Exhibit 10.51
FIXED PRICE CONTRACT
BETWEEN
PANAMSAT INTERNATIONAL SYSTEMS, INC.
AND
XXXXXX SPACE & COMMUNICATIONS COMPANY
FOR
PAS 6B HS601HP
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 98-PAS-001
TABLE OF CONTENTS
PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS.................................3
ARTICLE 2. ORDER OF PRECEDENCE.........................................4
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES..............5
ARTICLE 4. DELIVERABLES AND SCHEDULE...................................8
ARTICLE 5. PRICE......................................................10
ARTICLE 6. PAYMENTS...................................................13
ARTICLE 7. SPACECRAFT LAUNCH DATE.....................................32
ARTICLE 8. BUYER-FURNISHED ITEMS......................................34
ARTICLE 9. INSPECTION AND ACCEPTANCE..................................37
ARTICLE 10. ACCESS TO WORK IN PROCESS..................................39
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY...........40
ARTICLE 12. EXCUSABLE DELAYS...........................................43
ARTICLE 13. AMENDMENTS.................................................46
ARTICLE 14. TERMINATION FOR CONVENIENCE................................47
ARTICLE 15. TITLE AND RISK OF LOSS.....................................51
ARTICLE 16. SPACECRAFT WARRANTY........................................55
ARTICLE 17. INDEMNIFICATION............................................57
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER
ACCEPTANCE..............................................59
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY.................................61
ARTICLE 20. RIGHTS IN INVENTIONS.......................................63
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS...............................66
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE.........67
ARTICLE 23. PUBLIC RELEASE OF INFORMATION..............................70
ARTICLE 24. TAXES......................................................71
ARTICLE 25. GOVERNING LAW..............................................72
ARTICLE 26. TITLES.....................................................73
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES.....................74
ARTICLE 28. INTEGRATION................................................76
ARTICLE 29. CHANGES....................................................77
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES............................83
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY............................84
ARTICLE 32. SPACECRAFT STORAGE.........................................85
ARTICLE 33. DISPUTES...................................................86
ARTICLE 34. ASSIGNMENT.................................................89
ARTICLE 35. LIMITATION OF LIABILITY....................................91
ARTICLE 36. NO THIRD PARTY AGREEMENT...................................92
ARTICLE 37 LIQUIDATED DAMAGES FOR LATE SHIPMENT.......................94
ARTICLE 38 CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES..............95
ARTICLE 39 REPLACEMENT SPACECRAFT.....................................97
ARTICLE 40 INDEX OF DEFINED TERMS.....................................99
ARTICLE 41 EFFECTIVE DATE OF CONTRACT................................102
This FIXED PRICE CONTRACT (the "Contract") is entered into as of the 9th day of
March, 1998, by and between PANAMSAT INTERNATIONAL SYSTEMS, INC. (herein called
"Buyer"), a Delaware corporation having a place of business at Xxx Xxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, and XXXXXX SPACE AND COMMUNICATIONS COMPANY
(herein called "Contractor"), a Delaware corporation having a place of business
at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, PanAmSat Corporation (a Delaware corporation and the parent
company of Buyer) and Contractor are party to that certain letter agreement
dated December 24, 1997, as supplemented by that certain supplemental letter
agreement dated February 9, 1997 (as so supplemented, the "Letter Agreement"),
pursuant to which, in exchange for payment of consideration by PanAmSat
Corporation, Contractor undertook to proceed with certain preliminary design,
procurement and manufacturing efforts for a proposed PAS 6B spacecraft to
support the launch date specified therein;
WHEREAS, such proposed PAS 6B spacecraft would be built from a
spacecraft already under construction by Contractor for a third party, and
Contractor has reached agreement with such third party to terminate the
agreement for construction and delivery of such other spacecraft; and
WHEREAS, the Parties now desire to enter into this Contract for Buyer
to purchase and Contractor to manufacture, deliver and perform (as applicable)
the PAS 6B Spacecraft, Documentation and Related Services as provided and
defined herein below;
1
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
2
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 - PAS 6B Statement of Work - dated February 1998.
1.2 Exhibit B - PAS 6B Spacecraft Specification - dated February
1998.
1.3 Exhibit C - PAS 6B Spacecraft Integration Test Plan - dated
February 1998.
1.4 Exhibit D - PAS 6B Product Assurance Plan - dated February
1998.
1.5 Exhibit E - Certain Documentation - dated February 1998.
1.6 Exhibit F - Maximum Termination Liability - dated February
1998.
1.7 Exhibit G - [****************] - dated February 1998.
1.8 Exhibit H - PAS 6C Payment Plan - dated March 1998.
1.9 Exhibit I - Sample Incentives Obligations Payment Schedule -
dated March 1998.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 2. ORDER OF PRECEDENCE
In the event of any conflict or inconsistency among the provisions of
this document and the exhibits attached and incorporated into this
Contract, such conflict or inconsistency shall be resolved by giving
precedence to this document, and then to the attached and incorporated
exhibits in the order listed in Article 1 herein, entitled "Exhibits
and Incorporations."
4
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED
SERVICES ("DELIVERABLES")
3.1 Contractor shall sell and provide, and Buyer shall purchase,
the items and services referred to in Section 4.1. Contractor
shall provide the necessary personnel, material, services and
facilities to design, fabricate, test and deliver one (1) HS
601HP type Spacecraft for PAS 6B (hereinafter referred to as
"PAS 6B" or the "Spacecraft"), Documentation and Related
Services (as defined in Article 4) in accordance with the
provisions of this Contract and in the manner specified under
Exhibits A, B, C and D hereto.
3.2 All materials and services specified in Exhibit X, "XXX 0X
Xxxxxxxxx xx Xxxx," shall meet the requirements of Exhibit B,
entitled "PAS 6B Spacecraft Specification."
3.3 If Contractor has not made delivery [************************
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*******] or if, prior to the Launch Date, [*******************
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******] Buyer at its election may:
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Any such election shall be made by Buyer in writing. [********
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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 Spacecraft, Documentation and Related Services described above
shall be
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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delivered to Buyer at the indicated locations on the dates set
forth in Article 4 entitled, "Deliverables and Schedule"
herein.
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ARTICLE 4. DELIVERABLES AND SCHEDULE
4.1 The following deliverables to be furnished under this Contract
shall be furnished at the designated location(s) on or before
the dates specified below:
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Date of Shipment, Location of Shipment,
Delivery Delivery or
or Performance Performance
Deliverable(s)
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o Shipped from Contrac-
1. One PAS 6B Shipment on September tor's facility.
Spacecraft 29, 1998 ("Shipment Date") o Delivery Site at
to support Launch Date of Ariane facility,
October 20, 1998* Kourou, French
Guyana (subject
to change pursuant
to Paragraph 4.2.)
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o Performance Site to be
2. Launch Support, In Accordance with determined pursuant to
Mission Operations Exhibit A Paragraph 4.2.
and In-Orbit o Fillmore, California
Testing ("Related Services") o Castle Rock, Colorado
o El Segundo, California
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3. Documentation In Accordance with 0000 Xxxxxx Xxx
("Documentation") Exhibit A Long Beach, California
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*Contractor agrees to ship the Spacecraft from its facility on or
before such Shipment Date in order to support the launch of
the Spacecraft on the Launch Date in accordance with the
requirements of this Contract and the Exhibits hereto. [*************
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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4.2 Designation of Launch Vehicle.
4.2.1 The initial launch vehicle (the "Launch Vehicle")
designation for the Spacecraft is an Ariane launch
vehicle. Buyer may change the designation of the
Spacecraft's Launch Vehicle at any time on or before
[********] months prior to the scheduled Launch Date
for the Spacecraft, in which event the Contract Price
shall be increased or decreased by the applicable
amount specified in Paragraph 5.3. If, subsequent to
the date that is [********] months prior to such
Launch Date, Buyer requests a change in the Launch
Vehicle or Approved Storage Facility for the
Spacecraft, such request shall be dealt with as a
Change Order Request of Buyer under Article 29.
4.2.2 Buyer shall pay the costs of delivering the
Spacecraft to the Launch Site, which costs are
included in the Contract Price.
4.3 Contractor 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.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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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
shall be [**********************************************]
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 stated in Paragraph 5.1 is contingent upon
the utilization of the Launch Vehicle initially designated for
the 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 shall be adjusted in accordance with the following
table:
Table 5.3.1
Adjustment to Contract Price
--------------------------------------------------
Launch Vehicle Adjustment
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Delta III [********]
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Atlas IIAS/AR [********]
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Proton [*********]
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5.4 Any adjustment to the Contract Price under Paragraph 5.3 shall
be allocated pro rata over the entire Payment Plan for such
Spacecraft (including In-Orbit Performance Incentive
Obligations). Adjustments allocated to payments already made
shall be promptly paid by Buyer or refunded by Contractor, as
the case may be.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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5.5 Buyer agrees to pay to Contractor a delivery incentive (the
"Delivery Incentive") as follows:
(i) Buyer shall pay to Contractor an additional
amount of [**************************************] in
the event that [***************************************
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***************]
(ii) In addition to any amount in clause (i)
above, Buyer shall pay an additional amount equal to
[******************************************************
*******************************************] up to a
maximum amount in this clause (ii) of [****************
*********************] and a maximum total Delivery
Incentive under clauses (i) and (ii) of ***************
******************************]
Contractor shall submit an invoice for any Delivery Incentive
after such amount is earned, and Buyer shall pay such Delivery
Incentive within thirty (30) days of receipt by Buyer of such
invoice. [****************************************************
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**************************************************************
**************************************************************
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**********] Notwithstanding anything herein to the contrary,
in the event that Contractor [********************************
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**********] in achieving any part of the Delivery Incentive
provided by this Paragraph, Contractor [*********************
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confidential treatment.
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject
to Buyer's rights, defenses and remedies as expressly stated
in this Contract, Buyer shall pay to Contractor the Contract
Price as stated in Article 5 herein for the applicable
Spacecraft, Documentation, and Related Services under this
Contract.
6.2 Invoices shall be prepared and submitted by Contractor for
each Spacecraft in a form reasonably acceptable to Buyer.
Payments to Contractor for each Spacecraft shall be made
according to the following payment plans:
[**********]
[*****************************]
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[*****] [**] [**]
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[************************
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[********************
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(1) [*****************************************************************
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(2) [*******************************************]
6.3 Incentives Obligations.
6.3.1 The following definitions are applicable to this Section 6.3:
6.3.1.1 "Specified Operation Lifetime" means fifteen (15)
years.
6.3.1.2 "Successfully Operating Payload". The
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).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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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.
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.
15
6.3.1.5 "Successfully Injected Spacecraft". The Launched
Spacecraft shall be deemed to be a Success-
fully Injected Spacecraft if:
(a) The transfer orbit/spacecraft attitude meets
the following required criteria:
(1) Perigee altitude error is less than or
equal to +/-3 sigma;
(2) Apogee Altitude error is less than or
equal to +/-3 sigma;
(3) Inclination error is less than or equal
to +/-3 sigma;
(4) Argument of perigee error is less than
or equal to +/-3 sigma; and
(5) The Spacecraft has been separated with
attitude rate errors of less than or equal
to +/-3 sigma and
(b) The Spacecraft has not suffered physical
damage which resulted from Launch Vehicle
malfunction.
The calculated amount of Useful Commercial Life (the
"Calculated Operational Lifetime") shall be mutually
determined by Buyer and Contractor, based on
standard engineering practices, using measured
actuals of the Spacecraft, existing at the time of
the operational hand-off of the Spacecraft to
Contractor from the Launch Vehicle provider. If the
attained transfer orbit/Spacecraft
16
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 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.
6.3.1.6 "Incentives Interest Rate". The
Incentives Interest Rate shall be
the lesser of (i) the prime rate of
Chase Manhattan, New York, as
calculated on the first business day
of each month for which interest is
calculated plus [******************
***********************************]
or 9ii0 [***************************
*********************]
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
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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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
an equal monthly payment that, when
calculated on a net present value
basis to the Commencement Date using
the Incentives Interest Rate, equals
the total amount of Incentives
Obligations plus Change Order Profit
Component due hereunder. For
example, if the Spacecraft is a
Successfully Injected Spacecraft and
on the Commencement Date all
Transponders on the Spacecraft are
and continue to be Successfully
Operating Transponders for fifteen
(15) years, assuming the maximum [**
******************************] for
the entire period, the monthly
Incentives Obligations payment would
be [**************] (the "Nominal
Payment"). If the Incentives
Interest Rate is less than [***
**********************] for any
given month, the Incentives
Obligations payment will be less
than the Nominal Payment. In such
circumstances, the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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amount of each month's payment will
be calculated on a net present value
basis to the date of the last
month's payment using the remaining
unpaid principal as the new
principal, the Incentives Interest
Rate, and a term equal to the number
of months remaining in the
Incentives period. The Parties shall
agree in writing upon an appropriate
allocation of the portion of the
Incentive Obligations which shall be
payable for each Payload on the
Spacecraft. The Incentives
Obligations, identified above, shall
be payable in 180 equal and
consecutive monthly installments
over a fifteen (15) year life of the
Spacecraft, except as may be
adjusted as set forth herein. Except
as provided in Paragraph 6.3.4, the
first installment of each Incentives
Obligations shall be paid on the
Spacecraft's Commencement Date. A
sample schedule matrix showing
Incentives Obligations payments for
fifteen years, assuming fully
successful operation, and with
varying hypothetical interests rates
will be attached to this Contract as
Exhibit I.
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"
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(defined as the period from separation of
the Launch Vehicle through on-station
acquisition) then, subject to Section
6.3.2.3, Buyer shall pay the Incentives
Obligations for the Spacecraft in equal and
consecutive monthly installments over a
period of the Spacecraft's On Station
Operational Lifetime (defined at Section
6.3.2.1(b)).
(b) If the Spacecraft is Successfully Injected,
but is not successfully placed into its
on-station orbit by Contractor during the
Transfer Period, then the total amount of
the Incentives Obligations for the
Spacecraft shall be multiplied by a
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, using measured
actuals of the Spacecraft, existing at the
end of the Transfer Period. However, should
the Spacecraft continue to operate
successfully beyond the On-Station
Operational Lifetime, Contractor will
continue to earn Incentives 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
20
amount of the Incentives Obligations shall
be multiplied by the sum of (A)(i) the
Specified Operational Lifetime, plus (ii)
the On-Station Operational Lifetime, minus
(iii) the Calculated Operational Lifetime,
divided by (B) the Specified Operational
Lifetime, which percentile shall, in no
event, be greater than one. Subject to
Section 6.3.2.3, Buyer shall pay such
Incentives Obligations for the Spacecraft in
equal and consecutive monthly installments
over a period of the Spacecraft's On-Station
Operational Lifetime.
For purposes of any provision of this
Contract, if the Incentives Obligations or
related payment periods are to be
recalculated, the monthly installments due
shall be recalculated to reflect the 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), payment of any
Incentives Obligation shall be contingent
upon the Transponders being Successfully
Operating Transponders, as set forth herein,
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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 in Section 6.3.2.4
(the "Degraded Payload"), then Buyer's
then-remaining Incentives Obligations for
such Payload(s) (exclusive of any Change
Order Profit Component, as applicable) shall
be deemed extinguished.
6.3.2.4 Whether any Transponder is not Successfully
Operating shall be mutually determined by
Buyer and Contractor, based on relevant
technical data, reports and analyses, and
each Party will make available to the other
Party for its review, upon reasonable
request, all data used in making such
determination. If Contractor disagrees with
such determination, then the Parties shall
resolve such disagreement in accordance with
the dispute resolution procedure set forth
in Article 33.
6.3.2.5 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
22
predicted to continue to be Successfully
Operating had the Spacecraft and transponder
thereon been Properly Operated by Buyer;
provided, however, that if the failure is
the result of a defect in the deliverable
software or if Buyer demonstrates that the
failure of any Transponder to be
Successfully Operating was not caused
primarily, directly or indirectly, by any
act or omission of Buyer, its agents,
Subcontractors, Consultants or
representatives of any kind, then the
foregoing provision shall not apply with
respect to such Transponder.
6.3.2.6 Buyer may prepay any portion of the
Incentives Obligations or the Change Order
Profit Component pursuant to the schedule
matrix attached as Exhibit 6.3.2.1. Any
remaining Incentives Obligations so prepaid
shall be subject to refund by Contractor to
Buyer, in any instance and to the extent
that Buyer's obligation to make such
payments is relieved pursuant to this
Article 6, as outlined in the last sentence
of Section 6.3.4.1 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
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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.
6.3.4 Incentive Obligations and Launch Delay
6.3.4.1 If the Spacecraft has not been launched
by the 121st day after Delivery of the
Spacecraft, then, except as set forth in
Paragraph 6.3.4.2, 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
24
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 Subject to the second sentence below, if
on or before the 121st day following the
Satellite's Delivery Date, the Satellite
has not been Launched, then the first of
the equal and consecutive monthly
installments payments for the Incentives
Obligations on the Spacecraft shall be
due and payable on the earlier to occur
of the Spacecraft's Commencement Date or
the 241st day following such Spacecraft's
Date of Delivery (except that interest on
such Incentives Obligations shall begin
to accrue on the 121st day following the
Delivery Date, as such date may be
modified herein). If, however, the
Spacecraft has not been Launched due
primarily to (1) Contractor's Fault after
Delivery or (2) Contractor's failure to
timely meet the Spacecraft's scheduled
Delivery Date (where such failure in
Delivery is not caused by a Buyer's
Delay) (or a combination of clauses (1)
and (2) immediately above) then the first
of the equal and consecutive monthly
installments of the
25
Incentives Obligations on the Spacecraft
shall be due and payable on, and interest
shall not accrue until, the Causation
Date. If upon Spacecraft Commencement, or
at any time thereafter, any Transponder
on the Spacecraft (which has been subject
to a Launch delay under this Paragraph
6.3.4.2) 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 Delivery Date,
then the full amount of the Incentives
Obligations (and any Change Order Profit
Component, if applicable) (including
principal and accrued interest, if any)
shall become immediately due and payable
upon the last day
26
of such 24th month. If, however, the
Spacecraft is subsequently Launched
within 54 months of the Delivery Date and
any Transponder of the Spacecraft ceases
to be a Successfully Operating
Transponder or a Payload becomes a
Degraded Payload, then Buyer shall be
entitled to a proportionate refund
(without interest) for any Incentives
Obligations (and any Change Order Profit,
if applicable) paid for such Transponder
or Payload, taking into account the
amount of time such Transponder or
Payload met the performance
specifications. If, for any reason, the
Spacecraft has not been Launched prior to
the third anniversary of the Delivery
Date (the "Third Anniversary"), then
Buyer shall have an option (the
"LOPS/MOPS Option"), exercisable in
writing received by Contractor on or
before the Third Anniversary, to extend
its right to utilize the Related Services
for the Spacecraft to the fifth
anniversary of the Delivery Date (the
"Extension Period"). If Buyer does not
timely exercise the LOPS/MOPS Option,
then Contractor shall credit any unused
portion of the Baseline Launch Costs for
the Spacecraft against any due and unpaid
payment obligations of Customer under
this Contract (the "LOPS/MOPS Refund").
If Buyer timely exercises the LOPS/MOPS
Option, then the price associated with
the Related Services (pursuant to
Paragraph 6.3) for the Spacecraft during
the Extension Period, shall be increased
by a [****************************]
beginning on the Third Anniversary. Buyer
shall be obligated to pay such Escalation
Amount within 30 days of receipt
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of invoice from Contractor. In any case,
Contractor's obligation to provide such
services shall terminate on the date
which is fifty-four (54) months (or as
early as thirty-six (36) months) from the
Delivery Date for the Spacecraft. If
Contractor's obligation to provide Launch
and Mission Operations Services is
terminated under the immediately
preceding sentence, then Buyer shall
receive a LOPS/MOPS Credit or LOPS/MOPS
Refund, as applicable.
6.3.4.4 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.
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. Provided
further, however, that if Contractor does
not receive all such Recoverable
28
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
purposes of this Paragraph 6.3.4.4,
"Launch" shall mean, with respect to an
Xxxxxx XX Launch Vehicle, the ignition of
the first stage engines of the Launch
Vehicle, if said ignition is followed by
opening of the table clamps with
consequent release of such Launch
Vehicle.
6.4 Contractor shall not be obligated to deliver the Spacecraft to
the Launch Site if there are any outstanding Delinquent
Payments owed by Buyer to Contractor 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 to Contractor any reasonable
costs and [***] profit on such costs that Contractor may incur
as a result of a delay in delivery due to Buyer's Delinquent
Payments. Notwithstanding the foregoing, this Section 6.4
shall not relieve Contractor of its obligation to deliver a
Spacecraft, and no "Delinquent Payment" shall be deemed to
have occurred, due to any non-
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payment 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 Plan of Paragraphs 6.3.1.
Contractor shall submit one (1) original invoice for
the Spacecraft in each instance to:
PanAmSat Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxx Xxxxxxxx, Senior Vice President
and Chief Technology Officer
cc: Xxxxxxx X. Xxxxx, Senior Counsel
Xxxxx Xxxxx
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.
30
6.6 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
6.6 shall not apply to any payment made into escrow in
accordance with Section 29.4.
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ARTICLE 7. SPACECRAFT LAUNCH DATE
7.1.1 "Launch Date" Defined. The calendar date during which
a Launch will occur. The Launch Date shall be
notified by Buyer to Contractor no later than six (6)
months prior to the first day of the applicable
Launch Slot and once established, shall become an
express term of this Contract. As of the Effective
Date of this Contract, the Launch Date shall be
October 20, 1998, subject to change in accordance
with this Article 7.
7.1.2 "Launch Window" Defined. A period of time within the
Launch Date during which a Launch can occur and meet
mission requirements. The Launch Window shall be
established by notified by Buyer to Contractor no
later than forty-five (45) days prior to the Launch
Date and once established, shall become an express
term of this Contract.
7.1.3 Adjustment of dates. The time periods as delineated
in Sections 7.1.1 and 7.1.2 shall be adjusted to
reflect applicable launch provider contracts,
consistent with ordinary practices of such providers
as familiar to the Parties.
7.2 The Contract Price set forth in Paragraph 5.1 includes
Contractor furnished launch support services, post launch
support services, in-orbit test support services, and post
title transfer monitoring and command of the Spacecraft if
Buyer invokes the remedial provisions of Article 3, Paragraph
3.3.
7.3 No less than sixteen (16) weeks prior to the Launch Date,
Buyer shall order Contractor by notice in writing to commence
launch campaign preparations.
32
7.4 If a Spacecraft Launch Date 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, Buyer shall have the
right to prescribe the manner of disposition of such supplies
or materials. Costs included in the equitable adjustment shall
include but not be limited to: support personnel standby;
extra travel expenses; transport termination or rescheduling
fees and a profit rate of [********************]
7.5 Notwithstanding the foregoing, if a Spacecraft Launch Date is
postponed by either Party due to an Excusable Delay, as
defined in Paragraph 12.1 herein, the terms of Article 12
herein shall govern such postponement.
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ARTICLE 8. BUYER-FURNISHED ITEMS
8.1 The following facilities, equipment, and services ("Buyer-Furnished
Items") shall be furnished by Buyer at no cost to Contractor, in a
timely manner, so as to enable Contractor to perform the work described
herein.
1) Facilities (buildings, power, phones and data lines)
and enumerated services: (i) transportation of a
Spacecraft, Contractor related test equipment and
personnel within the Launch Site; (ii) storage of a
Spacecraft and related test equipment for all force
majeure events (which prevent Buyer from supplying
Buyer-Furnished Items) and/or launch vehicle delays;
(iii) fueling; (iv) photographs; (v) interface
hardware at the Launch Site; and (vi) earth station
facilities for IOT including appropriate RF
facilities, but not specialized test equipment.
2) Reservation and procurement of launch services and
associated services.
Contractor will provide preliminary requirements of Item 1
above to Buyer no later than two (2) months after the
Effective Date of this Contract to assist Buyer's compliance
with this Article, which shall be consistent with what
Contractor has generally required Buyer to secure for previous
launches with the same launch provider. Subject to the
confidentiality requirements of the applicable agreements,
Contractor will be allowed to review the list of basic and
optional service which Buyer has procured in Buyer's
contract(s) for launch services.
In the event that the Buyer-Furnished Items set forth above
are not suitable for the intended purpose or are not provided
in a timely manner, excluding
34
any excusable delay as defined in Article 12 herein, then
Buyer shall be liable to Contractor for all applicable costs
which shall include but not be limited to; procurement or
rental of suitable substitutes for such Buyer Furnished Items
at no higher than market prices; with title and possession of
all such procured items reverting to Buyer after Contractor's
use under this Contract; support personnel standby; extra
travel expenses; transport termination or rescheduling fees;
and installation/de-installation of communication links to the
Launch Site and a profit rate of [*******************] In the
event that the Buyer-Furnished Items are not suitable for the
intended purpose or are not provided in a timely manner and
the Contractor must procure or rent suitable substitutes, and
the foregoing process has materially affected Contractor's
ability to ship the Spacecraft on or prior to the Shipment
Date, the parties agree to adjust the Shipment Date to account
for any delay resulting from the non-suitability or non-timely
provision of such Buyer-Furnished Items.
8.2 Contractor shall maintain a system to ensure the adequate
control and protection of Buyer's Property. For the purposes
of this Article, Buyer Property shall be defined as any item
which Buyer provides to the Contractor or directs Contractor
to maintain in storage or an inventory account under this
Contract. Upon receipt of notification from Buyer, the
Contractor shall complete and return within fifteen (15)
working days a Property System Certification describing the
system that will be used to control Buyer's Property.
Additionally, Buyer's representative may, at its option and at
no additional cost to Buyer, conduct surveillance at a
reasonable time of the Contractor's Property Control System as
Buyer deems necessary to assure compliance with the terms and
conditions of this Article.
8.3 Contractor shall, commencing with its receipt and during its
custody or the
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use of any Buyer's Property, accomplish the following:
A. Establish and maintain inventory records and make
such records available for review upon Buyer's
request;
B. Provide the necessary precautions to guard against
damage from handling and deterioration during
storage;
C. Perform periodic inspection to assure adequacy of
storage conditions; and
D. Ensure that Buyer's Property is used only for
performing this Contract, unless otherwise provided
in this Article or approved by the cognizant
contracting officer.
8.4 Contractor shall not modify, add-on, or replace any Buyer
Property without Buyer's prior written authorization.
Contractor shall immediately report to Buyer's contract
representative the loss of any Buyer Property or any such
property found damaged, malfunctioning, or otherwise
unsuitable for use. The Contractor shall determine and report
the probable cause and necessity for withholding such property
from use.
8.5 Upon termination or completion of this Contract, and upon
request by Buyer, the Contractor shall perform a physical
inventory, adequate for accountability and disposition
purposes, of all Buyer's Property applicable to such
terminated or completed agreement and shall cause its
subcontractors and suppliers at every tier to do likewise.
36
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 and
contract deliverables meet the requirements of this Contract,
at which time Buyer 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, 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 Buyer as
provided above. In either case, the Hardware shall be deemed
accepted upon failure of Buyer to notify Contractor in writing
within the above five (5) business days that it is accepted,
rejected or that in Buyer's opinion further corrective action
must be taken by the Contractor. In the event that Buyer has
not given Preliminary Acceptance of the Spacecraft, Contractor
shall not ship the Spacecraft from Contractor's facility
without Buyer's prior written consent.
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 16, Paragraph 16.2
of this Contract) or iii) immediately before a Partial
Failure, Total Failure or Total Constructive Failure (as each
such term is defined in the applicable Launch Insurance
Contract or successor contract), which occurs at or after
37
Intentional Ignition. Buyer shall have access to Launch
Integration Facility and/or Launch Site test results during
the launch campaign in accordance with the provisions of
Article 10, Paragraph 10.1 "Access to Work in Process."
9.4 With respect to deliverable Hardware which Buyer orders
Contractor to store, the Hardware shall be stored at a
location to be negotiated and Final Acceptance shall occur at
the end of the [**********] warranty period as set forth in
Article 16 herein, entitled "Spacecraft Warranty," or such
other event mutually agreed upon between the Parties.
9.5 Non-Conforming Products.
9.5.1 If (i) the Spacecraft does not meet its
weight requirements and (ii) Buyer will be
required to pay for additional weight from
the launch provider in order to achieve the
Specified Operational Lifetime without
delaying the placing of the Spacecraft in
its orbital location by more than fifteen
(15) additional days, then Contractor shall
reimburse Buyer for such additional payments
up to [********]
9.5.2 Any Preliminary Acceptance or Final
Acceptance by Buyer of a Spacecraft that
does not conform to the requirements of this
Contract (whether or not related to weight)
shall not affect the Parties rights and
obligations under Paragraph 6.3 ("Incentive
Obligations") with respect to the Spacecraft
or other deliverable that does not perform
to the specifications of this Contract.
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ARTICLE 10. ACCESS TO WORK IN PROCESS
10.1 Contractor shall afford Buyer access to work in progress
being performed at Contractor's plants and 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) Contractor'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 Buyer access to work being
performed pursuant to this Contract in subcontractor's
plants in the company of Contractor's representatives.
Contractor shall exert its reasonable best efforts in
subcontracting to obtain permission for Buyer access to
those major subcontractors' plants. Major subcontracts are
defined as those subcontracts in excess of [************
********************************]
10.3 Buyer shall have the right to witness on a non-interference
basis all system and subsystem tests scheduled by Contractor
in connection with the performance of work under this
Contract. If the system or subsystem tests are performed by
a subcontractor of Contractor, Contractor shall take all
reasonable steps to secure Buyer's access to the
subcontractor's facility or facilities. Buyer's right to
witness testing shall be on a non-interference basis with
the subcontractor's activities and subject to (i) any
subcontractor security procedures and (ii) U.S. or Foreign
Government Regulations.
[***] Filed separately with the Commission pursuant to a request for
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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 launch of more than [**************
****]; or (ii) Contractor fails to ship the Spacecraft on or
before the Shipment Date other than due to the primary fault
of Buyer or a Force Majeure Event and such failure to ship
results in a delay of launch of the Spacecraft of more than
{*************] days. Subsequent to the issuance of said
notice, the Buyer may terminate this Contract in whole and
thereafter elect remedies as identified in Paragraph 11.2
below. [****************************************************
************************************************************
************************************************************
************************************************************
************************************************************
**********]
11.2 If Buyer terminates this Contract as provided in Paragraph
11.1 herein, Buyer, at its sole option, shall either: (i)
take title to all deliverable hardware, all hardware in
process which ultimately would have been deliverable by
Contractor and all drawings and data produced by Contractor
which ultimately would have been deliverable by Contractor,
the cost of which has been charged or becomes chargeable to
any work terminated plus all reasonable reprocurement costs
up to a maximum amount of [*******************************];
or (ii) receive a refund of all payments submitted to
Contractor by the Buyer for performance of
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this Contract for the portion terminated by Buyer, plus
[***********************************************************
************************************************************
************************************************************
***********************************] and Contractor shall
retain title and possession to all terminated Hardware which
ultimately would have been deliverable by Contractor.
11.3 Except as expressly provided in Paragraph 11.4, there will
be no termination for default after Intentional Ignition of
the Launch Vehicle for the Spacecraft.
11.4 In the event that the delivery of the Certain Documentation
listed on Exhibit E is delayed (other than due to the
primary fault of Buyer or Force Majeure Event) for more than
[**********************************************************]
Buyer may issue a written notice of default to Contractor
and may thereafter terminate the Contract in part as to such
Certain Documentation only. If Buyer elects to terminate
this Contract in part as to such Certain Documentation, then
Buyer shall be relieved of payment of [*********************
************************************************************
************] (or any such amount already paid shall be
refunded), and Contractor shall pay Buyer an additional
[*********] for reprocurement costs.
11.5 If, after termination of this Contract (or portion thereof)
under the provisions of this Article, it is determined for
any reason that Contractor was not in default under the
provisions of this Article, or that the default was
excusable under the provision of Article 12 entitled
"Excusable Delays," the rights and obligations of the
Parties shall be the same as if notice of termination had
been issued pursuant to Article 14, entitled "Termination
for Convenience," or pursuant to Article 12, Paragraph
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12.4, as the case may be.
11.6 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.
11.7 In the event Buyer elects the remedy set forth in clause
(ii) of Paragraph 11.2, Contractor shall pay such amount as
follows: [****************************] of the total amount
to be paid by Contractor pursuant to such clause shall be
paid within thirty (30) days of the effective date of
termination; and (b) the remaining [********************] of
the total amount to be paid by Contractor pursuant to such
clause shall be paid upon the first to occur of (I) [*******
***************************************************] or (II)
[***********************************************************
************************************************************
************************************************************
************************************************************
***************************************]
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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 [**********] days, the Parties shall
enter into good faith negotiations to develop a mutual
course of action and/or an equitable adjustment to the
affected terms of this Contract.
12.3 Notwithstanding the foregoing, if the Launch Date for the
Spacecraft defined in Paragraph 7.1 herein is delayed due to
a Force Majeure event affecting Buyer's ability to furnish
any item to be supplied by it under Article 8 hereof, Buyer
shall reimburse Contractor for all reasonable expenses
incurred as a result, including without limitation expenses
for: support personnel standby; extra travel expenses; and
transport termination or rescheduling fees.
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12.4 Notwithstanding anything herein to the contrary, in the
event that a Force Majeure Event occurs and Contractor's
performance of its obligations as to the Spacecraft is
delayed or prevented for a period of [**************] or
longer, then Buyer shall have the right to either: (i)
terminate this Contract with respect to the Spacecraft upon
thirty (30) days written notice or (ii) [******************]
************************************************************
****************] The period of such delay shall be measured
from the initial occurrence of such Force Majeure Event or
Contractor fault (whichever occurred first). Notwithstanding
the foregoing, Buyer agrees that [**************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
*****************]
12.5 In the event of a termination under clause (i) of Paragraph
12.4, Buyer shall be entitled to a refund equal to [********
************************************************************
*******************************************************] and
Contractor shall retain title to all Deliverables produced
by Contractor under this Contract with respect to the
Spacecraft. For purposes of this Section 12.4, [************
************************************************************
************************************************************
************************************************************
******************]
12.6 In the event of [********************************] under
clause (ii) of
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
44
Paragraph 12.4, the price (including any
profit component) [***************************] shall be
paid as follows:
[******************************************************
**************************************************
**************]
[*******************************************************
**************************************************
**************************************************
******************************]
[********************************************************
**************************************************
**************************************************
**************************************************
**************]
[*******************************************************
**************************************************
**************************************************
**********************]
Buyer and Contractor agree to negotiate in good faith the
schedule for delivery of the Spacecraft [**********].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
45
ARTICLE 13. AMENDMENTS
The terms and provisions of this Contract shall not be amended or
modified without specific written provision to that effect, signed by
the Authorized Representative(s) of both Parties. These Authorized
Representative(s) are identified in Article 27, "Notices and Authorized
Representative(s)." No oral statement of any person shall in any manner
or degree modify or otherwise affect the terms and provisions of this
Contract.
46
ARTICLE 14. TERMINATION FOR CONVENIENCE
14.1 Buyer may terminate all or any portion of the work to be
performed pursuant to this Contract upon five (5) days written
notice to Contractor. Buyer shall pay Contractor, in the event
of such termination, termination liability equaling all Costs
(as defined in Paragraph 14.5 below) expended by Contractor
for all work done up to the date of termination on the
terminated portion of the Contract, settlements with
subcontractors for work performed prior to termination on the
terminated portion of the Contract, and Contractor's
reasonable costs related to termination which would not
otherwise have been incurred plus a [****] profit for the
applicable termination costs and charges, but in no event more
than the maximum termination liability that is set forth in
Exhibit F hereto, as of date of termination, less amounts
previously paid by Buyer to Contractor pursuant to the Payment
Article; provided that the Parties agree that Exhibit F sets
forth the maximum termination liability if the entire Contract
is terminated under this Article 14, and that the maximum
termination liability shall be pro rated appropriately in the
event of a termination under this Article 14 of less than all
of the work to be performed by Contractor. Buyer's termination
liability shall also include Costs incurred by Contractor for
the parts of the Base Spacecraft incorporated into the PAS 6B
Spacecraft, but shall exclude any amounts retained or received
by Contractor (whether for Costs, profits or otherwise) in
connection with the termination of its agreement with a third
party for the construction and delivery of the Base
Spacecraft. Buyer shall pay the unpaid balance of such
termination liability within thirty (30) days of Buyer's
receipt of certification of Contractor's costs. In the event
that Buyer has paid to Contractor any amount in excess of such
termination liability, then Contractor shall refund such
excess amount to Buyer within
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
47
thirty (30) days of certification of costs. In no event shall
the termination liability exceed either the Contract price
defined in Article 5 herein or the amount specified in Exhibit
F.
14.2 In the event of termination by Buyer hereunder, and upon
payment in full of all amount due (if any) under 14.1 above
(or, if any amount is in dispute, payment of such amount into
escrow in the manner set forth in Paragraph 6.4), all tangible
work in process inventories generated under this Contract,
with respect to the terminated work, shall become the property
of Buyer. Buyer shall direct disposition of such property
within sixty (60) days from date of termination (which
disposition may include requesting Contractor to undertake
mitigation efforts in accordance with Paragraph 14.4 below) or
such other date as agreed to by the Parties. Final acceptance
and transfer of title for all tangible work in process
inventories to be delivered to the Buyer in the event of
termination shall be the subject of separate negotiations
between Buyer and Contractor and shall be subject to
applicable U.S. Government Export Regulations. The expense of
disposition shall be borne by Buyer.
14.3 In the event of partial termination, the Contract Price shall
be adjusted accordingly.
14.4 At Buyer's request, Contractor shall use reasonable best
efforts to identify an alternate use (i.e. sale to third
Parties and/or internal utilization) for any Hardware affected
by a termination under this Article 14, the Contractor shall
submit a proposal to Buyer, which, at a minimum, defines (i)
the applicable Hardware, (ii) the intended use of the
Hardware, (iii) the original acquisition cost/value of the
applicable Hardware, as available, and (iv) the sale/transfer
payment(s) to be received by Buyer. Contractor
48
shall use its reasonable best efforts to obtain fair market
value for the applicable Hardware. Buyer, at its sole option,
may accept or reject the proposal submitted by Contractor. In
the event that Buyer accepts the proposal submitted by
Contractor, payment by Contractor to Buyer of the agreed upon
payment value shall occur within thirty (30) days of the
sale/transfer of the applicable Hardware, or such other
payment period as mutually accepted between the Parties. If
the Contractor's proposal is rejected by Buyer, if Contractor
is unable to find any alternative use within two (2) years of
being requested to do so or if Buyer so directs, then Title to
the applicable Hardware shall be vested as stated in Paragraph
14.2 above.
14.5 As used in this Article 14, Contractor's "Costs" shall
mean costs actually incurred by Contractor in performing its
obligations hereunder (including G&A costs not to exceed
[*****************] of such costs), all such costs to be
determined in accordance with Contractor's normal accounting
practices. Contractor shall provide to Buyer an invoice
certified by the Chief Financial Officer of the company
stating Contractor claim for costs properly includes only the
costs specified in this paragraph. In the event Buyer desires
independent verification of claim, Buyer may request to have
independent certified public accountants (CPA) audit costs
incurred by Contractor and report to the Parties. The CPA to
perform such audit shall be selected by Buyer, subject to the
approval of Contractor, which approval shall not be
unreasonably withheld (and in any event shall not be withheld
if Buyer selects a "Big Six" accounting firm). Such audit
shall be at Buyer's expense unless such audit shows
Contractor's costs to have been overstated (in which event
Contractor shall bear the audit expense). Such audit shall
constitute a final determination of actual costs
notwithstanding the provision of Article 33; provided that, if
the costs
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
49
determined by such report exceed the amount of Contractor's
termination claim, Buyer shall only be obliged to pay the
amount of Contractor's termination claim.
14.6 Contractor shall use its reasonable best efforts to include in
its subcontracts for work hereunder on terms that will enable
Contractor to terminate such subcontracts in a manner
consistent with this Article 14.
50
ARTICLE 15. TITLE AND RISK OF LOSS
15.1 Title and risk of loss or damage in respect of all items to be
delivered under this Contract shall pass from Contractor to
Buyer as follows:
15.1.1 Risk of loss of the Spacecraft and title
shall pass from Contractor to Buyer 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 Launch Insurance
Contract or successor contract) which occurs
at or after Intentional Ignition.
15.1.2 In respect to a Spacecraft which Buyer
directs Contractor to store, title and risk
of loss shall remain with the Contractor
until Final Acceptance as specified in
Article 9.4 herein.
15.1.3 Notwithstanding Paragraph 15.1.2 above, upon
removal of the Spacecraft from storage, the
Contractor shall not assume risk of loss
relative to a Battery which Buyer directs
Contractor to replace after the five-year
storage period which disqualifies the
battery for a 15-year mission. In that
event, Article 30 herein entitled "Effects
of Storage on Batteries," shall apply.
15.1.4 "Risk of Loss" for purposes of this Article
15 is limited to the responsibility and
liability for a Partial Failure, Total
Failure or Total Constructive Failure (as
each such term is
51
as defined in the applicable Launch
Insurance Contract or successor contract).
Responsibility and liability for the
Spacecraft prior to intentional ignition is
with the Contractor.
15.2 In the event of damage to or destruction of Hardware when
Contractor shall have risk of loss, Contractor shall repair or
replace (at Contractor's option) said Hardware. The Buyer
shall participate in the decision to repair or replace said
Hardware and the provisions of Article 16 shall apply.
15.3 Insurance Provided By Contractor. The Contractor shall, at its
own expense, provide and maintain the following insurance:
15.3.1 "All Risk" Insurance
(i) The Policy for "All Risks" insurance shall
insure the Contractor and name Buyer as additional
insured and Loss Payee as their interest may
appear.
(ii) The insurance shall cover the Spacecraft while
in or about the Contractor's and subcontractors'
plants, while at other premises which may be used
or operated by the Contractor for construction or
storage purposes, while in transit, or while at the
Designated Launch Site until Intentional Ignition,
or while Spacecraft is stored by the Contractor at
Buyer'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.
52
(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.
15.3.2 Third Party Liability Insurance
(i) The Policy(s) for Third Party Liability
insurance shall be written on forms the Buyer may
review and shall include Buyer as additional
insured.
(ii) This Third Party Liability insurance shall be
in force from the time of the Effective Date of
this Contract and shall continue in effect until
Contractor's liabilities have expired at
intentional ignition.
(iii) The Policy(s) may be issued with deductibles,
for which losses shall be borne by the Contractor.
15.4 General Insurance Requirements
(i) The Contractor shall, upon request, provide to
the Buyer certificates of the Insurance Policy(s)
issued by an agent of the Contractor's Insurer(s)
for coverage which the Contractor is required to
provide pursuant to the provisions of these
Articles.
(ii) All Policies of insurance to be provided and
maintained pursuant to these Articles shall require
the insurer(s) or its authorized agent(s) to give
each insured not less than thirty (30) days prior
written notice in the event of cancellation or any
proposed material change in such policies, except
for ten (10) days prior written notice in the event
of cancellation due to non-
53
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.
54
ARTICLE 16. SPACECRAFT WARRANTY
16.1 Contractor warrants that the Spacecraft, upon successful
completion of Spacecraft in plant Tests pursuant to Article 9
herein, shall be free from any defects in material or
workmanship and shall conform to the applicable specifications
and drawings, as evidenced by the acceptance criteria in
Exhibits A-D herein.
16.2 This warranty shall start from the date of Preliminary
Acceptance of the Spacecraft as stated in Article 9 herein,
entitled "Inspection and Acceptance," and continue for a
period of [***********] or until the "Intentional Ignition"
(defined herein as the Intentional Ignition of any rocket
motor on the first stage of the Launch Vehicle) of the
applicable Launch Vehicle, whichever is earlier. [************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************]("Warranty
Time Period"). Contractor shall not be liable in Contract or
in Tort for any incidental, special, contingent, or
consequential damages.
16.3 Buyer shall have the right at any time during the Warranty
Time Period to reject any goods not conforming to this
warranty and require that Contractor, at its expense, correct
or replace (at Contractor's option) such goods with conforming
goods. If any time during the Warranty Time Period Contractor
fails to correct or replace such defective goods and fails to
initiate reasonable efforts to correct or replace such
defective goods within a reasonable period after written
notification and authorization from Buyer, Buyer may then, by
contract or otherwise, correct or replace such defective goods
and equitably adjust the price.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
55
16.4 Except as otherwise expressly agreed upon in this Contract,
Contractor shall have no liability, or responsibility in
Contract or in Tort with respect to the Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2) of the
Launch Vehicle.
16.5 THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR
MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE
REMEDY FOR FAILURE BY CONTRACTOR TO FURNISH A SPACECRAFT THAT
IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP AS
SET FORTH IN PARAGRAPH 16.1 ABOVE. ALL OTHER WARRANTIES OR
CONDITIONS IMPLIED BY ANY OTHER STATUTORY ENACTMENT OR RULE OF
LAW WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED.
CONTRACTOR AND ITS SUBCONTRACTORS SHALL HAVE NO LIABILITY IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR IN ANY OTHER
MANNER WHATSOEVER FOR A SPACECRAFT AFTER INTENTIONAL IGNITION
OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT.
16.6 Any limitations on warranties, liability or requests for
indemnification from liability for the malfunction of
delivered items which are imposed upon the 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.
56
ARTICLE 17. INDEMNIFICATION
17.1 Each Party shall indemnify and hold the other and/or all its
officers, agents, servants, subsidiaries, affiliates, parent
companies and employees, or any of them, harmless from any
liability or expense in connection herewith on account of
damage to property (excepting other Spacecraft in flight)
and injuries, including death, to all persons including but
not limited to employees of the Parties, and their
subcontractors, and of all other persons performing any part
of the work hereunder, arising from any occurrence caused by
an negligent act or omission of the indemnifying Party or
its subcontractors, or any of them in connection with the
work to be performed by such Party under this Contract. The
indemnifying Party shall have the right, but not the
obligation, to participate in any legal or other proceedings
concerning claims for which it is indemnifying under this
Article 17 and to direct the defense of such claims.
However, with respect to such legal or other proceedings,
the indemnifying Party shall pay all expenses (including
attorneys fees incurred by the indemnified Party in
connection with such legal or other proceedings) and satisfy
all judgments, costs or other awards which may be incurred
by or rendered against the indemnified Party. The
indemnifying Party shall not settle any such claim, legal or
other proceeding without first giving thirty (30) days prior
written notice of the Terms and Conditions of such
settlement and obtaining the consent of the indemnified
Party, which consent shall not be unreasonably withheld or
delayed.
17.2 Notwithstanding the foregoing, neither the Contractor nor
its subcontractors shall have any liability in Contract or
in Tort, for damages to or caused by the Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2), and
Buyer shall obtain waivers of
57
subrogation rights from Buyer's insurers against Contractor,
and affiliates and subcontractors of Contractor.
58
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE
18.1 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance per Article 9, entitled
"Inspection and Acceptance," and is subsequently ordered to
be launched within [************] following its Preliminary
Acceptance, it is agreed that the Spacecraft shall be
returned at Contractor's option at Contractor's expense, to
Contractor's facility for inspection and refurbishment. Any
inspection and refurbishment undertaken by Contractor to
meet the requirements of Article 16 entitled, "Spacecraft
Warranty," shall be at Contractor's expense, including
Spacecraft transit insurance.
18.2 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance and is subsequently ordered
to be launched later than [**************] following its
Preliminary Acceptance, it is agreed that the Spacecraft
shall be returned, at Buyer's expense, to Contractor's
facility for inspection and refurbishment. An equitable
adjustment to Contract price for such inspection and
refurbishment, to include a [***] profit component shall be
negotiated by the Parties unless the fact that the launch is
scheduled for later than [******************] is due to
Contractor's negligent acts or omissions.
18.3 If the Spacecraft is returned to Contractor's facility for
inspection and refurbishment per the terms of Paragraph 18.2
above, all charges to return the Spacecraft to the Launch
Site shall be borne by Buyer.
18.4 If the Spacecraft has not been launched within [**********
****] after its preliminary Acceptance, neither Party shall
be further obligated to the other with respect to the
Spacecraft. Disposition of the Spacecraft shall
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
59
be at the option of Buyer with costs of such disposition to
be borne by Buyer.
60
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY
19.1 Contractor shall indemnify and hold Buyer harmless against
any liability or expense as a result of claims, actions, or
proceedings against Buyer alleging the infringement of any
trademarks, United States Copyright or mask work, United
States Letters Patent, any other intellectual property
rights, by any article fabricated by Contractor and
delivered to Buyer pursuant to this Contract as set forth
below.
19.2 Contractor agrees to defend at its own expense any claim,
action, proceeding or request for royalty payments or any
claim for equitable relief or damages against Buyer, its
officers, employees, agents, or subsidiaries based on an
allegation that the manufacture of any item under this
Contract or the use, lease, or sale thereof infringes any
United States Letters Patent trademark, United States
Copyright or mask work or any other intellectual property
right, and to pay any royalties and other costs related to
the settlement of such claim, action, proceeding or request
and to pay the costs and damages, including reasonable
attorney's fees finally awarded as the result of any claim,
action or proceeding based on such request, provided that
Contractor is given prompt written notice of such request or
claim by Buyer and given authority and such assistance and
information as is available to Buyer for resisting such
request or for the defense of such claim, action or
proceeding. Any such assistance or information which is
furnished by Buyer at the written request of Contractor is
to be at Contractor's expense.
19.3 In the event that, as a result of any such claim, action,
proceeding or request: a) prior to delivery, the manufacture
of any item is enjoined; or b) after delivery, the use,
lease or sale thereof is enjoined, Contractor
61
agrees to utilize its best effort to either: (1) negotiate a
license or other agreement with plaintiff so that such item
is no longer infringing; or (2) modify such item suitably or
substitute a suitable item therefore, which modified or
substituted item is not subject to such injunction, and to
extend the provisions of this Article thereto. In the event
that neither of the foregoing alternatives is suitably
accomplished by Contractor, Contractor shall be liable to
Buyer for Buyer's additional costs and damages arising as a
result of such injunction; provided however, that in no
event shall Contractor's entire liability under this Article
exceed [****************************************] for
each Spacecraft. The existence of one or more claims,
actions, proceedings or lawsuits shall not extend such
amount.
19.4 The foregoing indemnity shall not apply to any infringement
resulting from a modification or addition, by other than
Contractor, to an item after delivery.
19.5 If the infringement results from the compliance by
Contractor with the Buyer's directed designs, specifications
or instructions, the Buyer will defend or settle, at its
expense, any such suit against the Contractor.
19.6 The foregoing constitutes the Parties' entire obligation
with respect to claims for infringement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
62
ARTICLE 20. RIGHTS IN INVENTIONS
20.1 As used in this Contract, "Program Invention" shall mean any
invention, discovery or improvement conceived of and first
reduced to practice in the performance of Work under this
Contract. Information relating to Inventions shall be
treated as proprietary information in accordance with the
provisions of this Contract. Rights to inventions conceived
solely by Contractor or its employees shall vest completely
with Contractor.
20.2 Contractor shall be the owner of all Program Inventions
invented solely by Contractor. Contractor grants Buyer a
royalty-free, nonexclusive license in Program Inventions to
use Program Inventions solely for the purposes of
maintenance and operation of 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.
20.3.1 In the case of joint Program Inventions, that
is, inventions conceived jointly by one or more
employees of both Parties hereto, each Party
shall have an equal, undivided one-half
interest in and to such joint Program
Inventions, as well as in and to patent
applications and patents thereon in all
countries.
20.3.2 In the case of such joint Program Inventions,
Contractor shall have the first right of
election to file patent applications in any
country, and Buyer shall have a second right of
election. Each Party in turn shall make its
election at the earliest practicable time, and
shall notify the other Party of its decision.
63
20.3.3 The expenses for preparing, filing and securing
each joint Program Invention patent
application, and for issuance of the respective
patent shall be borne by the Party which
prepares and files the application. The other
Party shall furnish the filing Party with all
documents or other assistance that may be
necessary for the filing and prosecution of
each application. Where such joint Program
Invention application for patent is filed by
either Party in a country which requires the
payment of taxes, annuities, maintenance fees
or other charges on a pending application or on
an issued patent, the Party which files the
application shall, prior to filing, request the
other Party to indicate whether it will agree
to pay one-half of such taxes, annuities,
maintenance fees or other charges. If within
sixty (60) days of receiving such request, the
non-filing Party fails to assume in writing the
obligation to pay its proportionate share of
such taxes, annuities, maintenance fees or
other charges, or if either Party subsequently
fails to continue such payments within sixty
(60) days of demand, it shall forthwith
relinquish to the other Party, providing that
said other Party continues such payments, its
interest in such application and patent and the
Invention disclosed therein, subject, however,
to retention of a paid-up, non-exclusive,
non-assignable license in favor of the
relinquishing Party, its parent, and any
subsidiary thereof to make, use, lease and sell
apparatus and/or methods under said application
and patent.
20.4 Each owner of a jointly-owned patent application or patent
resulting therefrom shall, provided that it shall have
fulfilled its obligation, if any, to pay its share of taxes,
annuities, maintenance fees and other charges
64
on such pending application or patent, have the right to
grant non-exclusive licenses thereunder and to retain any
consideration that it may receive therefor without
obligation to account therefor to the other Party. In
connection therewith, each of the Parties hereby consents to
the granting of such non-exclusive licenses by the other
Party and also agrees not to assert any claim with respect
to the licensed application or patent against any licensee
of the other Party thereunder during the term of any such
license.
20.5 No sale or lease hereunder shall convey any license by
implication, estoppel or otherwise, under any proprietary or
patent rights of Contractor, to practice any process with
such product or part, or, for the combination of such
product or part with any other product or part.
65
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS
Except as provided in Article 20, neither Party shall acquire any
rights with respect to any patent, trademark, trade secret, or any
other intellectual property developed or used by the other Party in the
performance of this Contract.
66
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE
Proprietary Information shall mean any data and information received by
one Party from the other Party, which is identified as proprietary in
accordance with either of the following methods: (i) if in writing, it
shall be marked by the disclosing Party with an appropriate proprietary
legend, or (ii) if disclosed orally, it shall be presented by the
disclosing Party as Proprietary at the time of disclosure and shall be
confirmed by the disclosing Party as Proprietary Information in writing
within fifteen (15) days of its initial oral disclosure.
22.1 The receiving Party agrees to protect such data and
information with the same degree of care which the receiving
Party uses to protect its own confidential data and
information;
22.2 The receiving Party shall not disclose or have disclosed to
third Parties, in any manner or form, or otherwise publish
such data and information so long as it remains proprietary
without the explicit authorization of the other Party or
except as otherwise permitted in this Article 22;
22.3 The receiving Party agrees that it shall use such data and
information solely in connection with the performance of Work
under this Contract, unless otherwise explicitly authorized by
or on behalf of the other Party with the designation of
specific data and information and use;
22.4 The foregoing obligations with regard to such data and
information shall exist unless and until such time as:
22.4.1 Such data and information are to the receiving
Party or otherwise publicly available prior to its
receipt by the receiving Party
67
without the default of the receiving Party; or
22.4.2 Such data and information have been lawfully
disclosed to the receiving Party by a Third Party
which has the right to disclose such data; or
22.4.3 Such data and information are shown by written
record to have been independently developed by the
receiving Party; or
22.4.4 Such data and information are otherwise available
in the public domain without breach of this
Contract by the receiving Party; or
22.4.5 Such data and information are disclosed by or with
the permission of the disclosing Party to a Third
Party without restriction; or
22.4.6 Such data and information that a Party may be
required by law or government regulation or order
to disclose.
22.4.7 Such data and information are released for
disclosure in writing by or with the permission of
the disclosing Party.
22.5 Providing Buyer shall obtain from the recipient a
nondisclosure agreement at least as restrictive as this
Article 22, Buyer may disclose any proprietary information on
a need to know basis to its customer(s), contractors,
insurers, agents, counsel and actual or prospective lenders,
investors, or successors in interest.
22.6 Any copyrighted material belonging to a Party to this Contract
may be copied by the other Party as necessary to enable the
receiving Party to perform its obligations under this
Contract, provided always that the
68
copyright legend is retained on the material.
69
ARTICLE 23. PUBLIC RELEASE OF INFORMATION
Neither Party shall issue news releases, articles, brochures,
advertisements, prepared speeches, and other information releases
concerning the work performed or to be performed under this Contract by
Contractor or its subcontractors, or any employee or consultant of
either, which contains new information not previously disclosed as
permitted under the Contract, without first obtaining the prior written
approval of the other Party concerning the content and timing of such
release which approval shall not be unreasonably withheld. The
initiating Party shall provide such releases to the other Party for
review within a reasonable time prior to the desired release date and
the other Party shall be required to respond within said time period.
70
ARTICLE 24. TAXES
24.1 The price which shall be paid by Buyer for Spacecraft,
Documentation and Related Services [******************
*****************] any U.S. (federal, state or local) sales or
use taxes, or fees or other U.S. taxes against real or
personal property, however designated, which may be levied or
assessed against Contractor. Buyer shall be responsible for
the payment of all personal property taxes, if any, with
regard to goods which are levied upon subsequent to the date
of delivery to Buyer. Buyer shall be responsible for any
inventory taxes, state taxes or any other taxes that are
assessed to Contractor as a result of storage of a Spacecraft
in accordance with Article 32.
24.2 In the event Contractor in the performance of this Contract is
required to pay non-U.S. customs, import duties, value-added
or sales taxes, commercial card fees, port fees, harbor
maintenance tax, other charges, or taxes, or fees,
(collectively, "Assessments") however designated (except for
(i) any Assessment based on Contractor's income and (ii) any
Assessment incurred as a result of or associated with
Contractor's manufacture of a Spacecraft), then Buyer will
reimburse Contractor for such Assessments within thirty (30)
days of written notification by Contractor of payment;
provided, however that, Contractor shall used its reasonable
best efforts to obtain waivers, exemptions and/or relief from
such Assessments when practicable, and Buyer shall not be
required to pay any Assessment to the extent any such waiver,
exemption or relief is pending or has been obtained.
Notification shall then be supported by an invoice and
attachment(s) evidencing such payment having been made by
Contractor.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
71
ARTICLE 25. GOVERNING LAW
This Contract shall be deemed made in the State of California and shall
be construed in accordance with the laws of the State of California.
72
ARTICLE 26. TITLES
Titles given to the Articles herein are inserted only for convenience
and are in no way to be construed as part of this Contract or as a
limitation of the scope of the particular article to which the title
refers.
73
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES
Any notice or request required or desired to be given or made hereunder
shall be in writing and shall be effective if delivered in person or
sent by mail or by facsimile as indicated below:
1. PanAmSat International Systems, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Senior Vice President and
Chief Technology Officer
cc: Xxxxxxx X. Xxxxx, Senior Counsel
and
cc: Xxxx Xxxxx
Xxx Xxxxxxxxxxx
Xxxxx & Associates
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Authorized Representative(s): Xxxxxxxxx Xxxxxxx,
President and Chief Executive
Officer
Xxxxxx Xxxxxxxx,
Senior Vice President and
Chief Technology Officer
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
74
cc: Xxxxxx Xxxxxxxxx, Program Manager
Authorized Representative(s): Xxxxxx XxXxxxxxx
Vice President
or in each case as a Party may direct by notice to the other Party in
accordance with this Article 27.
75
ARTICLE 28. INTEGRATION
This document, with Exhibits, constitutes the entire understanding
between the Parties with respect to the subject matter of this Contract
and supersedes all previous oral and/or written negotiations,
commitments, and understandings of the Parties (and/or their
affiliates), including without limitation that certain Letter Agreement
dated as of December 24, 1997, as supplemented by the supplemental
letter agreement thereto dated February 9, 1998.
76
ARTICLE 29. CHANGES
Subject to Paragraphs 4.2.1 and 5.3 and Article 38:
29.1 Any changes requested by Contractor during the performance of
this Contract, within the general scope of this Contract,
which will add or delete work, stop work, affect the design of
the Spacecraft, change the method of shipment or packing, or
the place or time of delivery, or will affect any other
requirement of this Contract, shall be submitted in writing
("Change Proposal") to Buyer [********] days prior to the
proposed effective date of the change. If such Contractor
requested change causes an increase or decrease in the total
price or other terms of this Contract, Contractor shall submit
a proposal to Buyer detailing the impact of such change.
29.2 Buyer shall notify Contractor in writing within ten (10) days
after receipt of the requested change and price adjustment
(downward or upward), if any, whether or not it agrees with
and accepts such Change Proposal. If Buyer agrees with and
accepts the Contractor requested Change Proposal, Contractor
shall proceed with the performance of the Contract as changed
or in the case of a stop work order, suspend the performance
of this Contract, and an amendment to the Contract reflecting
the Change Proposal shall be incorporated into the Contract.
If Buyer does not agree with the Contractor requested Change
Proposal, the Parties shall attempt to reach agreement on such
Change Proposal. If the Parties are unable to agree on the
requested change and price adjustment, then the Parties shall
proceed with the performance of this Contract, 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
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
77
can not be achieved within a reasonable period of time under
the circumstances, Buyer may make a qualified acceptance of
the Change Proposal, accepting all matters other than price
adjustment, and the issue of price adjustment shall be
submitted for resolution by arbitration in accordance with the
provisions of Paragraph 33.2 hereof. Pending such resolution
of the price issue, the Parties shall perform their
obligations under the Contract, or in the case of a Stop work
order, suspend their obligations, as if the Change Proposal
had been accepted; provided, however, that Buyer shall pay any
disputed amount of the price adjustment into an escrow account
in accordance with Paragraph 29.4 hereof on the date such
amount would have been due and payable had the Change Proposal
been accepted, or if the Change Proposal could result in a
downward adjustment in the Contract Price in excess of the
amount remaining to be paid by the Buyer, Contractor shall
deposit the disputed amount of such excess into an escrow
account in accordance with Paragraph 29.4 hereof.
29.3 Buyer may submit to Contractor in writing (a "Change Order
Request") detailing any changes requested by Buyer during the
performance of this Contract, within the general scope of the
Contract, which will add or delete work, stop work, affect the
design of the Spacecraft, change the method of shipment or
packing, or the place or time of delivery, or will affect any
other requirement of this Contract. Contractor shall respond
to such Change Order Request in writing to Buyer within [***
****] days after such request. If Contractor determines that
the change requested by Buyer is feasible and can be made at
no additional cost and with no associated delays, then
Contractor shall so notify, Buyer and Contractor shall
commence implementing such change. If the Contractor
determines otherwise, then, Contractor shall submit to Buyer,
a proposal detailing the impact of such change and the price
adjustment (downward or upward), if
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
78
any, (the "Change Order Offer"). Buyer shall notify Contractor
in writing, within ten (10) days after receipt of Contractor's
Change Order Offer, whether or not it agrees with and accepts
Contractor's Change Order Offer. If Buyer agrees with and
accepts Contractor's Change Order Offer, Contractor shall
immediately proceed with the performance of the Contract as
changed, or in the case of a stop work order, suspend the
performance of this Contract, and an amendment to the Contract
reflecting such change shall be incorporated into the
Contract. If Buyer does not agree with the Contractor's Change
Order Offer, the Parties shall attempt to reach agreement on
such Change Order Offer. In the event the Parties are able to
reach agreement on the change, but not on the price adjustment
component, then the Parties shall elevate such dispute to the
Senior Executives of the respective companies for resolution.
If resolution can not be achieved within a reasonable period
of time under the circumstances, Buyer may make a qualified
acceptance of the Change Order Offer, accepting all matters
other than price, and the issue of price shall be submitted
for resolution by arbitration in accordance with the
provisions of Paragraph 33.2 hereof. Pending such resolution
of the price issue, the Parties shall perform their
obligations under the Contract, or in the case of a Stop work
order, suspend their obligations, as if the Change Order Offer
had been accepted; provided however, that the Buyer shall pay
any disputed amount of the price adjustment into an escrow
account in accordance with Paragraph 29.4 hereof on the date
such amount would have been due and payable had the Change
Order Offer been accepted, or if the Change Order Request
could result in a downward adjustment in the Contract Price in
excess of the amount remaining to be paid by Buyer, Contractor
shall deposit the disputed amount of such excess into an
escrow account in accordance with Paragraph 29.4 hereof. The
dispute shall then be resolved by arbitration under the
provisions of Article 33, entitled "Disputes."
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29.4 Escrow Provisions - Disputed Amounts
Disputed amounts with respect to any change under this Article
29 shall be paid into an interest bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged
breach in accordance with Article 33, the Party entitled to
the amount or part thereof in escrow, shall receive such
amount together with all accrued interest thereon and the
other Party shall pay all costs and fees associated with the
escrow of said amount. The placement of disputed amounts into
an escrow account shall not relieve either Party of its
remaining obligations under this contract.
29.5 Determination of Price Adjustment of Change
The Parties agree that the change order price adjustment
(downward or upward) for any change shall be equal to the sum
of (i) the "Change Order Cost" plus (ii) the "Change Order
Profit Component". The "Change Order Cost" shall mean those
additional or reduced recurring and non-recurring costs to
Contractor to implement such change (or which are not required
to be implemented), as determined in accordance with
Contractor's normal accounting practices, including those
general and administrative costs ("G&A Costs") of such change,
as determined in accordance with Contractor's normal
accounting practices, [*********************************] of
Contractor's costs for such change. The "Change Order Profit
Component" shall be equal to [**********************] of the
Change Order Cost. The Total Change Order Cost shall be
payable in accordance with the payment plan agreed by the
Parties or, if applicable, by the Arbitrator. Unless otherwise
agreed by the Parties, the Change Order Profit Component shall
be payable in equal monthly installments at the same time as
the monthly installments of Incentives Obligations; provided,
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
80
however, that payment of the Change Order Profit Component
shall not be conditioned upon performance of the Spacecraft or
any component thereof.
29.6 If Contractor makes any improvements to the generic HS-601HP
Spacecraft design, then Contractor shall provide reports to
Buyer concerning such improvements. Buyer may request that any
improvement to the HS-601HP Spacecraft design reported to
Buyer be incorporated into the Spacecraft, and such
improvements shall be considered a Change and shall be dealt
with in accordance with the Change Order process in this
Article 29. The foregoing shall not apply to any changes to
the generic HS-601HP Spacecraft design, to correct or mitigate
the impact of anomalies with respect to such design, made by
Contractor on its own accord or as necessary in Contractor's
reasonable engineering judgment, which changes shall not
relieve Contractor of its obligations to meet the technical
specifications for the Spacecraft, as set forth in Exhibit B,
hereto. Contractor shall notify Buyer on a periodic basis or
as requested by Buyer from time to time of any anomalies with
respect to such HS-601HP Spacecraft design.
29.7 The Change Order Price shall be allocated and payable as
follows: The Change Order Profit Component shall be an
independent payment obligation not contingent upon performance
of the Spacecraft and shall be payable at the same time as the
monthly installments of the Incentives Obligations for the
Spacecraft as set forth in Paragraph 6.3.4 and, in any case,
the then-remaining Change Order Profit Component for the
Spacecraft shall be paid in full with the last Incentives
Obligations Payment. The Total Change Order Cost shall be
payable as agreed by the Parties.
81
29.8 To the extent that (i) any change agreed under this Article 29
deletes any Hardware already produced by Contractor, then the
provisions of Paragraphs 14.2 and 14.4 shall apply to the
disposition of such Hardware.
29.9 The Spacecraft shall be designed to support the Launch Vehicle
interface requirements issued by the Launch Vehicle provider
(as to Ariane, Proton, Delta and Atlas launch vehicles)
existing at the time of the date required of any change in
Launch Vehicle designation under Paragraph 4.2.1. If there are
any changes to such interface requirements thereafter, then
any such change shall be deemed to be a Change Order Request
by Buyer, and the Change Order process set forth in Section
29.3 shall apply.
82
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES
For Spacecraft batteries to provide the required minimum fifteen (15)
years of in-orbit services per Exhibit B, it is understood that launch
must occur within three (3) years from the date of activation of the
first battery cell. In the event Buyer directs Contractor to store any
deliverable Spacecraft and the period of such storage causes a launch
later than three (3) years from the date of activation of that
Spacecraft's first battery cell, and Buyer upon its election to either:
(i) install replacement batteries or (ii) recondition batteries, so
directs Contractor, Buyer shall pay Contractor its costs plus a [***]
profit rate. In either case (i) or (ii), the batteries shall meet a
fifteen (15) year in-orbit service requirement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
83
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY
31.1 Prior to the time Buyer and the Contractor enter the Launch
Integration Facility and/or Launch Site, they each agree that
they will not make a claim against each other for an event
that occurs at the Launch Integration Facility and/or Launch
Site premises involving damage to, loss of, or loss of use of
their property or the property of others in their possession,
caused by the fault or negligence of the other Party to this
Contract, or otherwise caused by any defect in any product
manufactured or sold by the other Party to this Contract. Such
claims are waived and each Party will bear its own losses.
Buyer will include a comparable clause in each of its
contracts with vendors, subcontractors or customers for
services or benefits expected as a result of the launch or
orbiting of the Spacecraft. Such comparable clause shall
include a requirement to flow the clause down to lower-tier
contractors.
31.2 Notwithstanding any other provisions of this Contract, prior
to the time any Party, associated with launch activities at
the Launch Integration Facility and/or Launch Site, shall
enter the Launch Integration Facility and/or Launch Site, such
Parties shall be required to sign an Inter-Party Waiver of
Liability consistent with that between Buyer and the
Contractor as incorporated herein under Paragraph 31.1 of this
provision or other similar agreement as may be required by the
launch agency. Each Party shall have the responsibility to
assure that all the Parties associated with the launch of the
Spacecraft (for which they have control or privity of Contract
with hereunder) have executed said Inter-Party Waiver of
Liability.
84
ARTICLE 32. SPACECRAFT STORAGE
32.1 Buyer may, at its option, order Contractor to store, in
accordance with the provisions of Exhibit B Spacecraft
Specification, the deliverable Spacecraft (including separate
storage of Batteries, if needed) for a period of up to two (2)
years from the date of their delivery to Buyer. Buyer shall
provide written notice to the Contractor not later than six
(6) months prior to the scheduled delivery of the Spacecraft.
Contractor's price for providing storage shall be provided to
Buyer in accordance with Article 29, "Changes," (and such
price shall be deemed a "Change Proposal" for purposes of
Article 29) within 30 days after receipt of Buyer's notice to
store the Spacecraft and Contractor shall provide storage
facilities. If such storage facilities are unavailable,
Contractor and Buyer shall hold discussions to determine a
mutually agreed storage arrangement.
32.2 Six (6) months prior to a stored Spacecraft's scheduled launch
date, Buyer shall, by notice in writing, order the Contractor
to remove said Spacecraft from storage and ship it to a Launch
Site designated by Buyer.
85
ARTICLE 33. DISPUTES
33.1 Disputes
33.1.1 In the event any dispute arises between the
Contractor and the Buyer relating to this Contract,
either Party may give written notice to the other
of its objections and reasons therefore. The
Contractor and Buyer shall consult in an effort to
reach a mutual agreement to resolve such dispute.
In the event a mutual agreement cannot be reached
within fifteen (15) days after receipt of this
notice, the respective positions of the Parties
shall be forwarded to Contractor and Buyer's
respective Executive Offices for discussions and
they shall attempt to reach a mutual agreement to
resolve such dispute within another fifteen (15)
day period.
33.2 Arbitration of Disputes
33.2.1 Grounds for Arbitration and Notice Requirement. Any
dispute, disagreement, controversy or claim arising
out of or relating to this Contract or the
interpretation thereof or any arrangements relating
thereto, or the validity or enforceability thereof,
or contemplated therein or the breach, termination
or invalidity thereof which is not settled to the
mutual satisfaction of the Parties in accordance
with Paragraph 33.1 above, then it shall be settled
exclusively and finally by binding arbitration,
after written notice by either Party. Arbitration
of such disputes in accordance with this Article 33
shall be the Parties' exclusive remedy.
86
33.2.2 Administration and Rules. Arbitration proceedings
in connection with the Contract shall be
administered by the American Arbitration
Association in accordance with its then in effect
Commercial Arbitration Rules, together with any
relevant supplemental rules including but not
limited to its Supplementary Procedures for Large,
Complex Disputes, as modified by the terms and
conditions of the Contract. With respect to the
selection of arbitrators, arbitration proceedings
in connection with this Contract shall be conducted
before a panel of three (3) arbitrators. Within
fifteen (15) days after the commencement of
arbitration, each Party shall select from a list of
qualified persons one person to serve as an
arbitrator on the panel, and within ten (10) days
of their selection, the two arbitrators shall
select a third arbitrator who is listed as an
active member of the American Arbitration
Association at the time that arbitration
proceedings commence. If the two arbitrators
selected by the respective Parties are unable or
fail to agree upon the third arbitrator in the
allotted time, then the third arbitrator shall be
selected by the American Arbitration Association.
33.2.3 Place of Arbitration. The place of arbitration
shall be in Los Angeles, California, U.S.A.
33.2.4 Discovery. The arbitrators shall have the
discretion to order a pre-hearing exchange of
information by the Parties, including without
limitation, production of requested documents,
exchange of summaries of testimony of proposed
witnesses, and examination by deposition of the
Parties.
33.2.5 Award and Judgment. The arbitrators shall have no
authority to
87
award punitive damages, and may not, in any event,
make any ruling, finding or award that does not
conform to the terms and conditions of this
Contract. Subject to the foregoing, the Parties
agree that the judgment of the arbitrators shall be
final and binding upon the Parties and that the
judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction
thereof.
33.2.6 Confidentiality. No Party or arbitrator may
disclose the existence, content, or results of any
arbitration proceedings in connections with this
Contract without prior written consent of all
Parties to the arbitration proceeding.
33.2.7 Fee and Expenses. All fees and expenses of any
arbitration proceedings in connection with this
Contract shall be borne by the losing Party.
However, each Party shall bear the expense of its
own counsel, experts, witnesses, and preparation
and presentation of evidence.
33.2.8 Performance. Contractor and Buyer shall continue
with performance under this Contract during any
disagreement, negotiation, or arbitration.
88
ARTICLE 34. ASSIGNMENT
34.1 Neither Party shall assign, or transfer this Contract or any of its
rights, duties or obligations thereunder to any person or entity, in
whole or part without the prior written consent of the other Party
except that either Party may assign or transfer any of its rights,
duties or obligations under this Contract, either in whole or in part,
to its parent company, subsidiary or affiliate.1 In addition,
notwithstanding anything in this Article 34 to the contrary, the
consent of Contractor shall not be required for, and Paragraph 34.2
shall not apply to any assignment by Buyer of its rights, duties and/or
obligations hereunder as security for any indebtedness of Buyer or its
subsidiaries or affiliates.
Neither Party shall unreasonably withhold consent to any assignment or
transfer providing that the requesting Party can demonstrate to the
other Party's satisfaction that:
(1) its successor or assignee possesses the financial resources to
fulfill the obligations of this Contract; and
(2) any such assignment or transfer shall not jeopardize any data
rights or competitive position, or violate laws related to
export or technology transfer, or otherwise increase the other
Party's risks or obligations.
If the requesting Party cannot so demonstrate, both Parties agree to
negotiate in good faith suitable modifications and new provisions to
this Contract which would mitigate the above risks and/or bring this
Contract into conformance with applicable laws.
1 Affiliate: An "affiliate" of, or a person "affiliated" with, a
specified person, is a person
89
that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the
person specified.
34.2 The Parties agree that in the event that the ownership or control of
Buyer or Contractor is changed, the Parties reserve the right to
negotiate in good faith suitable modifications and new provisions to
this Contract which would mitigate any additional risks, financial or
otherwise, which may be brought about by such change in ownership or
control.
34.3 This Contract shall be binding upon the Parties hereto and their
successors and permitted assigns.
90
ARTICLE 35. LIMITATION OF LIABILITY
35.1 The Parties to this Contract expressly recognize that commercial space
ventures involve substantial risks and recognize the commercial need to
define, apportion and limit contractually such risks associated with
this commercial space venture. The payments and other remedies
expressly set forth in this Contract fully reflect the Parties'
negotiations, intentions and bargained-for allocation of such risks
associated with commercial space ventures.
35.2 In no event shall the Parties be liable for any direct, indirect,
incidental, special, contingent or consequential damages (including,
but not limited to, lost revenues or profits), except as expressly
provided for in this Contract. This Article shall survive the
expiration or termination of this Contract for whatever cause.
91
ARTICLE 36. NO THIRD PARTY AGREEMENT OR RIGHTS
36.1 Contractor represents and warrants that: (i) Contractor has terminated
the agreement between Contractor and a third party for construction and
delivery of the spacecraft (the "Base Spacecraft") from which PAS 6B
will now be built; and (ii) neither Contractor nor such third party
have any continuing rights or obligations with respect to PAS 6B or the
Base Spacecraft (or otherwise arising under such terminated agreement).
Contractor agrees to indemnify Buyer for, and hold Buyer harmless from,
any and all liability, loss, claim or damage to which Buyer or its
affiliates (or any director, officer, employee or agent of Buyer or one
of its affiliates) may become subject, arising from any claim by such
third party or any breach of the representations and warranties made by
Contractor in this Article 36.
36.2 The provisions of this Contract are for the benefit of only the parties
hereto, and no third party may seek to enforce, or benefit from, the
terms and conditions of this Contract, other than as expressly provided
in the immediately following sentence. The parties agree and
acknowledge that (i) the first two sentences of Paragraph 14.4, and
Contractor's obligation to make payment to Buyer in the event that
Buyer accepts Contractor's proposal as provided in such Paragraph 14.4,
are for the benefit of Buyer and of Buyer's customers NetSat ServiAos
Ltda. ("NetSat") and Multi-Country Partners GP ("Multi-Country") and
(ii) each of NetSat and Multi-Country shall have the right to enforce,
as a third party beneficiary, the obligations of Contractor under the
first two sentences of Paragraph 14.4, and Contractor's obligation to
make payment to Buyer in the event that Buyer accepts Contractor's
proposal as provided in such Paragraph 14.4, directly against
Contractor, either in an action brought solely by such party or in a
joint action with each other and/or with Buyer.
92
36.3 This Article 36 shall survive delivery of the Spacecraft and the
Documentation, the performance of the Related Services and any
termination of this Contract.
93
ARTICLE 37. LIQUIDATED DAMAGES FOR LATE PERFORMANCE
37.1 In the event that the launch of the Spacecraft is delayed due to the
fault of Contractor (and/or Contractor's subcontractors or suppliers)
or the Spacecraft is not shipped on or prior to the Shipment Date in
accordance with the requirements of this Contract and the Exhibits
hereto, Contractor shall pay to Buyer liquidated damages as follows:
37.1.1 For [************************] of delay, Contractor
shall [**************************]
37.1.2 For the next [**************] of delay, Contractor
shall [**********************************************
*****************************************************
******************************]
37.2 Contractor shall pay to Buyer the liquidated damages owed pursuant to
Paragraphs 37.1 within thirty (30) days of invoice from Buyer.
37.3 The Parties understand and agree that the liquidated damages provided
under this Article 37 shall be in lieu of all other remedies of any
kind except for Buyer's rights and remedies under Articles 11 and 14.
The amounts presented in Paragraph 37.1 shall constitute liquidated
damages for such late shipment and shall not constitute a penalty. The
Parties acknowledge and agree that such liquidated damages are believed
to represent a genuine estimate of the losses that would be suffered by
reason of any such delay (which losses would be difficult or impossible
to calculate with certainty).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
94
ARTICLE 38. CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES
38.1 Without limiting the obligations of Contractor under other provisions
of this Contract, if the data available from another satellite
manufactured or under manufacture or design by Contractor (a
"Contractor Satellite") indicates that there is or may be a material
deficiency in the design or manufacture of such Contractor Satellite
which, in the reasonable opinion of Contractor, will or may adversely
affect the Spacecraft produced under this Contract, or the operations
of such Spacecraft, then Contractor shall notify Buyer of such any such
material deficiency. Contractor shall promptly take appropriate
corrective measures, at Contractor's expense, with respect to the
Spacecraft so as to satisfactorily eliminate from such Spacecraft prior
to its shipment all the material deficiencies discovered in Contractor
Satellite(s), subject to the provisions of Paragraph 38.5.
38.2 In the event that the corrective measures performed pursuant to this
Article 38 cause a delay, then: (i) Contractor shall [*****************
****************************] in accordance with Paragraph 4.1; (ii)
the time periods provided in Paragraph 5.5 and 37.1 [***************
********] and (iii) Buyer and Contractor shall discuss the impact (if
any) to the construction and delivery of the Spacecraft.
38.3 If Contractor, in performing corrective measures in accordance with
this Article 38, replaces any equipment or part determined to be
deficient, such deficient equipment or part shall remain or become the
property of Contractor.
38.4 Contractor shall disclose to Buyer sufficient technical and operational
information regarding a material deficiency [*******************
*********] to enable Buyer to make an informed decision regarding the
taking of corrective measures.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
95
Notwithstanding the foregoing, Contractor shall not be obligated by
this Article 38 to disclose the identity (or any identifying
information) of any such satellite, or the owners or customers of such
Contractor Satellite, on which a material deficiency is discovered.
38.5 Contractor shall be obligated to notify Buyer if Contractor proposes to
resolve technical deficiencies (arising during the design and/or
manufacturing process of the Spacecraft) through the imposition of
operational constraints. The Parties agree promptly to enter into good
faith negotiations to resolve any such deficiency and, if appropriate,
agree to adjust equitably the Contract Price and/or schedule, subject
to Paragraph 38.2. In the event that the Parties cannot reach an
agreement within five (5) business days as to the resolution of such
deficiency or its adjustment (if any) to Contract Price and/or
schedule, then the unresolved issues shall be submitted to the
Contractor's and Buyer's senior executives for resolution. If such
senior executives cannot reach agreement within ten (10) business days
thereafter, then the remaining unresolved issues shall be submitted for
resolution by arbitration pursuant to Paragraph 33.2.
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ARTICLE 39. REPLACEMENT SPACECRAFT
39.1 Buyer shall have the right to purchase a replacement spacecraft ("PAS
6C") for PAS 6B in the event that PAS 6B suffers a launch failure
(including any total or constructive total loss that occurs prior to
the placement of PAS 6B into commercial operations). PAS 6C shall have
substantially the same configuration and performance of PAS 6B. If
Buyer orders PAS 6C, the price for such spacecraft (and its Related
Services and Documentation) shall [*******************************
***********************] which shall include as a baseline launch on an
Ariane Launch Vehicle, and Contractor shall construct and deliver PAS
6C and Documentation, and shall perform the required Related Services,
to support a launch of PAS 6C within twelve (12) months from written
direction from Buyer for the order of PAS 6C. Except as expressly
specified in this Article, the terms and conditions of this Contract
shall apply in context to PAS 6C if ordered under this Article. PAS 6C
may be ordered at any time through one hundred twenty (120) days after
the launch of PAS 6B. Attached as Exhibit H hereto is a payment plan
for PAS 6C based upon a price of [*************]
39.2 In order to have the right to order PAS 6C in accordance with Paragraph
39.1, Buyer shall direct Contractor to purchase long lead items for PAS
6C by written notice to Contractor no later than April 20, 1998;
provided, that if, prior to April 20, 1998, the Launch Date has been
revised from October 20, 1998 in accordance with the terms of this
Contract, then such written notice shall be required no later than six
(6) months prior to such revised Launch Date. If Buyer provides such
written notice, then Contractor shall purchase long lead items and take
such other steps as may be required to enable Contractor to have PAS 6C
ready to be launched within twelve (12) months of the PAS 6B launch
failure. The price for the long lead items shall be [**************
**********************] payable
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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in accordance with the following payment schedule:
[***********]
[**********************************]
--------------------------------------------------
[*****]
[****] [**********]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
39.3 If Buyer has purchased long lead items in accordance with Paragraph
39.2, then, within one hundred twenty (120) days of the successful
launch of PAS 6B, Buyer shall direct disposition of such long lead
items either: (a) to build PAS 6C at the same price for launch within
twelve (12) months of such direction; or (b) direct the disposition of
such long lead items pursuant to Paragraphs 14.2 and 14.5.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 40. INDEX OF DEFINED TERMS
Each of the following capitalized terms has the meaning ascribed to
such term in the applicable Paragraph.
----------------------------------------------------------
Defined Terms Paragraph
----------------------------------------------------------
Affiliate 34
----------------------------------------------------------
Assessments 24.2
----------------------------------------------------------
Authorized Representations 27
----------------------------------------------------------
Base Spacecraft 36
----------------------------------------------------------
Buyer Introduction
----------------------------------------------------------
Buyer-Furnished Item 8.1
----------------------------------------------------------
Calculated Operational 6.3.1.5
Lifetime
----------------------------------------------------------
Certain Documentation Exhibit E
----------------------------------------------------------
Change Order Cost 29.5
----------------------------------------------------------
Change Order Offer 29.3
----------------------------------------------------------
Change Order Profit Component 29.5
----------------------------------------------------------
Change Order Request 29.3
----------------------------------------------------------
Change Proposal 29.1
----------------------------------------------------------
Contract Introduction
----------------------------------------------------------
Contract Price 5.1
----------------------------------------------------------
Contractor Introduction
----------------------------------------------------------
Contractor Satellite 38.1
----------------------------------------------------------
Costs 14.5
----------------------------------------------------------
Degraded Payload 6.3.2.3
----------------------------------------------------------
Delinquent Payments 6.4
----------------------------------------------------------
99
----------------------------------------------------------
Deliverables 3
----------------------------------------------------------
Documentation 4.1
----------------------------------------------------------
Effective Date 39
----------------------------------------------------------
Extension Period 6.3.4.3
----------------------------------------------------------
G&A Costs 29.5
----------------------------------------------------------
Holdback Amount 12.5
----------------------------------------------------------
Incentives Interest Rate 6.3.2.2
----------------------------------------------------------
Intentional Ignition 16.2
----------------------------------------------------------
Launch Date 7.1.1
----------------------------------------------------------
Launch Vehicle 4.2.1
----------------------------------------------------------
Launch Window 7.1.2
----------------------------------------------------------
Letter Agreement Recitals
----------------------------------------------------------
LOPS/MOPS Option 6.3.4.3
----------------------------------------------------------
LOPS/MOPS Refund 6.3.4.3
----------------------------------------------------------
MCC 3.3(a)
----------------------------------------------------------
OCC 3.3(b)
----------------------------------------------------------
PAS 6B 3.1
----------------------------------------------------------
Pre-Launch Incentive Payments 6.3.4.1
----------------------------------------------------------
Program Invention 20.1
----------------------------------------------------------
Properly Operated 3.4
----------------------------------------------------------
Recoverable Amount 6.3.4.4
----------------------------------------------------------
Related Services 4.1
----------------------------------------------------------
Risk of Loss 15.1.4
----------------------------------------------------------
Shipment Date 4.1
----------------------------------------------------------
Spacecraft 3.1
----------------------------------------------------------
100
----------------------------------------------------------
Spacecraft Retirement Payment 6.3.3
----------------------------------------------------------
Specified Operational 6.3.1.1
Lifetime
----------------------------------------------------------
Successfully Injected 6.3.1.5
Spacecraft
----------------------------------------------------------
Successfully Operating 6.3.1.2
Payload
----------------------------------------------------------
Successfully Operating 6.3.1.3
Transponder
----------------------------------------------------------
Third Anniversary 6.3.4.3
----------------------------------------------------------
Useful Commercial Life 6.3.1.4
----------------------------------------------------------
Warranty Time Period 16.2
----------------------------------------------------------
101
ARTICLE 41. EFFECTIVE DATE OF CONTRACT
The "Effective Date" of this Amended and Restated Contract No. 98-PAS-001 shall
be 9 March 1998.
102
IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated
Contract No. 98-PAS-001 to become effective upon the date specified in Article
39, herein entitled, "Effective Date of Contract."
XXXXXX SPACE & COMMUNICATIONS COMPANY
SIGNATURE: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
NAME: Xxxxxxx X. Xxxxxxxxx
--------------------------------------
TITLE: VP HSC
-------------------------------------
DATE: March 9, 1998
--------------------------------------
PANAMSAT INTERNATIONAL SYSTEMS, INC.
SIGNATURE: /s/ Xxxxxxxxx Xxxxxxx
---------------------------------
NAME: Xxxxxxxxx Xxxxxxx
--------------------------------------
TITLE: President & Chief Executive Officer
-------------------------------------
DATE: March 9, 1998
--------------------------------------
