Exhibit 10.38.1
AMENDMENT No. 1 TO
FIXED PRICE CONTRACT
BETWEEN
PANAMSAT CORPORATION
AND
XXXXXX SPACE AND COMMUNICATIONS COMPANY
FOR
PAS 1R & PAS 9 HS702
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 97-HCG-001
AMENDMENT No. 1 TO FIXED PRICE XXXXXXXX XXX XXX 0X & XXX 0 HS702
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
This AMENDMENT No. 1 (the "Amendment"), entered into as of 6 November 2000, by
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and between PANAMSAT CORPORATION (herein called "Buyer"), a Delaware corporation
having a principal place of business at Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000, and XXXXXX SPACE AND COMMUNICATIONS COMPANY (herein called
"Contractor"), a Delaware corporation having a principal place of business at
000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000, amends that certain
Fixed Price Contract for PAS 1R & PAS 9 HS702 Spacecraft, Related Services and
Documentation with an effective date of August 15, 1997 (Contract No. 97-HCG-
001) (the "Agreement").
RECITALS
WHEREAS, Buyer and Contractor are party to the Agreement, providing for
Buyer to purchase and Contractor to provide the PAS 1R & PAS 9 Spacecraft,
Documentation, and Related Services as therein specified;
WHEREAS, the Parties now desire to amend the Agreement;
AGREEMENT
NOW, THEREFORE, the Parties hereby agree to amend and restate the Agreement
as follows:
1. All references in the Agreement to "PAS 9" are hereby amended to read "Galaxy
IIIC".
2. ARTICLE 4. DELIVERABLES AND SCHEDULE is hereby amended as follows:
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Section 4.1, Item 1A., is hereby amended by adding one week to the PAS 1R
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Shipment Date. The Shipment Date is changed from "May 15, 1999/1/" to "May
22, 1999/1/."
Page seven (7) of the Agreement is replaced by page seven (7) "Amendment
No. 1."
3. ARTICLE 5. PRICE is hereby amended as follows:
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(a) Section 5.1(a) for PAS 1R is hereby amended by replacing [*******]
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(b) Section 5.1(b) for GIIIC is hereby amended by replacing [********].
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Page twelve (12) of the Agreement is replaced by page twelve (12) "Amendment
No. 1."
4. ARTICLE 6. PAYMENTS is hereby amended as follows:
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(a) Section 6.2, Table 6.2.1, PAS 1R - Progress Payment Plan, is hereby
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amended and restated in its entirety with the attached Table 6.2.1 PAS 1R -
Progress Payment Plan.
(b) Section 6.2, Table 6.2.2, Galaxy IIIC - Progress Payment Plan, is
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hereby amended and restated in its entirety with the attached Table 6.2.2
Galaxy IIIC - Progress Payment Plan.
(c) Sections 6.3.1.2 through 6.3.4.4, have been amended and restated to
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correct various administrative errors and for clarification purposes.
Pages fourteen through thirty-three (18 through 33) of the Agreement are
replaced by pages fourteen through thirty-three (18 through 33) "Amendment
No. 1."
5. Contractor agrees to perform COMSEC efforts for PAS 1R and Galaxy IIIC
accordance with the terms identified under PanAmSat letter dated January 9,
1998 attached hereto.
6. Each capitalized term used but not defined in this Amendment shall have the
same meaning described to such term in the Agreement. Except as amended by
this Amendment, the Agreement shall continue in full force and effect.
7. For clarity and continuity purposes, replacement pages of the Contract are
attached hereto, and are designated with "Amendment No. 1" in the lower left
hand corner. There are no other Amendments to the Contract except as
expressly set forth herein.
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to the PAS 1R
& Galaxy IIIC Agreement.
XXXXXX SPACE AND PANAMSAT CORPORATION
COMMUNICATIONS COMPANY
By: By:
-------------------------- --------------------------
-------------------------- --------------------------
(printed) (printed)
Title: Title:
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Date: Date:
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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:
Date of Shipment Location of Shipment
Delivery Delivery or
Deliverables or Performance Performance
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1A. One PAS 1R Spacecraft May 22, 1999/1/ . Shipped from Contractor's
("PAS 1R) --------------- facility.
. Delivery Site at Ariane
("Shipment Date") facility, Kourou, French
Guyana (subject to change
pursuant to Paragraph
4.2.)
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1B. One Galaxy IIIC Spacecraft August 15, 1999/1/ . Shipped from Contractor's
("Galaxy IIIC) facility.
("Shipment Date") . Delivery Site at Sea
Launch facility at Long
Beach Ca (subject to
change to Paragraph 4.2.)
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2A. Launch Support, Mission In Accordance with . Performance Site to be
Operations and In-Orbit Exhibit A determined pursuant to
Testing for PAS 1R Paragraph 4.2.
("Related Services") . Fillmore, California
. Castle Rock, Colorado
. El Segundo, California
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Buyer _______ Contractor _______
ARTICLE 5. PRICE
5.1 The total price (the "Contract Price") for Contractor to provide
Spacecraft, Documentation and Related Services shall be as follows:
For PAS 1R, [*********]
(b) For Galaxy IIIC, [**********]
5.2 Buyer shall pay Contractor the Contract Price stated in Paragraph 5.1
above in accordance with Article 6, Paragraph 6.2 of this Contract.
5.3 The Contract Price for each Spacecraft identified in Paragraph 5.1 are
contingent upon the utilization of the launch vehicles initially
designated for such Spacecraft in Paragraph 4.2.1. If Buyer changes
the designated launch vehicle for the Spacecraft in accordance with
Paragraph 4.2.1 (as opposed to Article 29), the Contract Price for the
applicable Spacecraft shall be adjusted in accordance with the
following table:
Table 5.3.1
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Adjustment to Contract Price
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Launch Vehicle PAS 1R Galaxy IIIC
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Sea Launch [*******] [*******]
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Ariane [*****] [******]
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Proton [*****] [*****]
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Buyer _______ Contractor _______
ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject to
Buyer's rights, defenses and remedies as expressly stated in this
Contract, Buyer shall pay to Contractor the Contract Price as stated
in Article 5 herein for the applicable Spacecraft, Documentation, and
Related Services under this Contract.
6.2 Invoices shall be prepared and submitted by Contractor for the
Spacecraft in a form reasonably acceptable to Buyer. Payments to
Contractor for each Spacecraft shall be made according to the
following payment plans:
[*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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______________________________
/1/ [*****]
Buyer _______ Contractor _______
[*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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[*****] [*****] [*****]
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______________________________
/1/ [*****]
/2/ [*****].
Buyer _______ Contractor _______
6.3.1.2 "Successfully Operating Payload." Each Spacecraft
shall be equipped with one or more Payloads, as
specified In Exhibit B. Each Payload shall be deemed
to be Successfully Operating if at least that number
of Transponders that is one more than one-half of
the total number of Transponders within such Payload
are Successfully Operating Transponders (as defined
below).
6.3.1.3 "Successfully Operating Transponder". A Successfully
Operating Transponder is a Transponder which meets either or
both of the following two criteria:
(a) The Transponder meets or exceeds the performance
specifications set forth in Exhibit B. For the
avoidance of doubt, if the Spacecraft is placed into
inclined orbit, then the Transponders shall be deemed
not to meet the criteria stated in this Paragraph
6.3.1.3(a) at such time as the Spacecraft would have
ceased to have a Useful Commercial Life, (as mutually
determined by the Parties) had it not been placed in
such an orbit.
(b) The Transponder, while not meeting or exceeding the
performance specifications, provides Buyer with no
material loss in its commercial value.
A Transponder shall also be deemed to be a Successfully
Operating Transponder if it meets the performance
specifications through use of any redundant or spare
equipment not already in use by another Transponder.
Buyer _______ Contractor _______
For the avoidance of doubt, if Buyer must shut down one
or more Transponders during any portion of a
Spacecraft's useful life for reasons due to Spacecraft
constraints or in order to protect the overall health
of such Spacecraft, such Transponder(s) shall not be
deemed to be "Successfully Operating Transponders,"
unless Buyer subsequently is able to use such
Transponder to provide full-time commercial service to
its customer(s) on such Transponder with no reduction
in Buyer's future revenue therefrom resulting solely
from such shutdown; provided, however, that Buyer shall
not shut down Transponders without the consent of
Contractor (such consent not to be unreasonably
withheld); provided further that Contractor's right to
consent shall apply only to the total number of
Transponders to be shut down in any instance, and Buyer
shall have the right to select which Transponders on a
Spacecraft to shut down.
Notwithstanding the foregoing, in the event that Buyer
shuts down a certain number of Transponders with the
consent of Contractor due to Spacecraft constraints or
to protect the overall health of the Spacecraft, the
total number of Transponders deemed not to be
Successfully Operating Transponders (for purposes of
Paragraph 6.3.1.2) solely on account of being shut down
for such reasons shall not increase beyond such certain
number (even if in the future Buyer shuts down
different Transponders than the Transponders initially
shut down) unless Buyer shuts down additional
Transponders for such reasons with the consent of
Contractor pursuant to the foregoing.
Buyer _______ Contractor _______
6.3.1.4 "Useful Commercial Life". The Useful Commercial Life of
a Spacecraft means the period beginning on the
Commencement Date and ending on the earlier to occur of
(i) the date on which there is just sufficient fuel
remaining on board the Spacecraft only to eject the
Spacecraft from its geostationary orbital location or
(ii) the date on which at least one-half of the
Transponders on each Payload are not Successfully
Operating Transponders.
6.3.1.5 "Successfully Injected Spacecraft". A Launched
Spacecraft shall be deemed to be a Successfully Injected
Spacecraft if:
(a) The transfer orbit/spacecraft attitude meets the
following required criteria:
(1) Perigee altitude error is less than or
equal to + or - 3 sigma;
(2) Apogee Altitude error is less than or
equal to + or - 3 sigma;
(3) Inclination error is less than or equal
to + or - 3 sigma;
(4) Argument of perigee error is less than
or equal to + or - 3 sigma; and
(5) The Spacecraft has been separated with
attitude rate errors of less than or
equal to + or - 3 sigma and
Buyer _______ Contractor _______
(b) The Spacecraft has not suffered physical damage which
resulted from Launch Vehicle malfunction.
The calculated amount of Useful Commercial Life (the
"Calculated Operational Lifetime") shall be mutually
determined by Buyer and Contractor, based on standard
engineering practices, using measured actuals of the
Spacecraft, existing at the time of the operational hand-off
of the Spacecraft to Contractor from the Launch Vehicle
provider. If the attained transfer orbit/Spacecraft
attitude does not meet the criteria stated in this Section,
but the Calculated Operational Lifetime is greater than or
equal to the Specified Operational Lifetime for the
Spacecraft, then the Spacecraft shall be deemed to have been
a Successfully Injected Spacecraft. If, on the other hand,
the attained transfer orbit/Spacecraft attitude does not
meet the criteria stated above, and the Calculated
Operational Lifetime is less than the Specified Operational
Lifetime, then the Spacecraft shall be deemed not to be a
Successfully Injected Spacecraft. If Buyer and Contractor
cannot agree on the Calculated Operational Lifetime, then
the Parties shall resolve such disagreement in acceptance
with the dispute resolution procedures set forth in Article
33. During such dispute resolution procedure, Buyer shall
commence all payments under Section 6.3.2 to Contractor
based on Contractor's calculation of such Calculated
Operational Lifetime, except only the disputed amount(s)
which shall be paid by Buyer in escrow as set forth in
Section 29.4, and the prevailing party shall be entitled to
interest as Provided therein.
Buyer _______ Contractor _______
6.3.1.6 "Incentives Interest Rate". The Incentives Interest Rate
shall be the lesser of (i) [*****]or (ii) [*****].
6.3.1.7 "Commencement Date". The Commencement Date shall be the
date on which Buyer receives written certification from
Contractor that, based upon the results of completed in-
orbit performance tests, at least one Payload is a
Successfully Operating Payload.
6.3.2 Buyer shall pay to Contractor the Incentives Obligations and the
Change Order Profit Component (if applicable), as follows:
6.3.2.1 Incentives Obligations and Change Order Profit
Component. Subject to Section 6.3.2.3 through 6.3.2.6,
Buyer shall be obligated to pay to Contractor the
Incentives Obligation and any Change Order Profit
Component (if applicable), as follows: Buyer shall pay
Contractor equal monthly payments that, when summed on a
net present value basis to the Commencement Date using
the Incentives Interest Rate, equals the total amount of
Incentives Obligations plus Change Order Profit
Component due hereunder. For example, if the PAS 1R
Spacecraft is a Successfully Injected Spacecraft and on
the Commencement Date all Transponders on such
Spacecraft are and continue to be Successfully Operating
Transponders for fifteen (15) years, assuming the
maximum [*****] for the entire period, the monthly
Incentives Obligations payment would be [*****] for PAS
1R and [*****] for Galaxy IIIC (the "Nominal Payment").
If the Incentives Interest Rate is less than [*****] per
annum for any given month, the Incentives Obligations
payment will be less than
Buyer _______ Contractor _______
the Nominal Payment. In such circumstances, the amount
of each month's payment will be calculated on a net
present value basis to the date of the last month's
payment using the remaining unpaid principal as the new
principal, the Incentives Interest Rate, and a term
equal to the number of months remaining in the
Incentives period. The Parties shall agree in writing
upon an appropriate allocation of the portion of
Incentive Obligations which shall be payable for each
Payload on the Spacecraft. The Incentives Obligations,
identified above, shall be payable in 180 equal and
consecutive monthly installments over a fifteen (15)
year life of the Spacecraft, except as may be adjusted
as set forth herein. Except as provided in Paragraph
6.3.4, the first installment of each Incentives
Obligations shall be paid on the Spacecraft's
Commencement Date.
The foregoing notwithstanding:
(a) If the Spacecraft is not a Successfully Injected
Spacecraft pursuant to Section 6.3.1.4 but is
successfully placed into its on-station orbit by Xxxxxx
during the "Transfer Period" (defined as the period from
separation of the Launch Vehicle through on-station
acquisition) then, subject to Section 6.3.2.3, Buyer
shall pay the Incentives Obligations for the Spacecraft
in equal and consecutive monthly installments over a
period of the Spacecraft's On Station Operational
Lifetime (defined at Section 6.3.2. 1 (b)).
Buyer _______ Contractor _______
(b) If the Spacecraft is Successfully Injected, but is not
successfully placed into its on-station orbit by
Contractor during the Transfer Period, then the total
amount of the Incentives Obligations for the Spacecraft
shall be multiplied by a percentile equal to (i) the
On-Station Operational Lifetime divided by (ii) the
Calculated Operational Lifetime, which percentile
shall, in no event, be greater than one. Subject to
Section 6.3.2.3, Buyer shall pay such Incentives
Obligations for the Spacecraft in equal and consecutive
monthly installments over a period of the Spacecraft's
On Station Operational Lifetime. The "On Station
Operational Lifetime" shall be mutually determined by
Buyer and Contractor, based on standard engineering
practices, measured actuals of the Spacecraft, existing
at the end of the Transfer Period. However, should the
Spacecraft continue to operate successfully beyond the
On-Station Operational Lifetime, Contractor will
continue to earn Incentives Obligations at the same
monthly rate up to the Specified Operational Lifetime.
(c) Finally, if the Spacecraft is not a Successfully
Injected Spacecraft and, in addition, is not
successfully placed into its on-station orbit during
the Transfer Period, then the total amount of the
Incentives Obligations shall be multiplied by the sum
of (A)(i) the Specified Operational Lifetime, plus (ii)
the On-Station Operational Lifetime, minus (iii) the
Calculated Operational Lifetime, divided by (B) the
Specified Operational Lifetime, which percentile shall,
in no event, be greater than one. Subject to Section
6.3.2.3, Buyer shall pay such Incentives Obligations
for the
Buyer _______ Contractor _______
Spacecraft in equal and consecutive monthly installments
over a period of the Spacecraft's On-Station
Operational Lifetime.
For purposes of any provision of this Contract, if the
Incentives Obligations or related payment periods are to
be recalculated, the monthly installments due shall be
recalculated to reflect the imputed interest element
that is reflected in the payment plans specified above.
6.3.2.2 Notwithstanding the foregoing, if at any time Buyer continues to
utilize for revenue-producing purposes any Transponder that 'is
not a Successfully Operating Transponder, then Buyer shall pay a
pro rated amount of the Incentives Obligation attributable to
such Transponder that is proportionate to the partial benefit
that Buyer derives from such Transponder (the "Partial Incentive
Payment"), all as mutually agreed upon by the Parties in good
faith.
6.3.2.3 Except for any Change Order Profit Component (which is
non-contingent), and except as provided in Paragraph 6.3.2.2,
payment of any Incentives Obligation shall be contingent upon
the Transponders being Successfully Operating Transponders, as
set forth herein, on the applicable Payload and shall be
pro-rated, therefore, on a Transponder equivalent-by-Transponder
equivalent basis over the duration of the applicable term of
such Obligation; provided, however, that beginning on the date,
if any, that any one or more of the Payloads are no longer a
Successfully Operating Payload, as and when ascertained pursuant
to Section 6.3.2.4 (the "Degraded Payload"), then Buyer's
then-remaining Incentives
Buyer _______ Contractor _______
Obligations for such Payload(s) (exclusive of any Change Order
Profit Component, as applicable) shall be deemed extinguished.
6.3.2.4 Whether any Transponder is not Successfully Operating shall be
mutually determined by Buyer and Contractor, based on relevant
technical data, reports and analyses, and each Party will make
available to the other Party for its review upon reasonable
request all data used in making such determination. Any
disagreements between the Parties shall be resolved in
accordance with the dispute resolution procedure set forth in
Article 33.
6.3.2.5 If the Spacecraft has not been, or is not being, Properly
Operated by the Buyer, and any Transponders thereof are not
Successfully Operating Transponders, then the Transponders of
the Spacecraft which were Successfully Operating prior to such
improper operation of the Spacecraft shall be deemed to be
Successfully Operating Transponders for purposes of Contractor's
entitlement to payment of any applicable Incentives Obligations
for such period as such Transponders would have reasonably been
predicted to continue to be Successfully Operating had the
Spacecraft and transponder thereon been Properly Operated by
Buyer; provided, however, that if the failure is the result of a
defect in the deliverable software (except to the extent that
such defect was caused solely by a modification to such software
by Buyer) or if Buyer demonstrates that the failure of any
Transponder to be Successfully Operating was not caused
primarily, directly or indirectly, by any act or omission of
Buyer, its agents, Subcontractors, Consultants or
representatives of any kind, then the foregoing provision shall
not apply with respect to such Transponder.
Buyer _______ Contractor _______
6.3.2.6 Buyer may prepay any portion of the Incentives
Obligations or the Change Order Profit Component
pursuant to the schedule matrix attached as Exhibit J.
Any remaining Incentives Obligations so prepaid shall be
subject to refund by Contractor to Buyer, in any
instance and to the extent that Buyer's obligation to
make such payments is relieved pursuant to this Article
6, as outlined in the last sentence of Section 6.3.4.1
hereof.
6.3.3 "Spacecraft Retirement Payment". At any time following the
Spacecraft's Delivery, Buyer may, at its option, cease to
utilize the Spacecraft for any purpose; provided, however, that
if Buyer does cease using the Spacecraft (or if the Spacecraft
is rendered a total loss by virtue of Buyer's failure to
Properly Operate the Spacecraft), then, upon the exercise date
of such option or the declaration of the Spacecraft as a total
loss as applicable, all remaining Incentives Obligations
payments for any Transponder (and any Change Order Profit
Component, if applicable) (subject to the provisions of Section
6.3.2.3 through 6.3.2.5) shall become immediately due and
payable, all relative to the Spacecraft; and Buyer shall pay to
Contractor such amounts, in immediately available funds, along
with the outstanding balance of principal and accrued interest
on any other outstanding payment obligations with respect to the
Spacecraft, if any, as of such date. In determining the amount
of principal and interest due, present value analysis discounted
at the Incentives Interest Rate per annum shall be done for any
scheduled payment stream previously created by the Parties
hereunder. Notwithstanding the foregoing, Buyer shall have the
right to cease using the Spacecraft and remove it from its
orbital location at any time following the expiration of the
Spacecraft's Useful Commercial Life, without payment of such
Spacecraft Retirement Payment.
Buyer _______ Contractor _______
6.3.4 Incentive Obligations and Launch Delay
6.3.4.1 If the Spacecraft has not been launched by the 181st day
after the earlier of (i) the actual date of shipment of
the Spacecraft by Contractor or (ii) Buyer's Preliminary
Acceptance of the Spacecraft, then, except as set forth
in Paragraph 6.3.4.2, the first of the equal and
consecutive monthly installment payments for Incentive
Obligations on the Spacecraft shall be due and payable
and the fifteen year period shall be deemed to have
begun for purposes of this Paragraph 6.3 and such
payments shall commence (the "Pre- Launch Incentive
Payments"). If upon the Commencement Date or at any time
thereafter, any Transponder ceases to be a successfully
Operating Transponder or a Payload becomes a Degraded
Payload, then Contractor shall deliver to Buyer a refund
(without interest) of that portion of the Pre-Launch
Incentive Payment attributable to such Transponder or
Payload, taking into account the amount of such time
such Transponder or Payload met the performance
specifications, and Buyer's subsequent Incentives
Obligations shall be reduced thereafter on a pro rata
basis; provided, if applicable, Buyer shall receive a
credit to the extent of any Pre-Launch Incentive
Payments, to be applied as an offset against Buyer's
consecutive monthly installment payments for the
Incentives Obligations otherwise due and payable for the
months immediately following the Commencement Date.
6.3.4.2 If the Spacecraft has not been Launched due primarily to
(1) Contractor's fault after shipment or (2)
Contractor's failure to timely meet the Spacecraft's
scheduled Shipment Date (where such failure in shipment
is not caused by Buyer's actions or inactions)
Buyer _______ Contractor _______
(or a combination of clauses (1) and (2) immediately
above), then the first of the equal and consecutive
monthly installments of the Incentives Obligations on
the Spacecraft shall be due and payable on, and interest
shall not accrue until, the earlier to occur of (i) the
Commencement Date or (ii) one year after the earlier of
(a) the actual date of shipment of the Spacecraft by
Contractor or (b) Buyer's Preliminary Acceptance of the
Spacecraft. If upon the Commencement Date, or at any
time thereafter, any Transponder on the Spacecraft
(which has been subject to a Launch delay under this
Paragraph 6.3.4.2) ceases to be a Successfully Operating
Transponder or a Payload becomes a Degraded Payload,
then Contractor shall deliver to Buyer a refund (without
interest) of that portion of the Pre-Launch Incentives
Payments attributable to such Transponder or Payload,
taking into account the amount of time such Transponder
or Payload met the performance specifications, and
Buyer's subsequent Incentives Obligation for the
affected Payload on the Spacecraft shall be reduced
thereafter on a pro rata basis; provided however, that
Buyer shall receive a credit to the extent of any
Pre-Launch Incentive Payments, such credit to be applied
as an offset against Buyer's consecutive monthly
installment payments for the Incentives Obligations
otherwise due and payable for the months immediately
following the Commencement Date.
6.3.4.3 If, for any reason other than primarily Contractor's
Fault, the Spacecraft has not been Launched within 24
months following the Spacecraft's actual date of
shipment, then the full amount of the Incentives
Obligations (and any Change Order Profit Component, if
applicable) (including principal and accrued interest,
if any) shall become immediately due and payable upon
the last day of such 24th
Buyer _______ Contractor _______
month. If, however, the Spacecraft is subsequently
Launched within 54 months of its actual date of shipment
and any Transponder of the Spacecraft ceases to be a
Successfully Operating Transponder or a Payload becomes
a Degraded Payload, then Buyer shall be entitled to a
proportionate refund (without interest) for any
Incentives Obligations (and any Change Order Profit, if
applicable) paid for such Transponder or Payload, taking
into account the amount of time such Transponder or
Payload met the performance specifications. If, for any
reason, the Spacecraft has not been Launched prior to
the third anniversary of its actual date of shipment
(the "Third Anniversary"), then Buyer shall have an
option (the "LOPS/MOPS Option"), exercisable in writing
received by Contractor on or before the Third
Anniversary, to extend its right to utilize the Related
Services for the Spacecraft to the fifth anniversary of
the Spacecraft's actual date of shipment (the "Extension
Period"). If Buyer does not timely exercise the
LOPS/MOPS Option, then Buyer shall pay Contractor the
portion of the "Related Services Price" (as defined
below) for the Spacecraft expended by the Contractor. If
Buyer timely exercises the LOPS/MOPS Option, then the
Related Services Price for the Spacecraft during the
Extension Period, shall be increased by a [*****]
beginning on the Third Anniversary. Buyer shall be
obligated to pay such escalation amount within 30 days
of receipt of invoice from Contractor. In any case,
Contractor's obligation to provide such services shall
terminate on the date which is fifty-four (54) months
(or as early as thirty-six (36) months) from the actual
date of shipment of the Spacecraft. If Contractor's
obligation to provide Related Services is terminated
under the immediately preceding sentence, then Buyer
shall pay the portion of the Related Services Price
expended by the Contractor. For purposes of this
Buyer _______ Contractor _______
Paragraph 6.3.4.3, "Related Services Price" shall mean
the amount payable upon completion of the Related
Services pursuant to Paragraph 6.2.
6.3.4.4 If, for any reason, other than Contractor's fault, a
Launch failure occurs between the time of Launch and the
Commencement Date (or if no Commencement occurs), then
the full amount of the Incentives Obligations (and any
Change Order Profit Component, if applicable) (the
"Recoverable Amount(s)") shall become immediately due
and payable upon the date of such Launch failure.
Contractor shall be entitled to obtain payment of such
Recoverable Amounts from the proceeds of the launch
insurance obtained by Buyer and shall be entitled to a
priority in obtaining such proceeds over Buyer and all
other parties or claims; provided, however, that nothing
herein shall relieve Buyer of its obligations to pay to
Contractor all such Recoverable Amounts, as set forth
herein. Buyer agrees to name Contractor as a loss payee
under Buyer's launch insurance policy to the extent
Contractor is entitled to payment of Recoverable
Amounts. During the six (6) months immediately following
such Launch failure, Buyer shall use best reasonable
efforts to obtain the proceeds of its launch insurance
to pay Contractor the Recoverable Amounts, hereunder.
However, if Contractor does not receive all such
Recoverable Amounts from the proceeds of Buyer's launch
insurance within such six (6) month period, then Buyer
shall be obligated immediately to compensate Contractor
for, and Contractor may also look to Buyer directly for
satisfaction of, all such Recoverable Amounts. For the
purposes of this Paragraph 6.3.4.4, "Launch" shall mean
intentional ignition of any first stage engine of the
Launch Vehicle.
Buyer _______ Contractor _______
6.4 Contractor shall not be obligated to deliver the Spacecraft to
the Launch Site if there are any outstanding Delinquent Payments
owed by Buyer to Contractor with respect to such Spacecraft
under this Contract one month prior to shipment of such
Spacecraft from the Contractor facility. "Delinquent Payments"
are defined as those payments not received by Contractor within
thirty (30) days of the dates due as defined in Paragraphs 6.2.1
and 6.2.2 above. Once Buyer has paid Contractor for any
"Delinquent Payments" and any interest accrued in accordance
with Paragraph 6.6 below, Contractor shall use its reasonable
best efforts to ship such Spacecraft to the Launch Site so as to
enable launch on the scheduled Launch Date and in any event to
make shipment as soon as practicable and no later than sixteen
(16) weeks after payment by Buyer of such Delinquent Payments.
Buyer will be responsible for and will pay toContractor any
reasonable costs and [*****] profit on such costs that
Contractor may incur as a result of a delay in delivery due to
Buyer's Delinquent Payments. Notwithstanding the foregoing, this
Section 6.4 shall not relieve Contractor of its obligation to
deliver a Spacecraft, and no "Delinquent Payment" shall be
deemed to have occurred, due to any nonpayment by Buyer on
account of an alleged breach by Contractor or other dispute as
to such payment. In such event, Buyer shall, within thirty (30)
days of the date such payment is due, pay the full amount of
such payment into an interest-bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged breach
in accordance with Article 33, the Party entitled to the amount
in escrow shall receive such amount together with all accrued
interest thereon and the other Party shall pay all costs and
fees associated with the escrow of such amount.
6.5 Invoice
6.5.1 Invoices submitted to Buyer for payment shall contain a
cross- reference to the Contract number and the date
specified in the Payment Plans of Paragraphs 6.3.1 and
6.3.2. Contractor shall submit one (1) original invoice
for the Spacecraft in each instance to:
Buyer _______ Contractor _______
PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Senior Vice President and
Chief Technology Officer
cc: Xxxxx Xxxxxxxxxxx, Vice President -- Space Systems
Xxxxxxx X. Xxxxx, Senior Counsel (by fax to 000-000-0000)
6.5.2 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 Buyer within thirty (30) days upon receipt of the
invoice by Buyer.
6.6 Late Payments
Buyer _______ Contractor _______
