Exhibit 10.38
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
FIXED PRICE CONTRACT
BETWEEN
XXXXXX COMMUNICATIONS GALAXY, INC.
AND
XXXXXX SPACE & COMMUNICATIONS COMPANY
FOR
GALAXY XIII/XIV HS702
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 97-HCG-001
TABLE OF CONTENTS
PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS......................................2
ARTICLE 2. ORDER OF PRECEDENCE..............................................3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES...................4
ARTICLE 4. DELIVERABLES AND SCHEDULE........................................9
ARTICLE 5. PRICE...........................................................13
ARTICLE 6. PAYMENTS........................................................14
ARTICLE 7. SPACECRAFT LAUNCH DATE..........................................31
ARTICLE 8. BUYER-FURNISHED ITEMS...........................................33
ARTICLE 9. INSPECTION AND ACCEPTANCE.......................................36
ARTICLE 10. ACCESS TO WORK IN PROCESS.......................................38
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY................39
ARTICLE 12. EXCUSABLE DELAYS................................................41
ARTICLE 13. AMENDMENTS......................................................43
ARTICLE 14. TERMINATION FOR CONVENIENCE.....................................44
ARTICLE 15. TITLE AND RISK OF LOSS..........................................47
ARTICLE 16. SPACECRAFT WARRANTY.............................................50
ARTICLE 17. INDEMNIFICATION.................................................52
(i)
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE......53
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY......................................54
ARTICLE 20. RIGHTS IN INVENTIONS............................................56
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS....................................58
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE..............59
ARTICLE 23. PUBLIC RELEASE OF INFORMATION...................................61
ARTICLE 24. TAXES...........................................................62
ARTICLE 25. GOVERNING LAW...................................................63
ARTICLE 26. TITLES..........................................................64
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES..........................65
ARTICLE 28. INTEGRATION.....................................................66
ARTICLE 29. CHANGES.........................................................67
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES.................................72
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY.................................73
ARTICLE 32. SPACECRAFT STORAGE..............................................74
ARTICLE 33. DISPUTES........................................................75
ARTICLE 34. ASSIGNMENT......................................................78
ARTICLE 35. LIMITATION OF LIABILITY.........................................80
ARTICLE 36. OPTIONS.........................................................81
ARTICLE 37 REPLACEMENT SPACECRAFT .........................................87
ARTICLE 38 EFFECTIVE DATE OF CONTRACT......................................89
(ii)
THIS CONTRACT is entered into on the 15th day of May, 1997, by and between
XXXXXX COMMUNICATIONS GALAXY, INC. (herein called "Buyer" or "HCG"), a
California corporation having a place of business at 0000 Xxxxxx Xxx, Xxxx
Xxxxx, Xxxxxxxxxx 00000 and XXXXXX SPACE AND COMMUNICATIONS COMPANY (herein
called "Contractor," "Seller" or "HSC"), a Delaware corporation having a place
of business at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, HCG desires to purchase, and Contractor desires to provide
communications Spacecraft, Documentation, and Related Services as hereinafter
specified, and the Parties desire to define the terms and conditions under which
the same shall be furnished,
NOW, THEREFORE, the Parties hereto agree as follows:
1
ARTICLE 1. EXHIBITS AND INCORPORATIONS
The following documents are hereby incorporated and made a part of this
Contract with the same force and effect as though set forth herein:
1.1 Exhibit A - Galaxy XIII/XIV Statement of Work - dated TBD.
1.2 Exhibit B - Galaxy XIII/XIV Spacecraft Specification - dated TBD.
1.3 Exhibit C - Galaxy XIII/XIV Spacecraft Integration Test Plan -
dated TBD.
1.4 Exhibit D - Galaxy XIII/XIV Product Assurance Plan - dated TBD.
1.5 Exhibit E - Certain Documentation - dated TBD.
1.6 Exhibit F - Maximum Termination Liability - dated TBD.
1.7 Exhibit G - Replacement Satellite Payment Plan - dated TBD.
2
ARTICLE 2. ORDER OF PRECEDENCE
In the event of any conflict or inconsistency among the provisions of
this document and the exhibits attached and incorporated into this
Contract, such conflict or inconsistency shall be resolved by giving
precedence to this document, and then to the attached and incorporated
exhibits in the order listed in Article 1 herein, entitled "Exhibits and
Incorporations."
3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED
SERVICES ("DELIVERABLES")
HCG shall purchase from Contractor and Contractor shall sell and furnish
the following:
3.1 Contractor shall provide the necessary personnel, material,
services and facilities to design, fabricate, test and deliver as
required and perform work in accordance with the requirements of
Exhibits A, B, C and D hereto (all to be completed pursuant to
Paragraph 3.2), two (2) HS702 type Spacecrafts for Galaxy XIII and
Galaxy XIV (hereinafter referred to as "Spacecraft" Documentation
and Related Services (as defined in Article 4).
3.2 The Parties agree and acknowledge as follows:
(i) Buyer and Contractor had previously discussed entering into an
agreement for the construction of two (2) identical Spacecraft with
Ku-Band (FSS) and Ka-Band payloads (the "Ku/Ka-Band Spacecraft") at
an aggregate price of [***].
(ii) Buyer and Contractor agree and acknowledge that Buyer desires
two non-identical Spacecraft which shall include Ku-Band (FSS) and
C-Band payloads. Buyer and Contractor agree to work together to
complete the designs and prices for such Galaxy XIII and Galaxy XIV
Spacecraft (which may differ from that currently contemplated) and
all other TBD items specified in the Contract within sixty (60)days
following the signing of this Contract. As the design configuration
and specifications for each of Galaxy XIII and Galaxy XIV are
completed, technical exhibits to the Contract shall be completed
accordingly.
(iii) The Contract Price for each such Spacecraft and any Optional
or Replacement Spacecraft shall be mutually agreed by the Parties
and shall be based upon the sum of: (a) a good faith estimate of
Contractor's costs under Contractor's established accounting
practices that are fairly attributable to the applicable
Spacecraft, delivery to the applicable launch base, and
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
necessary launch support services as fairly determined at the time
such Spacecraft's design is determined; plus (b) a profit component
of [***] of such estimated costs. Such determination shall be made
without regard to the aggregate price of [***] for the two (2)
Ku/Ka-Band Spacecraft. Buyer may request to have an independent
audit performed of Contractor's estimated costs. Such audit shall
be at the expense of Buyer unless such audit shows Contractor to
have overstated its estimated costs (in which event Contractor
shall bear the audit expense).
(iv) To the extent Contractor has incurred costs for items which
will not be incorporated into the Galaxy XIII and Galaxy XIV
Spacecraft, then: (a) in addition to the Contract Price for the
Galaxy XIII and Galaxy XIV Spacecraft, Buyer shall be required to
pay such costs plus a [***] component; and (b) the provisions of
Paragraph 14.2 and 14.4 shall apply with respect to the disposition
of tangible work in process that is not to be incorporated into
such Spacecraft.
(v) As of May 12, 1997, Contractor's good faith estimate of Buyer's
maximum termination liability for the Ka-Band element of the
Ku/Ka-Band Spacecraft is [***]. At Buyer's request, Contractor
shall: (a) within seven (7) days of the signing of this Contract,
provide a definitive statement of such Ka-Band costs; and (b)
within thirty (30) days of the signing of this Contract, provide a
detailed accounting of all of Contractor's expenditures and
commitments on the Ku/Ka-Band Spacecraft to date.
(vi) If the aggregate Contract Price for the Galaxy XIII and Galaxy
XIV Spacecraft determined in accordance with clause (iii) above is
[***], then [***].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(vii) Until and unless the Parties reach agreement under
clauses (ii) and (iii) above, Buyer's termination liability
shall not exceed [***] Until such agreement is reached, Contractor
shall use reasonable efforts to focus any continuing work on
generic items that could be used for different designs and, if this
Contract is terminated, for other projects; provided, however, that
before Contractor reaches its decision as to what work it will
continue, Contractor will invite Buyer to participate in the
decision process and allow Buyer an opportunity to offer its
observations and recommendations for Contractor's consideration.
At such time that Contractor determines in good faith that the
exposure of ongoing work will exceed the liability cap stated
above, Contractor may on two (2) business days notice to Buyer stop
work, pending resolution of design and price issues for the
Spacecraft.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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3.3 All materials and services specified in Exhibit A, entitled
"Galaxy XIII/XIV Statement of Work," shall meet the
requirements of Exhibit B, entitled "Galaxy XIII/XIV
Spacecraft Specification" as such Exhibits are completed in
accordance with Paragraph 3.2.
3.4 If Contractor has not made delivery [***] or if, prior to the
Launch Date, [***] Buyer at its election may:
[***]
Any such election shall be made by Buyer in writing. In either case
(a) or (b) above, [***].
3.5 [***]in accordance with: (i) current directives and instructions in
the Xxxxxx Spacecraft Operators Handbook, utilized at either
Buyer's Operations Control Center (OCC) or Contractor's Mission
Control Center (MCC); and (ii) any other Documentation utilized,
including that Documentation which takes into consideration the
unique or special characteristics of the contracted Spacecraft.
[***] Contractor has responsibility and liability for the Mission
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7
Control Center. Buyer has responsibility and liability for the
Operations Control Center and its associated ground station(s).
3.6 Spacecraft, Documentation and Related Services described above
shall be delivered to HCG at the indicated locations on the dates
set forth in Article 4 entitled, "Deliverables and Schedule"
herein.
8
ARTICLE 4. DELIVERABLES AND SCHEDULE
4.1 The following deliverables to be furnished under this Contract
shall be furnished at the designated location(s) on or before the
dates specified below:
-----------------------------------------------------------------------------------------------------------
Location of Delivery
Date of Delivery and
Deliverable(s) or Performance Performance
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
o Delivery Site to be determined
1A. One Galaxy XIII Spacecraft Twenty-four (24) months from pursuant to Paragraph 4.2.
("Spacecraft XIII") determination of new design (in
accordance with Paragraph 3.2)(1)
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Twenty-four (24) months from o Delivery Site to be determined
1B. One Galaxy XIV Spacecraft determination of new design (in pursuant to Paragraph 4.2.
("Spacecraft XIV") accordance with Paragraph 3.2)(1)
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
o Performance Site to be
2A. Launch Support, Mission In Accordance with Exhibit A determined pursuant to Paragraph
Operations and In-Orbit 4.2.
Testing for Galaxy XIII o Filmore, California
("Related Services") o Castle Rock, Colorado
o El Segundo, California
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
o Performance Site to be
2B. Launch Support, Mission In Accordance with Exhibit A determined pursuant to Paragraph
Operations and In-Orbit 4.2.
Testing for Galaxy XIV o Filmore, California
("Related Services") o Castle Rock, Colorado
o El Segundo, California
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
3A. Documentation for Galaxy In Accordance with Exhibit A 0000 Xxxxxx Xxx
XIII ("Documentation") Long Beach, California
-----------------------------------------------------------------------------------------------------------
9
-----------------------------------------------------------------------------------------------------------
3B. Documentation for Galaxy In Accordance with Exhibit A 0000 Xxxxxx Xxx
XIV ("Documentation") Long Beach, California
-----------------------------------------------------------------------------------------------------------
(1)Delivery date is to the integration facility.
4.2 Designation of Launch Vehicle.
4.2.1 The designation of each Spacecraft's Launch Site shall be
made by Buyer on such Spacecraft's "Delivery Site
Designation Date", which date shall occur at least 12
months prior to the scheduled Delivery Date for such
Spacecraft (and if such Launch Site differs from that
upon which the Contract Price was determined under
Paragraph 3.2, then the Contract Price shall be adjusted
to account for any differences in costs between the
requirements related to such Launch Sites).If, subsequent
to such Delivery Site Designation Date, Buyer requests a
change in the Launch Site or Approved Storage Facility
for such Spacecraft, such request shall be dealt with as
a Change Order Request of Buyer under Article 29 (the
"Subsequent Delivery Site Change").
4.2.2 Buyer shall pay the costs of delivering the Spacecraft to
the Delivery Site, which costs are included in the
Contract Price.
4.3 The Contractor will arrange transportation required for Items 1A
and 1B, 2A and 2B, and 3A and 3B above. With respect to Deliverable
Items 1A and 1B and 2A and 2B, in the event that a Sea Launch
Vehicle is used with respect to either Spacecraft, the following
allocation of transportation duties for such Spacecraft shall
apply:
10
Such Spacecraft will be mated with a Sea Launch Zenit Vehicle (the
"Vehicle") at the Sea Launch, L.P. facilities, Port of Long Beach
(the "Integration Facility"). The Parties contemplate that such
mated Spacecraft, associated equipment and HSC personnel necessary
to assist in the monitoring and control of such Spacecraft will be
transported by Sea Launch, L.P. Command Ship (the "Ship") at the
expense of Sea Launch, L.P. from the Integration Facility to the
Launch Site in the vicinity of the Christmas Islands (the "Launch
Site"). HSC may also utilize the Ship at Sea Launch L.P.'s expense
for the transportation of other related HSC personnel when
accommodations are available and such accommodations do not
interfere with other Sea Launch, L.P. commitments for the launch
of such Spacecraft.
4.3.1 If such Spacecraft fails to conform to the warranty
provisions set forth in Article 15 and: (i) such mated
Spacecraft requires testing, maintenance, replacement
and/or corrective actions at the Launch Site or (ii)
return to the Integration Facility and/or the El Segundo
Plant Site is necessary to accomplish such actions, HSC
shall have responsibility and liability as follows:
4.3.1.1 If Spacecraft warranty actions can be
performed at the Launch Site, HSC shall be
responsible and liable for [***] to the
warranty provisions of this Contract.
4.3.1.2 If return of the Spacecraft to the Integration
Facility and/or Plant Site is necessary for
such warranty actions, HSC shall be liable to
Buyer in [***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[***]
4.4 [***] shall be responsible for obtaining and maintaining: (i)
all U.S. Government export licenses to enable export of each
Spacecraft, related test and support equipment to the Launch Site
and (ii) all authorizations required for the performance of this
Contract.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
12
ARTICLE 5. PRICE
5.1 The total price (the "Contract Price") for Contractor to provide
Spacecraft, Documentation and Related Services as defined in
Article 3 herein shall be determined for each Spacecraft in
accordance with Paragraph 3.2.
5.2 Buyer shall pay Contractor the Contract Price stated in Paragraph
5.1 above in accordance with Article 6, Paragraphs 6.2 and 6.3 of
this Contract.
13
ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject to
HCG's rights, defenses and remedies as expressly stated in this
Agreement, HCG shall pay to Contractor the Contract Price as
stated in Article 5 herein for the applicable Spacecraft,
Documentation, and Related Services under this Contract.
6.2 Invoices shall be prepared and submitted by Contractor for each
Spacecraft in a form reasonably acceptable to Buyer. Payments to
Contractor for each Spacecraft shall be made as follows:
(i) [***] of the Contract Price shall be payable in accordance
with the payment plan to be established under Paragraph 6.3; and
(ii) [***] of the Contract Price shall be payable as "Incentives
Obligations" in accordance with Paragraph 6.4.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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6.3 Payment Plans: The Parties shall establish a payment plan for each
Spacecraft at the time that the Contract Price for such Spacecraft
is determined in accordance with Paragraph 3.2
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
15
[***]
6.4 Incentives Obligations.
6.4.1 The following definitions are applicable to this Section
6.4:
6.4.1.1 "Specified Operation Lifetime" means fifteen
(15) years
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confidential treatment.
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6.4.1.2 "Successfully Operating Payload". The
Spacecraft shall be equipped with one or more
Payloads, as specified in Exhibit B upon
definition of all Final Specifications. Each
Payload shall be deemed to be Successfully
Operating if at least that number of
Transponders that is one more than one-half of
the total number of Transponders within such
Payload are Successfully Operating
Transponders (as defined below).
6.4.1.3 "Successfully Operating Transponder". A
Successfully Operating Transponder is a
Transponder which meets either or both of the
following two criteria:
(a) The Transponder meets or exceeds the
performance specifications set forth in
Exhibit B. For the avoidance of doubt, if the
Spacecraft is placed into inclined orbit, then
the Transponders shall be deemed not to meet
the criteria stated in this Paragraph
6.4.1.3(a) at such time as the Spacecraft
would have ceased to have a Useful Commercial
Life, (as mutually determined by the Parties)
had it not been placed in such an orbit.
(b) The Transponder, while not meeting or
exceeding the performance specifications,
provides Buyer with no material loss in its
commercial value.
A Transponder shall also be deemed to be a
Successfully Operating Transponder if it meets
the performance specifications through use of
any redundant or spare equipment.
6.4.1.4 "Useful Commercial Life". The Useful
Commercial Life of a Spacecraft means the
period beginning on the Commencement Date and
ending on the earlier to occur of (i) the date
on which there is just sufficient fuel
remaining on board the Spacecraft only to
eject the Spacecraft from its geostationary
orbital location or (ii) the date on which at
least
17
one-half of the Transponders on each Payload
are not Successfully Operating Transponders.
6.4.1.5 "Successfully Injected Spacecraft". The
Launched Spacecraft shall be deemed to be a
Successfully Injected Spacecraft if:
(a) The transfer orbit/spacecraft attitude meets
the following required criteria:
(1) Perigee altitude error is less than or
equal to +/-3 sigma;
(2) Apogee Altitude error is less than or
equal to +/-3 sigma;
(3) Inclination error is less than or equal to
+/-3 sigma;
(4) Argument of perigee error is less than or
equal to +/-3 sigma; and
(5) The Spacecraft has been separated with
attitude rate errors of less than or equal to
+/-3 sigma and
(b) The Spacecraft has not suffered physical
damage which resulted from Launch Vehicle
malfunction.
The calculated amount of Useful Commercial Life
(the "Calculated Operational Lifetime") shall be
mutually determined by Buyer and Contractor, based
on standard engineering practices, using measured
actuals of the Spacecraft, existing at the time of
the operational hand-off of the Spacecraft to
Contractor from the Launch Vehicle provider. If
the attained transfer orbit/Spacecraft attitude
does not meet the criteria stated in this Section,
but the Calculated Operational Lifetime is greater
than or equal to the Specified Operational
Lifetime for the Spacecraft, then the Spacecraft
shall be deemed to have been a Successfully
Injected
18
Spacecraft, If, on the other hand, the attained transfer
orbit/Spacecraft attitude does not meet the criteria
stated above, and the Calculated Operational Lifetime is
less than the Specified Operational Lifetime, then the
Spacecraft shall be deemed not be a Successfully
Injected Spacecraft. If Buyer and Contractor cannot
agree on the Calculated Operational Lifetime, then the
Parties shall resolve such disagreement in acceptance
with the dispute resolution procedures set forth in
Article 33. During such dispute resolution procedure,
Buyer shall commence all payments under Section 6.4.2 to
Contractor based on Contractor's calculation of such
Calculated Operational Lifetime, except only the
disputed amount(s) which shall be paid by Buyer in
escrow as set forth in Section 29.4, and the prevailing
party shall be entitled to interest as provided therein.
6.4.1.6 "Incentives Interest Rate". The Incentives
Interest Rate shall be the lesser of (i) the
prime rate of Chase Manhattan, New York, as
calculated on the first business day of each
month for which interest is calculated plus
[***] or (ii) [***].
6.4.1.7 "Commencement Date". The Commencement Date
shall be the date on which Buyer receives
written certification from Contractor that,
based upon the results of completed in-orbit
performance tests, at least one Payload is a
Successfully Operating Payload.
6.4.2 Buyer shall pay to Contractor the Incentives Obligations
and the Change Order Profit Component (if applicable),
as follows:
6.4.2.1 Incentives Obligations and Change Order Profit
Component. Subject to Section 6.4.2.3 through
6.4.2.6, Buyer shall be obligated to pay to
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Contractor the Incentives Obligation and any
Change Order Profit Component (if applicable),
as follows: Buyer shall pay Contractor an
equal monthly payment that, when calculated on
a net present value basis to the Commencement
Date using the Incentives Interest Rate,
equals the total amount of Incentives
Obligations plus Change Order Profit Component
due hereunder. For example, if the Galaxy XIII
Spacecraft is a Successfully Injected
Spacecraft and on the Commencement Date all
Transponders on the Spacecraft are and
continue to be Successfully Operating
Transponders for fifteen (15) years, assuming
the maximum [***] for the entire period, the
monthly Incentives Obligations payment would
be [TBD] (the "Nominal Payment"). If the
Incentives Interest Rate is less than [***]
for any given month, the Incentives
Obligations payment will be less than the
Nominal Payment. In such circumstances, the
amount of each month's payment will be
calculated on a net present value basis to the
date of the last month's payment using the
remaining unpaid principal as the new
principal, the Incentives Interest Rate, and a
term equal to the number of months remaining
in the Incentives period. The Parties shall
agree in writing upon an appropriate
allocation of the portion of the Incentive
Obligations which shall be payable for each
Payload on the Spacecraft. The Incentives
Obligations, identified above, shall be
payable in 180 equal and consecutive monthly
installments over a fifteen (15) year life of
the Spacecraft, except as may be adjusted as
set forth herein. Except as provided in
Paragraph 6.4.4, the first installment of each
Incentives Obligations shall be paid on the
Spacecraft's Commencement Date. A sample
schedule matrix showing Incentives
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Obligations payments for fifteen years,
assuming fully successful operation, and with
varying hypothetical interests rates will be
attached to this Agreement as Schedule
6.4.2.1.
The foregoing notwithstanding:
(a) If the Spacecraft is not a Successfully
Injected Spacecraft pursuant to Section
6.4.1.4 but is successfully placed into its
on-station orbit by Xxxxxx during the
"Transfer Period" (defined as the period from
separation of the Launch Vehicle through
on-station acquisition), then, subject to
Section 6.4.2.3, Buyer shall pay the
Incentives Obligations for the Spacecraft in
equal and consecutive monthly installments
over a period of the Spacecraft's On Station
Operational Lifetime (defined at Section
6.4.2.1(b)).
(b) If the Spacecraft is Successfully Injected,
but is not successfully placed into its
on-station orbit by Contractor during the
Transfer Period, then the total amount of the
Incentives Obligations for the Spacecraft
shall be multiplied by a percentile equal to
(i) the On-Station Operational Lifetime
divided by (ii) the Calculated Operational
Lifetime, which percentile shall, in no event,
be greater than one. Subject to Section
6.4.2.3, Buyer shall pay such Incentives
Obligations for the Spacecraft in equal and
consecutive monthly installments over a period
of the Spacecraft's On-Station Operational
Lifetime. The "On Station Operational
Lifetime" shall be mutually determined by
Buyer and Contractor, based on standard
engineering practices, using measured actuals
of the Spacecraft, existing at the end of the
Transfer Period. However, should the
Spacecraft continue to operate successfully
beyond the On-Station Operational Lifetime,
Contractor will continue to earn Incentives
21
Obligations at the same monthly rate up to the
Specified Operational Lifetime.
(c) Finally, if the Spacecraft is not a
Successfully Injected Spacecraft and, in
addition, is not successfully placed into its
on-station orbit during the Transfer Period,
then the total amount of the Incentives
Obligations shall be multiplied by the sum of
(A)(i) the Specified Operational Lifetime,
plus (ii) the On-Station Operational Lifetime,
minus (iii) the Calculated Operational
Lifetime, divided by (B) the Specified
Operational Lifetime, which percentile shall,
in no event, be greater than one. Subject to
Section 6.4.2.3, Buyer shall pay such
Incentives Obligations for the Spacecraft in
equal and consecutive monthly installments
over a period of the Spacecraft's On-Station
Operational Lifetime.
For purposes of any provision of this
Contract, if the Incentives Obligations or
related payment periods are to be
recalculated, the monthly installments due
shall be recalculated to reflect the imputed
interest element that is reflected in the
payment plans specified above.
6.4.2.2 Notwithstanding the foregoing, if at any time
Buyer continues to utilize for
revenue-producing purposes any Transponder
that is not a Successfully Operating
Transponder, then Buyer shall pay a pro rated
amount of the Incentives Obligation
attributable to such Transponder that is
proportionate to the partial benefit that
Buyer derives from such Transponder (the
"Incentive Payment"), all as mutually agreed
upon by the Parties in good faith.
6.4.2.3 Except for any Change Order Profit Component
(which is non-contingent), payment of any
Incentives Obligation shall be contingent upon
the Transponders being Successfully Operating
Transponders, as set forth herein, on the
applicable Payload and shall be pro-rated,
therefore, on a
22
Transponder equivalent-by-Transponder
equivalent basis over the duration of the
applicable term of such Obligation; provided,
however, that beginning on the date, if any,
that any one or more of the Payloads are no
longer a Successfully Operating Payload, as
and when ascertained pursuant to in Section
6.4.2.4 (the "Degraded Payload"), then Buyer's
then-remaining Incentives Obligations for such
Payload(s) (exclusive of any Change Order
Profit Component, as applicable) shall be
deemed extinguished.
6.4.2.4 Whether any Transponder is not Successfully
Operating shall be mutually determined by
Buyer and Contractor, based on relevant
technical data, reports and analyses, and each
Party will make available the other review
upon reasonable request all data used in
making such determination. If Contractor
disagrees with such determination, then the
Parties shall resolve such disagreement in
accordance with the dispute resolution
procedure set forth in Article 33.
6.4.2.5 If the Spacecraft has not been, or is not
being, Properly Operated by the Buyer, and any
Transponders thereof are not Successfully
Operating Transponders, then the Transponders
of the Spacecraft which were Successfully
Operating prior to such improper operation of
the Spacecraft shall be deemed to be
Successfully Operating Transponders for
purposes of Contractor's entitlement to
payment of any applicable Incentives
Obligations for such period as such
Transponders would have reasonably been
predicted to continue to be Successfully
Operating had the Spacecraft and transponder
thereon been Properly Operated by Buyer;
provided, however, that if the failure is the
result of a defect in the deliverable software
or if Buyer demonstrates that the failure of
any Transponder to be Successfully Operating
was not caused primarily, directly or
indirectly, by any act or omission of Buyer,
its agents, Subcontractors, Consultants
23
or representatives of any kind, then the
foregoing provision shall not apply with
respect to such Transponder.
6.4.2.6 Buyer may prepay any portion of the Incentives
Obligations or the Change Order Profit
Component pursuant to the schedule matrix
attached as Exhibit 6.4.2.1. Any remaining
Incentives Obligations so prepaid shall be
subject to refund by Contractor to Buyer, in
any instance and to the extent that Buyer's
obligation to make such payments is relieved
pursuant to this Article 6, as outlined in the
last sentence of Section 6.4.4.1 hereof.
6.4.3 "Spacecraft Retirement Payment". At any time following
the Spacecraft's Delivery, Buyer may, at its option,
cease to utilize the Spacecraft for any purpose;
provided, however, that if Buyer does cease using the
Spacecraft (or if the Spacecraft is rendered a total
loss by virtue of Buyer's failure to Properly Operate
the Spacecraft), then, upon the exercise date of such
option or the declaration of the Spacecraft as a total
loss as applicable, all remaining Incentives Obligations
payments for any Transponder (and any Change Order
Profit Component, if applicable) (subject to the
provisions of Section 6.4.2.3 through 6.4.2.5) shall
become immediately due and payable, all relative to the
Spacecraft; and Buyer shall pay to Contractor such
amounts, in immediately available funds, along with the
outstanding balance of principal and accrued interest on
any other outstanding payment obligations with respect
to the Spacecraft, if any, as of such date. In
determining the amount of principal and interest due,
present value analysis discounted at the Incentives
Interest Rate per annum shall be done for any scheduled
payment stream previously created by the Parties
hereunder. Notwithstanding the foregoing, Buyer shall
have the right to cease using the Spacecraft and remove
it from its orbital location at any time following the
expiration of the Spacecraft's Useful Commercial Life,
without payment of such Spacecraft Retirement Payment.
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6.4.4 Incentive Obligations and Launch Delay
6.4.4.1 If the Spacecraft has not been launched by the
121st day after Delivery of the Spacecraft,
then, except as set forth in Paragraph
6.4.4.2, the first of the equal and
consecutive monthly installment payments for
Incentive Obligations on the Spacecraft shall
be due and payable and the fifteen year period
shall be deemed to have begun for purposes of
this Paragraph 6.4 and such payments shall
commence (the "Pre-Launch Incentive
Payments"). If upon the Commencement Date or
at any time thereafter, any Transponder ceases
to be a successfully Operating Transponder or
a Payload becomes a Degraded Payload, then
Contractor shall deliver to Buyer a refund
(without interest) of that portion of the
Pre-Launch Incentive Payment attributable to
such Transponder or Payload, taking into
account the amount of such time such
Transponder or Payload met the performance
specifications, and Buyer's subsequent
Incentives Obligations shall be reduced
thereafter on a pro rata basis; provided, if
applicable, Buyer shall receive a credit to
the extent of any Pre-Launch Incentive
Payments, to be applied as an offset against
Buyer's consecutive monthly installment
payments for the Incentives Obligations
otherwise due and payable for the months
immediately following the Commencement Date.
6.4.4.2 Subject to the second sentence below, if on or
before the 121st day following the Satellite's
Delivery Date, the Satellite has not been
Launched, then the first of the equal and
consecutive monthly installments payments for
the Incentives Obligations on the Spacecraft
shall be due and payable on the earlier to
occur of the Spacecraft's Commencement Date or
the 241st following such Spacecraft's Date of
Delivery (except that interest on such
Incentives Obligations shall begin to accrue
on the
25
121st day following the Delivery Date, as such
date may be modified herein). If, however, the
Spacecraft has not been Launched due primarily
to (1) Contractor's Fault after Delivery or
(2) Contractor's failure to timely meet the
Spacecraft's scheduled Delivery Date (where
such failure in Delivery is not caused by a
Buyer's Delay) (or a combination of clauses
(1) and (2) immediately above) then the first
of the equal and consecutive monthly
installments of the Incentives Obligations on
the Spacecraft shall be due and payable on,
and interest shall not accrue until, the
Causation Date. If upon Spacecraft
Commencement, or at any time thereafter, any
Transponder on the Spacecraft (which has been
subject to a Launch delay under this Paragraph
6.5.4.2) ceases to be a Successfully Operating
Transponder or a Payload becomes a Degraded
Payload, then Contractor shall deliver to
Buyer a refund (without interest) of that
portion of the Pre-Launch Incentives Payments
attributable to such Transponder or Payload,
taking into account the amount of time such
Transponder or Payload met the performance
specifications, and Buyer's subsequent
Incentives Obligation for the affected Payload
on the Spacecraft shall be reduced thereafter
on a pro rata basis; provided, however, that
Buyer shall receive a credit to the extent of
any Pre-Launch Incentive Payments, such credit
to be applied as an offset against Buyer's
consecutive monthly installment payments for
the Incentives Obligations otherwise due and
payable for the months immediately following
the Commencement Date.
6.4.4.3 If, for any reason other than primarily
Contractor's Fault, the Spacecraft has not
been Launched within 24 months following the
Spacecraft's Delivery Date, then the full
amount of the Incentives Obligations (and any
Change Order Profit Component, if applicable)
26
(including principal and accrued interest, if
any) shall become immediately due and payable
upon the last day of such 24th month. If,
however, the Spacecraft is subsequently
Launched within 54 months of the Delivery Date
and any Transponder of the Spacecraft ceases
to be a Successfully Operating Transponder or
a Payload becomes a Degraded Payload, then
Buyer shall be entitled to a proportionate
refund (without interest) for any Incentives
Obligations (and any Change Order Profit, if
applicable) paid for such Transponder or
Payload, taking into account the amount of
time such Transponder or Payload met the
performance specifications. If, for any
reason, the Satellite has not been Launched
prior to the third anniversary of the Delivery
Date (the "Third Anniversary"), then Buyer
shall have an option (the "LOPS/MOPS Option"),
exercisable in writing received by Contractor
on or before the Third Anniversary, to extend
its right to utilize the Related Services for
the Satellite to the fifth anniversary of the
Delivery Date (the "Extension Period"). If
Buyer does not timely exercise the LOPS/MOPS
Option, then Contractor shall credit any
unused portion of the Baseline Launch Costs
for the Spacecraft against any due and unpaid
payment obligations of Customer under this
Contract (the "LOPS/MOPS Refund"). If Buyer
timely exercises the LOPS/MOPS Option, then
the price associated with the Related Services
(pursuant to Paragraph 6.3) for the Spacecraft
during the Extension Period, shall be
increased by a [***] beginning on the Third
Anniversary. Buyer shall be obligated to pay
such Escalation Amount within 30 days of
receipt of invoice from Contractor. In any
case, Contractor's obligation to provide such
services shall terminate on the date which is
fifty-four (54) months (or as early as
thirty-six (36) months) from the Delivery Date
for the
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Spacecraft. If Contractor's obligation to
provide Launch and Mission Operations Services
is terminated under the immediately preceding
sentence, then Buyer shall receive a LOPS/MOPS
Credit or LOPS/MOPS Refund, as applicable.
6.4.4.4 If, for any reason, other than Contractor's
Fault, a Launch delay occurs between the time
of Launch and the Commencement Date (or if no
Commencement occurs), then the full amount of
the Incentives Obligations (and any Change
Order Profit Component, if applicable) (the
"Recoverable Amount(s)") shall become
immediately due and payable upon the date of
such Launch delay. Contractor shall be
entitled to obtain payment of such Recoverable
Amounts from the proceeds of the launch
insurance obtained by Buyer and shall be
entitled to a priority in obtaining such
proceeds over Buyer and all other parties or
claims; provided, however, that nothing herein
shall relieve Buyer of its obligations to pay
to Contractor all such Recoverable Amounts, as
set forth herein. During the six (6) months
immediately following such Launch delay, Buyer
shall use best reasonable efforts to obtain
the proceeds of its launch insurance to pay
Contractor the Recoverable Amounts, hereunder.
Provided further, however, that if Contractor
does not receive all such Recoverable Amounts
from the proceeds of Buyer's launch insurance
within such six (6) month period, then Buyer
shall be obligated immediately to compensate
Contractor for, and Contractor may also look
to Buyer directly for satisfaction of, all
such Recoverable Amounts.
6.5 HSC shall not be obligated to deliver a Spacecraft to the Launch
Site if there are any outstanding Delinquent Payments owed by HCG
to HSC with respect to such Spacecraft under this contract one
month prior to shipment of such Spacecraft from the HSC facility.
"Delinquent Payments" are
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defined as those payments not received by HSC within thirty (30)
days of the dates due as defined in Paragraphs 6.2.1 and 6.2.2
above. Once HCG has paid HSC for any "Delinquent Payments" and any
interest accrued in accordance with Paragraph 6.10 below, HSC
shall use its reasonable best efforts to ship such Spacecraft to
the Launch Site so as to enable launch on the scheduled Launch
Date and in any event to make shipment as soon as practicable and
no later than sixteen (16) weeks after payment by HCG of such
Delinquent Payments. HCG will be responsible for and will pay to
HSC any reasonable costs and [***] profit on such costs that HSC
may incur as a result of a delay in delivery due to HCG's
Delinquent Payments. Notwithstanding the foregoing, this Section
6.6 shall not relieve Contractor of its obligation to deliver a
Spacecraft, and no "Delinquent Payment" shall be deemed to have
occurred, due to any non-payment by HCG on account of an alleged
breach by Contractor or other dispute as to such payment. In such
event, HCG shall, within thirty (30) days of the date such payment
is due, pay the full amount of such payment into an
interest-bearing escrow account to be established at Bank of
America, Concord, California. Upon settlement of the dispute as to
such payment and alleged breach in accordance with Article 33, the
Party entitled to the amount in escrow shall receive such amount
together with all accrued interest thereon and the other Party
shall pay all costs and fees associated with the escrow of such
amount.
6.6 Invoice
6.6.1 Invoices submitted to HCG for payment shall contain a
cross-reference to the Contract number and the date
specified in Payment Plans of Paragraphs 6.3.1 and
6.3.2. Contractor shall submit one (1) original invoice
for each Spacecraft in each instance to:
Xxxxxx Communications Galaxy, Inc.
X.X. Xxx 0000 Xxxx.
X00/0X000
Xxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Accounts Payable - Xxxx Xxxxxx
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6.6.2 Invoice amounts, as specified in Paragraph 6.3, provide
for xxxxxxxx to be submitted by the 15th day of each
month and shall be paid by HCG within thirty (30) days
upon receipt of the invoice by HCG.
6.7 Late Payments
In the event of a failure by the Buyer or the Contractor to make a
payment required pursuant to this Contract, the delinquent Party
shall pay interest at the rate of [***] on the overdue amount for
the number of days that the payment is overdue, commencing on the
date payment is due and terminating on the date the overdue amount
is paid in full. Notwithstanding the foregoing, this Section 6.9
shall not apply to any payment made into escrow in accordance with
Section 29.4.
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ARTICLE 7. SPACECRAFT LAUNCH DATE
7.1.1 Launch Semester. A six (6) month period of time in which
a launch will occur, the first day of which shall be
thirty (30) days after the Delivery Date under Section
4.1 herein (forty-five (45) days after Delivery Date if
a Sea Launch is utilized).
7.1.2 Launch Period. A ninety (90) day period of time within a
launch Semester during which a launch will be scheduled
to occur as shall be notified by Buyer to Contractor.
7.1.3 Launch Slot Definition. A thirty (30) day period of time
within a Launch Period during which a Launch will occur.
The Launch Slot within the Launch Period shall be
notified by Buyer to Contractor not later than one (1)
year prior to the first day of the applicable Launch
Period and, once established, shall become an express
term of this Contract.
7.1.4 Launch Date Defined. The calendar date within the Launch
Slot during which a Launch will occur. The Launch Date
within the Launch Slot shall be notified by Buyer to
Contractor no later than six (6) months prior to the
first day of the applicable Launch Slot and once
established, shall become an express term of this
Contract.
7.1.5 Launch Window Definition. A period of time within the
Launch Date during which a Launch can occur and meet
mission requirements. The Launch Window shall be
established by notified by Buyer or Contractor no later
than forty-five (45) days prior to the Launch Date and
once established, shall become an express term of this
Contract.
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7.1.6 Adjustment of dates. The time periods as delineated in
Sections 7.1.2 through 7.1.5 shall be adjusted to
reflect applicable launch provider contracts, consistent
with ordinary practices of such providers as familiar to
the Parties.
7.2 The Contract Price set forth in Paragraph 5.1 includes Contractor
furnished launch support services, post launch support services,
in-orbit test support services, and post title transfer monitoring
and command of each Spacecraft if Buyer invokes the remedial
provisions of Article 3, Paragraph 3.3.
7.3 No less than sixteen (16) weeks prior to the launch date, Buyer
shall order Contractor by notice in writing to commence launch
campaign preparations.
7.4 If a Spacecraft Launch Date defined in Paragraph 7.1 is postponed
for any reason other than the sole fault of Contractor, excluding
any postponement due to an Excusable Delay as defined in Article
12, the Parties shall negotiate in good faith to determine an
equitable adjustment to the price and affected terms of this
Contract, if any. If the cost of supplies or materials made
obsolete or excess as a result of a such postponement is included
in the equitable adjustment, HCG shall have the right to prescribe
the manner of disposition of such supplies or materials. Costs
included in the equitable adjustment shall include but not be
limited to: support personnel standby; extra travel expenses;
transport termination or rescheduling fees and a profit rate of
[***].
7.5 Notwithstanding the foregoing, if a Spacecraft Launch Date defined
in Paragraph 7.1 is postponed by either Party due to an Excusable
Delay, as defined in Paragraph 12.1 herein, the terms of Article
12 herein shall govern such postponement.
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ARTICLE 8. BUYER-FURNISHED ITEMS
8.1 The following facilities, equipment, and services
("Buyer-Furnished Items") shall be furnished by Buyer at no cost
to Contractor, in a timely manner, so as to enable Contractor to
perform the work described herein.
1) Facilities (buildings, power, phones and data lines) and
enumerated services: (i) transportation of a Spacecraft,
Contractor related test equipment and personnel within
the Launch Site and if a Sea Launch is provided, between
the Integration Facility (Port of Long Beach) and the
Launch Site (vicinity of Christmas Islands) unless
Article 4, Paragraph 4.2.1 conditions apply (ii) storage
of a Spacecraft and related test equipment for all force
majeure events (which prevent Buyer from supplying
Buyer-Furnished Items) and/or launch vehicle delays
(iii) fueling (iv) photographs, (v) interface hardware
at the Launch Site and (vi) earth station facilities for
IOT including appropriate RF facilities, but not
specialized test equipment.
2) Reservation and procurement of launch services and
associated services.
Contractor will provide preliminary requirements of Item 1 above
to Buyer no later than 6 months after the Effective Date of this
Contract to assist Buyer's compliance with this Article, which
shall be consistent with what Contractor has generally required
Buyer to secure for previous launches with the same launch
provider. Subject to the confidentiality requirements of the
applicable agreements, Contractor will be allowed to review the
list of basic and optional service which Buyer has procured in
Buyer's contract(s) for launch services.
In the event that the Buyer-Furnished Items set forth above are
not suitable for the intended purpose or are not provided in a
timely manner, excluding any excusable delay as defined in Article
12 herein, then HCG shall be liable to Contractor for all
applicable costs which shall include but not be limited to;
procurement or rental of suitable substitutes for such Buyer
Furnished Items
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at no higher than market prices; with title and possession of all
such procured items reverting to Buyer after Contractor's use
under this Agreement; support personnel standby; extra travel
expenses; transport termination or rescheduling fees; and
installation/de-installation of communication links to the Launch
Site and a profit rate of [***].
8.2 Contractor shall maintain a system to ensure the adequate control
and protection of HCG's Property. For the purposes of this
Article, HCG Property shall be defined as any item which HCG
provides to the Contractor or directs Contractor to maintain in
storage or an inventory account under this Contract. Upon receipt
of notification from HCG, the Contractor shall complete and return
within fifteen (15) working days a Property System Certification
describing the system that will be used to control HCG's Property.
Additionally, HCG's representative may, at its option and at no
additional cost to HCG, conduct surveillance at a reasonable time
of the Contractor's Property Control System as HCG deems necessary
to assure compliance with the terms and conditions of this
Article.
8.3 Contractor shall, commencing with its receipt and during its
custody or the use of any HCG's Property, accomplish the
following:
A. Establish and maintain inventory records and make such
records available for review upon HCG's request;
B. Provide the necessary precautions to guard against
damage from handling and deterioration during storage;
C. Perform periodic inspection to assure adequacy of
storage conditions; and
D. Ensure that HCG's Property is used only for performing
this Contract, unless otherwise provided in this Article
or approved by the cognizant contracting officer.
8.4 Contractor shall not modify, add-on, or replace any HCG Property
without
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HCG's prior written authorization. Contractor shall immediately
report to HCG's contract representative the loss of any HCG
Property or any such property found damaged, malfunctioning, or
otherwise unsuitable for use. The Contractor shall determine and
report the probable cause and necessity for withholding such
property from use.
8.5 Upon termination or completion of this Contract, and upon request
by HCG, the Contractor shall perform a physical inventory,
adequate for accountability and disposition purposes, of all HCG's
Property applicable to such terminated or completed agreement and
shall cause its subcontractors and suppliers at every tier to do
likewise.
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ARTICLE 9. INSPECTION AND ACCEPTANCE
9.1 Inspection of all Hardware, documentation and Contractor's
services provided hereunder shall take place in accordance with
the terms of Article 10, entitled "Access to Work in Process,"
herein.
9.2 Preliminary Acceptance of a Spacecraft shall occur when all
in-plant tests required to be performed by Contractor for the
Hardware have been completed and the Contractor has demonstrated
at the pre-ship review that the Hardware and contract deliverables
meet the requirements of this Contract , at which time HCG shall
accept the Hardware on a Preliminary basis in writing within five
(5) business days subject to completion of Launch Integration
Facility and/or Launch Site tests specified in Exhibit C, Galaxy
XIII/XIV Spacecraft Integration Test Plan. If the Hardware is
unacceptable, Contractor shall promptly and at its expense,
rectify the unsatisfactory Hardware and resubmit the Hardware for
acceptance by HCG as provided above. In either case, the Hardware
shall be deemed accepted upon failure of HCG to notify Contractor
in writing within the above five (5) business days that it is
accepted, rejected or that in HCG's opinion further corrective
action must be taken by the Contractor.
9.3 Final Acceptance of a Spacecraft shall occur upon the earliest of
i) the completion of In-orbit Testing in accordance with Exhibit
A, ii) fifty (50) days after Intentional Ignition (as defined in
Article 16, Paragraph 16.2 of this Contract) or iii) immediately
before a Partial Failure, Total Failure or Total Constructive
Failure (as each such term is defined in the applicable Xxxxxx
Communications Galaxy Launch Insurance Contract or successor
contract), which occurs at or after Intentional Ignition. HCG
shall have access to Launch Integration Facility and/or Launch
Site test results during the launch campaign in accordance with
the provisions of Article 10, Paragraph 10.1 "Access to Work in
Process."
9.4 With respect to deliverable Hardware which HCG orders Contractor
to store, the Hardware shall be stored at a location to be
negotiated and Final Acceptance shall occur at the end of the
[***] warranty period as set
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forth in Article 16 herein, entitled "Spacecraft Warranty," or
such other event mutually agreed upon between the Parties.
9.5 Non-Conforming Products.
9.5.1 If (i) the Spacecraft does not meet its weight
requirements and (ii) Buyer will be required to pay for
additional weight from the launch provider in order to
achieve the Specified Operational Lifetime without
delaying the placing of the Spacecraft in its orbital
location by more than fifteen (15) additional days, then
Contractor shall reimburse Buyer for such additional
payments up to [***].
9.5.2 Any Preliminary Acceptance or Final Acceptance by Buyer
of Spacecraft that does not conform to the requirements
of this Contract (whether or not related to weight)
shall not affect the Parties rights and obligations
under Paragraph 6.4 ("Incentive Obligations") with
respect to a Spacecraft or other deliverable that does
not perform to the specifications of this Contract.
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ARTICLE 10. ACCESS TO WORK IN PROCESS
10.1 Contractor shall afford HCG access to work in progress being
performed at Contractor's plants and at the Launch Integration
Facility and/or Launch Site pursuant to this Contract, including
technical data, documentation, and hardware, at reasonable times
during the period of Contract performance, provided such access
does not unreasonably interfere with such work or require the
disclosure of Contractor's proprietary information to third
Parties and subject to (i) HSC's Security Procedures and (ii) U.S.
or Foreign Government Regulations.
10.2 To the extent that the Contractor's major subcontracts
permit, Contractor shall afford HCG access to work being
performed pursuant to this Contract in subcontractor's
plants in the company of Contractor's representatives.
Contractor shall exert reasonable effort in subcontracting
to obtain permission for HCG access to those major
subcontractors' plants. Major subcontracts are defined as
those subcontracts in excess of [***].
10.3 HCG shall have the right to witness on a non-interference
basis all system and subsystem tests scheduled by Contractor
in connection with the performance of work under this
Contract. If the system or subsystem tests are performed by
a subcontractor of HSC, HSC shall take all reasonable steps
to secure HCG's access to the subcontractor's facility or
facilities. HCG's right to witness testing shall be on a
non-interference basis with the subcontractor's activities
and subject to (i) any subcontractor security procedures and
(ii) U.S. or Foreign Government Regulations.
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ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY
11.1 Subject to provisions of Article 3 entitled "Spacecraft,
Documentation and Related Services," Article 5 entitled "Price"
and Article 12 entitled "Excusable Delays," Buyer may issue a
written notice of default with respect to a particular Spacecraft
to Contractor if: (i) Contractor fails [***] as confirmed in
writing by the Contractor's and Buyer's Senior Executives and such
failure may result in a delay in delivery of more than [***]; or
(ii) the delivery of such Spacecraft or Contractor's performance
of any material obligation under the Contract has been delayed due
to the primary fault of the Contractor for more than [***].
Subsequent to the issuance of said notice, the Buyer may terminate
this Contract with respect to such Spacecraft and thereafter elect
remedies as identified in Paragraph 11.2 below.
11.2 If Buyer terminates this Contract, in whole or in part, as
provided in Paragraph 11.1 herein, Buyer, at its sole option,
shall either: (i) take title to all deliverable hardware, all
hardware in process which ultimately would have been deliverable
by Contractor and all drawings and data produced by Contractor,
the cost of which has been charged or becomes chargeable to any
work terminated plus all reasonable reprocurement costs up to a
maximum amount per Spacecraft of: (a) [***] in the event of a
termination of this Contract solely with respect to Documentation
and/or Related Services for such Spacecraft or (b) [***] with
respect to a complete termination of the Contract with respect to
such Spacecraft; or (ii) receive a refund of all payments
submitted to Contractor by the Buyer for performance of this
Contract for the portion terminated by Buyer and Contractor shall
retain title and possession to all terminated Hardware which
ultimately would have been deliverable by Contractor. Contractor
shall continue the performance of this Contract to the extent not
terminated under the provisions of this Article.
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11.3 Notwithstanding the other provisions of this Article, there will
be no termination for default after Intentional Ignition of the
Launch Vehicle for the applicable Spacecraft.
11.4 If, after termination of this Contract (or portion thereof) under
the provisions of this Article, it is determined for any reason
that Contractor was not in default under the provisions of this
Article, or that the default was excusable under the provision of
Article 12 entitled "Excusable Delays," the rights and obligations
of the Parties shall be the same as if Notice of Termination had
been issued pursuant to Article 14, entitled "Termination for
Convenience" or pursuant to Article 12, Paragraph 12.4, as the
case may be.
11.5 Except as otherwise provided in the Contract, the rights and
remedies of the Parties provided in this Article shall be in lieu
of any other rights and remedies provided by law or in equity in
the event Contractor or Buyer fails to meet its obligations under
this Contract. Buyer shall have no other rights or remedies for
late delivery of a Spacecraft, Documentation and Related Services
under this Contract except for those rights and remedies expressly
provided for in this Contract.
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ARTICLE 12. EXCUSABLE DELAYS
12.1 If either Party or a subcontractor of either Party is delayed by
act of God, or of the public enemy, fire, flood, earthquake,
epidemic, quarantine restriction, strike, walkout, freight
embargo, or any other event which is beyond their control or does
not arise from the acts or omissions of either Party or its
respective subcontractors, said delay shall constitute an
excusable delay ("Force Majeure Events"). In the event of an
excusable delay, there shall be an equitable adjustment to the
time of delivery and/or performance stated in this Contract. The
affected Party shall give notice in writing to the other Party
within 10 working days that an excusable delay condition exists
after learning of such delay. Such notification shall include the
cause of the excusable delay, the expected length of the excusable
delay, and alternate plans to mitigate the effect of the excusable
delay.
12.2 If the affected Party, as defined in Paragraph 12.1 above,
requests or experiences, on a cumulative basis, excusable delay(s)
greater than [***], the Parties shall enter into good faith
negotiations to develop a mutual course of action and/or an
equitable adjustment to the affected terms of this Agreement.
12.3 Notwithstanding the foregoing, if the Launch Date for a particular
Spacecraft defined in Paragraph 7.1 herein is delayed due to a
Force Majeure event affecting HCG's ability to furnish any item to
be supplied by it under Article 8 hereof, HCG shall reimburse
Contractor for all reasonable expenses incurred as a result,
including without limitation expenses for: support personnel
standby; extra travel expenses; and transport termination or
rescheduling fees.
12.4 Notwithstanding anything herein to the contrary, in the event that
a Force Majeure Event occurs and continues to delay or prevent
performance by Contractor of its obligations as to either or both
Spacecraft for a period of twelve (12) months or longer from the
initial occurrence of such Force Majeure Event, then Buyer shall
have the right to terminate this Contract
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with respect to the affected Spacecraft upon thirty (30) days
written notice. In the event of a termination under this Paragraph
12.4, Buyer shall be entitled to a refund of all payments made to
Contractor with respect to the affected Spacecraft, and Contractor
shall retain title to all Deliverables produced by Contractor
under this Contract with respect to the affected Spacecraft.
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ARTICLE 13. AMENDMENTS
The terms and provisions of this Contract shall not be amended or
modified without specific written provision to that effect, signed by
the Authorized Representative(s) of both Parties. These Authorized
Representative(s) are identified in Article 27, "Notices and Authorized
Representative(s)." No oral statement of any person shall in any manner
or degree modify or otherwise affect the terms and provisions of this
Contract.
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ARTICLE 14. TERMINATION FOR CONVENIENCE
14.1 Buyer may terminate all or any portion of the work to be performed
pursuant to this Contract with respect to one or both of the
Spacecraft upon five (5) days written notice to Contractor. Buyer
shall pay Contractor, in the event of such termination,
termination liability equaling all costs (as defined in Paragraph
14.5 below) expended by Contractor for all work done up to the
date of termination, settlements with subcontractors for work
performed prior to termination, and Contractor's reasonable costs
related to termination which would not otherwise have been
incurred plus a [***] profit for the applicable termination costs
and charges, but in no event more than the maximum termination
liability that is set forth in Exhibit F hereto, as of date of
termination, less amounts previously paid by Buyer to Contractor
pursuant to the Payment Article. Buyer shall pay the unpaid
balance of such termination liability within thirty (30) days of
Buyer's receipt of certification of Contractor's costs. In the
event that Buyer has paid to Contractor any amount in excess of
such termination liability, then Contractor shall refund such
excess amount to Buyer within thirty (30) days of certification of
costs. In no event shall the termination liability exceed either
the Contract price defined in Article 5 herein or the amount
specified in Exhibit F.
14.2 In the event of termination by Buyer hereunder, and upon payment
in full of all amount due (if any) under 14.1 above, all tangible
work in process inventories generated under this Contract, with
respect to the terminated work, shall become the property of
Buyer. Buyer shall direct disposition of such property within
sixty (60) days from date of termination (which disposition may
include requesting Contractor to undertake mitigation efforts in
accordance with Paragraph 14.4 below) or such other date as agreed
to by the Parties. Final acceptance and transfer of title for all
tangible work in process inventories to be delivered to the Buyer
in the event of termination shall be the subject of separate
negotiations between Buyer and Contractor and shall be subject to
applicable U.S. Government Export Regulations. The expense of
disposition shall be borne by HCG.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
44
14.3 In the event of partial termination of the Contract, the Contract
Price shall be adjusted accordingly.
14.4 At HCG's request, Contractor shall use reasonable best efforts to
identify an alternate use (i.e. sale to third Parties and/or
internal utilization) for any Hardware affected by a termination
under this Article 14, the Contractor shall submit a proposal to
HCG, which, at a minimum, defines (i) the applicable Hardware,
(ii) the intended use of the Hardware, (iii) the original
acquisition cost/value of the applicable Hardware, as available,
and (iv) the sale/transfer payment(s) to be received by HCG.
Contractor shall use its reasonable best efforts to obtain fair
market value for the applicable Hardware. HCG, at its sole option,
may accept or reject the proposal submitted by Contractor. In the
event that HCG accepts the proposal submitted by Contractor,
payment by Contractor to HCG of the agreed upon payment value
shall occur within thirty (30) days of the sale/transfer of the
applicable Hardware, or such other payment period as mutually
accepted between the Parties. If the Contractor's proposal is
rejected by HCG or if Contractor is unable to find any alternative
use within two (2) years of being requested to do so, then Title
to the applicable Hardware shall be vested as stated in Paragraph
14.2 above.
14.5 As used in this Article 14, Contractor's "Costs" shall mean costs
actually incurred by Contractor in performing its obligations
hereunder (including G&A costs not to exceed [***] of such costs)
all such costs to be determined in accordance with Contractor's
normal accounting practices. Contractor shall provide to Buyer an
invoice certified by a financial officer of the company stating
Contractor claim for costs properly includes only the costs
specified in this paragraph. In the event Buyer desires
independent verification of claim, Buyer may request to have
independent certified public accountants (CPA) audit costs
incurred by Contractor and report to the Parties. Such audit shall
be at Buyer's expense unless such audit shows Contractor's costs
to have been overstated (in which event Contractor shall bear the
audit expense). Such audit shall constitute a final determination
of actual costs notwithstanding the provision of Article 33;
provided that, if the costs determined by such report exceed
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
45
the amount of Contractor's termination claim, Buyer shall
only be obliged to pay the amount of Contractor's termination
claim.
14.6 Contractor shall use its reasonable best efforts to include in its
subcontracts for work hereunder on terms that will enable
Contractor to terminate such subcontracts in a manner consistent
with this Article 14.
46
ARTICLE 15. TITLE AND RISK OF LOSS
15.1 Title and risk of loss or damage in respect of all items to be
delivered under this Contract shall pass from Contractor to HCG as
follows:
15.1.1 Risk of loss of the Spacecraft and title shall pass from
Contractor to HCG upon the earliest of: (i) the
completion of In-orbit Testing in accordance with
Exhibit A, (ii) fifty (50) days after Intentional
Ignition (as defined in Article 15, Paragraph 15.2 of
this contract) or (iii) immediately before a Partial
Failure, Total Failure or Total Constructive Failure (as
each such term is defined in the applicable Xxxxxx
Communications Galaxy Launch Insurance Contract or
successor contract) which occurs at or after Intentional
Ignition.
15.1.2 In respect to a Spacecraft which HCG directs Contractor
to store, title and risk of loss shall remain with the
Contractor until Final Acceptance as specified in
Article 9.4 herein.
15.1.3 Notwithstanding Paragraph 15.1.2 above, upon removal of
the Spacecraft from storage, the Contractor shall not
assume risk of loss relative to a Battery which HCG
directs Contractor to replace after the five-year
storage period which disqualifies the battery for a
15-year mission. In that event, Article 30 herein
entitled "Effects of Storage on Batteries," shall apply.
15.1.4 "Risk of Loss" for purposes of this Article 15 is
limited to the responsibility and liability for a
Partial Failure, Total Failure or Total Constructive
Failure (as each such term is as defined in the
applicable Xxxxxx Communications Galaxy Launch Insurance
Contract or successor contract). Responsibility and
liability for the Spacecraft prior to intentional
ignition is with the Contractor.
47
15.2 In the event of damage to or destruction of Hardware when
Contractor shall have risk of loss, Contractor shall repair or
replace (at Contractor's option) said Hardware. The Buyer shall
participate in the decision to repair or replace said Hardware and
the provisions of Article 16 shall apply.
15.3 Insurance Provided By Contractor. The Contractor shall, at its own
expense, provide and maintain the following insurance:
15.3.1 "All Risk" Insurance
(i) The Policy for "All Risks" insurance shall insure
the Contractor and name Buyer as additional insured and
Loss Payee as their interest may appear.
(ii) The insurance shall cover the Spacecraft while in
or about the Contractor's and subcontractors' plants,
while at other premises which may be used or operated by
the Contractor for construction or storage purposes,
while in transit, or while at the Designated Launch Site
until Intentional Ignition, or while Spacecraft is
stored by the Contractor at HCG's direction until Final
Acceptance as specified in Article 9.4.
(iii) Such insurance shall be sufficient to cover the
full replacement value or selling price of the
Spacecraft and may be issued with deductibles, for which
losses shall be borne by the Contractor.
(iv) This "All Risk" insurance shall be in force from
the time of the Effective Date of this Contract and
shall continue in effect until Contractor's liabilities
have expired at intentional ignition.
48
15.3.2 Third Party Liability Insurance
(i) The Policy(s) for Third Party Liability insurance
shall be written on forms the Buyer may review and shall
include Buyer as additional insured.
(ii) This Third Party Liability insurance shall be in
force from the time of the Effective Date of this
Contract and shall continue in effect until Contractor's
liabilities have expired at intentional ignition.
(iii) The Policy(s) may be issued with deductibles, for
which losses shall be borne by the Contractor.
15.4 General Insurance Requirements
(i) The Contractor shall, upon request, provide to the
Buyer certificates of the Insurance Policy(s) issued by
an agent of the Contractor's Insurer(s) for coverage
which the Contractor is required to provide pursuant to
the provisions of these Articles.
(ii) All Policies of insurance to be provided and
maintained pursuant to these Articles shall require the
insurer(s) or its authorized agent(s) to give each
insured not less than thirty (30) days prior written
notice in the event of cancellation or any proposed
material change in such policies, except for ten (10)
days prior written notice in the event of cancellation
due to non-payment of premium.
(iii) The Contractor may also acquire and maintain, at
its own expense, other insurance for amounts and perils,
and upon such terms, conditions and deductibles as it
may deem advisable or necessary to cover any loss or
damage to persons or property that may occur as a result
of the performance of this Contract.
49
ARTICLE 16. SPACECRAFT WARRANTY
16.1 Contractor warrants that a Spacecraft, upon successful completion
of Spacecraft in plant Tests pursuant to Article 9 herein, shall
be free from any defects in material or workmanship and shall
conform to the applicable specifications and drawings, as
evidenced by the acceptance criteria in Exhibits A-D herein.
16.2 This warranty shall start from the date of Preliminary Acceptance
of a Spacecraft as stated in Article 9 herein, entitled
"Inspection and Acceptance," and continue for a period of [***],
or until the Intentional Ignition (defined herein as the
"Intentional Ignition of any rocket motor on the first stage of
the launch vehicle") of the applicable launch vehicle, whichever
is earlier. [***] ("Warranty Time Period"). Contractor shall not
be liable in Contract or in Tort for any incidental, special,
contingent, or consequential damages.
16.3 Buyer shall have the right at any time during the Warranty Time
Period to reject any goods not conforming to this warranty and
require that Contractor, at its expense, correct or replace (at
Contractor's option) such goods with conforming goods. If any time
during the Warranty Time Period Contractor fails to correct or
replace such defective goods and fails to initiate reasonable
efforts to correct or replace such defective goods within a
reasonable period after written notification and authorization
from Buyer, Buyer may then, by contract or otherwise, correct or
replace such defective goods and equitably adjust the price.
16.4 Except as otherwise expressly agreed upon in this Contract,
Contractor shall have no liability, or responsibility in Contract
or in Tort with respect to a Spacecraft after Intentional Ignition
(as defined in Paragraph 16.2) of the launch vehicle.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
50
16.5 THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR
MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE REMEDY
FOR FAILURE BY CONTRACTOR TO FURNISH A SPACECRAFT THAT IS FREE
FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP AS SET FORTH IN
PARAGRAPH 16.1 ABOVE. ALL OTHER WARRANTIES OR CONDITIONS IMPLIED
BY ANY OTHER STATUTORY ENACTMENT OR RULE OF LAW WHATSOEVER ARE
EXPRESSLY EXCLUDED AND DISCLAIMED. CONTRACTOR AND ITS
SUBCONTRACTORS SHALL HAVE NO LIABILITY IN CONTRACT OR IN TORT
(INCLUDING NEGLIGENCE) OR IN ANY OTHER MANNER WHATSOEVER FOR A
SPACECRAFT AFTER INTENTIONAL IGNITION OTHER THAN AS EXPRESSLY
PROVIDED IN THIS CONTRACT.
16.6 Any limitations on warranties, liability or requests for
indemnification from liability for the malfunction of delivered
items which are imposed upon the Contractor by its various
equipment suppliers shall be passed on directly to Buyer provided,
however, nothing therein shall decrease or invalidate the rights
of the Buyer during, or the length of, the Warranty Time Period as
stated in this Article.
51
ARTICLE 17. INDEMNIFICATION
17.1 Each Party shall indemnify and hold the other and/or all its
officers, agents, servants, subsidiaries, affiliates, parent
companies and employees, or any of them, harmless from any
liability or expense in connection herewith on account of damage
to property (excepting other Spacecraft in flight) and injuries,
including death, to all persons including but not limited to
employees of the Parties, and their subcontractors, and of all
other persons performing any part of the work hereunder, arising
from any occurrence caused by an negligent act or omission of the
indemnifying Party or its subcontractors, or any of them in
connection with the work to be performed by such Party under this
Contract. The indemnifying Party shall have the right, but not the
obligation, to participate in any legal or other proceedings
concerning claims for which it is indemnifying under this Article
17 and to direct the defense of such claims. However, with respect
to such legal or other proceedings, the indemnifying Party shall
pay all expenses (including attorneys fees incurred by the
indemnified Party in connection with such legal or other
proceedings) and satisfy all judgments, costs or other awards
which may be incurred by or rendered against the indemnified
Party. The indemnifying Party shall not settle any such claim,
legal or other proceeding without first giving thirty (30) days
prior written notice of the Terms and Conditions of such
settlement and obtaining the consent of the indemnified Party,
which consent shall not be unreasonably withheld or delayed.
17.2 Notwithstanding the foregoing, neither the Contractor nor its
subcontractors shall have any liability in Contract or in Tort,
for damages to or caused by a Spacecraft after Intentional
Ignition (as defined in Paragraph 16.2), and Buyer shall obtain
waivers of subrogation rights from Buyer's insurers against
Contractor, and affiliates and subcontractors of Contractor.
52
ARTICLE 1 SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE
18.1 If a Spacecraft is not launched within six (6) months after its
Preliminary Acceptance per Article 9, entitled "Inspection and
Acceptance," and is subsequently ordered to be launched within
[***] following its Preliminary Acceptance, it is agreed that such
Spacecraft shall be returned at Contractor's option at
Contractor's expense, to Contractor's facility for inspection and
refurbishment. Any inspection and refurbishment undertaken by
Contractor to meet the requirements of Article 16 entitled,
"Spacecraft Warranty," shall be at Contractor's expense, including
Spacecraft transit insurance.
18.2 If a Spacecraft is not launched within six (6) months after its
Preliminary Acceptance and is subsequently ordered to be launched
later than [***] following its Preliminary Acceptance, it is
agreed that such Spacecraft shall be returned, at Buyer's expense,
to Contractor's facility for inspection and refurbishment. An
equitable adjustment to Contract price for such inspection and
refurbishment, to include a [***] profit component shall be
negotiated by the Parties unless the fact that the launch is
scheduled for later than [***] is due to Contractor's negligent
acts or omissions.
18.3 If a Spacecraft is returned to Contractor's facility for
inspection and refurbishment per the terms of Paragraph 18.2
above, all charges to return such Spacecraft to the Launch Site
shall be borne by Buyer.
18.4 If a Spacecraft has not been launched within [***] after its
preliminary Acceptance, neither Party shall be further obligated
to the other with respect to such Spacecraft. Disposition of such
Spacecraft shall be at the option of Buyer with costs of such
disposition to be borne by Buyer.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
53
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY
19.1 Contractor shall indemnify and hold Buyer harmless against any
liability or expense as a result of claims, actions, or
proceedings against Buyer alleging the infringement of any
trademarks, United States Copyright or mask work, United States
Letters Patent, any other intellectual property rights, by any
article fabricated by Contractor and delivered to Buyer pursuant
to this Contract as set forth below.
19.2 Contractor agrees to defend at its own expense any claim, action,
proceeding or request for royalty payments or any claim for
equitable relief or damages against Buyer, its officers,
employees, agents, or subsidiaries based on an allegation that the
manufacture of any item under this Contract or the use, lease, or
sale thereof infringes any United States Letters Patent trademark,
United States Copyright or mask work or any other intellectual
property right, and to pay any royalties and other costs related
to the settlement of such claim, action, proceeding or request and
to pay the costs and damages, including reasonable attorney's fees
finally awarded as the result of any claim, action or proceeding
based on such request, provided that Contractor is given prompt
written notice of such request or claim by Buyer and given
authority and such assistance and information as is available to
Buyer for resisting such request or for the defense of such claim,
action or proceeding. Any such assistance or information which is
furnished by Buyer at the written request of Contractor is to be
at Contractor's expense.
19.3 In the event that, as a result of any such claim, action,
proceeding or request: a) prior to delivery, the manufacture of
any item is enjoined; or b) after delivery, the use, lease or sale
thereof is enjoined, Contractor agrees to utilize its best effort
to either: (1) negotiate a license or other agreement with
plaintiff so that such item is no longer infringing; or (2) modify
such item suitably or substitute a suitable item therefore, which
modified or substituted item is not subject to such injunction,
and to extend the provisions of this Article thereto. In the event
that neither of the foregoing alternatives is suitably
accomplished by Contractor, Contractor shall be
54
liable to Buyer for Buyer's additional costs and damages arising
as a result of such injunction; provided however, that in no event
shall Contractor's entire liability under this Article exceed
[***] for each Spacecraft. The existence of one or more claims,
actions, proceedings or lawsuits shall not extend such amount.
19.4 The foregoing indemnity shall not apply to any infringement
resulting from a modification or addition, by other than
Contractor, to an item after delivery.
19.5 If the infringement results from the compliance by Contractor with
the Buyer's directed designs, specifications or instructions, the
Buyer will defend or settle, at its expense, any such suit against
the Contractor.
19.6 The foregoing constitutes the Parties' entire obligation with
respect to claims for infringement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
55
ARTICLE 20. RIGHTS IN INVENTIONS
20.1 As used in this Contract, "Program Invention" shall mean any
invention, discovery or improvement conceived of and first reduced
to practice in the performance of Work under this Contract.
Information relating to Inventions shall be treated as proprietary
information in accordance with the provisions of this Contract.
Rights to inventions conceived solely by Contractor or its
employees shall vest completely with Contractor.
20.2 Contractor shall be the owner of all Program Inventions invented
solely by Contractor. Contractor grants Buyer a royalty-free,
nonexclusive license in Program Inventions to use Program
Inventions solely for the purposes of maintenance and operation of
a Spacecraft and delivered Equipment. Contractor agrees that it
will not revoke such license if Buyer is in compliance with the
terms of the license.
20.3.1 In the case of joint Inventions, that is, inventions
conceived jointly by one or more employees of both
Parties hereto, each Party shall have an equal,
undivided one-half interest in and to such joint
Inventions, as well as in and to patent applications and
patents thereon in all countries.
20.3.2 In the case of such joint Inventions, Contractor shall
have the first right of election to file patent
applications in any country, and Buyer shall have a
second right of election. Each Party in turn shall make
its election at the earliest practicable time, and shall
notify the other Party of its decision.
20.3.3 The expenses for preparing, filing and securing each
joint Invention patent application, and for issuance of
the respective patent shall be borne by the Party which
prepares and files the application. The other Party
shall furnish the filing Party with all documents or
other assistance that may be necessary for the filing
and prosecution of each application. Where such joint
Invention application for patent is filed by either
Party in a
56
country which requires the payment of taxes, annuities,
maintenance fees or other charges on a pending
application or on an issued patent, the Party which
files the application shall, prior to filing, request
the other Party to indicate whether it will agree to pay
one-half of such taxes, annuities, maintenance fees or
other charges. If within sixty (60) days of receiving
such request, the non-filing Party fails to assume in
writing the obligation to pay its proportionate share of
such taxes, annuities, maintenance fees or other
charges, or if either Party subsequently fails to
continue such payments within sixty (60) days of demand,
it shall forthwith relinquish to the other Party,
providing that said other Party continues such payments,
its interest in such application and patent and the
Invention disclosed therein, subject, however, to
retention of a paid-up, non-exclusive, non-assignable
license in favor of the relinquishing Party, its parent,
and any subsidiary thereof to make, use, lease and sell
apparatus and/or methods under said application and
patent.
20.4 Each owner of a jointly-owned patent application or patent
resulting therefrom shall, provided that it shall have fulfilled
its obligation, if any, to pay its share of taxes, annuities,
maintenance fees and other charges on such pending application or
patent, have the right to grant non-exclusive licenses thereunder
and to retain any consideration that it may receive therefor
without obligation to account therefor to the other Party. In
connection therewith, each of the Parties hereby consents to the
granting of such non-exclusive licenses by the other Party and
also agrees not to assert any claim with respect to the licensed
application or patent against any licensee of the other Party
thereunder during the term of any such license.
20.5 No sale or lease hereunder shall convey any license by
implication, estoppel or otherwise, under any proprietary or
patent rights of Contractor, to practice any process with such
product or part, or, for the combination of such product or part
with any other product or part.
57
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS
Except as provided in Article 20, neither Party shall acquire any
rights with respect to any patent, trademark, trade secret, or any
other intellectual property developed or used by the other Party in the
performance of this Contract.
58
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE
Proprietary Information shall mean any data and information received by
one Party from the other Party, which is identified as proprietary in
accordance with either of the following methods: (i) if in writing, it
shall be marked by the disclosing Party with an appropriate proprietary
legend, or (ii) if disclosed orally, it shall be presented by the
disclosing Party as Proprietary at the time of disclosure and shall be
confirmed by the disclosing Party as Proprietary Information in writing
within fifteen (15) days of its initial oral disclosure.
22.1 The receiving Party agrees to protect such data and information
with the same degree of care which the receiving Party uses to
protect its own confidential data and information;
22.2 The receiving Party shall not disclose or have disclosed to third
Parties, in any manner or form, or otherwise publish such data and
information so long as it remains proprietary without the explicit
authorization of the other Party or except as otherwise permitted
in this Article 22;
22.3 The receiving Party agrees that it shall use such data and
information solely in connection with the performance of Work
under this Contract, unless otherwise explicitly authorized by or
on behalf of the other Party with the designation of specific data
and information and use;
22.4 The foregoing obligations with regard to such data and information
shall exist unless and until such time as:
22.4.1 Such data and information are to the receiving Party or
otherwise publicly available prior to its receipt by the
receiving Party without the default of the receiving
Party; or
22.4.2 Such data and information have been lawfully disclosed
to the receiving Party by a Third Party which has the
right to disclose such data; or
59
22.4.3 Such data and information are shown by written record to
have been independently developed by the receiving
Party; or
22.4.4 Such data and information are otherwise available in the
public domain without breach of this Contract by the
receiving Party; or
22.4.5 Such data and information are disclosed by or with the
permission of the disclosing Party to a Third Party
without restriction; or
22.4.6 Such data and information that a Party may be required
by law or government regulation or order to disclose.
22.4.7 Such data and information are released for disclosure in
writing by or with the permission of the disclosing
Party.
22.5 Providing Buyer shall obtain from the recipient a nondisclosure
agreement at least as restrictive as this Article 22, Buyer may
disclose any proprietary information on a need to know basis to
its customer(s), contractors, insurers, agents, counsel and actual
or prospective lenders, investors, or successors in interest.
22.6 Any copyrighted material belonging to a Party to this Contract may
be copied by the other Party as necessary to enable the receiving
Party to perform its obligations under this Contract, provided
always that the copyright legend is retained on the material.
60
ARTICLE 23. PUBLIC RELEASE OF INFORMATION
Neither Party shall issue news releases, articles, brochures,
advertisements, prepared speeches, and other information releases
concerning the work performed or to be performed under this Contract by
Contractor or its subcontractors, or any employee or consultant of
either, which contains new information not previously disclosed as
permitted under the Contract, without first obtaining the prior written
approval of the other Party concerning the content and timing of such
release which approval shall not be unreasonably withheld. The
initiating Party shall provide such releases to the other Party for
review within a reasonable time prior to the desired release date and
the other Party shall be required to respond within said time period.
61
ARTICLE 24. TAXES
24.1 The price which shall be paid by Buyer for Spacecraft,
Documentation and Related Services [***] any U.S. (federal, state
or local) sales or use taxes, or fees or other U.S. taxes against
real or personal property, however designated, which may be levied
or assessed against Contractor. Buyer shall be responsible for the
payment of all personal property taxes, if any, with regard to
goods which are levied upon subsequent to the date of delivery to
Buyer. Buyer shall be responsible for any inventory taxes, state
taxes or any other taxes that are assessed to Contractor as a
result of storage of a Spacecraft in accordance with Article 32.
If Sea Launch, L. P. is the Launch Vehicle Provider for any such
launch, Contractor shall be relieved of responsibility for any
taxes and/or port fees associated with the Sea Launch Zenit
Vehicle except as provided by Article 4, Paragraph 4.3.1.2 of the
Contract.
24.2 In the event Contractor in the performance of this Contract is
required to pay non-U.S. customs, import duties, value-added or
sales taxes, commercial card fees, port fees, harbor maintenance
tax, other charges, or taxes, or fees, (collectively,
"Assessments") however designated (except for (i) any Assessment
based on Contractor's income and (ii) any Assessment incurred as a
result of or associated with Contractor's manufacture of a
Spacecraft), then Buyer will reimburse Contractor for such
Assessments within thirty (30) days of written notification by
Contractor of payment; provided, however that, Contractor shall
used its reasonable best efforts to obtain waivers, exemptions
and/or relief from such Assessments when practicable, and Buyer
shall not be required to pay any Assessment to the extent any such
waiver, exemption or relief is pending or has been obtained.
Notification shall then be supported by an invoice and
attachment(s) evidencing such payment having been made by
Contractor.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
62
ARTICLE 25. GOVERNING LAW
This Contract shall be deemed made in the State of California and shall
be construed in accordance with the laws of the State of California.
63
ARTICLE 26. TITLES
Titles given to the Articles herein are inserted only for convenience
and are in no way to be construed as part of this Contract or as a
limitation of the scope of the particular article to which the title
refers.
64
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES
Any notice or request required or desired to be given or made hereunder
shall be in writing and shall be effective if delivered in person or
sent by mail or by facsimile as indicated below:
1. Xxxxxx Communications Galaxy Inc.
X.X. Xxx 0000
Xxxx. X00, X/X 0X000
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: TBD, Contracts Manager
cc: TBD, Director, Systems Engineering &
Technology
Authorized Representative(s): [TBD]
2. Xxxxxx Space and Communications Company
Xxxx Xxxxxx Xxx 00000, Xxxxxxx Xxxxxxx
Xxxx. X00, M/S A374
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Contracts Manager
cc: Xxxxxx X. Xxxxxxxx, Xx., Program Manager
Authorized Representative(s): [TBD]
or in each case as a Party may direct by notice to the other Party in
accordance with this Article 27.
65
ARTICLE 28. INTEGRATION
This document, with Exhibits, constitutes the entire understanding
between the Parties with respect to the subject matter of this Agreement
and supersedes all previous oral and/or written negotiations,
commitments, and understandings of the Parties, including without
limitation the version of the Agreement dated May 9, 1997.
66
ARTICLE 29. CHANGES
29.1 Any changes requested by Contractor during the performance of this
Contract, within the general scope of this Contract, which will
add or delete work, stop work, affect the design of a Spacecraft,
change the method of shipment or packing, or the place or time of
delivery, or will affect any other requirement of this Contract,
shall be submitted in writing ("Change Proposal") to Buyer sixty
(60) days prior to the proposed effective date of the change. If
such Contractor requested change causes an increase or decrease in
the total price or other terms of this Contract, Contractor shall
submit a proposal to Buyer detailing the impact of such change.
29.2 Buyer shall notify Contractor in writing within thirty (30) days
after receipt of the requested change and price adjustment
(downward or upward), if any, whether or not it agrees with and
accepts such Change Proposal. If Buyer agrees with and accepts the
Contractor requested Change Proposal, Contractor shall proceed
with the performance of the Contract as changed or in the case of
a stop work order, suspend the performance of this Contract, and
an amendment to the Contract reflecting the Change Proposal shall
be incorporated into the Contract. If Buyer does not agree with
the Contractor requested Change Proposal, the Parties shall
attempt to reach agreement on such Change Proposal. If the Parties
are unable to agree on the requested change and price adjustment,
then the Parties shall proceed with the performance of this
Agreement, as unchanged. In the event the Parties are able to
reach agreement on the change, but not on the price adjustment
component, then the Parties shall elevate such dispute to the
Senior Executives of the respective companies for resolution. If
resolution can not be achieved within a reasonable period of time
under the circumstances, Buyer may make a qualified acceptance of
the Change Proposal, accepting all matters other than price
adjustment, and the issue of price adjustment shall be submitted
for resolution by arbitration in accordance with the provisions of
Paragraph 33.2 hereof. Pending such resolution of the price issue,
the Parties shall perform their obligations under the Contract, or
in the case of a Stop work order, suspend their obligations, as if
the Change Proposal had been accepted; provided,
67
however, that Buyer shall pay any disputed amount of the
price adjustment into an escrow account in accordance with
Paragraph 29.4 hereof on the date such amount would have been due
and payable had the Change Proposal been accepted, or if the
Change Proposal could result in a downward adjustment in the
Contract Price in excess of the amount remaining to be paid by the
Buyer, Contractor shall deposit the disputed amount of such excess
into an escrow account in accordance with Paragraph 29.4 hereof.
29.3 Buyer may submit to Contractor in writing (a "Change Order
Request") detailing any changes requested by Buyer during the
performance of this Contract, within the general scope of the
Contract, which will add or delete work, stop work , affect the
design of a Spacecraft, change the method of shipment or packing,
or the place or time of delivery, or will affect any other
requirement of this Contract. Contractor shall respond to such
Change Order Request in writing to Buyer within thirty (30) days
after such request. If Contractor determines that the change
requested by Buyer is feasible and can be made at no additional
cost and with no associated delays, then Contractor shall so
notify, Buyer and Contractor shall commence implementing such
change. If the Contractor determines otherwise, then, Contractor
shall submit to Buyer, a proposal detailing the impact of such
change and the price adjustment (downward or upward), if any, (the
"Change Order Offer"). Buyer shall notify Contractor in writing,
within thirty (30) days after receipt of Contractor's Change Order
Offer, whether or not it agrees with and accepts Contractor's
Change Order Offer. If Buyer agrees with and accepts Contractor's
Change Order Offer, Contractor shall immediately proceed with the
performance of the Contract as changed, or in the case of a stop
work order, suspend the performance of this Contract, and an
amendment to the Contract reflecting such change shall be
incorporated into the Contract. If Buyer does not agree with the
Contractor's Change Order Offer, the Parties shall attempt to
reach agreement on such Change Order Offer. In the event the
Parties are able to reach agreement on the change, but not on the
price adjustment component, then the Parties shall elevate such
dispute to the Senior Executives of the respective companies for
resolution. If resolution can not be achieved within a reasonable
period of time under the circumstances, Buyer may make a
68
qualified acceptance of the Change Order Offer, accepting all
matters other than price, and the issue of price shall be
submitted for resolution by arbitration in accordance with the
provisions of Paragraph 33.2 hereof. Pending such resolution of
the price issue, the Parties shall perform their obligations under
the Contract, or in the case of a Stop work order, suspend their
obligations, as if the Change Order Offer had been accepted;
provided however, that the Buyer shall pay any disputed amount of
the price adjustment into an escrow account in accordance with
Paragraph 29.4 hereof on the date such amount would have been due
and payable had the Change Order Offer been accepted, or if the
Change Order Request could result in a downward adjustment in the
Contract Price in excess of the amount remaining to be paid by
Buyer, Contractor shall deposit the disputed amount of such excess
into an escrow account in accordance with Paragraph 29.4 hereof.
The dispute shall then be resolved by arbitration under the
provisions of Article 33, entitled "Disputes."
29.4 Escrow Provisions - Disputed Amounts
Disputed amounts with respect to any change under this Article 29
shall be paid into an interest bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged breach in
accordance with Article 33, the Party entitled to the amount or
part thereof in escrow, shall receive such amount together with
all accrued interest thereon and the other Party shall pay all
costs and fees associated with the escrow of said amount. The
placement of disputed amounts into an escrow account shall not
relieve either Party of its remaining obligations under this
contract.
29.5 Determination of Price Adjustment of Change
The Parties agree that the change order price adjustment (downward
or upward) for any change shall be equal to the sum of (i) the
"Change Order Cost" plus (ii) the "Change Order Profit Component".
The "Change Order Cost" shall mean those additional or reduced
recurring and non-recurring costs to Contractor to implement such
change ( or which are not required to be implemented), as
determined in accordance with Contractor's normal
69
accounting practices, including those general and administrative
costs ("G&A Costs") of such change, as determined in accordance
with Contractor's normal accounting practices, [***] of
Contractor's costs for such change. The "Change Order Profit
Component" shall be equal to [***] of the Change Order Cost. The
Total Change Order Cost shall be payable in accordance with the
payment plan agreed by the Parties or, if applicable, by the
Arbitrator. Unless otherwise agreed by the Parties, the Change
Order Profit Component shall be payable in equal monthly
installments at the same time as the monthly installments of
Incentives Obligations; provided, however, that payment of the
Change Order Profit Component shall not be conditioned upon
performance of the Spacecraft or any component thereof.
29.6 If Contractor makes any improvements to the generic HS-702
Spacecraft design, then Contractor shall provide reports to Buyer
concerning such improvements. Buyer may request that any
improvement to the HS-702 Spacecraft design reported to Buyer be
incorporated into the Spacecraft, and such improvements shall be
considered a Change and shall be dealt with in accordance with the
Change Order process in this Article 29. The foregoing shall not
apply to any changes to the generic HS-702 Spacecraft design, to
correct or mitigate the impact of anomalies with respect to such
design, made by Contractor on its own accord or as necessary in
Contractor's reasonable engineering judgment, which changes shall
not relieve Contractor of its obligations to meet the technical
specifications for the Spacecraft, as set forth in Exhibit B,
hereto. Contractor shall notify Buyer on a periodic basis or as
requested by Buyer from time to time of any anomalies with respect
to such HS-702 Spacecraft design.
29.7 The Change Order Price shall be allocated and payable as follows:
The Change Order Profit Component shall be an independent payment
obligation not contingent upon performance of the Spacecraft and
shall be payable at the same time as the monthly installments of
the Incentives Obligations for the Spacecraft as set forth in
Paragraph 6.4.4 and, in any case, the then-remaining Change Order
Profit Component for the Spacecraft shall be paid in full with the
last Incentives Obligations Payment. The Total Change Order Cost
shall be payable as agreed by the Parties.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
70
29.8 To the extent that (i) any change agreed under this Article 29
deletes any Hardware already produced by Contractor, then the
provisions of Paragraphs 14.2 and 14.4 shall apply to the
disposition of such Hardware.
29.9 The Spacecraft shall be designed to support the Launch Vehicle
interface requirements issued by the Launch Vehicle provider
(as to Ariane, Proton and Sea Launch launch vehicles) existing
at the time of the "Delivery Site Designation Date" as defined
in Paragraph 4.2.1. If there are any changes to such interface
requirements thereafter, then any such change shall be deemed
to be a Change Order Request by Buyer, and the Change Order
process set forth in Section 29.3 shall apply.
71
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES
For Spacecraft batteries to provide the required minimum fifteen (15)
years of in-orbit services per Exhibit B, it is understood that launch
must occur within three (3) years from the date of activation of the
first battery cell. In the event Buyer directs Contractor to store any
deliverable Spacecraft and the period of such storage causes a launch
later than three (3) years from the date of activation of that
Spacecraft's first battery cell, and Buyer upon its election to either:
(i) install replacement batteries or (ii) recondition batteries, so
directs Contractor, Buyer shall pay Contractor its costs plus a [***]
profit rate. In either case (i) or (ii), the batteries shall meet a
fifteen (15) year in-orbit service requirement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
72
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY
31.1 Prior to the time Buyer and the Contractor enter the Launch
Integration Facility and/or Launch Site, they each agree that they
will not make a claim against each other for an event that occurs
at the Launch Integration Facility and/or Launch Site premises
involving damage to, loss of, or loss of use of their property or
the property of others in their possession, caused by the fault or
negligence of the other Party to this Contract, or otherwise
caused by any defect in any product manufactured or sold by the
other Party to this Contract. Such claims are waived and each
Party will bear its own losses. Buyer will include a comparable
clause in each of its contracts with vendors, subcontractors or
customers for services or benefits expected as a result of the
launch or orbiting of a Galaxy Spacecraft. Such comparable clause
shall include a requirement to flow the clause down to lower-tier
contractors.
31.2 Notwithstanding any other provisions of this Contract, prior to
the time any Party, associated with the Galaxy XIII and/or Galaxy
XIV launch activities at the Launch Integration Facility and/or
Launch Site, shall enter the Launch Integration Facility and/or
Launch Site, such Parties shall be required to sign an Inter-Party
Waiver of Liability consistent with that between Buyer and the
Contractor as incorporated herein under Paragraph 31.1 of this
provision or other similar agreement as may be required by the
launch agency. Each Party shall have the responsibility to assure
that all the Parties associated with the launch of Galaxy XIII
and/or Galaxy XIV Spacecrafts (for which they have control or
privity of Contract with hereunder) have executed said Inter-Party
Waiver of Liability.
73
ARTICLE 32. SPACECRAFT STORAGE
32.1 Buyer may, at its option, order Contractor to store, in accordance
with the provisions of Exhibit B Galaxy XIII/XIV Spacecraft
Specification, each deliverable Spacecraft (including separate
storage of Batteries, if needed) for a period of up to two (2)
years from the date of their delivery to Buyer. Buyer shall
provide written notice to the Contractor not later than six (6)
months prior to the scheduled delivery of said Spacecraft.
Contractor's price for providing storage shall be provided to
Buyer in accordance with Article 29, "Changes," (and such price
shall be deemed a "Change Proposal" for purposes of Article 29)
within 30 days after receipt of Buyer's notice to store such
Spacecraft and Contractor shall provide storage facilities. If
such storage facilities are unavailable, Contractor and Buyer
shall hold discussions to determine a mutually agreed storage
arrangement.
32.2 Six (6) months prior to a stored Spacecraft's scheduled launch
date, Buyer shall, by notice in writing, order the Contractor to
remove said Spacecraft from storage and ship it to a Launch Site
designated by Buyer. In the case of a Sea Launch, the cost for
storage and additional transportation costs exceeding that
required to transport a Spacecraft to the Port of Long Beach
(Integration Facility) point specified herein, shall be borne by
Buyer. These will be in addition to any charges which become the
obligation of the Buyer per Article 18 herein entitled "Spacecraft
Not Launched Within Six Months After Acceptance."
74
ARTICLE 33. DISPUTES
33.1 Disputes
33.1.1 In the event any dispute arises between the Contractor
and the Buyer relating to this Contract, either Party
may give written notice to the other of its objections
and reasons therefore. The Contractor and Buyer shall
consult in an effort to reach a mutual agreement to
resolve such dispute. In the event a mutual agreement
cannot be reached within fifteen (15) days after receipt
of this notice, the respective positions of the Parties
shall be forwarded to Contractor and Buyer's respective
Executive Offices for discussions and they shall attempt
to reach a mutual agreement to resolve such dispute
within another fifteen (15) day period.
33.2 Arbitration of Disputes
33.2.1 Grounds for Arbitration and Notice Requirement. Any
dispute, disagreement, controversy or claim arising out
of or relating to this Contract or the interpretation
thereof or any arrangements relating thereto, or the
validity or enforceability thereof, or contemplated
therein or the breach, termination or invalidity thereof
which is not settled to the mutual satisfaction of the
Parties in accordance with Paragraph 33.1 above, then it
shall be settled exclusively and finally by binding
arbitration, after written notice by either Party.
Arbitration of such disputes in accordance with this
Article 33 shall be the Parties' exclusive remedy.
33.2.2 Administration and Rules. Arbitration proceedings in
connection with the Agreement shall be administered by
the American Arbitration Association in accordance with
its then in effect Commercial Arbitration Rules,
together with any relevant supplemental rules including
but not limited to its Supplementary Procedures for
Large, Complex Disputes, as modified by the terms and
conditions of the Agreement. With respect to the
75
selection of arbitrators, arbitration proceedings in
connection with this Agreement shall be conducted before
a panel of three (3) arbitrators. Within fifteen (15)
days after the commencement of arbitration, each Party
shall select from a list of qualified persons one person
to serve as an arbitrator on the panel, and within ten
(10) days of their selection, the two arbitrators shall
select a third arbitrator who is listed as an active
member of the American Arbitration Association at the
time that arbitration proceedings commence. If the two
arbitrators selected by the respective Parties are
unable or fail to agree upon the third arbitrator in the
allotted time, then the third arbitrator shall be
selected by the American Arbitration Association.
33.2.3 Place of Arbitration. The place of arbitration shall be
in Los Angeles, California, U.S.A.
33.2.4 Discovery. The arbitrators shall have the discretion to
order a pre-hearing exchange of information by the
Parties, including without limitation, production of
requested documents, exchange of summaries of testimony
of proposed witnesses, and examination by deposition of
the Parties.
33.2.5 Award and Judgment. The arbitrators shall have no
authority to award punitive damages, and may not, in any
event, make any ruling, finding or award that does not
conform to the terms and conditions of this Agreement.
Subject to the foregoing, the Parties agree that the
judgment of the arbitrators shall be final and binding
upon the Parties and that the judgment upon the award
rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
33.2.6 Confidentiality. No Party or arbitrator may disclose the
existence, content, or results of any arbitration
proceedings in connections with this Agreement without
prior written consent of all Parties to the arbitration
proceeding.
76
33.2.7 Fee and Expenses. All fees and expenses of any
arbitration proceedings in connection with this
Agreement shall be borne by the losing Party. However,
each Party shall bear the expense of its own counsel,
experts, witnesses, and preparation and presentation of
evidence.
33.2.8 Performance. Contractor and Seller shall continue with
performance under this Agreement during any
disagreement, negotiation, or arbitration.
77
ARTICLE 34. ASSIGNMENT
34.1 Neither Party shall assign, or transfer this Contract or any of
its rights, duties or obligations thereunder to any person or
entity, in whole or part without the prior written consent of the
other Party except that either Party may assign or transfer any of
its rights, duties or obligations under this Contract, either in
whole or in part, to its parent company, subsidiary or
affiliate(1). In addition, notwithstanding anything in this
Article 34 to the contrary, the consent of Contractor shall not be
required for, and Paragraph 34.2 shall not apply to: (i) any
assignment of this Contract from HCG to Magellan International,
Inc. (which currently contemplates changing its name to PanAmSat
Corporation), or an affiliate thereof, in connection with the
consummation of the transactions contemplated by that certain
Agreement and Plan of Reorganization dated as of September 20,
1996 by and among HCG, Magellan International, Inc., PanAmSat
Corporation and certain affiliates of HCG; or (ii) any assignment
by Buyer of its rights, duties and/or obligations hereunder as
security for any indebtedness of Buyer or its subsidiaries or
affiliates.
Neither Party shall unreasonably withhold consent to any
assignment or transfer providing that the requesting Party can
demonstrate to the other Party's satisfaction that:
(1) its successor or assignee possesses the financial
resources to fulfill the obligations of this Contract;
and
(2) any such assignment or transfer shall not jeopardize any
data rights or competitive position, or violate laws
related to export or technology transfer, or otherwise
increase the other Party's risks or obligations.
If the requesting Party cannot so demonstrate, both Parties agree
to negotiate in good faith suitable modifications and new
provisions to this Contract which would mitigate the above risks
and/or bring this Contract into conformance with applicable laws.
(1) Affiliate: An "affiliate" of, or a person "affiliated" with, a specified
person, is a person that directly, or indirectly through one or more
intermediaries, controls, or is
78
controlled by, or is under common control with, the person specified.
34.2 The Parties agree that in the event that the ownership or control
of HCG or HSC is changed, the Parties reserve the right to
negotiate in good faith suitable modifications and new provisions
to this Contract which would mitigate any additional risks,
financial or otherwise, which may be brought about by such change
in ownership or control.
34.3 This Contract shall be binding upon the Parties hereto and their
successors and permitted assigns.
79
ARTICLE 35. LIMITATION OF LIABILITY
35.1 The Parties to this Contract expressly recognize that commercial
space ventures involve substantial risks and recognize the
commercial need to define, apportion and limit contractually such
risks associated with this commercial space venture. The payments
and other remedies expressly set forth in this Contract fully
reflect the Parties' negotiations, intentions and bargained-for
allocation of such risks associated with commercial space
ventures.
35.2 In no event shall the Parties be liable for any direct, indirect,
incidental, special, contingent or consequential damages
(including, but not limited to, lost revenues or profits), except
as expressly provided for in this Agreement. This Article shall
survive the expiration or termination of this Contract for
whatever cause.
80
[ARTICLE 36. OPTIONS
36.1 HCG may, in its sole discretion, exercise on or before 30 June
1998, the Option provisions of this Contract to request Contractor
to deliver to Buyer up to two (2) additional Spacecraft,
hereinafter referred to as Galaxy XV and XVI. Upon exercise of
this Option, Buyer shall make the first payment of [TBD] for each
Spacecraft ordered. The configuration and performance of Galaxy XV
and/or XVI shall be substantially similar to Galaxy XIII and
Galaxy XIV.
36.2 The Contract Price for Galaxy XV is [TBD]. The Contract Price for
Galaxy XVI is [TBD].
36.3 Delivery to the Launch Site Integration Facility and/or Launch
Site will be as required to meet the established Launch Schedule
(consistent with the Galaxy XIII and Galaxy XIV delivery schedule
span).
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36.2.1 Payment Plan: June 1998 -
Table 36.2.1
Galaxy XV - Payment Plan
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Amount Cumulative
Month $M Amount $M
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Milestone Payments
TBD
----------------------------------------------------------------------
----------------------------------------------------------------------
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
82
[***}
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
83
36.2.2 Payment Plan: TBD
Table 36.2.2
Galaxy XVI - Payment Plan
----------------------------------------------------------------------
Amount Cumulative
Month $M Amount $M
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
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----------------------------------------------------------------------
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
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----------------------------------------------------------------------
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----------------------------------------------------------------------
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Milestone Payments TBD
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
84
[***}
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
85
36.3 The Galaxy XV and XVI Option prices provide for the following:
(a) Up to two spacecraft substantially similar to Galaxy
XIII and XIV in configuration and performance
(b) Documentation
(c) Program Management
(d) Insurance up to the Intentional Ignition of Launch Vehicle
(e) Launch and Mission Operations Services (Baselined with a
Zenit Vehicle) ("Related Services").
(f) Storage for a Spacecraft on similar terms as Galaxy XIII and
Galaxy XIV
(g) The terms of Galaxy XV and/or XVI are pursuant to the terms
of this Contract
36.4 In the even that exercise of this Option does not occur on or
prior to the date stated in Paragraph 36.1, this Option shall
expire unless (i) the Parties otherwise agree or (ii) this Option
is superseded by a definitive Spacecraft Acquisition Agreement.]
86
ARTICLE 37. REPLACEMENT SPACECRAFT
Buyer shall have the right to purchase Replacement Spacecraft for one or
both of Galaxy XIII or Galaxy XIV in the event that one or both of these
Spacecraft suffers a launch failure (including any total or constructive
total loss that occurs prior to the placement of a Spacecraft into
commercial operations). Each Replacement Spacecraft shall have the same
configuration and performance of the Spacecraft being replaced. The
price for each such Replacement Spacecraft, if ordered, shall be [TBD],
which price covers all associated deliverables as specified in this
Contract and which shall be adjusted accordingly with the changes to the
Contract Price under Paragraph 3.2. Except as expressly specified in
this Article, the terms and conditions of this Contract shall apply in
context to any Replacement Spacecraft that is ordered under this
Article.
A Replacement Spacecraft may be ordered at any time through ninety (90)
days after the launch of the applicable Spacecraft. Unless long lead
items are purchased, as provided below, the Spacecraft shall be
constructed and all associated deliverable provided to support a launch
within eighteen (18) months of the day ordered.
Buyer shall also have the option to require Contractor to purchase long
lead items sufficient to enable Contractor to have Replacement
Spacecraft, which could be configured as either Galaxy XIII or Galaxy
XIV (to be specified by Buyer if and when Buyer orders the Spacecraft to
be completed) and shall be ready to be launched with the later of
eighteen (18) months after a long lead option is exercised or twelve
(12) months after the go ahead is given by Buyer to complete
construction of the Spacecraft. The price for the long lead items shall
be [TBD], with the remaining portion of such Replacement Spacecraft's
price to be payable if (and only if) such Replacement Spacecraft is
ordered by Buyer to be completed.
87
Payment schedules for the eighteen (18) months without long lead items
and long lead item and completion payment options are attached hereto as
Exhibit G.
If Buyer has purchased long lead items, within ninety (90) days of the
successful launch of both Galaxy XIII and Galaxy XIV, Buyer shall direct
disposition of such long lead items either: (a) to build an identical
Spacecraft (at the same price and schedule as a twelve-month Replacement
Spacecraft); or (b) direct the disposition of such long lead items
pursuant to Paragraphs 14.2 and 14.4.
88
ARTICLE 38. EFFECTIVE DATE OF CONTRACT
The "Effective Date" of this Contract No. 97-HCG-001 shall be 15, May 1997.
IN WITNESS WHEREOF, the Parties hereto have executed this Contract No.
97-HCG-001 to become effective upon the date specified in this Article 38,
herein entitled, "Effective Date of Contract."
XXXXXX SPACE & COMMUNICATIONS COMPANY
SIGNATURE: /s/H.E. XxXxxxxxx
-----------------------
NAME: H.E. XxXxxxxxx
---------------------------
TITLE: Vice President
---------------------------
DATE: May 15, 1997
---------------------------
XXXXXX COMMUNICATIONS GALAXY, INC.
SIGNATURE: /s/X.X. Xxxxxxx
-----------------------
NAME: X.X. Xxxxxxx
---------------------------
TITLE: President
---------------------------
DATE: May 15, 1997
---------------------------
89
