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EXHIBIT 10.5
ORBCOMM SYSTEM PROCUREMENT AGREEMENT
This ORBCOMM System Procurement Agreement (this "AGREEMENT") is made
and entered into as of the 12th day of September, 1995 between ORBCOMM Global,
L.P., a Delaware limited partnership ("ORBCOMM GLOBAL"), and Orbital Sciences
Corporation, a Delaware corporation ("ORBITAL").
WITNESSETH
WHEREAS Orbital, Orbital Communications Corporation ("ORBCOMM"),
Teleglobe Inc. ("TELEGLOBE"), Teleglobe Mobile Partners ("TELEGLOBE MOBILE"),
ORBCOMM Global, ORBCOMM USA, L.P. and ORBCOMM International Partners, L.P. have
entered into agreements for the development, construction, operation and
marketing of a global digital satellite communications system of low-Earth
orbit satellites and certain terrestrial facilities intended to provide two-way
data and message communications and position determination services throughout
the world (the "ORBCOMM SYSTEM") and related activities in connection
therewith; and
WHEREAS the initial phase of the ORBCOMM System consisting of two (2)
satellites, the Satellite Control Center and the Network Control Center
suitable for the two satellite system and the four (4) United States Gateway
Earth Stations has been generally completed, and the parties desire to
terminate the ORBCOMM System, Design, Development and Operations Agreement
dated June 30, 1993 between ORBCOMM Global (formerly known as ORBCOMM
Development) and ORBCOMM, as amended (the "ORBCOMM SYSTEM AGREEMENT") and
incorporate the remaining efforts into this Procurement Agreement; and
WHEREAS ORBCOMM Global desires to contract with Orbital for the
overall design, development, construction, integration, test and operation of
certain assets comprising the second phase of the ORBCOMM System:
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1 - DEFINITIONS
Except as otherwise specifically defined herein, capital terms shall
have the meanings ascribed to such terms in Appendix C attached to the Master
Agreement dated as of June 30, 1993 among Orbital, ORBCOMM, Teleglobe and
Teleglobe Mobile, which Appendix is incorporated herein by reference.
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"ADMINISTRATIVE SERVICES AGREEMENT" shall mean that administrative
service agreement entered into as of the 12th day of September 1995 between
Orbital and ORBCOMM Global.
"SATELLITE NETWORK SOFTWARE" shall mean the software algorithms and
capabilities designed by ORBCOMM Global to be integrated in the Satellites
within the framework of the Interface Specifications relating thereto but shall
not include the software, computer capabilities and design practices relating
to real-time operation of the ORBCOMM System which shall be the responsibility
of Orbital.
"INTERFACE SPECIFICATIONS" shall mean the specifications contained in
the Interface Control Documents for (i) the interface between the Satellites
and the Communication software, (ii) the interface between the Satellites and
the subscriber terminals and (iii) the interface between the Satellites and the
Gateway Earth Stations and, (iv) the interface between the Network Control
Center and the Satellite Control Center.
ARTICLE 2 - SCOPE OF WORK
Consistent with the terms and conditions set forth herein, Orbital
shall furnish the management, labor, facilities and materials required for the
performance by it of the following work (collectively, the "WORK"):
Section 2.1 - Construction of Satellites and Completion of the
Satellite Control Center Efforts. Orbital shall develop, construct and deliver
to ORBCOMM Global, thirty-four (34) Satellites and complete the Satellite
Control Center efforts initiated under the ORBCOMM System Agreement, the whole
in accordance with the Satellite Statement of Work (Exhibit A Part 1A) and the
Satellite Specifications (Exhibit A Part 1B), including on-orbit check-out
support for up to one hundred twenty (120) days after each of the first three
(3) launches of the Satellites.
Section 2.2 - Provision of Launch Vehicle Launch Services. Orbital
shall provide to ORBCOMM Global launch services for twenty-four (24) Satellites
using three (3) Pegasus XL Launch Vehicles in accordance with the Launch
Vehicle Statement of Work and Specifications. On an optional basis, Orbital
shall provide a launch service for an additional plane of eight (8) Satellites
using one (1) additional Pegasus XL Launch Vehicle, in accordance with the
Launch Vehicle Statement of Work and Specifications (Exhibit A Part 2).
On-orbit Check Out support for up to one hundred twenty (120) days after such
optional launch shall be provided in accordance with Section 2.6.
Section 2.3 - Completion of Gateway Earth Station Efforts. Orbital
shall complete the Gateway Earth Station efforts initiated under the ORBCOMM
System Agreement in accordance with the Gateway Earth Station Statement of Work
and the Specifications (Exhibit A Part 3).
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Section 2.4 - Other Documentation. Orbital shall prepare, develop and
submit to ORBCOMM Global on or before the Preliminary Design Review,
preliminary versions of the following documents which shall be reasonably
acceptable to ORBCOMM Global:
(a) the Interface Specifications; and
(b) the Verification and Test Plan, which shall be developed in
accordance with the Satellites, Launch Vehicle and Gateway
Earth Station Specifications and shall include the Gateway
Earth Station Acceptance Test Procedure and the Satellite
Control Center Acceptance Test Procedure and a First Article
Acceptance Test Procedure.
After acceptance by ORBCOMM Global of the documents referred to in subsections
(a) and (b) above, the Interface Specifications and the Verification and Test
Plan shall be incorporated into this Agreement as Exhibit F and G respectively.
The Interface Specifications relating to the interface between the Satellites
and the Satellite Network Software shall set forth in detail the following:
(i) the software interface points (such as, without limitation,
system calls) between the Satellite Network Software and the
Satellites;
(ii) the Satellite-related constraints on the Satellite Network
Software (such as, without limitation, the system resource utilization
caps); and
(iii) the responsibilities of each of Orbital and ORBCOMM Global
with respect to the integration of the Satellite Network Software into
the Satellites.
Any disagreement on the scope or interpretation of the Interface Specification
relating to the interface between the Satellites and the Satellite Network
Software shall not be deemed a dispute to be settled in accordance with the
provisions of Section 16.4 and Teleglobe Mobile shall have the right to settle
any such disagreement in its sole discretion. However, either party may
request the other to implement corrective action on its behalf provided the
responsible party bears the costs.
Section 2.5 - Sustaining Research and Development Activities. Orbital
shall provide sustaining research and development services for the
specifications and design of replacement and/or subsequent generations of
Satellites and related ground equipment and network control center equipment
upon terms and conditions (including the price therefor) to be mutually agreed
upon by Orbital and ORBCOMM Global.
Section 2.6 - Technical Assistance. Orbital shall provide to ORBCOMM
Global, on a time and materials basis (including a fee not to exceed
[CONFIDENTIAL TREATMENT] percent
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[CONFIDENTIAL TREATMENT] to be mutually agreed upon by Orbital and ORBCOMM
Global), technical services, as and when required by ORBCOMM Global, relating
to the ORBCOMM System.
Section 2.7 - Regulatory Matters. Orbital, directly or indirectly
through its subsidiary ORBCOMM, shall use all commercially reasonable efforts
(a) to obtain and maintain the required United States regulatory authority
needed to construct, launch and operate the Satellites and operate the ORBCOMM
System, (b) to obtain and maintain FCC regulatory authority for the operation
of type-approved subscriber terminals for use in connection with the ORBCOMM
System, and (c) to take reasonable actions in any regulatory proceedings to
defend any claims against any regulatory authority granted to Orbital or
ORBCOMM in connection with the ORBCOMM System or to oppose any application by
competing systems that use frequencies below 1 GHz. ORBCOMM Global shall pay,
or reimburse Orbital or ORBCOMM for (a) all out-of-pocket expenses incurred in
connection with the activities contemplated by this Section 2.7, and (b)
Orbital's or ORBCOMM's internal costs, as appropriate, under the Administrative
Services Agreement.
Section 2.8 - Option for Replacement Constellation Satellites. On an
optional basis, Orbital shall construct and deliver to ORBCOMM Global an
additional thirty-two (32) Satellites in accordance with the Satellite
Statement of Work and the Satellite Specifications (the "REPLACEMENT
CONSTELLATION") and the launch services for such additional Satellites using
four (4) Pegasus XL Launch Vehicles in accordance with the Satellite and Launch
Vehicle Statement of Work and the Satellite and Launch Vehicle Specifications.
Section 2.9 - Option for the Launch of Two High Inclination Orbit
Satellites. Subject to availability, on an optional basis, Orbital shall
provide the launch of two (2) Satellites to a high inclination orbit on a
Pegasus XL or Taurus Launch Vehicle upon terms and conditions to be mutually
agreed upon by Orbital and ORBCOMM Global. In the event of the availability of
the two Satellites and the Taurus Launch Vehicle for the upcoming GeoSat
Follow-On mission, Orbital shall launch the two Satellites on that Launch
Vehicle for a price of [CONFIDENTIAL TREATMENT] ($[CONFIDENTIAL TREATMENT]).
Section 2.10 - Option for Launch Vehicle Substitution. ORBCOMM Global
shall have a one-time option to require Orbital to provide a Standard Taurus
Launch Vehicle instead of a Pegasus XL Launch Vehicle for any launch procured
pursuant to this Agreement. Such option may be exercised at any time during
the three years immediately following the execution of this Agreement. The
option price for each Standard Taurus Launch Vehicle shall be separately
negotiated on a no-fee basis (shall not include any Orbital fee) and shall not
exceed $21,000,000, and delivery shall be on a best efforts basis but in no
event later than twenty-for (24) months after option exercise.
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ARTICLE 3 - CONSIDERATION
Section 3.1 - Price. The price for the Work under this Agreement (the
"PRICE") is as follows:
(a) Satellites and Launch Vehicles
(i) thirty-four (34) Satellites $ [CONFIDENTIAL
TREATMENT]
(ii) three (3) Pegasus XL Launch Vehicle $ [CONFIDENTIAL
Launch Services TREATMENT]
(iii) Satellite Control Center Completion $ [CONFIDENTIAL
TREATMENT]
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TOTAL $ 157,872.143
(b) Gateway Earth Station Completion $ [CONFIDENTIAL
TREATMENT]
Section 3.2 - Price for Options. The prices for the options referred
to in Sections 2.2 and 2.8 (the "OPTION PRICES") are as follows:
(a) Option for one (1) Pegasus XL Launch
Vehicle Launch Service $ [CONFIDENTIAL
TREATMENT]
(b) Option for the Replacement
Constellation $ [CONFIDENTIAL
TREATMENT]
(including Launch Vehicle Launch Services)
Section 3.3 - Adjustment to the Option Prices. The Option Prices, or
any of them, as the case may be, will be subject to annual retroactive
adjustments for inflation based upon changes to the Gross National Product
implicit price deflator index as reported by the United States Department of
Commerce, Bureau of Economic Analysis on or after December of each calendar
year (the "CURRENT INDEX"). The Gross National Product implicit price deflator
index value of [CONFIDENTIAL TREATMENT] shall be used as the baseline index
against which all such annually reported index values are compared. In the
event the differences between the current index value for the year then being
considered, and the baseline index value of [CONFIDENTIAL TREATMENT] exceeds
[CONFIDENTIAL TREATMENT] percent ([CONFIDENTIAL TREATMENT]%) per year, then the
monthly and milestone payments for those invoices or milestones scheduled to
have been
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submitted or completed, as the case may be, during the year then being
considered, shall be increased by the difference (expressed as a percentage)
above the [CONFIDENTIAL TREATMENT]% annual inflation already included in the
milestone prices. This calculation is shown by formula 1 below. In the event
the difference between the current index value for the year then being
considered, and the baseline index value is less than [CONFIDENTIAL TREATMENT]
percent ([CONFIDENTIAL TREATMENT]%) per year, then the monthly and milestone
payments for those invoices or milestones scheduled to have been submitted or
completed, as the case may be, during the year then being considered, shall be
reduced by the difference (expressed as a percentage) below the [CONFIDENTIAL
TREATMENT]% annual inflation included in the milestone prices. This
calculation is shown by formula 2 below.
Formula 1: Percentage Increase = (A / [CONFIDENTIAL TREATMENT]) - B
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B
Formula 2: Percentage Increase = B - (A / [CONFIDENTIAL TREATMENT])
----------------------------------
B
A = The current index value for the year then being considered.
B = For adjustments to invoices or milestones scheduled to be
submitted or completed in 1995, as the case may be, this
number is [CONFIDENTIAL TREATMENT] (for 1996 it is
[CONFIDENTIAL TREATMENT]; for 1997 it is [CONFIDENTIAL
TREATMENT]; for 1998 it is [CONFIDENTIAL TREATMENT]; for
subsequent years, continue to multiply the prior year's number
by [CONFIDENTIAL TREATMENT] per year).
Section 3.4 - Taxes. (a) The Price does not include any federal,
state or local sales, use or excise taxes levied upon or measured by the sale,
the sales price, or the use of the items to be delivered or services required
to be performed hereunder. Orbital shall list separately on its invoice any
such tax lawfully applicable to the items to be delivered or services required
to be performed hereunder and payable by ORBCOMM Global. The Price shall not
however include any taxes on property owned by the United States Government, or
any U.S. or foreign federal, state or local income taxes imposed on Orbital.
(b) In cases where Orbital and/or ORBCOMM Global are wholly or
partially exempt from such taxes and duties or otherwise entitled to relief by
way of protest, refund claims, litigation or other proceedings, Orbital shall
take all necessary steps to facilitate such exemption or relief by:
(i) Using reasonable efforts to bring about the exemption or
relief before submitting the invoices to ORBCOMM Global; and
(ii) Complying with all formalities necessary to enable ORBCOMM
Global to claim reimbursement with respect to taxes and duties that
have been paid. For this purpose,
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Orbital shall comply with the reasonable instructions given to it by
ORBCOMM Global and provide in due time the information that ORBCOMM
Global reasonably requires.
If any such tax is determined to be legally due from either Orbital or ORBCOMM
Global, ORBCOMM Global shall pay it separately. ORBCOMM Global shall pay, or
reimburse Orbital for all out-of-pocket expenses incurred in connection with
the activities contemplated by this Subsection 3.4(b).
Section 3.5 - Insurance. The Price does not include the cost of
launch or Satellite insurance (but includes Satellite on-ground transportation
insurance and property insurance for the pre-launch phase), which insurance
shall be procured by ORBCOMM Global or, at ORBCOMM Global's discretion, by
Orbital for ORBCOMM Global's account. ORBCOMM Global shall pay or promptly
reimburse Orbital for all expenses incurred by Orbital, on behalf of ORBCOMM
Global in obtaining launch and/or Satellite insurance, upon receipt of
Orbital's invoice therefor.
ARTICLE 4 - PAYMENT TERMS AND INVOICING
Section 4.1 - Payment Terms and Invoices. The Price for the Work
under this Agreement shall be invoiced and paid as follows:
(a) Initial Invoicing. Upon the execution of this Agreement,
Orbital shall be entitled to invoice ORBCOMM Global an amount of $[CONFIDENTIAL
TREATMENT] for the Work performed prior to the date hereof, such invoice to be
paid by ORBCOMM Global within one (1) business day.
(b) Monthly Invoicing. Orbital shall invoice ORBCOMM Global on a
monthly basis for a maximum of 90% of its costs incurred during such month
plus, to the extent permitted by Subsection 4.1(f), such portion of the cost in
excess of the maximum amount to be invoiced to ORBCOMM Global in accordance
with such Subsection 4.1(f) and not previously invoiced and paid. Orbital
shall present its invoice to ORBCOMM Global promptly after the end of the month
covered by the invoice.
(c) Category B Milestones. The remaining 10% of costs incurred in
any month may be invoiced incrementally upon completion of the Category B
Milestone for that month as set forth in Exhibit B.
(d) Category A Milestones. The balance of the price
($[CONFIDENTIAL TREATMENT]) is allocated to Category A Milestones as set forth
in Exhibit C. The amount for such Category A Milestones may be invoiced upon
achievement of the relevant Category A Milestone in
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accordance with the requirements for achievement of Category A Milestones set
forth in Section 4.2 below (the "CATEGORY A MILESTONE ACHIEVEMENT CRITERIA").
(e) The total amount paid under 4.1(a), (b) and (c) shall not
exceed $[CONFIDENTIAL TREATMENT]. In the event costs incurred are less than
$[CONFIDENTIAL TREATMENT], the remaining amount shall be paid pro-rata upon
each launch.
(f) Schedule 4.1(f) sets forth the maximum cumulative payments to
be made by ORBCOMM Global under Sections 4.1(a), (b) and (c) during the term of
this Agreement. At any time during the term of this Agreement, ORBCOMM Global
shall not be obligated to make any payments associated with monthly invoices
and Category B Milestones to the extent that the cumulative costs exceed the
maximum payments identified in Schedule 4.1(f) at the relevant time until such
time where the cumulative costs are less than such maximum cumulative payments.
Section 4.2 - Category A Milestone Achievement. (a) Preliminary
Design Review, Critical Design Review and System Production Readiness Review
shall be deemed achieved upon conduct of the respective review meaningfully
addressing all significant areas as described in the Statement of Work, mutual
agreement on the scope of and schedule for action plan items and resolution of
any action items mutually agreed to be resolved as a condition of the related
Category A Milestone achievement. First Article Test shall be deemed achieved
upon successful completion of the First Article Acceptance Test Procedure. In
the event of substantial achievement of any milestone, Orbital shall be
entitled to invoice for a portion of the value with the balance to be invoiced
upon full achievement or waiver. In such event, any amount withheld shall be
at ORBCOMM Global's discretion, but shall be commensurate with the remaining
tasks and risks. Preliminary Design Review, Critical Design Review and System
Production Readiness Review shall be deemed fully achieved no later than the
first launch. In the event First Article Test is not fully achieved prior to
launch any remaining amount shall be earned to the same extent of On-orbit
Check Out achievement.
(b) Launch success for each launch service shall be deemed
achieved upon delivery of the Satellites to orbit in accordance with the orbit
criteria contained in Section 3.1.1 of the Launch Vehicle Statement of Work and
Specifications, as further defined in the interface control document for the
interface specification between the Launch Vehicle and the Satellite, which
interface control document shall be mutually agreed upon by Orbital and ORBCOMM
Global. In the event the Section 3.1.1 criteria are not achieved, but the
Satellites are placed in an orbit that make them useable to ORBCOMM Global,
Orbital shall be entitled to payment for partial launch success in an amount to
be determined by negotiation of the parties based on the usability of the
Satellites to generate revenues.
(c) On-Orbit Check Out for each plane of Satellites shall be deemed
achieved on a percentage basis as described in Schedule 4.2(c). In the event
of a failure of Satellite operation due to launch failure, the On-orbit Check
Out Milestone payment may be earned for On-orbit Check Out of the fourth plane
in accordance with the criteria described in Schedule 4.2. In the
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event of failure or performance degradation below the criteria in Schedule 4.2
of any Satellite due to improper operation by ORBCOMM Global (to the extent
that such improper operation is not the result of Orbital's directives), such
Satellite shall be deemed fully functional for the purposes of On-orbit Check
Out Milestone achievement
Section 4.3 - Achievement of Milestones. (a) In the event that
Orbital fails to achieve any Category A Milestone in accordance with the
Category A Milestone Achievement Criteria on or before the scheduled completion
date shown in Exhibit C, ORBCOMM Global shall be relieved of its obligation to
pay the applicable amounts specified for such Category A Milestone until such
time as Orbital achieves such Category A Milestone in accordance with the
Category A Milestone Achievement Criteria or obtains a waiver in writing from
ORBCOMM Global for such achievement. The invoicing and payment procedure
referred to Section 4.1 shall then apply mutatis mutandis. This, together with
any additional rights and remedies ORBCOMM Global may have under Article 12 -
Termination, shall constitute ORBCOMM Global's exclusive right and remedy for
Orbital's failure to achieve any or all such Category A Milestones. Orbital's
failure to timely complete any milestone shall not relieve ORBCOMM Global from
its obligation to pay for other achieved milestones.
(b) If ORBCOMM Global concludes that the milestone event for which
any invoices have been submitted has not been successfully completed in
accordance with the requirements of this Agreement or that any condition
established by this Agreement as prerequisite to payment has not been
fulfilled, it shall provide Orbital written exceptions within ten (10) business
days after receipt of the invoice, specifying in detail the non-conformance.
The applicable payments shall be made within five (5) business days after
ORBCOMM Global's receipt of Orbital's response, in writing, addressing in
detail each of ORBCOMM Global's exceptions and, in the event of any Category A
Milestone, demonstrating to the reasonable satisfaction of ORBCOMM Global that
the milestone requirements have been successfully completed; provided, however,
if, with respect to any such Category A Milestone, ORBCOMM Global reasonably
concludes that Orbital's response to ORBCOMM Global's exceptions to be
non-responsive and so notifies Orbital as provided in Subsection 4.3(c) below,
ORBCOMM Global may, at its sole discretion, defer any unpaid amount of the
relevant Category A Milestone payment until the resolution of the matter as
described in Subsection 4.3(c) below.
(c) In the event ORBCOMM Global concludes that Orbital has been
non-responsive to ORBCOMM Global's exception to a Category A Milestone, ORBCOMM
Global shall notify Orbital thereof in writing (the "EXCEPTION NOTIFICATION")
within ten (10) business days after receipt of Orbital's response to ORBCOMM
Global's written exception. The Exception Notification shall (i) specify in
detail the reason(s) ORBCOMM Global believes Orbital's response to be
non-responsive, and (ii) advise Orbital formally that ORBCOMM Global intends to
withhold payment for such Category A Milestones until Orbital demonstrates to
the reasonable satisfaction of ORBCOMM Global that such Category A Milestone
has been achieved in accordance with the Category A Milestone Achievement
Criteria.
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Upon receipt of an Exemption Notification from ORBCOMM Global,
Orbital shall have thirty (30) days to demonstrate the achievement of the
relevant Category A Milestone to the reasonable satisfaction of ORBCOMM Global.
If Orbital is unable to make such demonstration, either party may submit the
matter to be resolved as provided in Section 16.4 hereof.
Section 4.4 - Invoicing. Subject to the foregoing, Orbital shall
submit to ORBCOMM Global at the address below monthly invoices covering the
amounts as described in Subsection 4.1(b) or invoices for Category A and
Category B Milestone payments, in each case certified by the Vice-President and
Controller of Orbital or by any other officer designated by the Vice-President
and Controller of Orbital in the form provided for in Schedule 4.4. Subject to
the provisions of Section 4.3, ORBCOMM Global shall pay such invoices within
thirty (30) days from the date of their receipt:
ORBCOMM Global, L.P.
Attn: Controller
21700 Atlantic Boulevard
Dulles, Virginia 20166
Section 4.5 - Auditor Review of Submitted Invoices. Under this
Agreement, Orbital shall submit certified invoices on a monthly basis for a
percentage of incurred costs, and in certain cases for a percentage of incurred
costs but only after successful completion of any Category B milestones. In
order to ensure ORBCOMM Global that the invoices that are submitted accurately
reflect (i) the actual incurred costs and (ii) the correct percentage of costs
to be invoiced under the terms of this Agreement, an outside auditor firm
selected by ORBCOMM Global may review the accuracy of submitted invoices under
this Agreement against Orbital's accounting books and records. In the event
that an error was made and ORBCOMM Global was overcharged, the amount of the
overcharge shall be determined by the auditors and the overcharged amount,
plus interest to be calculated at the prime rate of Morgan Guaranty Trust
Company of New York in effect on the first business day for each relevant month
from the date of overpayment, shall be refunded to ORBCOMM Global within five
(5) business days from the date of notification by the auditors. All expenses
of such audits shall be paid by ORBCOMM Global except that, to the extent that
there is an overcharge greater than Fifty Thousand Dollars ($50,000) finally
determined and that such determination is binding upon the parties, Orbital
shall pay audit expenses with respect to any invoices for which an overcharge
is so determined. To the extent that Orbital does not agree with the auditors'
determination, such dispute shall be settled in accordance with Section 16.4.
ARTICLE 5 - WORK SCHEDULE AND DELIVERY
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Section 5.1 - Delivery. (a) Orbital understands and agrees that
timely completion of the milestones is of the essence of this Agreement.
Completion of Category A and Category B Milestones shall be determined as
described in Article 4.
(b) Delivery of the Launch Vehicle Launch Services and Satellites
shall occur on separation of the Launch Vehicle from the carrier aircraft as
follows:
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Deliverable Date
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(i) Satellites 1-8 and Launch Vehicle Launch Service No. 1 Jan. 1997
(ii) Satellites 9-16 and Launch Vehicle Launch Service No. 2 April 1997
(iii) Satellites 17-24 and Launch Vehicle Launch Service No. 3 July 1997
(iv) Satellites 25-34 Nov. 1997
(c) Delivery of the remaining gateway earth station effort to be
completed under this Agreement shall be as follows:
Deliverable Quantity Shipment Destination
-------------------------- ---------- ------------------ -------------------------
GES System - 05 1 Oct. 1995 East Wenatchee, WA
GES System - 06 1 Oct. 1995 East Wenatchee, WA
STE Antenna System 1 Oct. 1995 East Wenatchee, WA
GES System - 07 1 Jan. 1996 Ocilla, GA
GES System - 08 1 May 1996 Arcade, NY
(d) Delivery of the remaining Satellite Control Center efforts to
be completed under this Agreement shall be in accordance with the Satellite
Statement of Work.
ARTICLE 6 - ACCESS AND ACCEPTANCE
Section 6.1 - Access. Subject to the receipt of any and all required
governmental approvals, ORBCOMM Global's authorized representatives shall have
the right, on a not to interfere basis, at all reasonable times during the
performance of this Agreement, to monitor the work in progress (including
without limitation all design and test activities with access to related
computer program information to the extent reasonable safeguards can be
implemented) at the plant(s) of Orbital. Orbital shall use all commercially
reasonable efforts to incorporate in all of its subcontracts, Orbital's and
ORBCOMM Global's rights to monitor work in progress as
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provided herein, provided that any additional direct expenses associated with
the exercise or implementation of such rights shall be borne by ORBCOMM Global.
Section 6.2 - Progress Meetings. During the performance of this
Agreement, Orbital shall conduct reviews in accordance with the schedule
identified in the Satellite, Launch Vehicle and Gateway Earth Station
Statements of Work, as the case may be, at which Orbital shall provide a review
of milestones completed subsequent to the preceding review, status of the
upcoming milestones, and such other matters as may be mutually agreed upon by
the parties. Orbital shall also provide ORBCOMM Global at such meetings with
such reports and documentation as are required by such Statements of Work. The
parties may mutually agree to conduct additional interim meetings or reviews
from time to time with a mutually acceptable agenda. ORBCOMM Global shall
determine its appropriate manager and personnel to attend such meetings.
Orbital shall be represented by its program manager and such other personnel as
are specifically required to support the particular presentation. All such
meetings shall be held at Orbital's facility in Germantown, Maryland or other
mutually agreeable location. Orbital shall prepare and distribute to ORBCOMM
Global the minutes of such meeting within fifteen (15) days of each such
meeting.
Orbital shall provide ORBCOMM Global and/or its representatives,
office space for a maximum of ten (10) of ORBCOMM Global personnel (or its
consultants) at Orbital's facilities at Germantown, Maryland and Dulles,
Virginia. The office facilities to be provided shall include a reasonable
amount of office space, office furniture, regular parking facilities, telephone
and fax services and access to copy machines. ORBCOMM Global shall reimburse
Orbital for variable costs such as long distance telephone and fax services on
a reasonable basis to be negotiated.
Section 6.3 - Inspection and Acceptance. (a) The remaining efforts to
be performed on the Gateway Earth Stations as specified in Section 2.3 shall be
accepted in accordance with Gateway Earth Station Acceptance Test Procedure
("GES ATP"), a copy of which is attached hereto as Schedule 6.3(a). The GES
ATP shall take place at the location where the Gateway Earth Stations to be
purchased under this Agreement are to be installed by ORBCOMM Global. Such GES
ATP shall be scheduled at a mutually convenient time within fifteen (15) days
after Orbital notifies ORBCOMM Global that the installation is complete.
ORBCOMM Global shall satisfy itself during the GES ATP that the Gateway Earth
Stations conform to the Gateway Earth Station Specifications set forth in this
Agreement. Within thirty (30) days after completion of each GES ATP, ORBCOMM
Global shall give written notice of any claim that the Gateway Earth Stations
do not conform to such specifications. If ORBCOMM Global fails to participate
in the GES ATP for any particular Gateway Earth Station or to notify Orbital as
required, ORBCOMM Global agrees that the remaining Gateway Earth Station
efforts for such Gateway Earth Station shall be deemed accepted with all faults
that inspection and test would have revealed and to have waived all rights to
revoke acceptance after such a thirty-day period for such Gateway Earth
Station. ORBCOMM Global may be assisted in all inspections by its consultants
or advisors.
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(b) ORBCOMM Global's authorized representatives shall promptly
conduct a final inspection of the Satellites and Launch Vehicles in accordance
with the Verification and Test Plan or, at ORBCOMM Global's option, witness
such inspection by Orbital and shall either approve them for launch in writing
or promptly notify Orbital in writing of the particulars in which they are
non-conforming with the applicable Specifications. If no objections have been
sent by ORBCOMM Global within fifteen (15) days of the inspection, the relevant
Satellite and Launch Vehicles shall be deemed to have received approval for
launch by ORBCOMM Global. Corrections required to render the Satellites and
Launch Vehicles in conformance with the applicable Specification shall be made
by Orbital at its cost. The decision as to how to make the corrections shall
be at Orbital's sole discretion and an item found to be non-conforming during
or after testing performed under this Agreement shall, at ORBCOMM Global's
request and without charge to ORBCOMM Global, be re-tested by Orbital after
Orbital has remedied the non-conformance. ORBCOMM Global may be assisted in all
inspections by its consultants or advisors.
(c) The remaining efforts to be performed on the Satellite Control
Center as specified in Section 2.1 shall be accepted in accordance with a
Satellite Control Center Acceptance Test Procedure ("SCC ATP"), a copy of which
shall be attached upon completion as Exhibit 6.3(c). The SCC ATP shall take
place at the facilities of Orbital at Dulles, Virginia. Such SCC ATP shall be
scheduled at a mutually convenient time within fifteen (15) days after Orbital
notifies ORBCOMM Global that the remaining efforts on the Satellite Control
Center have been completed. ORBCOMM Global shall satisfy itself during the SCC
ATP that the Satellite Control Center conforms to the requirements contained in
the Satellite Specifications contained in this Agreement. Within thirty (30)
days after completion of the SCC ATP, ORBCOMM Global shall give written notice
of any claim that the remaining efforts on the Satellite Control Center does
not conform to such Specifications. If ORBCOMM Global fails to participate in
the SCC ATP or to notify Orbital as required, ORBCOMM Global agrees that the
remaining Satellite Control Center efforts shall be deemed accepted with all
faults that inspection and test would have revealed and to have waived all
rights to revoke acceptance after such a thirty-day period. ORBCOMM Global may
be assisted in all inspections by its consultants or advisors.
Section 6.4 - Corrections in Unlaunched Satellites. If at any time,
Orbital becomes aware that defects exist in any unlaunched Satellite as a
result of the operation of on-orbit Satellites or otherwise, Orbital shall
notify promptly ORBCOMM Global of such defects and to the extent that ORBCOMM
Global determines that such defects would, in the reasonable opinion of ORBCOMM
Global, materially and adversely affect the operation of the ORBCOMM System,
Orbital shall take prompt and appropriate corrective measures at its own
expense to eliminate any such defects from all unlaunched Satellites (including
any spare Satellites). The decision as to how to make the corrections shall be
at Orbital's sole discretion.
ARTICLE 7 - TITLE AND RISK OF LOSS
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Section 7.1 - Title Passing and Risk of Loss. Unless otherwise
provided in this Agreement, title to, beneficial ownership of, and right to
possession to and risk of loss of or damage shall pass to ORBCOMM Global, as
follows:
(a) with respect to each Launch Vehicle and to the Satellites upon
separation of the Launch Vehicle from the carrier aircraft;
(b) with respect to the Gateway Earth Stations upon successful
completion of the GES ATP in accordance with the provisions of Section 6.3(a);
and
(c) with respect to the Satellite Control Center upon successful
completion of the SCC ATP in accordance with the provisions of Section 6.3(c).
ARTICLE 8 - CHANGES
Section 8.1 - Changes. At any time and by written order, ORBCOMM
Global may make changes within the general scope of this Agreement in (a) the
Specifications or the Statements of Work, (b) the method of packing or
shipment, (c) place or time of delivery, or (d) the quantity or type of the
items to be delivered or services required to be performed hereunder.
Section 8.2 - Adjustments to Agreement. (a) If any change causes an
increase or decrease in the Price, or in the time required for performance of
any part of the Work, whether or not directly changed by the order, ORBCOMM
Global and Orbital shall negotiate an equitable adjustment to such Price,
delivery schedule or other provision of this Agreement. Orbital shall perform
the Work as changed pending resolution of any negotiation under this Article 8.
(b) Orbital must assert in a written proposal that addresses its
right to an adjustment under this Article 8 within sixty (60) days from receipt
of the written order; provided that, if Orbital requires additional time to
finalize its written proposal, it shall request an extension within the initial
sixty (60) day period, which request shall not be unreasonably denied by
ORBCOMM Global.
(c) If Orbital's proposal includes the cost of replacing property
made obsolete or excess by the change, ORBCOMM Global shall have the right to
prescribe the manner of the disposition of the obsolete or excess property.
(d) Failure to agree to any adjustment shall be a dispute and
settled in accordance with Section 16.4, provided that nothing in this Section
8.2 shall excuse Orbital from proceeding with the Work as changed.
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES
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Section 9.1 - Representations and Warranties. Orbital represents and
warrants that (a) it has, and it shall deliver to ORBCOMM Global at the time of
title passing pursuant to Article 7, sole and good legal and equitable title to
the items to be delivered or to the extent applicable, the services required to
be performed pursuant to Article 2, free and clear of any and all security
interests, liens, claims, charges, and encumbrances of any kind or nature
whatsoever, together with full power and lawful authority to sell, deliver and
perform the items to be delivered or to the extent applicable, the services
required to be performed under Article 2, (b) subject to the provisions of
Section 9.2(a), the items to be delivered or to the extent applicable, the
services required to be performed shall be free from defects in design,
material and workmanship and shall operate and conform to the performance
capabilities, specifications, functions and other descriptions set forth in the
Specifications (as such Specifications may be modified from time to time), (c)
neither the delivery of the items nor the performance of the services required
to be performed by Orbital shall in any way constitute an infringement or other
violation of any copyright, trademark or patent or other validly registered
enforceable intellectual property right of any third party and (d) the items to
be delivered and the services required to be performed hereunder shall be in
compliance with all applicable United States laws, rules and regulations.
Section 9.2 - Remedies for Breach of Warranty and Warranty Period.
(a) Notwithstanding acceptance by ORBCOMM Global of the Gateway
Earth Stations, the Satellite Control Center, or any part thereof, or any
provision of this Agreement, to the extent permitted by the terms thereof,
Orbital shall assign to ORBCOMM Global any warranties it has with respect to
any part of any such Gateway Earth Stations and of the Satellite Control
Center, from third parties and warrants with respect to all such other Gateway
Earth Stations, the Satellite Control Center, or any part thereof, that for a
period of one (1) year after title passing in accordance with Article 7
(together with the term of any applicable third party warranty, the "WARRANTY
PERIOD"), the Gateway Earth Stations, the Satellite Control Center, or any part
thereof, shall be free from defects in design, material and workmanship and
shall operate and conform to the performance capabilities, specifications,
functions and other descriptions set forth in the Specifications that relate
thereto. Orbital shall, at its expense, repair or replace the Gateway Earth
Stations, the Satellite Control Center, or any part thereof, that do not
conform to such warranty. Notwithstanding the above, the Warranty Period for
the Gateway Earth Stations shall expire no later than December 31, 1996.
Orbital's obligation during the applicable Warranty Period shall be limited to
repair or replacement of any Gateway Earth Stations, the Satellite Control
Center, or any part thereof, for which it has provided a warranty. Notice of
all claimed defects must be provided in writing to Orbital within the
applicable Warranty Period. Orbital shall determine after inspection that the
product or part was, in fact, defective, such determination to be to the
reasonable satisfaction of ORBCOMM Global. The Gateway Earth Stations, the
Satellite Control Center, or any part thereof, found to conform to the
Specifications and requirements of this Agreement and not defective shall be
returned to ORBCOMM Global, at ORBCOMM Global's expense. ORBCOMM Global shall
pay for shipping and insurance of defective Goods to Orbital and Orbital shall
pay the cost of return shipping and insurance. Any
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product or part repaired or replaced shall be subject to the original,
applicable Warranty Period. The warranty set forth herein is ORBCOMM Global's
exclusive remedy against Orbital for defective Gateway Earth Stations, the
Satellite Control Center, or any part thereof, and is in lieu of all other
warranties, express or implied.
(b) The Orbital warranty set forth herein shall not extend to any
Gateway Earth Stations, the Satellite Control Center, or any part thereof that,
upon Orbital's or its subcontractors' examination is found to have been (i)
mishandled, misused, subjected to negligence, accident or abuse, (ii)
installed, operated or maintained contrary to Orbital's specifications or
instructions or otherwise used improperly, (iii) tampered with or damaged as
evidenced by, for example, broken seals, unauthorized modifications, damaged
packaging containers and the like, (iv) repaired/altered by anyone other than
Orbital or its subcontractors with Orbital's express advance written approval,
or (v) delivered to Orbital not in conformance with the notice requirements in
the warranty.
(c) For the Launch Vehicle Launch Services and the Satellites,
following separation of the Launch Vehicle from the carrier aircraft, ORBCOMM
Global's sole remedy for launch failure, defects, failure to conform with
applicable Specifications or any other requirements shall be limited to (i)
the potential non-payment to Orbital of the related Category A milestone
payments and of the performance incentive payment referred to in Article 14 and
(ii) termination remedies under Article 12.
Section 9.3 - Limitation of Liability. (a) ORBITAL SHALL NOT BE
LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES RESULTING FROM
THE USE OF ANY OF THE GOODS OR SERVICES TO BE PROVIDED HEREUNDER, OTHER THAN
THE LIABILITY EXPRESSLY STATED HEREIN. THE WARRANTY SET FORTH HEREIN IS IN
LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
(b) Except as otherwise provided herein, regardless of fault,
under no circumstances shall Orbital be liable for any damages greater than
[CONFIDENTIAL TREATMENT] Dollars ($[CONFIDENTIAL TREATMENT]) (excluding (i) any
unpaid portion of the Category A Milestone Payments not paid to Orbital as a
result of a failure to meet, in whole or in part, any of the Category A
Milestones, and (ii) any unpaid portion of the On-orbit Performance Incentive
Payment payable under Article 14) for any claim made, including any special,
incidental or consequential damages of any nature whatsoever, whether arising
from Orbital's breach of contract, breach of express or implied warranty,
arising in tort, at law or in equity including any law giving rise to a claim
of strict liability or for any other cause.
Section 9.4 - Patent Indemnification. (a) In the event of a breach of
the representation and warranty set forth in Section 9.1(c), Orbital agrees to
indemnify and hold harmless ORBCOMM Global and its permitted successors and
assigns of its products from and against all
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loss, damages, claims, demands and suits at law or in equity, for actual or
alleged claims, demands and suits at law or in equity, arising out of such
breach or alleged breach.
(b) Notwithstanding the provisions of Subsections 9.1(c), 9.3(b)
and 9.4(a), ORBCOMM Global agrees that Orbital shall be relieved of its
obligations referenced in Subsection 9.4(a), unless ORBCOMM Global notifies
Orbital in writing promptly, but in any event, no later than sixty (60) days
after ORBCOMM Global becomes aware of any such claim, suit or proceeding and,
at Orbital's expense, cooperates with and gives Orbital all necessary
information and assistance to mitigate, settle and/or defend any such claim,
suit or proceeding; provided, however, that ORBCOMM Global shall not be
obligated to suspend service using the ORBCOMM System in mitigation of
Orbital's liability. In the event that the actual liability of Orbital as a
consequence of a claim, suit or proceeding in a particular country, exceeds
[CONFIDENTIAL TREATMENT] Dollars ($[CONFIDENTIAL TREATMENT ]) in such country,
excluding any country listed in Schedule 9.4(b) for which the claim, suit or
proceeding shall exceed [CONFIDENTIAL TREATMENT] Dollars ($[CONFIDENTIAL
TREATMENT]), and excluding the United States of America for which the claim,
suit or proceeding shall exceed the Price , then ORBCOMM Global shall release
Orbital from any obligation for liability for copyright, trademark and patent
infringement in such country in excess of the applicable limit.
Notwithstanding anything to the contrary herein contained, under no
circumstances shall Orbital be liable for any copyright, trademark or patent
indemnification for countries other than the United States of America, greater
than [CONFIDENTIAL TREATMENT] Dollars ($[CONFIDENTIAL TREATMENT]) and
copyrights, trademark or patent indemnification for all countries including the
United States of America greater than the Price.
ARTICLE 10 - RESERVED
ARTICLE 11 - STOP WORK
Section 11.1 - Stop Work Order. ORBCOMM Global may, at any time, by
written order to Orbital, require Orbital to stop all, or any part, of the Work
called for by this Agreement for a period of sixty (60) days or for any further
period to which the parties may agree. The order shall be specifically
identified as a Stop Work issued under this Article 11. Upon receipt of the
order, Orbital shall immediately comply with its terms and take all reasonable
steps to minimize costs allocable to the work covered by the order during the
period of work stoppage. Within a period of sixty (60) days after a stop-work
is delivered to Orbital, or within any extension of that period to which the
parties agree, ORBCOMM Global shall either (a) cancel the stop-work order and
make an equitable adjustment to this Agreement for the delay or (b) terminate
the work as provide in Article 12 hereof if applicable or if Orbital otherwise
agrees to terminate.
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ARTICLE 12 - TERMINATION
Section 12.1 - Termination. ORBCOMM Global may, by written notice of
termination to Orbital, terminate this Agreement upon the failure of Orbital
(a) to achieve any of the Category A Milestones within fifty-six (56) weeks
after the scheduled completion date set forth in the Milestone Payment
Schedule, provided that scheduled completion dates shall be extended by any
excusable delays as a result of a force majeure event under Section 16.2; (b)
to comply in any material respect with any of the provisions of this Agreement
and to correct such failure, within sixty (60) days from the date of Orbital's
receipt of written notice thereof from ORBCOMM Global's authorized
representative, setting forth in detail ORBCOMM Global's basis for termination
of the Agreement.
Section 12.2 - Remedies Upon Termination. (a) In the event of
termination of this Agreement by ORBCOMM Global, as provided for hereinabove,
Orbital shall:
(i) To the extent it is permitted to do so by law,
regulation and third parties, deliver to ORBCOMM Global all completed
items to be delivered under Article 2, work-in-progress, drawings, and
other technical data associated with the Work developed as part of the
performance of the completed milestones of this Agreement along with
appropriate licenses to the intellectual property embodied in all such
items (excluding any Launch Vehicle Launch Services data), drawings
and other technical data to use, make and have made such items
(excluding any Launch Vehicle Launch Services data), provided, that
such data and licenses shall be used exclusively for purposes related
to the ORBCOMM System and shall be subject to appropriate
confidentiality obligations;
(ii) Take all commercially reasonable steps to protect and
preserve the property referred to in (i) above in the possession of
Orbital until delivery to ORBCOMM Global;
(iii) Be paid such portion of the ORBCOMM System Price for
all due monthly invoices and completed milestones less any amount
payable to ORBCOMM Global hereunder; and
(iv) At ORBCOMM Global's request and to the fullest extent
permitted by law, and subject to applicable laws and regulations,
transfer the approvals, permits, and licenses relating to the ORBCOMM
System and held by Orbital or ORBCOMM to ORBCOMM USA.
(v) Be liable to ORBCOMM Global for liquidated damages in
the amount of [CONFIDENTIAL TREATMENT] dollars ($[CONFIDENTIAL
TREATMENT]) except that in the event of termination after a Change of
Control as defined in the Master Agreement, the amount shall be
[CONFIDENTIAL TREATMENT] dollars ($[CONFIDENTIAL TREATMENT]).
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(b) In the event of ORBCOMM Global's proper exercise of its rights
under this Article 12, Orbital shall protect ORBCOMM Global, hold ORBCOMM
Global harmless and indemnify ORBCOMM Global from all claims (and related
liabilities and costs) by Orbital's customers or third parties, derived from or
relating to Orbital's rights under this Agreement, subject to any limitation
provided in Section 9.3 hereof.
(c) Any disagreement under this provision, including disagreements
with respect to ORBCOMM Global's right to seek a termination and the
appropriate remedies for termination, shall be resolved in accordance with
Article 16.4 of this Agreement.
ARTICLE 13 - OWNERSHIP OF INTELLECTUAL PROPERTY
Section 13.1. All designs, inventions (whether or not patented),
processes, technical data, drawings and/or confidential information related to
the Work, including without limitation the Satellites, Launch Vehicle Launch
Services, Satellite Control Center and Gateway Earth Stations, are the
exclusive property of Orbital and/or its subcontractors. All rights, title and
interest in and to all underlying intellectual property relating to the Work
shall remain exclusively in Orbital and/or its subcontractors, notwithstanding
Orbital's disclosure of any information or delivery of any data items to
ORBCOMM Global or ORBCOMM Global's payment to Orbital for engineering or
non-recurring charges. ORBCOMM Global shall not use or disclose such
information or property to any third party without the prior written consent of
Orbital. Title to all tools, test equipment and facilities not furnished by
ORBCOMM Global or specifically paid for by ORBCOMM Global and delivered to
ORBCOMM Global under this Agreement shall remain in Orbital and/or its
subcontractors. ORBCOMM Global agrees that it will not directly or through any
third party reverse engineer the Work.
Section 13.2. To the extent that computer software, source codes,
programming information and other related documentation relating to the Work,
other than the Launch Vehicles (the "BACKGROUND INFORMATION") are not
deliverable data under this Agreement (or to the extent that they are
deliverable data, that no ownership or license rights are being transferred to
ORBCOMM Global), Orbital, to the extent that it has the right to do so, shall
provide to ORBCOMM Global, on an as needed basis, the right to access and copy
such Background Information. ORBCOMM Global shall have the right to use such
Background Information to support its analysis of the ORBCOMM System, to
develop alternative solutions for technical problems affecting the operation
and management of the ORBCOMM System and to design modifications to the
Background Information but in any event, not for any reprocurement. To the
extent that ORBCOMM Global designs modifications to the Background Information,
it shall not have the right to implement such modifications without the prior
written consent of Orbital. However, if ORBCOMM Global decides to implement
such modifications without the prior written consent of Orbital, ORBCOMM Global
shall be deemed to have waived its right to the unpaid portion of the On-orbit
Performance Incentive Payment and shall pay to Orbital within
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thirty (30) days of the implementation of the modification such unpaid portion
of the On-orbit Performance Incentive Payment.
ARTICLE 14 - ON-ORBIT PERFORMANCE
INCENTIVE PAYMENTS
(a) In addition to the Price set forth in Article 3 hereof,
Orbital shall be entitled to receive on-orbit performance incentive payments
during the On-orbit Performance Incentive Period. Payments shall be made on a
per plane basis with the incentive to be earned on a monthly basis, for each
complete month during the first thirty (30) months years that there are at
least seven (7) Working Satellites in the plane, and during the last thirty
(30) months, for each complete month that there are at least six (6) Working
Satellites in the plane, as described in Schedule 14.
(b) The "ON-ORBIT PERFORMANCE INCENTIVE PERIOD" for each plane of
satellites shall commence on the first day after all the conditions for the
successful completion of the Category A Milestone attached to such plane have
been satisfied or when On-orbit Check Out is completed and reasonable
corrective actions mutually agreed upon by Orbital and ORBCOMM Global, if
necessary, have been implemented to the reasonable satisfaction of ORBCOMM
Global and shall continue for a period of five (5) years thereafter.
(c) The monthly On-orbit performance incentive payment to be
earned for each complete month during the On-orbit Performance Incentive Period
shall be as follows:
Year Monthly Payment per Plane
---- ------------------------
1 $ [CONFIDENTIAL TREATMENT]
2 $ [CONFIDENTIAL TREATMENT]
3 $ [CONFIDENTIAL TREATMENT]
4 $ [CONFIDENTIAL TREATMENT]
5 $ [CONFIDENTIAL TREATMENT]
(d) In the event any available On-orbit Performance Incentive
Payment is not earned, the balance (up to a maximum of $[CONFIDENTIAL
TREATMENT] per plane) shall be available to be earned if there are at least six
(6) Working Satellites in any plane in the sixth year of operation payable on a
monthly basis over that year.
(e) In the event of failure or performance degradation of any
Satellite due to improper operation by ORBCOMM Global (to the extent that such
improper operation is not the result of Orbital's directives), or if any
Working Satellite is intentionally put out of service by ORBCOMM Global, it
shall, for the purpose of earning On-orbit Performance Incentive Payment, be
considered a Working Satellite.
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(f) In the event of launch failure of any plane of Satellites, no
On-orbit Performance Incentive Payment shall be payable for that plane, but
shall be available to be earned for performance of the fourth plane, if
launched.
ARTICLE 15 - SPECIAL PROVISIONS RELATING TO LAUNCH SERVICES
Section 15.2 - Cross-Waiver of Liability Relating to the Launch of the
Orbital Satellites. (a) In accordance with the applicable Department of
Transportation commercial launch license requirements, ORBCOMM Global agrees to
enter into an agreement with Orbital for a no-fault, no-subrogation,
inter-participant waiver of liability pursuant to which each shall not bring a
claim against or sue the employees of the other, or any of them, or the United
States Government, and each party agrees to be responsible for and to absorb
the financial and any other consequences of any Property Damage it incurs or
for any Bodily Injury to, or Property Damage incurred by, its own employees
resulting from activities carried out under this Agreement, irrespective of
whether such Bodily Injury or Property Damage is caused by ORBCOMM Global,
Orbital or by their contractors, subcontractors, officers, directors, agents,
servants and employees and the Government and regardless of whether such Bodily
Injury or Property Damage arises through negligence or otherwise.
(b) ORBCOMM Global and Orbital shall each be responsible for such
insurance as they deem necessary to protect their respective property. Any
insurance carried in accordance with this Article 15 and any policy taken out
in substitution or replacement for any such policy shall provide that the
insurers shall waive any rights of subrogation against ORBCOMM Global, Orbital,
and the United States Government, as the case may be, and their contractors and
subcontractors at every tier.
(c) ORBCOMM Global and Orbital hereby agree to obtain a similar
waiver in the form set forth above from any party with which it enters into an
agreement relating to the activities (launch of the Satellites) contemplated by
this Article, including without limitation, all of its respective contractors,
subcontractors and suppliers at every tier, and all persons and entities to
whom it assigns all or any part of its rights or obligations under this
Agreement.
(d) As used herein, "BODILY INJURY" means bodily injury, sickness,
disease, disability, shock, mental anguish or mental injury sustained by any
person including death and damages for care and loss of services resulting
therefrom. "PROPERTY DAMAGE" means injury to or destruction of tangible
property including the loss of use of such injured or destroyed property.
Section 15.3 - Flight Readiness Assessment. Orbital shall conduct a
Mission Readiness Review (MRR) to be held subsequent to Orbital's final launch
readiness review. At the MRR, Orbital shall summarize the status of its
expendable launch vehicle (ELV) and launch support systems and attest to its
readiness to launch the mission. If after due consideration of the status of
the ELV, spacecraft, and other launch support systems, ORBCOMM Global does not
agree
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that the total mission is ready for launch, ORBCOMM Global shall retain the
right to direct the delay to the launch under the terms of the Changes
provision of this Agreement.
Section 15.4 - Final Countdown Launch Authorization. ORBCOMM Global
shall also be polled in the final countdown procedure during status checks and
shall retain the right to concur or not to concur in the "GO" for launch.
ORBCOMM Global's designated representative shall be authorized to make such a
decision. If ORBCOMM Global does not concur, it may declare a "HOLD" and delay
the launch. If ORBCOMM Global calls for delay and the cause for such delay
cannot be shown to be attributable to Orbital's performance, or to have been
within its control or due to its fault or negligence, Orbital shall receive an
equitable adjustment to the Agreement price and schedule.
Section 15.5 - Range Support. Orbital is responsible for the range
costs, interface, and all coordination with the Government Agencies that
control the launch ranges required to launch each payload.
ARTICLE 16 - MISCELLANEOUS
Section 16.1 - Notices. (a) Except as otherwise specified herein, all
notices, requests and other communications required to be delivered to any
party hereunder shall be in writing (including any facsimile transmission or
similar writing), and shall be sent either by certified or registered mail,
return receipt requested, by telecopy or delivered in person addressed as
follows:
(i) if to Orbital, to it at:
21700 Atlantic Boulevard
Dulles, Virginia 20166
Telecopy: (703) 406-5572
Attention: Senior Vice President and
General Counsel
(ii) If to ORBCOMM Global, to it at:
21700 Atlantic Boulevard
Dulles, Virginia 20166
Telecopy: (703) 406-3508
Attention: President
with copies to:
Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
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Telecopy: (703) 406-3509
Attention: Executive Vice President and
General Manager,
Communication and Information
Systems Group
Teleglobe Mobile Inc.
c/o Teleglobe Inc.
1000 de la Gauchetiere Street West
Montreal, Quebec
Canada H3B 4X5
Telecopy: (514) 868-7719
Attention: Executive Vice President,
Corporate Development and
Corporate Secretary
or to such other persons or addresses as any party may designate by written
notice to the others. Each such notice, request or other communication shall
be effective (i) if given by telecopy, when such telecopy is transmitted and
the appropriate answerback is received, (ii) if given by reputable overnight
courier, one (1) business day after being delivered to such courier, (iii) if
given by certified mail (return receipt requested), three (3) business days
after being deposited in the mail with first class postage prepaid, or (iv) if
given by any other means, when received at the address specified in this
Section 16.1.
Section 16.2 - Force Majeure. Neither party shall be responsible for
failure or delay in performance or delivery if such failure or delay is the
result of an act of God, the public enemy, embargo, governmental act, fire,
accident, war, riot, strikes, inclement weather or other cause of a similar
nature that is beyond the control of the parties. In the event of such
occurrence, this Agreement shall be amended by mutual agreement to reflect an
extension in the period of performance and/or time of delivery. Failure to
agree on an equitable extension shall be considered a dispute and resolved in
accordance with Section 16.4 hereof.
Delays in the launch of Satellites caused by the actions or inactions
of Orbital in connection with this Agreement, including without limitation any
Launch Vehicle Launch Service failure, directly or pursuant to its subcontracts
shall not constitute a force majeure event under this Section 16.2. All other
delays in launches of Satellites arising for whatever reason shall constitute a
force majeure event, including but not limited to delays in the launch(es) of
Satellite(s) due to delays of any other launches (i.e., not under the Launch
Vehicle Launch Service under this Agreement) preceding any of the ORBCOMM
System scheduled launches.
Section 16.3 - Licenses and Permits. Launches of the ORBCOMM System
Satellites shall be accomplished under the Commercial Space Launch Act (49
U.S.C. Section 2601, et seq.). Orbital shall be responsible for obtaining the
necessary licenses, permits and clearances that may be required by the United
States Department of Transportation, Department of Commerce, or other
governmental agency in order to operate as a launch service contractor.
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Section 16.4 - Resolution of Disputes. (a) Any controversy or claim
that may arise under, out of, in connection with or relating to this Agreement
or any breach hereof, shall be submitted to a representative management panel
of ORBCOMM Global, Orbital and Teleglobe Mobile. Each of ORBCOMM Global,
Orbital and Teleglobe Mobile may appoint up to two (2) individuals to such
panel. Such appointments shall be made within ten (10) days of the receipt by
the appointing party of notice of the existence of such controversy or claim.
The unanimous decision and agreement of such panel shall resolve the
controversy or claim. If the panel is unable to resolve such matter within
thirty (30) days of the submission of such controversy or claim to such panel,
it shall be brought before the Presidents of ORBCOMM Global and Orbital and a
designee of Teleglobe Mobile for final resolution. If such individuals are
unable to resolve the matter within thirty (30) days of the submission of such
controversy or claim to such individuals by way of unanimous decision, either
party may remove the controversy or claim for arbitration in accordance with
Section 16.4(b).
(b) Any controversy or claim that is not resolved under Section
16.4(a) shall be settled by final and binding arbitration in New York, New
York, in accordance with the then existing United States domestic rules of the
American Arbitration Association (the "AAA") (to the extent not modified by
this Section 16.4). In the event that claims or controversies arise under this
Agreement and any of the Definitive Agreements, such claims or controversies
may be consolidated in a single arbitral proceeding. The arbitral tribunal
shall be composed of three (3) arbitrators who are expert in satellite
communications systems and/or launch vehicles as may be appropriate depending
on the nature of the dispute. Each of ORBCOMM Global and Orbital shall appoint
one (1) arbitrator. If any party fails to appoint an arbitrator within thirty
(30) days from the date on which another party's request for arbitration has
been communicated to the first party, such appointment shall be made by the
AAA. The two (2) arbitrators so appointed shall agree upon the third
arbitrator who shall act as chairman of the arbitral tribunal. If the two (2)
appointed arbitrators fail to nominate a chairman within ten (10) days from the
date as of which both arbitrators shall have been appointed, such chairman
shall be selected by the AAA. In all cases, the arbitrators shall be fluent in
English. Judgment upon any award rendered by the arbitrators may be entered
into any court having jurisdiction or application may be made for judicial
acceptance of the award and an order of enforcement, as the case may be. The
parties agree that if it becomes necessary for any party to enforce an arbitral
award by a legal action or additional arbitration or judicial methods, the
party against whom enforcement is sought shall pay all reasonable costs and
attorneys' fees incurred by the party seeking to enforce the award.
Section 16.5 - Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of Virginia, USA,
without giving effect to the provisions, policies or principles thereof
relating to choice or conflict of laws.
Section 16.6 - Binding Effect; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors and permitted assigns. Neither this Agreement nor any interest or
obligations hereunder shall be assigned or transferred
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(by operation of law or otherwise) to any person without the prior written
consent of the other party, provided that any party may assign this Agreement
and its interest and obligations hereunder to any wholly owned subsidiary of
such party.
Section 16.7 - Order of Precedence. Inconsistencies between or among
Articles of Agreements and/or any attachment shall be resolved in the following
order of precedence:
(a) Article 1 through Article 16 of this Agreement;
(b) the Statements of Work; and
(c) the Specifications.
Section 16.8 - Options and Option Exercise.
(a) The option for a fourth launch may be exercised up until
thirty (30) days after the third launch contemplated by this Agreement, but in
any event, no later than December 31, 1997. Delivery shall be no later than
twenty-two (22) months after exercise.
(b) The option for the Replacement Constellation may be exercised
up until twenty-two (22) months after the third launch contemplated by this
Agreement but in any event, no later than December 31, 1999. Delivery shall
begin no later than twenty-two (22) months after exercise with a detailed
schedule to be negotiated.
(c) The option for launch of two (2) ORBCOMM Satellites to a high
inclination orbit shall be on an "as available" basis and delivery and to the
extent that the option price referred to in Section 2.9 is not applicable,
price shall be negotiated prior to exercise.
(d) Invoicing and payment for the options shall be negotiated
prior to exercise and shall be consistent with the Invoicing and Payment terms
of this Agreement.
Section 16.9 - Export Regulations. ORBCOMM Global acknowledges that
if Goods or technical data purchased, provided or produced hereunder are to be
exported, they are subject to applicable U.S. Commerce and/or State Department
export regulations. ORBCOMM Global accepts full responsibility for and agrees
to comply fully with such regulations, including obtaining export licenses and
re-export permission.
Section 16.10 - Key Personnel. Orbital agrees that those individuals
identified in Exhibit D, which Exhibit D may be modified from time to time at
the request of ORBCOMM Global, which request shall not be unreasonably denied
by Orbital, are necessary for the successful completion of the Work to be
performed of this Agreement. Such key personnel shall not be removed from the
performance of the Work under this Agreement unless replaced with personnel of
substantially equal qualifications and ability. ORBCOMM Global shall have the
right to
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review the qualifications of any proposed replacements and, if for valid
reasons ORBCOMM Global deems such personnel to be unsuitable, ORBCOMM Global
may require Orbital to offer alternative candidates. Notwithstanding its role
in approving key personnel, ORBCOMM Global shall have no supervisory control
over their work, and nothing in this Section 16.10 shall relieve Orbital of any
of its obligations under this Agreement, or of its responsibility for any acts
or omissions of its personnel. To the extent that one or more of the key
personnel voluntarily resign, ORBCOMM Global shall be consulted in the
selection of the replacement personnel but shall not have the right to approve
such replacement personnel.
Section 16.11 - Counterparts. This Agreement may be executed in any
number of counterparts of the signature pages, each of which shall be
considered an original, but all of which together shall constitute one and the
same instrument.
Section 16.12 - Headings. This section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
Section 16.13 - Amendment Waiver. Except as provided otherwise
herein, this Agreement may not be amended nor may any rights hereunder by
waived except by an instrument in writing signed by the parties hereto.
Section 16.14 -Termination of the ORBCOMM System Agreement. The
ORBCOMM System Agreement is hereby terminated and except for the Gateway Earth
Station efforts described in Exhibit A, Part 3, which is to be completed and
paid for under this Agreement, ORBCOMM Global's potential liability for taxes
and ORBCOMM's warranty obligations under Article 10 of the ORBCOMM System
Agreement, if any, which shall survive this termination, there shall be no
further obligations under the ORBCOMM System Agreement.
ARTICLE 17 - LIST OF EXHIBITS AND SCHEDULES
Exhibits
--------
Exhibit A STATEMENT OF WORK AND SPECIFICATIONS
Part 1A Satellite Statement of Work
Part 1B Satellite Specifications
Part 2 Launch Vehicle Statement of Work Specifications
Part 3 Gateway Earth Station Statement of Work and Specifications
Exhibit B Category B Milestones
Exhibit C Category A Milestones
Exhibit D Key Personnel
Exhibit E Reserved
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To Be Incorporated
------------------
Exhibit F Verification and Test Plan
Exhibit G Interface Specifications
Schedules
---------
Schedule 4.1(f) Maximum Cumulative Payments
Schedule 4.2(c) Category A On-orbit Check Out Achievement Criteria
Schedule 4.4 Form of Invoice
Schedule 6.3(a) Gateway Earth Station Acceptance Test Procedure
Schedule 9.4(b) Patent Indemnification - List of Countries
Schedule 14 Working Satellites for On-Orbit Incentive Payment
To Be Incorporated
------------------
Schedule 6.3(b) Satellite Control Center Acceptance Test Procedure
APPENDIX I OF THE ORBCOMM SYSTEM AGREEMENT IS ATTACHED HERETO. THE PARTIES
SHALL HAVE NO OBLIGATION WITH RESPECT TO SUCH APPENDIX I, WHICH SHALL BE USED
TO CLARIFY THE MEANING AND INTERPRETATION OF THIS AGREEMENT, IF SUCH MEANING OR
INTERPRETATION CANNOT BE REASONABLY DERIVED FROM THIS AGREEMENT, THE EXHIBITS
OR SCHEDULES THERETO.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
ORBITAL SCIENCES CORPORATION
By: /s/ Bruce W. Ferguson
-------------------------
Name: Bruce W. Ferguson
Title: Executive Vice President and
General Manager/Communications and
Information Systems Group
ORBCOMM GLOBAL, L.P.
BY ITS GENERAL PARTNERS,
ORBITAL COMMUNICATIONS CORPORATION
By: /s/ Alan L. Parker
-------------------------
Name: Alan L. Parker
Title: President
- and -
TELEGLOBE MOBILE PARTNERS
BY ITS MANAGING PARTNER
TELEGLOBE MOBILE INVESTMENTS INC.
By: /s/ Guthrie J. Stewart
-------------------------
Name: Guthrie J. Stewart
Title: Executive Vice President, Corporate
Development and Corporate Secretary
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