EXHIBIT 10.38
AMENDED AND RESTATED
FIXED PRICE CONTRACT
BETWEEN
PANAMSAT CORPORATION
AND
▇▇▇▇▇▇ SPACE & COMMUNICATIONS COMPANY
FOR
PAS 1R & PAS 9 HS702
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 97-HCG-001
TABLE OF CONTENTS
PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS..................................2
ARTICLE 2. ORDER OF PRECEDENCE..........................................3
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES...............4
ARTICLE 4. DELIVERABLES AND SCHEDULE....................................7
ARTICLE 5. PRICE.......................................................12
ARTICLE 6. PAYMENTS....................................................14
ARTICLE 7. SPACECRAFT LAUNCH DATE......................................35
ARTICLE 8. BUYER-FURNISHED ITEMS.......................................37
ARTICLE 9. INSPECTION AND ACCEPTANCE...................................44
ARTICLE 10. ACCESS TO WORK IN PROCESS...................................46
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY............47
ARTICLE 12. EXCUSABLE DELAYS............................................49
ARTICLE 13. AMENDMENTS..................................................51
ARTICLE 14. TERMINATION FOR CONVENIENCE.................................52
ARTICLE 15. TITLE AND RISK OF LOSS......................................56
ARTICLE 16. SPACECRAFT WARRANTY.........................................60
ARTICLE 17. INDEMNIFICATION.............................................62
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE..64
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY..................................66
ARTICLE 20. RIGHTS IN INVENTIONS........................................68
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS................................71
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE..........72
ARTICLE 23. PUBLIC RELEASE OF INFORMATION...............................75
ARTICLE 24. TAXES.......................................................76
ARTICLE 25. GOVERNING LAW...............................................77
ARTICLE 26. TITLES......................................................78
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES......................79
ARTICLE 28. INTEGRATION.................................................81
ARTICLE 29. CHANGES.....................................................82
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES.............................88
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY.............................89
ARTICLE 32. SPACECRAFT STORAGE..........................................90
ARTICLE 33. DISPUTES....................................................91
ARTICLE 34. ASSIGNMENT..................................................94
ARTICLE 35. LIMITATION OF LIABILITY.....................................96
ARTICLE 36. OPTIONS.....................................................97
ARTICLE 37 REPLACEMENT SPACECRAFT .....................................99
ARTICLE 38 LIQUIDATED DAMAGES FOR LATE SHIPMENT ......................101
ARTICLE 39 EFFECTIVE DATE OF CONTRACT.................................104
This AMENDED AND RESTATED FIXED PRICE CONTRACT (the "Contract") is entered into
as of the 15th day of August, 1997, by and between PANAMSAT CORPORATION (herein
called "Buyer"), a Delaware corporation having a place of business at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ SPACE AND
COMMUNICATIONS COMPANY (herein called "Contractor"), a Delaware corporation
having a place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, Buyer (as assignee of ▇▇▇▇▇▇ Communications Galaxy, Inc.)
and Contractor are party to that certain Fixed Price Contract for Galaxy
XIII/XIV HS 702 Spacecraft, Related Services and Documentation (No. 97-HCG-001),
dated May 15, 1997 (the "Galaxy XIII/XIV Contract"), providing for Buyer to
purchase and Contractor to provide communications Spacecraft, Documentation, and
Related Services as therein specified,
WHEREAS, the Galaxy XIII/XIV Contract required the Parties to define
further the specifications and configurations of the Spacecraft to be delivered,
which definition has been established as set forth herein below;
WHEREAS, the Parties now desire to amend and restate the Galaxy
XIII/XIV Contract;
NOW, THEREFORE, the Parties hereby agree to amend and restate the
Galaxy XIII/XIV Contract in its entirety as follows:
1
ARTICLE 1. EXHIBITS AND INCORPORATIONS
The following documents are hereby incorporated and made a part of
this Contract with the same force and effect as though set forth
herein:
1.1 Exhibit A - PAS 1R & PAS 9 Statement of Work - dated August
1997
1.2 Exhibit B - PAS 1R & PAS 9 Spacecraft Specification -
September 1997 for PAS 1R and October 1997 for PAS 9
1.3 Exhibit C - PAS 1R & PAS 9 Spacecraft Integration Test Plan
- August 1997
1.4 Exhibit D - PAS 1R & PAS 9 Product Assurance Plan - dated
August 1997
1.5 Exhibit E - Certain Documentation - dated August 1997
1.6 Exhibit F - Maximum Termination Liability - dated October
1997.
1.7 Exhibit G - Optional Spacecraft Satellite Payment Plan -
dated October 1997.
1.8 Exhibit H - Replacement Spacecraft Payment Plan - dated
October 1997.
1.9 Exhibit I - List of Agreed Exhibit Changes - dated October
1997
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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."
3
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 two (2) HS702 type Spacecraft for PAS 1R
and PAS 9 (hereinafter referred to as "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
(in the case of Exhibit B, as completed pursuant to
Paragraph 3.7 and 8.7).
3.2 The Parties agree that [**********************************
**********************************************************
***********************].
3.3 All materials and services specified in Exhibit A, "PAS 1R
& PAS 9 Statement of Work," shall meet the requirements of
Exhibit B, entitled "PAS 1R & PAS 9 Spacecraft
Specification" as such Exhibit is completed in accordance
with Paragraphs 3.7 and 8.7.
3.4 If Contractor has not made delivery [**********************
******* ***************] or if, prior to the Launch Date,
[*********************************] Buyer at its election
may:
[*********************************************************
**********************************************************
***************************************************]
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confidential treatment.
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Any such election shall be made by Buyer in writing.
In either case (a) or (b) above,
[*************************************************
*************************************]
3.5 [**********************************************************
****************************************] in accordance
with: (i) current directives and instructions in the ▇▇▇▇▇▇
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).
3.6 Spacecraft, Documentation and Related Services described
above shall be delivered to Buyer at the indicated
locations on the dates set forth in Article 4 entitled,
"Deliverables and Schedule" herein.
3.7 Contractor and Buyer shall complete Exhibit A and Exhibit B
to specify the complete Statement of Work and Spacecraft
Specifications for PAS 1R and PAS 9 (except for those
specifications to be provided pursuant to Paragraph 8.7) by
October 31, 1997 consistent with the parameters set forth in
the forms of Exhibit A and Exhibit B initially attached
hereto and consistent with the agreement of the parties to
make certain changes, attached hereto as Exhibit I, "List of
Agreed Exhibit Changes." In addition, Contractor and Buyer
agrees
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that the completed Spacecraft Specification for PAS 9 shall
be substantially similar to the Spacecraft Specification
for PAS IR, except for differences attributable to the
difference in their respective configurations.
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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:
------------------------------------------ ---------------------------------------- -----------------------------------------
Location of Shipment,
Date of Shipment, Delivery Delivery or
Deliverable(s) or Performance Performance
------------------------------------------ ---------------------------------------- -----------------------------------------
o Shipped from Contractor's facility.
1A. One PAS 1R Spacecraft May 15, 1999/1/ o Delivery Site at Ariane facility,
("PAS 1R") ("Shipment Date") Kourou, French Guyana (subject to
change pursuant to Paragraph 4.2.)
------------------------------------------ ---------------------------------------- -----------------------------------------
o Shipped from Contractor's facility.
1B. One PAS 9 Spacecraft ("PAS 9") August 15, 1999/1/ o Delivery Site at Baikonur
("Shipment Date") Cosmodrome, Kazakhstan (subject to
change pursuant to Paragraph 4.2.)
------------------------------------------ ---------------------------------------- -----------------------------------------
o Performance Site to be determined
2A. Launch Support, Mission In Accordance with Exhibit A pursuant to Paragraph 4.2.
Operations and In-Orbit Testing o Fillmore, California
for PAS 1R ("Related Services") o Castle Rock, Colorado
o El Segundo, California
------------------------------------------ ---------------------------------------- -----------------------------------------
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o Performance Site to be determined
2B. Launch Support, Mission In Accordance with Exhibit A pursuant to Paragraph 4.2.
Operations and In-Orbit Testing o Fillmore, California
for PAS 9 ("Related Services") o Castle Rock, Colorado
o El Segundo, California
------------------------------------------ ---------------------------------------- -----------------------------------------
------------------------------------------ ---------------------------------------- -----------------------------------------
3A. Documentation for PAS 1R In Accordance with Exhibit A ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
("▇▇▇▇▇▇▇▇▇▇▇▇▇") ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
------------------------------------------ ---------------------------------------- -----------------------------------------
------------------------------------------ ---------------------------------------- -----------------------------------------
3B. Documentation for PAS 9 In Accordance with Exhibit A ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
("▇▇▇▇▇▇▇▇▇▇▇▇▇") ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
------------------------------------------ ---------------------------------------- -----------------------------------------
/1/ Contractor warrants that the Shipment Date will support a launch of
the Spacecraft thirty (30) days after the Shipment Date. [*************
*************].
[***] 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 designation for PAS 1R is
an Ariane launch vehicle. The initial launch vehicle
designation for PAS 9 is a Proton launch vehicle.
Buyer may change the designation of each
Spacecraft's launch vehicle at any time on or before
[********] prior to the scheduled Shipment Date for
such Spacecraft. If, subsequent to such time, Buyer
requests a change in the Launch Site or Approved
Storage Facility for such Spacecraft, such request
shall be dealt with as a Change Order Request of
Buyer under Article 29.
4.2.2 Buyer shall pay the costs of delivering the
Spacecraft to the Delivery Site, which costs are
included in the Contract Price.
4.3 The Contractor will arrange transportation required for
Items 1A and 1B, 2A and 2B, and 3A and 3B above. With
respect to Deliverable Items 1A and 1B and 2A and 2B, in
the event that a Sea Launch Vehicle is used with respect to
either Spacecraft, Contractor shall support a launch of the
Spacecraft fifty (50) days after the Shipment Date and the
following allocation of transportation duties for such
Spacecraft shall apply:
Such Spacecraft will be mated with a Sea Launch
Zenit Vehicle (the "Vehicle") at the Sea Launch,
L.P.facilities, Port of Long Beach (the "Integration
Facility"). The Parties contemplate that such mated
Spacecraft, associated equipment and Contractor
personnel necessary to assist in the monitoring and
control of such Spacecraft will be transported by
Sea Launch, L.P. Command Ship (the "Ship") at the
expense of Sea Launch, L.P. from the Integration
Facility to the Launch Site in the vicinity of the
Christmas Islands (the "Launch Site"). Contractor
may
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also utilize the Ship at Sea Launch L.P.'s expense
for the transportation of other related Contractor
personnel when accommodations are available and such
accommodations do not interfere with other Sea
Launch, L.P. commitments for the launch of such
Spacecraft.
4.3.1 If such Spacecraft fails to conform to the
warranty provisions set forth in Article 15
and: (i) such mated Spacecraft requires
testing, maintenance, replacement and/or
corrective actions at the Launch Site or (ii)
return to the Integration Facility and/or the
El Segundo Plant Site is necessary to
accomplish such actions, Contractor shall have
responsibility and liability as follows:
4.3.1.1 If Spacecraft warranty actions can be
performed at the Launch Site, Contractor
shall be responsible and liable for
[****************
**************************************] (as
each such term is defined in Article 24 of
this Contract) [**************************
****************] to the warranty provisions
of this Contract.
4.3.1.2 If return of the Spacecraft to the
Integration Facility and/or Plant Site is
necessary for such warranty actions,
Contractor shall be liable to Buyer in
[*****************************
**********************************] (as each
such term is defined in Article 24 of this
Contract) [****************************].
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4.4 [****] shall be responsible for obtaining and maintaining:
(i) all U.S. Government export licenses to enable export of
each 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 Spacecraft, Documentation and Related Services
shall be as follows:
(a) For PAS 1R, [****************************************
**** ********************];
(b) For PAS 9, *******************************************
********************].
5.2 Buyer shall pay Contractor the Contract Price stated in
Paragraph 5.1 above in accordance with Article 6, Paragraph
6.2 of this Contract.
5.3 The Contract Price for each Spacecraft identified in
Paragraph 5.1 are contingent upon the utilization of the
launch vehicles initially designated for such Spacecraft in
Paragraph 4.2.1. If Buyer changes the designated launch
vehicle for a Spacecraft in accordance with Paragraph 4.2.1
(as opposed to Article 29), the Contract Price for the
applicable Spacecraft shall be adjusted in accordance with
the following table:
Table 5.3.1
Adjustment to Contract Price
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Launch Vehicle PAS 1R PAS 9
--------------------------------------------------------------------------------
Sea Launch [******] [*******]
--------------------------------------------------------------------------------
Ariane N/A [*******]
--------------------------------------------------------------------------------
Proton [*******] N/A
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5.4 Any adjustment to the Contract Price of a Spacecraft 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.
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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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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
upon definition of all Final Specifications.
Each Payload shall be deemed to be
Successfully Operating if at
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least that number of Transponders that is
one more than one-half of the total number
of Transponders within such Payload are
Successfully Operating Transponders (as
defined below).
6.3.1.3 "Successfully Operating Transponder". A
Successfully Operating Transponder is a
Transponder which meets either or both of
the following two criteria:
(a) The Transponder meets or exceeds the
performance specifications set forth in
Exhibit B. For the avoidance of doubt, if
the Spacecraft is placed into inclined
orbit, then the Transponders shall be deemed
not to meet the criteria stated in this
Paragraph 6.3.1.3(a) at such time as the
Spacecraft would have ceased to have a
Useful Commercial Life, (as mutually
determined by the Parties) had it not been
placed in such an orbit.
(b) The Transponder, while not meeting or
exceeding the performance specifications,
provides Buyer with no material loss in its
commercial value.
A Transponder shall also be deemed to be a
Successfully Operating Transponder if it
meets the performance specifications through
use of any redundant or spare equipment.
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
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board the Spacecraft only to eject the
Spacecraft from its geostationary orbital
location or (ii) the date on which at least
one-half of the Transponders on each Payload
are not Successfully Operating Transponders.
6.3.1.5 "Successfully Injected Spacecraft". The
Launched Spacecraft shall be deemed to be a
Successfully Injected Spacecraft if:
(a) The transfer orbit/spacecraft attitude meets
the following required criteria:
(1) Perigee altitude error is less than or
equal to +/-3 sigma;
(2) Apogee Altitude error is less than
or equal to +/-3 sigma;
(3) Inclination error is less than or equal
to +/-3 sigma;
(4) Argument of perigee error is less
than or equal to +/-3 sigma; and
(5) The Spacecraft has been separated with
attitude rate errors of less than or equal
to +/-3 sigma and
(b) The Spacecraft has not suffered physical
damage which resulted from Launch Vehicle
malfunction.
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
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actuals of the Spacecraft, existing at
the time of the operational hand-off of the
Spacecraft to Contractor from the Launch
Vehicle provider. If the attained transfer
orbit/Spacecraft attitude does not meet the
criteria stated in this Section, but the
Calculated Operational Lifetime is greater than
or equal to the Specified Operational Lifetime
for the Spacecraft, then the Spacecraft shall
be deemed to have been a Successfully Injected
Spacecraft, If, on the other hand, the attained
transfer orbit/Spacecraft attitude does not
meet the criteria stated above, and the
Calculated Operational Lifetime is less than
the Specified Operational Lifetime, then the
Spacecraft shall be deemed not 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 (ii)
[*******************]
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6.3.1.7 "Commencement Date". The Commencement Date
shall be the date on which Buyer receives
written certification from Contractor that,
based upon the results of completed in-orbit
performance tests, at least one Payload is a
Successfully Operating Payload.
6.3.2 Buyer shall pay to Contractor the Incentives
Obligations and the Change Order Profit Component
(if applicable), as follows:
6.3.2.1 Incentives Obligations and Change Order
Profit Component. Subject to Section 6.3.2.3
through 6.3.2.6, Buyer shall be obligated to
pay to Contractor the Incentives Obligation
and any Change Order Profit Component (if
applicable), as follows: Buyer shall pay
Contractor 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 PAS 1R 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 [TBD] (the "Nominal Payment"). If
the Incentives Interest Rate is less than
[********************] for any given month,
the
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Incentives Obligations payment will be less
than the Nominal Payment. In such
circumstances, the amount of each month's
payment will be calculated on a net present
value basis to the date of the last month's
payment using the remaining unpaid principal
as the new principal, the Incentives
Interest Rate, and a term equal to the
number of months remaining in the Incentives
period. 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
Schedule 6.3.2.1.
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 ▇▇▇▇▇▇ during the
"Transfer Period" (defined as the period
from separation of the Launch Vehicle
through on-station acquisition), then,
subject to Section
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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 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
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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,
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
23
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 the other
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
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
24
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 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
25
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 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.
26
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 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 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
27
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 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
Satellite 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 Satellite to
the fifth anniversary
28
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 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 delay 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
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29
"Recoverable Amount(s)") shall become
immediately due and payable upon the date of
such Launch delay. 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 delay, 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 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.
6.4 Contractor shall not be obligated to deliver a 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 6.10
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
30
make shipment as soon as practicable and no later than
sixteen (16) weeks after payment by Buyer of such
Delinquent Payments. Buyer will be responsible for and will
pay to Contractor any reasonable costs and [***] profit on
such costs that Contractor may incur as a result of a delay
in delivery due to Buyer's Delinquent Payments.
Notwithstanding the foregoing, this Section 6.4 shall not
relieve Contractor of its obligation to deliver a
Spacecraft, and no "Delinquent Payment" shall be deemed to
have occurred, due to any non-payment by Buyer on account
of an alleged breach by Contractor or other dispute as to
such payment. 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 Payment Plans of
Paragraphs 6.3.1 and 6.3.2. Contractor shall
submit one (1) original invoice for each
Spacecraft in each instance to:
PanAmSat Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: Accounts Payable - ▇▇▇▇ ▇▇▇▇▇▇
6.5.2 Invoice amounts, as specified in Paragraph 6.3,
provide for ▇▇▇▇▇▇▇▇ to
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be submitted by the 15th day of each month and
shall be paid by Buyer within thirty (30) days
upon receipt of the invoice by Buyer.
6.6 Late Payments
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 Semester. A six (6) month period of time
---------------
in which a launch will occur, the first day of
which shall be thirty (30) days after the
Delivery Date under Section 4.1 herein (fifty
(50) days after Delivery Date if a Sea Launch is
utilized).
7.1.2 Launch Period. A ninety (90) day period of time
-------------
within a launch Semester during which a launch
will be scheduled to occur as shall be notified
by Buyer to Contractor.
7.1.3 Launch Slot Definition. A thirty (30) day period
----------------------
of time within a Launch Period during which a
Launch will occur. The Launch Slot within the
Launch Period shall be notified by Buyer to
Contractor not later than one (1) year prior to
the first day of the applicable Launch Period
and, once established, shall become an express
term of this Contract.
7.1.4 Launch Date Defined. The calendar date within the
-------------------
Launch Slot during which a Launch will occur. The
Launch Date within the Launch Slot 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.
7.1.5 Launch Window Definition. 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.
7.1.6 Adjustment of dates. The time periods as
-------------------
delineated in Sections 7.1.2 through 7.1.5 shall
be adjusted to reflect applicable launch provider
33
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 each 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.
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 and if a Sea Launch is provided,
between the Integration Facility (Port of Long
Beach) and the Launch Site (vicinity of Christmas
Islands) unless Article 4, Paragraph 4.2.1
conditions apply (ii) storage of 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 6 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 any
35
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 [************].
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 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;
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36
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.
8.6 Notwithstanding the provisions of Article 29, at any time
on or before [************] Buyer may make changes to the
PAS 9 configuration/specifications as follows:
[*********************************************************
***************************************]
[******]
[************]
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-------------------------------------------------------------------------------
[*************] [********]
-------------------------------------------------------------------------------
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confidential treatment.
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--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
[*************] [***********]
--------------------------------------------------------------------------------
8.6.2 Changes other than those specified in [*******]
shall result in an adjustment to the PAS 9 Contract
Price [*********************
****************************].
8.6.3 Any adjustment to the Contract Price of a Spacecraft
under Paragraphs 8.6.1 or 8.6.2 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.
8.7 Buyer shall provide Contractor with the following payload
definitions to Contractor in accordance with the following
schedule, and once all such information has been provided
for a Spacecraft, Exhibit B, "PAS 1R & PAS 9 Interim
Spacecraft Specification", shall be completed and
thereafter shall be deemed the final specifications of such
Spacecraft (subject to change in accordance with the
provisions of this Contract):
[********]
[*****************]
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39
-------------------------------------------------------------------------------
[********] [***] [*****]
-------------------------------------------------------------------------------
[********] [***] [*****]
-------------------------------------------------------------------------------
[********] [***] [*****]
-------------------------------------------------------------------------------
[********] [***] [*****]
-------------------------------------------------------------------------------
[********] [***] [*****]
-------------------------------------------------------------------------------
[*********************************************]
Any changes to the payload requested by Buyer after the
applicable decision dates identified in Table 8.7.1 shall
be deemed to be a "Change Order Request" under Paragraph
29.3.
8.8 Contractor shall reasonably and promptly respond to Buyer's
requests for information and assistance in making the
configuration decisions required by Paragraph 8.7.
8.9 In the event that (i) Buyer does not provide Contractor
with the required information as to a Spacecraft in
accordance with Table 8.7.1 and (ii) Contractor has
complied with its obligations under Paragraph 8.8, then
with respect to such Spacecraft:
8.9.1 In the event of cumulative delays by Buyer of
[********] or less, the Shipment Date and any
remaining configuration decision dates for such
Spacecraft in Table 8.7.1 shall each be delayed
[*******]
8.9.2 In the event of cumulative delays by Buyer in excess
of [******* ******] and not longer than
[****************] (i) the Shipment Date and any
remaining configuration decision dates for such
Spacecraft in Table 8.7.1 shall each be delayed
[************** ******] of such delay in excess of
[*****] and (ii) Buyer [***** *************] for
cumulative delay beyond [***********] or, in
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40
the case of delays of [****************************
********************************************]
for the delay in such decisions, to be calculated
[*****************************] provided that the
maximum period of time for which Buyer shall
[***************] under this Paragraph 8.9.2 shall
be [*****************************] under Paragraph
8.9.1 per Spacecraft;
8.9.3 In the event of cumulative delays by Buyer in excess
of [******* ***********] such delays shall be deemed
to be a Change Order Request by Buyer for a stop
work order under Paragraph 29.3; or
8.9.4 In the event of cumulative delays by Buyer in excess
of [******** **********] Buyer shall be deemed to
have terminated this Contract pursuant to Paragraph
14.1 with respect to the applicable Spacecraft, and
Buyer's termination liability under Paragraph 14.1
shall be calculated as of the date that Buyer's
delay aggregated [**********************].
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ARTICLE 9. INSPECTION AND ACCEPTANCE
9.1 Inspection of all Hardware, documentation and Contractor's
services provided hereunder shall take place in accordance
with the terms of Article 10, entitled "Access to Work in
Process," herein.
9.2 Preliminary Acceptance of a 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, PAS 1R &
PAS 9 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.
9.3 Final Acceptance of a 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 ▇▇▇▇▇▇
Communications Galaxy Launch Insurance Contract or
successor contract), which occurs at or after 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,
42
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 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 a
Spacecraft or other deliverable that does not
perform to the specifications of this Contract.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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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 reasonable effort 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
confidential treatment.
44
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 with respect
to a particular Spacecraft to Contractor if: (i)
Contractor fails
[*********************************************] as
confirmed in writing by the Contractor's and Buyer's
Senior Executives and such failure may result in a delay
in delivery of more than [*****] or (ii) the delivery of
such Spacecraft or Contractor's performance of any
material obligation under the Contract has been delayed
due to the primary fault of the Contractor for more than
[********] Subsequent to the issuance of said notice,
the Buyer may terminate this Contract with respect to
such Spacecraft and thereafter elect remedies as
identified in Paragraph 11.2 below.
11.2 If Buyer terminates this Contract, in whole or in part,
as provided in Paragraph 11.1 herein, Buyer, at its sole
option, shall either: (i) take title to all deliverable
hardware, all hardware in process which ultimately would
have been deliverable by Contractor and all drawings and
data produced by Contractor, the cost of which has been
charged or becomes chargeable to any work terminated
plus all reasonable reprocurement costs up to a maximum
amount per Spacecraft of: (a) [**************] in the
event of a termination of this Contract solely with
respect to Documentation and/or Related Services for
such Spacecraft or (b) [*** **********] with respect to
a complete termination of the Contract with respect to
such Spacecraft; or (ii) receive a refund of all
payments submitted to Contractor by the Buyer for
performance of this Contract for the portion terminated
by Buyer, plus [*********************] and Contractor
shall retain title and
[***] Filed separately with the Commission pursuant to a request for
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possession to all terminated Hardware which ultimately
would have been deliverable by Contractor. Contractor
shall continue the performance of this Contract to the
extent not terminated under the provisions of this
Article.
11.3 Notwithstanding the other provisions of this Article,
there will be no termination for default after
Intentional Ignition of the Launch Vehicle for the
applicable Spacecraft.
11.4 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 12.4, as the case may
be.
11.5 Except as otherwise provided in the Contract, the rights
and remedies of the Parties provided in this Article
shall be in lieu of any other rights and remedies
provided by law or in equity in the event Contractor or
Buyer fails to meet its obligations under this Contract.
Buyer shall have no other rights or remedies for late
delivery of a Spacecraft, Documentation and Related
Services under this Contract except for those rights and
remedies expressly provided for in this Contract.
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ARTICLE 12. EXCUSABLE DELAYS
12.1 If either Party or a subcontractor of either Party is
delayed by act of God, or of the public enemy, fire,
flood, earthquake, epidemic, quarantine restriction,
strike, walkout, freight embargo, or any other event
which is beyond their control or does not arise from the
acts or omissions of either Party or its respective
subcontractors, said delay shall constitute an excusable
delay ("Force Majeure Events"). In the event of an
excusable delay, there shall be an equitable adjustment
to the time of delivery and/or performance stated in
this Contract. The affected Party shall give notice in
writing to the other Party within 10 working days that
an excusable delay condition exists after learning of
such delay. Such notification shall include the cause of
the excusable delay, the expected length of the
excusable delay, and alternate plans to mitigate the
effect of the excusable delay.
12.2 If the affected Party, as defined in Paragraph 12.1
above, requests or experiences, on a cumulative basis,
excusable delay(s) greater than [********] the Parties
shall enter into good faith negotiations to develop a
mutual course of action and/or an equitable adjustment
to the affected terms of this Contract.
12.3 Notwithstanding the foregoing, if the Launch Date for a
particular 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.
12.4 Notwithstanding anything herein to the contrary, in
the event that a Force
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Majeure Event occurs and continues to delay or prevent
performance by Contractor of its obligations as to
either or both Spacecraft for a period of twelve (12)
months or longer from the initial occurrence of such
Force Majeure Event, then Buyer shall have the right to
terminate this Contract with respect to the affected
Spacecraft upon thirty (30) days written notice. In the
event of a termination under this Paragraph 12.4, Buyer
shall be entitled to a refund of all payments made to
Contractor with respect to the affected Spacecraft, and
Contractor shall retain title to all Deliverables
produced by Contractor under this Contract with respect
to the affected Spacecraft.
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ARTICLE 13. AMENDMENTS
The terms and provisions of this Contract shall not be amended or
modified without specific written provision to that effect, signed by
the Authorized Representative(s) of both Parties. These Authorized
Representative(s) are identified in Article 27, "Notices and
Authorized Representative(s)." No oral statement of any person shall
in any manner or degree modify or otherwise affect the terms and
provisions of this Contract.
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ARTICLE 14. TERMINATION FOR CONVENIENCE
14.1 Buyer may terminate all or any portion of the work to be
performed pursuant to this Contract with respect to one or
both of the Spacecraft 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 14.6 below) expended by Contractor
for all work done up to the date of termination,
settlements with subcontractors for work performed prior to
termination, and Contractor's reasonable costs related to
termination which would 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. Buyer shall pay the unpaid balance of such
termination liability within thirty (30) days of Buyer's
receipt of certification of Contractor's costs. In the
event that Buyer has paid to Contractor any amount in
excess of such termination liability, then Contractor shall
refund such excess amount to Buyer within thirty (30) days
of certification of costs. In no event shall the
termination liability 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, 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 14.5 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
[***] Filed separately with the Commission pursuant to a request for
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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 with respect to a
Spacecraft, the Contract Price for such Spacecraft shall be
adjusted accordingly.
14.4 Notwithstanding any other provision in this Contract, in
the event that Buyer terminates PAS 1R for convenience, the
Contract Price of PAS 9 shall be adjusted in accordance
with the following schedule of maximum increases, with any
such increase to be paid in proportion to the remaining
payments in the PAS 9 Payment Plan in Table 6.2.2:
[**********]
[************************]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
[********] [********]
The parties agree that: (i) the amounts in Table 14.4.1 are
the maximum price increase in the event of a termination at
the beginning of each such three month period; (ii) the
actual increase in the PAS 9 Contract Price will be the sum
of (a) those non-recurring costs mutually beneficial to
both PAS 1R and PAS 9, allocated to the PAS 1R Contract
Price for convenience purposes
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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only, and not already completed by Contractor or otherwise
paid by Buyer (whether through the payment plan or
termination liability payments), plus (b) recurring costs
related to managerial labor common to both the PAS 1R and
PAS 9 programs; and (iii) the actual amount of such costs
will decrease over the course of each three-month period.
Buyer may request to have an independent audit performed of
such costs. Such audit shall be at the expense of Buyer
unless such audit shows Contractor to have overstated its
costs, in which event Contractor shall bear the audit
expense and the increase to the PAS 9 Contract Price will
be adjusted accordingly.
14.5 At Buyer's request, Contractor shall use reasonable best
efforts to identify an alternate use (i.e. sale to third
Parties and/or internal utilization) for any Hardware
affected by a termination under this Article 14, the
Contractor shall submit a proposal to Buyer, which, at a
minimum, defines (i) the applicable Hardware, (ii) the
intended use of the Hardware, (iii) the original
acquisition cost/value of the applicable Hardware, as
available, and (iv) the sale/transfer payment(s) to be
received by Buyer. Contractor shall use its reasonable best
efforts to obtain fair market value for the applicable
Hardware. Buyer, at its sole option, may accept or reject
the proposal submitted by Contractor. In the event that
Buyer accepts the proposal submitted by Contractor, payment
by Contractor to Buyer of the agreed upon payment value
shall occur within thirty (30) days of the sale/transfer of
the applicable Hardware, or such other payment period as
mutually accepted between the Parties. If the Contractor's
proposal is rejected by Buyer or if Contractor is unable to
find any alternative use within two (2) years of being
requested to do so, then Title to the applicable Hardware
shall be vested as stated in Paragraph 14.2 above.
14.6 As used in this Article 14, Contractor's "Costs" shall mean
costs actually incurred by Contractor in performing its
obligations hereunder (including
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G&A costs not to exceed [*******] of such costs) all such
costs to be determined in accordance with Contractor's
normal accounting practices. Contractor shall provide to
Buyer an invoice certified by a financial officer of the
company stating 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. Such audit shall be at Buyer's
expense unless such audit shows Contractor's costs to have
been overstated (in which event Contractor shall bear the
audit expense). Such audit shall constitute a final
determination of actual costs notwithstanding the provision
of Article 33; provided that, if the costs determined by
such report exceed the amount of Contractor's termination
claim, Buyer shall only be obliged to pay the amount of
Contractor's termination claim.
14.7 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.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 15. TITLE AND RISK OF LOSS
15.1 Title and risk of loss or damage in respect of all items to
be delivered under this Contract shall pass from Contractor
to Buyer as follows:
15.1.1 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 ▇▇▇▇▇▇ Communications
Galaxy 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 as defined in the
applicable ▇▇▇▇▇▇ Communications Galaxy
54
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.
(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
55
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-payment of premium.
(iii) The Contractor may also acquire and maintain,
at its own
56
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.
57
ARTICLE 16. SPACECRAFT WARRANTY
16.1 Contractor warrants that a 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 a 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.
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 a Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2) of the
launch vehicle.
[***] Filed separately with the Commission pursuant to a request for
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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.
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ARTICLE 17. INDEMNIFICATION
17.1 Each Party shall indemnify and hold the other and/or all
its officers, agents, servants, subsidiaries, affiliates,
parent companies and employees, or any of them, harmless
from any liability or expense in connection herewith on
account of damage to property (excepting other Spacecraft
in flight) and injuries, including death, to all persons
including but not limited to employees of the Parties, and
their subcontractors, and of all other persons performing
any part of the work hereunder, arising from any occurrence
caused by 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 a Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2), and
Buyer shall obtain waivers of subrogation rights from
Buyer's insurers against Contractor, and affiliates and
subcontractors of Contractor.
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ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE
18.1 If a Spacecraft is not launched within six (6) months after
its Preliminary Acceptance per Article 9, entitled
"Inspection and Acceptance," and is subsequently ordered to
be launched within [********] following its Preliminary
Acceptance, it is agreed that such Spacecraft shall be
returned at Contractor's option at Contractor's expense, to
Contractor's facility for inspection and refurbishment. Any
inspection and refurbishment undertaken by Contractor to
meet the requirements of Article 16 entitled, "Spacecraft
Warranty," shall be at Contractor's expense, including
Spacecraft transit insurance.
18.2 If a Spacecraft is not launched within six (6) months after
its Preliminary Acceptance and is subsequently ordered to
be launched later than [********] following its
Preliminary Acceptance, it is agreed that such Spacecraft
shall be returned, at 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 a Spacecraft is returned to Contractor's facility for
inspection and refurbishment per the terms of Paragraph
18.2 above, all charges to return such Spacecraft to the
Launch Site shall be borne by Buyer.
18.4 If a Spacecraft has not been launched within [********]
after its preliminary Acceptance, neither Party shall be
further obligated to the other with respect to such
Spacecraft. Disposition of such Spacecraft shall be at the
option of Buyer with costs of such disposition to be borne
by Buyer.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 19. PATENT/COPYRIGHT INDEMNITY
19.1 Contractor shall indemnify and hold Buyer harmless against
any liability or expense as a result of claims, actions, or
proceedings against Buyer alleging the infringement of any
trademarks, United States Copyright or mask work, United
States Letters Patent, any other intellectual property
rights, by any article fabricated by Contractor and
delivered to Buyer pursuant to this Contract as set forth
below.
19.2 Contractor agrees to defend at its own expense any claim,
action, proceeding or request for royalty payments or any
claim for equitable relief or damages against Buyer, its
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
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
62
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.
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ARTICLE 20. RIGHTS IN INVENTIONS
20.1 As used in this Contract, "Program Invention" shall mean
any invention, discovery or improvement conceived of and
first reduced to practice in the performance of Work under
this Contract. Information relating to 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 a 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 Inventions, that is, inventions
conceived jointly by one or more employees of both
Parties hereto, each Party shall have an equal,
undivided one-half interest in and to such joint
Inventions, as well as in and to patent applications
and patents thereon in all countries.
20.3.2 In the case of such joint Inventions, Contractor
shall have the first right of election to file
patent applications in any country, and Buyer shall
have a second right of election. Each Party in turn
shall make its election at the earliest practicable
time, and shall notify the other Party of its
decision.
20.3.3 The expenses for preparing, filing and securing each
joint Invention patent application, and for issuance
of the respective patent shall be borne by the Party
which prepares and files the
64
application. The other Party shall furnish the
filing Party with all documents or other assistance
that may be necessary for the filing and prosecution
of each application. Where such joint Invention
application for patent is filed by either Party in a
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 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
65
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.
66
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.
67
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 without the default of the
receiving Party; or
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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 copyright legend is
retained on the material.
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ARTICLE 23. PUBLIC RELEASE OF INFORMATION
Neither Party shall issue news releases, articles, brochures,
advertisements, prepared speeches, and other information releases
concerning the work performed or to be performed under this Contract
by Contractor or its subcontractors, or any employee or consultant of
either, which contains new information not previously disclosed as
permitted under the Contract, without first obtaining the prior
written approval of the other Party concerning the content and timing
of such release which approval shall not be unreasonably withheld.
The initiating Party shall provide such releases to the other Party
for review within a reasonable time prior to the desired release date
and the other Party shall be required to respond within said time
period.
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. If Sea Launch, L. P. is the
Launch Vehicle Provider for any such launch, Contractor
shall be relieved of responsibility for any taxes and/or
port fees associated with the Sea Launch Zenit Vehicle
except as provided by Article 4, Paragraph 4.3.1.2 of the
Contract.
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 Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President and
Chief Technology Officer
cc: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Counsel
and
cc: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Sing
PanAmSat Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Authorized Representative(s): ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive Officer
2. ▇▇▇▇▇▇ Space and Communications Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇. ▇▇▇, M/S A374
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Contracts Manager
cc: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Program Manager
▇▇. ▇▇▇▇▇▇▇ ▇. Ballhaus, Assistant Program Manager
74
Authorized Representative(s): ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
or in each case as a Party may direct by notice to the other Party in
accordance with this Article 27.
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ARTICLE 28. INTEGRATION
This document, with Exhibits, constitutes the entire understanding
between the Parties with respect to the subject matter of this
Contract and supersedes all previous oral and/or written
negotiations, commitments, and understandings of the Parties,
including without limitation the versions of the Galaxy XIII/XIV
Contract dated May 9, 1997 and May 15, 1997.
76
ARTICLE 29. CHANGES
Subject to Paragraphs 4.2.1, 5.3, 8.6 and 8.7:
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 a Spacecraft, change the method of shipment
or packing, or the place or time of delivery, or will
affect any other requirement of this Contract, shall be
submitted in writing ("Change Proposal") to Buyer sixty
(60) days prior to the proposed effective date of the
change. If such Contractor requested change causes an
increase or decrease in the total price or other terms of
this Contract, Contractor shall submit a proposal to Buyer
detailing the impact of such change.
29.2 Buyer shall notify Contractor in writing within thirty (30)
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 can not be achieved within a
reasonable period of time under the circumstances, Buyer
may make a qualified acceptance of the Change Proposal,
accepting
77
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 a Spacecraft, change the method of
shipment or packing, or the place or time of delivery, or
will affect any other requirement of this Contract.
Contractor shall respond to such Change Order Request in
writing to Buyer within thirty (30) days after such
request. If Contractor determines that the change requested
by Buyer is feasible and can be made at no additional cost
and with no associated delays, then Contractor shall so
notify, Buyer and Contractor shall commence implementing
such change. If the Contractor determines otherwise, then,
Contractor shall submit to Buyer, a proposal detailing the
impact of such change and the price adjustment (downward or
upward), if any, (the "Change Order Offer"). Buyer shall
notify Contractor in writing, within thirty (30) days after
receipt of Contractor's Change Order Offer, whether or not
it agrees with and accepts Contractor's Change Order Offer.
If Buyer agrees with and accepts Contractor's Change Order
Offer, Contractor shall immediately proceed with
78
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."
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
79
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, 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-702
Spacecraft design, then Contractor shall provide reports to
Buyer concerning such improvements. Buyer may request that
any improvement to the HS-702 Spacecraft design reported to
Buyer be incorporated into the Spacecraft, and such
improvements shall be considered a Change and shall be
dealt with in
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
80
accordance with the Change Order process in this Article
29. The foregoing shall not apply to any changes to the
generic HS-702 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-702 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.
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 14.5 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 and Sea Launch launch
vehicles) existing at the time of the "Delivery Site
Designation Date" as defined in 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.
81
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.
82
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 a Galaxy 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 the PAS 1R
and/or PAS 9 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 PAS 1R
and/or PAS 9 Spacecraft (for which they have control or
privity of Contract with hereunder) have executed said
Inter-Party Waiver of Liability.
83
ARTICLE 32. SPACECRAFT STORAGE
32.1 Buyer may, at its option, order Contractor to store, in
accordance with the provisions of Exhibit B PAS 1R & PAS 9
Spacecraft Specification, each 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 said Spacecraft. Contractor's price
for providing storage shall be provided to Buyer in
accordance with Article 29, "Changes," (and such price
shall be deemed a "Change Proposal" for purposes of Article
29) within 30 days after receipt of Buyer's notice to store
such Spacecraft and Contractor shall provide storage
facilities. If such storage facilities are unavailable,
Contractor and Buyer shall hold discussions to determine a
mutually agreed storage arrangement.
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. In the case of a
Sea Launch, the cost for storage and additional
transportation costs exceeding that required to transport a
Spacecraft to the Port of Long Beach (Integration Facility)
point specified herein, shall be borne by Buyer. These will
be in addition to any charges which become the obligation
of the Buyer per Article 18 herein entitled "Spacecraft Not
Launched Within Six Months After Acceptance."
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ARTICLE 33. DISPUTES
33.1 Disputes
33.1.1 In the event any dispute arises between the
Contractor and the Buyer relating to this Contract,
either Party may give written notice to the other of
its objections and reasons therefore. The Contractor
and Buyer shall consult in an effort to reach a
mutual agreement to resolve such dispute. In the
event a mutual agreement cannot be reached within
fifteen (15) days after receipt of this notice, the
respective positions of the Parties shall be
forwarded to Contractor 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.
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
85
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 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
86
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.
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ARTICLE 34. ASSIGNMENT
34.1 Neither Party shall assign, or transfer this Contract or
any of its rights, duties or obligations thereunder to any
person or entity, in whole or part without the prior
written consent of the other Party except that either Party
may assign or transfer any of its rights, duties or
obligations under this Contract, either in whole or in
part, to its parent company, subsidiary or affiliate./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 that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is
under common control with, the person specified.
88
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.
89
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.
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ARTICLE 36. OPTIONS
36.1 Buyer may, in its sole discretion, exercise on or before 30
June 1998, the Option provisions of this Contract to
request Contractor to deliver to Buyer up to two (2)
additional Spacecraft, hereinafter referred to as PAS 10
and 11. Upon exercise of this Option, Buyer shall make the
first payment of [***] for each Spacecraft ordered. The
configuration and performance of PAS 10 and 11 shall be
"Substantially Similar" to PAS 1R and PAS 9, respectively.
For purposes of this Paragraph 36.1, a satellite shall be
deemed "Substantially Similar" to another satellite if the
total payload power and the size and number of antennae are
the same; provided that the RF amplifier power, antenna
coverage patterns and frequencies in the same band(s)
orbital range and associated technical parameters may be
different; provided, further, that any other change may be
made pursuant to Article 29, entitled "Changes."
36.2 The Contract Price for PAS 10 is [*********************]
The Contract Price for PAS 11 is [***********************]
Payment schedules for PAS 10 and PAS 11 are attached hereto
as Exhibit G.
36.3 Delivery to the Launch Site Integration Facility and/or
Launch Site will be as required to meet the established
Launch Schedule (consistent with the PAS 1R and PAS 9
delivery schedule span).
36.4 The PAS 10 and 11 Option prices provide for the following:
----------------------------------------------------------
(a) Up to two spacecraft substantially similar to PAS 1R
and 9 in configuration and performance
(b) Documentation
(c) Program Management
(d) Insurance up to the Intentional Ignition of Launch
Vehicle
(e) Launch and Mission Operations Services (Baselined
with a Sea Launch Vehicle)
[***] Filed separately with the Commission pursuant to a request for
onfidential treatment.
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("Related Services"). The price of each Optional
Spacecraft includes [********] for launch and
mission support services for launch on a Sea Launch
launch vehicle; if Buyer designates an Ariane or
Proton launch vehicle for a spacecraft, the price of
such spacecraft shall be increased by no more than
(i) [********] in the event of an Ariane launch
vehicle or (ii) [********] in the event of a Proton
launch vehicle, to account for launch and mission
support services.
(f) Storage for a Spacecraft on similar terms as PAS 1R
and PAS 9
(g) The terms of PAS 10 and/or 11 are pursuant to the
terms of this Contract
36.5 In the event that exercise of this Option does not occur on
or prior to the date stated in Paragraph 36.1, this Option
shall expire unless (i) the Parties otherwise agree or (ii)
this Option is superseded by a definitive Spacecraft
Acquisition Contract.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 37. REPLACEMENT SPACECRAFT
Buyer shall have the right to purchase Replacement Spacecraft for one
or both of PAS 1R or PAS 9 in the event that one or both of these
Spacecraft suffers a launch failure (including any total or
constructive total loss that occurs prior to the placement of a
Spacecraft into commercial operations). Each Replacement Spacecraft
shall have the same configuration and performance of the Spacecraft
being replaced. The price for each such Replacement Spacecraft, if
ordered, shall be: (i) [***********************] for the PAS 1R
Replacement Spacecraft and (ii) [***********************] for the PAS
9 Replacement Spacecraft. Such prices include all associated
deliverables and services as specified in this Contract.
Notwithstanding the preceding sentence, each such prices includes
[*******] for launch and mission support services for launch on a Sea
Launch launch vehicle; if Buyer designates an Ariane or Proton launch
vehicle for a spacecraft, the price of such spacecraft shall be
increased by no more than (i) [*********] in the event of an Ariane
launch vehicle or (ii) [**********] in the event of a Proton launch
vehicle, to account for launch and mission support services. Except
as expressly specified in this Article, the terms and conditions of
this Contract shall apply in context to any Replacement Spacecraft
that is ordered under this Article.
A Replacement Spacecraft may be ordered at any time through ninety
(90) days after the launch of the applicable Spacecraft. Unless long
lead items are purchased, as provided below, the Spacecraft shall be
constructed and all associated deliverable provided to support a
launch within eighteen (18) months of the day ordered.
Buyer shall also have the option to require Contractor to purchase
long lead items sufficient to enable Contractor to have Replacement
Spacecraft, which could be configured as either PAS 1R or PAS 9 (to
be specified by Buyer if and when Buyer
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
93
orders the Spacecraft to be completed) and shall be ready to be
launched with the later of eighteen (18) months after a long lead
option is exercised or twelve (12) months after the go ahead is given
by Buyer to complete construction of the Spacecraft. The price for
the long lead items shall be [***********************], of which
[********] is attributable to the Replacement Spacecraft for PAS 1R
and an additional [**********] attributable to the Replacement
Spacecraft for PAS 9. The remaining portion of such Replacement
Spacecraft's Contract Price shall be payable if (and only if) such
Replacement Spacecraft is ordered by Buyer to be completed.
Payment schedules for the eighteen (18) months without long lead
items and long lead item and completion payment options are attached
hereto as Exhibit H.
If Buyer has purchased long lead items, within ninety (90) days of
the successful launch of both PAS 1R and PAS 9, Buyer shall direct
disposition of such long lead items either: (a) to build an identical
Spacecraft (at the same price and schedule as a twelve-month
Replacement Spacecraft); 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 38. LIQUIDATED DAMAGES FOR LATE SHIPMENT
38.1 In the event that the shipment of PAS IR is delayed due to
the fault of Contractor (and/or Contractor's subcontractors
or suppliers) and not shipped on or before the PAS IR
Shipment Date identified under Article 4 (as such date may
be adjusted by mutual agreement of the Parties), Contractor
shall pay to Buyer liquidated damages as follows:
38.1.1 For [**********] of delay, Contractor shall
[****************]
38.1.2 For [************] of delay, Contractor shall [************
*************************]
38.1.3 For [***********] of delay, Contractor shall [*************
***************************]
38.1.4 For [*************] of delay, Contractor shall
[************* **************************************] and
38.1.5 For [************] of delay, Contractor shall
[***************************************************]
38.1.6 In the event of any delay of a partial month, the amounts
specified in Paragraphs [*****************************]
shall be pro rated on a day-for-day manner based upon the
number of days in such month.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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38.2 In the event that the shipment of PAS 9 is delayed due to
the fault of Contractor (and/or Contractor's subcontractors
or suppliers) and not shipped on or before the PAS 9
Shipment Date identified under Article 4 (as such date may
be adjusted by mutual agreement of the Parties), Contractor
shall pay to Buyer liquidated damages as follows:
38.2.1 For [****************************] of delay,
Contractor shall [****************************]
38.2.2 For [****************************] of delay,
commencing on the day after the period specified in
Paragraph 38.2.1, Contractor shall
[*************************************************
********************************]
38.2.3 In the event of any delay of a partial one-month
period, the amounts specified in Paragraph [******]
shall be pro rated on a day-for-day manner based
upon the number of days in such one-month period.
38.3 In addition, in the event that Contractor does not begin
[**************************************] on or before the
date (the "Test Date") that is [***************] prior to
the then-existing Shipment Date, Contractor shall pay to
Buyer liquidated damages in the amount of
[*********************************] for each day that such
testing is delayed past the Test Date, up to a maximum of
[************************] In the event that (i) Contractor
pays to Buyer liquidated damages under this Paragraph 38.3
with respect to a Spacecraft and (ii) Contractor then
completes construction and testing of such Spacecraft in
accordance with this Contract and the Exhibits thereto and
ships the Spacecraft on or before the applicable Shipment
Date, then Buyer shall refund to Contractor the liquidated
damages paid for such Spacecraft.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
96
38.4 Contractor shall pay to Buyer the liquidated damages owed
pursuant to Paragraphs 38.1, 38.2 and 38.3 within thirty
(30) days of invoice from Buyer.
38.5 The Parties understand and agree that the liquidated
damages provided under this Article 38 shall be in lieu of
all other remedies of any kind except for Buyer's rights
and remedies under Articles 11 and 14. The reduction in
Contract Price 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).
38.6 The Parties agree that the provisions of this Article 38
shall apply separately to each Spacecraft. The maximum
reduction in Contract Price under this Article 38 may equal
but shall not exceed
[**************************************] per Spacecraft.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 39. EFFECTIVE DATE OF CONTRACT
The "Effective Date" of this Amended and Restated Contract No. 97-HCG-001
shall be 15, August 1997.
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IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated
Contract No. 97-HCG-001 to become effective upon the date specified in Article
39, herein entitled, "Effective Date of Contract."
▇▇▇▇▇▇ SPACE & COMMUNICATIONS COMPANY
SIGNATURE: ▇.▇. ▇▇▇▇▇▇▇
NAME: G.W. (▇▇▇▇) ▇▇▇▇▇▇▇
TITLE: CBD Ops. Mgr. For President
DATE: 9 October 1997
PANAMSAT CORPORATION
SIGNATURE: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: President and Chief Executive Officer
DATE: 9 October 1997
99