CONTRACT NO. 104274-B
DIRECT BROADCAST SATELLITE CONTRACT
BETWEEN
LOCKHEED XXXXXX CORPORATION
AND
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
TERMS AND CONDITIONS
PROPRIETARY NOTICE
THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN ARE PROPRIETARY TO USSB AND
LOCKHEED XXXXXX CORPORATION AND ARE TO BE USED BY THE RECIPIENT SOLELY FOR THE
PURPOSES OF USSB'S CONTRACT WITH LOCKHEED XXXXXX CORPORATION.
TABLE OF CONTENTS
ARTICLE PAGE
Article 1. Definitions 1
Article 2. Scope of Work 2
Article 3. Price 3
Article 4. Deliverable Items and Delivery Schedule 5
Article 5. Progress and Milestone Payments 5
Article 6. In-Orbit Incentive Payments 7
Article 7. Spacecraft On-Orbit Flight Operation Services 15
Article 8. Deficiencies Noted in Launched Spacecraft 18
Article 9. Options for Backup Spacecraft, On-Orbit Spacecraft Delivery 18
Article 10. Price Reduction for Late Delivery 20
Article 11. Access to Work in Progress and Data 21
Article 12. Title and Assumption of Risk 21
Article 13. Inspection and Final Acceptance 22
Article 14. Indemnification 24
Article 15. XXXX's Right to Terminate 26
Article 16. Changes 27
Article 17. Taxes and Duties 28
Article 18. Excusable Delays 28
Article 19. Termination for Default 29
Article 20. Assignment 31
Article 21. Arbitration 31
Article 22. Rights in Data 33
Article 23. Public Release of Information 33
Article 24. Patent Indemnity 34
Article 25. Warranty 36
Article 26. Notices, Reports and Documentation Deliverables 37
Article 27. Storage 38
Article 28. Applicable Law 39
Article 29. Additional Representations, Warranties and Covenants of
the Parties 39
Article 30. Responsibility for Design, Drawings and Specifications 40
Article 31. Disclosure and Use of Proprietary Information 40
Article 32. Integration 42
Article 33. Permits and Licenses 42
Article 34. Contractor Provided Office Space 43
TABLE OF CONTENTS (CONTINUED)
ARTICLE PAGE
Article 35. Interparty Waiver of Liability 44
Article 36. Launch Vehicle Designation 44
Article 37. Miscellaneous Provisions 44
Article 38. Limitation of Liability 45
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TERMS AND CONDITIONS
THIS CONTRACT is entered into this 31st day of December, 1996, by and between
Lockheed Xxxxxx Corporation, a corporation organized and existing under the laws
of the State of Maryland acting through Lockheed Xxxxxx Telecommunications
(hereinafter referred to as "Contractor") having a place of business at 0000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000, xxx Xxxxxx Xxxxxx Satellite
Broadcasting Company, Inc. (hereinafter referred to as "USSB"), a corporation
organized and existing under the laws of the State of Minnesota with offices at
0000 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000.
WITNESSETH THAT:
In consideration of the mutual covenants set forth herein, the Parties
agree as follows:
ARTICLE 1. DEFINITIONS
A. In this Contract and its Attachments and Exhibits, unless otherwise
specifically defined within the context of individual Articles, the
following terms shall have the meanings stated hereunder:
1. ACCEPTANCE TESTING - Any system level testing carried out in
accordance with the terms of, or in the performance of, this Contract
whether through a factory acceptance test under the Comprehensive Test
Plan or In-Orbit Testing as defined in Exhibit C.
2. COMPREHENSIVE TEST PLAN - The overall plan used for testing the
Spacecraft, incorporated as Exhibit C to this Contract.
3. CONTRACT - This Contract, including its Amendments and Modifications,
and the Exhibits attached to and incorporated into it.
4. DATA AND DOCUMENTATION - The written information to be delivered by
Contractor to USSB in accordance with Exhibit B, Table 1 of this
Contract.
5. EFFECTIVE DATE OF CONTRACT OR EDC - The effective date of this
Contract as defined in Article 37 of this Contract.
6. INTENTIONAL IGNITION - The Parties agree to amend this Contract no
later than the date launch risk insurance is obtained in order to
incorporate the definition of Intentional Ignition contained in the
Launch Vehicle services contract for the Launch Vehicle
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selected pursuant to Article 36, which definition shall also be
incorporated into the launch risk insurance policy.
7. LAUNCH VEHICLE - The launch vehicle selected by USSB under the Launch
Vehicle services contract for the launching of the Spacecraft
purchased hereunder.
8. LAUNCH AND MISSION OPERATIONS SERVICES - The services provided by
Contractor and purchased by USSB under this Contract in accordance
with Article 2, and as defined in Exhibit B.
9. ON-ORBIT FLIGHT OPERATIONS SERVICES - The telemetry, tracking and
control services provided by Contractor and purchased by USSB under
this Contract in accordance with the terms of Article 7, and as
defined in Exhibit B, paragraph 15.
10. PARTIES - Collectively means USSB and the Contractor. "Party"
individually means USSB or the Contractor as the case may be.
11. PRODUCT ASSURANCE PLAN - The quality assurance plan set forth in
Exhibit D to this Contract.
12. SPACECRAFT - The satellite purchased by USSB with the attributes set
out in Exhibit A. For purposes of this Contract, the term "Spacecraft"
is synonymous with the term "Satellite."
13. WORK - The design, manufacture, construction, test, and delivery of
the Spacecraft, performance of the Launch and Mission Operations
Services and delivery of the Data and Documentation.
ARTICLE 2. SCOPE OF WORK
The Contractor shall provide or cause to be provided all personnel, material,
services and facilities necessary to design, construct, test, and shall deliver
one (1) Spacecraft, perform the Launch and Mission Operation Services, perform
(subject to Article 7) the On-Orbit Flight Operations Services, and provide Data
and Documentation in accordance with all the provisions of this Contract,
including the Exhibits listed below which are attached hereto and hereby made a
part of this Contract:
Exhibit A Spacecraft Performance Specification, dated 31 December 1996
Exhibit B Statement of Work, dated 31 December 1996
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Exhibit C Comprehensive Test Plan, dated 31 December 1996
Exhibit D Product Assurance Plan, dated 31 December 1996
The Work shall be performed in accordance with and shall conform to Exhibits A,
B, C and D. In the event of a conflict between this Contract and the
above-listed Exhibits, the following order of precedence shall apply in
resolving such conflict:
1 - The Terms and Conditions specified in the Articles of this Contract
2 - Exhibit B - Statement of Work
3 - Exhibit A - Spacecraft Performance Specification
4 - Exhibit C - Comprehensive Test Plan
5 - Exhibit D - Product Assurance Plan
ARTICLE 3. PRICE
A. For the full, satisfactory, and timely performance of the Work by the
Contractor in accordance with all the provisions of this Contract, USSB
shall pay the Contractor the Total Contract Price set out below, as such
price may be adjusted in accordance with the provisions of this Contract.
Except as otherwise provided herein, the Total Contract Price includes all
transportation and related charges for delivery of the Spacecraft to the
designated launch site.
B. Without limiting the obligation of the Contractor to fully perform all the
Work in accordance with all the provisions of this Contract, it is
understood that the Total Contract Price is comprised of the following
items:
ITEM QTY. DESCRIPTION PRICE
1. 1 Spacecraft as defined in Exhibit A
2. 1 Lot Launch and Mission Operation Services
as defined in Exhibit B
3. 1 Lot On-Orbit Flight Operations Services
4. 1 Lot Data and Documentation as defined in
Exhibit B, Table 1
5. -- In-Orbit Incentive Payments
Total Contract Price:
---------------------
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C. The price for Item 1 of paragraph B is for launch of the Spacecraft on an
Ariane Launch Vehicle. The price for Item 1, paragraph B will be
conclusively determined and mutually agreed upon after USSB designates the
Launch Vehicle in accordance with Article 36.
D. The price for Item 3 of paragraph B is subject to Article 7, and is also
subject to an annual escalation under Article 7, paragraph D.
E. Payment of the price for Item 5 of paragraph B shall be made in accordance
with Article 6.
F. On or before February 1, 1997, USSB may request Contractor to provide
information to USSB regarding a change in the Spacecraft's payload
configuration to consist of twenty-eight (28) spot beams and 63W TWTAs
without adjusting the Spacecraft delivery date of twenty-five and one-half
(25.5) months after EDC. Upon such request, Contractor shall undertake a
study effort regarding the implementation plan for the spot beam design for
such payload configuration (to be performed at Contractor's sole expense),
and Contractor will propose price, performance specifications and payment
terms for this requested change as soon as practicable but not later than
fifteen (15) working days following XXXX's request. The Parties
understand and agree that, in order to not cause a delay to the Spacecraft
delivery date, the Parties must agree upon the price, performance
specifications and payment terms for this requested change no later than
March 1, 1997.
G. The Spacecraft shall be shipped at Contractor's expense to the designated
launch site or to a storage site designated by USSB. In the event that
USSB selects a Launch Vehicle that results in a shipment of the Spacecraft
to a launch site other than Kourou, French Guiana (for launch on an Ariane
Launch Vehicle) or to a storage site outside the United States, the Total
Contract Price and the delivery schedule specified in Article 4 shall be
equitably adjusted.
H. The prices specified above do not include any costs for security services
for Spacecraft at the designated launch site. Should the U.S. Government,
or any other government entity having legal or regulatory launch
responsibility, require Contractor to provide such security services,
Contractor shall promptly notify USSB to that effect and USSB shall
reimburse Contractor for all costs incurred in providing such services, and
a reasonable profit, within thirty (30) days of receipt of Contractor's
invoice therefor.
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ARTICLE 4. DELIVERABLE ITEMS AND DELIVERY SCHEDULE
A. The Spacecraft, Launch and Mission Operations Services, On-Orbit Flight
Operations Services (subject to Article 7) and Data and Documentation to be
provided by Contractor under this Contract shall be delivered to USSB in
accordance with the following schedule. The Parties agree that the
following are deliverable items under this Contract:
ITEM DESCRIPTION DELIVERY DATE
l. Spacecraft Twenty-five and one-half
(25.5) months after EDC
2. Launch and Mission Operations Services As required per Exhibit B
3. Data and Documentation As required per Exhibit B
4. On-Orbit Flight Operations Services As required per Exhibit B
(subject to Article 7)
B. Except with respect to the Spacecraft, delivery shall be deemed to have
occurred when all the Contract requirements for a deliverable item have
been satisfactorily fulfilled and the deliverable item has arrived at the
specified delivery location in a condition fully conforming to the
provisions of this Contract and, if required by this Contract, has been
satisfactorily installed at that location.
C. With respect to a Spacecraft delivered for launch, delivery shall occur at
the designated launch site upon Contractor's completion of the Launch
Readiness Review ("LRR") for the Spacecraft and the results of the LRR
demonstrate that the Spacecraft meets the performance specifications for
such Spacecraft. With respect to a Spacecraft delivered to storage,
delivery shall occur at the Contractor's facility upon Contractor's
completion of the Pre-Shipment Review ("PSR") for the Spacecraft, and the
results of the PSR demonstrate that the Spacecraft meets the performance
specifications for such Spacecraft.
ARTICLE 5. PROGRESS AND MILESTONE PAYMENTS
A. Subject to the provisions of paragraph B. of this Article, payments shall
be made by USSB to Contractor on a monthly basis in accordance with the
following "Progress Payment Plan." Payment invoices submitted by the
Contractor under this plan that comply with the terms of this Contract
shall be paid by USSB to the Contractor within thirty (30) days of the date
of invoice. However, no invoice shall be dated earlier than the last day of
the month to which it applies, and all invoices shall be promptly delivered
to USSB. XXXX acknowledges and agrees that all payments made represent
compensation for Work
5
performed by Contractor and therefore are not refundable under any
circumstances except in accordance with the terms of this Contract. In no
event shall USSB be required to make Progress Payments in excess of the
payments set forth in the Progress Payment Plan or earlier than the payment
dates set forth below.
PROGRESS PAYMENT PLAN
PAYMENT MONTHLY TOTAL CUMULATIVE TOTAL
NUMBER DATE ($ IN U.S. MILLIONS) ($ IN U.S. MILLIONS)
1 12/31/96
2 January - '97
3 February
4 March
5 April
6 May
7 June
8 July
9 August
10 September
11 October
12 November
13 December
14 January - '98
15 February
16 March
17 April
18 May
19 June
20 July
21 August
22 September
23 October
24 11/30/98
B. The Progress Payment Plan set forth herein is based on Contractor's
successful, satisfactory, and timely achievement of each milestone set
forth below. In the event that the Contractor does not achieve a particular
milestone on or before the date set forth below, the value assigned to that
milestone shall be deducted from the corresponding month's progress
payments and any subsequent month's progress payment (but only to the
extent necessary
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to fully deduct the amount of the uncompleted milestone), and this amount
shall be payable when the milestone is successfully and satisfactorily
achieved. Except as specified in the previous sentence, failure to achieve
a milestone shall not affect any subsequent monthly progress payments.
PAYMENT MILESTONE TABLE
DUE DATE
MILESTONE (MONTHS VALUE
NUMBER MILESTONE DESCRIPTION AFTER EDC) ($US)
1 System PDR Held 4.0
2 Structure Subcontract Issued 7.5
3 Provide Launch Vehicle services contractor 10.0
with Spacecraft Preliminary Dynamic Model
4 System Critical Design Review Held 12.5
5 90% of System CDR Action Items Completed 13.5
6 Spacecraft Structure Received 15.0
(core module/payload panels)
7 Spacecraft TWTAs Received 15.5
8 Spacecraft Antenna Tests Complete 18.0
9 Satisfactory Completion of Pre-Shipment 24.0
Review
C. Unless otherwise directed in writing by Contractor, all amounts due
Contractor shall be paid by USSB in United States Dollars and remitted by
electronic funds transfer to:
Citibank N.A.
ABA #000000000
Lockheed Xxxxxx
Valley Forge Collection Center
A/C #40678043
ARTICLE 6. IN-ORBIT INCENTIVE PAYMENTS
A. In addition to the payments specified in Article 5, USSB will pay the
Contractor incentive payments for the in-orbit performance of the
Spacecraft as set forth herein.
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B. For the purposes of this Article, only the four (4) CONUS communications
channels will be considered and the following definitions shall apply:
(1) Successfully Operating Spacecraft -- A Successfully Operating
Spacecraft is a Spacecraft: (i) that has been Successfully Injected;
(ii) for which each communications channel is a Successfully Operating
Communications Channel; and (iii) that has sufficient stationkeeping
propellant and solar array power to maintain operation for a period of
fifteen (15) years or 5,479 days (the "Performance Time Period"),
commencing on the day when the Spacecraft has been positioned in the
specified orbital slot and has completed in-orbit testing as specified
in Exhibit C.
(2) Successfully Operating Communications Channel -- A Successfully
Operating Communications Channel is a communications channel which:
a. allowing reasonable and agreed tolerances for measurement
purposes, meets or exceeds the performance specifications
described in Exhibit A relating to communications RF signals; or
b. while not in compliance with the performance parameters of
Exhibit A, has no measurable reduction in its communications
capabilities or is capable of being used by USSB for its intended
commercial communications purposes in the same manner and to the
same extent as a communications channel described in paragraph
B.(2)a. above.
For the purpose of this definition, a communications channel which
meets the above criteria and which is being used as an in-orbit spare
or is turned off at USSB's direction shall be regarded as a
Successfully Operating Communications Channel. Any communications
channel failure which is or could be corrected by switching to a
redundant communications channel immediately after the failure is
discovered shall be deemed to be a Successfully Operating
Communications Channel.
(3) Successfully Injected -- The Spacecraft shall be deemed to have been
Successfully Injected if, after Intentional Ignition:
a. at the time of separation from the Launch Vehicle, the transfer
orbit perigee altitude error, apogee altitude error, inclination
error, argument of perigee error, Spacecraft attitude, and
Spacecraft spin are within or equal to +/-3 sigma limits of
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their specified values; and
b. the Launch Vehicle has not, during the launch, diminished in any
way the operating integrity of the Spacecraft, demonstrable
through available telemetry or other applicable data; and the
Spacecraft has not suffered damage as a consequence of causes
which the Contractor can reasonably demonstrate are not the fault
of or beyond the reasonable control of Contractor.
Notwithstanding that the transfer orbit does not meet all of the
criteria stated in paragraph B.(3)a. above, the Spacecraft shall be
deemed to have been Successfully Injected if the Spacecraft has
nevertheless been positioned in its orbital slot as defined in Exhibit
A, the Spacecraft otherwise performs in accordance with the
requirements of this Contract, and the then remaining calculated
operation time period is equal to or greater than the Performance Time
Period specified in paragraph B.(1) above.
(4) Inoperative Communications Channel -- An Inoperative Communications
Channel is a communications channel which, upon completion of in-orbit
testing of the Spacecraft, has communications performance degraded to
such an extent as to preclude its use by USSB for its intended
commercial communications purposes. Notwithstanding the foregoing, if
the communications channel is capable of carrying at least 25% of its
traffic capacity based upon the parameters specified in Exhibit A, and
USSB uses or is capable of using such communications channel for its
intended commercial communications purposes (which purpose shall be
reasonably documented and reasonably demonstrable prior to the
occurrence of the inoperability), such use shall be conclusive
evidence that the communications channel is not an Inoperative
Communications Channel.
(5) Degraded Communications Channel -- A Degraded Communications Channel
is a communications channel which is not an Inoperative Communications
Channel, but which is incapable of actually being operated to the
levels of communications performance set forth in Exhibit A due to the
degradation of the communications channel itself. Notwithstanding the
foregoing, if the communications channel is capable of carrying at
least 25% of its traffic capacity based upon the parameters specified
in Exhibit A, and USSB uses or is capable of using such Degraded
Communications Channel for its intended commercial communications
purposes (which purpose shall be reasonably documented and reasonably
demonstrable
9
prior to the occurrence of the degredation), such use will be deemed
conclusive evidence of at least partial operation.
(6) Day -- A Day is any twenty-four (24) hour period from midnight to
midnight, Greenwich mean time.
C. In-Orbit Incentive Payments
(1) Commencing thirty (30) days after the date that the Spacecraft has
been positioned in the specified orbital slot and has completed
in-orbit testing as specified in Exhibit C, USSB will make one hundred
eighty (180) monthly incentive payments to Contractor in the amount of
______________________________________ per month if the Spacecraft is
either: (i) a Successfully Operating Spacecraft; or (ii) is not
Successfully Injected. In the event that the Spacecraft is not
Successfully Injected, Contractor shall issue an invoice for the
present value of the total monthly incentive payments and shall attach
to Contractor's invoice a written rationale demonstrating that the
cause of the Spacecraft's failure to become Successfully Injected was
not attributable to Contractor. The per annum rate used to discount
the incentive payments will be the Prime Rate published in the Wall
Street Journal on the date it is determined that the Spacecraft was
not Successfully Injected. Notwithstanding the foregoing, in the
event that the Spacecraft fails to become Successfully Injected due to
the fault of the Contractor, USSB shall not be obligated to make
incentive payments hereunder.
(2) The monthly incentive payments set forth in paragraph C.(1) above
shall be subject to reduction as set forth below if the Spacecraft,
which would otherwise be a Successfully Operating Spacecraft, has one
or more Inoperative Communications Channel(s), one or more Degraded
Communications Channel(s), and/or its calculated operational time
period is less than the Performance Time Period. The amount of the
reduction of the monthly incentive payments shall be determined as
follows:
a. For an Inoperative Communications Channel, the monthly incentive
payment shall be reduced by an amount equal to the daily value of
U.S. $_________ per Inoperative Communications Channel,
multiplied by the number of days during the month that the
channel was inoperative; provided, however that such reduction
shall not exceed the total amount included in the monthly payment
that would be paid if such communications channel were a
Successfully Operating Communications Channel. Notwithstanding
the above and subject to paragraph
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D hereof, should the number of Inoperative Communications
Channels exceed (25%) of the total number of communications
channels on the Spacecraft, excluding any Inoperative
Communications Channels that are or could be corrected by
switching to a redundant communications channel, USSB shall be
relieved of its obligation to make monthly incentive payments for
in-orbit performance of the Spacecraft.
b. For a Degraded Communications Channel, USSB and Contractor shall
negotiate and agree upon an equitable reduction in the amount of
the monthly incentive payment. However, in no event shall there
be a reduction for Degraded Communications Channels that are or
could be corrected by switching to a redundant communications
channel, and in no event shall such reduction exceed the daily
value specified in paragraph C.(2)a. above, multiplied by the
number of days during the month for which the subject
communications channel was degraded.
c. In the event the calculated operation time period of the
Spacecraft is less than the Performance Time Period, all monthly
incentive payments shall be reduced by multiplying the amount of
the monthly incentive payment by a fraction equal to the
calculated operation time period over the Performance Time
Period. Notwithstanding the foregoing, in the event the actual
operation time period of the Spacecraft exceeds the calculated
time period, the total amount of incentive payments payable
hereunder shall be equitably adjusted to reflect such actual
operation time period.
d. Notwithstanding the above and subject to subparagraph D. hereof,
if the combination of Inoperative Communications Channels and
Degraded Communication Channels is such that the total
communications performance level of the four (4) CONUS channels
of the Spacecraft is less than fifty percent (50%) of the total
communications performance level of the four (4) CONUS channels
on the Spacecraft as specified in Exhibit A, then USSB shall be
relieved of its obligation to make monthly incentive payments for
in-orbit performance of the Spacecraft.
D. Inoperative Communications Channel or a Degraded Communications Channel
becomes operational at a higher performance level
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(1) If an Inoperative Communications Channel or a Degraded Communications
Channel becomes operational at a higher performance level (e.g., an
Inoperative Communications Channel becomes a Degraded Communications
Channel, or a Degraded Communications Channel becomes a Successfully
Operating Communications Channel), then, unless the communications
channel has been inoperative or degraded for more than one (1) year,
Contractor shall thereafter be paid an amount corresponding to the
communications channel's higher performance level, as defined above,
commencing on the date on which the Inoperative Communications Channel
or Degraded Communications Channel begins to perform at such higher
level. If the communications channel has been inoperative or degraded
for more than one (1) year, Contractor shall be paid an amount
corresponding to the communications channel's higher performance level
only if USSB uses the communications channel for its intended
commercial communications purposes as described in subparagraphs B.(4)
and B.(5) above.
(2) If USSB has been relieved of the obligation to make monthly incentive
payments under subparagraphs C.(2)a. or C.(2)d. for less than one (1)
year, USSB shall begin making or shall resume making monthly incentive
payments in accordance with this Article 6 if, prior to the end of
such one (1) year period both: (i) such higher performance operation
causes the number of Inoperative Communications Channels to be less
than or equal to twenty-five percent (25%) of the total number of
communications channels, including communications channels which are
or could be corrected by switching to a redundant communications
channel; and (ii) the combination of Inoperative Communications
Channels and Degraded Communications Channels is such that the total
communications performance level of the four (4) CONUS channels on the
Spacecraft is equal to or greater than fifty percent (50%) of the
total communications performance level of the four (4) CONUS channels
on the Spacecraft, as specified in Exhibit A, including communications
channels which are or could be corrected by switching to a redundant
communications channel. If USSB has been relieved of the obligation to
make monthly incentive payments under subparagraphs C.(2)a. or C.(2)d.
for more than one (1) year, Contractor shall thereafter be paid an
amount corresponding to the communications channel's higher
performance level, as discussed in this subparagraph D.(2), only if
USSB uses the communications channel for its intended commercial
communications purposes as described in subparagraphs B.(4) and B.(5)
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above.
E. The Spacecraft will be deemed to be properly operated if it is operated by
the Contractor or its subcontractors or it is monitored and commanded in
accordance with the directives and instructions in the Contractor furnished
Satellite operating procedures. If it is determined that the failure of
any communications channel(s) to maintain successful operation, as defined
in paragraph B.(2) above, has occurred as a direct result of the improper
actions or inactions of USSB or its Satellite operations personnel, other
than Contractor personnel or Contractor's subcontractor personnel, the
total amount of the incentive payments for in-orbit operation relating to
such communications channel shall be deemed to have been earned by
Contractor and shall be due and payable each and every month by USSB.
F. For the purpose of this Article, USSB and Contractor shall jointly
determine responsibility for failures which occur. If the Parties are
unable to reach a satisfactory determination between themselves, the matter
shall be resolved in accordance with the provisions of the Article hereof
entitled "Arbitration". All measurements, computations, and analyses for
the purposes of determining whether any communications channel is operating
satisfactorily will be performed by XXXX, using measurement techniques
agreed to by Contractor. Contractor shall be given access to the resulting
data.
G. In the event of a delay caused by USSB such that the Spacecraft is not
launched within one hundred and five (105) days after final acceptance,
Contractor shall deliver the Spacecraft to storage at USSB's expense in
accordance with Article 27 of this Contract. In addition, Contractor shall
be entitled to receive non-refundable incentive payments under this Article
6 as follows:
(1) Commencing on the one hundred sixth (106th) day and continuing on a
monthly basis thereafter until the earlier of Intentional Ignition, or
twenty-four (24) months, USSB will pay Contractor
__________________________________ per month (for a total sum of
_________________________________________.
(2) Within thirty (30) days after the end of the twenty-four (24) month
period specified in subparagraph G.(1), if Intentional Ignition has
not occurred, USSB will pay Contractor the sum of
____________________________________________.
(3) Notwithstanding the provisions of subparagraphs G.(1) and G.(2) above,
in the event that the Spacecraft is launched at any time after the one
hundred and five (105) day
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period stated above, in-orbit incentive payments shall be paid during
the Performance Time Period of the Spacecraft in accordance with the
terms of this Article 6; provided, however, that the amount of each
monthly incentive payment shall be re-calculated by subtracting from
the sum of ________________________________ the amount of any
incentive payments made by USSB to Contractor under this paragraph G,
and the difference shall be divided into one hundred eighty (180)
equal monthly payments.
(4) In the event that the Spacecraft is never launched, after USSB has
paid the Contractor the incentive payments in subparagraphs G.(1) and
G.(2) above, USSB shall have no obligation to make further incentive
payments to Contractor.
H. In the event of a delay caused by unavailability of the Launch Vehicle,
acts of any governmental agency or court which affect the launch of the
Spacecraft, or excusable delays specified in the launch services contract,
such that the Spacecraft is not launched within eight (8) months after
Pre-Shipment Review (PSR) but no earlier than September 1, 1999,
Contractor shall deliver the Spacecraft to storage in accordance with
Article 27 of this Contract. In the event the Spacecraft was delivered to
the designated launch site, USSB shall pay the shipping expense upon any
subsequent delivery to a storage facility and the shipping expense to
deliver the Spacecraft from the storage facility to the designated launch
site. In addition, Contractor shall be entitled to receive non-refundable
incentive payments under this Article 6 as follows:
(1) Commencing on the date that is eight (8) months after PSR but no
earlier than September 1, 1999 and continuing on a monthly basis
thereafter until the earlier of Intentional Ignition, or twenty-four
(24) months, USSB will pay Contractor ________________________________
per month (for a total sum of _______________________________________.
(2) Within thirty (30) days after the end of the twenty-four (24) month
period specified in subparagraph H.(1), if Intentional Ignition has
not occurred, USSB will pay Contractor the sum of
________________________________________________.
(3) Notwithstanding the provisions of subparagraphs H.(1) and H.(2) above,
in the event that the Spacecraft is launched at any time after USSB
begins making incentive payments under this paragraph H, in-orbit
incentive payments shall be paid during the Performance Time Period of
the Spacecraft in accordance with the terms of this
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Article 6; provided, however, that the amount of each monthly
incentive payment shall be re-calculated by subtracting from the sum
of ________________________________ the amount of any incentive
payments made by USSB to Contractor under this paragraph H, and the
difference shall be divided into one hundred eighty (180) equal
monthly payments.
(4) In the event that the Spacecraft is never launched, after USSB has
paid the Contractor the incentive payments in subparagraphs H.(1) and
H.(2) above, USSB shall have no obligation to make further incentive
payments to Contractor.
I. Contractor shall have the right to file Uniform Commercial Code financing
statements at any time during the term of this Contract to perfect a
security interest in the Spacecraft to secure USSB's obligation to pay
incentive payments due Contractor under this Contract. In the event
Contractor exercises the right to file Uniform Commercial Code financing
statements, XXXX agrees to execute any financing statement, amended
financing statements, continuation statements or other documents from time
to time which are deemed reasonably necessary by Contractor to create,
perfect, confirm or validate a security interest in the incentive payments
Any security interest in the incentive payments shall be subordinate to any
other security interest or lien granted by USSB to lenders or other parties
and Contractor agrees to execute and deliver to USSB any and all such
documents reasonably requested by USSB to evidence such subordination.
J. Subsequent to Intentional Ignition, except in the event of gross negligence
or willful misconduct of Contractor, this Article 6 is the sole and
exclusive remedy and the sole and exclusive liability of Contractor in the
event the Spacecraft fails to perform in accordance with the specifications
stated in this Contract. In the event of gross negligence or willful
misconduct by Contractor, Contractor's total liability to USSB under this
Article 6 shall not exceed in the aggregate the sum of the amount of any
remedy provided to USSB under this Article 6 plus
____________________________________.
ARTICLE 7. SPACECRAFT ON-ORBIT FLIGHT OPERATION SERVICES
A. Subject to paragraph B below, Contractor shall provide or cause to be
provided all personnel, material, services, and facilities necessary to
perform and shall perform, or cause to be performed, telemetry, tracking
and control of the Spacecraft delivered under this Contract for the entire
duration of the Performance Time Period. Such services are to be provided
in accordance with Exhibit B.
15
B. The Parties agree to negotiate appropriate revisions to the Articles and
Exhibits of this Contract or to enter a Spacecraft On-Orbit Flight
Operations services contract which will then be applicable to the
Spacecraft On-Orbit Flight Operations Services. Such revisions will be
consistent with this Article 7. If such revisions are not agreed to by the
Parties, as evidenced by a signed modification to this Contract or similar
written agreement, within ninety (90) days after EDC, or within such other
time as the Parties may agree to in writing, the Contractor shall not be
obligated to provide Spacecraft On-Orbit Flight Operation Services under
this Contract, and USSB shall not be obligated to make any of the payments
for Spacecraft On-Orbit Flight Operation Services specified below in
paragraph C.
C. Subject to paragraph B above, payments for the Spacecraft On-Orbit Flight
Operation Services shall be made as follows:
(1) USSB shall make a non refundable payment of _________________________
to Contractor for equipment that is required to provide the services
stated in this Article 7. This amount shall be paid in twelve (12)
equal monthly installments, with the first installment due twelve (12)
months after EDC and continue monthly thereafter. All right, title,
and interest in and to such equipment shall pass to USSB upon receipt
of payment in full for such equipment by the Contractor.
(2) USSB shall pay Contractor the sum of _________________________________
per year for fifteen (15) years (concurrent with the Performance Time
Period of the Spacecraft) or until USSB terminates the contract for
Spacecraft On-Orbit Flight Operations Services. Payments shall be
made in twelve (12) equal monthly installments, with the first
installment due thirty (30) days after the completion of in-orbit
testing of the Spacecraft.
D. The price for Spacecraft On-Orbit Flight Operations Services shall be
subject to an annual economic price adjustment for each year of services.
The base period upon which an economic price adjustment will be calculated,
if any, shall be the first twelve (12) month period of the Performance Time
Period of the Spacecraft. The payment for the first twelve (12) months of
Spacecraft On-Orbit Flight Operation Services shall be
_________________________________________ and shall be adjusted in
accordance with this Article annually during the remaining fourteen (14)
years of the Performance Time Period. The calculation of the annual
economic price adjustment shall be performed by the Contractor in
accordance with the following criteria:
16
(1) The standard of measurement for determining whether there shall be an
economic price adjustment is AHE3762NS, published by the U.S.
Department of Labor, Bureau of Labor Statistics (hereinafter the
"Index"). A "Factor," based upon the Index, shall be calculated as
follows: Factor = Index for December of each subsequent year after
1998 (AHE3762NS) divided by the Index (AHE3762NS) for the month of
December for the immediately preceding year.
(2) If the Factor is less than or equal to 1.03, no economic price
adjustment shall be made for the subsequent twelve (12) month period.
If the Factor is greater than 1.03, then an economic price adjustment
shall be made in accordance with subparagraph D.(4) below.
(3) The amount of the economic price adjustment is calculated by
multiplying the amount that the Factor exceeds 1.03 by the total
amount of the payments made for Spacecraft On-Orbit Flight Operation
Services during the preceding twelve (12) month period. For example,
as noted above, the amount for the first twelve (12) month period is
_____________________________________________. Thus, if the Factor
computed in January 2000 equals 1.06, then the economic price
adjustment is the product of _______________________________
multiplied by 0.03 which equals ____________________________________.
(4) If an economic price adjustment is required under subparagraph D.(3)
above, one twelfth (1/12th) of the amount of such adjustment shall
then be added to each monthly payment for Spacecraft On-Orbit Flight
Operation Services made by USSB during the preceding twelve (12) month
period. The sum of these amounts shall then constitute the total
monthly payment amount for Spacecraft On-Orbit Flight Operation
Services for the next twelve (12) month period.
(5) The economic price adjustment calculations for each twelve (12) month
period shall be made by the Contractor on or before January 31 of the
following year. A copy of the economic price adjustment calculations
shall be provided to USSB for review and comment.
E. Payments due the Contractor, if any, shall be paid by USSB within thirty
(30) days of receipt of the Contractor's invoice therefor. If applicable,
such invoice will include a copy of the economic price adjustment
calculations performed by the Contractor on which such
17
invoice is based.
F. In the event that the U.S. Department of Labor, Bureau of Labor Statistics
discontinues publication of the index specified in this Article 7, the
Parties shall agree upon an appropriate substitute for the discontinued
index. In the event that the U.S. Department of Labor, Bureau of Labor
Statistics significantly changes its method of calculating the index, the
Parties shall agree to an appropriate adjustment to put the economic price
adjustment on a comparable basis with the index calculated before the
change.
ARTICLE 8. DEFICIENCIES NOTED IN LAUNCHED SPACECRAFT
Without limiting the obligations of the Contractor under other provisions of
this Contract, if the data available from a launched A2100 spacecraft shows that
the Spacecraft does not or will not meet all the requirements of Exhibit A to
this Contract at any time during the period of the Spacecraft's in-orbit design
lifetime, the Contractor shall, promptly notify USSB of such deficiencies,
recommend appropriate corrective measures (if any) and upon the request of USSB,
take appropriate corrective measures with respect to any unlaunched spacecraft
to be delivered to USSB under this Contract so as to satisfactorily eliminate
from such spacecraft all the deficiencies attributable to the Contractor noted
in such spacecraft. The Contractor shall fulfill the foregoing obligations at
its sole cost and expense, including all costs arising from charges for
shipping, insurance, taxes, and other matters associated with the corrective
measures. If the Contractor fails to remedy any or all such deficiencies, USSB
may have such deficiencies remedied through other means in which event the
Contractor shall pay the reasonable costs of so remedying such deficiencies.
ARTICLE 9. OPTIONS FOR BACKUP SPACECRAFT, ON-ORBIT SPACECRAFT DELIVERY
A. Option For Backup Spacecraft
(1) USSB shall have the unilateral right to exercise an option for
delivery of the items specified below for the applicable price set
forth below. USSB may exercise such option by providing written
notice to be received by Contractor not later than the applicable
option exercise date specified herein. Any such notice shall make
reference to this Article 9 and clearly state that the option is
being exercised.
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QUANTITY PRODUCT OPTION EXERCISE DELIVERY
DESCRIPTION DATE PRICE($) DATE
1 backup spacecraft No Later Than 6 TBD 6 Months
("Backup Spacecraft") Months After After Delivery
identical to the EDC of the
Spacecraft specified in Spacecraft
Article 2, paragraph B
1 Lot Launch and Mission N/A NSP As Required
Operation Services for by Exhibit B
Backup Spacecraft as (not
specified in Article 2, separately
Subparagraph B.2 priced)
Total Option Price:
(2) In the event USSB exercises this option, the Parties hereby agree
that USSB shall make an initial payment in the amount of [TBD]% of the
Total Option Price concurrent with USSB's issuance of its notice of
option exercise. The balance of the payments shall be made to
Contractor based upon a mutually established schedule which is
consistent with: (i) the Progress Payment Plan for the Spacecraft; and
(ii) incentive payments payable as set forth in Article 6 amounting
to [TBD]% of the Total Option Price.
(3) Except for appropriate revisions to Articles 3, 4, 5, 6, 7, 10, 15 and
27 the Parties recognize and agree that the Articles and Exhibits of
this Contract shall apply to the Backup Spacecraft that is the subject
of the option stated herein.
(4) All prices and payment percentages contained in this Article 9 which
are listed herein as "TBD" shall be mutually agreed upon by the
Parties no later than two (2) months after EDC. Should the Parties
fail to reach mutual agreement on the "TBD" prices, payment
percentages, and appropriate revisions to the terms and conditions of
this Contract stated in this Article 9 by the Option Exercise Date,
this option shall become null and void.
B. Option for In-Orbit Spacecraft Delivery
(1) Subject to subparagraph B.(2) below, USSB shall have the unilateral
right to exercise an option for the in-orbit delivery of the
Spacecraft described in Article 2, paragraph
19
B, Item 1. Such option must be exercised by providing written notice
to the Contractor within ninety (90) days of EDC.
(2) This option is expressly contingent upon the occurrence of the
following events, all of which must be completed prior to the option
exercise date in order for USSB to be able to exercise this option:
(a) USSB must enter into a contract with a Launch Vehicle services
contractor for a compatible Launch Vehicle; (b) Contractor must review
and provide written approval of the terms of such Launch Vehicle
services contract (which approval shall not be unreasonably withheld
or delayed); (c) USSB must assign its rights under the Launch Vehicle
services contract to Contractor and Contractor shall assume the
obligations thereunder; (d) such assignment must be reviewed and
approved in writing by both the Launch Vehicle services contractor and
the Contractor prior to such assignment; and (e) the Parties shall
mutually agree upon all revisions to the Articles and Exhibits of this
Contract that are appropriate or necessary, including the Total
Contract Price and delivery schedule. In particular, the Total
Contract Price shall be amended to provide for the cost of launch risk
insurance, which shall be stated as an indicative rate for USSB's
planning purposes only. The firm, fixed price for such insurance will
be finalized at the time the insurance premium rate and market
capacity are known. Upon finalization of the cost of insurance, this
Contract shall be further modified as necessary to reflect the final
price associated with such insurance. Contractor will use reasonable
efforts to place insurance, subject to market capacity, sufficient to
cover the Spacecraft (including incentive payments), the launch
services, and the cost of the launch risk insurance, beginning at
Intentional Ignition of the Launch Vehicle and ending one hundred
eighty (180) days thereafter.
ARTICLE 10. PRICE REDUCTION FOR LATE DELIVERY
A. The Parties agree that time is of the essence, and late delivery of the
Spacecraft may cause USSB to incur costs including, but without limitation,
the Launch Vehicle services contractor's postponement fees and USSB's loss
of revenue. The Parties agree that the actual damages incurred will be
difficult to assess and, in lieu thereof, have agreed to liquidated
damages. To compensate USSB for late delivery of the Spacecraft, the
liquidated damages specified in paragraph B below have been agreed as
reasonable compensation for late delivery of the Spacecraft.
B. In the event that the Spacecraft is not delivered on the date of delivery
specified in Article 4 of this Contract, as extended by the number of days
of excusable delay to which
20
Contractor is entitled in accordance with Article 18, the Total Contract
Price of this Contract shall be reduced at the rate of U.S. $_________ for
each week's delay from week one (1) up to week thirteen (13) and by U.S.
$__________ for each week's delay from week fourteen (14) to week
twenty-eight (28) or until the maximum amount of _______________ of
cumulative liquidated damages is reached. These weekly rates shall apply to
each full week (seven (7) calendar days) of delay, no provision for
reduction shall be made for partial week delays. However, if Contractor's
late delivery of the Spacecraft does not cause a delay in the launch of the
Spacecraft, as determined by the Launch Vehicle services contractor's
launch manifest, no liquidated damages shall be due or payable by the
Contractor. In addition to the foregoing, in the event that this Contract
is terminated by USSB for default under Article 19 prior to the end of the
period that liquidated damages are payable hereunder, no liquidated damages
shall be due or payable after the date of such termination.
C. Any amounts due in accordance with this Article shall be paid within thirty
(30) days of receipt of USSB's invoice therefor. XXXX's invoice shall not
be submitted until USSB reasonably determines that liquidated damages are
due and payable under this Contract.
ARTICLE 11. ACCESS TO WORK IN PROGRESS AND DATA
A. All work in progress under this Contract and technical and schedule Data
and Documentation related to the Contract effort of the Contractor,
including all design and test data, are subject to continuous examination,
evaluation, and inspection by USSB or its designated representative
acceptable to the Contractor at any reasonable hour during the period of
performance of this Contract. Thereafter, for the Performance Time Period,
Contractor agrees to maintain and retain technical documentation related to
the Work such as assembly drawings, parts lists, schematics, and as-built
documentation folders, and to make such technical documentation available
to USSB for purposes of Spacecraft performance evaluation and fault
isolation.
B. All information obtained as a result of the foregoing shall be Proprietary
Information to the extent required under the provisions of Article 31
hereof entitled "Disclosure and Use of Proprietary Information."
ARTICLE 12. TITLE AND ASSUMPTION OF RISK
A. Title and risk of loss or damage to the Spacecraft shall pass to USSB at
Intentional Ignition
21
or placement of the Spacecraft into storage subsequent to final acceptance,
whichever occurs first.
B. Except as provided in paragraph E. below, title to deliverable copies of
Data and Documentation specified in Table 1 of Exhibit B shall pass to USSB
at the time of Final Acceptance of Data and Documentation in accordance
with the terms of the Article hereof titled Inspection and Final
Acceptance.
X. XXXX agrees to cause its insurer(s) to waive all rights of subrogation
against Contractor and Contractor's directors, officers, agents, servants,
affiliates, subcontractors and employees. Contractor agrees to cause its
insurer(s) to waive all rights of subrogation against XXXX and XXXX's
directors, officers, agents, servants, affiliates, subcontractors and
employees.
D. Title to Spacecraft-unique test and handling equipment (not deliverable
under this Contract) for use in connection with inspection of the
Spacecraft at the launch site and ground system-unique test and handling
equipment (not deliverable under this Contract) used at USSB's designated
installation site(s) shall remain with Contractor.
E. Notwithstanding any other provision herein, the ownership and title to all
works of authorship and to copyrights, and in computer programs and related
Data and Documentation, delivered to USSB by Contractor in accordance with
this Contract shall remain in Contractor or its licensor. Contractor shall
grant USSB a paid up non-exclusive, non-transferable license to use
(including "to duplicate") solely for operation of USSB's Spacecraft, the
copies of computer programs and related Data and Documentation specified in
the Contract and required for the operation of the Spacecraft deliverable
under this Contract. Such non-exclusive license may be assigned to a third
party that is not a competitor of the Contractor by USSB, and such third
party shall have the right to further assign such license to another third
party that is not a competitor of Contractor; provided, however, that in
each case assignment shall be contingent upon the prior written consent of
Contractor, which consent shall not be unreasonably withheld or delayed.
Any purported assignment made in violation of this paragraph E shall be
null and void and of no legal effect.
ARTICLE 13. INSPECTION AND FINAL ACCEPTANCE
A. Preliminary inspections of the Work may be made by USSB or its designated
representative reasonably acceptable to the Contractor at either the
Contractor's or a
22
subcontractor's plant, as the case may be. All such inspections shall be in
the company of the Contractor's representative. USSB may inform the
Contractor in writing of any particulars in which XXXX observes that the
Work being performed under this Contract does not meet the requirements of
this Contract, and the Contractor shall remedy such defects.
B. FINAL ACCEPTANCE
(1) Final acceptance of a Spacecraft delivered to the designated launch
site for the purpose of launch shall occur at the designated launch
site when the Spacecraft has successfully completed the Launch
Readiness Review ("LRR") in accordance with Exhibit A. Final
acceptance of a Spacecraft delivered to storage in accordance with
Article 27 shall occur at the Contractor's facility when the
Spacecraft has successfully completed the Spacecraft system level
Acceptance Tests in accordance with Exhibit C. Successful completion
of such testing shall be documented in the Pre-Shipment Review ("PSR")
specified in Exhibit B. Within five (5) working days of completion of
the LRR or the PSR, as the case may be, USSB shall either notify
Contractor in writing of final acceptance of the Spacecraft or notify
Contractor in writing of those particulars in which the Spacecraft
does not meet the requirements of this Contract. Upon remedy of such
particulars so that the Spacecraft meets the requirements of this
Contract or in the event USSB does not notify Contractor in writing
within said five (5) working day period, USSB's final acceptance of
the Spacecraft shall be deemed to have occurred. In the case of a
Spacecraft delivered to the designated launch site for the purpose of
launch, in no event shall the Spacecraft be launched until the
Spacecraft has been finally accepted by USSB.
(2) Final acceptance of Launch and Mission Operations Services as
specified in Exhibit B, shall be deemed to occur after successful
completion of performance of such services. Contractor shall provide
written notification to USSB upon successful completion of performance
of these services, together with applicable supporting documents, if
any. Within ten (10) working days of receipt of such notification,
USSB shall either notify Contractor in writing of final acceptance of
the services or shall notify Contractor in writing of those
particulars in which the services did not meet the requirements of
this Contract. Upon remedy of such particulars to meet the
requirements of this Contract, or in the event USSB does not notify
Contractor in writing within said ten (10) working day period, XXXX's
final acceptance of the
23
services shall be deemed to have occurred.
(3) Final acceptance of deliverable Data and Documentation shall occur
upon USSB's receipt and acceptance of the Data and Documentation set
forth in Table 1 of Exhibit B. Within fifteen (15) working days of
USSB's receipt of such Data and Documentation, USSB shall either
notify Contractor in writing of its final acceptance of the Data and
Documentation or shall notify Contractor in writing of those
particulars in which the Data and Documentation do not meet the
requirements of this Contract. Upon remedy of such particulars to meet
the requirements of this Contract or in the event USSB does not notify
Contractor in writing within said fifteen (15) working day period,
USSB's final acceptance of the Data and Documentation shall be deemed
to have occurred.
C. Remedy of any particulars referred to in paragraphs A and B of this Article
shall be accomplished by the Contractor, at its expense, promptly upon
receipt of notice thereof. If the Contractor fails to remedy any or all
such particulars, USSB may have such particulars remedied through other
means, in which event the Contractor shall pay the reasonable costs of so
remedying such particulars.
ARTICLE 14. INDEMNIFICATION
A. Subject to the terms of Articles 24, 35 and 38 of this Contract, each Party
shall indemnify and hold the other Party and its directors, officers,
agents, servants, affiliates and employees, or any of them, harmless from
any claims, loss, damage, liability or expense (including reasonable court
cost and attorneys' fees) including, without limitation, damage to any
property, private or public, and injuries to persons, including death,
arising out of or resulting from any act or omission of the Indemnifying
Party and/or the Indemnifying Party's directors, officers, agents,
representatives, contractors, affiliates and employees related to the Work
performed or such Party's performance hereunder. The Indemnifying Party, at
its expense shall be entitled to control and shall assume the defense of
any suits or other proceedings brought against the Indemnified Party and/or
its directors, officers, agents representatives, contractors, affiliates,
and employees, or any of them on account thereof, and shall pay all
expenses and satisfy all judgments which may be incurred by or rendered
against any or all of them in connection therewith. Subject to paragraph D
of this Article 14, the Indemnifying Party shall have the right to settle
any claim or litigation against which it indemnifies hereunder.
24
B. To the extent permitted by law, XXXX agrees to incorporate an express
release of all claims, liabilities, losses and damages against the
Contractor in USSB's contracts with its customers in order to minimize the
possibility of the assertion of claims by XXXX's customers against the
Contractor. In the event that USSB fails to incorporate such a release to
the extent permitted by law in its contracts with its customers, and,
subject to Articles 35 and 38 of this Contract, USSB shall indemnify and
hold harmless Contractor (to include its directors, officers, agents,
servants, affiliates and employees and its subcontractors) from such
claims, liabilities, losses and damages sustained or claimed by such
customers arising after Intentional Ignition in connection with the
Spacecraft.
C. The Party which is entitled to indemnification (the "Indemnified Party")
shall given written notice to the other to provide indemnification (the
"Indemnifying Party") promptly after the Indemnified Party has knowledge of
any claim as to which indemnity may be sought. The written notice shall
specify, in reasonable detail, the nature of any such claim giving rise to
the right of indemnification. The failure of the Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations, unless such failure hindered the defense of such claim and, in
such event, shall relieve the Indemnifying Party only to the ascertainable
extent of the material hindrance.
D. No Indemnifying Party, in the defense of any claim or litigation, shall,
except with the consent of the Indemnified Party (which shall not be
unreasonably withheld), consent to the entry of any judgment or enter into
a settlement which does not include, as an unconditional term thereof, the
giving by the claimant or plaintiff to such Indemnified Party a release
from all liability with respect to such claim or litigation. No Indemnified
Party shall consent to the entry of a judgment or enter into any settlement
with respect to a claim or litigation for which the Indemnified Party is
seeking indemnification hereunder, without prior written consent of the
Indemnifying Party (which shall not be unreasonably withheld). Each
Indemnified Party shall furnish information regarding itself or the claim
in question as the Indemnifying Party may reasonably request in writing and
shall be reasonably required in connection with such claim or litigation
resulting therefrom. If the Indemnifying Party, after written notice from
the Indemnified Party, fails to take timely action to defend the same, the
Indemnified Party shall have the right to defend the claim or litigation by
counsel of its own choosing, but at the cost and expense of the
Indemnifying Party.
25
ARTICLE 15. USSB's RIGHT TO TERMINATE
X. XXXX, by written notice to the Contractor, may terminate this Contract in
whole, or in part, for its convenience at any time prior to Pre-shipment
Review ("PSR") of the Spacecraft. In event of such termination of the
Contract by USSB, it is agreed that the termination charges shall be as set
forth below. In addition, in event of such termination of the Contract by
USSB, it is agreed that, if the Spacecraft is subsequently launched, the
Contractor: (i) shall provide, subject to a mutually acceptable agreement
(taking into account the amount for any launch and mission operations paid
by USSB prior to the date of termination), launch and mission operations
services for the Spacecraft; and (ii) shall be entitled to receive
incentive payments in accordance with the terms of Article 6 only if this
Contract is terminated by USSB for its convenience following completion of
System Critical Design Review, and if the Spacecraft is launched.
Notwithstanding the provisions of paragraph A. (ii) above, in the event
that USSB terminates this Contract for its convenience prior to the System
Critical Design Review and this Contract is subsequently reinstated and the
Spacecraft is then launched, Contractor shall be entitled to receive
incentive payments in accordance with Article 6 herein.
TERMINATION SCHEDULE
MONTHLY TOTAL CUMULATIVE TOTAL
DATE ($ IN US MILLIONS)L ($ IN US MILLIONS)
January 31-1997
February 28
March 31
April 30
May 31
June 30
July 31
August 31
September 30
October 31
November 30
December 31
January 31-1998
February 28
March 31
April 30
26
May 31
June 30
July 31
August 31
September 30
October 31
November 30
December 31
B. In the event of such a termination, all Work in progress, including but not
limited to, inventory, equipment, purchased items, Data and Documentation,
and other property designed, constructed or obtained by Contractor or
generated under this Contract with respect to the terminated Work and which
would have been deliverable if this Contract has not been terminated shall
become the property of USSB. The Contractor shall take such action as may
be necessary, or as USSB may direct, for the protection and preservation of
such inventory in the possession of the Contractor.
C. In the event that XXXX's right to terminate the Contract as defined in this
Article 15 should stand in the way of USSB's meeting the due diligence
requirement as set forth by the Federal Communications Commission, then
USSB may, at its sole option, declare this Article 15 to be null and void.
ARTICLE 16. CHANGES
From time to time between award and prior to final acceptance of all Work under
this Contract USSB may, by issuing written change orders, make changes within
the general scope of this Contract in drawings, designs, specifications, method
of shipment or packing, or time or place of delivery, require additional Work or
direct the omission of Work. If any such change causes an increase or decrease
in the cost of or the time required for the performance of this Contract, an
equitable adjustment shall be made in the price, or delivery date or schedule,
or both, and any other affected provisions hereof, and this Contract shall be
modified in writing accordingly. Any claim by the Contractor for adjustment
under this Article shall be deemed waived unless asserted in writing within
thirty (30) days from the date of receipt by the Contractor of the change order.
The amount of the claim shall be stated when it is submitted, or at a later
date, not to exceed sixty (60) days from the date for assertion of the claim. If
the cost of supplies or materials made obsolete or excess as a result of a
change is included in the Contractor's claim for adjustment, USSB shall have the
right to prescribe the manner of disposition of such supplies or materials. All
changes and equitable adjustments pursuant to this Article shall be subject to
27
negotiation between and approval by both parties prior to inception of any such
change, which approval shall not be unreasonably withheld.
ARTICLE 17. TAXES AND DUTIES
A. All non-U.S. taxes, duties, assessments and fees, including tariffs, that
are imposed as the results of the importation into any non-U.S.
jurisdiction of any portion of the Work shall be paid by USSB, or if paid
by Contractor, shall be reimbursed to Contractor by USSB immediately upon
notification that Contractor has paid any such taxes, duties, assessments
and fees.
B. Contractor shall be responsible for payment of all U.S. taxes as part of
the Contract Price in Article 2.
C. Portions of the Work may include some imported goods. Notwithstanding the
above, in the event any portion of the Work and its included imported
goods are not exported in a timely manner (not more than three (3) years
after EDC) due to USSB's actions or inactions, any duties, taxes, and
penalties arising therefrom will be USSB's responsibility. Contractor shall
pay such duties, taxes and penalties, the payment of which is required by
law, and XXXX agrees to reimburse Contractor for such payments within
thirty (30) days of receipt of Contractor's invoice.
X. XXXX shall be responsible for all applicable duties and taxes, including
sales taxes, resulting from storage of the Spacecraft.
E. Each Party agrees to cooperate with the other Party to minimize the amount
or impact of any taxes that may be applicable to the Work under this
Contract.
ARTICLE 18. EXCUSABLE DELAYS
A. Acts of God, acts of the public enemy, acts of USSB, acts of any government
in its sovereign capacity (including government priorities, allocations,
regulations or orders affecting material, facilities or completed
spacecraft), changes in the launch specifications in effect on the
effective date of this Contract, fires, earthquakes, unusually severe
weather, floods, epidemics, quarantine restrictions, excusable delays
specified in USSB's contract with the launch services contractor, freight
embargoes, labor difficulties, unavailability of the Launch Vehicle, and
any other cause beyond the reasonable control and without the fault or
negligence of Contractor or its subcontractors which in every case
unavoidably prevent the performance of the Work in accordance with the
schedule specified herein,
28
shall constitute an excusable delay if written notice thereof is given to
USSB within fifteen (15) days after such event shall have occurred. In
event of delay resulting from any of the above causes, the delivery dates
shall be extended accordingly. Any unexcused default by Contractor's
subcontractors shall not constitute an excusable delay.
B. In the event that an event of excusable delay exceeds or is reasonably
expected to exceed ninety (90) days, USSB shall have the right to an
equitable adjustment of the Progress Payment and Milestone Event payment
due dates specified in Article 5 and the Termination Schedule stated in
Article 15.
ARTICLE 19. TERMINATION FOR DEFAULT
A. USSB may, by timely written Notice of Default sent by registered or
certified mail to Contractor, terminate this Contract or any part thereof
if: (1) final acceptance of the Spacecraft fails to occur on or before a
date that permits the Spacecraft to be launched within the launch period
established by the Launch Vehicle services contractor's launch manifest,
which date shall in no event be earlier than twenty-six (26) months after
EDC; or (2) Contractor fails to perform any other material requirement of
this Contract prior to Intentional Ignition within the time period
specified herein.
B. With respect to paragraph A.(1) of this Article 19, XXXX agrees to use
commercially reasonable efforts to establish the first day of the launch
period for the Launch Vehicle at twenty-six (26) months after EDC. USSB
shall notify Contractor in writing of its launch accommodations upon
execution of the launch vehicle services contract. In addition, prior to
USSB issuance of a Notice of Default under paragraph A.(2) of this Article
19, USSB shall send a written Cure Notice to Contractor specifying the
Contract particulars for which USSB considers the Contractor to be in
default and providing Contractor a period of thirty (30) days (or such
longer period as USSB may authorize within the Cure Notice) for Contractor
to respond to USSB in writing as to (1) the corrective actions taken or to
be taken to remedy the alleged default condition, or (2) why Contractor
does not consider itself to be in a default condition. USSB shall give
reasonable consideration to Contractor's response to XXXX's Cure Notice
prior to USSB's issuance of a Notice of Default under this Article.
Notwithstanding the foregoing, no Notice of Default shall be required to be
sent under paragraph A.(1) of this Article 19.
C. To the extent the Contract is terminated under this Article, USSB may
demand either that: (1) all partially completed items be delivered and that
Contractor pay to USSB all costs
29
reasonably incurred by USSB through the one (1) year period following the
scheduled delivery date (as adjusted by excusable delays) to have such
items completed by other responsible contractors (with whom Contractor
shall provide reasonable cooperation), to the extent such costs exceed the
total amount which USSB would have had to pay Contractor for such items had
Contractor completed the Contract as required (excluding any incentive
payments); or (2) subject to paragraph E of this Article 19, all payments
made to Contractor by USSB shall be returned, in which case all right,
title and interest in and to the Work shall remain with, or be reconveyed
to, the Contractor.
D. If this Contract is terminated as provided in this Article and XXXX does
not elect to have all payments returned under paragraph C.(2) of this
Article 19, Contractor shall:
(1) be paid the Contract price (excluding any incentive payments) for all
Work delivered and accepted prior to such termination; and
(2) protect and preserve property in the possession of Contractor in which
USSB has an interest.
E. After Intentional Ignition, this Article shall not affect payment to
Contractor of any payment which would otherwise be due under the terms of
Articles 6 and 7.
F. This Article shall be the sole remedy to which USSB is entitled in the
event of Contractor's default under this Article 19, and Contractor shall
have no liability for special, indirect, incidental, punitive or
consequential damages, including lost profits or lost revenues.
G. In the event USSB terminates Contractor for default under the provisions of
this Article and it is subsequently determined that Contractor was not in
default, said termination shall be deemed to have been issued pursuant to
Article 15.
H. If USSB fails to perform any obligation which it is required to perform
pursuant to this Contract, Contractor may issue a written Cure Notice to
USSB specifying the Contract particulars for which Contractor considers
USSB to be in default and providing USSB a period of thirty (30) days (or
such longer period as Contractor may authorize within the Cure Notice) for
USSB to correct such failure to perform. If such failure is not corrected
by USSB within this period Contractor may stop work on this Contract and
consider this Contract to be terminated pursuant to Article 15.
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ARTICLE 20. ASSIGNMENT
Neither Party shall assign or delegate this Contract or any of its rights,
duties, or obligations hereunder to any other person without the prior express
written approval of the other Party, which consent shall not be unreasonably
withheld or delayed. Nothing contained in this Article shall restrict
Contractor from subcontracting work or procuring parts, materials, equipment or
services in the ordinary course of performance of this Contract. This assignment
restriction shall not apply in the event of assignment by USSB or Contractor to
any successor corporation, subsidiary or affiliate provided thirty (30) days
advance notice is given to the other Party and the assignor remains obligated
under this Contract.
ARTICLE 21. ARBITRATION
A. Except for disputes involving claims of specific performance or injunctive
relief, any dispute or disagreement arising between the Parties in
connection with the interpretation of any Article or provision of this
Contract, or the compliance or non-compliance therewith, or the validity or
enforceability thereof, or any other dispute related to this Contract which
is not settled to the mutual satisfaction of the Parties within thirty (30)
days (or such longer period as may be mutually agreed upon) from the date
that either Party informs the other, in writing, that such dispute or
disagreement exists, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, in
effect on the date that such notice is given. Arbitration shall be held in
San Francisco, California, U.S.A. or at another location mutually agreed to
by the Parties.
B. The arbitration shall be determined by a panel of no more than three (3)
arbitrators who have the qualifications and experience described in
paragraph C. below, and the arbitrators shall be selected in accordance
with the procedures in paragraph D. below. The arbitrators shall base any
award on the terms of this Contract, the applicable law and judicial
precedent, and shall accompany such award with a written explanation of the
reasons therefor. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. The relief that may be
awarded by the arbitrators under any arbitration arising from this Contract
may not exceed actual compensatory damages. In no event may the arbitrators
award special, incidental, indirect, consequential or punitive damages
except as otherwise provided in Article 6.J. hereof.
C. Every person recommended to serve as an arbitrator hereunder shall be
qualified by education, experience, and training to pass on the particular
controversies in dispute, and shall have had experience as an arbitrator
and at least fifteen (15) years experience with
31
expertise in interpreting contracts in the field or fields of law involved
in the subject controversy. The arbitrators selected shall be fair and
impartial and shall have no financial or personal interest in the Parties
or outcome of the matter to be decided.
X. Xxxxxx Party demanding arbitration of a controversy shall, in writing,
specify the matter to be submitted to arbitration and, simultaneously,
choose and nominate an individual meeting the qualifications set forth in
paragraph C. to act as an arbitrator. Thereupon, within fifteen (15) days
after receipt of such written notice, the other Party shall, in writing,
choose and nominate a second arbitrator meeting the qualifications set
forth in paragraph C. The two arbitrators so chosen shall promptly meet
and endeavor to resolve the question in dispute and, if they agree upon
such determination, the determination so made shall be reduced to writing
and signed by both arbitrators.
If, within ten (10) working days, such two arbitrators fail to agree, they
shall promptly select a third arbitrator, giving written notice to both
Parties of their choice and fixing a time and place at which both Parties
may appear and be heard with respect to the controversy at hand. In the
event the two arbitrators fail to agree upon a third arbitrator within a
period of seven (7) days, or if, for any other reason, there is a lapse in
the naming of an arbitrator or arbitrators, or in the filling of a vacancy,
or in the event of failure or refusal of any arbitrator(s) to attend to or
fulfill his or their dutires, then upon application by either Party to the
controversy, an arbitrator or arbitrators shall be named by the American
Arbitration Association in accordance with its rules.
E. Each Party shall, upon the written request of the other Party, provide the
other with copies of documents relevant to the issues raised by any claim,
counterclaim or defense and shall be entitled to request interrogatories
and take a reasonable number of depositions as are relevant to the matters
under arbitration. Other discovery may be ordered by the arbitrators to the
extent the arbitrators deem additional discovery appropriate, and any
dispute regarding discovery, including disputes as to the need therefor or
the relevance or scope thereof, shall be determined by the arbitrators,
which determination shall be conclusive.
F. In the event that the dispute is resolved by a three-person arbitration
panel, , the arbitration shall take place at a single hearing before the
arbitrators. The arbitrators shall select such time and place for the
hearing after appointment, provided that the time scheduled for the hearing
shall not be later than forty-five (45) business days after the date of the
appointment of the last arbitrator appointed. The arbitrators shall give
written notice of the scheduled hearing to each Party at least thirty (30)
business days prior the date so fixed.
32
Prior to the scheduled hearing date, the Parties and the arbitrators shall
agree on procedures to be used in connection with the arbitration except as
they may conflict with the specific provisions of this paragraph. To the
extent the Parties and the arbitrators cannot agree upon procedures,
arbitration shall be conducted in accordance with the AAA Rules. At the
hearing, each of the Parties shall submit its position, together with such
testimony and evidence as each Party may see fit, with respect to the
controversy at issue. Such testimony or evidence may be oral or written.
The formal rules of evidence applicable to judicial proceedings will not
govern the arbitration proceeding. After the hearing, each Party shall have
the right to submit such written summary of its own submissions and
positions as it deems appropriate, and written comments upon the
submissions and positions of the other Party. The arbitrators shall affix
an appropriate time table for such written comments and submissions. Said
arbitrators shall hear and determine the matters presented for decisions,
shall consider all testimony, evidence, submissions, and comments provided,
giving such weight to each as the arbitrators may deem appropriate; and the
arbitrators shall render a decision thereon no later than thirty (30) days
after the date affixed for written comments and submissions.
G. All expenses and fees of the arbitrators and expenses for hearing
facilities, stenographers and other expenses of the arbitrators shall be
borne equally by both Parties.
ARTICLE 22. RIGHTS IN DATA
Except as provided in Article 12 of this Contract, and subject to Articles 31
and 33 hereof, USSB shall have the right to use, duplicate and disclose the Data
and Documentation furnished hereunder for the purpose of inspecting and
operating the Spacecraft furnished hereunder. USSB shall have the right to make
copies of any written material furnished as part of the Data and Documentation
that is copyrighted and to use such copies for the performance of this Contract
and for operation of the Spacecraft furnished hereunder without payment of
additional compensation to Contractor.
ARTICLE 23. PUBLIC RELEASE OF INFORMATION
Within a reasonable time prior to the release of news releases, articles,
brochures, advertisements, prepared speeches, and other information releases to
the public, concerning the work performed or to be performed hereunder, by the
Contractor, or a subcontractor of any tier, or an .employee or consultant of
either, the Contractor shall request the written approval of USSB concerning the
content and timing of such release, and such approval shall not be unreasonably
33
denied or delayed. If such approval is not granted, the requested release shall
not be made.
ARTICLE 24. PATENT INDEMNITY
A. Contractor agrees, at its own expense (including attorneys fees and costs),
to defend or at its sole option to settle, and XXXX agrees that the
Contractor has the right to defend, or at its option to settle, any claim,
suit or proceeding ("Claims") brought against USSB alleging infringement of
any United States, Mexico, or Canada patent, copyright, trademark or trade
secret (hereinafter "Intellectual Property") by any Spacecraft or any
deliverable supplied by the Contractor to USSB under this Contract
("deliverable"). Contractor shall have the option to settle any such Claim
on behalf of USSB only if Contractor pays and satisfies fully at its sole
expense all amounts and undertakings required under such settlement. The
Contractor agrees to pay and satisfy any final judgment entered in a U.S.
Court or a court or agency of competent jurisdiction in Canada or Mexico
against USSB on any such Claim, without regard to any limitation imposed by
Article 38. XXXX agrees that the Contractor at its sole option shall be
relieved of the foregoing obligations unless USSB notifies the Contractor
promptly in writing of any such Claim, and at the Contractor's expense,
gives the Contractor proper and full information and assistance as is
reasonably available to USSB for the purpose of settling and/or defending
any Claim.
B. If any deliverable furnished by the Contractor to USSB becomes, or in the
opinion of the Contractor may become, the subject of any Claim for
infringement of any United States, Mexico, or Canada Intellectual Property
rights, or in the event of an adjudication that such deliverable infringes
any United States, Mexico, or Canada Intellectual Property right or in
connection with the settlement thereof, or if the use, lease or sale as
appropriate of such deliverable is enjoined, the Contractor may, at its
option and its expense: (1) procure for USSB such Intellectual Property
rights as are necessary to use, lease or sell, as appropriate, such
deliverable(s); or (2) replace such infringing deliverable(s) or parts
thereof; or (3) modify such deliverable(s); or (4) remove such
deliverable(s) or parts thereof and replace such deliverables or parts
thereof with a noninfringing deliverable or part. Contractor may exercise
any of the aforementioned options with respect to a Successfully Operating
Spacecraft ; provided that the exercise of such option: (a) does not
materially impair or interfere with the operation of the Spacecraft; and
(b) does not result in the Spacecraft failing to meet the performance
specifications of this Contract. In all such cases, USSB and Contractor
shall cooperate to minimize the impact to USSB's use or operation of the
Spacecraft and Contractor shall use all comercially practicable efforts to
avoid or minimize any period during which the Spacecraft's operations are
diminished. Notwithstanding the
34
foregoing, nothing in this paragraph B. shall relieve Contractor from
performing the Work in accordance with the terms of this Contract.
C. With respect to the Spacecraft only, in the event that Contractor is unable
to resolve any Claim for infringement of any United States, Mexico, or
Canada Intellectual Property rights brought against USSB and USSB is
permanently enjoined from using the Spacecraft and all appeals of an
infringement Claim have been fully exhausted, then Contractor agrees to
undertake one of the following:
(1) PRIOR TO INTENTIONAL IGNITION. Contractor will: (a) return to USSB
all Progress Payments and other amounts which have been received from
USSB under this Contract (in which case Contractor shall retain all
rights, title and interest in the Spacecraft); (b) pay USSB (after
USSB has taken all reasonable mitigation measures) all costs, if any,
that USSB must pay or has paid for launch services (less any refunds
received by USSB from the Launch Vehicle services contractor), and,
upon such payment, USSB shall assign the launch vehicle services
contract to the Contractor; and (c) pay to USSB a lump sum payment of
_____________________________________________________________.
(2) AFTER INTENTIONAL IGNITION. For a Successfully Operating Spacecraft
Contractor will: (i) provide USSB with a replacement spacecraft and
the title thereto, as soon as commercially practicable with
substantially the same performance characteristics as described in
Exhibit A, but with the infringing part(s) replaced with a
non-infringing part or parts; and (ii) provide launch and mission
operations and data and documentation substantially the same as
provided in this Contract; (iii) provide launch services and launch
risk insurance for the replacement spacecraft; provided, however, that
the Contractor shall have no other or further liability to USSB for an
infringing Spacecraft as a result of Contractor's replacement of the
Spacecraft under this subparagraph C.(2). Furthermore, if Contractor
is required to provide a replacement spacecraft under this
subparagraph C.(2), USSB shall transfer all right, title and interest
in and to the infringing Spacecraft to Contractor and transfer all
right, title and interest in and to the replacement spacecraft at the
end of any remaining portion of the Performance Time Period for the
Spacecraft or the estimated time period of performance of the
infringing Spacecraft, whichever is longer (which period shall be
extended for such period of time, if any, that USSB has been enjoined
from using the Spacecraft for its intended communications
35
purposes).
D. The Contractor shall have no liability for any infringement arising from:
(i) the combination of such deliverable with any other item not furnished
to USSB by the Contractor, or (ii) the modification of such deliverable
unless such modification was made by the Contractor, or (iii) the use of
such deliverable in practicing any process that is not practiced in its
entirety by such deliverable and/or any other deliverables provided by
Contractor. USSB shall hold the Contractor harmless against any expense,
judgment or loss for infringement of any United States patents or
trademarks which results from the Contractor's compliance with USSB's
specific designs, specifications (other than performance specifications) or
instructions other than those contained in the Exhibits to this Contract.
E. The Contractor shall not be liable for any costs or expenses incurred
without the Contractor's written authorization, and subject to paragraphs
C. (1) and C. (2) above, in no event shall the Contractor's total liability
to USSB under, or as a result of compliance with the provisions of this
Article 24 exceed the total damages USSB may be required to pay by order of
a United States court for the allegedly infringing Spacecraft or
deliverable, plus applicable attorneys fees and costs.
F. By this Contract, Contractor shall not convey any license by implication,
estoppel or otherwise, under any proprietary or patent rights of the
Contractor, to practice any process with such deliverable unless such
process is practiced in its entirety by such deliverable or by the
combination of such deliverable with any other product or part furnished by
Contractor.
ARTICLE 25. WARRANTY
A. Contractor warrants to USSB that the Spacecraft sold hereunder will, at the
time of final acceptance pursuant to Article 13 of this Contract, be free
from defects in material and workmanship and will comply with the
requirements of the Spacecraft Performance Specification, Exhibit A. This
warranty shall extend for a period of one (1) year from the date of final
acceptance of the Spacecraft by USSB or until Intentional Ignition of the
primary Launch Vehicle, whichever is earlier.
B. USSB shall have the right at any time during the warranty period to require
that Contractor, at Contractor's expense, correct or replace, at
Contractor's option, any non-conforming, defective, or deficient Spacecraft
component with a conforming component which
36
complies with the Spacecraft Performance Specification. The provisions of
this warranty shall apply to the corrected or replacement component for the
unexpired portion of the time period set forth in paragraph A. above.
C. Contractor warrants that each item of Data and Documentation will be
accurate at the time of its final acceptance pursuant to paragraph B.3 of
Article 13 of this Contract. Contractor undertakes during a one (1) year
period following each such final acceptance, to provide corrections to the
item of Data and Documentation to USSB (free of charge) as and when
Contractor becomes aware of such inaccuracies that materially affect the
operation of the Spacecraft.
D. If an excusable delay event occurs subsequent to final acceptance of the
Spacecraft but prior to Intentional Ignition, the warranty period shall be
extended on a day-for-day basis until such event is no longer considered an
excusable delay. However, such period of extension shall not exceed six (6)
months in the event of an excusable delay under Article 18 and eight (8)
months in the event of an excusable delay under Article 6.X. XXXX may
issue a change order to extend the warranty beyond such eight (8) month
period in accordance with Article 16.
E. The foregoing warranty shall constitute the sole remedy of USSB and the
sole liability of Contractor for any non-conforming, defective, or
deficient item delivered under this Contract.
F. THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST
INFRINGEMENT. CONTRACTOR SHALL HAVE NO OTHER LIABILITY UNDER THIS ARTICLE
25, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY
LIABILITY FOR SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES, OR FOR LOST PROFIT OR REVENUES.
ARTICLE 26. NOTICES, REPORTS AND DOCUMENTATION DELIVERABLES
All notices, reports and technical documentation required to be provided to USSB
or the Contractor under this Contract shall be sent to USSB or the Contractor as
described below and
37
shall be effective upon receipt.
USSB CONTRACTOR
United States Satellite Broadcasting Lockheed Xxxxxx Telecommunications
Company, Inc. Building 551
0000 Xxxxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxx.
St. Xxxx, Minnesota 55114 Sunnyvale, CA 94089-1310
Attention: Xxxxxx Xxxxxxxxx Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
ARTICLE 27. STORAGE
X. XXXX may elect to have the Contractor deliver, or Contractor may be
required under Article 6 (paragraph G. or H.) hereof to deliver, the
Spacecraft purchased under this Contract to a USSB-provided storage
location within the Continental United States. In such event, Contractor
shall be paid incentive payments in accordance with the terms of Article 6
(paragraph G. or H., as applicable) and title and risk of loss or damage to
the Spacecraft shall pass to USSB as set forth in Article 12 at the time of
delivery of the Spacecraft to the storage site.
B. Subsequent to the delivery of the Spacecraft to a storage site, USSB may
direct the Contractor to remove the Spacecraft from storage for the purpose
of launch. If so directed, the Contractor shall transport the Spacecraft to
the launch site and shall perform the pre-launch, launch and post-launch
services specified in this Contract at the Contractor's expense in
accordance with Exhibit B.
C. If, in the course of removing the Spacecraft from storage and shipping it
to the designated launch site, the Contractor is required to perform
refurbishment of the Spacecraft or any testing that is outside of the scope
of this Contract prior to shipment of the Spacecraft, then the terms and
conditions of this Contract will be adjusted pursuant to Article 16.
D. The Contractor shall assume the risk of loss or damage to the Spacecraft
from the time the Spacecraft leaves the Contractor's facility until
delivery to the storage site and again from the time the Contractor takes
possession of the Spacecraft at the storage location for the purposes of
delivery to the designated launch site, until Intentional Ignition.
38
ARTICLE 28. APPLICABLE LAW
This Contract shall be interpreted, construed, and governed by the laws of the
State of New York, exclusive of its choice of law rules.
ARTICLE 29. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PARTIES
A. Contractor's Representatives, Warranties and Covenants. Contractor hereby
represents, warrants and covenants to USSB as follows:
(1) As of the EDC date, the execution, delivery and performance by
Contractor of this Contract has been duly authorized by all requisite
corporate action and will not violate any applicable provisions of law
or any order of any court or any agency of government and will not
conflict with or result in the breach under any agreement applicable
to Contractor.
(2) As of the EDC date, Contractor has not employed or authorized anyone
to represent it as a broker or finder in connection with this
Contract.
(3) Contractor will deliver to USSB good and clear marketable title to the
Spacecraft delivered under the Contract free of all liens,
encumbrances and adverse claims of title, and Contractor has the right
to convey the rights specified in Article 12.E. with respect to the
Data and Documentation.
(4) In connection with performance of the Work and delivery of the
Spacecraft, Data and Documentation and Launch and Mission Operation
Services, Contractor shall comply with all applicable laws,
regulations, or orders of any governmental entity.
(5) Contractor shall deliver to USSB a Spacecraft that: (i) conforms in
all material respects to the requirements of this Contract and is
substantially similar, in all material respects, with series A2100
spacecraft Contractor provides to its other customers; and (ii)
complies with all engineering standards applicable to Lockheed Xxxxxx
commercial communications satellites in effect at the time of
construction.
(6) As of the EDC date, to the best of Contractor's knowledge, no Exhibit
to this Contract contains any material inaccuracies.
(7) At any time during Contractor's performance of this Contract, if XXXX
reasonably believes that it has reason to inquire concerning
Contractor's ability to perform its
39
obligation hereunder, upon written requests by XXXX, Contractor agrees
to provide USSB with written assurances of Contractor's continued
ability to perform its obligations hereunder. Contractor shall
provide any such assurances together with relevant information
requested by USSB to support such assurances within ten (10) business
days following Contractor's receipt of XXXX's written request.
B. USSB's Representations, Warranties and Covenants. USSB hereby represents,
warrants and covenants to Contractor as follows:
(1) As of the EDC date, the execution, delivery and performance by USSB of
this Contract has been duly authorized by all requisite corporate
action and will not violate any applicable provisions of law or any
order of any agency of government and will not conflict with or result
in the breach under any agreement applicable to USSB.
(2) As of the EDC date, USSB has not employed or authorized anyone to
represent it as a broker or finder in connection with this Contract.
ARTICLE 30. RESPONSIBILITY FOR DESIGN, DRAWINGS AND SPECIFICATIONS
The review or granting of any approvals by USSB, or the failure of USSB to
inform Contractor of any deficiencies in the Work or to review or grant any
approvals, shall not affect the responsibility of the Contractor for the design
or for the correctness of drawings and specifications, for the performance of
the Spacecraft, or for any other obligation of the Contractor under this
Contract.
ARTICLE 31. DISCLOSURE AND USE OF PROPRIETARY INFORMATION
A. If documents supplied by one Party to the other are marked with a
proprietary legend, the receiving Party shall take all reasonable steps to
ensure that the documents and contents of such documents are not disclosed
to any person other than a person employed or engaged by the receiving
Party, whether under subcontract or otherwise, for the performance of this
Contract. Whenever the receiving Party makes copies of such proprietary
documents for performance of work covered by this Contract and such copy is
not marked as proprietary, the receiving Party shall mark each such copy as
proprietary to the disclosing Party.
B. Any disclosure to any person permitted under paragraph A above shall be
made in confidence and shall extend only so far as may be necessary for the
purposes of this Contract. Any such disclosure to a person other than an
employee or attorney residing in
40
the U.S. of the receiving Party shall be made pursuant to a written
confidential disclosure agreement or with prior written approval of the
disclosing Party.
C. Except with the written consent of the disclosing Party, the receiving
Party shall not make use of any document mentioned in paragraph A above
other than for the purposes of this Contract.
D. The obligations and restrictions imposed by this Article shall not apply to
information which:
(1) is or becomes available to the public from a source other than the
receiving Party before or during the period of this Agreement;
(2) is authorized for release in writing by the disclosing Party;
(3) is lawfully obtained by the receiving Party without restriction from a
third Party;
(4) is known by the receiving Party prior to such disclosure;
(5) is, at any time, developed by the receiving Party completely
independently of any disclosure or disclosures from the disclosing
Party;
(6) is reasonably necessary to support a patent application, the subject
matter of which belongs to the receiving Party and which the receiving
Party discloses to an appropriate Patent Agent or Patent Office and/or
court of any country in pursuance thereof; or
(7) is, with respect to USSB, reasonably necessary to support applications
to be filed with the Federal Communications Commission in connection
with XXXX's DBS program.
E. Neither Party shall be liable for the inadvertent or accidental disclosure
of such information marked as proprietary if such failure to mark or
disclosure occurs despite the practice of exercising the same degree of
care as the receiving Party normally takes to preserve and safeguard its
own proprietary information, but at least reasonable care.
F. Neither Party shall be liable for the disclosure of any technical
information of the other Party pursuant to any legally enforceable
requirement of any Government, or any court, agency or department thereof.
41
G. No license, under any patent, is granted or implied by merely conveying
data or information under this Contract.
H. Any proprietary disclosure to either Party, if made orally, or visually,
shall be so identified at the time of disclosure and shall be confirmed in
writing within fifteen (l5) days by the disclosing Party and identified as
proprietary information, if the disclosing Party wishes to keep such
information proprietary under this Contract. Neither Party shall be liable
for the disclosure of proprietary information made prior to the
identification of such information as proprietary.
I. The obligations of this Article shall be effective for a period of seven
(7) years from the date of the disclosure.
ARTICLE 32. INTEGRATION
This Contract embodies the whole agreement between the Parties. There are no
promises, terms, conditions, or obligations other than those contained herein;
and this Contract shall supersede all previous proposals, communications,
representations, or agreements either verbal or written, between the Parties
hereto. This Contract shall not be changed, modified, amended, extended,
terminated, waived, or discharged, except by an instrument in writing signed by
the Parties hereto.
ARTICLE 33. PERMITS AND LICENSES
A. This Contract is subject to all applicable U.S. laws and regulations
relating to the export of Spacecraft, services and/or Data and
Documentation deliverable hereunder and other technical data and equipment
being furnished pursuant to or to be utilized in connection with this
Contract (hereinafter in this Article referred to as "Export Licensed
Items") and to all applicable laws and regulations of the country or
countries to which Export Licensed Items are exported or are sought to be
exported.
B. Contractor shall use reasonable efforts to obtain U.S. Government approvals
and licenses necessary for export of any Export Licensed Items. USSB is
responsible to provide Contractor, upon Contractor's request, with all
available and necessary information to enable Contractor to apply for such
approvals and licenses.
C. If, within a reasonable time, the U.S. Government fails to grant a required
approval or license to Contractor to export any Export Licensed Items or
revokes or suspends such an approval or license subsequent to its grant, or
grants such a license or approval subject to
42
conditions, this Contract shall, nevertheless, remain in full force and
effect. In the event of such U.S. Government action or inaction,
deliveries and acceptance of the Spacecraft, services and Data and
Documentation to be furnished by Contractor shall be made at locations
within the continental U.S. as agreed upon between the Parties. Such U.S.
Government action or inaction shall not otherwise modify in any way the
rights and obligations of the Parties under this Contract except to relieve
Contractor of any obligations which cannot be performed without such an
approval or license. In such event, the Export Licensed Items ready for
delivery will be placed in storage at USSB's expense and USSB shall pay
Contractor all payments due under the Contract for such Export Licensed
Items, including the Spacecraft Initial Incentive Payment, less the price
of services related to such Export Licensed Items but not performed due to
such storage.
D. If, within a reasonable time, any foreign country or countries to which
such Export Licensed Items are sought to be exported fails to grant a
required approval or license, or suspends or revokes a required approval or
license subsequent to its grant, or grants a license subject to conditions,
or if any foreign country or countries to which such Export Licensed Items
are exported fails to grant an approval or license to utilize the Export
Licensed Items for the purpose(s) for which exported, this Contract shall,
nevertheless, remain in full force and effect. In the event of such
foreign country's or countries' action or inaction, deliveries and
acceptance of the Spacecraft, services and Data and Documentation to be
furnished by Contractor shall be made at locations within the continental
U.S. as agreed upon between the Parties. Such foreign government's action
or inaction shall not otherwise modify in any way the rights and
obligations of the Parties under this Contract except to relieve Contractor
of any obligations which cannot be performed without such an approval or
license. In such event, the Export Licensed Items ready for delivery will
be placed in storage at USSB's expense and USSB shall pay Contractor all
payments due under the Contract for such Export Licensed Items, including
the Initial Incentive Payment, less the price of services related to such
Export Licensed Items but not performed due to such storage.
ARTICLE 34. CONTRACTOR PROVIDED OFFICE SPACE
Upon request by XXXX, at any time through the Pre-Shipment Review of the
Spacecraft, the Contractor shall provide to USSB personnel or their designees a
suitably furnished and equipped private office, with an area of not less than
one hundred fifty (150) square feet, at the Contractor's facilities.
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ARTICLE 35. INTERPARTY WAIVER OF LIABILITY
USSB and Contractor agree to amend this Contract Article to incorporate
appropriate flowdown requirements of USSB's launch contract with the Launch
Vehicle services contractor for launch and associated services regarding damage
to persons or property involved in launch operations. Such amendment shall be
accomplished prior to the launch of any Spacecraft delivered under this
Contract.
ARTICLE 36. LAUNCH VEHICLE DESIGNATION
A. USSB is required to obtain Launch Vehicle services for the purpose of
successfully launching the Spacecraft deliverable under this Contract and
to provide all launch support services not otherwise specifically required
to be provided by Contractor hereunder.
B. The Parties recognize that USSB must designate, as the Launch Vehicle for
launch of the Spacecraft, a Launch Vehicle that is compatible with the
Spacecraft. USSB shall notify Contractor in writing of USSB's Launch
Vehicle designation no later than three (3) months after EDC. USSB's delay
in providing Contractor such notification of its Launch Vehicle designation
or any subsequent USSB-directed change in the designated Launch Vehicle may
constitute a basis for an equitable adjustment in the price and delivery
schedule of this Contract.
ARTICLE 37. MISCELLANEOUS PROVISIONS
A. CONTRACT EFFECTIVITY - The Effective Date of this Contract [EDC] is
December 31, 1996
B. LANGUAGE - This Contract and all Data and Documentation, reports and other
written materials, and all communications between the Parties pursuant to
performance of this Contract, shall be in the English language.
C. UNITS OF MEASURE - Contractor's standard measurement units shall be used
for drawings and technical documents supplied to either Party by the other
pursuant to performance of this Contract.
D. ENFORCEMENT OF REMEDIES - Unless expressly stated to the contrary within a
specific Article, all rights and remedies hereunder shall be cumulative and
may be exercised singly or concurrently. Failure by either Party to enforce
any of its rights under this Contract shall not be deemed a waiver of
future enforcement of such rights or any other rights hereunder.
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E. SEVERABILITY OF PROVISIONS - If any provision of this Contract is found to
be invalid or unenforceable, it shall not affect any other provision of
this Contract, and the invalid or unenforceable provision shall be replaced
with a provision consistent with the original intent of the Parties.
F. SURVIVING ARTICLES - The following Articles shall survive the completion,
expiration or termination of this Contract: Article 6, In-Orbit Incentive
Payments; Article 14, Indemnification; Article 15, USSB's Right to
Terminate; Article 17, Taxes and Duties; Article 21, Arbitration; Article
22, Rights in Data; Article 24, Patent Indemnity; Article 25, Warranty;
Article 26, Notices, Report and Documentation Deliverables; Article 28,
Applicable Law Article 31, Disclosure and Use of Proprietary Information;
Article 33, Permits and Licenses; Article 35, Interparty Waiver of
Liability; and Article 38, Limitation of Liability.
ARTICLE 38. LIMITATION OF LIABILITY
Except as expressly provided in Article 24 and Article 6.J, in no event shall
either Party or their respective officers, employees, agents, consultants, or
subcontractors be liable in contract, tort, or otherwise, for special,
incidental, punitive, indirect, or consequential damages, including, but not
limited to, lost profits or revenues.
This Contract may be executed in one or more counterparts all of which
constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Contract.
LOCKHEED XXXXXX CORPORATION
By: /s/ Xxxxxxx X. XxXxxx
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Name: Xxxxxxx X. XxXxxx
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Title: President
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Lockheed Xxxxxx Telecommunications
UNITED STATES SATELLITE
BROADCASTING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Chairman
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