Exhibit 10.65
FIXED PRICE CONTRACT
BETWEEN
PANAMSAT CORPORATION
AND
BOEING SATELLITE SYSTEMS, INC.
FOR
GALAXY VIII(i)R AND OPTION
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 00-PAS-001
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This Contract (excluding the Xxxxxxxx X0, X0, X0, X0, C and D which have their
own separate proprietary markings and proprietary legend) contains information
that is proprietary to PanAmSat Corporation and Boeing Satellite Systems, Inc.
All information contained herein is deemed to be Proprietary Information (as
such term is defined in Article 22 of this Contract) of both Parties, and
disclosure thereof is governed by Article 22.
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
TABLE OF CONTENTS
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PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS.................................... 2
ARTICLE 2. ORDER OF PRECEDENCE............................................ 3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES
("DELIVERABLES").............................................................. 4
ARTICLE 4. DELIVERABLES AND SCHEDULE...................................... 6
ARTICLE 5. PRICE.......................................................... 9
ARTICLE 6. PAYMENTS....................................................... 12
ARTICLE 7. SPACECRAFT LAUNCH DATE......................................... 30
ARTICLE 8. BUYER-FURNISHED ITEMS.......................................... 32
ARTICLE 9. INSPECTION AND ACCEPTANCE...................................... 35
ARTICLE 10. ACCESS TO WORK IN PROCESS...................................... 39
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY............... 41
ARTICLE 12. EXCUSABLE DELAYS............................................... 43
ARTICLE 13. AMENDMENTS..................................................... 45
ARTICLE 14. TERMINATION FOR CONVENIENCE.................................... 46
ARTICLE 15. TITLE AND RISK OF LOSS......................................... 49
ARTICLE 16. SPACECRAFT WARRANTY............................................ 52
ARTICLE 17. INDEMNIFICATION................................................ 54
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER
ACCEPTANCE.................................................................... 55
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY..................................... 57
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ARTICLE 20. RIGHTS IN INVENTIONS........................................... 59
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS................................... 62
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE............. 63
ARTICLE 23. PUBLIC RELEASE OF INFORMATION.................................. 66
ARTICLE 24. TAXES.......................................................... 67
ARTICLE 25. GOVERNING LAW.................................................. 68
ARTICLE 26. TITLES......................................................... 69
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES......................... 70
ARTICLE 28. INTEGRATION.................................................... 72
ARTICLE 29. CHANGES........................................................ 73
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES................................ 79
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY................................ 80
ARTICLE 32. SPACECRAFT STORAGE............................................. 81
ARTICLE 33. DISPUTES....................................................... 82
ARTICLE 34. ASSIGNMENT..................................................... 85
ARTICLE 35. LIMITATION OF LIABILITY........................................ 87
ARTICLE 36. CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES.................. 88
ARTICLE 37. LIQUIDATED DAMAGES FOR LATE PERFORMANCE........................ 90
ARTICLE 38. OPTION SPACECRAFT.............................................. 91
ARTICLE 39. NO THIRD PARTY RIGHTS.......................................... 98
ARTICLE 40. INDEX OF DEFINED TERMS......................................... 99
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ARTICLE 41. EFFECTIVE DATE OF CONTRACT..................................... 102
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This FIXED PRICE CONTRACT (the "Contract") is entered into as of the 15th day
of December, 2000, by and between PANAMSAT CORPORATION (herein called "Buyer"),
a Delaware corporation having a place of business at Xxx Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, and BOEING SATELLITE SYSTEMS, INC. (herein called
"Contractor"), a Delaware corporation having a place of business at 000 Xxxxx
Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Parties now desire to enter into this Contract for Buyer
to purchase and Contractor to manufacture, deliver and perform (as applicable)
the Galaxy VIII(i)R Spacecraft, Documentation and Related Services with an
option for one (1) additional Spacecraft, Documentation and Related Services, as
provided and defined herein below;
NOW, THEREFORE, the Parties hereby agree as follows:
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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:
1.1A Exhibit A1 - Statement of Work and Contract Data Requirements List
for Flight Spacecraft - dated December 2000.
1.1B Exhibit A2 - Statement of Work and Contract Data Requirements List
for Operations Products - dated December 2000.
1.2A Exhibit B1 - Galaxy VIII(i)R Spacecraft Specification - dated
December 2000.
1.2B Exhibit B2 - Option Spacecraft Specification - dated December 2000
(subject to completion in accordance with Paragraph 38.1).
1.3 Exhibit C - Spacecraft Integration Test Plan - dated December 2000.
1.4 Exhibit D - Product Assurance Plan - dated October 9, 1998.
1.5A Exhibit E1 - Maximum Termination Liability Schedule, GVIII(i)R and
Option Spacecraft.
1.5B Exhibit E2 - Maximum Termination Liability Schedule, Replacement
Spacecraft.
1.6 Exhibit F - Payment Plan for Replacement Spacecraft
1.7 Exhibit G - Sample Incentives Obligations Payment Schedule.
1.8 Exhibit H - Certain Documentation.
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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."
Notwithstanding the foregoing, for avoidance of doubt, any reference to
G8iR or similar designation in the Exhibits shall be deemed to refer to
Galaxy VIII(i)R.
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ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES ("DELIVERABLES")
3.1 Contractor shall sell and provide, and Buyer shall purchase, the items
and services referred to in Section 4.1. Contractor shall provide the
necessary personnel, material, services and facilities to design,
fabricate, test and deliver one (1) HS601HP type Spacecraft designated
Galaxy VIII(i)R (hereinafter referred to as "Galaxy VIII(i)R" or the
"Spacecraft"), including Documentation and Related Services (as
defined in Article 4) in accordance with the provisions of this
Contract and in the manner specified under Exhibits A1, A2, B(1 or 2),
C and D hereto.
3.2 All materials and services specified in Exhibit A1, and A2 "Statement
of Work," shall meet the requirements of the applicable Exhibit B(1 or
2), entitled "Spacecraft Specification," for the applicable
Spacecraft.
3.3 If Contractor has not made delivery [***] or if, prior to the Launch
Date, [***] Buyer may at its election:
(a) [***]
(b) [***]
Any such election shall be made by Buyer in writing. [***]
In addition, in the event that (i) Contractor has earned a Delivery
Incentive under Paragraph 5.5 and (ii) the scheduled Commencement Date
is delayed as a result of [***]
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3.4 [***] in accordance with: (i) current directives and instructions in
the Boeing Spacecraft Operators Handbook, utilized at Buyer's OCC; and
(ii) any other Documentation utilized, including that Documentation
which takes into consideration the unique or special characteristics
of such Spacecraft. [***] Buyer has responsibility and liability for
the Operations Control Center and its associated ground station(s).
[***]
3.5 Spacecraft, Documentation and Related Services described above shall
be delivered to Buyer at the indicated locations on the dates set
forth in Article 4 entitled, "Deliverables and Schedule" herein.
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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:
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Date of Shipment Location of Shipment
Delivery Delivery or
Deliverables or Performance Performance
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1. Galaxy VIII(i)R Spacecraft 15 June 2002 (the "Shipment . Shipped from Contractor's
Date")/1/ facility.
. Delivery Site at Launch
. Integration Facility/2/.
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2. Launch Support, Mission Operations In Accordance with Exhibit A . Performance Site to be
and In-Orbit Testing for Galaxy determined pursuant to
VIII(i)R ("Related Services") Paragraph 4.2.
. Fillmore, California
. Castle Rock, Colorado
. El Segundo, California
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3. Documentation for Galaxy VIII(i)R In Accordance with Exhibit A 0000 Xxxxxx Xxx
("Xxxxxxxxxxxxx") Xxxx Xxxxx, Xxxxxxxxxx
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/1/ Contractor agrees to ship the Spacecraft from its facility on or before
such date as may be necessary to support the launch of the Spacecraft on
the Launch Date in accordance with the requirements of this Contract and
the Exhibits hereto. [***] Notwithstanding anything herein to the
contrary, Contractor shall not be required to ship any Spacecraft earlier
than its applicable Shipment Date (as such Shipment Date may be adjusted by
mutual agreement of the Parties).
/2/ Delivery Site to be (i) the Launch Integration Facility (Port of Long
Beach) in the event Buyer uses a Sea Launch launch vehicle, (ii) the Launch
Integration Facility in Baikonur, Kazakhstan in the event Buyer uses a
Proton launch vehicle, or (iii) the Launch Integration Facility in Kourou,
French Guyana in the event Buyer uses an Ariane launch vehicle.
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4.2 Designation of Launch Vehicle.
4.2.1 Buyer shall designate a Spacecraft's Launch Vehicle on or
before [***] months prior to the Shipment Date for such
Spacecraft, in which event the Contract Price shall be increased
by the applicable amount specified in Paragraph 5.3 if the Buyer
designates a Proton Launch Vehicle. If, subsequent to the date
that is [***] months prior to such Shipment Date, Buyer requests
a change in the Launch Vehicle or Approved Storage Facility for
such Spacecraft, such request shall be dealt with as a Change
Order Request of Buyer under Article 29.
4.2.2 Buyer shall pay the costs of delivering the Spacecraft to the
Launch Site, which costs are included in the Contract Price.
Contractor shall arrange and provide transportation required for
the deliverables specified in Section 4.1.
4.3 Contractor shall be responsible for obtaining: (i) all U.S. Government
export licenses to enable export of each Spacecraft, and related test
and support equipment to the Launch Site and disclosure of information
reasonably requested by Buyer's foreign insurers; and (ii) all
authorizations required for Contractor to perform this Contract.
Notwithstanding the foregoing, (i) the failure or refusal of the U.S.
Government to issue a required export license or (ii) the U.S.
Government's revocation of a previously issued license, or (iii) the
export authorization by the U.S. Government (a) of only a portion of
the information requested by Buyer's foreign insurers, or (b) to fewer
than all of Buyer's foreign insurers, or (iv) the U.S. Government's
issuance of a limited or
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restricted export license that prevents Contractor's performance
(provided in the case of (i), (ii), (iii) and (iv) that (A) Contractor
has used its reasonable best efforts to obtain and retain such export
license and (B) any revocation of a previously issued license or
imposition of license limitations or restrictions is not due to any
violation of U.S. Government export laws, regulations or licenses by
Contractor) shall be deemed under Paragraph 12.1 to constitute a Force
Majeure Event.
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ARTICLE 5. PRICE
5.1 The total price (the "Contract Price") for Contractor to provide the
Galaxy VIII(i)R Spacecraft, Documentation and Related Services shall
[***]
5.2 Buyer shall pay Contractor the Contract Price stated in Paragraph 5.1
above in accordance with Article 6, Paragraph 6.2 of this Contract.
5.3 The Contract Price for a Spacecraft shall be adjusted in accordance
with the following table, based upon the Launch Vehicle designated by
Buyer for such Spacecraft pursuant to Paragraph 4.2.1. If Buyer
changes the designated Launch Vehicle for the Spacecraft in accordance
with Paragraph 4.2.1 (as opposed to Article 29), the Contract Price
shall be adjusted in accordance with the following table:
Table 5.3.1
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Adjustment to Contract Price
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Launch Vehicle Adjustment
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Sea Launch [***]
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Ariane 4/5 (applicable to Option [***]
Spacecraft only)
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Proton - any configuration [***]
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5.4 Any adjustment to the Contract Price under Paragraph 5.3 shall be
allocated pro rata over the entire Payment Plan for such Spacecraft.
Adjustments allocated to payments already made shall be promptly paid
by Buyer or refunded by Contractor.
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5.5 Buyer agrees to pay to Contractor a delivery incentive (the "Delivery
Incentive") up to a maximum amount [***] due and payable in accordance
with this Paragraph 5.5. In the event that [***] Buyer agrees to pay
to Contractor a delivery incentive (the "Delivery Incentive") as
follows:
5.5.1 In the event that [***] the Delivery Incentive shall equal
[***] or
5.5.2 In the event that [***] the Delivery Incentive shall equal
[***]
5.6 Contractor shall submit an invoice for any Delivery Incentive
after such amount is earned under Paragraph 5.5, and Buyer shall pay
such Delivery Incentive within thirty (30) days of receipt by Buyer of
such invoice.
5.7 The Delivery Incentive (if any) paid by Buyer for each Spacecraft
shall be [***] in accordance with this Paragraph 5.7. The [***] shall
be equal to the sum of: [***] pursuant to Paragraph 6.3 (and all
subparagraphs thereof); plus [***] in clause (i) at the [***]. For
example, if the Contractor earns a Delivery Incentive of [***] for a
Spacecraft and if with respect to such Spacecraft, Contractor [***].
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[***] in accordance with clause (ii) above. If [***].
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ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject to
Buyer's rights, defenses and remedies as expressly stated in this
Contract, Buyer 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 such Spacecraft shall be made according to the
following payment plans:
Table 6.2
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Galaxy VIII(i)R - Progress Payment Plan*
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*This plan also applies to the Option in Article 38, Section 38.1 (but not
the Replacement Spacecraft Options) if ordered and the Shipment Date is
determined to be 18 months from option exercise in accordance with
Paragraph 38.2.
**Initial Payment shall be paid by the Buyer to the Contractor not later
than 10 business days after the later of (i) Contract award or Option
exercise date or (ii) the business day that the Buyer receives a proper
invoice
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from the Contractor for such Initial Payment. For purposes of GVIII(i)R,
this means the initial payment is due to the Contractor not later than 29
December 2000.
6.3 Incentives Obligations.
6.3.1 The following definitions are applicable to this Section 6.3:
6.3.1.1 "Specified Operation Lifetime" means (i) fifteen (15)
years if the Launch Vehicle is Sea Launch or Proton
Breeze M ,or (ii) fourteen and one half (14.5) years if
the Launch Vehicle is Proton D-1-e or (iii) fifteen
(15) years if the Launch Vehicle is Ariane 42L (or
larger) and the Spacecraft dry mass specified by
Contractor at the contract execution date (in the case
of Galaxy VIII(i)R), the Option exercise date (for the
Option Spacecraft), or the order date (for any
Replacement Spacecraft) does not exceed [***]
6.3.1.2 "Successfully Operating Payload." Each Spacecraft shall
be equipped with one or more Payloads, as defined in
Paragraph 6.3.1.8. 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).
6.3.1.3 "Successfully Operating Transponder". A Successfully
Operating Transponder is a Transponder which meets
either or both of the following two criteria:
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(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
6.3.1.3(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 not already in use by another Transponder.
[***]
6.3.1.4 "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 one-half of the
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Transponders on each Payload are not Successfully Operating
Transponders.
6.3.1.5 "Successfully Injected Spacecraft". A 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.
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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 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 to 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 6.3.2 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.
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6.3.1.6 "Incentives Interest Rate". The Incentives Interest Rate
shall be the lesser of (i) [***] or (ii) [***]
6.3.1.7 "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.
6.3.1.8 "Payload" The Payload shall be each payload specified in
Exhibit B1 or B2 (as applicable to the appropriate
spacecraft).
6.3.2 Buyer shall pay to Contractor the Incentives Obligations, and the
Change Order Profit Component (if applicable), as follows:
6.3.2.1 Incentives Obligations and Change Order Profit
Component. Subject to Section 6.3.2.3 through 6.3.2.6,
Buyer shall be obligated to pay to Contractor the
Incentives Obligation and any Change Order Profit
Component (if applicable), as follows: Buyer shall pay
Contractor equal monthly payments that, when summed 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
VIII(i)R Spacecraft is a Successfully Injected
Spacecraft and on the Commencement Date all Transponders
on such Spacecraft are and continue to be Successfully
Operating Transponders for fifteen (15) years,
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assuming the maximum [***] for the entire period, the
monthly Incentives Obligations payment would be [***]
(the "Nominal Payment"). If the Incentives Interest Rate
is less than [***] per annum 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. In the event that a Spacecraft has
multiple Payloads, the Incentives Obligations will be
allocated among such Payloads in the same manner as the
allocation in Buyer's policy for launch and in-orbit
insurance for such Spacecraft on the date that is not
less than 30 days prior to the Launch Date. The
Incentives Obligations, identified above, shall be
payable in equal and consecutive monthly installments
over the Specified Operation Lifetime of the Spacecraft,
except as may be adjusted as set forth herein. Except as
provided in Paragraph 6.3.4, the first installment of
each Incentives Obligations shall be paid on the
Spacecraft's Commencement Date. A sample schedule matrix
showing Incentives Obligations payments for fifteen
years, assuming fully successful operation, and with a
hypothetical interest rate will be attached to this
Contract as Exhibit G.
The foregoing notwithstanding:
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(a) If the Spacecraft is not a Successfully Injected
Spacecraft pursuant to Section 6.3.1.4 but is
successfully placed into its on-station orbit by
Contractor during the "Transfer Period" (defined as the
period from separation of the Launch Vehicle through
on-station acquisition) then, subject to Section
6.3.2.3, 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
6.3.2.1(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 percentage equal to (i) the
On-Station Operational Lifetime divided by (ii) the
Calculated Operational Lifetime, which percentage
shall, in no event, be greater than one. Subject to
Section 6.3.2.3, 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
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Spacecraft continue to operate successfully beyond the
On-Station Operational Lifetime, Contractor will
continue to earn Incentives 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
6.3.2.3, 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 appropriate interest
amount based upon the Incentive Interest Rate.
6.3.2.2 Notwithstanding the foregoing, if at any time Buyer
continues to utilize for revenue-producing purposes any
Transponder that is
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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 "Partial Incentive Payment"), all as mutually agreed
upon by the Parties in good faith.
6.3.2.3 Except for any Change Order Profit Component (which is
non-contingent), and except as provided in Paragraph
6.3.2.2, 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
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
Section 6.3.2.4 (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.
6.3.2.4 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 to the other Party for its review
upon reasonable request all data used in making such
determination. Any
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disagreements between the Parties shall be resolved in
accordance with the dispute resolution procedure set forth
in Article 33.
6.3.2.5 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 (except to the extent
that such defect was caused solely by a modification to such
software by Buyer) 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
or representatives of any kind, then the foregoing provision
shall not apply with respect to such Transponder.
6.3.2.6 Buyer may prepay any portion of the Incentives
Obligations or the Change Order Profit Component pursuant to
the schedule
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matrix attached as Exhibit G. 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 6.3.4.1 hereof.
6.3.3 "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 6.3.2.3 through 6.3.2.5) 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
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Commercial Life, without payment of such Spacecraft Retirement
Payment.
6.3.4 Incentive Obligations and Launch Delay
6.3.4.1 If the Spacecraft has not been launched by the 181st day
after the earlier of (i) the actual date of shipment of
the Spacecraft by Contractor or (ii) Buyer's Preliminary
Acceptance of the Spacecraft, then, except as set forth
in Paragraph 6.3.4.2, the first of the equal and
consecutive monthly installment payments for Incentive
Obligations on the Spacecraft shall be due and payable
and the Specified Operational Lifetime shall be deemed
to have begun for purposes of this Paragraph 6.3 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
of that portion of the Pre-Launch Incentive Payment
attributable to such Transponder or Payload (plus
interest thereon calculated at the Incentives Interest
Rate), 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
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Incentives Obligations otherwise due and payable for the
months immediately following the Commencement Date.
6.3.4.2 If the Spacecraft has not been Launched due primarily to
(1) Contractor's fault after shipment or (2) Contractor's
failure to timely meet the Spacecraft's scheduled Shipment
Date (where such failure in shipment is not caused by
Buyer's actions or inactions) (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 earlier to occur of
(i) the Commencement Date or (ii) one year after the earlier
of (a) the actual date of shipment of the Spacecraft by
Contractor or (b) Buyer's Preliminary Acceptance of the
Spacecraft. If upon the Commencement Date, or at any time
thereafter, any Transponder on the Spacecraft (which has
been subject to a Launch delay under this Paragraph 6.3.4.2)
ceases to be a Successfully Operating Transponder or a
Payload becomes a Degraded Payload, then Contractor shall
deliver to Buyer a refund (plus interest thereon calculated
at the Incentives Interest Rate) 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
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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.
6.3.4.3 If, for any reason other than primarily Contractor's
Fault, the Spacecraft has not been Launched within 24 months
following the Spacecraft's actual earliest date that the
Spacecraft is available for shipment provided that
Preliminary Acceptance has occurred (the "Shipment
Availability Date"), then the full amount of the Incentives
Obligations (and any Change Order Profit Component, if
applicable) (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 its Shipment
Availability 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 (plus interest thereon
calculated at the Incentives Interest Rate) 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
Spacecraft has not been Launched prior to the third
anniversary of Shipment Availability Date (the "Third
Anniversary"), then Buyer shall have an
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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
Spacecraft to the fifth anniversary of the Spacecraft's
Shipment Availability Date (the "Extension Period"). If
Buyer does not timely exercise the LOPS/MOPS Option, then
Buyer shall pay Contractor the portion of the "Related
Services Price" (as defined below) for the Spacecraft
expended by the Contractor. If Buyer timely exercises the
LOPS/MOPS Option, then the Related Services Price for the
Spacecraft during the Extension Period, shall be increased
by [***] 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 Shipment
Availability Date of the Spacecraft. If Contractor's
obligation to provide Related Services is terminated under
the immediately preceding sentence, then Buyer shall pay the
portion of the Related Services Price expended by the
Contractor. For purposes of this Paragraph 6.3.4.3, "Related
Services Price" shall mean the amount payable upon
completion of the Related Services pursuant to Paragraph
6.2.
6.3.4.4 If, for any reason, other than Contractor's fault, a
Launch failure occurs between the time of Launch and the
Commencement Date (or if no Commencement occurs), then the
full amount of the
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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 failure. 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. Buyer agrees to name Contractor as a loss payee
under Buyer's launch insurance policy to the extent
Contractor is entitled to payment of Recoverable Amounts.
During the [***] immediately following such Launch failure,
Buyer shall use best reasonable efforts to obtain the
proceeds of its launch insurance to pay Contractor the
Recoverable Amounts, hereunder. However, if Contractor does
not receive all such Recoverable Amounts from the proceeds
of Buyer's launch insurance within such [***] 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.
For the purposes of this Paragraph 6.3.4.4, "Launch" shall
mean intentional ignition of any first stage engine of the
Launch Vehicle.
6.4 Contractor shall not be obligated to deliver the Spacecraft to the
Launch Site if there are any outstanding Delinquent Payments owed by
Buyer to Contractor
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with respect to such Spacecraft under this Contract one month prior to
shipment of such Spacecraft from the Contractor facility. "Delinquent
Payments" are defined as those payments not received by Contractor
within thirty (30) days of the later of (i) the dates due as defined
in Paragraphs 6.2.1 and 6.2.2 above or (ii) the date that Buyer
received Contractor's invoice therefor. Once Buyer has paid Contractor
for any "Delinquent Payments" and any interest accrued in accordance
with Paragraph 6.6 below, Contractor 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 Buyer of such Delinquent Payments. Buyer will be
responsible for and will pay to Contractor any reasonable costs and
[***] profit on such costs that Contractor may incur as a result of a
delay in delivery due to Buyer's Delinquent Payments. Notwithstanding
the foregoing, this Section 6.4 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 Buyer on account
of an alleged breach by Contractor or other dispute as to such payment
provided such alleged breach of dispute is being handled in accordance
with Article 33. . In such event, Buyer 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.
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6.5 Invoice
6.5.1 Invoices submitted to Buyer for payment shall contain a cross-
reference to the Contract number and the date specified in the
Payment Plan of Paragraph 6.2, if any. Contractor shall submit
one (1) original invoice for the Spacecraft in each instance
to:
PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx, Controller, and Xxxxxx
Xxxxxxxx, Executive Vice President and
Chief Technology Officer
cc: Xxxxx Xxxxxxxxxxx, Senior Vice President -- Space
Systems
6.5.2 Invoice amounts, as specified in Paragraph 6.2, provide for
xxxxxxxx to be submitted by the 15th day of each month (unless
such invoice is for Related Services or Exhibit H
Documentation) and in any case shall be paid by Buyer within
thirty (30) days upon receipt of the proper invoice by Buyer.
6.5.3 The Contractor may submit the invoice for initial payments via
facsimile to Xxxxxxxx Xxxxxxxxx and the original invoice copy
shall be forwarded to the Buyer for record purposes. Such
facsimile copy shall be recognized as the formal submittal of
and receipt by the Buyer of such invoice.
6.6 Late Payments
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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 6.6 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 Date" Defined. The calendar date during which a Launch
will occur. The Launch Date shall be notified by Buyer to
Contractor no later than three (3) months prior to the first
day of the applicable Launch month and once established, shall
become an express term of this Contract, subject to change in
accordance with this Article 7.
7.1.2 "Launch Window" Defined. 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 mutual
agreement of Buyer and Contractor no later than forty-five (45)
days prior to the Launch Date and once established, shall
become an express term of this Contract.
7.1.3 Adjustment of dates. The time periods as delineated in Sections
7.1.1 and 7.1.2 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 the Spacecraft if Buyer invokes the remedial provisions of
Article 3, Paragraph 3.3.
7.3 If the Spacecraft Launch Date is postponed for any reason other than
the primary fault of Contractor (and/or any of its subcontractors or
suppliers), excluding any postponement due to an Excusable Delay as
defined in Article
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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 such postponement is included in the equitable
adjustment, Buyer 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 [***]
7.4 Notwithstanding the foregoing, if the Spacecraft Launch Date 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) Reservation and procurement of launch services, launch insurance
(Contractor to be named a loss payee as provided in Paragraph
6.3.4.2), and associated services and facilities as described in
the applicable Launch Vehicle users' manual.
2) 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.
3) Earth station facilities for IOT including appropriate RF
facilities, but not specialized test equipment.
4) Lightning warning services.
Contractor will provide preliminary requirements of Item 1 above to
Buyer no later than two (2) 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 services which Buyer
has procured in Buyer's contract(s) for launch services.
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In the event that the Buyer-Furnished Items set forth above are not
provided in a timely manner, excluding any excusable delay as defined
in Article 12 herein, then Buyer 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 at no higher than market prices, with title and possession of
all such procured items reverting to Buyer after Contractor's use
under this Contract; 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 [***]. In the event that the Buyer-Furnished Items are not
provided in a timely manner and the Contractor must procure or rent
suitable substitutes, and the foregoing process has materially
affected the Contractor's ability to ship the Spacecraft on or prior
to the applicable Shipment Date, the Parties agree to adjust such
Shipment Date to account for any delay resulting from the non-
suitability or non-timely provision of such Buyer-Furnished Items.
8.2 Contractor shall maintain a system to ensure the adequate control and
protection of Buyer's Property. For the purposes of this Article,
"Buyer's Property" shall be defined as any item which Buyer provides
to the Contractor or directs Contractor to maintain in storage or an
inventory account under this Contract. Upon receipt of notification
from Buyer, the Contractor shall complete and return within fifteen
(15) working days a Property System Certification describing the
system that will be used to control Buyer's Property. Additionally,
upon prior notice to Contractor, Buyer's representative may, at its
option and at no additional cost to Buyer, conduct surveillance of the
Contractor's Property Control System during normal
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business hours as Buyer 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 Buyer's Property, accomplish the following:
A. Establish and maintain inventory records and make such records
available for review upon Buyer'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 Buyer's Property is used only for performing this
Contract, unless otherwise provided in this Article or approved
by Buyer.
8.4 Contractor shall not modify, add-on, or replace any Buyer's Property
without Buyer's prior written authorization. Contractor shall
immediately report to Buyer's contract representative the loss of any
Buyer's 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
Buyer, the Contractor shall perform a physical inventory, adequate for
accountability and disposition purposes, of all Buyer'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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8.6 The use of Buyer's TT&C ground systems at Fillmore (for C-Band
Programs) or Castlerock (for K-Band programs) shall be provided at no
cost to the Contractor for transfer orbit services.
ARTICLE 9. INSPECTION AND ACCEPTANCE
9.1 Inspection of all deliverable 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 the Spacecraft shall occur when all in-
plant tests required to be performed by Contractor for the Spacecraft
and other deliverable hardware have been completed and the Contractor
has demonstrated at the pre-ship review that the Spacecraft and other
deliverable hardware and contract deliverables meet the requirements
of this Contract, at which time Buyer shall accept the Spacecraft and
other deliverable hardware on a preliminary basis in writing within
five (5) business days. If the Spacecraft or other deliverable
hardware is unacceptable, Contractor shall promptly and at its
expense, rectify the unsatisfactory hardware and resubmit such
hardware for acceptance by Buyer as provided above. In either case,
such hardware shall be deemed accepted upon failure of Buyer to notify
Contractor in writing within the above five (5) business days that it
is accepted, rejected or that in Buyer's opinion further corrective
action must be taken by the Contractor. In the event that Buyer has
not given Preliminary Acceptance of the Spacecraft, Contractor shall
not ship the Spacecraft from Contractor's facility without Buyer's
prior
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written consent. Any such Preliminary Acceptance shall not constitute
a "Consent to Fuel" nor a "Final Acceptance", which shall occur
pursuant to Paragraphs 9.3 and 9.4, respectively.
9.3 Buyer 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."
Contractor shall not fuel the Spacecraft at the launch site until
Buyer has given its written "Consent to Fuel" notice after
satisfactory completion and Buyer's review of successful launch site
test data upon completion of launch integration facility and/or launch
site tests specified in Exhibit C, Spacecraft Integration Test Plan.
9.4 Final Acceptance of the Spacecraft shall occur upon the earlier to
occur of (i) the completion of In-orbit Testing in accordance with
Exhibit A, or (ii) immediately before a Partial Failure, Total Failure
or Total Constructive Failure of the Spacecraft (as each such term is
defined in the applicable launch insurance contract or successor
contract), which occurs at or after Intentional Ignition.
9.5 With respect to deliverable Hardware which Buyer 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 forth in Article 16 herein, entitled "Spacecraft Warranty," or
such other event mutually agreed upon between the Parties.
9.6 Non-Conforming Products.
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9.6.1 At (i) the Effective Date (in the case of Galaxy VIII(i)R),
(ii) the Option exercise Date (in the case of an Option
Spacecraft) and (iii) the order date (in the case of a
Replacement Spacecraft), Contractor shall notify Buyer in writing
of the dry mass of such Spacecraft (the "Specified Dry Mass").
Contractor shall formally notify Buyer, by letter, not later than
ten (10) months prior to the Shipment Date for such Spacecraft,
and at any time thereafter, in the event that, based on actual
mass measurements and historical statistics, the dry mass for a
Spacecraft is projected to exceed [***]. If (i) the Specified Dry
Mass for a Spacecraft does not exceed [***], (ii) Contractor
notifies Buyer pursuant to the immediately preceding sentence
that dry mass for such Spacecraft is projected to exceed [***]
and as a result such Spacecraft cannot achieve the Specified
Operational Lifetime on a Ariane 42L launch vehicle and (iii)
Buyer will be required to pay for additional weight from the
Ariane 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 a maximum of [***].
9.6.2 Any Preliminary Acceptance or Final Acceptance by Buyer of a
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 6.3 ("Incentive
Obligations") with respect to the Spacecraft or other deliverable
that does not perform to the specifications of this Contract.
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9.6.3 In the event that (i) Contractor makes a reimbursement to Buyer
with respect to a Spacecraft pursuant to Paragraph 9.6.1, and
(ii) the Useful Commercial Life of such Spacecraft continues
beyond the Specified Operational Lifetime, then Buyer shall pay
to Contractor each month that the Useful Commercial Life of
such Spacecraft continues (not to exceed thirty-six months
beyond the Specified Operational Lifetime) an amount equal to
the lesser of (a) [***] or (b) [***] All amounts payable by
Buyer pursuant to this Paragraph 9.6.3 shall include interest
on the amount payable by Buyer, calculated at the Incentives
Interest Rate from the date that Contractor reimbursed Buyer
pursuant to Paragraph 9.6.1 until the date of the applicable
payment by Buyer. [***]
9.7 Until there has been a launch of the Spacecraft that does not result
in a Total Failure, Total Constructive Failure or Partial Failure, (as
defined in the applicable launch insurance contract) prior to the
completion of the Related Services, Contractor shall [***] and shall
[***]
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ARTICLE 10. ACCESS TO WORK IN PROCESS
10.1 Contractor shall afford Buyer access to work in progress being
performed at Contractor's plants and (subject to the Buyer's launch
vehicle contract) at the launch integration facility and/or launch
site pursuant to this Contract, including technical data,
documentation, and hardware, at all times, subject to Contractor's
approval not to be unreasonably withheld, 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)
Contractor's security procedures and (ii) U.S. or foreign government
laws, rules and regulations.
10.2 To the extent that the Contractor's major subcontracts permit,
Contractor shall afford Buyer access to work being performed pursuant
to this Contract in subcontractor's plants during normal business
hours in the company of Contractor's representatives.
Contractor shall exert reasonable efforts in subcontracting to obtain
permission for Buyer access to those major subcontractors' plants.
Major subcontracts are defined as those subcontracts in excess of
[***]
10.3 Buyer 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 Contractor,
Contractor shall take all reasonable steps to secure Buyer's access to
the subcontractor's facility or facilities. Buyer's right to witness
testing shall be on a non-interference basis with the subcontractor's
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activities and subject to (i) any subcontractor security procedures
and (ii) U.S. or foreign government laws, rules, and 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" and the final sentence of
Paragraph 4.3, 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 for more than [***] other than due to the primary
fault of Buyer or a Force Majeure Event. 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 which ultimately would have been
deliverable 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
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Contractor shall retain title and possession to all terminated
hardware and data which ultimately would have been deliverable by
Contractor.
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, a final determination is made pursuant to
Article 33, entitled "Disputes," 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 fails to meet its obligations under this Contract. Buyer
shall have no other rights or remedies for late delivery of the
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 and does not arise from the acts
or omissions of the delayed 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 Contract.
12.3 Notwithstanding the foregoing, if the Launch Date for the Spacecraft
defined in Paragraph 7.1 herein is delayed due to a Force Majeure
Event affecting Buyer's ability to furnish any item to be supplied by
it under Article 8 hereof, Buyer 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.
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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 [***] or longer from the initial occurrence
of such Force Majeure Event, then Buyer shall have the right to
terminate this Contract 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 [***] 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 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 14.4 below) expended by Contractor for all work done up to
the date of termination on the terminated portion of the Contract,
settlements with subcontractors for work performed prior to
termination on the terminated portion of the Contract, 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 for the applicable Spacecraft that is set forth
in Exhibit F hereto, as of the date of termination, less amounts
previously paid by Buyer to Contractor pursuant to Article 6; provided
that the Parties agree that Exhibit F sets forth the maximum
termination liability if the entire Contract is terminated under this
Article 14 with respect to the applicable Spacecraft, and that the
maximum termination liability shall be reduced pro rata appropriately
in the event of a termination under this Article 14 of less than all
the work to be performed by Contractor. 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 for a Spacecraft exceed either
the Contract Price defined in Article 5 herein or the amount specified
in Exhibit F for such Spacecraft.
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14.2 In the event of termination by Buyer hereunder, and upon payment in
full of all amounts due (if any) under 14.1 above (or, if any amount
is in dispute, payment of such amount into escrow in the manner set
forth in Paragraph 6.4), 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 14.3 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 Buyer.
14.3 At Buyer'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 Buyer, 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 Buyer. Contractor shall use its
reasonable best efforts to obtain fair market value for the applicable
hardware. Buyer, at its sole option, may accept or reject the
proposal submitted by Contractor. In the event that Buyer accepts the
proposal submitted by Contractor, payment by Contractor to Buyer of
the agreed upon payment value shall occur within thirty (30) days of
the sale/transfer of the applicable hardware, or such other payment
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period as mutually accepted between the Parties. If the Contractor's
proposal is rejected by Buyer, and if Contractor is unable to find any
alternative use within [***] of being requested to do so or if Buyer
so directs, then Title to the applicable hardware shall be vested as
stated in Paragraph 14.2 above.
14.4 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 that
Contractor's claim for the 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. The CPA to perform such audit shall be selected by
the Buyer, subject to the approval of the Contractor, which approval
shall not be unreasonably withheld (and in any event shall not be
withheld if Buyer selects a "Big Six" accounting firm). Contractor
shall cooperate with such CPA and shall provide all data and records
reasonably requested by such CPA. 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 the amount of Contractor's
termination claim, Buyer shall only be obliged to pay the amount of
Contractor's termination claim.
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14.5 Contractor shall use its reasonable best efforts to include in its
subcontracts for work hereunder terms that will enable Contractor to
terminate such subcontracts with a goal of minimizing termination
costs in a manner consistent with this Article 14.
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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 Buyer as
follows:
15.1. Risk of loss of the Spacecraft and title shall pass from
Contractor to Buyer upon the earlier to occur of: (i) the
completion of In-orbit Testing in accordance with Exhibit A; or
(ii) immediately before a Partial Failure, Total Failure or
Total Constructive Failure (as each such term is defined in
Buyer's applicable Launch Insurance Contract) which occurs at
or after Intentional Ignition.
15.1.2 In respect to a Spacecraft which Buyer directs Contractor to
store, title and risk of loss shall remain with the Contractor
until Final Acceptance as specified in Article 9.5 herein.
15.1.3 "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
defined in Buyer's applicable Launch Insurance Contract).
Responsibility and liability for the Spacecraft prior to
Intentional Ignition is with the Contractor.
15.2 In the event of damage to or destruction of deliverable hardware when
Contractor shall have risk of loss, Contractor shall repair or replace
(subject to Buyer's consent, not to be unreasonably withheld) said
hardware.
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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 the Spacecraft is stored
by the Contractor at Buyer's direction until Final
Acceptance as specified in Article 9.5.
(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, or Final Acceptance, if
earlier.
15.3.2 Third Party Liability Insurance
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(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.
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(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.
ARTICLE 16. SPACECRAFT WARRANTY
16.1 Contractor warrants that the 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
applicable acceptance criteria in Exhibits A-D herein.
16.2 This warranty shall start from the date of Preliminary Acceptance of
the 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 at any time during the
Warranty Time Period Contractor fails to correct or replace such
defective goods and fails to initiate reasonable
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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 the Spacecraft after Intentional Ignition (as
defined in Paragraph 16.2) of the Launch Vehicle.
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
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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.
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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 a 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 have been 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 the Spacecraft after Intentional Ignition (as
defined in Paragraph 16.2), and Buyer
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shall obtain waivers of subrogation rights from Buyer's insurers
against Contractor, and affiliates and subcontractors of Contractor.
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE
18.1 If the 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 the Spacecraft
shall be returned at Contractor's option and 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.
After completion of inspection and refurbishment, Contractor shall not
re-ship such Spacecraft without the consent of Buyer, which shall be
governed by Paragraph 9.2.
18.2 If the 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 the 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. After completion of
inspection and refurbishment, Contractor shall not re-ship such
Spacecraft without the consent of Buyer, which shall be governed by
Paragraph 9.2.
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18.3 If the Spacecraft is returned to Contractor's facility for inspection
and refurbishment per the terms of Paragraph 18.2 above, all charges
to return the Spacecraft to the Launch Site shall be borne by Buyer.
18.4 If the Spacecraft has not been launched within [***] after its
preliminary Acceptance, neither Party shall be further obligated to
the other with respect to the Spacecraft. Disposition of the
Spacecraft shall be at the option of Buyer with costs of such
disposition to be borne by Buyer.
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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 subsidiaries, and the officers,
employees, consultants and advisors of Buyer and its subsidiaries
(each such party entitled to indemnification being referred to herein
as a "Buyer Indemnitee") 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, and provided
that such Buyer Indemnitee has not intentionally done and shall not
intentionally do anything to prejudice materially the defense of such
claim, action or proceeding.
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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 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 To the extent that an infringement of an intellectual property right
results solely from the compliance by Contractor with an express
direction of Buyer in a Change Order Request to employ a particular
design not provided in the original Spacecraft Specification for such
Spacecraft, then Buyer shall defend or settle, at its expense, any
such suit against Contractor, subject to the same conditions,
liability cap and other limitations provided in this Article 19 that
are applicable to Contractor's indemnification obligations.
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19.6 The foregoing constitutes the Parties' entire obligation with respect
to claims for infringement described in this Article 19.
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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 Program 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 the
Spacecraft and delivered hardware. Contractor agrees that it will not
revoke such license if Buyer is in compliance with the terms of the
license.
20.2.1 In the case of joint Program 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 Program Inventions, as well as
in and to patent applications and patents thereon in all
countries.
20.2.2 In the case of such joint Program 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
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make its election at the earliest practicable time, and shall
notify the other Party of its decision.
20.2.3 The expenses for preparing, filing and securing each joint
Program 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 Program Invention application
for patent is filed by either Party in a 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 the apparatus
and/or methods under said application and patent.
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20.3 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.
20.4 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.
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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.
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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 thirty (30) 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, but in no case less than
reasonable care.
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 express
written 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 expressly authorized in writing 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:
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22.4.1 Such data and information are previously known 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
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 are disclosed by the receiving Party
as required by law or government regulation or order (as long
as the receiving Party provides reasonable notice to the
disclosing Party prior to such disclosure); or
22.4.7 Such data and information are released for disclosure in
writing by or with the express written 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, and subject to
Paragraph 22.7, Buyer may
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disclose any Proprietary Information on a need to know basis to its
customer(s), contractors, insurers, consultants, advisors, counsel
and actual or prospective lenders, investors, or successors in
interest. In no event shall either Party disclose any Proprietary
Information of the other Party to any competitor of the other Party
without first obtaining written consent from the other Party.
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.
22.7 Certain of the hardware and documentation ("Export-Licensed
Products") furnished under this Contract will be authorized by the
United States Government for export only to the designated launch
site for Launch into space or other locations required for
performance of obligations under this Contract. Such Export-Licensed
Products or any other ITAR controlled hardware and/or documentation
may not be resold, diverted, transferred, trans-shipped or otherwise
be disposed of in any other country or in any other manner, either in
their original form or after being incorporated through an
intermediate process into other end items without the prior written
approval of the United States Government, which approvals are the
sole responsibility of the Buyer. Additionally, transferring
ownership or control to any other person who is not a U.S. citizen or
business entity which is not incorporated in the United States, of
any of the Export-Licensed Products or ITAR controlled hardware
and/or documentation furnished under this Contract is considered an
export and as such also requires prior written approval from the
United States Government,
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which approvals are the sole responsibility of the Buyer. The Buyer
represents and warrants that the ultimate end use of the Export-
Licensed Products and ITAR controlled hardware and/or documentation
is for provision of telecommunications services.
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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.
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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 the Spacecraft and/or deliverable hardware subsequent to
the date of delivery to Buyer. Buyer shall be responsible for any
inventory taxes, sales 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 or delivery of goods under the provisions
of Article 14.
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 use 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
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an invoice and attachment(s) evidencing such payment having been made
by Contractor.
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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 without
resort to its conflicts of law principles.
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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.
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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. PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Executive Vice President and
Chief Technology Officer
cc: Xxxxx Xxxxxxxxxxx
Senior Vice President - Space Systems
and
cc: Xxxxxxx X. Xxxxx
Vice President and Associate General Counsel
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Authorized Representative(s): R. Xxxxxxx Xxxx
President and Chief Executive Officer
Xxxxxx Xxxxxxxx
Executive Vice President and
Chief Technology Officer
Xxxxx Xxxxxxxxxxx
Senior Vice President - Space Systems
2. Boeing Satellite Systems, Inc.
Xxxx Xxxxxx Xxx 00000, Xxxxxxx Xxxxxxx
Xxxx. X00, M/S A374
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxx, Contract Manager
cc: Xxxxxx Xxxxxxxxx, Program Manager
Authorized Representative(s): Xxxxxx X. Xxxxxxx
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Vice President and General Manager
Xxxxx Xxxxxxxx, Senior Vice President
Programs
or in each case as a Party may direct by notice to the other Party in
accordance with this Article 27.
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ARTICLE 28. INTEGRATION
This document, with Exhibits, constitutes the entire understanding between
the Parties with respect to the subject matter of this Contract and
supersedes all previous oral and/or written negotiations, commitments, and
understandings of the Parties, including that certain Memorandum of
Agreement dated as of October 16, 2000 (the "MOA") between the Parties.
For the avoidance of doubt, this Contract shall not affect the terms and
conditions of Amendment No. 2, dated concurrently herewith, to the Fixed
Price Contract 98-PAS-002 dated as of October 9, 1998 between Buyer and
Contractor.
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ARTICLE 29. CHANGES
Subject to Paragraphs 4.2.1 and 5.3:
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 the 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 [***] 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 ten (10) calendar
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 negotiate in
good faith 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 Contract,
as unchanged. In the event the Parties are able to reach agreement
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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 cannot 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, 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")
[***] days prior to the proposed effective date of the change
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 the 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 [***] 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
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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 ten (10) calendar 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 negotiate in
good faith 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 cannot be achieved within a reasonable
period of time under the circumstances, Buyer may make a 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
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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 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
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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 HS601HP
Spacecraft design, then Contractor shall provide reports to Buyer
concerning such improvements. Buyer may request that any improvement
to the HS601HP 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 HS601HP 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 each Spacecraft, as set forth in the applicable 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 HS601HP 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
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time as the monthly installments of the Incentives Obligations for
the Spacecraft as set forth in Paragraph 6.3.4 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.
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 14.3 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 of
the Effective Date for Ariane 4 and 5, Proton, and SeaLaunch launch
vehicles). The Contractor shall provide the Buyer written notice of
any material changes in such interface requirements occurring after
the Effective Date of this Contract and a good faith estimate of the
time required to achieve compatibility as soon as practical after the
Contractor becomes aware of a change in interface requirements for
any one or more of the aforementioned launch vehicles. In addition,
on the date(s) that Buyer exercises an Option for an Option
Spacecraft and/or orders any Replacement Spacecraft, Contractor shall
notify Buyer whether or not there have been any such material changes
that would apply to the launch of the applicable Option Spacecraft or
Replacement Spacecraft on any one or more of the aforementioned
launch vehicles. If the Buyer designates, and maintains designation
of, a Launch Vehicle affected by such material changes to Launch
Vehicle interface requirements, then [***]
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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.
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ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY
31.1 Buyer and Contractor each agree not to make a claim against the 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 the 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 launch activities at the launch
integration facility and/or launch site, shall enter the launch
integration facility and/or launch site, such party 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 the Spacecraft (for which they have control or privity of
contract with hereunder) have executed said Inter-Party Waiver of
Liability.
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ARTICLE 32. SPACECRAFT STORAGE
32.1 Buyer may, at its option, order Contractor to store, in accordance
with the provisions of Exhibit B Spacecraft Specification, the
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 of intention to
store to the Contractor not later than six (6) months prior to the
scheduled shipment of the relevant 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 the Spacecraft and Contractor shall arrange
for such storage facilities. If such storage facilities are
unavailable, Contractor and Buyer shall hold discussions to determine
a mutually agreed storage arrangement.
32.2 No later than six (6) months prior to a stored Spacecraft's scheduled
Launch Date, Buyer shall notify Contractor in writing of such Launch
Date. Contractor shall take such steps as may be necessary to remove
such Spacecraft from storage and ship it to the launch site
designated by Buyer so as to support such Launch Date.
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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's and Buyer's respective executive officers 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, 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.
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33.2.2 Administration and Rules. Arbitration proceedings in
------------------------
connection with the Contract 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 Contract. With
respect to the selection of arbitrators, arbitration
proceedings in connection with this Contract 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.
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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 Contract. 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 Contract without the prior written
consent of all Parties to the arbitration proceeding.
33.2.7 Fee and Expenses. All fees and expenses of any arbitration
----------------
proceedings in connection with this Contract 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 Buyer shall continue with
-----------
performance under this Contract during any disagreement,
negotiation, or arbitration.
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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. 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 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 prior to such assignment 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. As used in this
Agreement, "Affiliate" of, or a person "affiliated" with, a specified
person, shall mean a person that directly, or
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indirectly through one or more intermediaries, controls, or is
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
Buyer or Contractor 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.
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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 either Party 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 Contract. This Article shall survive the
expiration or termination of this Contract for whatever cause.
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ARTICLE 36. CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES
36.1 Without limiting the obligations of Contractor under other provisions
of this Contract, if the data available from another satellite
manufactured or under manufacture or design by Contractor (a
"Contractor Satellite") indicates that there is or may be a material
deficiency in the design or manufacture of such Contractor Satellite
which, in the reasonable opinion of Contractor, will or may adversely
affect the Spacecraft produced under this Contract, or the operations
of such Spacecraft, then Contractor shall notify Buyer of any such
material deficiency. Contractor shall promptly take appropriate
corrective measures, at Contractor's expense, with respect to the
Spacecraft so as to satisfactorily eliminate from such Spacecraft
prior to its shipment all the material deficiencies discovered in
Contractor Satellite(s), subject to the provisions of Paragraph 36.5.
36.2 In the event that the corrective measures performed pursuant to this
Article 36 cause a delay, then: (i) Contractor shall [***]; (ii) the
time periods provided in Paragraph 5.5 and 37.1 [***]; and (iii)
Buyer and Contractor shall discuss the impact (if any) to the
construction and delivery of the Spacecraft.
36.3 If Contractor, in performing corrective measures in accordance with
this Article 36, replaces any equipment or part determined to be
deficient, such deficient equipment or part shall remain or become
the property of Contractor.
36.4 Contractor shall disclose to Buyer sufficient technical and
operational information regarding a material deficiency [***] to
enable Buyer to make an informed decision regarding the taking of
corrective measures.
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Notwithstanding the foregoing, Contractor shall not be obligated by
this Article 36 to disclose the identity (or any identifying
information) of any such satellite, or the owners or customers of
such Contractor Satellite, on which a material deficiency is
discovered.
36.5 Contractor shall be obligated to notify Buyer promptly if Contractor
proposes to resolve technical deficiencies (arising during the design
and/or manufacturing process of the Spacecraft) through the
imposition of operational constraints. The Parties agree promptly to
enter into good faith negotiations to resolve any such deficiency
and, if appropriate, agree to adjust equitably the Contract Price
and/or schedule, subject to Paragraph 36.2. In the event that the
Parties cannot reach an agreement within five (5) business days as to
the resolution of such deficiency or its adjustment (if any) to
Contract Price and/or schedule, then the unresolved issues shall be
submitted to the Contractor's and Buyer's senior executives for
resolution. If such senior executives cannot reach agreement within
ten (10) business days thereafter, then the remaining unresolved
issues shall be submitted for resolution by arbitration pursuant to
Paragraph 33.2.
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ARTICLE 37. LIQUIDATED DAMAGES FOR LATE PERFORMANCE
37.1 Subject to Excusable Delays which excuse or delay Contractor's
performance under Article 12, in the event that (i) (A) the shipment
of a Spacecraft is delayed due to the fault of Contractor (and/or
Contractor's subcontractors or suppliers) and (B) such Spacecraft is
not shipped on or before the applicable Shipment Date identified
under Article 4 (as such date may be adjusted by mutual agreement of
the Parties), or (ii) [***] Contractor shall pay liquidated damages
for such Spacecraft as follows:
37.1.1 For [***] of delay in (a) the shipment of the Spacecraft (in
the event of clause (i) above) or (b) [***] (in the event of
clause (ii) above), Contractor shall pay to Buyer liquidated
damages equal to [***]
and
37.1.2 For each of the next [***] of delay in (a) the shipment of
the Spacecraft (in the event of clause (i) above), or (b)
[***] (in the event of clause (ii) above), Contractor shall
pay to Buyer additional liquidated damages equal to [***].
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37.2 In the event of any delay of a partial month, the amounts specified
in Paragraphs 37.1.1 and 37.1.2, as applicable, shall be pro rated on
a day-for-day manner based upon the number of days in such month.
37.3 Contractor shall pay to Buyer the liquidated damages owed pursuant to
Paragraphs 37.1.1, 37.1.2 and 37.6 within thirty (30) days of invoice
from Buyer.
37.4 The Parties understand and agree that the liquidated damages provided
under this Article 37 shall be in lieu of all other remedies of any
kind except for Buyer's rights and remedies under Articles 11 and 14.
The amounts presented in Paragraph 37.1 and 37.6 shall constitute
liquidated damages for such late shipment or delivery and shall not
constitute a penalty. The Parties acknowledge and agree that such
liquidated damages are believed to represent a genuine estimate of
the losses that would be suffered by reason of any such delay (which
losses would be difficult or impossible to calculate with certainty).
37.5 The Parties agree that the provisions of this Article 37 shall apply
separately to each Spacecraft, and that the maximum liquidated
damages for a Spacecraft under Paragraphs 37.1.1 and 37.1.2 is [***]
per Spacecraft.
37.6 In addition to the amounts (if any) payable under Paragraph(s) 37.1.1
and 37.1.2 above, if [***], the Contractor shall pay to Buyer
liquidated damages of [***]. In the event
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of any delay of a partial month, the per month amount specified in
this Paragraph 37.6 shall be pro rated on a day-for-day manner based
upon the number of days in such month.
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ARTICLE 38. OPTION SPACECRAFT
38.1 Buyer shall have the option (the "Option") to purchase from
Contractor one (1) additional HS601HP spacecraft (the "Option
Spacecraft") in accordance with this Article 38. The baseline
configuration for the Option Spacecraft shall be essentially the same
as the configuration of the PAS 10 spacecraft (delivered by
Contractor to Buyer under contract 98-PAS-002) as summarized in Table
38.1.1 below. Changes to such baseline configuration shall be handled
as a Change Order Request under Paragraph 29.3. Upon final agreement
of the configuration of the Option Spacecraft, Buyer and Contractor
shall prepare and sign Exhibit B2 based on such agreed configuration.
Buyer shall exercise this Option by (i) written notice to Contractor
and (ii) written agreement between the Parties on [***]. The
Contractor shall reasonably and promptly respond to Buyer's requests
for information and assistance in preparing and submitting to Buyer
[***]. Upon Buyer's exercise of the Option for the Option Spacecraft,
but not later than 2 business days after such exercise of the Option,
the Contractor shall issue a proper invoice to the Buyer for the
initial payment for the Option Spacecraft. Provided that the
Contractor receives the initial payment from the Buyer no later than
10 business days after the later of (i) exercise of the Option or
(ii) the business day that Buyer receives a proper invoice therefor
from the Contractor, the Contractor shall construct and deliver the
Option Spacecraft, perform all Related Services and deliver all
Documentation therefor, in accordance with the terms and provisions
of this Contract (except as expressly provided otherwise in this
Article 38) and all references in the Contract to "Spacecraft" shall
thereafter be deemed to include the Option Spacecraft. If the initial
payment is received by the Contractor later than 10 business days
after the later of (i) the exercise of the
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Option or (ii) the business day that the Buyer receives a proper
invoice therefor from the Contractor, the Option exercise date shall
be revised to the date of Contractor's receipt of the initial payment
and the Shipment Date shall be revised accordingly.
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38.1.1 Table 38.1.1
--------------------------------------------------------------------------------
Option Spacecraft Configuration
[***]
--------------------------------------------------------------------------------
38.2 Contractor and Buyer shall agree upon the Shipment Date for the
Option Spacecraft; provided that the Shipment Date shall not be later
than the date that is [***] after the exercise of the Option for such
Option Spacecraft. However, in no event shall the "Shipment Date" of
the Option Spacecraft be less than [***] after the "Shipment Date" of
the GVIII(i)R Spacecraft.
38.3 The Option shall expire if not exercised on or before [***].
38.4 The Contract Price for the Option Spacecraft shall be [***]. The
Contract Price shall include all Related Services and Documentation,
and shall be based upon use of an Ariane 4 or 5 Launch Vehicle. For
the Option Spacecraft purchased by Buyer, the Contract Price will be
paid in accordance with the payment plan in Paragraph 6.2, Table 6.2
(subject to pro rata adjustment in the event of a change in the
Contract Price or Shipment Date). Prior to exercise by Buyer of the
Option for the Option Spacecraft, Buyer shall not owe any amount to
Contractor with respect to the Option or such Option Spacecraft.
38.5 Option for Replacement Spacecraft:
Notwithstanding Paragraph 38.3, in the event that the GVIII(i)R
Spacecraft and/or the Option Spacecraft (if ordered) delivered under
this Agreement, on or before its Commencement Date (i) suffers a
launch failure or (ii) one or more
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Payloads are not Successfully Operating Payloads or (iii) the
Spacecraft is significantly impaired (whether by shortened lifetime,
operational constraints or otherwise), then Buyer shall have the right
to order a replacement spacecraft of essentially the same
configuration as the failed Spacecraft ("Replacement Spacecraft");
provided that Buyer orders such Replacement Spacecraft no later than
[***] after the date of launch failure or, in the case of
Payloads that are not Successfully Operating Payloads or a
significantly impaired Spacecraft, the Commencement Date, as
applicable, of the failed Spacecraft. The Parties shall agree, in
writing, on the Commencement Date if the Spacecraft is, or is expected
to become, significantly impaired. The Contract Price for all
Replacement Spacecraft ordered under this Paragraph 38.5 shall be
[***]. The Contract Price for the Replacement Spacecraft shall be paid
in accordance with the applicable payment plan attached hereto as
Exhibit F [***]. Contractor shall begin work on the Replacement
Spacecraft upon receipt of Buyer's order provided the associated
initial payment is received by the Contractor not later than 10
business days from the later of (i) Contractor's receipt of order or
(ii) the business day that the Buyer receives a proper invoice
therefor from the Contractor. The Shipment Date shall be the date that
is [***] after the later of (i) the date that Buyer orders such
Replacement Spacecraft unless the initial payment is received by the
Contractor later than 10 business days after the Buyer's order after
the Contractor provided the Buyer a proper invoice not later than 2
business days after the Buyer's order, in which case the Shipment Date
shall be [***] after receipt of the initial payment. However, in
no event shall the "Shipment Date" of the Replacement Spacecraft be
less than [***] after the "Shipment Date" of any other Spacecraft
ordered under this Contract. Except as provided otherwise in this
Paragraph 38.5, all other provisions in this Article 38 (other than
Paragraph 38.3) and elsewhere in this
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Agreement applicable to "Spacecraft" shall apply to Replacement
Spacecraft ordered pursuant to this Paragraph 38.5.
38.6 Economic Price Adjustment
The following price adjustment shall apply to any Spacecraft ordered
under this Article 38 after [***];
38.6.1 The price for the Replacement Spacecraft shall be adjusted,
when ordered, to reflect changes, if any, in accordance with
the following formula:
[***]
38.6.2 In the event the above [***] is not updated, is discontinued,
or if the method of calculation is changed, or if its basis
has changed, or factors comprising the index have changed, or
if circumstances reveal that the index is no longer
equitable, a comparable index, as mutually agreed between the
Parties, shall be utilized.
38.7 Option for Spacecraft Ground Compatibility Test.
In the event that the Buyer elects to have the Contractor support the
conduct of compatibility tests between the baseband equipment,
Contractor supplied equipment, Buyer supplied Software interface and
the Spacecraft as described in Section 4.4 of the Statement of Work,
Exhibit A2, [***] in accordance with a written mutual agreement by
the Parties. Such agreement shall occur prior to the Contractor's
obligation to perform such support of the tests.
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ARTICLE 39. NO THIRD PARTY RIGHTS
39.1 Contractor represents and warrants that neither Contractor nor any
third party has any continuing rights or obligations with respect to
any hardware deliverable under this Contract (except as to Contractor
as expressly provided herein) or with respect to any parts or
materials incorporated into any such hardware deliverable. Contractor
agrees to indemnify Buyer for, and hold Buyer harmless from, any and
all liability, loss, claim or damage to which Buyer or its affiliates
(or any director, officer, employee or agent of Buyer or one of its
affiliates) may become subject, arising from any claim by any such
third party for any breach of the representations and warranties made
by Contractor in this Article 39.
39.2 This Article shall survive delivery of the Spacecraft and the
hardware, the performance of the Related Services, and any
termination of this Contract.
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ARTICLE 40. INDEX OF DEFINED TERMS
Each of the following capitalized terms has the meaning ascribed to such
term in the applicable Paragraph.
Defined Terms Paragraph
------------- ---------
Affiliate 34
Assessments 24.2
Authorized Representatives 27
Buyer Introduction
Buyer-Furnished Items 8.1
Buyer Indemnitee 19.2
Calculated Operational Lifetime 6.3.1.5
Certain Documentation Exhibit H
Change Order Cost 29.5
Change Order Offer 29.3
Change Order Profit Component 29.5
Change Order Request 29.3
Change Proposal 29.1
Commencement Date 6.3.1.7
Contract Introduction
Contract Price 5.1
Contractor Introduction
Contractor Satellite 36.1
Costs 14.4
Degraded Payload 6.3.2.3
Delinquent Payments 6.4
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Deliverables 3
Documentation 4.1
Effective Date 42
Extension period 6.3.4.3
G&A Costs 29.5
Incentive Interest Rate 6.3.2.2
Intentional Ignition 16.2
Launch Date 7.1.1
Launch Vehicle 4.2.1
Launch Window 7.1.2
OCC 3.3
On-Station Operational Lifetime 6.3.2.1(b)
Pre-Launch Incentives Payment 6.3.4.1
Program Invention 20.1
Properly Operated 3.4
Proprietary Information 22
Recoverable Amount 6.3.4.4
Related Services 4.1
Related Services Price 6.3.4.3
Risk of Loss 15.1.4
Shipment Availability Date 6.3.4.3
Shipment Date 4.1
Spacecraft 3.1
Spacecraft Retirement Payment 6.3.3
Specified Operational Lifetime 6.3.1.1
Successfully Injected Spacecraft 6.3.1.5
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Successfully Operating Payload 6.3.1.2
Successfully Operating Transponder 6.3.1.3
Third Anniversary 6.3.4.3
Useful Commercial Life 6.3.1.5
Warranty Time Period 16.2
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ARTICLE 41. EFFECTIVE DATE OF CONTRACT
The "Effective Date" of this Contract is 15 December 2000; [***].
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IN WITNESS WHEREOF, the Parties hereto have executed this Contract No. 00-PAS-
001 to become effective upon the date specified in Article 41, herein entitled,
"Effective Date of Contract."
BOEING SATELLITE SYSTEMS, INC.
SIGNATURE: _______________________________________________
NAME: Xxxx Xxxxx
-----------------------------------------------
TITLE: Vice President, Contracts and Cost Estimating
-----------------------------------------------
DATE: December 15, 2000
-----------------------------------------------
PANAMSAT CORPORATION
SIGNATURE: _______________________________________________
NAME: _______________________________________________
TITLE: _______________________________________________
DATE: _______________________________________________
SIGNATURE: _______________________________________________
NAME: _______________________________________________
TITLE: _______________________________________________
DATE: _______________________________________________
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