Exhibit 10.37
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
FIXED PRICE CONTRACT
BETWEEN
XXXXXX COMMUNICATIONS GALAXY, INC.
AND
XXXXXX SPACE & COMMUNICATIONS COMPANY
FOR
GALAXY XI HS702
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 96-HCG-002
TABLE OF CONTENTS
PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS.......................................2
ARTICLE 2. ORDER OF PRECEDENCE...............................................3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES....................4
ARTICLE 4. DELIVERABLES AND SCHEDULE.........................................6
ARTICLE 5. PRICE.............................................................9
ARTICLE 6. PAYMENTS.........................................................10
ARTICLE 7. SPACECRAFT LAUNCH DATE...........................................14
ARTICLE 8. BUYER-FURNISHED ITEMS............................................16
ARTICLE 9. INSPECTION AND ACCEPTANCE........................................19
ARTICLE 10. ACCESS TO WORK IN PROCESS........................................20
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY.................21
ARTICLE 12. EXCUSABLE DELAYS.................................................23
ARTICLE 13. AMENDMENTS.......................................................24
ARTICLE 14. TITLE AND RISK OF LOSS...........................................25
ARTICLE 15. SPACECRAFT WARRANTY..............................................28
ARTICLE 16. INDEMNIFICATION..................................................30
ARTICLE 17. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE.......31
ARTICLE 18. PATENT/COPYRIGHT INDEMNITY.......................................32
ARTICLE 19. RIGHTS IN INVENTIONS.............................................34
ARTICLE 20. INTELLECTUAL PROPERTY RIGHTS.....................................36
ARTICLE 21. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE...............37
ARTICLE 22. PUBLIC RELEASE OF INFORMATION....................................39
(i)
ARTICLE 23. TAXES............................................................40
ARTICLE 24. GOVERNING LAW....................................................41
ARTICLE 25. TITLES...........................................................42
ARTICLE 26. NOTICES AND AUTHORIZED REPRESENTATIVES...........................43
ARTICLE 27. INTEGRATION......................................................44
ARTICLE 28. CHANGES..........................................................45
ARTICLE 29. EFFECTS OF STORAGE ON BATTERIES..................................48
ARTICLE 30. INTER-PARTY WAIVER OF LIABILITY..................................49
ARTICLE 31. SPACECRAFT STORAGE...............................................50
ARTICLE 32. DISPUTES.........................................................51
ARTICLE 33. ASSIGNMENT.......................................................54
ARTICLE 34. LIMITATION OF LIABILITY..........................................56
ARTICLE 35. EFFECTIVE DATE OF CONTRACT.......................................57
(ii)
THIS CONTRACT is entered into on the 7th day of May, 1997, by and between
XXXXXX COMMUNICATIONS GALAXY, INC. (herein called "Buyer" or "HCG"), a
California corporation having a place of business at 0000 Xxxxxx Xxx, Xxxx
Xxxxx, Xxxxxxxxxx 00000 and XXXXXX SPACE AND COMMUNICATIONS COMPANY (herein
called "Contractor," "Seller" or "HSC"), a Delaware corporation having a place
of business at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, HCG desires to purchase, and Contractor desires to provide
communications Spacecraft, Documentation, and Related Services as hereinafter
specified, and the Parties desire to define the terms and conditions under which
the same shall be furnished,
NOW, THEREFORE, the Parties hereto agree as follows:
1
ARTICLE 1. EXHIBITS AND INCORPORATIONS
The following documents are hereby incorporated and made a part of this
Contract with the same force and effect as though set forth herein:
1.1 Exhibit A - Galaxy XI Statement of Work - executed on April 30, 1997.
1.2 Exhibit B - Galaxy XI Spacecraft Specification - executed on
December 19, 1996.
1.3 Exhibit C - Galaxy XI Spacecraft Integration Test Plan - executed on
April 30, 1997.
1.4 Exhibit D - Galaxy XI Product Assurance Plan - executed on
April 30, 1997.
1.5 Exhibit E - Certain Documentation - executed on April 30, 1997.
1.6 Exhibit F - Certain Software and/or Documentation - executed on
April 30, 1997.
2
ARTICLE 2. ORDER OF PRECEDENCE
In the event of any conflict or inconsistency among the provisions of
this document and the exhibits attached and incorporated into this
Contract, such conflict or inconsistency shall be resolved by giving
precedence to this document, and then to the attached and incorporated
exhibits in the order listed in Article 1 herein, entitled "Exhibits
and Incorporations."
3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED
SERVICES ("DELIVERABLES")
HCG shall purchase from Contractor and Contractor shall sell and
furnish the following:
3.1 Contractor shall provide the necessary personnel, material,
services and facilities to design, fabricate, test and deliver
as required and perform work in accordance with the
requirements of Exhibits A, B, C and D hereto, one (1) HS702
type Spacecraft for Galaxy Flight XI (hereinafter referred to
as "Spacecraft"), Documentation and Related Services (as
defined in Article 4).
3.2 All materials and services specified in Exhibit A, entitled
"Galaxy XI Statement of Work," shall meet the requirements of
Exhibit B, entitled "Galaxy XI Spacecraft Specification."
3.3 If Contractor has not made delivery [***] or if, prior to the
Launch Date, [***] Buyer at its election may:
[***]
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Any such election shall be made by Buyer in writing. In either
case (a) or (b) above, [***]
3.4 [***] in accordance with: (i) current directives and
instructions in the Xxxxxx Spacecraft Operators Handbook,
utilized at either Buyer's Operations Control Center (OCC) or
Contractor's Mission Control Center (MCC); and (ii) any other
Documentation utilized, including that Documentation which
takes into consideration the unique or special characteristics
of the contracted Spacecraft. [***] Contractor has
responsibility and liability for the Mission Control Center.
Buyer has responsibility and liability for the Operations
Control Center and its associated ground station(s).
3.5 The Spacecraft, Documentation and Related Services described
above shall be delivered to HCG at the indicated locations on
the dates set forth in Article 4 entitled, "Deliverables and
Schedule" herein.
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ARTICLE 4. DELIVERABLES AND SCHEDULE
4.1 The following deliverables to be furnished under this Contract
shall be furnished at the designated location(s) on or before
the dates specified below:
-----------------------------------------------------------------------------------------------------------
Integration Delivery Location and
Date of Delivery Performance Place
Deliverable(s) or Performance
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
o Sea Launch, L.P. Facilities,
1. One Spacecraft ("Spacecraft") Forty-five (45) days prior to Port of Long Beach, California
Launch(1) (the
"Integration Facility")
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
o Sea Launch, L.P. Facilities,
2. Launch Support, Mission In Accordance with Exhibit A Port of Long Beach, California
Operations and In-Orbit (the "Integration Facility")
Testing ("Related Services") then vicinity of Kiritimati,
"Christmas Islands", (the
"Launch Site")
o Filmore, California
o Castle Rock, Colorado
o El Segundo, California
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
3. Documentation In Accordance with Exhibit A 0000 Xxxxxx Xxx
("Xxxxxxxxxxxxx") Xxxx Xxxxx, Xxxxxxxxxx
-----------------------------------------------------------------------------------------------------------
1 Launch Period is 01 June - 01 September 1998
4.2 The Contractor will arrange transportation required for Items
1, 2 and 3 above. With respect to Deliverable Items 1 and 2,
liability is allocated as follows:
The Launch Vehicle Provider for this Galaxy XI Launch is
Sea Launch, L.P. The Galaxy XI Spacecraft will be mated
with the Sea Launch Zenit Vehicle (the "Vehicle") at the
Sea Launch, L.P. facilities, Port of Long Beach (the
"Integration Facility"). Under the Amended and Restated
Launch Services Agreement dated 17 January 1997 by and
between Xxxxxx Space and Communications International,
Inc. and Xxxxxx Communications Galaxy , Inc., which
allocates one (1) Sea Launch Limited Partnership Sea
Launch Service to Buyer, the mated Spacecraft, associated
equipment and HSC personnel necessary to assist in the
monitoring and control of the Spacecraft will be
transported by the Sea
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Launch, L.P. Command Ship (the "Ship") from the
Integration Facility to the Launch Site in the vicinity of
the Christmas Islands (the "Launch Site"). HSC may also
utilize the Ship at Sea Launch L.P.'s expense for the
transportation of other related HSC personnel when
accommodations are available and such accommodations do
not interfere with other Sea Launch, L.P. commitments for
the Galaxy XI Launch.
4.2.1 If the Spacecraft fails to conform to the
warranty provisions set forth in Article 15
and: (i) the mated Spacecraft requires
testing, maintenance, replacement and/or
corrective actions at the Launch Site or
(ii) return to the Integration Facility
and/or the El Segundo Plantsite is necessary
to accomplish such actions, HSC shall have
responsibility and liability as follows:
4.2.1.1 If Spacecraft warranty actions
can be performed at the Launch
Site, HSC shall be responsible
and liable for [***] to the
warranty provisions of this
Contract.
4.2.1.2 If return of the Spacecraft to
the Integration Facility and/or
Plantsite is necessary for such
warranty actions, HSC shall be
liable to Buyer in [***]
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[***]
4.3 [***] shall be responsible for obtaining and maintaining:
(i) all U.S. Government export licenses to enable export of
the Spacecraft, related test and support equipment to the
Launch Site and (ii) all authorizations required for the
performance of this Contract.
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ARTICLE 5. PRICE
5.1 The total price (the "Contract Price") for Contractor to
provide the Spacecraft, Documentation and Related Services as
defined in Article 3 herein is [***]
5.2 Buyer shall pay Contractor the Contract Price stated in
Paragraph 5.1 above in accordance with Article 6, Paragraphs
6.2 and 6.3 of this Contract.
5.3 Notwithstanding the foregoing, in the event that any Exhibit F
Certain Software and/or Documentation is delayed beyond the
delivery date (the "Liquidated Damages Date") identified in
this Exhibit, Buyer unless it otherwise agrees, and so
notifies Contractor, is excused from its duty to remit to
Contractor [***] required by Paragraph 6.3 upon timely
delivery of all Exhibit F Software and/or Documentation.
Thereafter, the Contract Price shall mean [***] Buyer and
Contractor agree that this Liquidated Damages sum is a
reasonable pre-estimate of actual loss and free of any
penalty. Contractor's maximum liability under this Paragraph
is [***].
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ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject
to HCG's rights, defenses and remedies as expressly stated in
this Agreement, HCG shall pay to Contractor the Contract Price
as stated in Article 5 herein for the Spacecraft,
Documentation, and Related Services under this Contract.
6.2 Invoices shall be prepared and submitted by Contractor in a
form reasonably acceptable to Buyer. Payments to Contractor
shall be made in accordance with the payment plan specified in
subparagraph 6.3 below:
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6.4 Payment Schedule Revision: The payment plan established in
Paragraph 6.3 above is based upon a launch period between 01
June - 01 September 1998. If the Launch Period established in
accordance with Article 7, Paragraph 7.1.2 is later than
September 1998, the payment plan in Paragraph 6.3 of this
Article shall be revised by mutual agreement of the Parties to
reflect the established Launch Period.
6.5 HSC shall not be obligated to deliver the Spacecraft to the
Launch Site if there are any outstanding Delinquent Payments
owed by HCG to HSC under this contract one month prior to
shipment of the Spacecraft from the HSC facility. "Delinquent
Payments" are defined as those payments not received by HSC
within thirty (30) days of the dates due as defined in
Paragraph 6.5.2 below. Once HCG has paid HSC for any
"Delinquent Payments" and any interest accrued in accordance
with Paragraph 6.7 below, HSC shall use its reasonable best
efforts to ship the Spacecraft to the Launch Site so as to
enable launch on the scheduled Launch Date and in any event to
make shipment as soon as practicable and no later than sixteen
(16) weeks after payment by HCG of such Delinquent Payments.
HCG will be responsible for and will pay to HSC any reasonable
costs and [***] profit on such costs that HSC may incur as a
result of a delay in delivery due to HCG's Delinquent
Payments. Notwithstanding the foregoing, this Section 6.5
shall not relieve Contractor of its obligation to deliver the
Spacecraft, and no "Delinquent Payment" shall be deemed to
have occurred, due to any non-payment by HCG on account of an
alleged breach by Contractor or other dispute as to such
payment. In such event, HCG shall, within thirty (30) days of
the date such payment is due, pay the full amount of such
payment into an interest-bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged
breach in accordance with Article 32, the Party entitled to
the amount in escrow shall receive such amount together with
all accrued interest thereon and the other Party shall pay all
costs and fees associated with the escrow of such amount.
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6.6 Invoice
6.6.1 Invoices submitted to HCG for payment shall contain a
cross-reference to the Contract number and the date
specified in the Paragraph 6.3 Payment Plan.
Contractor shall submit one (1) original invoice in
each instance to:
Xxxxxx Communications Galaxy, Inc.
X.X. Xxx 0000
Xxxx. X00/0X000
Xxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Accounts Payable - Xxxx Xxxxxx
6.6.2 Invoice amounts, as specified in Paragraph 6.3,
provide for xxxxxxxx to be submitted by the 15th day
of each month and shall be paid by HCG within thirty
(30) days upon receipt of the invoice by HCG.
6.7 Late Payments
In the event of a failure by the Buyer or the Contractor to
make a payment required pursuant to this Contract, the
delinquent Party shall pay interest at the rate of [***] on
the overdue amount for the number of days that the payment is
overdue, commencing on the date payment is due and terminating
on the date the overdue amount is paid in full.
Notwithstanding the foregoing, this Section 6.7 shall not
apply to any payment made into escrow in accordance with
Section 28.4.
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ARTICLE 7. SPACECRAFT LAUNCH DATE
7.1 This Contract is written on the basis that one (1) Spacecraft
supplied hereunder will be Launched on a Sea Launch (Zenit)
vehicle within the Launch Period set forth below and within
which a slot, date and window shall be established in
accordance with Paragraphs 7.1.1, 7.1.2, and 7.1.3 below:
Spacecraft Launch Vehicle Launch Period
---------- -------------- -------------
Galaxy XI Sea Launch 01 June-01 September 1998
(Zenit)
7.1.1 Launch Slot Definition. A thirty (30) day period of
time within a Launch Period during which the Launch
will occur. The Launch Slot within the Launch Period
shall be established by the Parties not later than
one (1) year prior to the first day of the applicable
Launch Period and once established, shall become an
express term of this Contract.
7.1.2 Launch Date Definition. The calendar date within the
Launch Slot during which a Launch will occur. The
Launch Date within the Launch Slot shall be
established by the Parties no later than six (6)
months prior to the first day of the applicable
Launch Slot and once established, shall become an
express term of this Contract.
7.1.3 Launch Window Definition. A daily period of time
within the Launch Date during which the Launch can
occur and meet mission requirements. The Launch
Window shall be established by the Parties no later
than forty-five (45) days prior to the Launch Date
and once established, shall become an express term of
this Contract.
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7.2 The Contract Price set forth in Paragraph 5.1 includes
Contractor furnished launch support services, post launch
support services, in-orbit test support services, and post
title transfer monitoring and command of the Spacecraft if
Buyer invokes the remedial provisions of Article 3, Paragraph
3.3. The Contract Price set forth in Paragraph 5.1 assumes the
launch of the Spacecraft on a Sea Launch vehicle within
forty-five (45) calendar days after delivery of the Spacecraft
to the Port of Long Beach, California (Integration Facility).
7.3 No less than sixteen (16) weeks prior to the launch date,
Buyer shall order Contractor by notice in writing to commence
launch campaign preparations including, but not limited to,
reserving transportation of the Spacecraft and related
equipment for shipment to the Sea Launch L.P. Integration
Facility.
7.4 If the Spacecraft launch date defined in Paragraph 7.1 is
postponed for any reason other than the sole fault of
Contractor, excluding any postponement due to an Excusable
Delay as defined in Article 12, the Parties shall negotiate in
good faith to determine an equitable adjustment to the price
and affected terms of this Contract, if any. If the cost of
supplies or materials made obsolete or excess as a result of a
such postponement is included in the equitable adjustment, HCG
shall have the right to prescribe the manner of disposition of
such supplies or materials. Costs included in the equitable
adjustment shall include but not be limited to: support
personnel standby; extra travel expenses; transport
termination or rescheduling fees; a profit rate of [***].
7.5 Notwithstanding the foregoing, if the Spacecraft Launch Date
defined in Paragraph 7.1 is postponed by either Party due to
an Excusable Delay, as defined in Paragraph 12.1 herein, the
terms of Article 12 herein shall govern such postponement.
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ARTICLE 8. BUYER-FURNISHED ITEMS
8.1 The following facilities, equipment, and services shall be
furnished by HCG at no cost to Contractor, in a timely manner,
so as to enable Contractor to perform the work herein in
accordance with the Spacecraft Launch Dates as described in
Article 7 of this Contract.
1) Facilities (buildings, power, phones and data lines)
and enumerated services: (i) transportation of the
Spacecraft, Contractor related test equipment and
personnel within the Launch Site and between the
Integration Facility (Port of Long Beach) and the
Launch Site (vicinity of Christmas Islands) unless
Article 4, Paragraph 4.2.1 conditions apply (ii)
storage of the Spacecraft and related test equipment
for all force majeure events and/or launch vehicle
delays (iii) fueling (iv) photographs and (v)
interface hardware at the Launch Site.
2) Reservation and procurement of the launch services
and associated services.
Contractor will provide preliminary requirements of Item 1
above to Buyer no later than 6 months after EDC to assist
Buyer's compliance with this Article. Prior to Buyer's
execution of a Launch Services Contract with the Launch
Services provider, Contractor will be allowed to review the
list of basic and optional service which Buyer shall procure.
In the event that the Buyer-Furnished Items set forth above
are not suitable for the intended purpose or are not provided
in a timely manner, excluding any excusable delay as defined
in Article 12 herein, then HCG shall be liable to Contractor
for all applicable costs which shall include but not be
limited to: procurement or rental of suitable substitutes for
such Buyer Furnished Items at no higher than market prices;
with title and possession of all such procured items reverting
to Buyer after Contractor's use under this Agreement; support
personnel standby; extra travel expenses; transport
termination or rescheduling fees; and
installation/de-installation of communication links to the
Launch Site and a profit rate of [***].
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8.2 Contractor shall maintain a system to ensure the adequate
control and protection of HCG's Property. For the purposes of
this Article, HCG Property shall be defined as any item which
HCG provides to the Contractor or directs Contractor to
maintain in storage or an inventory account under this
Contract. Upon receipt of notification from HCG, the
Contractor shall complete and return within fifteen (15)
working days a Property System Certification describing the
system that will be used to control HCG's Property.
Additionally, HCG's representative may, at its option and at
no additional cost to HCG, conduct surveillance at a
reasonable time of the Contractor's Property Control System as
HCG deems necessary to assure compliance with the terms and
conditions of this Article.
8.3 Contractor shall, commencing with its receipt and during its
custody or the use of any HCG's Property, accomplish the
following:
A. Establish and maintain inventory records and make
such records available for review upon HCG's request;
B. Provide the necessary precautions to guard against
damage from handling and deterioration during
storage;
C. Perform periodic inspection to assure adequacy of
storage conditions; and
D. Ensure that HCG's Property is used only for
performing this Contract, unless otherwise provided
in this Article or approved by the cognizant
contracting officer.
8.4 Contractor shall not modify, add-on, or replace any HCG
Property without HCG's prior written authorization. Contractor
shall immediately report to HCG's contract representative the
loss of any HCG Property or any such property found damaged,
malfunctioning, or otherwise unsuitable for use. The
Contractor shall determine and report the probable cause and
necessity for withholding such property from use.
8.5 Upon termination or completion of this Contract, and upon
request by HCG, the Contractor shall perform a physical
inventory, adequate for accountability and disposition
purposes, of all HCG's Property applicable
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to such terminated or completed agreement and shall cause its
subcontractors and suppliers at every tier to do likewise.
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ARTICLE 9. INSPECTION AND ACCEPTANCE
9.1 Inspection of all Hardware, documentation and Contractor's
services provided hereunder shall take place in accordance
with the terms of Article 10, entitled "Access to Work in
Process," herein.
9.2 Preliminary Acceptance of the Spacecraft shall occur when all
in-plant tests required to be performed by Contractor for the
Hardware have been completed and the Contractor has
demonstrated at the pre-ship review that the Hardware meets
the requirements of this Contract, at which time HCG shall
accept the Hardware on a Preliminary basis in writing within
five (5) business days subject to completion of Launch
Integration Facility and/or Launch Site tests specified in
Exhibit C, Galaxy XI Spacecraft Integration Test Plan. If the
Hardware is unacceptable, Contractor shall promptly and at its
expense, rectify the unsatisfactory Hardware and resubmit the
Hardware for acceptance by HCG as provided above. In either
case, the Hardware shall be deemed accepted upon failure of
HCG to notify Contractor in writing within the above five (5)
business days that it is accepted, rejected or that in HCG's
opinion further corrective action must be taken by the
Contractor.
9.3 Final Acceptance of the Spacecraft shall occur upon the
earliest of i) the completion of In-orbit Testing in
accordance with Exhibit A, ii) fifty (50) days after
Intentional Ignition (as defined in Article 15, Paragraph 15.2
of this Contract) or iii) immediately before a Partial
Failure, Total Failure or Total Constructive Failure (as each
such term is defined in the applicable Xxxxxx Communications
Galaxy Launch Insurance Contract or successor contract), which
occurs at or after Intentional Ignition. HCG shall have access
to Launch Integration Facility and/or Launch Site test results
during the launch campaign in accordance with the provisions
of Article 10, Paragraph 10.1 "Access to Work in Process."
9.4 With respect to deliverable Hardware which HCG orders
Contractor to store, the Hardware shall be stored at a
location to be negotiated and Final Acceptance shall occur at
the end of the [***] warranty period as set forth in
Article 15 herein, entitled "Spacecraft Warranty," or such
other event mutually agreed upon between the Parties.
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ARTICLE 10. ACCESS TO WORK IN PROCESS
10.1 Contractor shall afford HCG access to work in progress being
performed at Contractor's plants and at the Launch
Integration Facility and/or Launch Site pursuant to this
Contract, including technical data, documentation, and
hardware, at reasonable times during the period of Contract
performance, provided such access does not unreasonably
interfere with such work or require the disclosure of
Contractor's proprietary information to third Parties and
subject to (i) HSC's Security Procedures and (ii) U.S. or
Foreign Government Regulations.
10.2 To the extent that the Contractor's major subcontracts
permit, Contractor shall afford HCG access to work being
performed pursuant to this Contract in subcontractor's
plants in the company of Contractor's representatives.
Contractor shall exert reasonable effort in subcontracting
to obtain permission for HCG access to those major
subcontractors' plants. Major subcontracts are defined as
those subcontracts in excess of [***].
10.3 HCG shall have the right to witness on a non-interference
basis all system and subsystem tests scheduled by Contractor
in connection with the performance of work under this
Contract. If the system or subsystem tests are performed by
a subcontractor of HSC, HSC shall take all reasonable steps
to secure HCG's access to the subcontractor's facility or
facilities. HCG's right to witness testing shall be on a
non-interference basis with the subcontractor's activities
and subject to (i) any subcontractor security procedures and
(ii) U.S. or Foreign Government Regulations.
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ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY
11.1 Subject to provisions of Article 3 entitled "Spacecraft,
Documentation and Related Services," Article 5 entitled
"Price" and Article 12 entitled "Excusable Delays," Buyer
may issue a written notice of default to Contractor if: (i)
Contractor fails [***] as confirmed in writing by the
Contractor's and Buyer's Senior Executives and such failure
may result in a delay in delivery of more than [***]; or
(ii) the delivery of the Spacecraft or Contractor's
performance of any material obligation under the Contract
has been delayed due to the primary fault of the Contractor
for more than [***]. Subsequent to the issuance of said
notice, the Buyer may terminate this Contract and thereafter
elect remedies as identified in Paragraph 11.2 below.
11.2 If Buyer terminates this Contract, in whole or in part, as
provided in Paragraph 11.1 herein, Buyer, at its sole
option, shall either: (i) take title to all deliverable
hardware, all hardware in process which ultimately would
have been deliverable by Contractor and all drawings and
data produced by Contractor, the cost of which has been
charged or becomes chargeable to any work terminated plus
all reasonable reprocurement costs up to a maximum amount
of: (a) [***] in the event of a termination of this Contract
solely with respect to Documentation and/or Related Services
or (b) [***] with respect to a termination of the entire
Contract or (ii) receive a refund of all payments submitted
to Contractor by the Buyer for performance of this Contract
for the portion terminated by Buyer, and Contractor shall
retain title and possession to all terminated Hardware which
ultimately would have been deliverable by Contractor.
Contractor shall continue the performance of this Contract
to the extent not terminated under the provisions of this
Article.
11.3 Notwithstanding the other provisions of this Article, there
will be no termination for default after Intentional
Ignition of the Launch Vehicle.
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11.4 If, after termination of this Contract under the provisions
of this Article, it is determined for any reason that
Contractor was not in default under the provisions of this
Article, or that the default was excusable under the
provision of Article 12 entitled "Excusable Delays," then
the Contractor shall be entitled to be paid for its actual
reasonable costs plus [***] profit, less amounts previously
paid by the Buyer and upon making payment in full, the Buyer
shall take title to all tangible work in process inventories
generated under the Contract. For purposes of this Paragraph
11.4, Contractor's "actual reasonable costs" shall mean all
costs expended by Contractor for all work done under this
Contract up to the date of termination, settlements with
subcontractors for work performed prior to termination, and
Contractor's reasonable costs related to termination which
would otherwise not have been incurred.
11.5 Except as otherwise provided in the Contract, the rights and
remedies of the Parties provided in this Article shall be in
lieu of any other rights and remedies provided by law or in
equity in the event Contractor or Buyer fails to meet its
obligations under this Contract. Buyer shall have no other
rights or remedies for late delivery of the Spacecraft,
Documentation and Related Services under this Contract
except for those rights and remedies expressly provided for
in this Contract.
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ARTICLE 12. EXCUSABLE DELAYS
12.1 If either Party or a subcontractor of either Party is
delayed by act of God, or of the public enemy, fire, flood,
earthquake, epidemic, quarantine restriction, strike,
walkout, freight embargo, or any other event which is beyond
their control or does not arise from the acts or omissions
of either Party or its respective subcontractors, said delay
shall constitute an excusable delay ("Force Majeure
Events"). In the event of an excusable delay, there shall be
an equitable adjustment to the time of delivery and/or
performance stated in this Contract. The affected Party
shall give notice in writing to the other Party within 10
working days that an excusable delay condition exists after
learning of such delay. Such notification shall include the
cause of the excusable delay, the expected length of the
excusable delay, and alternate plans to mitigate the effect
of the excusable delay.
12.2 If the affected Party, as defined in Paragraph 12.1 above,
requests or experiences, on a cumulative basis, excusable
delay(s) greater than [***], the Parties shall
enter into good faith negotiations to develop a mutual
course of action and/or an equitable adjustment to the
affected terms of this Agreement.
12.3 Notwithstanding the foregoing, if the Launch Date defined in
Paragraph 7.1 herein is delayed due to a Force Majeure event
affecting either Party or a subcontractor thereof at any
point in time after the shipment of the Spacecraft to the
Launch Site has occurred, HCG shall reimburse Contractor for
all reasonable expenses incurred as a result, including
without limitation expenses for: support personnel standby;
extra travel expenses; transport termination or rescheduling
fees; and installation/de-installation of communication
links to the Launch Site.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
23
ARTICLE 13. AMENDMENTS
The terms and provisions of this Contract shall not be amended or
modified without specific written provision to that effect, signed by
the Authorized Representative(s) of both Parties. These Authorized
Representative(s) are identified in Article 26, "Notices and Authorized
Representative(s)." No oral statement of any person shall in any manner
or degree modify or otherwise affect the terms and provisions of this
Contract.
24
ARTICLE 14. TITLE AND RISK OF LOSS
14.1 Title and risk of loss or damage in respect of all items to be
delivered under this Contract shall pass from Contractor to
HCG as follows:
14.1.1 Risk of loss of the Spacecraft and title
shall pass from Contractor to HCG upon the
earliest of: (i) the completion of In-orbit
Testing in accordance with Exhibit A, (ii)
fifty (50) days after Intentional Ignition
(as defined in Article 15, Paragraph 15.2 of
this contract) or (iii) immediately before a
Partial Failure, Total Failure or Total
Constructive Failure (as each such term is
defined in the applicable Xxxxxx
Communications Galaxy Launch Insurance
Contract or successor contract) which occurs
at or after Intentional Ignition.
14.1.2 In respect to the Spacecraft which HCG
directs Contractor to store, title and risk
of loss shall remain with the Contractor
until Final Acceptance as specified in
Article 9.4 herein.
14.1.3 Notwithstanding Paragraph 14.1.2 above, upon
removal of the Spacecraft from storage, the
Contractor shall not assume risk of loss
relative to a Battery which HCG directs
Contractor to replace after the five-year
storage period which disqualifies the
battery for a 15-year mission. In that
event, Article 29 herein entitled "Effects
of Storage on Batteries," shall apply.
14.1.4 "Risk of Loss" for purposes of this Article
14 is limited to the responsibility and
liability for a Partial Failure, Total
Failure or Total Constructive Failure (as
each such term is as defined in the
applicable Xxxxxx Communications Galaxy
Launch Insurance Contract or successor
contract). Responsibility and liability for
the Spacecraft prior to intentional ignition
is with the Contractor.
25
14.2 In the event of damage to or destruction of Hardware when
Contractor shall have risk of loss, Contractor shall repair or
replace (at Contractor's option) said Hardware. The Buyer
shall participate in the decision to repair or replace said
Hardware and the provisions of Article 15 shall apply.
14.3 Insurance Provided By Contractor. The Contractor shall, at its
own expense, provide and maintain the following insurance:
14.3.1 "All Risk" Insurance
(i) The Policy for "All Risks" insurance shall
insure the Contractor and name Buyer as additional
insured and Loss Payee as their interest may
appear.
(ii) The insurance shall cover the Spacecraft while
in or about the Contractor's and subcontractors'
plants, while at other premises which may be used
or operated by the Contractor for construction or
storage purposes, while in transit, or while at the
Designated Launch Site until Intentional Ignition,
or while Spacecraft is stored by the Contractor at
HCG's direction until Final Acceptance as specified
in Article 9.4.
(iii) Such insurance shall be sufficient to cover
the full replacement value or selling price of the
Spacecraft and may be issued with deductibles, for
which losses shall be borne by the Contractor.
(iv) This "All Risk" insurance shall be in force
from the time of the Effective Date of this
Contract and shall continue in effect until
Contractor's liabilities have expired at
intentional ignition.
26
14.3.2 Third Party Liability Insurance
(i) The Policy(s) for Third Party Liability
insurance shall be written on forms the Buyer may
review and shall include Buyer as additional
insured.
(ii) This Third Party Liability insurance shall be
in force from the time of the Effective Date of
this Contract and shall continue in effect until
Contractor's liabilities have expired at
intentional ignition.
(iii) The Policy(s) may be issued with deductibles,
for which losses shall be borne by the Contractor.
14.4 General Insurance Requirements
(i) The Contractor shall, upon request, provide to
the Buyer certificates of the Insurance Policy(s)
issued by an agent of the Contractor's Insurer(s)
for coverage which the Contractor is required to
provide pursuant to the provisions of these
Articles.
(ii) All Policies of insurance to be provided and
maintained pursuant to these Articles shall require
the insurer(s) or its authorized agent(s) to give
each insured not less than thirty (30) days prior
written notice in the event of cancellation or any
proposed material change in such policies, except
for ten (10) days prior written notice in the event
of cancellation due to non-payment of premium.
(iii) The Contractor may also acquire and maintain,
at its own expense, other insurance for amounts and
perils, and upon such terms, conditions and
deductibles as it may deem advisable or necessary
to cover any loss or damage to persons or property
that may occur as a result of the performance of
this Contract.
27
ARTICLE 15. SPACECRAFT WARRANTY
15.1 Contractor warrants that the Spacecraft, upon successful
completion of Spacecraft in plant Tests pursuant to Article 9
herein, shall be free from any defects in material or
workmanship and shall conform to the applicable specifications
and drawings, as evidenced by the acceptance criteria in
Exhibits A-D herein.
15.2 This warranty shall start from the date of Preliminary
Acceptance of the Spacecraft as stated in Article 9 herein,
entitled "Inspection and Acceptance," and continue for a
period of [***], or until the Intentional Ignition (defined
herein as the "Intentional Ignition of any rocket motor on the
first stage of the launch vehicle") of the applicable launch
vehicle, whichever is earlier. [***] ("Warranty Time Period").
Contractor shall not be liable in Contract or in Tort for any
incidental, special, contingent, or consequential damages.
15.3 HCG shall have the right at any time during the Warranty Time
Period to reject any goods not conforming to this warranty and
require that Contractor, at its expense, correct or replace
(at Contractor's option) such goods with conforming goods. If
any time during the Warranty Time Period Contractor fails to
correct or replace such defective goods and fails to initiate
reasonable efforts to correct or replace such defective goods
within a reasonable period after written notification and
authorization from HCG, HCG may then, by contract or
otherwise, correct or replace such defective goods and
equitably adjust the price.
15.4 Except as otherwise expressly agreed upon in this Contract,
Contractor shall have no liability, or responsibility in
Contract or in Tort with respect to the Spacecraft after
Intentional Ignition (as defined in Paragraph 15.2) of the
launch vehicle.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
28
15.5 THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR
MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE
REMEDY FOR FAILURE BY CONTRACTOR TO FURNISH THE SPACECRAFT
THAT IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP
AS SET FORTH IN PARAGRAPH 15.1 ABOVE. ALL OTHER WARRANTIES OR
CONDITIONS IMPLIED BY ANY OTHER STATUTORY ENACTMENT OR RULE OF
LAW WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED.
CONTRACTOR AND ITS SUBCONTRACTORS SHALL HAVE NO LIABILITY IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR IN ANY OTHER
MANNER WHATSOEVER FOR THE SPACECRAFT AFTER INTENTIONAL
IGNITION OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT.
15.6 Any limitations on warranties, liability or requests for
indemnification from liability for the malfunction of
delivered items which are imposed upon the Contractor by its
various equipment suppliers shall be passed on directly to
Buyer provided, however, nothing therein shall decrease or
invalidate the rights of the Buyer during, or the length of,
the Warranty Time Period as stated in this Article.
29
ARTICLE 16. INDEMNIFICATION
16.1 Each Party shall indemnify and hold the other and/or all its
officers, agents, servants, subsidiaries, affiliates, parent
companies and employees, or any of them, harmless from any
liability or expense in connection herewith on account of
damage to property (excepting other Spacecraft in flight)
and injuries, including death, to all persons including but
not limited to employees of the Parties, and their
subcontractors, and of all other persons performing any part
of the work hereunder, arising from any occurrence caused by
an negligent act or omission of the indemnifying Party or
its subcontractors, or any of them in connection with the
work to be performed by such Party under this Contract. The
indemnifying Party shall have the right, but not the
obligation, to participate in any legal or other proceedings
concerning claims for which it is indemnifying under this
Article 16 and to direct the defense of such claims.
However, with respect to such legal or other proceedings,
the indemnifying Party shall pay all expenses (including
attorneys fees incurred by the indemnified Party in
connection with such legal or other proceedings) and satisfy
all judgments, costs or other awards which may be incurred
by or rendered against the indemnified Party. The
indemnifying Party shall not settle any such claim, legal or
other proceeding without first giving thirty (30) days prior
written notice of the Terms and Conditions of such
settlement and obtaining the consent of the indemnified
Party, which consent shall not be unreasonably withheld or
delayed.
16.2 Notwithstanding the foregoing, neither the Contractor nor
its subcontractors shall have any liability in Contract or
in Tort, for damages to or caused by the Spacecraft after
Intentional Ignition (as defined in Paragraph 15.2), and
Buyer shall obtain waivers of subrogation rights from
Buyer's insurers against Contractor, and affiliates and
subcontractors of Contractor.
30
ARTICLE 17. SPACECRAFT NOT LAUNCHED WITHIN SIX
MONTHS AFTER ACCEPTANCE
17.1 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance per Article 9, entitled
"Inspection and Acceptance," and is subsequently ordered to
be launched within [***] following its Preliminary
Acceptance, it is agreed that such Spacecraft shall be
returned at Contractor's option at Contractor's expense, to
Contractor's facility for inspection and refurbishment. Any
inspection and refurbishment undertaken by Contractor to
meet the requirements of Article 15 entitled, "Spacecraft
Warranty," shall be at Contractor's expense, including
Spacecraft transit insurance.
17.2 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance and is subsequently ordered
to be launched later than [***] following its Preliminary
Acceptance, it is agreed that such Spacecraft shall be
returned, at HCG's expense, to Contractor's facility for
inspection and refurbishment. An equitable adjustment to
Contract price for such inspection and refurbishment, to
include a [***] profit component shall be negotiated by the
Parties unless the fact that the launch is scheduled for
later than [***] is due to Contractor's negligent acts or
omissions.
17.3 If the Spacecraft is returned to Contractor's facility for
inspection and refurbishment per the terms of Paragraph 17.2
above, all charges to return such Spacecraft to the Launch
Site shall be borne by HCG.
17.4 If the Spacecraft has not been launched within [***] after
its preliminary Acceptance, neither Party shall be further
obligated to the other with respect to such Spacecraft.
Disposition of such Spacecraft shall be at the option of HCG
with costs of such disposition to be borne by HCG.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
31
ARTICLE 18. PATENT/COPYRIGHT INDEMNITY
18.1 Contractor shall indemnify and hold HCG harmless against any
liability or expense as a result of claims, actions, or
proceedings against HCG alleging the infringement of any
trademarks, United States Copyright or mask work, United
States Letters Patent, any other intellectual property
rights, by any article fabricated by Contractor and
delivered to HCG pursuant to this Contract as set forth
below.
18.2 Contractor agrees to defend at its own expense any claim,
action, proceeding or request for royalty payments or any
claim for equitable relief or damages against HCG, its
officers, employees, agents, or subsidiaries based on an
allegation that the manufacture of any item under this
Contract or the use, lease, or sale thereof infringes any
United States Letters Patent trademark, United States
Copyright or mask work or any other intellectual property
right, and to pay any royalties and other costs related to
the settlement of such claim, action, proceeding or request
and to pay the costs and damages, including reasonable
attorney's fees finally awarded as the result of any claim,
action or proceeding based on such request, provided that
Contractor is given prompt written notice of such request or
claim by HCG and given authority and such assistance and
information as is available to HCG for resisting such
request or for the defense of such claim, action or
proceeding. Any such assistance or information which is
furnished by HCG at the written request of Contractor is to
be at Contractor's expense.
18.3 In the event that, as a result of any such claim, action,
proceeding or request: a) prior to delivery, the manufacture
of any item is enjoined; or b) after delivery, the use,
lease or sale thereof is enjoined, Contractor agrees to
utilize its best effort to either: (1) negotiate a license
or other agreement with plaintiff so that such item is no
longer infringing; or (2) modify such item suitably or
substitute a suitable item therefore, which modified or
substituted item is not subject to such injunction, and to
extend the provisions of this Article thereto. In the event
that neither of the foregoing alternatives is suitably
accomplished by Contractor, Contractor shall be
32
liable to HCG for HCG's additional costs and damages arising
as a result of such injunction; provided however, that in no
event shall Contractor's entire liability under this Article
exceed [***]. The existence of one or more claims, actions,
proceedings or lawsuits shall not extend such amount.
18.4 The foregoing indemnity shall not apply to any infringement
resulting from a modification or addition, by other than
Contractor, to an item after delivery.
18.5 If the infringement results from the compliance by
Contractor with the Buyer's directed designs, specifications
or instructions, the Buyer will defend or settle, at its
expense, any such suit against the Contractor.
18.6 The foregoing constitutes the Parties' entire obligation
with respect to claims for infringement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
33
ARTICLE 19. RIGHTS IN INVENTIONS
19.1 As used in this Contract, "Program Invention" shall mean any
invention, discovery or improvement conceived of and first
reduced to practice in the performance of Work under this
Contract. Information relating to Inventions shall be
treated as proprietary information in accordance with the
provisions of this Contract. Rights to inventions conceived
solely by Contractor or its employees shall vest completely
with Contractor.
19.2 Contractor shall be the owner of all Program Inventions
invented solely by Contractor. Contractor grants Buyer a
royalty-free, nonexclusive license in Program Inventions to
use Program Inventions solely for the purposes of
maintenance and operation of the Spacecraft and delivered
Equipment. Contractor agrees that it will not revoke such
license if Buyer is in compliance with the terms of the
license.
19.3.1 In the case of joint Inventions, that is,
inventions conceived jointly by one or more
employees of both Parties hereto, each Party
shall have an equal, undivided one-half
interest in and to such joint Inventions, as
well as in and to patent applications and
patents thereon in all countries.
19.3.2 In the case of such joint Inventions,
Contractor shall have the first right of
election to file patent applications in any
country, and Buyer shall have a second right of
election. Each Party in turn shall make its
election at the earliest practicable time, and
shall notify the other Party of its decision.
19.3.3 The expenses for preparing, filing and securing
each joint Invention patent application, and
for issuance of the respective patent shall be
borne by the Party which prepares and files the
application. The other Party shall furnish the
filing Party with all documents or other
assistance that may be necessary for the filing
and prosecution of each application. Where such
joint Invention application for patent is filed
by either Party in a
34
country which requires the payment of taxes,
annuities, maintenance fees or other charges on
a pending application or on an issued patent,
the Party which files the application shall,
prior to filing, request the other Party to
indicate whether it will agree to pay one-half
of such taxes, annuities, maintenance fees or
other charges. If within sixty (60) days of
receiving such request, the non-filing Party
fails to assume in writing the obligation to
pay its proportionate share of such taxes,
annuities, maintenance fees or other charges,
or if either Party subsequently fails to
continue such payments within sixty (60) days
of demand, it shall forthwith relinquish to the
other Party, providing that said other Party
continues such payments, its interest in such
application and patent and the Invention
disclosed therein, subject, however, to
retention of a paid-up, non-exclusive,
non-assignable license in favor of the
relinquishing Party, its parent, and any
subsidiary thereof to make, use, lease and sell
apparatus and/or methods under said application
and patent.
19.4 Each owner of a jointly-owned patent application or patent
resulting therefrom shall, provided that it shall have
fulfilled its obligation, if any, to pay its share of taxes,
annuities, maintenance fees and other charges on such
pending application or patent, have the right to grant
non-exclusive licenses thereunder and to retain any
consideration that it may receive therefor without
obligation to account therefor to the other Party. In
connection therewith, each of the Parties hereby consents to
the granting of such non-exclusive licenses by the other
Party and also agrees not to assert any claim with respect
to the licensed application or patent against any licensee
of the other Party thereunder during the term of any such
license.
19.5 No sale or lease hereunder shall convey any license by
implication, estoppel or otherwise, under any proprietary or
patent rights of Contractor, to practice any process with
such product or part, or, for the combination of such
product or part with any other product or part.
35
ARTICLE 20. INTELLECTUAL PROPERTY RIGHTS
Except as provided in Article 19, neither Party shall acquire any
rights with respect to any patent, trademark, trade secret, or any
other intellectual property developed or used by the other Party in the
performance of this Contract.
36
ARTICLE 21. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE
Proprietary Information shall mean any data and information received by
one Party from the other Party, which is identified as proprietary in
accordance with either of the following methods: (i) if in writing, it
shall be marked by the disclosing Party with an appropriate proprietary
legend, or (ii) if disclosed orally, it shall be presented by the
disclosing Party as Proprietary at the time of disclosure and shall be
confirmed by the disclosing Party as Proprietary Information in writing
within fifteen (15) days of its initial oral disclosure.
21.1 The receiving Party agrees to protect such data and
information with the same degree of care which the receiving
Party uses to protect its own confidential data and
information;
21.2 The receiving Party shall not disclose or have disclosed to
third Parties, in any manner or form, or otherwise publish
such data and information so long as it remains proprietary
without the explicit authorization of the other Party;
21.3 The receiving Party agrees that it shall use such data and
information solely in connection with the performance of work
under this Contract, unless otherwise explicitly authorized by
or on behalf of the other Party with the designation of
specific data and information and use;
21.4 The foregoing obligations with regard to such data and
information shall exist unless and until such time as:
21.4.1 Such data and information are to the receiving
Party or otherwise publicly available prior to its
receipt by the receiving Party without the default
of the receiving Party; or
21.4.2 Such data and information have been lawfully
disclosed to the receiving Party by a third Party
which has the right to disclose such data; or
37
21.4.3 Such data and information are shown by written
record to have been independently developed by the
receiving Party; or
21.4.4 Such data and information are otherwise available
in the public domain without breach of this
Contract by the receiving Party; or
21.4.5 Such data and information are disclosed by or with
the permission of the disclosing Party to a Third
Party without restriction; or
21.4.6 Such data and information are released for
disclosure in writing by or with the permission of
the disclosing Party.
21.5 Providing HCG shall obtain from its customer(s), a
nondisclosure agreement at least as restrictive as this
Article 21 and furnishes a copy thereof to Contractor, HCG may
disclose any proprietary information to its customer(s) which
shall be necessary for HCG and its affiliates to meet its
contractual commitments with its customer(s).
21.6 Any copyrighted material belonging to a Party to this Contract
may be copied by the other Party as necessary to enable the
receiving Party to perform its obligations under this
Contract, provided always that the copyright legend is
retained on the material.
38
ARTICLE 22. PUBLIC RELEASE OF INFORMATION
Neither Party shall issue news releases, articles, brochures,
advertisements, prepared speeches, and other information releases
concerning the work performed or to be performed under this Contract by
Contractor or its subcontractors, or any employee or consultant of
either, without first obtaining the prior written approval of the other
Party concerning the content and timing of such release which approval
shall not be unreasonably withheld. The initiating Party shall provide
such releases to the other Party for review within a reasonable time
prior to the desired release date.
39
ARTICLE 23. TAXES
23.1 The price which shall be paid by HCG for the Spacecraft,
Documentation and Related Services provided under this
Contract does not include any state or local sales or use
taxes, or fees or other taxes against real or personal
property, however designated, which may be levied or assessed
against Contractor. With respect to such taxes, HCG shall
either furnish Contractor with an appropriate exemption
certificate applicable thereto or pay Contractor, upon timely
presentation of invoices therefor, such amounts thereof as
Contractor may by law be required to collect or pay. HCG shall
be responsible for the payment of all personal property taxes,
if any, with regard to goods which are levied upon subsequent
to the date of delivery to HCG. HCG shall be responsible for
any inventory taxes, state taxes or any other taxes that are
assessed to Contractor as a result of storage of the
Spacecraft in accordance with Article 31. HSC shall be
relieved of responsibility for any taxes and/or port fees
associated with the Sea Launch Zenit Vehicle except as
provided by Article 4 , Paragraph 4.2.1.2 of this Contract.
23.2 In the event Contractor in the performance of this Contract is
required to pay customs, import duties, value-added or sales
taxes, commercial card fees, port fees, harbor maintenance
tax, other charges, or taxes, or fees, (collectively,
"Assessments") however designated (except for (i) any
Assessment based on Contractor's income and (ii) any
Assessment incurred as a result of or associated with
Contractor's manufacture of the Spacecraft), then HCG will
reimburse Contractor for such Assessments within thirty (30)
days of written notification by Contractor of payment;
provided, however that, Contractor shall use its reasonable
best efforts to obtain waivers, exemptions and/or relief from
such Assessments when practicable, and HCG shall not be
required to pay any Assessment to the extent any such waiver,
exemption or relief is pending or has been obtained.
Notification shall then be supported by an invoice and
attachment(s) evidencing such payment having been made by
Contractor.
40
ARTICLE 24. GOVERNING LAW
This Contract shall be deemed made in the State of California and shall
be construed in accordance with the laws of the State of California.
41
ARTICLE 25. TITLES
Titles given to the Articles herein are inserted only for convenience
and are in no way to be construed as part of this Contract or as a
limitation of the scope of the particular article to which the title
refers.
42
ARTICLE 26. NOTICES AND AUTHORIZED REPRESENTATIVES
Any notice or request required or desired to be given or made hereunder
shall be in writing and shall be effective if delivered in person or
sent by mail or by facsimile as indicated below:
1. Xxxxxx Communications Galaxy Inc.
X.X. Xxx 0000
Xxxx. X00, X/X 0X000
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: TBD, Contracts Manager
cc: TBD, Director, Systems Engineering &
Technology
Authorized Representative(s): [TBD]
2. Xxxxxx Space and Communications Company
Xxxx Xxxxxx Xxx 00000, Xxxxxxx Xxxxxxx
Xxxx. X00, M/S A374
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Contracts Manager
cc: Xxxxxx X. Xxxxxxxx, Xx., Program Manager
Authorized Representative(s): [TBD]
43
ARTICLE 27. INTEGRATION
This document, with Exhibits, constitutes the entire understanding
between the Parties with respect to the subject matter of this
Agreement and supersedes all previous oral and/or written negotiations,
commitments, and understandings of the Parties.
44
ARTICLE 28. CHANGES
28.1 Any changes requested by Contractor during the performance of
this Contract, within the general scope of this Contract,
which will add or delete Work, stop Work, affect the design of
the Spacecraft, change the method of shipment or packing, or
the place or time of delivery, or will affect any other
requirement of this Contract, shall be submitted in writing
("Change Proposal") to Buyer sixty (60) days prior to the
proposed effective date of the change. If such Contractor
requested change causes an increase or decrease in the total
price or other terms of this Contract, Contractor shall submit
a proposal to Buyer detailing the impact of such change.
28.2 Buyer shall notify Contractor in writing within thirty (30)
days after receipt of the requested change and price
adjustment, if any, whether or not it agrees with and accepts
such Change Proposal. If Buyer agrees with and accepts the
Contractor requested Change Proposal, Contractor shall proceed
with the performance of the Contract as changed, or in the
case of a Stop Work Order, suspend the performance of this
Contract, and an amendment to the Contract reflecting the
Change Proposal shall be incorporated into the Contract. If
Buyer does not agree with the Contractor requested Change
Proposal, the Parties shall attempt to reach agreement on such
Change Proposal. If the Parties are unable to agree on the
requested change and price adjustment, then the Parties shall
proceed with the performance of this Agreement, as unchanged.
In the event the Parties are able to reach agreement on the
change, but not on the price adjustment component, then the
Parties shall elevate such dispute to the Senior Executives of
the respective companies for resolution. If resolution can not
be achieved within a reasonable period of time under the
circumstances, Buyer may make a qualified acceptance of the
Change Proposal, accepting all matters other than price, and
issue of price shall be submitted for resolution by
arbitration in accordance with the provisions of Paragraph
32.2 hereof. Pending such resolution of the price issue, the
Parties shall perform their obligations under the Contract, or
in the case of a Stop Work Order, suspend their obligations,
as if the Change Proposal had been accepted; provided,
however, that Buyer shall pay any disputed amount of the price
adjustment
45
into an escrow account in accordance with Paragraph 28.4
hereof on the date such amount would have been due and payable
had the Change Proposal been accepted, or if the Change
Proposal could result in a downward adjustment in the Contract
Price in excess of the amount remaining to be paid by the
Buyer, Contractor shall deposit the disputed amount of such
excess into an escrow account in accordance with Paragraph
28.4 hereof. The final change price adjustment achieved either
by the Parties, or through an arbitration award shall be paid
in accordance with the payment plan agreed by the Parties or,
if applicable, by the Arbitrator.
28.3 Buyer may submit to Contractor in writing (a "Change Order
Request") detailing any changes requested by Buyer during the
performance of this Contract, within the general scope of the
Contract, which will add or delete Work, stop Work, affect the
design of the Spacecraft, change the method of shipment or
packing, or the place or time of delivery, or will affect any
other requirement of this Contract. Contractor shall respond
to such Change Order Request in writing to Buyer within thirty
(30) days after such request. If Contractor determines that
the change requested by Buyer is feasible and can be made at
no additional cost and with no associated delays, then
Contractor shall so notify, Buyer and Contractor shall
commence implementing such change. If the Contractor
determines otherwise, then, Contractor shall submit to Buyer,
a proposal detailing the impact of such change and the price
adjustment, if any, (the "Change Order Offer"). Buyer shall
notify Contractor in writing, within thirty (30) days after
receipt of Contractor's Change Order Offer, whether or not it
agrees with and accepts Contractor's Change Order Offer. If
Buyer agrees with and accepts Contractor's Change Order Offer,
Contractor shall immediately proceed with the performance of
this Contract as changed, or in the case of a Stop Work Order,
suspend the performance of this Contract, and an amendment to
the Contract reflecting such change shall be incorporated into
the Contract. If Buyer does not agree with the Contractor's
Change Order Offer, the Parties shall attempt to reach
agreement on such Change Order Offer. In the event the Parties
are able to reach agreement on the change, but not on the
price adjustment component, then the Parties shall elevate
such dispute to the Senior Executives of the respective
companies for resolution. If resolution can not be achieved
within a reasonable period of time under
46
the circumstances, Buyer may make a qualified acceptance of
the Change Order Offer, accepting all matters other than
price, and the issue of price shall be submitted for
resolution by arbitration in accordance with the provisions of
Paragraph 32.2 hereof. Pending such resolution of the price
issue, the Parties shall perform their obligations under the
Contract, or in the case of a Stop Work Order, suspend their
obligations, as if the Change Order Offer had been accepted;
provided however, that the Buyer shall pay any disputed amount
of the price adjustment into an escrow account in accordance
with Paragraph 28.4 hereof on the date such amount would have
been due and payable had the Change Order Offer been accepted,
or if the Change Order Request could result in a downward
adjustment in the Contract Price in excess of the amount
remaining to be paid by Buyer, Contractor shall deposit the
disputed amount of such excess into an escrow account in
accordance with Paragraph 28.4 hereof. The dispute shall then
be resolved by arbitration under the provisions of Article 32,
entitled "Disputes." The final change price adjustment
achieved either by the Parties, or through an arbitration
award shall be paid in accordance with the payment plan agreed
by the Parties or, if applicable, by the Arbitrator.
28.4 Escrow Provisions - Disputed Amounts
Disputed amounts with respect to any change under this Article
28 shall be paid into an interest bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged
breach in accordance with Article 32, the Party entitled to
the amount or part thereof in escrow, shall receive such
amount together with all accrued interest thereon and the
other Party shall pay all costs and fees associated with the
escrow of said amount. The placement of disputed amounts into
an escrow account shall not relieve either Party of its
remaining obligations under this contract.
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ARTICLE 29. EFFECTS OF STORAGE ON BATTERIES
For Spacecraft batteries to provide the required minimum fifteen (15)
years of in-orbit services per Exhibit B, Galaxy XI Spacecraft
Specification, it is understood that launch must occur within three (3)
years from the date of activation of the first battery cell. In the
event Buyer directs Contractor to store any deliverable Spacecraft and
the period of such storage causes a launch later than three (3) years
from the date of activation of that Spacecraft's first battery cell,
and HCG upon its election to either: (i) install replacement batteries
or (ii) recondition batteries, so directs Contractor, HCG shall pay
Contractor its costs plus a [***] profit rate. In either case (i) or
(ii), the batteries shall meet a fifteen (15) year in-orbit service
requirement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 30. INTER-PARTY WAIVER OF LIABILITY
30.1 Prior to the time HCG and the Contractor enter the premises at
the Launch Site, they each agree that they will not make a
claim against each other for an event that occurs at the
Launch Site premises involving damage to, loss of, or loss of
use of their property or the property of others in their
possession, caused by the fault or negligence of the other
Party to this Contract, or otherwise caused by any defect in
any product manufactured or sold by the other Party to this
Contract. Such claims are waived and each Party will bear its
own losses. HCG will include a comparable clause in each of
its contracts with vendors, subcontractors or customers for
services or benefits expected as a result of the launch or
orbiting of this Galaxy Spacecraft. Such comparable clause
shall include a requirement to flow the clause down to
lower-tier contractors.
30.2 Notwithstanding any other provisions of this Contract, prior
to the time any Party, associated with the Galaxy XI launch
activities at the Launch Site, shall enter the premises at the
Launch Site, such Parties shall be required to sign an
Inter-Party Waiver of Liability consistent with that between
HCG and the Contractor as incorporated herein under Paragraph
30.1 of this provision or other similar agreement as may be
required by the launch agency. Each Party shall have the
responsibility to assure that all the Parties associated with
the launch of Galaxy XI Spacecraft (for which they have
control or privity of Contract with hereunder) have executed
said Inter-Party Waiver of Liability.
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ARTICLE 31. SPACECRAFT STORAGE
31.1 Buyer may, at its option, order Contractor to store, in
accordance with the provisions of Exhibit B Galaxy X
Spacecraft Specification, the deliverable Spacecraft
(including separate storage of Batteries, if needed) for a
period of up to two (2) years from the date of their delivery
to Buyer. HCG shall provide written notice to the Contractor
not later than six (6) months prior to the scheduled delivery
of said Spacecraft. Contractor's price for providing storage
shall be provided to Buyer in accordance with Article 29,
"Changes," (and such price shall be deemed a "Change Proposal"
for purposes of Article 29) within 30 days after receipt of
Buyer's notice to store such Spacecraft and Contractor shall
provide storage facilities. If such storage facilities are
unavailable, Contractor and Buyer shall hold discussions to
determine a mutually agreed storage arrangement.
31.2 Six (6) months prior to a stored Spacecraft's scheduled launch
date, Buyer shall, by notice in writing, order the Contractor
to remove said Spacecraft from storage and ship it to a Launch
Site designated by Buyer. The cost for storage and additional
transportation costs exceeding that required to transport the
Spacecraft to the Port of Long Beach (Integration Facility)
point specified herein, shall be borne by Buyer. These will be
in addition to any charges which become the obligation of the
Buyer per Article 17 herein entitled "Spacecraft Not Launched
Within Six Months After Acceptance."
50
ARTICLE 32. DISPUTES
32.1 Disputes
32.1.1 In the event any dispute arises between the
Contractor and the Buyer relating to this Contract,
either Party may give written notice to the other
of its objections and reasons therefore. The
Contractor and Buyer shall consult in an effort to
reach a mutual agreement to resolve such dispute.
In the event a mutual agreement cannot be reached
within fifteen (15) days after receipt of this
notice, the respective positions of the Parties
shall be forwarded to Contractor and Buyer's
respective Executive Offices for discussions and
they shall attempt to reach a mutual agreement to
resolve such dispute within another fifteen (15)
day period.
32.2 Arbitration of Disputes
32.2.1 Grounds for Arbitration and Notice Requirement. Any
dispute, disagreement, controversy or claim arising
out of or relating to this Contract or the
interpretation thereof or any arrangements relating
thereto, or the validity or enforceability thereof,
or contemplated therein or the breach, termination
or invalidity thereof which is not settled to the
mutual satisfaction of the Parties in accordance
with Paragraph 32.1 above, then it shall be settled
exclusively and finally by binding arbitration,
after written notice by either Party. Arbitration
of such disputes in accordance with this Article 32
shall be the Parties' exclusive remedy.
32.2.2 Administration and Rules. Arbitration proceedings
in connection with the Agreement shall be
administered by the American Arbitration
Association in accordance with its then in effect
Commercial Arbitration Rules, together with any
relevant supplemental rules including but not
limited to its Supplementary Procedures for Large,
Complex Disputes, as modified by the terms and
conditions of the Agreement. With respect to the
51
selection of arbitrators, arbitration proceedings
in connection with this Agreement shall be
conducted before a panel of three (3) arbitrators.
Within fifteen (15) days after the commencement of
arbitration, each Party shall select from a list of
qualified persons one person to serve as an
arbitrator on the panel, and within ten (10) days
of their selection, the two arbitrators shall
select a third arbitrator who is listed as an
active member of the American Arbitration
Association at the time that arbitration
proceedings commence. If the two arbitrators
selected by the respective Parties are unable or
fail to agree upon the third arbitrator in the
allotted time, then the third arbitrator shall be
selected by the American Arbitration Association.
32.2.3 Place of Arbitration. The place of arbitration
shall be in Los Angeles, California, U.S.A.
32.2.4 Discovery. The arbitrators shall have the
discretion to order a pre-hearing exchange of
information by the Parties, including without
limitation, production of requested documents,
exchange of summaries of testimony of proposed
witnesses, and examination by deposition of the
Parties.
32.2.5 Award and Judgment. The arbitrators shall have no
authority to award punitive damages, and may not,
in any event, make any ruling, finding or award
that does not conform to the terms and conditions
of this Agreement. Subject to the foregoing, the
Parties agree that the judgment of the arbitrators
shall be final and binding upon the Parties and
that the judgment upon the award rendered by the
arbitrators may be entered in any court having
jurisdiction thereof.
32.2.6 Confidentiality. No Party or arbitrator may
disclose the existence, content, or results of any
arbitration proceedings in connections with this
Agreement without prior written consent of all
Parties to the arbitration proceeding.
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32.2.7 Fee and Expenses. All fees and expenses of any
arbitration proceedings in connection with this
Agreement shall be borne by the losing Party.
However, each Party shall bear the expense of its
own counsel, experts, witnesses, and preparation
and presentation of evidence.
32.2.8 Performance. Contractor and Seller shall continue
with performance under this Agreement during any
disagreement, negotiation, or arbitration.
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ARTICLE 33. ASSIGNMENT
33.1 Neither Party shall assign, or transfer this Contract or any of its
rights, duties or obligations thereunder to any person or entity, in
whole or part without the prior written consent of the other Party
except that either Party may assign or transfer any of its rights,
duties or obligations under this Contract, either in whole or in part,
to its parent company, subsidiary or affiliate(1) in which the
assigning Party has a controlling interest thereof. In addition,
notwithstanding anything in this Article 33 to the contrary, the
consent of Contractor shall not be required for, and Paragraph 33.2
shall not apply to, any assignment of this Contract from HCG to
Magellan International, Inc. (which currently contemplates changing its
name to PanAmSat Corporation), or an affiliate thereof, in connection
with the consummation of the transactions contemplated by that certain
Agreement and Plan of Reorganization dated as of September 20, 1996 by
and among Buyer, Magellan International, Inc., Pan Am Sat Corporation
and certain affiliates of Buyer.
Neither Party shall unreasonably withhold consent to any assignment or
transfer providing that the requesting Party can demonstrate to the
other Party's satisfaction that:
(1) its successor or assignee possesses the financial resources to
fulfill the obligations of this Contract; and
(2) any such assignment or transfer shall not jeopardize any data
rights or competitive position, or violate laws related to
export or technology transfer, or otherwise increase the other
Party's risks or obligations.
If the requesting Party cannot so demonstrate, both Parties agree to
negotiate in good faith suitable modifications and new provisions to
this Contract which would mitigate the above risks and/or bring this
Contract into conformance with applicable laws.
(1) Affiliate: An "affiliate" of, or a person "affiliated" with, a specified
person, is a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, the person specified.
54
33.2 The Parties agree that in the event that the ownership or control of
HCG or HSC is changed, the Parties reserve the right to negotiate in
good faith suitable modifications and new provisions to this Contract
which would mitigate any additional risks, financial or otherwise,
which may be brought about by such change in ownership or control.
33.3 This Contract shall be binding upon the Parties hereto and their
successors and permitted assigns.
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ARTICLE 34. LIMITATION OF LIABILITY
34.1 The Parties to this Contract expressly recognize that commercial space
ventures involve substantial risks and recognize the commercial need to
define, apportion and limit contractually such risks associated with
this commercial space venture. The payments and other remedies
expressly set forth in this Contract fully reflect the Parties'
negotiations, intentions and bargained-for allocation of such risks
associated with commercial space ventures.
34.2 In no event shall the Parties be liable for any direct, indirect,
incidental, special, contingent or consequential damages (including,
but not limited to, lost revenues or profits), except as expressly
provided for in this Agreement. This Article shall survive the
expiration or termination of this Contract for whatever cause.
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ARTICLE 35. EFFECTIVE DATE OF CONTRACT
The effective date of this Contract No. 96-HCG-002 shall be 7th, May 1997.
IN WITNESS WHEREOF, the Parties hereto have executed this Contract No.
96-HCG-002 to become effective upon the date specified in this Article 35,
herein entitled, "Effective Date of Contract."
XXXXXX SPACE & COMMUNICATIONS COMPANY
SIGNATURE: /s/ Xxxxxx X. Xxxxxxxx Xx.
--------------------------
NAME: XXXXXX X. XXXXXXXX XX.
--------------------------
TITLE: GALAXY XI PROGRAM MANAGER
--------------------------
DATE: 5/7/97
--------------------------
XXXXXX COMMUNICATIONS GALAXY, INC.
SIGNATURE: /s/ Xxxx Xxxxxxx Xxxxxx
--------------------------
NAME: Xxxx Xxxxxxx Xxxxxx
--------------------------
TITLE: Xxxxxx Communications Galaxy, Inc. Contracts
--------------------------
DATE: May 7, 1997
--------------------------
57
