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EXHIBIT 10.3
Certain portions of this document have been omitted and filed separately with
the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
CONTRACT BETWEEN
ECHOSTAR ORBITAL CORPORATION
AND
SPACE SYSTEMS/LORAL, INC.
ECHOSTAR 9 SATELLITE PROGRAM
(121(DEGREES) X.X.)
This document contains data and information proprietary to Space Systems/Loral,
Inc. and EchoStar Orbital Corporation. This data shall not be disclosed,
disseminated or reproduced, in whole or in part, without the express prior
written consent of Space Systems/Loral, Inc. and EchoStar Orbital Corporation
except as otherwise provided in this Contract.
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TABLE OF CONTENTS
PREAMBLE ...................................................................................4
RECITALS ...................................................................................5
ARTICLE 1 DEFINITIONS........................................................................6
ARTICLE 2 SCOPE OF WORK.....................................................................13
ARTICLE 3 DELIVERABLE ITEMS AND DELIVERY SCHEDULE...........................................14
ARTICLE 4 PRICE.............................................................................15
ARTICLE 5 PAYMENTS..........................................................................17
ARTICLE 6 PURCHASER-FURNISHED ITEMS.........................................................21
ARTICLE 7 COMPLIANCE WITH U.S. EXPORT LAWS AND DIRECTIVES...................................24
ARTICLE 8 ACCESS TO WORK IN PROGRESS........................................................25
ARTICLE 9 SATELLITE PRE-SHIPMENT REVIEW (SPSR)..............................................29
ARTICLE 10 SATELLITE ACCEPTANCE - PARTIAL AND TOTAL LOSS.....................................32
ARTICLE 11 ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN SATELLITES.................39
ARTICLE 12 DELIVERY, TITLE AND RISK OF LOSS..................................................42
ARTICLE 13 XXX...............................................................................43
ARTICLE 14 INTENTIONALLY DELETED.............................................................43
ARTICLE 15 WARRANTY..........................................................................44
ARTICLE 16 CHANGES...........................................................................48
ARTICLE 17 FORCE MAJEURE.....................................................................50
ARTICLE 18 PURCHASER DELAY OF WORK...........................................................53
ARTICLE 19 PATENT INDEMNITY..................................................................54
ARTICLE 20 INDEMNITY FOR BODILY INJURY AND PROPERTY DAMAGE...................................57
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TABLE OF CONTENTS (CONTINUED)
ARTICLE 21 TERMINATION FOR CONVENIENCE.......................................................60
ARTICLE 22 XXX...............................................................................63
ARTICLE 23 DEFAULT...........................................................................64
ARTICLE 24 PARTIAL LOSS AMOUNT...............................................................67
ARTICLE 25 ARBITRATION.......................................................................68
ARTICLE 26 INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH......................................70
ARTICLE 27 CORRECTIVE MEASURES...............................................................72
ARTICLE 28 RESERVED..........................................................................73
ARTICLE 29 XXX...............................................................................74
ARTICLE 30 XXX...............................................................................75
ARTICLE 31 RESERVED..........................................................................76
ARTICLE 32 RESERVED..........................................................................77
ARTICLE 33 GROUND STORAGE....................................................................78
ARTICLE 34 LIMITATION OF LIABILITY...........................................................80
ARTICLE 35 DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION................................82
ARTICLE 36 INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN DATA.....................................86
ARTICLE 37 PUBLIC RELEASE OF INFORMATION.....................................................88
ARTICLE 38 NOTICES...........................................................................89
ARTICLE 39 RISK MANAGEMENT...................................................................91
ARTICLE 40 ORDER OF PRECEDENCE...............................................................99
ARTICLE 41 GENERAL..........................................................................100
ARTICLE 42 ATTACHMENTS......................................................................104
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TABLE OF CONTENTS (CONTINUED)
ARTICLE 43 TERMINATION RIGHT................................................................105
ARTICLE 44 RESERVED.........................................................................106
ARTICLE 45 ANTICIPATED LIFE OF SATELLITE....................................................107
ARTICLE 46 KEY PERSONNEL ...................................................................108
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PREAMBLE
This Contract is entered into as of February 22, 2000 (the "Effective Date of
Contract" or "EDC") between EchoStar Orbital Corporation, organized and existing
under the laws of the State of Colorado having an office and place of business
at 0000 Xxxxx Xxxxx Xx, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as
"Purchaser") and Space Systems/Loral, Inc., a corporation organized and existing
under the laws of the State of Delaware, having an office and place of business
at 0000 Xxxxxx Xxx, Xxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
"Contractor").
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RECITALS
WHEREAS, Purchaser desires to procure one (1) communications satellite, known as
EchoStar 9, to be delivered on-orbit, risk management therefor, all required
ground equipment and support and training services, to the extent and subject to
the terms and conditions set forth herein, and
WHEREAS, Contractor is willing to furnish such Satellite, Launch Services, risk
management, ground equipment and support and training services, to the extent
and subject to the terms and conditions set forth herein, in consideration of
the Firm Fixed Price and other valid consideration.
NOW, THEREFORE, the Parties hereto agree as follows:
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ARTICLE 1 - DEFINITIONS
Capitalized terms used and not otherwise defined herein shall have the following
meanings:
1.1 "ACCEPTANCE" (i) with respect to a Satellite shall be as provided for
in Article 10, and (ii) with respect to any Deliverable Item other than
a Satellite shall be as provided for in Article 11.
1.2 "AFFILIATE" means, with respect to a Party, any person or entity
directly or indirectly controlling, controlled by or under common
control with such Party.
1.3 "AVAILABLE COMMUNICATIONS CAPACITY" means the cumulative sum of the
Expected Transponder Life of all Ku-band and Ka-band Transponders on a
Satellite.
1.4 "CONTRACT" means the articles of this executed Contract, its Exhibits
and its Attachment(s), as may be amended from time to time in
accordance with the terms hereof.
1.5 "CONTRACTOR" has the meaning set forth in the preamble and any
successor or assignee permitted hereunder.
1.6 "DELIVERABLE DATA" means the data and documentation required to be
delivered to Purchaser as specified in the Statement of Work.
1.7 "DELIVERABLE ITEM" means any of the items listed in Article 3.1, and
any other items ordered by Purchaser pursuant to Article 29, and,
collectively, the "DELIVERABLE ITEMS".
1.8 "DELIVERY" (i) with respect to a Satellite shall be as provided for in
Article 12.1, and (ii) with respect to any Deliverable Item other than
a Satellite shall be as provided for in Article 12.2.
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1.9 "EFFECTIVE DATE OF CONTRACT" or "EDC" means the effective date of this
Contract as specified in the preamble.
1.10 "EXPECTED TRANSPONDER LIFE" means, with respect to a particular
Transponder, the span of time measured in years (and any portion
thereof), calculated from the earlier to occur of: (i) 30 days after
Lift-Off or (ii) Purchaser's Acceptance or rejection of the applicable
Satellite pursuant to Article 10, until the earlier to occur of: (i)
the end of the Satellite Stated Life for such Satellite or (ii) the
time when the relevant Transponder experiences or is expected to
experience a Transponder Failure.
1.11 "FCC" means the Federal Communications Commission or any successor
agency or governmental authority.
1.12 "FIRM FIXED PRICE" has the meaning set forth in Article 4.1.
1.13 "FORCE MAJEURE" has the meaning set forth in Article 17.
1.14 "GROSS NEGLIGENCE" means reckless disregard for the rights of others
which very closely approaches intentional wrongdoing or other actions
(or failures to act) which very closely approach intentional
wrongdoing.
1.15 "IN-ORBIT TESTING" or "IOT" means the testing of a Satellite on-orbit
in accordance with the Program Test Plan.
1.16 "INTELLECTUAL PROPERTY CLAIM" has the meaning set forth in Article 19.
1.17 "INTENTIONAL IGNITION" means, with respect to a Satellite, the official
time designated by the Launch Agency during the launch sequence when
the initial motors of the Launch Vehicle are ignited for the purpose of
Launch following a planned countdown.
1.18 "LAUNCH" means, with respect to a Satellite, Intentional Ignition
followed by Lift-Off.
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1.19 "LAUNCH AGENCY" means the provider responsible for conducting the
Launch Services for a Satellite.
1.20 "LAUNCH SERVICES" means those services provided by the Launch Agency
pursuant to the Launch Services Agreement.
1.21 "LAUNCH SERVICES AGREEMENT" or "LSA" means the contract between
Contractor and the Launch Agency which provides for Launch Services for
a Satellite, as such contract may be amended from time to time in
accordance with its terms.
1.22 "LAUNCH SITE" means the location that will be used by the Launch Agency
for purposes of launching a Satellite.
1.23 "LAUNCH SUPPORT" or "LAUNCH SUPPORT SERVICES" means those services
specified in the Statement of Work to be provided by Contractor in
support of Launch.
1.24 "LAUNCH VEHICLE" means the launch vehicle selected by Purchaser and
used for Launch of a Satellite.
1.25 "LIBOR" means the rate of interest per annum, at any relevant time, at
which thirty (30) day U.S. dollar deposits are offered at such time in
the London interbank market.
1.26 "LIFT-OFF" means, with respect to a Satellite, physical separation of
the Launch Vehicle from the ground support equipment following
Intentional Ignition due to the Launch Vehicle rising under its own
power for the purpose of launching a Satellite.
1.27 "MISSION OPERATIONS SUPPORT SERVICES" means the orbit-raising, IOT and
related services specified in the Statement of Work to be performed by
Contractor for a Satellite.
1.28 "NSP" means not separately priced.
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1.29 "PARTIAL LOSS" means, with respect to any Satellite, that the Available
Communications Capacity is less than the Stated Communications Capacity
as a result of one or more Ku-Band or Ka-Band Transponder Failures
where such reduction does not constitute a Total Loss, and where the
event giving rise to such loss has manifested itself at or after
Intentional Ignition.
1.30 "PARTIAL LOSS AMOUNT" means an amount payable to Purchaser pursuant to
Article 10, and calculated pursuant to Article 24, for the purpose of
indemnifying Purchaser in the event of a Partial Loss.
1.31 "PARTY" or "PARTIES" means Purchaser, Contractor or both, as the
context requires.
1.32 "PAYMENT PLAN" means the payment plan for the applicable Deliverable
Item, attached as Attachment A.
1.33 "PERFORMANCE SPECIFICATION" means the Satellite performance
specification attached as Exhibit B, as such Exhibit may be amended
from time to time in accordance with the terms of this Contract.
1.34 "PMO" means the Purchaser's program management office.
1.35 "PRODUCT ASSURANCE PROGRAM PLAN" means the product assurance program
plan attached as Exhibit C, as such Exhibit may be amended from time to
time in accordance with the terms of this Contract.
1.36 "PROGRAM TEST PLAN" means the Satellite program test plan attached as
Exhibit D, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
1.37 "PROPRIETARY INFORMATION" has the meaning set forth in Article 35.
1.38 "PURCHASER" has the meaning set forth in the preamble and any successor
or assignee permitted hereunder.
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1.39 "SATELLITE" means a communications satellite that is to be manufactured
by Contractor pursuant to this Contract.
1.40 "SATELLITE ACCEPTANCE REVIEW" has the meaning set forth in Article
10.1.
1.41 "SATELLITE ANOMALY" means, with respect to any Satellite, any
occurrence that occurs at or after Intentional Ignition and has or
could have an impact on a Satellite's health or performance of such
Satellite.
1.42 "SATELLITE PRE-SHIPMENT REVIEW" OR "SPSR" has the meaning set forth in
Article 9.
1.43 "SATELLITE STATED LIFE" means fifteen (15) years after the earlier to
occur of: (i) thirty (30) days after Lift-Off or (ii) Purchaser's
Acceptance or rejection of a Satellite pursuant to Article 10.
1.44 "SCF" means satellite control facility.
1.45 "SKYNET" means and refers to Loral SpaceCom Corporation, a corporation
organized and existing under the laws of the State of Delaware, doing
business as Loral Skynet(R), and having a place of business at 000
Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
1.46 "STATEMENT OF WORK" or "SOW" means the statement of work attached as
Exhibit A, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
1.47 "STATED COMMUNICATIONS CAPACITY" means, with respect to a Satellite,
the product of the Satellite Stated Life multiplied by the number of
Ku-Band and Ka-Band Transponders on such Satellite (excluding the
C-band Transponders on a Satellite).
1.48 "TT&C" means telemetry, tracking and control.
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1.49 "TOTAL LOSS" means, with respect to any Satellite (i) the complete
loss, destruction or failure of such Satellite, (ii) a loss or failure
such that the Available Communications Capacity is equal to less than
fifty percent (50%) of the Stated Communications Capacity, or (iii)
prior to IOT, but in any event no later than one hundred twenty (120)
days after Launch, the failure to place such Satellite into its
assigned orbital location.
1.50 "TRANSPONDER" means individually those sets of equipment within the
communications subsystem of a Satellite that provide a discrete path to
receive communications signals from earth, translate and amplify such
signals and transmit them to earth.
1.51 "TRANSPONDER FAILURE" means, at any time at or after Intentional
Ignition the physical loss of, or damage to, or permanent failure
(including permanently intermittent failures) of a Ku-Band or Ka-Band
Transponder to meet the requirements of the Performance Specification,
provided that, after all reasonable technical alternatives for
correcting such failure are examined: (i) the relevant Transponder
cannot be used for its intended commercial communications purposes; or
(ii) consistent with telemetry data, IOT or other evidence that
manifests itself at or after Intentional Ignition, it is expected that
the relevant Transponder will cease to be able to be used for its
intended commercial communications purposes before the end of Satellite
Stated Life. All available redundant and/or spare components on the
Satellite applicable to the Transponder must be used or cease to be
available before a Transponder is considered to have experienced a
Transponder Failure. For clarification purposes, a Transponder shall be
deemed a Transponder Failure if: (i) it cannot be used for its intended
commercial communications purposes, or (ii) consistent with telemetry
data, IOT or other evidence that manifests itself at or after
Intentional Ignition, it is expected that the relevant Transponder will
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cease to be able to be used for its intended commercial communications
purposes before the end of Satellite Stated Life, in either case due to
the failure of the Satellite to meet the requirements of the
Performance Specification, including without limitation loss of power
or on-board propellant, even if the relevant Transponder itself meets
the requirements of the Performance Specification.
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ARTICLE 2 - SCOPE OF WORK
2.1 Provision of Services and Materials
Contractor shall provide the necessary personnel, material, services,
and facilities to: design, manufacture, test, Launch and deliver on
orbit to Purchaser, one (1) Satellite, together with all other
Deliverable Items referred to in Article 3.1, in accordance with the
following Exhibits, which are attached hereto and made a part hereof:
2.1.1 Exhibit A, Statement of Work, dated [TBD] (Document Reference No.
[TBD]);
2.1.2 Exhibit B, Satellite Performance Specification, dated [TBD] (Document
Reference No. [TBD]);
2.1.3 Exhibit C, Product Assurance Program Plan, dated [TBD] (Document
Reference No. [TBD]);
2.1.4 Exhibit D, Satellite Program Test Plan, dated [TBD] (Doc No. [TBD]).
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ARTICLE 3 - DELIVERABLE ITEMS AND DELIVERY SCHEDULE
3.1 Deliverable Items
Subject to the other terms and conditions of this Contract, the items
to be delivered under this Contract are specified in the table below
and the corresponding delivery schedules and locations are as follows:
ITEM DESCRIPTION DELIVERY SCHEDULE DELIVERY LOCATION
---- ----------- ----------------- -----------------
1. Satellite (EchoStar 9) 29 months after To 121 X.X. geostationary orbital
EDC location.
2. Deliverable Data Per SOW, Exhibit A PMO
3. Support and Training Per SOW, Exhibit A Contractor's facilities and
Purchaser's SCF
4. Ground Equipment Per SOW, Exhibit A Purchaser's SCF
Contractor shall, at its cost, use its reasonable best efforts to
obtain all U.S. and foreign Government approvals necessary to export
and import the applicable Satellite, all Deliverable Items and
Deliverable Data required hereunder, the Launch Vehicle and the
individual components of the applicable Satellite, such Deliverable
Items and Deliverable Data and the Launch Vehicle.
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ARTICLE 4 - PRICE
4.1 Firm Fixed Price
The total price to be paid by Purchaser and Skynet to Contractor for
the Deliverable Items 1 through 4 set forth in Article 3.1 within the
scope of work detailed in the Statement of Work, shall be a firm fixed
price of $XXX (the "Firm Fixed Price"). The prices for those
Deliverable Items subject to an option under this Contract, if any, are
described in the particular Articles that set forth those options. The
itemization of the Firm Fixed Price is as follows:
Item Description Amount
---------------- ------
Satellite (EchoStar 9) $XXX
The item price for such Satellite includes in-orbit delivery and all
design, manufacturing, tests, In Orbit Incentives, Deliverable Data,
training, Launch and placement into the assigned orbital location,
Launch Vehicle, Launch Services, Launch Support Services, Mission
Operations Support Services, risk management insurance, ground
equipment and shipment and transportation, all in accordance with the
terms and conditions of this Contract, as specified herein. The item
price also includes, and Contractor shall indemnify, defend and hold
Purchaser, its Affiliates, directors, officers, employees, shareholders
and agents harmless from and against, all applicable taxes, duties and
similar liabilities whatsoever imposed by any governmental entity in
connection with this Contract, except any tax on the sale to Purchaser
resulting from Purchaser's election to exercise the Ground Storage
option in Article 33.
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Purchaser's share of the Firm Fixed Price is One Hundred Twenty Nine
Million Dollars ($129,000,000). The remaining Ninety Three Million
Dollars ($93,000,000) shall be paid by Skynet directly to Contractor
(the "Skynet Portion"). Purchaser does not guarantee payment of the
Skynet Portion, and Contractor agrees to look solely and exclusively to
Skynet for payment of the Skynet Portion. Failure of Skynet to make
payment of the Skynet Potion, when due, shall not be considered a
breach or default of this Contract and Contractor shall nonetheless
still be obligated to fully perform its obligations and duties under
this Contract. Contractor acknowledges and agrees that Purchaser shall
have no liability to Contractor whatsoever in the event that Skynet
fails to make timely payment of the Skynet Portion, and that Contractor
shall have no recourse whatsoever against Purchaser in such case.
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ARTICLE 5 - PAYMENTS
5.1 Payment Plan
Absent a bona fide dispute, payments by Purchaser to Contractor of its
portion of the Firm Fixed Price set forth in Article 4 and of the
amounts for options, if any, exercised by Purchaser pursuant to this
Contract, shall be in accordance with the Payment Plan applicable
thereto.
5.2 Payment Conditions
5.2.1 Payments. Absent a bona fide dispute, all payments due from
Purchaser shall be paid no later than the date specified
therefor as set forth in the Payment Plan, provided that: (i)
Contractor submits to Purchaser an invoice with respect to
each such payment no later than thirty (30) days prior to such
due date; and (ii) Contractor completes the applicable
milestone set forth in Attachment A no later than five (5)
business days prior to such due date. Notwithstanding the
foregoing, in the event that Contractor does not deliver an
invoice to Purchaser at least thirty (30) days prior to such
due date and/or does not achieve the relevant milestone, or
provide a work-around that does not affect schedule and is
otherwise acceptable to Purchaser, at least five (5) business
days prior to such due date, Purchaser may suspend all
payments until such time as the relevant invoice is received
and milestone is completed. Within thirty (30) days following
Purchaser's receipt of the relevant invoice or five (5)
business days following Contractor's completion of the
relevant milestone, whichever occurs later, Purchaser shall
pay Contractor for all payments that were required to have
been made but were not as a result of the suspension.
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5.2.2 Milestones. Notwithstanding the milestones set forth in
Attachment A, if it becomes reasonably clear that problems
with deliverables are reasonably likely to cause schedule
delays, then all payments may be suspended, at Purchaser's
option, and the date for payment of each subsequent payment
delayed, by an amount of time equal to the difference between
the originally scheduled delivery date for the Satellite set
forth in Article 3 and the revised forecast delivery date. In
the event that Contractor subsequently recovers all or a
portion of the originally scheduled delivery date for the
Satellite, payments will again be revised to reflect that
recovery. Further, if, following completion of a milestone, a
problem arises which requires rework of elements of the
milestone, then payments may be suspended, at Buyer's option,
until the milestone is again complete.
5.2.3 Non-Warranty Payments. Absent a bona fide dispute, all amounts
payable to Contractor with respect to non-warranty work
performed pursuant to Article 15.3 shall be paid no later than
thirty (30) days after submission of an invoice by Contractor
certifying that such non-warranty work has been completed.
5.2.4 Obligation to Pay. The failure of Contractor to deliver any
invoice required hereunder shall not affect Purchaser's
obligation hereunder to make any payments to Contractor. If
Contractor shall not have delivered any invoice required
hereunder within the time specified therefor, subject to the
terms and conditions of this Article 5, the relevant payment
due from Purchaser shall be payable thirty (30) days after
receipt of such invoice.
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5.3 Late Payment
Except in the case of a bona fide dispute, in the event that any
payment owed by one party to the other party is not made when due
hereunder, without prejudice to the second party's other rights and
remedies under this Contract, at law or in equity, the first party
shall pay the other party interest at the rate of LIBOR + XXX until
such time as payment is made. If a payment due to Contractor from
Purchaser is not made by the date thirty (30) days after the date due
hereunder, without prejudice to Contractor's other rights and remedies
under this Contract, at law or in equity, Contractor may elect to cease
performance of its obligations under this Contract, without prejudice
or penalty. In such case, if Contractor subsequently resumes
performance in lieu of termination pursuant to Article 23.5, the
schedule, price and other affected provisions of this Contract shall be
modified to compensate Contractor for its added reasonable, actual
out-of-pocket costs plus a profit of twelve percent (12%) (and
otherwise account for the non-economic impacts on Contractor)
associated with such work stoppage. Notwithstanding the foregoing, in
the event of a bona fide dispute between the Parties regarding a
payment due hereunder, such dispute shall be resolved pursuant to
Article 25 hereof, and Contractor shall have no right during the
penance of such dispute to stop work under this Contract because of
such dispute.
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5.4 Invoices
Invoices required to be delivered by Contractor hereunder shall be
submitted to Purchaser (original plus one (1) copy) at the following
address:
EchoStar Orbital Corporation
0000 Xxxxx Xxxxx Xx
Xxxxxxxxx, XX 00000
ATTN.: Xxxxx Xxxxxx
(with copies to Xxxxx Xxxxxxxxx and Xxxxxxx Xxxxx)
or to such other address as Purchaser may specify in writing to
Contractor.
5.5 Payment Bank
All payments made to Contractor hereunder shall be in U.S. currency and
shall be made by electronic funds transfer to the following account:
BANK OF AMERICA
SPACE SYSTEMS/LORAL, INC.
ACCOUNT XX. 00-00000
XXXXXXX, XXXXXXXX
ABA #000-000-000
or by check to:
Space Systems/Loral
0000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
or to such other account or address as Contractor may specify in
writing to Purchaser.
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ARTICLE 6 - PURCHASER-FURNISHED ITEMS
6.1 Purchaser-Furnished Support
To enable Contractor to perform Launch Support and Mission Operations
Support Services, Purchaser shall timely make available to Contractor
the Purchaser-furnished equipment, facilities and services described in
the Statement of Work. Such equipment, facilities and services shall be
in good working condition and adequate for the required purpose and
shall be made available free of charge for Contractor's use (including
Acceptance inspection pursuant to Article 11) during the period
commencing sixty (60) days prior to such Launch and continuing through
completion of the Satellite Acceptance Review. Purchaser and Contractor
will conduct an interface meeting approximately one hundred eighty
(180) days prior to such Launch to confirm the availability and
adequacy of Purchaser-furnished equipment, facilities and services.
6.2 Communications Authorizations
Purchaser shall be responsible, at its cost and expense, for preparing,
coordinating and filing all applications for licenses with the FCC, if
required to do so, for the Launch and operation of the Ku-Band and
Ka-Band payloads on a Satellite. Contractor shall timely provide
Purchaser with all reasonable assistance, at no additional cost to
Purchaser, requested by Purchaser in connection with Purchaser's
performance of the above-specified tasks, and in connection with the
filing of any technical filings required to be made by Purchaser with
the FCC.
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6.3 Radio Frequency Coordination
Purchaser shall be responsible for the timely preparation and
submission of all filings required by the International
Telecommunication Union (or any successor agency thereto) regarding
radio frequency and orbital position coordination for the Ku-Band and
Ka-Band payloads. Such filings shall be made in accordance with the
Radio Regulations of the International Telecommunication Union (or any
successor agency). Contractor shall timely provide Purchaser with all
reasonable assistance, at no additional cost to Purchaser, requested by
Purchaser in connection with Purchaser's performance of the
above-specified tasks.
6.4 Licenses and Permits
Except as set forth in Articles 6.2 and 6.3 above, Contractor shall be
responsible, at its sole cost and expense, for securing any and all
permits and licenses for the construction, transportation and Launch of
a Satellite (other than FCC construction permits for the Ku-Band and
Ka-Band payloads).
6.5 Satellite Performance Data
In the event of a Satellite Anomaly that occurs during the life of a
Satellite, Purchaser shall timely provide Contractor with or give
Contractor access to any data Contractor may reasonably require to
investigate or correct (if Contractor is able to do so) such Satellite
Anomaly or make or settle any insurance claim relating to such
Satellite Anomaly.
6.6 Late Delivery of Purchaser-Furnished Items or Services
The late delivery of Purchaser-furnished items, individually or
combined, shall be considered an event beyond the reasonable control
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of Contractor, and Contractor shall be entitled to a reasonable
adjustment in price, schedule, and other affected terms for such late
delivery.
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ARTICLE 7 - COMPLIANCE WITH U.S. EXPORT LAWS AND DIRECTIVES
7.1 Technical Information, Deliverable Data and Technical Services
7.1.1 Any obligation of either Party hereunder to provide technical
information, Deliverable Data or technical services to the
other Party or its representatives shall be subject to
applicable U.S. Government export control and security laws,
regulations, policies and license conditions. The Parties
shall work cooperatively and in good faith to implement this
Contract consistent with such laws, regulations, policies and
license conditions.
7.1.2 If and to the extent required by U.S. law, the Parties and/or
their representatives shall enter into U.S.
Government-approved agreement(s), separate from this Contract,
governing the Party's provision of technical information,
Deliverable Data or technical services in connection with this
Contract.
7.2 No Retransfer
The Parties shall not transfer to any "foreign person", as defined in
the International Traffic in Arms Regulations (22 C.F.R. Section 120.1)
technical information, Deliverable Data or technical services furnished
hereunder, except as expressly authorized by the U.S. Government in
accordance with U.S. export control laws. THE PARTIES UNDERSTAND AND
WARRANT THAT THEY SHALL NOT RE-EXPORT, TRANSFER OR DIVERT ANY ITEM
EXPORTED UNDER OR IN CONNECTION WITH THIS CONTRACT TO ANY "FOREIGN
PERSON" WITH A NATIONALITY OTHER THAN CONTRACTOR'S OR PURCHASER'S,
RESPECTIVELY, WITHOUT THE PRIOR WRITTEN APPROVAL OF THE U.S.
GOVERNMENT.
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ARTICLE 8 - ACCESS TO WORK IN PROGRESS
8.1 Work in Progress at Contractor's Plant
Subject to Article 7 and Article 8.5 and to compliance with
Contractor's safety and security regulations, Purchaser's and Skynet's
employees (and representatives, consultants or agents, subject to the
prior approval of Contractor, which approval shall not be unreasonably
withheld or delayed) shall be allowed access to work being performed at
Contractor's facility for the Satellite and other Deliverable Items,
for the purpose of observing the progress of such work and otherwise
confirming Contractor's compliance with this Contract. Notwithstanding
anything to the contrary set forth herein, the fact that Purchaser
and/or Skynet have observed work performed hereunder shall not be
deemed Purchaser's Acceptance or approval of such work.
8.2 Work in Progress at Subcontractors' Plant
Subject to Article 7 and Article 8.5, to the extent permitted by
Contractor's subcontractors supplying services or goods in connection
with the Satellite and subject to each such subcontractor's safety and
security regulations, Contractor shall allow Purchaser's and Skynet's
employees (and representatives, consultants or agents, subject to the
prior approval of Contractor, which approval shall not be unreasonably
withheld or delayed) access to work being performed with respect to the
Satellite in each such subcontractor's plants for the purpose of
observing the progress of such work and otherwise confirming
Contractor's compliance with this Contract, subject to the right of
Contractor to accompany Purchaser and/or Skynet on any such visit to a
subcontractor's plant; provided, however, that Purchaser and/or Skynet
may conduct an unaccompanied observation in the event that Contractor
fails to furnish a representative after reasonable written
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notice of Purchaser's or Skynet's observation request. Contractor will
use reasonable efforts to obtain permission for such access to
subcontractor's facilities.
8.3 Remedy for Non-Compliance
Purchaser may inform Contractor in writing of any particulars in which
Purchaser observes that work being performed under this Contract is
non-compliant, and Contractor shall remedy such non-compliance at
Contractor's expense, promptly upon receipt of notice thereof.
8.4 On-Site Facilities for Purchaser's Personnel
Subject to Article 7 and Article 8.5, for the purpose of monitoring the
progress of the work to be performed by Contractor hereunder and
otherwise confirming Contractor's compliance with this Contract,
Contractor shall provide private office facilities at or proximate to
Contractor's plant (which private office facilities shall in all cases
at least be co-located with Contractor's program management office) for
two (2) resident employees of Purchaser (or Purchaser's duly appointed
representatives, consultants and agents, subject to the prior approval
of Contractor, which approval shall not be unreasonably withheld or
delayed) through Acceptance of the last Satellite ordered hereunder (or
for a reasonable period of time after the completion of the Satellite
Acceptance Review, in the event that Purchaser exercises its option
under Article 29.2 to direct Contractor not to provide insurance for a
Satellite). The office facilities to be provided shall include a
reasonable amount of private office space, office furniture, local and
reasonable long distance telephone service, access to copy machines and
access to facsimile machines, to the extent necessary to enable such
personnel to monitor the progress of work and otherwise confirm
Contractor's compliance with this Contract.
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8.5 Competition/Foreign Persons as Purchaser Representatives
Purchaser's representatives, consultants and agents shall not be in
direct competition with Contractor, meaning they shall not currently be
employed by companies or entities that are in the business of
manufacturing communication satellites. Purchaser shall notify
Contractor in writing of the name, title or function, business
relationship, employer and such other information as may be reasonably
requested by Contractor, with respect to each of its intended
representatives, consultants and agents, and cause each such
representative, consultant and agent to execute a confidentiality
agreement directly with Contractor in form and substance reasonably
satisfactory to Contractor and containing terms substantially the same
as those set forth in Article 35. Contractor may deny access to
Contractor provided office facilities to any representative, consultant
or agent of Purchaser upon Contractor's reasonable determination that
such consultant or agent is, by reason of its business or affiliations,
in direct competition with Contractor.
Contractor shall apply for and, once issued, maintain all U.S.
Government export licenses and approvals needed for Purchaser's
employees and representatives, agents and consultants who are citizens
of a country other than the U.S., to access Contractor's and its
subcontractors' facilities or technical data in connection with the
performance of this Contract. Purchaser shall cooperate with Contractor
and provide the support necessary for Contractor to apply for and
maintain such export licenses and approvals, and shall promptly notify
Contractor of any occurrence or change in circumstances of which it
becomes aware that is relevant to or affects such export license and
approvals. IN NO EVENT SHALL CONTRACTOR BE OBLIGATED UNDER THIS
CONTRACT TO PROVIDE ACCESS TO CONTRACTOR FACILITIES, TO TRANSFER
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ANY TECHNICAL INFORMATION OR DELIVERABLE DATA OR TO PROVIDE ANY
TECHNICAL SERVICES, TO ANY PERSON EXCEPT IN COMPLIANCE WITH APPLICABLE
U.S. EXPORT CONTROL LAWS, REGULATIONS, POLICIES AND LICENSE CONDITIONS,
AS REASONABLY CONSTRUED BY CONTRACTOR.
8.6 Interference with Operations
Purchaser shall exercise its rights under this Article 8 in a manner
that does not unreasonably interfere with Contractor's or its
subcontractors' normal business operations or Contractor's performance
of its obligations under this Contract or any agreement between
Contractor and its subcontractors.
8.7 Notification
Notwithstanding any other provision of this Contract, Contractor shall
advise Purchaser immediately by telephone and confirm in writing any
event, circumstance or development which materially threatens the
quality of, or the delivery schedule for, any Satellite or component
part thereof, as well as any other Deliverable Items to be provided
hereunder.
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ARTICLE 9 - SATELLITE PRE-SHIPMENT REVIEW (SPSR)
9.1 Purchaser to Review
Purchaser shall conduct a review of each Satellite prior to shipment by
Contractor to the Launch Site in accordance with the terms of this
Article 9 and the Statement of Work (each a "Satellite Pre-Shipment
Review" or "SPSR").
9.2 Time, Place and Notice of SPSR; Failure to Conduct
Each SPSR shall take place at Contractor's facility. Contractor shall
notify Purchaser in writing at least thirty (30) days prior to the date
that each Satellite shall be available for SPSR, which shall be the
scheduled date for commencement of such SPSR. If Purchaser cannot
commence such SPSR on such scheduled date, Contractor shall make
reasonable efforts to accommodate Purchaser's scheduling requirements.
9.3 Conduct and Purpose of SPSR
Each SPSR shall be conducted in accordance with the pertinent Sections
of the Statement of Work. The purpose of each SPSR shall be to review
test data and analyses for the subject Satellite to determine whether
such Satellite meets applicable Performance Specification requirements
and is therefore ready for shipment to the Launch Site.
9.4 Waivers or Pending Waivers
At the earliest possible time, but at least ten (10) days before the
commencement of the SPSR for the Satellite or the Acceptance inspection
for any Deliverable Item pursuant to Article 11, Contractor shall
submit to Purchaser any request for a waiver of, or deviation from,
provisions(s) of the Performance Specification applicable to the
Satellite or Deliverable Item. Each such waiver or deviation approved
by Purchaser shall be deemed an amendment to the Performance
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Specification permitting such waiver thereof, or deviation therefrom,
effective on or after the date of such approval for the Satellite or
Deliverable Item. Purchaser shall, in keeping with customary industry
practice, consider each waiver or deviation request in good faith and
shall not unreasonably withhold or delay its consent to any such
request.
9.5 Purchaser's Inspection Agents
Purchaser may, subject to prior written notice to Contractor, cause any
representative, consultant or agent designated by Purchaser to observe
the SPSR pursuant to this Article 9; provided, however, that the
provisions of Article 7 and Article 8.5 shall apply to any such
representative, consultant or agent.
9.6 SPSR Results
Within a reasonable time after completion of the SPSR for the
Satellite, Purchaser shall notify Contractor in writing of the results
of the SPSR pursuant to this Article 9 with respect to the Satellite.
Provided Purchaser is in compliance with its contractual obligations
hereunder, such Satellite shall be prepared and shipped to the Launch
Site for Launch upon successful completion of the SPSR. In the event
that such SPSR discloses any non-conformance of the Satellite to the
requirements of the Performance Specification not the subject of any
waivers or deviations approved by Purchaser pursuant to Article 9.4,
Purchaser's notice shall state each such non-conformance (with
reference to the applicable requirement of the Performance
Specification deemed not met), and Contractor shall correct or repair
each such non-conformance and resubmit such Satellite for SPSR in
accordance with this Article 9 as to each corrected or repaired
element.
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9.7 Inspection Equipment and Facilities
Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser and its
agents to dispatch its personnel for pre-shipment inspections,
including travel and living expenses, shall be borne solely by
Purchaser.
9.8 Correction of Deficiencies after SPSR
If at any time following the SPSR for a Satellite, but prior to Launch,
Contractor becomes aware that such Satellite fails to meet the
Performance Specification, as may be modified as of such time pursuant
to Article 9.4, Contractor shall promptly correct such deficiencies at
its own cost and expense.
9.9 Warranty Obligations
In no event shall Contractor be released from any of its warranty
obligations as set forth in Article 15 hereof as a result of any
Satellite having successfully passed the pre-shipment inspection set
forth in this Article 9.
9.10 Repaired or Replaced Satellites
The provisions of this Article 9 shall apply to corrected, repaired or
replaced Satellites.
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ARTICLE 10 - SATELLITE ACCEPTANCE - PARTIAL AND TOTAL LOSS
10.1 Satellite Acceptance Procedure
Following the successful completion of the SPSR for the relevant
Satellite pursuant to Article 9, including without limitation the
correction of any non-conforming items pursuant to Article 9.6,
Contractor shall transport such Satellite, in accordance with
Contractor's standard commercial practices, to the Launch Site and
proceed with the Launch of such Satellite. During the period between
the successful completion of SPSR and Launch, Purchaser shall have the
continuing right to monitor, observe, evaluate and inspect the
Satellite. Thirty (30) days prior to the then-scheduled Launch of the
Satellite, Contractor shall notify Purchaser of the IOT schedule with
respect to the Satellite. Purchaser may observe and participate in such
IOT at Purchaser's, Skynet's and/or Contractor's location, at
Purchaser's election, subject to applicable U.S. Government and
Contractor security and export restrictions.
When, in the reasonable assessment of Contractor, IOT has been
completed for a Satellite, Contractor shall submit the IOT results to
Purchaser and shall either (i) certify to Purchaser by delivery of a
Satellite Acceptance Certificate pursuant to the SOW that such
Satellite meets the applicable criteria for Acceptance set forth in
Article 10.2 or (ii) certify to Purchaser by means of a written notice
that the Satellite is a Total Loss.
Within seventy-two (72) hours after Contractor provides the certified
IOT results to Purchaser with respect to the Satellite, Contractor and
Purchaser shall hold a Satellite Acceptance Review as defined in the
SOW. Within a reasonable period of time after completion of such
review, Purchaser shall either accept such Satellite in writing in
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accordance with Article 10.2 ("Acceptance" with respect to such
Satellite), or reject such Satellite in writing as a Total Loss, in
which event the provisions of Article 10.4 shall apply.
If Purchaser shall reject the Satellite as a Total Loss hereunder, and
Contractor disputes such rejection, rejection shall be deemed to have
occurred with respect to such Satellite pending resolution of such
dispute pursuant to Article 25. Should Purchaser's rejection be
sustained pursuant to Article 25, the provisions of Article 10.4 shall
apply to such Satellite. If such rejection is not sustained, Purchaser
shall promptly pay to Contractor all amounts that should have been paid
to Contractor if the Satellite was Accepted, plus interest in
accordance with Article 5.3 at the rate of LIBOR + 2% per annum.
Contractor may elect to conduct the IOT eclipse test set forth in the
Program Test Plan with respect to a Satellite during the first eclipse
season after IOT is otherwise completed. In such case, Satellite
Acceptance or rejection for such Satellite shall occur on the basis of
IOT results excluding the IOT eclipse test. For a Satellite that is
accepted pursuant to Article 10.1 on the basis of IOT results excluding
the IOT eclipse test, the results of the later IOT eclipse test will be
provided to Purchaser for Satellite performance characterization and
insurance purposes only and shall in no way affect Acceptance of such
Satellite.
10.2 Satellite Acceptance Criteria
Purchaser shall be obligated to accept a Satellite as set forth in
Article 10.1 if, as of the completion of the Satellite Acceptance
Review with respect to the Satellite, there has not been both: (i) a
Total Loss, as determined on the basis of the Ku-Band and Ka-Band
Transponders, and (ii) a total loss of the C-Band payload, as
determined using the criteria for determining a Total Loss, except that
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such determination shall be based solely upon the C-Band Transponders,
as opposed to the Ku-Band and Ka-Band Transponders.
10.3 Partial Loss Payment
If a Satellite (focusing solely on Ku-Band and Ka-Band payloads)
experiences a Partial Loss at any time during the period starting at
Intentional Ignition and ending one (1) year after Launch, Purchaser
shall be entitled to payment of a Partial Loss Amount calculated
pursuant to Article 24. Such Partial Loss Amount shall be paid by
Contractor to Purchaser upon the earlier to occur of: (i) 180 days
after the Partial Loss occurs and is known to Contractor, or (ii) ten
(10) days after Contractor receives proceeds for the Partial Loss from
the carrier that issued the risk management insurance policy described
in Article 39 or 29.3, as applicable.
10.4 Total Loss of a Satellite
10.4.1 If, with respect to a Satellite or a Replacement Satellite (as
defined below), at any time during the period starting at
Intentional Ignition and ending one (1) year after Launch,
there shall occur a Total Loss (such Satellite a "Total Loss
Satellite"), Contractor shall pay to Purchaser the greater of:
(i) total amount paid by Purchaser to Contractor for the Total
Loss Satellite, or (ii) the amount of the insurance procured
for the Ku-Band and Ka-Band payloads on such Total Loss
Satellite by Contractor pursuant to Article 39.1 or 29.3, as
applicable, below (less any portion of the Firm Fixed Price
due and owing to Contractor from Purchaser hereunder), in
either case Purchaser shall have no further obligation to
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make any further payments of the Firm Fixed Price to
Contractor hereunder.
Any amounts owed by Contractor under the immediately preceding
paragraph shall be made by Contractor to Purchaser upon the
earlier to occur of: (i) 180 days after the Total Loss occurs
and is known by Contractor, or (ii) ten (10) days after
Contractor receives proceeds for the Total Loss from the
carrier that issued the risk management insurance policy
described in Article 39 or 29.3, as applicable.
Notwithstanding anything to the contrary herein, if a bona
fide dispute exists as to whether or not the Satellite or
Replacement Satellite is a Total Loss, Contractor shall not be
obligated to refund any amounts paid until after the dispute
is resolved.
10.4.2 In lieu of Purchaser receiving payment of the appropriate
amount set forth in Article 10.4.1, if, with respect to a
Satellite (but not a Replacement Satellite), at any time
during the period starting at Intentional Ignition and ending
one (1) year after Launch, there has been both (i) a Total
Loss, as determined on the basis of the Ku-Band and Ka-Band
Transponders, and (ii) a total loss of the C-Band payload, as
determined using the criteria for determining a Total Loss,
except that such determination shall be based solely upon the
C-Band Transponders, as opposed to the Ku-Band and Ka-Band
Transponders, and both Purchaser and Skynet direct Contractor
in writing to construct and Launch a Replacement Satellite (as
defined below), then Contractor shall provide a new Satellite
(a "Replacement Satellite") substantially identical to the
Total Loss Satellite, which complies in all respects with the
Performance
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Specification, in accordance with the terms and conditions of
this Contract, to be delivered on orbit (provided that
Contractor shall not use a Launch Vehicle, the failure of
which resulted in the loss of the previous Satellite, without
Purchaser's prior written consent, which consent may be
withheld in Purchaser's reasonable judgment) to the location
specified in Article 3 within 27 months after the later to
occur of (i) Purchaser exercising this option or (ii) the
parties resolving any dispute as to whether or not a Total
Loss has occurred; or
If the option set forth in this Article 10.4.2 is selected by
Purchaser, Purchaser shall remain obligated to pay the
remaining unpaid portion of the Firm Fixed Price in accordance
with the terms of this Contract, except that the timing of
such remaining Payments shall be equitably adjusted to
accommodate the construction schedule for the Replacement
Satellite.
10.4.3 Upon the occurrence of a Total Loss with respect to a
Satellite or a Replacement Satellite, and as a condition to
Contractor performing as required under this Article 10.4,
Purchaser shall:
(i) Promptly refund to Contractor any Partial Loss Amount
previously paid by Contractor to Purchaser with respect to
such Total Loss Satellite; and
(ii) Cease to operate or use the Ku-Band and Ka-Band payloads
on such Satellite or Replacement Satellite that results in a
Total Loss promptly upon the occurrence of such Total Loss,
and, in the event that Acceptance of such Satellite or
Replacement Satellite shall have previously
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occurred, Purchaser shall release any right, title and
interest it may have in the Ku-Band and Ka-Band payloads and
Purchaser's ownership interest in the Common Elements (as
defined in the Agreement between Purchaser and Skynet of even
date herewith) of such Satellite or Replacement Satellite to
Contractor and shall promptly discharge or cause to be
discharged, at its expense, any lien, security interest,
charge or other claim on the Ku-Band and Ka-Band payloads and
Purchaser's ownership interest in the Common Elements of such
Satellite or Replacement Satellite or on any part thereof.
10.5 TT&C
If the Satellite experiences a material Anomaly at or prior to handover
of the Satellite, Contractor agrees to fly the Satellite until the
earlier to occur of: (i) all material anomalies being resolved; (ii)
insurance for all material anomalies being paid to Purchaser; or (iii)
Purchaser informing Contractor that it desires to use the Satellite for
commercial purposes (provided that, in such instance, Contractor shall
continue to fly the Satellite until such time as all material anomalies
are fully understood by both parties and Contractor has properly
trained Purchaser how to fly the Satellite in such anomalous
condition).
10.6 Scope of Coverage. For clarification purposes, the Parties acknowledge
and agree that Contractor's obligation to make payments for a Total
Loss or Partial Loss under this Contract only apply with respect to
Ku-Band and Ka-Band transponders. The Parties further acknowledge and
Agree that, except as otherwise set forth in Article 10.4.2,
Contractor's obligations to Skynet with respect to total loss or
partial loss of the C-Band Transponders and/or Skynet's ownership
interest in the Common Elements will be dealt with under a separate
arrangement between Contractor and Skynet.
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Notwithstanding anything to the contrary herein, in the event that the
insurance policy procured by Contractor pursuant to Article 39.1 or
29.3 below, if any, provides broader coverage than the Total Loss and
Partial Loss coverage provided hereunder, then Purchaser shall be
entitled to receive the benefit of such broader coverage.
In addition, if the overall Satellite experiences an Anomaly which will
affect the use of one or more Transponders, and a decision must be made
as to which Transponder(s) shall be affected, then such decision shall
be made in accordance with the terms and conditions of the Agreement
between Purchaser and Skynet of even date herewith. If this situation
arises, Contractor shall have no obligations under this Article 10
until such decision is communicated to Contractor.
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ARTICLE 11 - ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN SATELLITES
11.1 Inspection of Deliverable Items of Hardware Other Than Satellites
With respect to each Deliverable Item of hardware other than
Satellites, Purchaser shall perform Acceptance inspection within ten
(10) business days after Contractor has notified Purchaser that such
Deliverable Item has arrived at the location designated for delivery
thereof in Article 3.1. Such Acceptance inspection shall be conducted
in accordance with the procedures described in the Statement of Work.
The purpose of the Acceptance inspection shall be to determine whether
each such Deliverable Item meets applicable Performance Specification
requirements as of the date of such delivery, as such requirements may
have been modified pursuant to Article 11.3.
11.2 Purchaser's Inspection Agents
Purchaser may, upon giving prior written notice to Contractor, cause
any representative, consultant or agent designated by Purchaser to
conduct the Acceptance inspection pursuant to this Article 11 in whole
or in part; provided, however, that the provisions of Article 7 and
Article 8.5 shall apply to any such representative, consultant or agent
and representative, consultant or such agent shall comply with
Contractor's safety and security regulations.
11.3 Pending Waivers
Waivers of or deviations from the Performance Specification applicable
to any Deliverable Item subject to Acceptance inspection pursuant to
this Article 11 shall be addressed in the same manner as set forth in
Article 9.4.
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11.4 Acceptance Inspection Results
Within a reasonable time after completion of Acceptance inspection
pursuant to this Article 11 for any Deliverable Item, Purchaser shall
notify Contractor in writing of the results of such Acceptance
inspection. In the event that such Acceptance inspection demonstrates
conformity of such Deliverable Item to the applicable requirements of
the Performance Specification, such Deliverable Item shall be deemed
accepted by the Purchaser for all purposes hereunder ("Acceptance" with
respect to each such Deliverable Item other than a Satellite), and
Purchaser's notice shall so state. In the event that such Acceptance
inspection discloses any non-conformance of such Deliverable Item to
the applicable requirements of the Performance Specification,
Purchaser's notice shall detail each such non-conformance (with
reference to the applicable requirement of the Performance
Specification deemed not met), and Contractor shall correct or repair
such non-conformance and resubmit such Deliverable Item for Acceptance
inspection in accordance with this Article 11 as to each such corrected
or repaired element.
11.5 Acceptance Inspection; Equipment and Facilities
Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser or its agents
to dispatch its personnel for acceptance inspections, including travel
and living expenses, shall be borne solely by Purchaser.
11.6 Warranty Obligations
In no event shall Contractor be released from any of its warranty
obligations applicable to any Deliverable Item as a result of such
Deliverable Item having been Accepted as set forth in this Article 11.
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11.7 Repair or Replace Deliverable Items.
The provisions of this Article 11 shall apply to corrected, repaired or
replaced Deliverable Items other than Satellites.
11.8 Deliverable Data
Purchaser shall, within ten (10) business days of delivery by
Contractor to the location designated in Article 3.1 of Deliverable
Data requiring Purchaser approval pursuant to the Statement of Work,
notify Contractor in writing that such Deliverable Data has been
accepted in accordance with the Statement of Work ("Acceptance" with
respect to each such item of Deliverable Data), or advise Contractor in
writing that such Deliverable Data does not comply with the applicable
requirements of the Statement of Work, identifying each particular of
such non-compliance. Contractor shall promptly correct any
non-compliant aspect of such Deliverable Data described in such Notice
from Purchaser, and re-submit it to Purchaser for inspection pursuant
to this Article 11.7.
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ARTICLE 12 - DELIVERY, TITLE AND RISK OF LOSS
12.1 Satellites
Delivery of the Satellite shall occur, and risk of loss of, and title
to, the Satellite shall pass from Contractor to Purchaser, upon
Acceptance of such Satellite pursuant to Article 10.1.
EXCEPT WITH RESPECT TO WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY
CONTRACTOR, UPON AND AFTER LAUNCH OF THE LAUNCH VEHICLE FOR A
SATELLITE, CONTRACTOR'S SOLE FINANCIAL RISK, AND THE SOLE AND EXCLUSIVE
REMEDIES OF PURCHASER OR ANY PARTY ASSOCIATED WITH PURCHASER, WITH
RESPECT TO THE USE OR PERFORMANCE OF SUCH SATELLITE (INCLUDING WITH
RESPECT TO ANY ACTUAL OR CLAIMED DEFECT CAUSED OR ALLEGED TO BE CAUSED
AT ANY TIME BY CONTRACTOR OR ANY OF ITS SUBCONTRACTORS), SHALL BE AS
SET FORTH IN ARTICLES 4.1, 10, 13, 15, 19, 20, AND 24. IN ALL CASES
CONTRACTOR'S LIABILITY SHALL BE SUBJECT TO THE LIMITATION OF LIABILITY
SET FORTH IN ARTICLE 34. WITHOUT PREJUDICE TO PURCHASER'S RIGHTS UNDER
ARTICLES 10 AND 24, CONTRACTOR MAKES NO WARRANTY AS TO THE PERFORMANCE
OF ANY LAUNCH VEHICLE.
12.2 Deliverable Items Other Than Satellites
Delivery and risk of loss of, and title to, each Deliverable Item of
hardware other than Satellites shall pass from Contractor to Purchaser
upon Acceptance of such Deliverable Item pursuant to Article 11.4.
Purchaser's rights in Deliverable Data are as set forth in Article 36.
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ARTICLE 13 - XXX
XXX
ARTICLE 14 - INTENTIONALLY DELETED
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ARTICLE 15 - WARRANTY
15.1 Terms and Period of Warranty
15.1.1 Satellites. Contractor warrants that each Satellite delivered
under this Contract shall be free from any defects in design,
material or workmanship and shall be manufactured and perform
in conformity with the Performance Specification (as may be
waived pursuant to Article 9.4) applicable to the Satellite in
every respect. Prior to Launch, Contractor shall, at its sole
cost and expense, correct any defects in design, material and
workmanship in compliance with Article 9. After Launch,
Contractor's sole obligation and liability in breach of this
warranty is to comply with Articles 4.1, 10, 15.2.1 and 24.
Contractor makes no warranty regarding the performance of the
Satellite from and after the Launch of the Satellite. Nothing
in this Article 15.1.1 shall be construed to limit or
otherwise affect Contractor's obligations under Articles 19
and 20.
15.1.2 Deliverable Items of Hardware Other Than Satellites.
Contractor warrants that each Deliverable Item of hardware
other than the Satellite delivered under this Contract shall
be manufactured and will perform in conformity with the
Performance Specification (as may be waived pursuant to
Article 11.3) applicable to such Deliverable Item in every
respect and will be free from defects in design, materials and
workmanship during the period commencing on the date of
Acceptance of such Deliverable Item pursuant to Article 11 and
ending on the first anniversary thereof.
15.1.3 Disclaimer. EXCEPT AND TO THE EXTENT PROVIDED IN ARTICLE 15.1
AND ARTICLE 15.4, CONTRACTOR HAS
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NOT MADE NOR DOES IT HEREBY MAKE ANY REPRESENTATION OR
WARRANTY, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF DESIGN,
OPERATION, CONDITION, QUALITY, SUITABILITY OR MERCHANTABILITY
OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, WITH
REGARD TO ANY SATELLITE OR ANY OTHER DELIVERABLE ITEM.
15.2 Repair or Replacement
15.2.1 Satellite Anomalies.
Contractor shall investigate any Satellite Anomaly in any
Satellite arising during the life of the Satellite, and use
reasonable best efforts to correct any such Satellite Anomaly
that is correctable by Contractor from Purchaser's SCF using
the facilities and equipment available at such site.
WITHOUT PREJUDICE TO PURCHASER'S RIGHTS UNDER ARTICLES 19 AND
20, CONTRACTOR SHALL HAVE NO LIABILITY TO PURCHASER OR TO
THIRD PARTIES ARISING FROM ANY ADVICE OR ASSISTANCE THAT
CONTRACTOR OR ANY SUBCONTRACTOR OR AGENT OF CONTRACTOR MAY
PROVIDE IN RESPECT OF A SATELLITE AFTER LAUNCH, REGARDLESS OF
CAUSE OR LEGAL THEORY, INCLUDING NEGLIGENCE, EXCEPT WITH
RESPECT TO: (1) WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY
CONTRACTOR, AND (2) PURCHASER'S RIGHTS AND CONTRACTOR'S DUTIES
AND OBLIGATIONS UNDER ARTICLES 4.1, 10, 13, 15.2.1
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AND 24. IN ALL CASES CONTRACTOR'S LIABILITY SHALL BE SUBJECT
TO THE LIMITATION OF LIABILITY SET FORTH IN ARTICLE 34.
15.2.2 Deliverable Items of Hardware Other Than Satellites.
Without prejudice to Purchaser's right and Contractor's duties
and obligations under Articles 4.1, 19 and 20, during the
period specified in Article 15.1.2 for any Deliverable Item of
hardware other than a Satellite, as Purchaser's sole and
exclusive remedy, any defect in such Deliverable Item
discovered by Purchaser shall be remedied by Contractor at
Contractor's expense by repair or replacement of the defective
component (at Contractor's election). For any such Deliverable
Item, Contractor shall determine if repair or replacement is
required to be performed at Contractor's plant. If required,
Purchaser shall ship to Contractor's designated facility any
such Deliverable Item. Contractor shall be responsible for the
cost of shipment to such facility in accordance with its
standard commercial practice (including any taxes and/or
duties) of any such Deliverable Item, and the cost of return
shipment, in accordance with its standard commercial practice,
of any such Deliverable Item once repaired or replaced to
Purchaser at the location designated therefor in Article 3.1.
Risk of loss for such Deliverable Item shall transfer to
Contractor upon delivery of such Deliverable Item to the
shipping carrier by Purchaser, and risk of loss shall transfer
to Purchaser for any such Deliverable Item once repaired or
replaced pursuant to this Article 15.2.2 upon receipt thereof
by Purchaser at the location designated therefor in Article
3.1. When necessary,
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Contractor shall provide free of charge temporary equipment to
be used while a repair is being performed.
15.3 Use Conditions Not Covered by Warranty
With respect to Deliverable Items of hardware other than Satellites,
the warranty under this Article 15 shall not apply if adjustment,
repair, or parts replacement is required as a result, directly or
indirectly, of accident, unusual physical or electrical stress beyond
the unit's designed tolerances, negligence, misuse, failure of
environmental control prescribed in operations and maintenance manuals,
repair or alterations by any party other than Contractor or its agents,
or by causes other than normal and ordinary use. The warranty provided
pursuant to this Article 15 is conditioned upon Contractor being given
access, if required, to Deliverable Items delivered at Purchaser's
facility in order to effect any repair or replacement thereof. If the
defect repaired or remedied by Contractor is not covered by the
warranty provided pursuant to this Article 15, Purchaser shall pay
Contractor the reasonable cost of such repair or replacement,
transportation charges, and a twelve percent (12%) profit. Such repair
costs shall be invoiced to Purchaser pursuant to the provisions of
Article 5.
15.4 Warranty for Training and Services
Contractor warrants that the training and other services it provides to
Purchaser pursuant to this Contract will conform to reasonable industry
standards at the time such training or other services are provided. In
the event Contractor breaches this warranty, as Purchaser's sole
remedy, Contractor shall apply reasonable efforts to correct the
deficiencies in the provision of such training and other services where
it is practicable to do so.
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ARTICLE 16 - CHANGES
16.1 Right to Adjustment
Purchaser may from time to time, in writing, request a change within
the general scope of this Contract to:
a) Order work in addition to the work provided for
herein; or
b) Modify the whole or any part of the work provided for
herein.
If such change request causes an increase or decrease in the cost, or
the time required for completion, of the work to be provided herein, or
otherwise affects any other provision of this Contract, an equitable
adjustment shall be made in the price, or delivery schedule, or both,
and this Contract shall be modified in writing accordingly. Any claim
by Contractor for adjustment under this Article 16 shall be deemed
waived unless asserted in writing within sixty (60) days from the
receipt by Contractor of the relevant change order. If the cost of
supplies or materials made obsolete or excess as a result of a change
is included in Contractor's claim for adjustment, Purchaser shall have
the right to prescribe the manner of disposition of such supplies or
materials. Nothing in this Article 16 shall excuse Contractor from
promptly proceeding with the Contract as changed.
16.2 Cost Adjustments
If Contractor or Purchaser claims a right to adjustment pursuant to
Article 16.1 above, Contractor shall prepare and furnish to Purchaser
the evidence reasonably necessary to establish the amount of any
increase or decrease in the cost of, or the time required for, the
performance of this Contract caused by the relevant change order.
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Subject to Article 16.3 below, the amount of any such cost increase or
decrease will be calculated in accordance with Contractor's regularly
established accounting practices and include a profit margin of twelve
percent (12%). If requested by Purchaser, the amount of a particular
claim shall be verified, at Contractor's and Purchaser's expense to be
shared equally, by the independent certified public accounting firm
normally used by Contractor.
16.3 Equitable Adjustment
The Parties shall attempt to reach agreement as to any equitable
adjustment that is appropriate pursuant to Article 16.1 above. Without
relieving Contractor of the obligation to proceed promptly with the
Contract as changed, in the event that the Parties are unable to reach
agreement as to an equitable adjustment, the matter shall be determined
in accordance with Article 25. During the pendency of such proceedings,
Contractor shall proceed with the work required under this Contract as
changed and Purchaser shall pay Contractor all amounts not in dispute.
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ARTICLE 17 - FORCE MAJEURE
17.1 Contractor and Purchaser shall not be responsible for late Delivery,
delay of the final completion date or nonperformance of its contractual
obligations due to Force Majeure. Force Majeure shall be any event
beyond the reasonable control of a Party or its suppliers and
subcontractors and shall include, but not be limited to: (1) acts of
God; (2) acts of a public enemy; (3) acts of a government in its
sovereign capacity (including any action or inaction affecting the
import or export of items); (4) war and warlike events; (5)
catastrophic weather conditions such as hurricanes, tornadoes and
typhoons; (6) fire, earthquakes, floods, epidemics, quarantine
restrictions, strikes, lockouts and other industrial disputes,
sabotage, riot and embargoes; (7) non-availability of a Launch Vehicle
or Launch Site for any reason beyond a Party's reasonable control; and
(8) other unforeseen and extraordinary events, which in every case are
beyond the reasonable control and without fault or negligence of a
Party or its suppliers and subcontractors ("Force Majeure"). Upon the
occurrence of Force Majeure, an equitable adjustment shall be
negotiated in the schedule and other portions of this Contract affected
by Force Majeure. The Party affected by a Force Majeure event shall
provide reasonable notice to the other Party of a Force Majeure event.
In the event that a Force Majeure event (other than the
non-availability of a Launch Vehicle or Launch Site) occurs that
extends for two-hundred and seventy (270) or more days or that the
Parties reasonably believe will extend for two-hundred and seventy
(270) or more days, either Party shall have the right to terminate this
Contract upon delivery of written notice to the other party. In the
event of a termination pursuant to the immediately preceding sentence,
Contractor shall refund all payments made by Purchaser for Deliverable
Items not previously Accepted by Purchaser and Purchaser shall have no
further obligation to make any further payments of the Firm Fixed Price
to Contractor hereunder.
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17.2 Special Provision For Launch Vehicle Unavailability.
As of EDC, Contractor intends to Launch each Satellite using a Zenit
3SL Launch Vehicle provided by the Sea Launch Limited Partnership (a
"Sea Launch"). In the event that: (i) during the twelve (12) month
period of time prior to the scheduled Launch of a Satellite a Zenit 3SL
launch is unsuccessful due to a launch vehicle failure; (ii) at any
time prior to the scheduled Launch of a Satellite, a Zenit 3SL launch
is unsuccessful due to a launch vehicle failure and such unsuccessful
launch is reasonably expected to cause a delay of more than [TBD] days
in the Launch of the Satellite; (iii) a Satellite is scheduled to be
Launched immediately following an unsuccessful Zenit 3SL launch due to
a launch vehicle failure; (iv) or other reasons [TBD], then Purchaser
shall have the right to direct Contractor to instead use the launch
vehicle listed below that is expected to have the ability to launch the
Satellite in the shortest period of time (plus or minus one month)
after occurrence of the relevant event described in Subsections (i)
through (iv) above, taking into consideration all relevant factors
including without limitation integration and the procurement of any and
all additional licenses necessary in connection therewith: (a) an
Ariane 44L, (b) Delta IV, (c) Atlas V or (d) Proton Breeze M (assuming
that the Proton Breeze M can accommodate the Satellite) (such direction
a "Launch Vehicle Switch Direction"). Contractor shall be responsible
for all additional costs to switch from a Sea Launch to an Atlas V,
Delta IV or Proton Breeze M Launch Vehicle. In the event of switch to
an Ariane 44L, Purchaser shall be responsible for the increased cost of
the launch vehicle only, and Contractor shall be responsible for any
and all additional costs to switch from a Sea Launch to an Ariane 44L,
including without limitation integration and the procurement of any and
all
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additional licenses necessary in connection therewith. Upon receiving a
Launch Vehicle Switch Direction, Contractor shall procure a new Launch
Vehicle in accordance with the procedures set forth in this Article
17.2 and Contractor shall use its reasonable best efforts to ensure
that such new Launch Vehicle is available for Launch with the least
delay possible. Purchaser understands and acknowledges that in all
likelihood Contractor will not be able to Launch the Satellite on the
new Launch Vehicle until at least twelve (12) months after Contractor
receives a Launch Vehicle Switch Direction. Contractor understands and
acknowledges that in all likelihood the launch campaigns for the launch
vehicles listed in Subsections (a) through (d) above will be at least
one (1) month shorter than the launch campaign for a Zenit 3SL.
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ARTICLE 18 - PURCHASER DELAY OF WORK
Except in the case of a Force Majeure event, if the performance of all or any
part of the work required of Contractor under this Contract is delayed or
interrupted by Purchaser's failure to perform its contractual obligations within
the time specified in this Contract or within a reasonable time if no time is
specified, or an act by Purchaser that unreasonably interferes with Contractor's
performance of its obligations under this Contract, Contractor shall give notice
to Purchaser of the failure or act causing such delay or interruption. If
Purchaser does not promptly cease such act or correct such failure, this
Contract shall be equitably adjusted in the price, performance requirements,
Delivery schedule, and any other terms of this Contract affected by such act or
failure to act of Purchaser.
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ARTICLE 19 - PATENT INDEMNITY
19.1 Indemnification
Purchaser agrees that Contractor has the right to defend and, at
Contractor's sole option to settle, and Contractor, at its own expense,
hereby agrees to defend or, at Contractor's sole option to settle, and
to indemnify and hold harmless Purchaser, and its Affiliates, and their
respective officers, directors, employees, shareholders, agents and
representatives from and against any and all claims, actions, suits or
proceedings based on an allegation that the design or manufacture of
any Deliverable Item or part thereof or the normal intended use, lease,
sale or other disposition of any Deliverable Item or part thereof
infringes any patent or other intellectual property right
("Intellectual Property Claim"), and shall pay any royalties and other
liabilities adjudicated to be owing to the claimant (or, in
Contractor's sole discretion, provided in settlement of the matter) as
well as costs incurred in defending (including court costs and
reasonable attorneys' fees) such Intellectual Property Claim; provided
that Purchaser promptly notifies Contractor in writing of any such
Intellectual Property Claim and gives Contractor the authority and all
such assistance and information as may be requested from time to time
by Contractor for the defense of such Intellectual Property Claim. Any
such assistance or information which is furnished by Purchaser at the
request of Contractor shall be at Contractor's expense.
In any proceeding relating to an Intellectual Property Claim, any
person or entity entitled to indemnification hereunder (an "Indemnified
Party") shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, Contractor shall pay the fees
and expenses of counsel retained by an Indemnified Party in the event
that: (i) Contractor and such Indemnified Party shall have mutually
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agreed to retention of such other counsel; or (ii) the named parties to
any proceeding (including without limitation any impleaded parties)
include both Contractor and such Indemnified Party and representation
of both Contractor and such Indemnified Party by the same counsel would
be inappropriate due to actual or potential conflict of interest
between them.
19.2 Infringing Equipment
If the design or manufacture of any Deliverable Item or the normal
intended use, lease, sale or other disposition of any Deliverable Item
under this Contract is enjoined as a result of an Intellectual Property
Claim or is otherwise prohibited, Contractor shall (i) resolve the
matter so that the injunction or prohibition no longer pertains, (ii)
procure for Purchaser the right to use the infringing item or (iii)
modify the infringing item so that it becomes non-infringing while
remaining in compliance with the Performance Specification (as may be
waived pursuant to Article 9.4) in all respects. If Contractor is
unable to accomplish (i), (ii) or (iii) as stated above, Purchaser
shall have right to terminate this Contract with respect to such
Deliverable Item, return such Deliverable Item to Contractor (in space,
with respect to an in-orbit Satellite), and receive a refund of the
price paid for such Deliverable Item (less amounts unpaid for such item
plus a reasonable allowance for depreciation).
19.3 Combinations and Modifications
Contractor shall have no liability under this Article 19 for any
Intellectual Property Claim arising solely from (i) use of any
Deliverable Item in combination with other items, unless Contractor
sold them as a combination intended to be so used or (ii) modifications
of Deliverable Items after Acceptance, unless Contractor or one of its
subcontractors (with the knowledge and consent of Contractor) made or
specifically recommended such modifications.
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19.4 Sole Remedies
Except in the case of willful misconduct or Gross Negligence by
Contractor, the remedies set forth in this Article 19 are
Purchaser's sole and exclusive remedies for or related to any
Intellectual Property Claim, and Contractor's liability under this
Article 19 for any Intellectual Property Claim with respect to a
Deliverable Item shall in no event exceed the Firm Fixed Price
paid by Purchaser hereunder for such Deliverable Item. In all
cases Contractor's liability shall be subject to the limitation of
liability set forth in Article 34.
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ARTICLE 20 - INDEMNITY FOR BODILY INJURY AND PROPERTY DAMAGE
20.1 Contractor's Indemnification of Purchaser
Contractor shall defend, indemnify and hold harmless Purchaser, and its
Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all losses,
damages, liabilities, suits and expenses (including, but not limited
to, reasonable attorneys' fees) (collectively "Losses") attributable to
third party claims for bodily injury or property damage, but only if
such Losses were caused by, or resulted from, negligent acts or
omissions, Gross Misconduct or willful misconduct by Contractor or its
employees, agents, consultants or representatives. For the avoidance of
doubt, and except for Losses resulting from the Gross Negligence or
willful misconduct of Contractor, Contractor shall have no indemnity
obligation under this Article 20.1 for any Losses with respect to the
operation or use of a Satellite after Launch, even if such Losses are
attributable to an act or omission of Contractor or its employees prior
to Launch. In all cases Contractor's liability shall be subject to the
limitation of liability set forth in Article 34.
20.2 Purchaser's Indemnification of Contractor
Purchaser shall defend, indemnify and hold harmless Contractor, and its
Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all Losses
attributable to third party claims for bodily injury or property
damage, but only if such Losses were caused by, or resulted from,
negligent acts or omissions, Gross Negligence or willful misconduct by
Purchaser or its employees, agents, consultants or representatives.
20.3 Conditions to Indemnification
The right to any indemnity specified in Article 20.1 or 20.2 shall be
subject to the following conditions:
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a. The Party seeking indemnification shall promptly advise the
other Party in writing of the filing of any suit or of any
written or oral claim for indemnification upon receipt thereof
and shall provide the other Party, at its request, with such
assistance and information available to the indemnified party
as is relevant to the defense such suit or claim. Any such
assistance or information which is furnished by the
indemnified Party at the request of the indemnifying Party
shall be at the indemnifying Party's expense.
b. The Party seeking indemnification shall not make any admission
nor shall it reach a compromise or settlement without the
prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed.
c. The indemnifying Party shall assist and shall have the right
to assume, when not contrary to the governing rules of
procedure, the defense of any claim or suit in settlement
thereof and shall satisfy any judgments rendered by a court of
competent jurisdiction in such suits and shall make all
settlement payments.
d. The Party seeking indemnification may participate in any
defense at its own expense, using counsel reasonably
acceptable to the indemnifying Party, provided there is no
conflict of interest and that such participation would not
adversely affect the conduct of the proceedings.
e. Notwithstanding the foregoing, the indemnifying party shall
pay the fees and expenses of counsel retained by an
indemnified party in the event that: (i) the indemnifying
party and such indemnified party shall have mutually agreed to
retention of such other counsel; or (ii) the named parties to
any proceeding (including without limitation any impleaded
parties) include both the indemnifying party and such
indemnified party and representation of both the indemnifying
party and such
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indemnified party by the same counsel would be inappropriate
due to actual or potential conflicts of interest between them.
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ARTICLE 21 - TERMINATION FOR CONVENIENCE
21.1 Reimbursement of Contractor
Purchaser may terminate this Contract without cause, in whole or in
part, by giving Contractor written notice thirty (30) days prior to the
date of such termination. In the event of such termination, Contractor
will immediately cease work as directed in the termination notice and
it is agreed that the termination charges shall be negotiated. In no
event shall the termination charges pursuant to this Article 21.1
exceed the lesser of: (i) the Firm Fixed Price, as the same may be
modified in accordance with the terms of this Contract, less the price
of work not terminated if a price has been established for such work;
or (ii) the sum of: (x) the amount provided in paragraph (a) below and
(y) 112% of the amounts provided in paragraphs (b) through (d) below
(less (A) amounts previously paid and (B) amounts representing
Contractor's costs of segregable items of inventory for the work
terminated hereunder not desired by Purchaser and which Contractor
elects to retain for its own use).
a. The price set forth in Article 4 for Deliverable Items
completed prior to such termination and accepted by Purchaser
before or after termination for which payment had not been
made by Purchaser.
b. Actual out-of-pocket costs incurred by Contractor in
performance of work on Deliverable Items for which this
Contract has been terminated pursuant to this Article 21.1,
that have not been accepted by Purchaser or for which a price
has not been established.
c. Actual out-of-pocket costs incurred by Contractor in
completing the termination process.
d. Actual out-of-pocket costs incurred by Contractor in settling
claims of subcontractors and other suppliers and vendors in
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connection with such termination; provided that Contractor
shall use reasonable efforts to minimize such costs.
In no event will the aggregate of the amounts previously paid by
Purchaser under this Contract and the amounts to be paid by Purchaser
under this Article 21.1 exceed the Firm Fixed Price, as the same may be
modified in accordance with the terms of this Contract.
21.2 Partial Termination
If the termination by Purchaser is partial, the price for the
non-terminated portion of this Contract shall be increased by an amount
equal to the reasonable additional actual, out-of-pocket costs, if any,
which must be borne by such portion because of the partial termination,
plus a XXX profit on such additional costs; however, in no event will
the aggregate of the amounts previously paid by Purchaser under this
Contract and the amounts to be paid by Purchaser for the non-terminated
portion of this Contract, as increased under this Article 21.2, exceed
the Firm Fixed Price, as the same may be modified in accordance with
the terms of this Contract.
21.3 Title Transfer
In the event of a termination pursuant to this Article 21, a
termination settlement meeting shall be held at a mutually agreed time
and place no later than sixty (60) days after submission of a claim by
Contractor pursuant to Article 21.1. At or prior to the date of such
termination settlement meeting, Contractor shall provide Purchaser with
such documentation of the costs set forth in Articles 21.1 and 21.2 as
Purchaser may reasonably request. Upon mutual agreement of the
termination settlement, Contractor may submit an invoice to Purchaser
for payment in accordance with the terms of Article 5.2. Upon mutual
agreement of the termination settlement, subject to applicable U.S.
Government export laws, Contractor shall, at Contractor's or
subcontractor's plant, transfer title and risk of loss to Purchaser of
all Deliverable Items referred to in Article 21.1(a), and all other
partially
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completed or incomplete Deliverable Items for which Contractor is
entitled to payment under this Article 21 at the time of the
termination settlement. Purchaser may direct Contractor to undertake to
reallocate to other uses, and/or to otherwise assist Purchaser in
disposing/selling, items subject to termination under this Article 21
for the purpose of receiving a price refund or offset against
Contractor's termination claim. Upon receipt of such direction,
Contractor shall, on a reasonable efforts basis, attempt to reallocate,
and/or to otherwise assist Purchaser in disposing/selling, the items
and provide a refund (in cases where the amounts generated are greater
than Contractor's termination claim) to Purchaser or an offset (in
cases where the amounts generated are less than or equal to
Contractor's termination claim) against Contractor's termination claim,
less any reasonable selling expenses.
21.4 Minimize Termination Costs
In the event of termination pursuant to this Article 21, Contractor
shall take all actions necessary to reduce the termination costs due
from Purchaser, including but not limited to, the immediate
discontinuance of the terminated work under this Contract and the
placing of no further orders for labor, materials or services required
under the terminated portion of the Contract. Contractor agrees to take
such action as may be necessary or as Purchaser may direct for
protection of property in Contractor's possession in which Purchaser
may have acquired an interest.
21.5 Continued Efforts
Contractor shall continue performance of the portion of this Contract
not terminated. Purchaser shall have no obligations to Contractor with
respect to the terminated portion of this Contract except as set forth
in this Article 21.
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21.6 Settlements
Contractor agrees to advise Purchaser in writing of all proposed
settlements with vendors in excess of five hundred thousand dollars
($500,000.00) in the event of termination under this Article 21, and
Contractor further agrees not to enter into any binding settlements
until Purchaser has approved the proposed settlement or thirty (30)
days have elapsed from the date Purchaser was first notified of such
proposed settlement.
21.7 Measurement of Costs
Costs shall be determined in accordance with generally accepted
accounting principals and verified by an independent certified
accounting firm of national reputation mutually acceptable to Purchaser
and Contractor with costs therefor shared equally by both parties.
ARTICLE 22 - XXX
XXX
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ARTICLE 23 - DEFAULT
23.1 Failure to Perform by Contractor
Subject to Article 23.4 below, if: (i) Acceptance of a Satellite does
not occur within the time specified for delivery thereof plus the
maximum number of days for late delivery liquidated damages specified
in Article 22; (ii) Acceptance of any other Deliverable Item does not
occur within the time specified for delivery thereof in this Contract
(or, in either case, such longer time as may be agreed to in writing by
Purchaser), or (iii) Contractor fails to prosecute the work hereunder
or to perform any other material provision of this Contract, thereby
endangering performance of this Contract within the time period set
forth in Subsection (i) above, and in each case Contractor does not
cure such failure within sixty (60) days (or such longer period as may
be agreed to in writing by Purchaser) after receipt from Purchaser of
written notice of such failure, Purchaser may terminate this Contract
in whole or in part by written notice to Contractor.
23.2 Termination Liability
In the event of a termination for default pursuant to Article 23.1,
Contractor shall refund all payments made by Purchaser for the
terminated work except with respect to items referred to in Article
23.3, plus the maximum amount of liquidated damages payable pursuant to
Article 22. Such refund shall be made no later than XXX days after
Contractor's receipt of Purchaser's written notice requesting such
refund. In addition, Contractor shall pay to Purchaser all excess costs
above the prices set forth herein reasonably incurred by Purchaser in
reprocuring the work and Deliverables described herein, according to
the delivery schedules set forth herein. Such refund, liquidated
damages and excess reprocurement costs shall be Purchaser's sole remedy
in case of a termination pursuant to Article 23.1, except in the case
of willful misconduct or Gross Negligence by Contractor. In all
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cases Contractor's liability shall be subject to the limitation of
liability set forth in Article 34.
23.3 Partially Completed Items and Work In Process; Contractor's
Reimbursement for Terminated Work
In the event of termination pursuant to Article 23.1, upon Purchaser's
request, Contractor shall deliver to Purchaser all partially completed
items or services and work-in-process.
In the event of termination pursuant to Article 23.1, Contractor shall
not be required to refund any amounts, and Purchaser shall remain
liable for payment of all amounts, with respect to Deliverable Items
for which Acceptance has occurred pursuant to the terms of Article 10
or Article 11, or that are retained by Purchaser whether or not
completed, as follows: (i) at the price set forth in this Contract for
such items for which an itemized price is set forth herein and (ii) at
the reasonable out-of-pocket cost incurred by Contractor for (a) such
items for which no itemized price is set forth herein and (b) partially
completed items or services and work-in-progress.
23.4 Invalid Default Termination
If, after termination pursuant to Article 23.1, it is finally
determined by arbitration, legal proceeding or mutual agreement that
Contractor was not in default, or that the default was excusable, the
rights and obligations of the Parties shall be the same as if the
termination had occurred under Article 21; except that, Contractor
shall also be entitled to recover its additional reasonable
out-of-pocket costs that would not have been incurred but for such
invalid default termination.
23.5 Contractor Termination
Contractor may terminate this Contract upon Purchaser's failure to
comply with any material provision of this Contract by giving written
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notice to Purchaser of its intention to so terminate. Such notice shall
set forth the provision or provisions with which Purchaser has failed
to comply and a reasonably detailed description of such failure. Such
termination shall become effective upon Purchaser's failure to correct
such nonperformance within XXX days (or such longer period as may be
agreed to in writing by Contractor) after receipt of such notice from
Contractor.
In the event of termination pursuant to this Article 23.5, Contractor
shall be paid as if the termination were for convenience pursuant to
Article 21. Further, and without limiting Contractor's other rights or
remedies, Contractor may immediately take over all or part of the
Deliverable Items and Contract work-in-process and use them in any
manner Contractor may elect. In such case, the fair market value of any
Deliverable Items or Contract work-in-progress retained by Contractor
shall be off-set against Purchaser's termination liability. If, after
termination pursuant to this Article 23.5, it is finally determined by
arbitration pursuant to Article 25 that Purchaser did not fail in the
performance of its obligations under this Contract, Contractor shall be
liable to Purchaser for its reasonable direct damages resulting from
such termination of this Contract (in no event exceeding amounts
payable to Purchaser pursuant to Articles 23.2 and 23.3, except in the
case of Gross Negligence or willful misconduct, and in all cases
subject to the limitation of liability set forth in Article 34).
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ARTICLE 24 - PARTIAL LOSS AMOUNT
24.1 Partial Loss Amount
In the event any Satellite meets the criteria for Partial Loss pursuant
to Article 10.2, Contractor shall pay Purchaser a Partial Loss Amount
in accordance with this Article 24. In no event shall the aggregate of
Partial Loss Amounts for Partial Loss with respect to a Satellite
exceed the maximum sum insured for the Ku-Band and Ka-Band payloads on
such Satellite. In the event Purchaser has previously been indemnified
for a loss on a Satellite under the insurance policy therefor, the
amount of indemnity of Purchaser for a subsequent loss on such
Satellite shall be adjusted to eliminate any duplicative recovery for
loss. Except as otherwise provided in Articles 4.1, 10, 13 and 15, the
foregoing states Purchaser's sole remedy for a Partial Loss of any
Satellite, except in the case of Gross Negligence or willful
misconduct. In all cases Contractor's liability shall be subject to the
limitation of liability set forth in Article 34.
24.2 Calculation of Partial Loss Amount
Calculation of the Partial Loss Amount with respect to any Satellite
shall be made pursuant to the following formula:
Available Communications Capacity
Partial Loss Amount = A * (1 - ---------------------------------)
Stated Communications Capacity
"A" equals the amount for which the Ku-Band and Ka-Band payloads on a
Satellite are insured by Contractor pursuant to Article 39.1 or 29.3,
as applicable (less any portion of the Firm Fixed Price due and owing
to Contractor from Purchaser hereunder).
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ARTICLE 25 - ARBITRATION
25.1 Arbitration
Any dispute (except as set forth in Article 25.2) arising between the
Parties with respect to the performance of obligations under, or
interpretation of, this Contract that cannot be settled by negotiation
between the Parties within thirty (30) days of written notice from one
Party to the other stating such first Party's intent to resort to
arbitration ("Notice of Arbitration"), shall be determined by
submission to binding arbitration in accordance with the provisions of
the "Uniform Arbitration Act of 1975", part 2 of article 22 of title
13, Colorado Revised Statutes, as amended from time to time, and not by
a lawsuit or resort to court process except as Colorado law provides
for judicial review of arbitration proceedings. Any such arbitration
shall be conducted in the City and County of Denver, Colorado by a
panel of three arbitrators who shall be selected within sixty (60) days
of such Notice of Arbitration, as follows: (i) one arbitrator shall
selected by each Party; and (ii) the third arbitrator shall be selected
by the arbitrators chosen by the Parties. In resolving any dispute, the
arbitrators shall apply the substantive laws of the State of New York
(without regard to its conflict of law rules), but shall apply the
Colorado Rules of Civil Procedure and the Colorado Rules of Evidence,
and shall take into account usages, customs and practices in the
performance of contracts for the purchase and sale of commercial
communications satellites. Proceedings and documents provided and
generated in connection with any arbitration hereunder shall be in the
English language. Each Party shall bear its own costs and expenses
(including the costs and expenses of the arbitrator it selected) and
one-half of the costs and expenses of the third arbitrator, unless
otherwise determined in the arbitral award. The parties agree that, in
no event, shall the arbitrators' decision include a recovery under any
theory of liability, or award in any amount, not expressly allowed
under this Contract. In furtherance and without
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limitation of the foregoing, any award made by the arbitrators shall be
within the limitations set forth in Article 34.
25.2 Gross Negligence or Willful Misconduct
If a dispute arises as to whether or not a Party has committed or acted
with Gross Negligence or willful misconduct, that issue alone shall be
resolved by a federal or state court in New York without a jury, and
the court shall resolve such issue by applying the laws of the State of
New York without regard to its conflict of law rules. THE PARTIES
EXPRESSLY WAIVE THEIR RIGHT TO A JURY IN CONNECTION WITH SUCH DISPUTE.
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ARTICLE 26 - INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH
26.1 Launch Services Agreement Inter-Party Waiver of Liability
The Parties hereby agree to be bound by the no-fault, no-subrogation
inter-party waiver of liability and related indemnity provisions
provided in the Launch Services Agreement with respect to the Launch of
the Satellite and to use reasonable commercial efforts to cause their
respective contractors and subcontractors at any tier (including
suppliers of any kind) that are involved in the performance of this
Contract and any other person having an interest in the Satellite or
any Transponder thereon (including customers of Purchaser), as required
by the Launch Services Agreement and as specified by Buyer, to accede
to such waiver. The Parties shall execute and deliver any instrument
that may be required by the Launch Agency to evidence their agreement
to be bound by such waiver. Purchaser and Contractor also shall use
reasonable commercial efforts to obtain, from their insurers, and shall
use reasonable commercial efforts to cause their respective contractors
and subcontractors at any tier (including suppliers of any kind) that
are involved in the performance of this Contract and any other person
having an interest in any Satellite or any Transponder thereon
(including customers of Purchaser) to obtain from their insurers, as
required by the Launches Services Agreement and as specified by Buyer,
an express waiver of such insurers' rights of subrogation, subject to
terms and conditions as are then customarily available regarding such
waivers, with respect to any and all claims that have been waived
pursuant to this Article 26.
26.2 Indemnity Related to the Inter-Party Waiver of Liability
Each Party shall indemnify against and hold the other Party harmless
from any claim against the other Party, its contractors and
subcontractors at any tier (including suppliers of any kind) that are
involved in the performance of this Contract, made by the Launch
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Agency or any of its contractors and subcontractors (including
suppliers of any kind) that are involved in the performance of the
Launch Services Agreement, resulting from the failure of the first
Party to waive any liability against, or to use reasonable commercial
efforts to cause any other person such Party is obligated to use
reasonable commercial efforts to cause to waive any liability against,
the Launch Agency or its contractors and subcontractors at any tier
(including suppliers of any kind).
26.3 Survival of Obligations
The indemnification and hold harmless obligations provided in this
Article 26 shall survive and remain in full force and effect,
notwithstanding the expiration or termination of this Contract.
26.4 XXX
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ARTICLE 27 - CORRECTIVE MEASURES
27.1 Unlaunched Satellites
If the performance data from any launched satellite manufactured by
Contractor shows that such launched satellite will not or may not meet
the performance specifications for such launched satellite at any time
during its mission, then Contractor shall, at its sole cost and
expense, if applicable, take appropriate corrective measures in the
Satellite before it is Launched so as to eliminate therefrom the
deficiencies noted in the launched satellite.
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ARTICLE 28 - RESERVED
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ARTICLE 29 - XXX
XXX
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ARTICLE 30 - XXX
XXX
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ARTICLE 31 - RESERVED
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ARTICLE 32 - RESERVED
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ARTICLE 33 - GROUND STORAGE
33.1 Notification
Purchaser may direct Contractor to store the Satellite after completion
of SPSR.
33.2 Storage Location
Ground Storage shall be performed at a Contractor controlled facility
and shall be conducted in accordance with the satellite storage plan
section(s) of the Statement of Work.
33.3 Storage Prices
There shall be no charge for storage and reverification work if the
Contractor's failure to perform is the reason the Satellite is stored,
or if the Satellite is stored for less than six months.
The firm fixed price for Ground Storage of the Satellite in all other
circumstances shall be $XXX per month storage cost while the Satellite
is in Ground Storage. In addition, Purchaser shall also pay directly or
reimburse Contractor for all reasonable costs related to
re-verification of system flight assurance and re-verification testing
(plus XXX) and for all reasonable additional costs which Contractor
would not have incurred had Purchaser not elected Ground Storage of the
Satellite (including taxes, tariffs, duties, transportation, insurance,
and Launch preparation service-related expenses).
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33.4 Payments
Payments shall be made on the thirtieth day of each month for the prior
month's storage, provided an invoice is received at least thirty days
prior to the payment date.
33.5 Title and Risk of Loss
Title and risk of loss to a Satellite delivered for Ground Storage
shall remain with Contractor at the storage site. Contractor shall
assume full responsibility for any loss or damage to the Satellite
during Ground Storage.
33.6 Notification of Intention to Launch a Previously Stored Satellite
Purchaser shall notify Contractor in writing that a Satellite in Ground
Storage should be removed from Ground Storage and delivered to the
Launch Site. This notification must be received by Contractor not less
than three (3) months prior to the scheduled date for Delivery to the
Launch Site of the Satellite. Failure to notify Contractor in a timely
manner will result in an adjustment to the Delivery schedule for such
Satellite. Contractor shall use its reasonable best efforts to obtain
the next available Launch slot, subject to completion of all necessary
verification tests.
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ARTICLE 34 - LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE DIRECTLY OR INDIRECTLY TO THE OTHER PARTY
OR ITS AFFILIATES, OR THEIR OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS
OR SUBCONTRACTORS AT ANY TIER (INCLUDING SUPPLIERS OF ANY KIND), AGENTS
OR CUSTOMERS, TO ITS PERMITTED ASSIGNEES OR SUCCESSOR OWNERS OF ANY
SATELLITE OR OTHER DELIVERABLE ITEM OR TO ANY OTHER PERSON CLAIMING BY
OR THROUGH SUCH PARTY FOR ANY AMOUNTS REPRESENTING LOSS OF PROFITS,
LOSS OF BUSINESS, OR INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY,
CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION LOST
PROFITS, LOST REVENUES OR COSTS OF RECOVERING A SATELLITE (EXCEPT WITH
RESPECT TO A THIRD PARTY'S DAMAGES FOR WHICH A PARTY HAS AN
INDEMNIFICATION OBLIGATION UNDER ARTICLE 19 OR 20), ARISING FROM OR
RELATING TO THE PERFORMANCE OR NONPERFORMANCE OF THIS CONTRACT OR ANY
ACTS OR OMISSIONS ASSOCIATED THEREWITH OR RELATED TO THE USE OF ANY
ITEMS DELIVERED OR SERVICES FURNISHED HEREUNDER, WHETHER THE BASIS OF
SUCH LIABILITY IS BREACH OF CONTRACT, TORT, STATUTE OR OTHER LEGAL OR
EQUITABLE THEORY, EXCEPT THAT IN THE EVENT OF WILLFUL MISCONDUCT OR
GROSS NEGLIGENCE BY CONTRACTOR OR PURCHASER SUCH PARTY MAY BE LIABLE
AND RESPONSIBLE FOR AMOUNTS REPRESENTING LOSS OF PROFITS, LOSS OF
BUSINESS AND THE OTHER ABOVE-DESCRIBED DAMAGES IN AN AMOUNT NOT TO
EXCEED $XXX.
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IN NO EVENT SHALL EITHER PARTY'S TOTAL LIABILITY UNDER OR IN CONNECTION
WITH THIS CONTRACT EXCEED $XXX (PROVIDED REFUNDS UNDER ARTICLE 23.2 AND
PAYMENTS FOR PARTIAL AND TOTAL LOSSES UNDER ARTICLES 10 AND 24 WILL NOT
COUNT AGAINST THIS FIGURE), EXCEPT FOR LIABILITY ARISING FROM WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE BY A PARTY, IN WHICH CASE THE TOTAL
LIABILITY OF A PARTY MAY NOT EXCEED $XXX.
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ARTICLE 35 - DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION
35.1 Definition of Proprietary Information
For the purpose of this Contract, "Proprietary Information" means all
information (other than Deliverable Data, which is subject to the
provisions of Article 36), in whatever form transmitted, that is
disclosed by such Party (hereinafter referred to as the "disclosing
party") to the other Party hereto (hereinafter referred to as the
"receiving party") relating to the performance by the disclosing party
of this Contract and: (i) is identified as proprietary by means of a
written legend thereon, or (ii) if disclosed orally, is identified as
proprietary at the time of initial disclosure. Proprietary Information
shall not include any information disclosed by a Party that (i) is
already known to the receiving party at the time of its disclosure, as
evidenced by written records of the receiving party, without an
obligation of confidentiality at the time of disclosure; (ii) is or
becomes publicly known through no wrongful act of the receiving party;
(iii) is independently developed by the receiving party as evidenced by
written records of the receiving party; (iv) such Party is legally
compelled to disclose; or (v) is obtained from a third party without
restriction and without breach of this Contract.
35.2 Terms for Handling and Use of Proprietary Information
For a period of five (5) years after receipt of any Proprietary
Information (or until such time as such Proprietary Information becomes
publicly known as provided in Article 35.1), the receiving party shall
not disclose Proprietary Information that it obtains from the
disclosing party to any person or entity except its and Skynet's
employees and agents who have a need to know in order to perform under
this Contract and who have been informed of and have agreed to abide by
the receiving party's obligations under this Article 35. The receiving
party shall use not less than the same degree of care to
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avoid disclosure of such Proprietary Information as it uses for its own
Proprietary Information of like importance; but in no event less than a
reasonable degree of care. Proprietary Information shall be used only
for the purpose of performing the obligations under this Contract, or
as the disclosing party otherwise authorizes in writing.
IN NO EVENT SHALL EITHER PARTY DISCLOSE OR TRANSFER TECHNICAL
INFORMATION OR PROVIDE TECHNICAL SERVICES TO INSURANCE BROKERS,
UNDERWRITERS OR OTHER THIRD PERSONS OR ENTITIES WITHOUT THE OTHER
PARTY'S PRIOR WRITTEN APPROVAL (WHICH SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED) AND, WHERE REQUIRED, PRIOR APPROVAL OF THE U.S.
DEPARTMENT OF STATE.
35.3 Legally Required Disclosures
Notwithstanding the foregoing, in the event that the receiving party
becomes legally compelled to disclose Proprietary Information of the
disclosing party, including this Contract or other supporting
document(s), the receiving party shall, to the extent practicable under
the circumstances, provide the disclosing party with written notice
thereof so that the disclosing party may seek a protective order or
other appropriate remedy, or to allow the disclosing party to redact
such portions of the Proprietary Information as the disclosing party
deems appropriate. In any such event, the receiving party will disclose
only such information as is legally required, and will cooperate with
the disclosing party (at the disclosing party's expense) to obtain
confidential and proprietary treatment for any Proprietary Information
being disclosed.
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35.4 Title; Return
All Proprietary Information disclosed under this Contract in tangible
form (including without limitation information incorporated in computer
software or held in electronic storage means) shall be and remain the
property of the disclosing party. All notes, memoranda or other
materials created or fabricated by the receiving party, including
without limitation evaluations, based upon Proprietary information or
prepared by the receiving party which include Proprietary Information
shall be considered Proprietary Information for all purposes under this
Contract. Upon request of the disclosing party, all such Proprietary
Information shall be returned to the disclosing party or shall be
destroyed by the receiving party and shall not thereafter be retained
in any form by the receiving party. Upon request of the disclosing
party, the receiving party shall certify in writing that such party has
either returned or destroyed all Proprietary Information previously
received from the disclosing party. The rights and obligations of the
parties under this Article 35 shall survive any such return or
destruction of Proprietary Information.
35.5 Specific Performance
The parties acknowledge and agree that the unauthorized use or
disclosure by the receiving party of any Proprietary Information
disclosed by the disclosing party would result in irreparable injury to
the disclosing party. The parties agree that that the disclosing party
shall, in addition to and not in lieu of any other available legal or
equitable remedies or damages, be entitled to a temporary injunction
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to restrain threatened or actual breaches of the terms of this Article
35 by the receiving party, its agents, employees, representatives and
all other persons acting for any of the above-mentioned persons or
entities.
35.6 Disclosure of Contract Terms
Notwithstanding anything to the contrary in this Article 35, and
subject to applicable export restrictions, the terms and conditions of
this Contract may not be disclosed by either Party to any person except
with the prior written consent of the other Party, provided, in each
case, that the recipient of such information agrees to treat such
information as confidential and executes and delivers a confidentiality
agreement reasonably acceptable to both Parties or is otherwise subject
to confidentiality obligations reasonably satisfactory to both Parties;
provided, further, that either Party shall have the right to disclose
such information as is required under applicable law or the binding
order of a court or government agency; and provided further that
Purchaser shall have the right to disclose any or all of the terms and
conditions of this Contract to Skynet and to its and Skynet's insurance
brokers and underwriters as Purchaser deems necessary in its sole
judgment.
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ARTICLE 36 - INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN DATA
36.1 Intellectual Property Rights
(a) Contractor hereby grants to Purchaser a fully-paid up, royalty
free, irrevocable, and non-exclusive license to practice and have
practiced throughout the world exclusively for the purpose of (i)
operating, maintaining or using the Deliverable Items, or (ii)
developing, operating, maintaining or using ground equipment with such
Deliverable Items any inventions (including without limitation
software), whether patented or unpatented or otherwise subject to
intellectual property protections, now or hereafter owned by
Contractor, or to which Contractor has or may acquire rights, which
inventions are incorporated in any Deliverable Item or required in
order to practice or have practiced any invention incorporated in any
Deliverable Item.
36.2 Rights in Data
Contractor shall retain title to all Deliverable Data utilized or
developed by Contractor during the performance of this Contract.
Subject to U.S. export regulations and applicable export restrictions,
Purchaser's officers, directors, employees, consultants and
representatives shall have the non-exclusive right to obtain and use
the Deliverable Data for any and all purposes related to the testing,
operation, use and maintenance of the Satellite. With the sole
exception of Skynet, Purchaser's officers, directors, employees,
consultants and representatives shall not disclose Deliverable Data to
other companies, organizations or persons without the express prior
written consent of Contractor, which consent shall not be unreasonably
withheld or delayed. Purchaser shall have no rights in Deliverable Data
other than as expressly stated in this Contract, and title to
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Deliverable Data shall not pass to Purchaser or any other entity
pursuant to the terms hereof.
36.3 No Additional Obligation
Nothing contained in this Article shall require Contractor to provide
any data other than as set forth in the Statement of Work.
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ARTICLE 37 - PUBLIC RELEASE OF INFORMATION
Either Party intending to disclose publicly whether through the issuance of news
releases, articles, brochures, advertisements, prepared speeches or other
information releases concerning this Contract or the transactions contemplated
herein shall obtain the prior written approval of the other Party with respect
to the content and timing of such issuance. A Party's approval under this
Article 37 shall not be unreasonably delayed or denied. Notwithstanding the
above, either Party may release information described herein as required by
securities laws or other applicable laws.
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ARTICLE 38 - NOTICES
38.1 Written Notification
Each notice or correspondence required or permitted to be given
hereunder shall be given in writing (except where oral notice is
specifically authorized) to the respective addresses or facsimile
numbers and to the attention of the individuals set forth below by
post, facsimile transmission, overnight courier or first class
registered or certified mail, return receipt requested, postage
prepaid. The sending of such notice with confirmation of successful
receipt of the complete transmission (in the case of facsimile
transmissions) or receipt of such notice (in the case of delivery by
first class registered or certified mail or by overnight courier
service) shall constitute the giving thereof.
In the case of Purchaser:
Echostar Orbital Corporation
0000 Xxxxx Xxxxx Xx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a separately delivered copy to:
Xxxxxxx Xxxxx and Xxxxx Xxxxxx
(at the same address)
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In the case of Contractor:
Space Systems/Loral, Inc.
0000 Xxxxxx Xxx, Xxxxxxxx X-00
Xxxx Xxxx, XX 00000-0000
Attn.: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
38.2 Change of Address
Either Party may from time to time change its notice address or the
persons to be notified by giving the other Party written notice (as
provided above) of such new information and the date upon which such
change shall become effective.
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ARTICLE 39 - RISK MANAGEMENT
39.1 Risk Insurance Obligations of Contractor
Unless Purchaser exercises the option in Section 29.2 or 29.3,
Contractor shall obtain risk insurance coverage for each Satellite
commencing at Intentional Ignition until one (1) year after Launch for
the purpose of satisfying its obligations in respect of a Total Loss
under Article 10.4, any Partial Loss Amount payable pursuant to Article
10.3 and Article 24 and the procurement of a Replacement Satellite
pursuant to Article 10.4.2 (the "Policy"). The sum insured under the
Policy is currently expected to be equal to the Firm Fixed Price
($XXX), allocated $XXX to the Ku-Band and Ka-Band payloads and $XXX to
the C-Band payload.
At any time during the period starting at EDC and ending six (6) months
thereafter but prior to Contractor purchasing the Policy, Purchaser has
the option to direct Contractor to increase the sum insured under such
Policy. If Purchaser exercises this option, Purchaser shall be charged
a firm fixed rate of XXX% of the increased sum insured amount up to
$XXX. If the sum insured under the Policy exceeds $XXX, then Purchaser
shall pay to Contractor (i) the actual amount charged by the
underwriters (on a pass-through basis) with no xxxx-up for the
additional coverage above $XXX, plus (ii) the additional actual amount
(on a pass-through basis) with no xxxx-up, if any, that the
underwriters charge for the initial $XXX of coverage as a result of the
sum insured exceeding $XXX.
At any time after Contractor purchases the Policy or procures insurance
pursuant to Article 29.3, Purchaser has the option to direct Contractor
to increase the sum insured under such Policy. If
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Purchaser exercises this option, Purchaser shall pay to Contractor the
actual amount charged by the underwriters (on a pass-through basis)
with no xxxx-up for the additional coverage. Contractor makes no
guarantee as to the amount to be charged by the underwriters for such
additional coverage.
Contractor shall give Purchaser the full opportunity to participate in
the solicitation of proposals for, and the negotiations regarding the
placement of, such Policy.
39.2 Limitation of Liability for Insured Claims
Notwithstanding anything to the contrary in this Contract, Contractor
shall have no obligation to make payments to Purchaser for a Total Loss
or Partial Loss arising from occurrences or circumstances that are
excluded from or denied coverage under such insurance policy as set
forth in Article 39.9.
39.3 Conditions of Purchaser Rights
The right of Purchaser to a Partial Loss Amount, the amount payable
pursuant to Article 10.4 in the event of the Total Loss or correction
of any Satellite Anomaly as provided in Article 15.2.1 shall terminate
if Purchaser knowingly and intentionally conceals or misrepresents, in
writing or otherwise, any material fact or circumstance concerning the
operation or use of a Satellite or Transponder thereon which, if not
concealed or if correctly represented, would not entitle Purchaser to
any such right.
39.4 Waiver of Subrogation and Salvage Value Remedies
Each Party shall use reasonable commercial efforts to obtain a waiver
of subrogation and release, subject to terms and conditions as are then
customarily available, of any right of recovery against the other
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Party and its contractors and subcontractors at any tier (including
suppliers of any kind) that are involved in the performance of this
Contract, from any insurer providing coverage for risk of loss or
noncompliant performance of or damage to a Satellite or any
Transponder. Both Parties agree to perform their obligations pursuant
to any salvage value remedies included in applicable risk management
insurance policies for the Ku-Band and Ka-Band Transponders and
Purchaser's ownership interest in the Common Elements.
39.5 Mitigation of Loss; Satellite Information
Purchaser will at all times act with due diligence and will do all
things practicable and reasonable to avoid or diminish any loss or
degradation of the lifetime or operational capability of a Satellite.
Purchaser will provide to Contractor all information regarding
operation and control of a Satellite reasonably requested by
Contractor. In the event Contractor determines, in its reasonable
judgment, that changes to the Performance Specification requested by
Purchaser in accordance with the terms of this Contract could adversely
affect the risk of loss to a Satellite, Contractor shall have the right
to renegotiate the terms of the risk insurance coverage provided for
such Satellite hereunder.
39.6 Notice of Loss
In the event Purchaser believes a Total Loss or Partial Loss has
occurred, Purchaser shall give written notice of the occurrence to
Contractor as soon as possible, but in no event later than thirty (30)
days after an officer or director of Purchaser becomes aware of such
occurrence. If Purchaser believes such occurrence entitles it to claim
payment of any amount for a Total Loss or Partial Loss pursuant to this
Contract, Purchaser shall deliver to Contractor a sworn and
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notarized proof of loss in such form and including such information as
Contractor may reasonably require and request as soon as practicable,
but in no event later than ninety (90) days after the delivery of the
notice of such occurrence.
39.7 Return of Payment
In the event of payment to Purchaser of any amount for a Total Loss or
Partial Loss pursuant to this Contract with respect to a Satellite and
it is later determined that the Available Communications Capacity of
such Satellite has not been reduced to the extent claimed as the basis
for such payment, Purchaser shall return to Contractor, within thirty
(30) days after receipt of Contractor's invoice, which shall be issued
no earlier than the date of such determination, an amount such that the
payment retained by Customer equals the amount that would have been
paid had the Available Communications Capacity been calculated as
subsequently determined.
39.8 Salvage Value
Subject to Article 39.10 below, In the event that a Total Loss or
Partial Loss shall occur that entitles Purchaser to payment of any
amount pursuant to this Contract, Contractor shall be entitled to any
salvage value of the Ku-Band and Ka-Band Transponders and Purchaser's
ownership interest in the Common Elements that are the subject of a
Total Loss or any Transponders thereon that are the subject of a
Partial Loss.
39.9 Exclusions
Notwithstanding anything in this Contract to the contrary, Contractor
shall have no obligation to pay any amount to Purchaser for a Total
Loss or a Partial Loss caused by or resulting from any of the following
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(provided that the same are reasonably consistent with industry
standards and are actually excluded from or denied coverage under the
actual insurance policy procured by Contractor):
(i) war, hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against
an actual, impending or expected attack by any government or
sovereign power (de jure or de facto); any authority
maintaining or using a military, naval or air force; a
military, naval or air force; or any agent of any such
government, power, authority or force;
(ii) any anti-satellite device or device employing atomic or
nuclear fission and/or fusion, or device employing laser or
directed energy beams;
(iii) insurrection, strikes, riots, civil commotion,
rebellion, revolution, civil war, usurpation or action taken
by a government or governmental authority in hindering,
combating or defending against such an occurrence whether
there be a declaration of war or not;
(iv) confiscation by order of any government or governmental
authority or agency (whether secret or otherwise), or public
authority;
(v) nuclear reaction, nuclear radiation or radioactive
contamination of any nature, whether such loss or damage be
direct or indirect, except for radiation naturally occurring
in the space environment;
(vi) electromagnetic or radio frequency interference, except
for physical damage to a Satellite directly resulting from
such interference;
(vii) willful or intentional acts of Purchaser or its
contractors or subcontractors (other than Contractor) designed
to cause loss or failure of a Satellite; or
(viii) any exclusions in addition to the foregoing or any
modifications thereto as are reasonably consistent with
industry standards in first-party launch insurance contracts.
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39.10 Right of First Offer/Refusal
Any insurance policy procured pursuant to Article 39.1 or 29.3 above
shall contain a provision to the effect that in the event of a Total
Loss, Purchaser shall have the right for a period of up to thirty (30)
days following the Total Loss to make an offer to the underwriters of
such insurance policy to take or retain unencumbered title to Ku-Band
and Ka-Band Transponders and Purchaser's ownership interest in the
Common Elements that are subject to the Total Loss, In the event that
such underwriters are unwilling to accept such offer of Purchaser, the
underwriters shall have the right to solicit bona fide offers from
third parties to acquire title to such assets. Purchaser shall have the
right to meet all such bona fide third-party offers, if any, and in the
event that Purchaser makes such matching offer, the underwriters shall
be obligated to accept Purchaser's offer promptly.
39.11 Third Party Indemnity Insurance
Contractor shall cause Purchaser to be named as an additional insured
under any and all insurance policies procured by the Launch Agency with
respect to the Launch of any Satellite.
39.12 Pre-Launch Risk Insurance
Contractor shall obtain and at all times maintain insurance coverage
against all risks of loss and damage to a Satellite and its components
during the period from EDC until Launch in an amount not less than the
Firm Fixed Price of the applicable Satellite and sufficient to provide
the Replacement Satellite pursuant to Article 10.4.2.
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39.13 Other Insurance Terms
Contractor shall have Purchaser and/or its designees named as an
additional insured on the insurance policies referenced in Articles
39.1, 29.3 and 39.12 above. Contractor agrees to furnish to Purchaser
certificates of insurance and the underlying policies evidencing that
all insurance required pursuant to Articles 39.1, 29.3 and 39.12 is in
full force and effect. Contractor covenants and agrees not to change
any of the material terms and conditions of said policies of insurance
which are relevant to this Contract without first obtaining the written
consent of Purchaser (which consent shall not be unreasonable
withheld). The certificates of insurance and underlying policies shall
contain an endorsement setting forth that the insurer cannot terminate
or materially amend the provisions of the insurance without prior
written notification to Purchaser at least thirty (30) days before such
termination or amendment. Contractor shall use reasonable commercial
efforts to cause such insurance policies to contain a waiver of
subrogation rights by the insurer against Purchaser, its Affiliates and
their owners, officers, directors, employees, agents, subcontractors,
and customers.
39.14 Contractor shall, at its own cost and expense, timely provide Purchaser
and Skynet with all reasonable assistance requested by Purchaser and/or
Skynet in connection with the procurement of insurance for a Satellite,
including without limitation providing Purchaser and Skynet with such
information regarding a Satellite as is reasonably requested by
Purchaser's and Skynet's brokers and underwriters and performing
technical presentations to brokers and underwriters. In addition,
Contractor shall provide Purchaser and Skynet with such information
regarding a Satellite as is reasonably
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requested by the insurer(s) of a Satellite and will cooperate in any
insurance reviews.
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ARTICLE 40 - ORDER OF PRECEDENCE
In the event of conflict among the terms of the Preamble and Articles 1 to 46 of
this Contract and the Exhibits, the following order of decreasing precedence
shall apply:
o This Contract (Preamble and Articles 1 through 46 and
Attachment A)
o Exhibit A Statement of Work
o Exhibit B Performance Specification
o Exhibit C Product Assurance Program Plan
o Exhibit D Test Plan
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ARTICLE 41 - GENERAL
41.1 Binding Effect; Assignment
This Contract shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. Except
as otherwise expressly set forth to the contrary herein, this Contract
may not be assigned, either in whole or in part, by either Party
without the express written approval of the other Party. Such approval
shall not be unreasonably withheld or delayed. Contractor may require,
as a condition of approving an assignment by Purchaser, that the
proposed assignee establish irrevocable letters of credit, guarantees
or other comparable assurances satisfactory to Contractor prior to such
assignment becoming effective and that Purchaser remain primarily or
secondarily liable hereunder. Either Party, upon prior written notice
to the other Party, may grant security interests in its rights
hereunder to lenders that provide financing for the performance by such
Party of its obligations under this Contract or for the subject matter
hereof. In the event that either Party is sold to or merged into
another entity that shall be deemed an assignment requiring the other
party's approval hereunder. Notwithstanding anything to the contrary
herein, Purchaser may assign this Contract, in whole or in part without
Contractor's approval and without regard to the conditions set forth in
the fourth sentence of this Article 41.1, to a person or entity that
directly or indirectly controls, is controlled by or is under common
control with Purchaser.
41.2 Severability
If any provision of this Contract is declared or found to be illegal,
unenforceable or void, the Parties shall negotiate in good faith to
agree upon a substitute provision that is legal and enforceable and is
as nearly as possible consistent with the intentions underlying the
original
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provision. If the remainder of this Contract is not materially affected
by such declaration or finding and is capable of substantial
performance, then the remainder shall be enforced to the extent
permitted by law.
41.3 Captions
The captions contained herein are for purposes of convenience only and
shall not affect the construction of this Contract.
41.4 Relationships of the Parties
It is expressly understood that Contractor and Purchaser intend by this
Contract to establish the relationship of independent contractors only,
and do not intend to undertake the relationship of principal and agent
or to create a joint venture or partnership or any other relationship,
other than that of independent contractors, between them or their
respective successors in interests. Neither Contractor nor Purchaser
shall have any authority to create or assume, in the name or on behalf
of the other Party, any obligation, expressed or implied, or to act or
purport to act as the agent or the legally empowered representative of
the other Party, for any purpose whatsoever.
41.5 Entire Agreement
This Contract, including all Exhibits and the Attachments hereto,
represents the entire understanding and agreement between the Parties
hereto with respect to the subject matter hereof, and supersedes all
prior negotiations and agreements with respect to the subject matter
hereof. This Contract may not be modified or amended, and the Parties'
rights and obligations may not be waived, except by the written
agreement of both Parties.
41.6 Standard of Conduct
Both Parties agree that all their actions in carrying out the
provisions of this Contract shall be in compliance with applicable laws
and
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regulations and neither Party will pay or accept bribes, kickbacks or
other illegal payments, or engage in unlawful conduct.
41.7 Construction
This Contract, the Exhibits and the Attachment hereto have been drafted
jointly by the Parties and in the event of any ambiguities in the
language hereof, there shall be no inference drawn in favor of or
against either Party.
41.8 Counterparts
This Contract may be signed in any number of counterparts with the same
effect as if the signature(s) on each counterpart were upon the same
instrument.
41.9 Applicable Law
This Contract shall be interpreted, construed and governed, and the
rights of the Parties shall be determined, in all respects, according
to the laws of the State of New York without regard to its conflict of
law rules.
41.10 Survival
Termination or expiration of this Contract for any reason shall not
release either Party from any liabilities or obligations set forth in
this Contract that (i) the Parties have expressly agreed shall survive
any such termination or expiration or (ii) remain to be performed or by
their nature would be intended to be applicable following any such
termination or expiration.
41.11 U.N. Convention on the International Sales of Goods
The U.N. Convention on the International Sales of Goods shall not apply
or otherwise have any legal effect with respect to this Contract.
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41.12 Waiver
No delay or omission by either party to exercise any right or power
shall impair any such right or power or be construed to be a waiver
thereof. No payment of money by any person or entity shall be construed
as a waiver of any right or power under this Contract. A waiver by any
party of any of the covenants, conditions or contracts to be performed
by the other party or any breach thereof shall not be construed to be a
waiver of any succeeding breach thereof or of any other covenant,
condition or contract herein contained. No change, waiver or discharge
hereof shall be valid unless in writing and signed by a duly authorized
representative of the party against which such change, waiver or
discharge is sought to be enforced.
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ARTICLE 42 - ATTACHMENTS
The following Attachments are incorporated in this Contract:
Attachment A Payment Plan
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ARTICLE 43 - TERMINATION RIGHT
Notwithstanding anything to the contrary herein, if by the TBD Deadline the
Parties are unable to reach final agreement upon: (1) the pricing and schedule
for the options described in Article 29.1; or (2) the TBD terms of this
Contract, the Statement of Work, Satellite Performance Specification, Product
Assurance Program Plan, Satellite Program Test Plan and the milestones in the
Payment Plan, then Purchaser may immediately terminate this Contract by
providing written notice to Contractor. If such termination occurs, then
Purchaser shall pay Contractor $XXX within thirty (30) days of receipt of an
invoice. All other liabilities and obligations of the Parties shall be released,
waived and terminated, except for those set forth in Articles 20, 35 and 37.
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ARTICLE 44 - RESERVED
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ARTICLE 45 - ANTICIPATED LIFE OF SATELLITE
Contractor hereby represents and warrants to Purchaser that each Satellite will
have an orbital maneuver life of at least 15 years after Purchaser's Acceptance
or rejection of the applicable Satellite pursuant to Article 10 above, with
industry standard margins, assuming that the Satellite is successfully Launched
and operates in accordance with the Performance Specification.
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ARTICLE 46 - KEY PERSONNEL
The Contractor will assign properly qualified and experienced personnel to the
program contemplated under the Contract. Personnel assigned to the following
positions shall be considered "Key Personnel":
a) the Contractor's Program Manager
b) the Contractor's Contracts Manager
c) the Contractor's Product Assurance Manager
d) the Contractor's Systems Engineering Manager
e) the Contractor's Vehicle Manager
The Purchaser shall have the right to approve the Contractor's Program Manager
which approval shall not be unreasonably withheld or delayed. Key Personnel
shall not be assigned to other duties without the Contractor giving prior
written notice to and consulting with the Purchaser. The Contractor shall
provide a chart to the Purchaser of the program Key Personnel and shall keep
such chart current.
Additionally, for so long as Xxxxx Xxxxx is associated with Contractor as an
employee or consultant, Purchaser shall have unrestricted access to Xx. Xxxxx
for purposes of designing the payload and its specifications. Xx. Xxxxx shall
have a key decision-making role on payload-related issues, and shall be a
primary interface with the Purchaser on all payload-related technical and
performance issues.
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IN WITNESS THEREOF, the Parties have executed this Contract by their duly
authorized officers as of the date set forth in the Preamble.
ECHOSTAR ORBITAL
SPACE SYSTEMS/LORAL, INC. CORPORATION
By: By:
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Name: Name:
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Title: Title:
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