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EXHIBIT 10.2
AMENDED AND RESTATED CONTRACT
BETWEEN
ECHOSTAR ORBITAL CORPORATION
AND
SPACE SYSTEMS/LORAL, INC.
ECHOSTAR 8 SATELLITE PROGRAM
(110 DEGREES W.L.)
This document contains data and information proprietary to Space Systems/Loral,
Inc. and EchoStar Orbital Corporation. This data shall not be disclosed,
disseminated or reproduced, in whole or in part, without the express prior
written consent of Space Systems/Loral, Inc. and EchoStar Orbital Corporation
except as otherwise provided in this Contract.
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TABLE OF CONTENTS
PREAMBLE.....................................................................3
RECITALS.....................................................................4
ARTICLE 1 - DEFINITIONS......................................................5
ARTICLE 2 - SCOPE OF WORK....................................................9
ARTICLE 3 - DELIVERABLE ITEMS AND DELIVERY SCHEDULE..........................9
ARTICLE 4 - PRICE...........................................................10
ARTICLE 5 - PAYMENT.........................................................11
ARTICLE 6 - PURCHASER-FURNISHED ITEMS.......................................15
ARTICLE 7 - COMPLIANCE WITH U.S. EXPORT LAWS AND DIRECTIVES.................17
ARTICLE 8 - ACCESS TO WORK IN PROGRESS......................................18
ARTICLE 9 - SATELLITE PRE-SHIPMENT REVIEW (SPSR)............................22
ARTICLE 10 - SATELLITE ACCEPTANCE...........................................25
ARTICLE 11 - ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN
SATELLITES.....................................................26
ARTICLE 12 - DELIVERY, TITLE AND RISK OF LOSS...............................28
ARTICLE 13 - [CONFIDENTIAL INFORMATION REDACTED]............................29
ARTICLE 14 - INTENTIONALLY DELETED..........................................29
Article 15 - WARRANTY.......................................................30
ARTICLE 16 - CHANGES........................................................34
ARTICLE 17 - FORCE MAJEURE..................................................35
ARTICLE 18 - PURCHASER DELAY OF WORK........................................37
ARTICLE 19 - PATENT INDEMNITY...............................................38
ARTICLE 20 - INDEMNITY FOR BODILY INJURY AND PROPERTY DAMAGE................40
ARTICLE 21 - TERMINATION FOR CONVENIENCE....................................42
ARTICLE 22 - [CONFIDENTIAL INFORMATION REDACTED]............................45
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ARTICLE 22A - [CONFIDENTIAL INFORMATION REDACTED]...........................45
ARTICLE 23 - DEFAULT........................................................45
ARTICLE 24 - INTENTIONALLY DELETED..........................................48
ARTICLE 25 - ARBITRATION....................................................48
ARTICLE 26 - INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH...................49
ARTICLE 27 - CORRECTIVE MEASURES............................................51
ARTICLE 28 - RESERVED.......................................................51
ARTICLE 29 - [CONFIDENTIAL INFORMATION REDACTED]............................51
ARTICLE 30 - MOST FAVORED NATION............................................51
ARTICLE 31 - RESERVED.......................................................51
ARTICLE 32 - RESERVED.......................................................51
ARTICLE 33 - GROUND STORAGE.................................................52
ARTICLE 34 - LIMITATION OF LIABILITY........................................53
ARTICLE 35 - DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION.............54
ARTICLE 36 - INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN DATA..................57
ARTICLE 37 - PUBLIC RELEASE OF INFORMATION..................................59
ARTICLE 38 - NOTICES........................................................59
ARTICLE 39 - [CONFIDENTIAL INFORMATION REDACTED]............................60
ARTICLE 40 - ORDER OF PRECEDENCE............................................60
ARTICLE 41 - GENERAL........................................................61
ARTICLE 42 - ATTACHMENTS....................................................64
ARTICLE 43 - TERMINATION RIGHT..............................................65
ARTICLE 44 - COOPERATION REGARDING SPOT BEAMS...............................65
ARTICLE 45 - [CONFIDENTIAL INFORMATION REDACTED]............................66
ARTICLE 46 - KEY PERSONNEL..................................................66
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PREAMBLE
This Amended and Restated Contract is made and effective as of February 1, 2001
by and between EchoStar Orbital Corporation and Space Systems/Loral, Inc.,
regarding the EchoStar 8 Satellite Program (110 degrees W.L.) (the "Contract")
and amends and restates that certain Contract entered into as of February 4,
2000 (the "Effective Date of Contract" or "EDC") between EchoStar Orbital
Corporation, organized and existing under the laws of the State of Colorado
having an office and place of business at 5701 South Santa Fe, Littleton,
Colorado 80120 (hereinafter referred to as "Purchaser") and Space Systems/Loral,
Inc., a corporation organized and existing under the laws of the State of
Delaware, having an office and place of business at 3825 Fabian Way, Palo Alto,
California 94303 (hereinafter referred to as "Contractor").
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RECITALS
WHEREAS, Purchaser desires to procure one (1) communications satellite, known as
EchoStar 8, to be delivered to the Launch Site, risk management therefor, all
required ground equipment and support and training services, to the extent and
subject to the terms and conditions set forth herein, and
WHEREAS, Contractor is willing to furnish such Satellite, risk management,
ground equipment and support and training services, to the extent and subject to
the terms and conditions set forth herein, in consideration of the Firm Fixed
Price and other valid consideration.
NOW, THEREFORE, the Parties hereto agree as follows:
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ARTICLE 1 - DEFINITIONS
Capitalized terms used and not otherwise defined herein shall have the following
meanings:
1.1 "ACCEPTANCE" (i) with respect to a Satellite shall be as provided for
in Article 10, and (ii) with respect to any Deliverable Item other than
a Satellite shall be as provided for in Article 11.
1.2 "ADDITIONAL SATELLITE" has the meaning set forth in Article
[CONFIDENTIAL INFORMATION REDACTED].
1.3 "AFFILIATE" means, with respect to a Party, any person or entity
directly or indirectly controlling, controlled by or under common
control with such Party.
1.4 "CONTRACT" means the articles of this executed Contract, its Exhibits
and its Attachment(s), as may be amended from time to time in
accordance with the terms hereof.
1.5 "CONTRACTOR" has the meaning set forth in the preamble and any
successor or assignee permitted hereunder.
1.6 "DELIVERABLE DATA" means the data and documentation required to be
delivered to Purchaser as specified in the Statement of Work.
1.7 "DELIVERABLE ITEM" means any of the items listed in Article 3.1, and
any Additional Satellite or other items ordered by Purchaser pursuant
to Article [CONFIDENTIAL INFORMATION REDACTED], and, collectively, the
"DELIVERABLE ITEMS".
1.8 "DELIVERY" (i) with respect to a Satellite shall be as provided for in
Article 12.1, and (ii) with respect to any Deliverable Item other than
a Satellite shall be as provided for in Article 12.2.
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1.9 "EFFECTIVE DATE OF CONTRACT" or "EDC" means the effective date of this
Contract as specified in the preamble.
1.10 "FCC" means the Federal Communications Commission or any successor
agency or governmental authority.
1.11 "FIRM FIXED PRICE" has the meaning set forth in Article 4.1.
1.12 "FORCE MAJEURE" has the meaning set forth in Article 17.
1.13 "GROSS NEGLIGENCE" means reckless disregard for the rights of others
which very closely approaches intentional wrongdoing or other actions
(or failures to act) which very closely approach intentional
wrongdoing.
1.14 "IN-ORBIT TESTING" or "IOT" means the testing of a Satellite on-orbit
in accordance with the Program Test Plan.
1.15 "INTELLECTUAL PROPERTY CLAIM" has the meaning set forth in Article 19.
1.16 "INTENTIONAL IGNITION" means, with respect to a Satellite, the official
time designated by the Launch Agency during the launch sequence when
the initial motors of the Launch Vehicle are ignited for the purpose of
Launch following a planned countdown.
1.17 "LAUNCH" means, with respect to a Satellite, Intentional Ignition
followed by Lift-Off.
1.18 "LAUNCH AGENCY" means the provider responsible for conducting the
Launch Services for a Satellite.
1.19 "LAUNCH SERVICES" means those services provided by the Launch Agency
pursuant to the Launch Services Agreement.
1.20 "LAUNCH SERVICES AGREEMENT" or "LSA" means the contract between
Purchaser and the Launch Agency which provides for Launch
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Services for a Satellite, as such contract may be amended from time to
time in accordance with its terms.
1.21 "LAUNCH SITE" means the location that will be used by the Launch Agency
for purposes of launching a Satellite.
1.22 "LAUNCH SUPPORT" or "LAUNCH SUPPORT SERVICES" means those services
specified in the Statement of Work to be provided by Contractor in
support of Launch.
1.23 "LAUNCH VEHICLE" means the launch vehicle selected by Purchaser and
used for Launch of a Satellite, which is baselined to be an
[CONFIDENTIAL INFORMATION REDACTED] launch vehicle, unless changed
under Article [CONFIDENTIAL INFORMATION REDACTED].
1.24 "LIBOR" means the rate of interest per annum, at any relevant time, at
which thirty (30) day U.S. dollar deposits are offered at such time in
the London interbank market.
1.25 "LIFT-OFF" means, with respect to a Satellite, physical separation of
the Launch Vehicle from the ground support equipment following
Intentional Ignition due to the Launch Vehicle rising under its own
power for the purpose of launching a Satellite.
1.26 "MISSION OPERATIONS SUPPORT SERVICES" means the orbit-raising, IOT and
related services specified in the Statement of Work to be performed by
Contractor for a Satellite.
1.27 "NSP" means not separately priced.
1.28 "PARTY" or "PARTIES" means Purchaser, Contractor or both, as the
context requires.
1.29 "PAYMENT PLAN" means the payment plan for the applicable Deliverable
Item, attached as Attachment A.
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1.30 "PERFORMANCE SPECIFICATION" means the Satellite performance
specification attached as Exhibit B, as such Exhibit may be amended
from time to time in accordance with the terms of this Contract.
1.31 "PMO" means the Purchaser's program management office.
1.32 "PRODUCT ASSURANCE PROGRAM PLAN" means the product assurance program
plan attached as Exhibit C, as such Exhibit may be amended from time to
time in accordance with the terms of this Contract.
1.33 "PROGRAM TEST PLAN" means the Satellite program test plan attached as
Exhibit D, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
1.34 "PROPRIETARY INFORMATION" has the meaning set forth in Article 35.
1.35 "PURCHASER" has the meaning set forth in the preamble and any successor
or assignee permitted hereunder.
1.36 "SATELLITE" means a communications satellite that is to be manufactured
by Contractor pursuant to this Contract.
1.37 "SATELLITE ANOMALY" means, with respect to any Satellite, any
occurrence that occurs at or after Intentional Ignition and has or
could have an impact on a Satellite's health or performance of such
Satellite.
1.38 "SATELLITE PRE-SHIPMENT REVIEW" or "SPSR" has the meaning set forth in
Article 9.
1.39 "SCF" means satellite control facility.
1.40 "STATEMENT OF WORK" or "SOW" means the statement of work attached as
Exhibit A, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
1.41 "TT&C" means telemetry, tracking and control.
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ARTICLE 2 - SCOPE OF WORK
2.1 Provision of Services and Materials
Contractor shall provide the necessary personnel, material, services,
and facilities to: design, manufacture, test, and deliver to the
location set forth in Article 3.1 (or another location agreed upon
pursuant to Article [CONFIDENTIAL INFORMATION REDACTED]), one (1)
Satellite, together with all other Deliverable Items referred to in
Article 3.1, in accordance with the following Exhibits, which are
attached hereto and made a part hereof:
2.1.1 Exhibit A, Statement of Work, dated April 19, 2000 (Document Reference
No. 17/EchoStar-8/E8SOW New 1/-4/6/00);
2.1.2 Exhibit B, Satellite Performance Specification, dated April 25, 2000,
Rev. 6;
2.1.3 Exhibit C, Product Assurance Program Plan Part One, dated May 11, 2000
(Document Reference No. E224145, Rev. 1) and Product Assurance Program
Plan Part Two, dated February 14, 2000 (Document Reference No. E038152,
Rev. 4);
2.1.4 Exhibit D, Satellite Program Test Plan, dated April 19, 2000 (Doc No.
17/EchoStar8/E8TP1 doc/-3/27/00).
ARTICLE 3 - DELIVERABLE ITEMS AND DELIVERY SCHEDULE
3.1 Deliverable Items
Subject to the other terms and conditions of this Contract, the items
to be delivered under this Contract are specified in the table below
and the corresponding delivery schedules and locations are as follows:
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ITEM DESCRIPTION DELIVERY SCHEDULE DELIVERY LOCATION
---- ----------- ----------------- -----------------
1. Satellite [CONFIDENTIAL [CONFIDENTIAL INFORMATION
(EchoStar 8) INFORMATION REDACTED] REDACTED]
2. Deliverable Data Per SOW, Exhibit A PMO
3. Support and Training Per SOW, Exhibit A Contractor's facilities and Purchaser's SCF
4. Ground Equipment Per SOW, Exhibit A Purchaser's SCF
5. Risk Management Services Per Article 39 Contractor's facilities
Contractor shall, at its cost, use its reasonable best efforts to
obtain all U.S. and foreign Government approvals necessary to export
and import a Satellite, all Deliverable Items and Deliverable Data
required hereunder, and the individual components of the applicable
Satellite and such Deliverable Items and Deliverable Data.
ARTICLE 4 - PRICE
4.1 Firm Fixed Price The total price to be paid by Purchaser to Contractor
for the Deliverable Items 1 through 4 set forth in Article 3.1 within
the scope of work detailed in the Statement of Work, shall be a firm
fixed price of [CONFIDENTIAL INFORMATION REDACTED] (the "Firm Fixed
Price"). The total price to be paid by Purchaser to Contractor for
Deliverable Item 5 set forth in Article 3.1 within the scope of work
detailed in Article 39 shall be a firm fixed price equal to
[CONFIDENTIAL INFORMATION REDACTED] for any risk management insurance
policy(ies) procured by Contractor pursuant to Article 39. The prices
for those Deliverable Items subject to an option under this Contract,
if any, are described in the
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particular Articles that set forth those options. The itemization of
the Firm Fixed Price is as follows:
Item Description Amount
---------------- ------
Satellite (EchoStar 8) [CONFIDENTIAL INFORMATION REDACTED]
The Firm Fixed Price for such Satellite includes all design,
manufacturing, tests, In Orbit Incentives, Deliverable Data, training,
Launch Support Services, Mission Operations Support Services, ground
equipment and shipment and transportation, all in accordance with the
terms and conditions of this Contract, as specified herein. The item
price also includes, and Contractor shall indemnify, defend and hold
Purchaser, its Affiliates, directors, officers, employees, shareholders
and agents harmless from and against, all applicable taxes, duties and
similar liabilities whatsoever imposed by any governmental entity in
connection with the performance of this Contract, except any tax on the
sale to Purchaser resulting from Purchaser's election to exercise the
Ground Storage option in Article 33. The Firm Fixed Price does not
include the cost of any risk management insurance procured by
Contractor pursuant to Article 39 below.
ARTICLE 5 - PAYMENTS
5.1 Payment Plan
Absent a bona fide dispute, payments by Purchaser to Contractor of the
Firm Fixed Price set forth in Article 4 and of the amounts for options,
if any, exercised by Purchaser pursuant to this Contract, shall be in
accordance with the Payment Plan applicable thereto.
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5.2 Payment Conditions
5.2.1 Payments. Absent a bona fide dispute, all payments due from
Purchaser (other than payments for risk management services,
which shall be made in accordance with the payment terms set
forth in Article 39) shall be paid no later than the date
specified therefor as set forth in the Payment Plan, provided
that: (i) Contractor submits to Purchaser an invoice with
respect to each such payment no later than [CONFIDENTIAL
INFORMATION REDACTED] days prior to such due date; and (ii)
Contractor completes the applicable milestone set forth in
Attachment A no later than [CONFIDENTIAL INFORMATION REDACTED]
days prior to such due date. Notwithstanding the foregoing, in
the event that Contractor does not deliver an invoice to
Purchaser at least [CONFIDENTIAL INFORMATION REDACTED] days
prior to such due date and/or does not achieve the relevant
milestone, or provide a work-around that does not affect
schedule and is otherwise acceptable to Purchaser, at least
[CONFIDENTIAL INFORMATION REDACTED] days prior to such due
date, Purchaser may suspend all payments until such time as
the relevant invoice is received and milestone is completed.
Within [CONFIDENTIAL INFORMATION REDACTED] days following
Purchaser's receipt of the relevant invoice [CONFIDENTIAL
INFORMATION REDACTED] days following Contractor's completion
of the relevant milestone, whichever occurs later, Purchaser
shall pay Contractor for all payments that were required to
have been made but were not as a result of the suspension.
5.2.2 Milestones. Notwithstanding the milestones set forth in
Attachment A, if it becomes reasonably clear that problems
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with deliverables are reasonably likely to cause schedule
delays, then all payments may be suspended, at Purchaser's
option, and the date for payment of each subsequent payment
delayed, by an amount of time equal to the difference between
the originally scheduled delivery date for the Satellite set
forth in Article 3 and the revised forecast delivery date. In
the event that Contractor subsequently recovers all or a
portion of the originally scheduled delivery date for the
Satellite, payments will again be revised to reflect that
recovery. Further, if, following completion of a milestone, a
problem arises which requires rework of elements of the
milestone, then payments may be suspended, at Buyer's option,
until the milestone is again complete.
5.2.3 Non-Warranty Payments. Absent a bona fide dispute, all amounts
payable to Contractor with respect to non-warranty work
performed pursuant to Article 15.3 shall be paid no later than
[CONFIDENTIAL INFORMATION REDACTED] days after submission of
an invoice by Contractor certifying that such non-warranty
work has been completed.
5.2.4 Obligation to Pay. The failure of Contractor to deliver any
invoice required hereunder shall not affect Purchaser's
obligation hereunder to make any payments to Contractor. If
Contractor shall not have delivered any invoice required
hereunder within the time specified therefor, subject to the
terms and conditions of this Article 5, the relevant payment
due from Purchaser shall be payable [CONFIDENTIAL INFORMATION
REDACTED] days after receipt of such invoice.
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5.3 Late Payment
Except in the case of a bona fide dispute, in the event that any
payment owed by one Party to the other Party is not made when due
hereunder, without prejudice to the second Party's other rights and
remedies under this Contract, at law or in equity, the first Party
shall pay the other Party interest at the rate of [CONFIDENTIAL
INFORMATION REDACTED] on the unpaid balance thereof from the date such
payment is due hereunder until such time as payment is made. If a
payment due to Contractor from Purchaser is not made by the date
[CONFIDENTIAL INFORMATION REDACTED] days after the date due hereunder,
without prejudice to Contractor's other rights and remedies under this
Contract, at law or in equity, Contractor may elect to cease
performance of its obligations under this Contract, without prejudice
or penalty. In such case, if Contractor subsequently resumes
performance in lieu of termination pursuant to Article 23.5, the
schedule, price and other affected provisions of this Contract shall be
modified to compensate Contractor for its added reasonable, actual
out-of-pocket costs plus a profit of [CONFIDENTIAL INFORMATION
REDACTED] associated with such work stoppage. Notwithstanding the
foregoing, in the event of a bona fide dispute between the Parties
regarding a payment due hereunder, such dispute shall be resolved
pursuant to Article 25 hereof, and Contractor shall have no right
during the pendancy of such dispute to stop work under this Contract
because of such dispute.
5.4 Invoices
Invoices required to be delivered by Contractor hereunder shall be
submitted to Purchaser (original plus one (1) copy) at the following
address:
[CONFIDENTIAL INFORMATION REDACTED] or to such other address as
Purchaser may specify in writing to Contractor.
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5.5 Payment Bank
All payments made to Contractor hereunder shall be in U.S. currency and
shall be made by electronic funds transfer to the following account:
[CONFIDENTIAL INFORMATION REDACTED]
or by check to:
[CONFIDENTIAL INFORMATION REDACTED]
or to such other account or address as Contractor may specify in
writing to Purchaser.
ARTICLE 6 - PURCHASER-FURNISHED ITEMS
6.1 Purchaser-Furnished Support
To enable Contractor to perform Launch Support and Mission Operations
Support Services, Purchaser shall timely make available to Contractor
the Purchaser-furnished equipment, facilities and services described in
the Statement of Work. Such equipment, facilities and services shall be
in good working condition and adequate for the required purpose and
shall be made available free of charge for Contractor's use (including
Acceptance inspection pursuant to Article 11) during the period
commencing [CONFIDENTIAL INFORMATION REDACTED] prior to such Launch and
continuing through completion of the IOT review. Purchaser and
Contractor will conduct an interface meeting [CONFIDENTIAL INFORMATION
REDACTED] prior to such Launch to confirm the availability and adequacy
of Purchaser-furnished equipment, facilities and services.
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6.2 Communications Authorizations
Purchaser shall be responsible, at its cost and expense, for preparing,
coordinating and filing all applications for licenses with the FCC, if
required to do so, for the Launch and operation of the Satellite.
Contractor shall timely provide Purchaser with all reasonable
assistance, at no additional cost to Purchaser, requested by Purchaser
in connection with Purchaser's performance of the above-specified
tasks, and in connection with the filing of any technical filings
required to be made by Purchaser with the FCC.
6.3 Radio Frequency Coordination
Purchaser shall be responsible for the timely preparation and
submission of all filings required by the International
Telecommunication Union (or any successor agency thereto) regarding
radio frequency and orbital position coordination. Such filings shall
be made in accordance with the Radio Regulations of the International
Telecommunication Union (or any successor agency). Contractor shall
timely provide Purchaser with all reasonable assistance, at no
additional cost to Purchaser, requested by Purchaser in connection with
Purchaser's performance of the above-specified tasks.
6.4 Licenses and Permits
Except as set forth in Articles 6.2 and 6.3 above, Contractor shall be
responsible, at its sole cost and expense, for securing any and all
permits and licenses for the construction and transportation of a
Satellite (other than FCC construction permits for a Satellite).
6.5 Satellite Performance Data
In the event of a Satellite Anomaly that occurs during the life of a
Satellite, Purchaser shall timely provide Contractor with or give
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Contractor access to any data Contractor may reasonably require to
investigate or correct (if Contractor is able to do so) such Satellite
Anomaly or make or settle any insurance claim relating to such
Satellite Anomaly.
6.6 Late Delivery of Purchaser-Furnished Items or Services
The late delivery of Purchaser-furnished items, individually or
combined, shall be considered an event beyond the reasonable control of
Contractor, and Contractor shall be entitled to a reasonable adjustment
in price, schedule, and other affected terms for such late delivery.
ARTICLE 7 - COMPLIANCE WITH U.S. EXPORT LAWS AND DIRECTIVES
7.1 Technical Information, Deliverable Data and Technical Services
7.1.1 Any obligation of either Party hereunder to provide technical
information, Deliverable Data or technical services to the
other Party or its representatives shall be subject to
applicable U.S. Government export control and security laws,
regulations, policies and license conditions. The Parties
shall work cooperatively and in good faith to implement this
Contract consistent with such laws, regulations, policies and
license conditions.
7.1.2 If and to the extent required by U.S. law, the Parties and/or
their representatives shall enter into U.S.
Government-approved agreement(s), separate from this Contract,
governing the Party's provision of technical information,
Deliverable Data or technical services in connection with this
Contract.
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7.2 No Retransfer
The Parties shall not transfer to any "foreign person", as defined in
the International Traffic in Arms Regulations (22 C.F.R. Section 120.1)
technical information, Deliverable Data or technical services furnished
hereunder, except as expressly authorized by the U.S. Government in
accordance with U.S. export control laws. THE PARTIES UNDERSTAND AND
WARRANT THAT THEY SHALL NOT RE-EXPORT, TRANSFER OR DIVERT ANY ITEM
EXPORTED UNDER OR IN CONNECTION WITH THIS CONTRACT TO ANY "FOREIGN
PERSON" WITH A NATIONALITY OTHER THAN CONTRACTOR'S OR PURCHASER'S,
RESPECTIVELY, WITHOUT THE PRIOR WRITTEN APPROVAL OF THE U.S.
GOVERNMENT.
ARTICLE 8 - ACCESS TO WORK IN PROGRESS
8.1 Work in Progress at Contractor's Plant
Subject to Article 7 and Article 8.5 and to compliance with
Contractor's safety and security regulations, Purchaser's employees
(and representatives, consultants or agents, subject to the prior
approval of Contractor, which approval shall not be unreasonably
withheld or delayed) shall be allowed access, in such a manner so as
not to unreasonably disrupt the routine business operations of
Contractor, to observe work being performed at Contractor's facility
for the Satellite and other Deliverable Items, for the purpose of
observing the progress of such work and otherwise confirming
Contractor's compliance with this Contract. Notwithstanding anything to
the contrary set forth herein, the fact that Purchaser has observed
work performed hereunder shall not be deemed Purchaser's Acceptance or
approval of such work.
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8.2 Work in Progress at Subcontractors' Plant
Subject to Article 7 and Article 8.5, to the extent permitted by
Contractor's subcontractors supplying services or goods in connection
with the Satellite and subject to each such subcontractor's safety and
security regulations, Contractor shall allow Purchaser's employees (and
representatives, consultants or agents, subject to the prior approval
of Contractor, which approval shall not be unreasonably withheld or
delayed) access, in such a manner so as not to unreasonably disrupt the
routine business operations of Contractor, to observe work being
performed with respect to the Satellite in each such subcontractor's
plants for the purpose of observing the progress of such work and
otherwise confirming Contractor's compliance with this Contract,
subject to the right of Contractor to accompany Purchaser on any such
visit to a subcontractor's plant; provided, however, that Purchaser may
conduct an unaccompanied observation in the event that Contractor fails
to furnish a representative after reasonable written notice of
Purchaser's observation request. Contractor will use reasonable efforts
to obtain permission for such access to subcontractor's facilities.
8.3 Remedy for Non-Compliance
Purchaser may inform Contractor in writing of any particulars in which
Purchaser observes and reasonably believes that work being performed
under this Contract is non-compliant, including the specific contract
requirements believed to be non-compliant and the reasons for such
belief, and Contractor shall remedy such non-compliance at Contractor's
expense, promptly upon receipt of notice thereof.
8.4 On-Site Facilities for Purchaser's Personnel
Subject to Article 7 and Article 8.5, for the purpose of monitoring the
progress of the work to be performed by Contractor hereunder and
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otherwise confirming Contractor's compliance with this Contract,
Contractor shall provide private office facilities at or proximate to
Contractor's plant (which private office facilities shall in all cases
at least be co-located with Contractor's program management office) for
two (2) resident employees of Purchaser (or Purchaser's duly appointed
representatives, consultants and agents, subject to the prior approval
of Contractor, which approval shall not be unreasonably withheld or
delayed) for a reasonable period of time after the completion of the
Satellite review described in Article 10.2. The office facilities to be
provided shall include [CONFIDENTIAL INFORMATION REDACTED], to the
extent necessary to enable such personnel to monitor the progress of
work and otherwise confirm Contractor's compliance with this Contract.
8.5 Competition/ Foreign Persons as Purchaser Representatives
Purchaser's representatives, consultants and agents shall not be in
direct competition with Contractor, meaning they shall not currently be
employed by companies or entities that are in the business of
manufacturing communication satellites. Purchaser shall notify
Contractor in writing of the name, title or function, business
relationship, employer and such other information as may be reasonably
requested by Contractor, with respect to each of its intended
representatives, consultants and agents, and cause each such
representative, consultant and agent to execute a confidentiality
agreement directly with Contractor in form and substance reasonably
satisfactory to Contractor and containing terms substantially the same
as those set forth in Article 35. Contractor may deny access to
Contractor provided office facilities to any representative, consultant
or agent of Purchaser upon Contractor's reasonable determination that
such consultant or agent is, by reason of its business or affiliations,
in direct competition with Contractor.
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Contractor shall apply for and, once issued, maintain all U.S.
Government export licenses and approvals needed for Purchaser's
employees and representatives, agents and consultants who are citizens
of a country other than the U.S., to access Contractor's and its
subcontractors' facilities or technical data in connection with the
performance of this Contract. Purchaser shall cooperate with Contractor
and provide the support necessary for Contractor to apply for and
maintain such export licenses and approvals, and shall promptly notify
Contractor of any occurrence or change in circumstances of which it
becomes aware that is relevant to or affects such export license and
approvals. IN NO EVENT SHALL CONTRACTOR BE OBLIGATED UNDER THIS
CONTRACT TO PROVIDE ACCESS TO CONTRACTOR FACILITIES, TO TRANSFER ANY
TECHNICAL INFORMATION OR DELIVERABLE DATA OR TO PROVIDE ANY TECHNICAL
SERVICES, TO ANY PERSON EXCEPT IN COMPLIANCE WITH APPLICABLE U.S.
EXPORT CONTROL LAWS, REGULATIONS, POLICIES AND LICENSE CONDITIONS, AS
REASONABLY CONSTRUED BY CONTRACTOR.
8.6 Interference with Operations
Purchaser shall exercise its rights under this Article 8 in a manner
that does not unreasonably interfere with Contractor's or its
subcontractors' normal business operations or Contractor's performance
of its obligations under this Contract or any agreement between
Contractor and its subcontractors.
8.7 Notification
Notwithstanding any other provision of this Contract, Contractor shall
advise Purchaser immediately by telephone and confirm in writing any
event, circumstance or development which materially threatens the
quality of, or the delivery schedule for, any Satellite or component
part thereof, as well as any other Deliverable Items to be provided
hereunder.
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ARTICLE 9 - SATELLITE PRE-SHIPMENT REVIEW (SPSR)
9.1 Purchaser to Review
Purchaser shall conduct a review of each Satellite prior to shipment by
Contractor to the Launch Site in accordance with the terms of this
Article 9 and the Statement of Work (each a "Satellite Pre-Shipment
Review" or "SPSR").
9.2 Time, Place and Notice of SPSR; Failure to Conduct
Each SPSR shall take place at Contractor's facility. Contractor shall
notify Purchaser in writing [CONFIDENTIAL INFORMATION REDACTED] days
prior to the date that each Satellite shall be available for SPSR,
which shall be the scheduled date for commencement of such SPSR. If
Purchaser cannot commence such SPSR on such scheduled date, Contractor
shall make reasonable efforts to accommodate Purchaser's scheduling
requirements.
9.3 Conduct and Purpose of SPSR
Each SPSR shall be conducted in accordance with the pertinent Sections
of the Statement of Work. The purpose of each SPSR shall be to review
test data and analyses for the subject Satellite to determine whether
such Satellite meets applicable Performance Specification requirements
and is therefore ready for shipment to the Launch Site.
9.4 Waivers or Pending Waivers
At the earliest possible time, but [CONFIDENTIAL INFORMATION
REDACTED] days before the commencement of the SPSR for the Satellite or
the Acceptance inspection for any Deliverable Item pursuant to Article
11, Contractor shall submit to Purchaser any request for a waiver of,
or deviation from, provisions(s) of the Performance Specification
applicable to the Satellite or Deliverable Item. Each such waiver or
deviation approved by Purchaser shall be
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deemed an amendment to the Performance Specification permitting such
waiver thereof, or deviation therefrom, effective on or after the date
of such approval for the Satellite or Deliverable Item. Purchaser
shall, in keeping with customary industry practice, consider each
waiver or deviation request in good faith and shall not unreasonably
withhold or delay its consent to any such request.
9.5 Purchaser's Inspection Agents
Purchaser may, subject to prior written notice to Contractor, cause any
representative, consultant or agent designated by Purchaser to observe
the SPSR pursuant to this Article 9; provided, however, that the
provisions of Article 7 and Article 8.5 shall apply to any such
representative, consultant or agent.
9.6 SPSR Results
Within a reasonable time after completion of the SPSR for the
Satellite, Purchaser shall notify Contractor in writing of the results
of the SPSR pursuant to this Article 9 with respect to the Satellite.
Provided Purchaser is in compliance with its contractual obligations
hereunder, such Satellite shall be prepared and shipped to the Launch
Site for Launch upon successful completion of the SPSR. In the event
that such SPSR discloses any non-conformance of the Satellite to the
requirements of the Performance Specification not the subject of any
waivers or deviations approved by Purchaser pursuant to Article 9.4,
Purchaser's notice shall state each such non-conformance (with
reference to the applicable requirement of the Performance
Specification deemed not met), and Contractor shall correct or repair
each such non-conformance and resubmit such Satellite for SPSR in
accordance with this Article 9 as to each corrected or repaired
element.
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9.7 Inspection of Equipment and Facilities
Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser and its
agents to dispatch its personnel for pre-shipment inspections,
including travel and living expenses, shall be borne solely by
Purchaser.
9.8 Correction of Deficiencies after SPSR
If at any time following the SPSR for a Satellite, but prior to Launch,
Contractor becomes aware that such Satellite fails to meet the
Performance Specification, as may be modified as of such time pursuant
to Article 9.4, Contractor shall promptly correct such deficiencies at
its own cost and expense.
9.9 Warranty Obligations
In no event shall Contractor be released from any of its warranty
obligations as set forth in Article 15 hereof as a result of any
Satellite having successfully passed the pre-shipment inspection set
forth in this Article 9.
9.10 Repaired or Replaced Satellites
The provisions of this Article 9 shall apply to corrected, repaired or
replaced Satellites.
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ARTICLE 10 - SATELLITE ACCEPTANCE
10.1 Satellite Acceptance
Acceptance of a Satellite by Purchaser shall occur [CONFIDENTIAL
INFORMATION REDACTED].
10.2 In-Orbit Test (IOT) Services
[CONFIDENTIAL INFORMATION REDACTED] days prior to Launch of a
Satellite, Contractor shall notify Purchaser of the IOT schedule.
Purchaser may observe IOT at Purchaser's or Contractor's location, at
Purchaser's election, subject to applicable U.S. Government or
Contractor security or export restrictions.
When, in the reasonable assessment of Contractor, the IOT review has
been completed for a Satellite, Contractor shall submit the IOT results
to Purchaser.
Within [CONFIDENTIAL INFORMATION REDACTED] hours after Contractor
provides the certified IOT results to Purchaser with respect to a
Satellite, Contractor and Purchaser shall hold a Satellite review as
defined in the SOW.
Contractor may elect to conduct from Contractor's facilities the IOT
eclipse test set forth in the Program Test Plan with respect to a
Satellite during the first eclipse season after IOT is otherwise
completed. The results of the later IOT eclipse test will be provided
to Purchaser for Satellite performance characterization and insurance
purposes only.
10.3 [CONFIDENTIAL INFORMATION REDACTED]
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ARTICLE 11 - ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS
OTHER THAN SATELLITES
11.1 Inspection of Deliverable Items of Hardware Other Than Satellites
With respect to each Deliverable Item of hardware other than
Satellites, Purchaser shall perform Acceptance inspection [CONFIDENTIAL
INFORMATION REDACTED] days after Contractor has notified Purchaser that
such Deliverable Item has arrived at the location designated for
delivery thereof in Article 3.1. Such Acceptance inspection shall be
conducted in accordance with the procedures described in the Statement
of Work. The purpose of the Acceptance inspection shall be to determine
whether each such Deliverable Item meets applicable Performance
Specification requirements as of the date of such delivery, as such
requirements may have been modified pursuant to Article 11.3.
11.2 Purchaser's Inspection Agents
Purchaser may, upon giving prior written notice to Contractor, cause
any representative, consultant or agent designated by Purchaser to
conduct the Acceptance inspection pursuant to this Article 11 in whole
or in part; provided, however, that the provisions of Article 7 and
Article 8.5 shall apply to any such representative, consultant or agent
and representative, consultant or such agent shall comply with
Contractor's safety and security regulations.
11.3 Pending Waivers
Waivers of or deviations from the Performance Specification applicable
to any Deliverable Item subject to Acceptance inspection pursuant to
this Article 11 shall be addressed in the same manner as set forth in
Article 9.4.
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11.4 Acceptance Inspection Results
Within a reasonable time after completion of Acceptance inspection
pursuant to this Article 11 for any Deliverable Item, Purchaser shall
notify Contractor in writing of the results of such Acceptance
inspection. In the event that such Acceptance inspection demonstrates
conformity of such Deliverable Item to the applicable requirements of
the Performance Specification, such Deliverable Item shall be deemed
accepted by the Purchaser for all purposes hereunder ("Acceptance" with
respect to each such Deliverable Item other than a Satellite), and
Purchaser's notice shall so state. In the event that such Acceptance
inspection discloses any non-conformance of such Deliverable Item to
the applicable requirements of the Performance Specification,
Purchaser's notice shall detail each such non-conformance (with
reference to the applicable requirement of the Performance
Specification deemed not met), and Contractor shall correct or repair
such non-conformance and resubmit such Deliverable Item for Acceptance
inspection in accordance with this Article 11 as to each such corrected
or repaired element.
11.5 Acceptance Inspection; Equipment and Facilities
Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser or its agents
to dispatch its personnel for acceptance inspections, including travel
and living expenses, shall be borne solely by Purchaser.
11.6 Warranty Obligations
In no event shall Contractor be released from any of its warranty
obligations applicable to any Deliverable Item as a result of such
Deliverable Item having been Accepted as set forth in this Article 11.
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11.7 Repair or Replace Deliverable Items.
The provisions of this Article 11 shall apply to corrected, repaired or
replaced Deliverable Items other than Satellites.
11.8 Deliverable Data
Purchaser shall, within [CONFIDENTIAL INFORMATION REDACTED] days of
delivery by Contractor to the location designated in Article 3.1 of
Deliverable Data requiring Purchaser approval pursuant to the Statement
of Work, notify Contractor in writing that such Deliverable Data has
been accepted in accordance with the Statement of Work ("Acceptance"
with respect to each such item of Deliverable Data), or advise
Contractor in writing that such Deliverable Data does not comply with
the applicable requirements of the Statement of Work, identifying each
particular of such non-compliance. Contractor shall promptly correct
any non-compliant aspect of such Deliverable Data described in such
Notice from Purchaser, and re-submit it to Purchaser for inspection
pursuant to this Article 11.7.
ARTICLE 12 - DELIVERY, TITLE AND RISK OF LOSS
12.1 Satellites
Delivery of the Satellite shall occur upon arrival of the Satellite at
the Launch Site, and risk of loss of, and title to, the Satellite shall
pass from Contractor to Purchaser, upon Acceptance of such Satellite
pursuant to Article 10.1. In the event that Contractor binds insurance
coverage under Article 39, then notwithstanding the foregoing sentence,
risk of loss or damage to the Satellite shall remain with Contractor
for the duration of the in-orbit phase of such insurance coverage and
shall pass to Buyer upon the expiration thereof.
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EXCEPT WITH RESPECT TO WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY
CONTRACTOR, UPON AND AFTER LAUNCH OF THE LAUNCH VEHICLE FOR A
SATELLITE, CONTRACTOR'S SOLE FINANCIAL RISK, AND THE SOLE AND EXCLUSIVE
REMEDIES OF PURCHASER OR ANY PARTY ASSOCIATED WITH PURCHASER, WITH
RESPECT TO THE USE OR PERFORMANCE OF SUCH SATELLITE (INCLUDING WITH
RESPECT TO ANY ACTUAL OR CLAIMED DEFECT CAUSED OR ALLEGED TO BE CAUSED
AT ANY TIME BY CONTRACTOR OR ANY OF ITS SUBCONTRACTORS), SHALL BE AS
SET FORTH IN ARTICLES 4.1, [CONFIDENTIAL INFORMATION REDACTED], 15, 19,
20 and 39. IN ALL CASES CONTRACTOR'S LIABILITY SHALL BE SUBJECT TO THE
LIMITATION OF LIABILITY SET FORTH IN ARTICLE 34. WITHOUT PREJUDICE TO
PURCHASER'S RIGHTS UNDER ARTICLE [CONFIDENTIAL INFORMATION REDACTED]
AND 39, CONTRACTOR MAKES NO WARRANTY AS TO THE PERFORMANCE OF ANY
LAUNCH VEHICLE.
12.2 Deliverable Items Other Than Satellites
Delivery and risk of loss of, and title to, each Deliverable Item of
hardware other than Satellites shall pass from Contractor to Purchaser
upon Acceptance of such Deliverable Item pursuant to Article 11.4.
Purchaser's rights in Deliverable Data are as set forth in Article 36.
ARTICLE 13 -
[CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 14 - INTENTIONALLY DELETED
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ARTICLE 15 - WARRANTY
15.1 Terms and Period of Warranty
15.1.1 Satellites. Contractor warrants that each Satellite Delivered
under this Contract shall be free from any defects in design,
material or workmanship and shall be manufactured and perform
in conformity with the Performance Specification (as may be
waived pursuant to Article 9.4) applicable to the Satellite in
every respect. Prior to Launch, Contractor shall, at its sole
cost and expense, correct any defects in design, material and
workmanship in compliance with Article 9. After Launch,
Contractor's sole obligation and liability with respect to
fulfillment of this warranty is to comply with Articles 4.1,
[CONFIDENTIAL INFORMATION REDACTED], 15.2.1 and 39. Contractor
makes no warranty regarding the performance of the Satellite
from and after the Launch of the Satellite. Nothing in this
Article 15.1.1 shall be construed to limit or otherwise affect
Contractor's obligations under Articles 19 and 20.
15.1.2 Deliverable Items of Hardware Other Than Satellites.
Contractor warrants that each Deliverable Item of hardware
other than the Satellite delivered under this Contract shall
be manufactured and will perform in conformity with the
Performance Specification (as may be waived pursuant to
Article 11.3) applicable to such Deliverable Item in every
respect and will be free from defects in design, materials and
workmanship during the period commencing on the date of
Acceptance of such Deliverable Item pursuant to Article 11
and [CONFIDENTIAL INFORMATION REDACTED].
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15.1.3 Disclaimer. EXCEPT AND TO THE EXTENT PROVIDED IN ARTICLE 15.1
AND ARTICLE 15.4, CONTRACTOR HAS NOT MADE NOR DOES IT HEREBY
MAKE ANY REPRESENTATION OR WARRANTY, WHETHER WRITTEN OR ORAL,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY
OF DESIGN, OPERATION, CONDITION, QUALITY, SUITABILITY OR
MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR
PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, WITH REGARD TO ANY SATELLITE OR ANY OTHER
DELIVERABLE ITEM.
15.2 Repair or Replacement
15.2.1 Satellite Anomalies.
Contractor shall investigate any Satellite Anomaly in any
Satellite arising during the life of the Satellite, and use
reasonable best efforts to correct any such Satellite Anomaly
that is correctable by Contractor from Purchaser's SCF using
the facilities and equipment available at such site.
WITHOUT PREJUDICE TO PURCHASER'S RIGHTS UNDER ARTICLES 19 AND
20, CONTRACTOR SHALL HAVE NO LIABILITY TO PURCHASER OR TO
THIRD PARTIES ARISING FROM ANY ADVICE OR ASSISTANCE THAT
CONTRACTOR OR ANY SUBCONTRACTOR OR AGENT OF CONTRACTOR MAY
PROVIDE IN RESPECT OF A SATELLITE AFTER LAUNCH, REGARDLESS OF
CAUSE OR LEGAL THEORY, INCLUDING NEGLIGENCE, EXCEPT WITH
RESPECT TO: (1) WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY
CONTRACTOR, AND (2)
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PURCHASER'S RIGHTS AND CONTRACTOR'S DUTIES AND OBLIGATIONS
UNDER ARTICLES 4.1, [CONFIDENTIAL INFORMATION REDACTED],
15.2.1 AND 39. IN ALL CASES CONTRACTOR'S LIABILITY SHALL BE
SUBJECT TO THE LIMITATION OF LIABILITY SET FORTH IN ARTICLE
34.
15.2.2 Deliverable Items of Hardware Other Than Satellites.
Without prejudice to Purchaser's rights and Contractor's
duties and obligations under Articles 4.1, 19 and 20, during
the period specified in Article 15.1.2 for any Deliverable
Item of hardware other than a Satellite, as Purchaser's sole
and exclusive remedy, any defect in such Deliverable Item
discovered by Purchaser shall be remedied by Contractor at
Contractor's expense by repair or replacement of the defective
component (at Contractor's election). For any such Deliverable
Item, Contractor shall determine if repair or replacement is
required to be performed at Contractor's plant. If required,
Purchaser shall ship to Contractor's designated facility any
such Deliverable Item. Contractor shall be responsible for the
cost of shipment to such facility in accordance with its
standard commercial practice (including any taxes and/or
duties) of any such Deliverable Item, and the cost of return
shipment, in accordance with its standard commercial practice,
of any such Deliverable Item once repaired or replaced to
Purchaser at the location designated therefor in Article 3.1.
Risk of loss for such Deliverable Item shall transfer to
Contractor upon delivery of such Deliverable Item to the
shipping carrier by Purchaser, and risk of loss shall transfer
to Purchaser for any such Deliverable Item once repaired or
replaced pursuant to this Article 15.2.2 upon receipt thereof
by Purchaser at the
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location designated therefor in Article 3.1. When necessary,
Contractor shall provide free of charge temporary equipment to
be used while a repair is being performed.
15.3 Use Conditions Not Covered by Warranty
With respect to Deliverable Items of hardware other than Satellites,
the warranty under this Article 15 shall not apply if adjustment,
repair, or parts replacement is required as a result, directly or
indirectly, of accident, unusual physical or electrical stress beyond
the unit's designed tolerances, negligence, misuse, failure of
environmental control prescribed in operations and maintenance manuals,
repair or alterations by any party other than Contractor or its agents,
or by causes other than normal and ordinary use. The warranty provided
pursuant to this Article 15 is conditioned upon Contractor being given
access, if required, to Deliverable Items delivered at Purchaser's
facility in order to effect any repair or replacement thereof. If the
defect repaired or remedied by Contractor is not covered by the
warranty provided pursuant to this Article 15, Purchaser shall pay
Contractor the reasonable cost of such repair or replacement,
transportation charges, and [CONFIDENTIAL INFORMATION REDACTED] profit.
Such repair costs shall be invoiced to Purchaser pursuant to the
provisions of Article 5.
15.4 Warranty for Training and Services
Contractor warrants that the training and other services it provides to
Purchaser pursuant to this Contract will conform to reasonable industry
standards at the time such training or other services are provided. In
the event Contractor breaches this warranty, as Purchaser's sole
remedy, Contractor shall apply reasonable efforts to correct the
deficiencies in the provision of such training and other services where
it is practicable to do so.
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ARTICLE 16 - CHANGES
16.1 Right to Adjustment
Purchaser may from time to time, in writing, request a change within
the general scope of this Contract to:
a) Order work in addition to the work provided for herein; or
b) Modify the whole or any part of the work provided for
herein.
If such change request causes an increase or decrease in the cost, or
the time required for completion, of the work to be provided herein, or
otherwise affects any other provision of this Contract, an equitable
adjustment shall be made in the price, or delivery schedule, or both,
and this Contract shall be modified in writing accordingly. Any claim
by Contractor for adjustment under this Article 16 shall be deemed
waived unless asserted in writing within [CONFIDENTIAL INFORMATION
REDACTED] days from the receipt by Contractor of the relevant change
order. If the cost of supplies or materials made obsolete or excess as
a result of a change is included in Contractor's claim for adjustment,
Purchaser shall have the right to prescribe the manner of disposition
of such supplies or materials. Nothing in this Article 16 shall excuse
Contractor from promptly proceeding with the Contract as changed.
16.2 Cost Adjustments
If Contractor or Purchaser claims a right to adjustment pursuant to
Article 16.1 above, Contractor shall prepare and furnish to Purchaser
the evidence reasonably necessary to establish the amount of any
increase or decrease in the cost of, or the time required for, the
performance of this Contract caused by the relevant change order.
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Subject to Article 16.3 below, the amount of any such cost increase or
decrease will be calculated in accordance with Contractor's regularly
established accounting practices and include [CONFIDENTIAL INFORMATION
REDACTED]. If requested by Purchaser, the amount of a particular claim
shall be verified, at Contractor's and Purchaser's expense to be shared
equally, by the independent certified public accounting firm normally
used by Contractor.
16.3 Equitable Adjustment
The Parties shall attempt to reach agreement as to any equitable
adjustment that is appropriate pursuant to Article 16.1 above. Without
relieving Contractor of the obligation to proceed promptly with the
Contract as changed, in the event that the Parties are unable to reach
agreement as to an equitable adjustment within a reasonable period of
time, the matter shall be determined in accordance with Article 25.
During the pendency of such proceedings, Contractor shall proceed with
the work required under this Contract as changed and Purchaser shall
pay Contractor all amounts not in dispute.
ARTICLE 17 - FORCE MAJEURE
17.1 Contractor and Purchaser shall not be responsible for late Delivery,
delay of the final completion date or nonperformance of its contractual
obligations due to Force Majeure. Force Majeure shall be any event
beyond the reasonable control of a Party or its suppliers and
subcontractors and shall include, but not be limited to: (1) acts of
God; (2) acts of a public enemy; (3) acts of a government in its
sovereign capacity (including any action or inaction affecting the
import or export of items); (4) war and warlike events; (5)
catastrophic weather
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conditions such as hurricanes, tornadoes and typhoons; (6) fire,
earthquakes, floods, epidemics, quarantine restrictions, strikes,
lockouts and other industrial disputes, sabotage, riot and embargoes;
(7) non-availability of a Launch Vehicle or Launch Site for any reason
beyond a Party's reasonable control; and (8) other unforeseen and
extraordinary events, which in every case are beyond the reasonable
control and without fault or negligence of a Party or its suppliers and
subcontractors ("Force Majeure"). Upon the occurrence of Force Majeure,
an equitable adjustment shall be negotiated in the schedule and other
portions of this Contract affected by Force Majeure. The Party affected
by a Force Majeure event shall provide reasonable notice to the other
Party of a Force Majeure event. In the event that a Force Majeure event
(other than the non-availability of a Launch Vehicle or Launch Site)
occurs that extends for [CONFIDENTIAL INFORMATION REDACTED] or more
days or that the Parties reasonably believe will extend for
[CONFIDENTIAL INFORMATION REDACTED] or more days, either Party shall
have the right to terminate this Contract upon delivery of written
notice to the other Party. In the event of a termination pursuant to
the immediately preceding sentence, Contractor shall refund all
payments made by Purchaser for Deliverable Items not previously
Accepted by Purchaser, except with respect to items referred to in
Article 17.2, and Purchaser shall have no further obligation to make
any further payments of the Firm Fixed Price to Contractor hereunder.
Such refund shall be made no later than [CONFIDENTIAL INFORMATION
REDACTED] days after Contractor's receipt of Purchaser's written notice
requesting such refund.
17.2 In the event of termination pursuant to Article 17.1, upon Purchaser's
request, Contractor shall deliver to Purchaser all partially completed
items or services and work-in-process.
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In the event of termination pursuant to Article 17.1, Contractor shall
not be required to refund any amounts, and Purchaser shall remain
liable for payment of all amounts, with respect to Deliverable Items
for which Acceptance has occurred pursuant to the terms of Article 10
or Article 11, or that are retained by Purchaser whether or not
completed, as follows: (i) at the price set forth in this Contract for
such items for which an itemized price is set forth herein and (ii) at
the reasonable out-of-pocket cost incurred by Contractor for (a) such
items for which no itemized price is set forth herein and (b) partially
completed items or services and work-in-progress.
ARTICLE 18 - PURCHASER DELAY OF WORK
Except in the case of a Force Majeure event, if the performance of all or any
part of the work required of Contractor under this Contract is delayed or
interrupted by Purchaser's failure to perform its contractual obligations within
the time specified in this Contract or within a reasonable time if no time is
specified, or an act by Purchaser that unreasonably interferes with Contractor's
performance of its obligations under this Contract, Contractor shall give
written notice to Purchaser of the failure or act causing such delay or
interruption. If Purchaser does not promptly cease such act or correct such
failure, this Contract shall be equitably adjusted in the price, performance
requirements, Delivery schedule, and any other terms of this Contract affected
by such act or failure to act of Purchaser.
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ARTICLE 19 - PATENT INDEMNITY
19.1 Indemnification
Purchaser agrees that Contractor has the right to defend and, at
Contractor's sole option to settle, and Contractor, at its own expense,
hereby agrees to defend or, at Contractor's sole option to settle, and
to indemnify and hold harmless Purchaser, and its Affiliates, and their
respective officers, directors, employees, shareholders, agents and
representatives from and against any and all claims, actions, suits or
proceedings based on an allegation that the design or manufacture of
any Deliverable Item or part thereof or the normal intended use, lease,
sale or other disposition of any Deliverable Item or part thereof
infringes any patent or other intellectual property right
("Intellectual Property Claim"), and shall pay any royalties and other
liabilities adjudicated to be owing to the claimant (or, in
Contractor's sole discretion, provided in settlement of the matter) as
well as costs incurred in defending (including court costs and
reasonable attorneys' fees) such Intellectual Property Claim; provided
that Purchaser promptly notifies Contractor in writing of any such
Intellectual Property Claim and gives Contractor the authority and all
such assistance and information as may be requested from time to time
by Contractor for the defense of such Intellectual Property Claim. Any
such assistance or information which is furnished by Purchaser at the
request of Contractor shall be at Contractor's expense.
In any proceeding relating to an Intellectual Property Claim, any
person or entity entitled to indemnification hereunder (an "Indemnified
Party") shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, Contractor shall pay the fees
and expenses of counsel retained by an Indemnified Party in the event
that: (i) Contractor and such Indemnified Party shall have mutually
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agreed to retention of such other counsel; or (ii) the named parties to
any proceeding (including without limitation any impleaded parties)
include both Contractor and such Indemnified Party and representation
of both Contractor and such Indemnified Party by the same counsel would
be inappropriate due to actual or potential conflict of interest
between them.
19.2 Infringing Equipment
If the design or manufacture of any Deliverable Item or the normal
intended use, lease, sale or other disposition of any Deliverable Item
under this Contract is enjoined as a result of an Intellectual Property
Claim or is otherwise prohibited, Contractor shall (i) resolve the
matter so that the injunction or prohibition no longer pertains, (ii)
procure for Purchaser the right to use the infringing item or (iii)
modify the infringing item so that it becomes non-infringing while
remaining in compliance with the Performance Specification (as may be
waived pursuant to Article 9.4) in all respects. If Contractor is
unable to accomplish (i), (ii) or (iii) as stated above, Purchaser
shall have right to terminate this Contract with respect to such
Deliverable Item, return such Deliverable Item to Contractor (in space,
with respect to an in-orbit Satellite), and receive [CONFIDENTIAL
INFORMATION REDACTED].
19.3 Combinations and Modifications
Contractor shall have no liability under this Article 19 for any
Intellectual Property Claim arising solely from (i) use of any
Deliverable Item in combination with other items, unless Contractor
sold them as a combination intended to be so used or (ii) modifications
of Deliverable Items after Acceptance, unless Contractor or one of its
subcontractors (with the knowledge and consent of Contractor) made or
specifically recommended such modifications.
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19.4 Sole Remedies
Except in the case of willful misconduct or Gross Negligence by
Contractor, the remedies set forth in this Article 19 are Purchaser's
sole and exclusive remedies for or related to any Intellectual Property
Claim, and Contractor's liability under this Article 19 for any
Intellectual Property Claim with respect to a Deliverable Item shall in
no event exceed [CONFIDENTIAL INFORMATION REDACTED]. In all cases
Contractor's liability shall be subject to the limitation of liability
set forth in Article 34.
ARTICLE 20 - INDEMNITY FOR BODILY INJURY AND PROPERTY DAMAGE
20.1 Contractor's Indemnification of Purchaser
Contractor shall defend, indemnify and hold harmless Purchaser, and its
Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all losses,
damages, liabilities, suits and expenses (including, but not limited
to, reasonable attorneys' fees) (collectively "Losses") attributable to
third party claims for bodily injury or property damage, but only if
such Losses were caused by, or resulted from, negligent acts or
omissions, Gross Misconduct or willful misconduct by Contractor or its
employees, agents, consultants or representatives. For the avoidance of
doubt, and except for Losses resulting from the Gross Negligence or
willful misconduct of Contractor, Contractor shall have no indemnity
obligation under this Article 20.1 for any Losses with respect to the
operation or use of a Satellite after Launch, even if such Losses are
attributable to an act or omission of Contractor or its employees prior
to Launch. In all cases Contractor's liability shall be subject to the
limitation of liability set forth in Article 34.
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20.2 Purchaser's Indemnification of Contractor
Purchaser shall defend, indemnify and hold harmless Contractor, and its
Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all Losses
attributable to third party claims for bodily injury or property
damage, but only if such Losses were caused by, or resulted from,
negligent acts or omissions, Gross Negligence or willful misconduct by
Purchaser or its employees, agents, consultants or representatives.
20.3 Conditions to Indemnification
The right to any indemnity specified in Article 20.1 or 20.2 shall be
subject to the following conditions:
a. The Party seeking indemnification shall promptly advise the
other Party in writing of the filing of any suit or of any
written or oral claim for indemnification upon receipt thereof
and shall provide the other Party, at its request, with such
assistance and information available to the indemnified party
as is relevant to the defense of such suit or claim. Any such
assistance or information which is furnished by the
indemnified Party at the request of the indemnifying Party
shall be at the indemnifying Party's expense.
b. The Party seeking indemnification shall not make any admission
nor shall it reach a compromise or settlement without the
prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed.
c. The indemnifying Party shall assist and shall have the right
to assume, when not contrary to the governing rules of
procedure, the defense of any claim or suit in settlement
thereof and shall satisfy any judgments rendered by a court of
competent jurisdiction in such suits and shall make all
settlement payments.
d. The Party seeking indemnification may participate in any
defense at its own expense, using counsel reasonably
acceptable to the indemnifying Party, provided there is no
conflict of interest and that such participation would not
adversely affect the conduct of the proceedings.
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e. Notwithstanding the foregoing, the indemnifying party shall
pay the fees and expenses of counsel retained by an
indemnified party in the event that: (i) the indemnifying
party and such indemnified party shall have mutually agreed to
retention of such other counsel; or (ii) the named parties to
any proceeding (including without limitation any impleaded
parties) include both the indemnifying party and such
indemnified party and representation of both the indemnifying
party and such indemnified party by the same counsel would be
inappropriate due to actual or potential conflicts of interest
between them.
ARTICLE 21 - TERMINATION FOR CONVENIENCE
21.1 Reimbursement of Contractor
Purchaser may terminate this Contract without cause, in whole or in
part, by giving Contractor written notice [CONFIDENTIAL INFORMATION
REDACTED] days prior to the date of such termination. In the event of
such termination, Contractor will immediately cease work as directed in
the termination notice and it is agreed that the termination charges
shall be negotiated. In no event shall the termination charges pursuant
to this Article 21.1 exceed [CONFIDENTIAL INFORMATION REDACTED]
In no event will the aggregate of the amounts previously paid by
Purchaser under this Contract and the amounts to be paid by Purchaser
under this Article 21.1 [CONFIDENTIAL INFORMATION REDACTED].
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21.2 Partial Termination
If the termination by Purchaser is partial, the price for the
non-terminated portion of this Contract shall be increased by
[CONFIDENTIAL INFORMATION REDACTED] equal to [CONFIDENTIAL INFORMATION
REDACTED]; however, in no event will the aggregate of the amounts
previously paid by Purchaser under this Contract and the amounts to be
paid by Purchaser for the non-terminated portion of this Contract, as
increased under this Article 21.2, [CONFIDENTIAL INFORMATION REDACTED].
21.3 Title Transfer
In the event of a termination pursuant to this Article 21, a
termination settlement meeting shall be held at a mutually agreed time
and place no later than [CONFIDENTIAL INFORMATION REDACTED] days after
submission of a claim by Contractor pursuant to Article 21.1. At or
prior to the date of such termination settlement meeting, Contractor
shall provide Purchaser with such documentation of the costs set forth
in Articles 21.1 and 21.2 as Purchaser may reasonably request. Upon
mutual agreement of the termination settlement, Contractor may submit
an invoice to Purchaser for payment in accordance with the terms of
Article 5.2. Upon mutual agreement of the termination settlement,
subject to applicable U.S. Government export laws, Contractor shall, at
Contractor's or subcontractor's plant, transfer title and risk of loss
to Purchaser of all Deliverable Items referred to in Article 21.1(a),
and all other partially completed or incomplete Deliverable Items for
which Contractor is entitled to payment under this Article 21 at the
time of the termination settlement. Purchaser may direct Contractor to
undertake to reallocate to other uses, and/or to otherwise assist
Purchaser in disposing/selling, items subject to termination under this
Article 21 for the purpose of receiving a price refund or offset
against Contractor's termination claim. Upon receipt of such direction,
Contractor shall, on a reasonable efforts basis, attempt to reallocate,
and/or to otherwise assist Purchaser in disposing/selling, the items
and provide a refund (in cases where the
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amounts generated are greater than Contractor's termination claim) to
Purchaser or an offset (in cases where the amounts generated are less
than or equal to Contractor's termination claim) against Contractor's
termination claim, less any reasonable selling expenses.
21.4 Minimize Termination Costs
In the event of termination pursuant to this Article 21, Contractor
shall take all actions necessary to reduce the termination costs due
from Purchaser, including but not limited to, the immediate
discontinuance of the terminated work under this Contract and the
placing of no further orders for labor, materials or services required
under the terminated portion of the Contract. Contractor agrees to take
such action as may be necessary or as Purchaser may direct for
protection of property in Contractor's possession in which Purchaser
may have acquired an interest.
21.5 Continued Efforts
Contractor shall continue performance of the portion of this Contract
not terminated. Purchaser shall have no obligations to Contractor with
respect to the terminated portion of this Contract except as set forth
in this Article 21.
21.6 Settlements
Contractor agrees to advise Purchaser in writing of all proposed
settlements with vendors in excess of [CONFIDENTIAL INFORMATION
REDACTED] in the event of termination under this Article 21, and
Contractor further agrees not to enter into any binding settlements
until Purchaser has approved the proposed settlement or [CONFIDENTIAL
INFORMATION REDACTED] days have elapsed from the date Purchaser was
first notified of such proposed settlement.
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21.7 Measurement of Costs
Costs shall be determined in accordance with generally accepted
accounting principals and verified by an independent certified
accounting firm of national reputation mutually acceptable to Purchaser
and Contractor with costs therefor shared equally by both Parties.
ARTICLE 22 - [CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 22A - [CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 23 - DEFAULT
23.1 Failure to Perform by Contractor
Subject to Article 23.4 below, if (i) Contractor fails to Deliver a
Satellite within the time specified for Delivery thereof plus the
maximum number of days for late delivery liquidated damages specified
in Article [CONFIDENTIAL INFORMATION REDACTED] ; (ii) Acceptance of any
other Deliverable Item does not occur within the time specified for
delivery thereof in this Contract (or, in either case, such longer time
as may be agreed to in writing by Purchaser), or (iii) Contractor fails
to prosecute the work hereunder or to perform any other material
provision of this Contract, thereby endangering performance of this
Contract within the time period set forth in Subsection (i) above, and
in each case Contractor does not cure such failure within [CONFIDENTIAL
INFORMATION REDACTED] days (or such longer period as may be agreed to
in writing by Purchaser) after receipt from Purchaser of written notice
of such failure, Purchaser may terminate this Contract in whole or in
part by written notice to Contractor.
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23.2 Termination Liability
In the event of a termination for default pursuant to Article 23.1,
Contractor shall [CONFIDENTIAL INFORMATION REDACTED]. In all cases
Contractor's liability shall be subject to the limitation of liability
set forth in Article 34.
23.3 Partially Completed Items and Work In Process; Contractor's
Reimbursement for Terminated Work
In the event of termination pursuant to Article 23.1, upon Purchaser's
request, Contractor shall deliver to Purchaser all partially completed
items or services and work-in-process.
In the event of termination pursuant to Article 23.1, Contractor shall
not be required to refund any amounts, and Purchaser shall remain
liable for payment of all amounts, with respect to Deliverable Items
for which Acceptance has occurred pursuant to the terms of Article 10
or Article 11, or that are retained by Purchaser whether or not
completed, as follows: (i) at the price set forth in this Contract for
such items for which an itemized price is set forth herein and (ii)
[CONFIDENTIAL INFORMATION REDACTED] for (a) such items for which no
itemized price is set forth herein and (b) partially completed items or
services and work-in-progress.
23.4 Invalid Default Termination
If, after termination pursuant to Article 23.1, it is finally
determined by arbitration, legal proceeding or mutual agreement that
Contractor was not in default, or that the default was excusable, the
rights and obligations of the Parties shall be the same as if the
termination had occurred under Article 21; except that, Contractor
shall also be entitled to recover [CONFIDENTIAL INFORMATION REDACTED].
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23.5 Contractor Termination
Contractor may terminate this Contract upon Purchaser's failure to
comply with any material provision of this Contract by giving written
notice to Purchaser of its intention to so terminate. Such notice shall
set forth the provision or provisions with which Purchaser has failed
to comply and a reasonably detailed description of such failure. Such
termination shall become effective upon Purchaser's failure to correct
such nonperformance within [CONFIDENTIAL INFORMATION REDACTED] days (or
such longer period as may be agreed to in writing by Contractor) after
receipt of such notice from Contractor.
In the event of termination pursuant to this Article 23.5, Contractor
shall be paid as if the termination were for convenience pursuant to
Article 21. Further, and without limiting Contractor's other rights or
remedies, Contractor may immediately take over all or part of the
Deliverable Items and Contract work-in-process and use them in any
manner Contractor may elect. In such case, the fair market value of any
Deliverable Items or Contract work-in-progress retained by Contractor
shall be off-set against Purchaser's termination liability. If, after
termination pursuant to this Article 23.5, it is finally determined by
arbitration pursuant to Article 25 that Purchaser did not fail in the
performance of its obligations under this Contract, Contractor shall be
liable to Purchaser for its reasonable direct damages resulting from
such termination of this Contract (in no event exceeding amounts
payable to Purchaser pursuant to Articles 23.2 and 23.3, except in the
case of Gross Negligence or willful misconduct, and in all cases
subject to the limitation of liability set forth in Article 34).
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ARTICLE 24 - INTENTIONALLY DELETED
ARTICLE 25 - ARBITRATION
25.1 Arbitration
Any dispute (except as set forth in Article 25.2) arising between the
Parties with respect to the performance of obligations under, or
interpretation of, this Contract that cannot be settled by negotiation
between the Parties within [CONFIDENTIAL INFORMATION REDACTED] days of
written notice from one Party to the other stating such first Party's
intent to resort to arbitration ("Notice of Arbitration"), shall be
determined by submission to binding arbitration in accordance with the
provisions of the "Uniform Arbitration Act of 1975", part 2 of article
22 of title 13, Colorado Revised Statutes, as amended from time to
time, and not by a lawsuit or resort to court process except as
Colorado law provides for judicial review of arbitration proceedings.
Any such arbitration shall be conducted in the City and County of
Denver, Colorado by a panel of three arbitrators who shall be selected
within [CONFIDENTIAL INFORMATION REDACTED] days of such Notice of
Arbitration, as follows: (i) one arbitrator shall selected by each
Party; and (ii) the third arbitrator shall be selected by the
arbitrators chosen by the Parties. In resolving any dispute, the
arbitrators shall apply the substantive laws of the State of New York
(without regard to its conflict of law rules), but shall apply the
Colorado Rules of Civil Procedure and the Colorado Rules of Evidence,
and shall take into account usages, customs and practices in the
performance of contracts for the purchase and sale of commercial
communications satellites. Proceedings and documents provided and
generated in connection with any arbitration hereunder shall be in the
English language. Each Party shall bear its own costs and expenses
(including the costs and expenses of the arbitrator it selected) and
one-half of the costs and expenses of the third arbitrator, unless
otherwise determined in the arbitral award. The Parties agree that, in
no event, shall the arbitrators' decision include a recovery under any
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theory of liability, or award in any amount, not expressly allowed
under this Contract. In furtherance and without limitation of the
foregoing, any award made by the arbitrators shall be within the
limitations set forth in Article 34.
25.2 Gross Negligence or Willful Misconduct
If a dispute arises as to whether or not a Party has committed or acted
with Gross Negligence or willful misconduct, that issue alone shall be
resolved by a federal or state court in New York without a jury, and
the court shall resolve such issue by applying the laws of the State of
New York without regard to its conflict of law rules. THE PARTIES
EXPRESSLY WAIVE THEIR RIGHT TO A JURY IN CONNECTION WITH SUCH DISPUTE.
ARTICLE 26 - INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH
26.1 Launch Services Agreement Inter-Party Waiver of Liability
The Parties hereby agree to be bound by the no-fault, no-subrogation
inter-party waiver of liability and related indemnity provisions
provided in the Launch Services Agreement with respect to the Launch of
the Satellite and to use reasonable commercial efforts to cause their
respective contractors and subcontractors at any tier (including
suppliers of any kind) that are involved in the performance of this
Contract and any other person having an interest in the Satellite or
any Transponder thereon (including customers of Purchaser), as required
by the Launch Services Agreement and as specified by Buyer, to accede
to such waiver. The Parties shall execute and deliver any instrument
that may be required by the Launch Agency to evidence their agreement
to be bound by such waiver. Purchaser and Contractor also shall use
reasonable commercial efforts to obtain, from their insurers, and shall
use reasonable commercial efforts to
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cause their respective contractors and subcontractors at any tier
(including suppliers of any kind) that are involved in the performance
of this Contract and any other person having an interest in any
Satellite or any Transponder thereon (including customers of Purchaser)
to obtain from their insurers, as required by the Launches Services
Agreement and as specified by Buyer, an express waiver of such
insurers' rights of subrogation, subject to terms and conditions as are
then customarily available regarding such waivers, with respect to any
and all claims that have been waived pursuant to this Article 26.
26.2 Indemnity Related to the Inter-Party Waiver of Liability
Each Party shall indemnify against and hold the other Party harmless
from any claim against the other Party, its contractors and
subcontractors at any tier (including suppliers of any kind) that are
involved in the performance of this Contract, made by the Launch Agency
or any of its contractors and subcontractors (including suppliers of
any kind) that are involved in the performance of the Launch Services
Agreement, resulting from the failure of the first Party to waive any
liability against, or to use reasonable commercial efforts to cause any
other person such Party is obligated to use reasonable commercial
efforts to cause to waive any liability against, the Launch Agency or
its contractors and subcontractors at any tier (including suppliers of
any kind).
26.3 Survival of Obligations
The indemnification and hold harmless obligations provided in this
Article 26 shall survive and remain in full force and effect,
notwithstanding the expiration or termination of this Contract.
26.4 [CONFIDENTIAL INFORMATION REDACTED]
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ARTICLE 27 - CORRECTIVE MEASURES
27.1 Unlaunched Satellites
If the performance data from any launched satellite manufactured by
Contractor shows that such launched satellite will not or may not meet
the performance specifications for such launched satellite at any time
during its mission, then Contractor shall, at its sole cost and
expense, if applicable, take appropriate corrective measures in the
Satellite before it is Launched so as to eliminate therefrom the
deficiencies noted in the launched satellite.
ARTICLE 28 - RESERVED
ARTICLE 29 -
[CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 30 - MOST FAVORED NATION
30. If a total loss or destruction occurs with respect to a Satellite at
any time during the period of [CONFIDENTIAL INFORMATION REDACTED] after
Launch and Purchaser desires to obtain a new DBS satellite from
Contractor, Contractor hereby guarantees that the price of such new
satellite, [CONFIDENTIAL INFORMATION REDACTED].
ARTICLE 31 - RESERVED
ARTICLE 32 - RESERVED
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ARTICLE 33 - GROUND STORAGE
33.1 Notification
Purchaser may direct Contractor to store the Satellite after completion
of SPSR.
33.2 Storage Location
Ground Storage shall be performed at a Contractor controlled facility
and shall be conducted in accordance with the satellite storage plan
section(s) of the Statement of Work.
33.3 Storage Prices
There shall be no charge for storage and reverification work if the
Contractor's failure to perform is the reason the Satellite is stored,
or if the Satellite is stored for less than six months.
The firm fixed price for Ground Storage of the Satellite in all other
circumstances shall be [CONFIDENTIAL INFORMATION REDACTED] per month
storage cost while the Satellite is in Ground Storage. In addition,
Purchaser shall also pay directly or reimburse Contractor for
[CONFIDENTIAL INFORMATION REDACTED].
33.4 Payments
Payments shall be made on the thirtieth day of each month for the prior
month's storage, provided an invoice is received at least thirty days
prior to the payment date.
33.5 Title and Risk of Loss
Title and risk of loss to a Satellite delivered for Ground Storage
shall remain with Contractor at the storage site. Contractor shall
assume full responsibility for any loss or damage to the Satellite
during Ground Storage.
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33.6 Notification of Intention to Launch a Previously Stored Satellite
Purchaser shall notify Contractor in writing that a Satellite in Ground
Storage should be removed from Ground Storage and delivered to the
Launch Site. This notification must be received by Contractor not less
than [CONFIDENTIAL INFORMATION REDACTED] months prior to the scheduled
date for Delivery to the Launch Site of the Satellite. Failure to
notify Contractor in a timely manner will result in an adjustment to
the Delivery schedule for such Satellite.
ARTICLE 34 - LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE DIRECTLY OR INDIRECTLY TO THE OTHER PARTY
OR ITS AFFILIATES, OR THEIR OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS
OR SUBCONTRACTORS AT ANY TIER (INCLUDING SUPPLIERS OF ANY KIND), AGENTS
OR CUSTOMERS, TO ITS PERMITTED ASSIGNEES OR SUCCESSOR OWNERS OF ANY
SATELLITE OR OTHER DELIVERABLE ITEM OR TO ANY OTHER PERSON CLAIMING BY
OR THROUGH SUCH PARTY FOR ANY AMOUNTS REPRESENTING [CONFIDENTIAL
INFORMATION REDACTED], ARISING FROM OR RELATING TO THE PERFORMANCE OR
NONPERFORMANCE OF THIS CONTRACT OR ANY ACTS OR OMISSIONS ASSOCIATED
THEREWITH OR RELATED TO THE USE OF ANY ITEMS DELIVERED OR SERVICES
FURNISHED HEREUNDER, WHETHER THE BASIS OF SUCH LIABILITY IS BREACH OF
CONTRACT, TORT, STATUTE OR OTHER LEGAL OR EQUITABLE THEORY, EXCEPT THAT
IN THE EVENT OF WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY CONTRACTOR OR
PURCHASER SUCH PARTY MAY BE LIABLE AND RESPONSIBLE FOR AMOUNTS
REPRESENTING [CONFIDENTIAL INFORMATION REDACTED].
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IN NO EVENT SHALL EITHER PARTY'S TOTAL LIABILITY UNDER OR IN CONNECTION
WITH THIS CONTRACT EXCEED THE FIRM FIXED PRICE (PROVIDED REFUNDS UNDER
ARTICLE 23.2 AND PAYMENTS FOR LOSSES UNDER ARTICLE 39 WILL NOT COUNT
AGAINST THIS FIGURE), EXCEPT FOR LIABILITY ARISING FROM WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE BY A PARTY, IN WHICH CASE THE TOTAL
LIABILITY OF A PARTY MAY NOT EXCEED THE FIRM FIXED PRICE PLUS
[CONFIDENTIAL INFORMATION REDACTED].
ARTICLE 35 - DISCLOSURE AND HANDLING OF PROPRIETARY
INFORMATION
35.1 Definition of Proprietary Information
For the purpose of this Contract, "Proprietary Information" means all
information (other than Deliverable Data, which is subject to the
provisions of Article 36), in whatever form transmitted, that is
disclosed by such Party (hereinafter referred to as the "disclosing
party") to the other Party hereto (hereinafter referred to as the
"receiving party") relating to the performance by the disclosing party
of this Contract and: (i) is identified as proprietary by means of a
written legend thereon, or (ii) if disclosed orally, is identified as
proprietary at the time of initial disclosure. Proprietary Information
shall not include any information disclosed by a Party that (i) is
already known to the receiving party at the time of its disclosure, as
evidenced by written records of the receiving party, without an
obligation of confidentiality at the time of disclosure; (ii) is or
becomes publicly known through no wrongful act of the receiving party;
(iii) is independently developed by the receiving party as evidenced by
written records of the receiving party; (iv) such Party is legally
compelled to disclose; or (v) is obtained from a third party without
restriction and without breach of this Contract.
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35.2 Terms for Handling and Use of Proprietary Information
For a period of [CONFIDENTIAL INFORMATION REDACTED] years after receipt
of any Proprietary Information (or until such time as such Proprietary
Information becomes publicly known as provided in Article 35.1), the
receiving party shall not disclose Proprietary Information that it
obtains from the disclosing party to any person or entity except its
employees and agents who have a need to know in order to perform under
this Contract and who have been informed of and have agreed to abide by
the receiving party's obligations under this Article 35. The receiving
party shall use not less than the same degree of care to avoid
disclosure of such Proprietary Information as it uses for its own
Proprietary Information of like importance; but in no event less than a
reasonable degree of care. Proprietary Information shall be used only
for the purpose of performing the obligations under this Contract, or
as the disclosing party otherwise authorizes in writing.
IN NO EVENT SHALL EITHER PARTY DISCLOSE OR TRANSFER TECHNICAL
INFORMATION OR PROVIDE TECHNICAL SERVICES TO INSURANCE BROKERS,
UNDERWRITERS OR OTHER THIRD PERSONS OR ENTITIES WITHOUT THE OTHER
PARTY'S PRIOR WRITTEN APPROVAL (WHICH SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED) AND, WHERE REQUIRED, PRIOR APPROVAL OF THE U.S.
DEPARTMENT OF STATE.
35.3 Legally Required Disclosures
Notwithstanding the foregoing, in the event that the receiving party
becomes legally compelled to disclose Proprietary Information of the
disclosing party, including this Contract or other supporting
document(s), the receiving party shall, to the extent practicable under
the circumstances, provide the disclosing party with written notice
thereof so that the disclosing party may seek a protective order or
other appropriate remedy, or to allow the disclosing party to redact
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such portions of the Proprietary Information as the disclosing party
deems appropriate. In any such event, the receiving party will disclose
only such information as is legally required, and will cooperate with
the disclosing party (at the disclosing party's expense) to obtain
confidential and proprietary treatment for any Proprietary Information
being disclosed.
35.4 Title; Return
All Proprietary Information disclosed under this Contract in tangible
form (including without limitation information incorporated in computer
software or held in electronic storage means) shall be and remain the
property of the disclosing party. All notes, memoranda or other
materials created or fabricated by the receiving party, including
without limitation evaluations, based upon Proprietary information or
prepared by the receiving party which include Proprietary Information
shall be considered Proprietary Information for all purposes under this
Contract. Upon request of the disclosing party, all such Proprietary
Information shall be returned to the disclosing party or shall be
destroyed by the receiving party and shall not thereafter be retained
in any form by the receiving party. Upon request of the disclosing
party, the receiving party shall certify in writing that such party has
either returned or destroyed all Proprietary Information previously
received from the disclosing party. The rights and obligations of the
Parties under this Article 35 shall survive any such return or
destruction of Proprietary Information.
35.5 Specific Performance
The Parties acknowledge and agree that the unauthorized use or
disclosure by the receiving party of any Proprietary Information
disclosed by the disclosing party would result in irreparable injury to
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the disclosing party. The Parties agree that that the disclosing party
shall, in addition to and not in lieu of any other available legal or
equitable remedies or damages, be entitled to a temporary injunction to
restrain threatened or actual breaches of the terms of this Article 35
by the receiving party, its agents, employees, representatives and all
other persons acting for any of the above-mentioned persons or
entities.
35.6 Disclosure of Contract Terms
Notwithstanding anything to the contrary in this Article 35, and
subject to applicable export restrictions, the terms and conditions of
this Contract may not be disclosed by either Party to any person except
with the prior written consent of the other Party, provided, in each
case, that the recipient of such information agrees to treat such
information as confidential and executes and delivers a confidentiality
agreement reasonably acceptable to both Parties or is otherwise subject
to confidentiality obligations reasonably satisfactory to both Parties;
provided, further, that either Party shall have the right to disclose
such information as is required under applicable law or the binding
order of a court or government agency; and provided further that
Purchaser shall have the right to disclose any or all of the terms and
conditions of this Contract to its insurance brokers and underwriters
as Purchaser deems necessary in its sole judgment.
ARTICLE 36 - INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN DATA
36.1 Intellectual Property Rights
(a) Contractor hereby grants to Purchaser a fully-paid up, royalty
free, irrevocable, and non-exclusive license to practice and have
practiced throughout the world exclusively for the purpose of (i)
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operating, maintaining or using the Deliverable Items, or (ii)
developing, operating, maintaining or using ground equipment with such
Deliverable Items any inventions (including without limitation
software), whether patented or unpatented or otherwise subject to
intellectual property protections, now or hereafter owned by
Contractor, or to which Contractor has or may acquire rights, which
inventions are incorporated in any Deliverable Item or required in
order to practice or have practiced any invention incorporated in any
Deliverable Item.
36.2 Rights in Data
Contractor shall retain title to all Deliverable Data utilized or
developed by Contractor during the performance of this Contract.
Subject to U.S. export regulations and applicable export restrictions,
Purchaser's officers, directors, employees, consultants and
representatives shall have the non-exclusive right to obtain and use
the Deliverable Data for any and all purposes related to the testing,
operation, use and maintenance of the Satellite. Purchaser's officers,
directors, employees, consultants and representatives shall not
disclose Deliverable Data to other companies, organizations or persons
without the express prior written consent of Contractor, which consent
shall not be unreasonably withheld or delayed. Purchaser shall have no
rights in Deliverable Data other than as expressly stated in this
Contract, and title to Deliverable Data shall not pass to Purchaser or
any other entity pursuant to the terms hereof.
36.3 No Additional Obligation
Nothing contained in this Article shall require Contractor to provide
any data other than as set forth in the Statement of Work.
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ARTICLE 37 - PUBLIC RELEASE OF INFORMATION
Either Party intending to disclose publicly whether through the issuance of news
releases, articles, brochures, advertisements, prepared speeches or other
information releases concerning this Contract or the transactions contemplated
herein shall obtain the prior written approval of the other Party with respect
to the content and timing of such issuance. A Party's approval under this
Article 37 shall not be unreasonably delayed or denied. Notwithstanding the
above, either Party may release information described herein as required by
securities laws or other applicable laws.
ARTICLE 38 - NOTICES
38.1 Written Notification
Each notice or correspondence required or permitted to be given
hereunder shall be given in writing (except where oral notice is
specifically authorized) to the respective addresses or facsimile
numbers and to the attention of the individuals set forth below by
post, facsimile transmission, overnight courier or first class
registered or certified mail, return receipt requested, postage
prepaid. The sending of such notice with confirmation of successful
receipt of the complete transmission (in the case of facsimile
transmissions) or receipt of such notice (in the case of delivery by
first class registered or certified mail or by overnight courier
service) shall constitute the giving thereof.
In the case of Purchaser:
[CONFIDENTIAL INFORMATION REDACTED]
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With a separately delivered copy to:
[CONFIDENTIAL INFORMATION REDACTED]
In the case of Contractor:
[CONFIDENTIAL INFORMATION REDACTED]
38.2 Change of Address
Either Party may from time to time change its notice address or the
persons to be notified by giving the other Party written notice (as
provided above) of such new information and the date upon which such
change shall become effective.
ARTICLE 39 -
[CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 40 - ORDER OF PRECEDENCE
In the event of conflict among the terms of the Preamble and Articles 1 to 46 of
this Contract and the Exhibits, the following order of decreasing precedence
shall apply:
o This Contract (Preamble and Articles 1 through 46 and Attachment A
and B)
o Exhibit A Statement of Work
o Exhibit B Performance Specification
o Exhibit C Product Assurance Program Plan
o Exhibit D Test Plan
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ARTICLE 41 - GENERAL
41.1 Binding Effect; Assignment
This Contract shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. Except
as otherwise expressly set forth to the contrary herein, this Contract
may not be assigned, either in whole or in part, by either Party
without the express written approval of the other Party. Such approval
shall not be unreasonably withheld or delayed. Contractor may require,
as a condition of approving an assignment by Purchaser, that the
proposed assignee establish irrevocable letters of credit, guarantees
or other comparable assurances satisfactory to Contractor prior to such
assignment becoming effective and that Purchaser remain primarily or
secondarily liable hereunder. Either Party, upon prior written notice
to the other Party, may grant security interests in its rights
hereunder to lenders that provide financing for the performance by such
Party of its obligations under this Contract or for the subject matter
hereof. In the event that either Party is sold to or merged into
another entity that shall be deemed an assignment requiring the other
Party's approval hereunder. Notwithstanding anything to the contrary
herein, Purchaser may assign this Contract, in whole or in part without
Contractor's approval and without regard to the conditions set forth in
the fourth sentence of this Article 41.1, to a person or entity that
directly or indirectly controls, is controlled by or is under common
control with Purchaser.
41.2 Severability
If any provision of this Contract is declared or found to be illegal,
unenforceable or void, the Parties shall negotiate in good faith to
agree upon a substitute provision that is legal and enforceable and is
as nearly as possible consistent with the intentions underlying the
original
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provision. If the remainder of this Contract is not materially affected
by such declaration or finding and is capable of substantial
performance, then the remainder shall be enforced to the extent
permitted by law.
41.3 Captions
The captions contained herein are for purposes of convenience only and
shall not affect the construction of this Contract.
41.4 Relationships of the Parties
It is expressly understood that Contractor and Purchaser intend by this
Contract to establish the relationship of independent contractors only,
and do not intend to undertake the relationship of principal and agent
or to create a joint venture or partnership or any other relationship,
other than that of independent contractors, between them or their
respective successors in interests. Neither Contractor nor Purchaser
shall have any authority to create or assume, in the name or on behalf
of the other Party, any obligation, expressed or implied, or to act or
purport to act as the agent or the legally empowered representative of
the other Party, for any purpose whatsoever.
41.5 Entire Agreement
The existing Contract between EchoStar Orbital Corporation and Space
Systems/Loral, Inc. dated February 4, 2000, regarding the EchoStar 8
Satellite Program (110 degrees W.L.), is hereby amended, restated and
superceded in its entirety by this Contract effective as of February 1,
2001, and the Parties hereby agree that, this Contract, including all
Exhibits and the Attachments hereto, represents the entire
understanding and agreement between the Parties hereto with respect to
the subject matter hereof, and supersedes all prior negotiations and
agreements with respect to the subject matter hereof. This Contract may
not be modified or amended, and the Parties' rights and obligations may
not be waived, except by the written agreement of both Parties.
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41.6 Standard of Conduct
Both Parties agree that all their actions in carrying out the
provisions of this Contract shall be in compliance with applicable laws
and regulations and neither Party will pay or accept bribes, kickbacks
or other illegal payments, or engage in unlawful conduct.
41.7 Construction
This Contract, the Exhibits and the Attachment hereto have been drafted
jointly by the Parties and in the event of any ambiguities in the
language hereof, there shall be no inference drawn in favor of or
against either Party.
41.8 Counterparts
This Contract may be signed in any number of counterparts with the same
effect as if the signature(s) on each counterpart were upon the same
instrument.
41.9 Applicable Law
This Contract shall be interpreted, construed and governed, and the
rights of the Parties shall be determined, in all respects, according
to the laws of the State of New York without regard to its conflict of
law rules.
41.10 Survival
Termination or expiration of this Contract for any reason shall not
release either Party from any liabilities or obligations set forth in
this Contract that (i) the Parties have expressly agreed shall survive
any such termination or expiration or (ii) remain to be performed or by
their nature would be intended to be applicable following any such
termination or expiration.
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41.11 U.N. Convention on the International Sales of Goods
The U.N. Convention on the International Sales of Goods shall not apply
or otherwise have any legal effect with respect to this Contract.
41.12 Waiver
No delay or omission by either Party to exercise any right or power
shall impair any such right or power or be construed to be a waiver
thereof. No payment of money by any person or entity shall be construed
as a waiver of any right or power under this Contract. A waiver by any
Party of any of the covenants, conditions or contracts to be performed
by the other Party or any breach thereof shall not be construed to be a
waiver of any succeeding breach thereof or of any other covenant,
condition or contract herein contained. No change, waiver or discharge
hereof shall be valid unless in writing and signed by a duly authorized
representative of the Party against which such change, waiver or
discharge is sought to be enforced.
ARTICLE 42 - ATTACHMENTS
The following Attachments are incorporated in this Contract:
Attachment A Payment Plan
Attachment B Pages 5 through 11 of the EchoStar 5 Insurance Policy
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ARTICLE 43 - TERMINATION RIGHT
Notwithstanding anything to the contrary herein, if by the TBD Deadline the
Parties are unable to reach final agreement upon: (1) the pricing and schedule
for the options described in Article [CONFIDENTIAL INFORMATION REDACTED], or (2)
the TBD terms of this Contract, the Statement of Work, Satellite Performance
Specification, Product Assurance Program Plan, Satellite Program Test Plan and
Payment Plan, then Purchaser may immediately terminate this Contract by
providing written notice to Contractor. If such termination occurs, then
Purchaser shall pay Contractor [CONFIDENTIAL INFORMATION REDACTED] within
[CONFIDENTIAL INFORMATION REDACTED] days of receipt of an invoice. All other
liabilities and obligations of the Parties shall be released, waived and
terminated, except for those set forth in Articles 20, 35 and 37.
ARTICLE 44 - COOPERATION REGARDING SPOT BEAMS
Until the TBD Deadline, Contractor shall use reasonable commercial efforts to
cooperate with [CONFIDENTIAL INFORMATION REDACTED] regarding the coordination
and development of the requirements and footprints for the spot beams for the
Satellite and [CONFIDENTIAL INFORMATION REDACTED] satellite being manufactured
by [CONFIDENTIAL INFORMATION REDACTED] In addition, upon Purchaser's request,
Contractor shall use reasonable commercial efforts to cooperate with
[CONFIDENTIAL INFORMATION REDACTED] as necessary to change the initial
requirements and/or footprints of the spot beams for the Satellite and the
[CONFIDENTIAL INFORMATION REDACTED] satellite. Finally, Contractor shall use
reasonable commercial efforts to cooperate with [CONFIDENTIAL INFORMATION
REDACTED] as necessary to ensure that the spot beams of the Satellite and the
[CONFIDENTIAL INFORMATION REDACTED] satellite, as deployed, will operate in
accordance with the final approved requirements and footprints. In performing
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the above obligations, Contractor shall not be required to disclose any of its
proprietary information to [CONFIDENTIAL INFORMATION REDACTED].
ARTICLE 45 -
[CONFIDENTIAL INFORMATION REDACTED]
ARTICLE 46 - KEY PERSONNEL
The Contractor will assign properly qualified and experienced personnel to the
program contemplated under the Contract. Personnel assigned to the following
positions shall be considered "Key Personnel":
a) the Contractor's Program Manager
b) the Contractor's Contracts Manager
c) the Contractor's Product Assurance Manager
d) the Contractor's Systems Engineering Manager
e) the Contractor's Vehicle Manager
The Purchaser shall have the right to approve the Contractor's Program Manager
which approval shall not be unreasonably withheld or delayed. Key Personnel
shall not be assigned to other duties without the Contractor giving prior
written notice to and consulting with the Purchaser. The Contractor shall
provide a chart to the Purchaser of the program Key Personnel and shall keep
such chart current.
Additionally, for so long as Randy Tyner is associated with Contractor as an
employee or consultant, Purchaser shall have unrestricted access to Mr. Tyner
for purposes of designing the payload and its specifications. Mr. Tyner shall
have a key decision-making role on payload-related issues, and shall be a
primary interface with the Purchaser on all payload-related technical and
performance issues.
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IN WITNESS THEREOF, the Parties have executed this Amended and Restated Contract
by their duly authorized officers as of the date set forth in the Preamble.
ECHOSTAR ORBITAL
SPACE SYSTEMS/LORAL, INC. CORPORATION
By: By:
-------------------------------- ------------------------------------
Name: Name:
------------------------------ ----------------------------------
Title: Title:
----------------------------- ---------------------------------
ATTACHMENT A
PAYMENT PLAN
[CONFIDENTIAL INFORMATION REDACTED]
ATTACHMENT B
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