executed and delivered to the Administrative Agent a Guarantee dated as of April 12, 2011 providing for the guarantee of the Borrower’s obligations under the Credit Agreement and the Loans (such Guarantee, together with the Initial Guarantee, the February 2008 Guarantee, the December 2009 Guarantee and the January 2011 Guarantee, the “ Existing Guarantees ”);

WHEREAS, the New Guarantor acknowledges that it will derive substantial direct and indirect benefit from the making of the Extensions of Credit; and

1. Defined Terms .

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

2. Guarantee .

7. Guarantee Absolute and Unconditional .

(b) This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the New Guarantor and the successors

and assigns thereof and shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors, indorsees, transferees and assigns until all the Obligations (other than any contingent indemnity obligations not then due) shall have been satisfied by payment in full and the Commitments thereunder shall be terminated, or otherwise satisfied in accordance with the terms of the Credit Agreement (including Section 2 thereof).

9. Payments . The New Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Administrative Agent’s Office.

10. [RESERVED]

11. [RESERVED]

16. Amendments in Writing; No Waiver; Cumulative Remedies .

(c) The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

21. Submission to Jurisdiction; Waivers . The New Guarantor hereby irrevocably and unconditionally:

22. GOVERNING LAW . THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written.


INTELSAT LUXEMBOURG INVESTMENT S.À R.L.

By:	/s/ Flavien Bachabi
	Name:	Flavien Bachabi
	Title:	Manager


BANK OF AMERICA, N.A., as Administrative Agent

By:		/s/ Paley Chen
		Name: Paley Chen
		Title: Vice President

Exhibit 31.1

CERTIFICATIONS

I, David McGlade, Chief Executive Officer of Intelsat S.A. (the “Company”), certify that:

I have reviewed this Quarterly Report on Form 10-Q of Intelsat S.A.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: August 1, 2012

/ S / D AVID M C G LADE

David McGlade

Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Michael McDonnell, Chief Financial Officer of Intelsat S.A. (the “Company”), certify that:

I have reviewed this Quarterly Report on Form 10-Q of Intelsat S.A.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: August 1, 2012

/ S / M ICHAEL M C D ONNELL

Michael McDonnell

Chief Financial Officer

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant

To Section 906 of the Sarbanes-Oxley Act Of 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Intelsat S.A. (the “Company”) hereby certifies that to such officer’s knowledge, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 1, 2012

/ S / D AVID M C G LADE

David McGlade

Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

Exhibit 32.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant

To Section 906 of the Sarbanes-Oxley Act Of 2002

Date: August 1, 2012

/ S / M ICHAEL M C D ONNELL

Michael McDonnell

Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.