Exhibit 10.67

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[***]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

AMENDED AND RESTATED

CONTRACT

FOR TERRESTAR-2

Between

TerreStar Networks Inc.

And

Space Systems/Loral, Inc.

for the

TerreStar Satellite Program

(Acceptance In-Orbit)

December 12, 2007

The attached Contract and the information contained therein are confidential and
proprietary to TerreStar Networks Inc. and Space Systems/Loral, Inc. and shall
not be published or disclosed to any third party except as permitted by the
Terms and Conditions of this Contract.

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

Article

   Page

Preamble

   1

Recitals

   2

ARTICLE 1 – Definitions

   3

ARTICLE 2 – Scope of Work

   11

ARTICLE 3 – Deliverable Items and Delivery Schedule

   12

ARTICLE 4 – Price

   13

ARTICLE 5 – Payments

   15

ARTICLE 6 – Purchaser-Furnished Items

   20

ARTICLE 7 – Compliance with U.S. Laws and Directives

   23

ARTICLE 8 – Access to Work in Progress

   26

ARTICLE 9 – Satellite Pre-Shipment Review (SPSR) and Spacecraft Launch and
Spacecraft Launch Readiness Review (LRR)

   29

ARTICLE 10 – Satellite Acceptance

   33

ARTICLE 11 – Acceptance Inspection for Deliverable Items Other Than Satellite

   35

ARTICLE 12 – Transfer of Title and Risk of Loss

   39

ARTICLE 13 – Orbital Performance Incentives

   41

ARTICLE 14 – Corrective Measures in Satellites and Other Deliverable Items

   50

ARTICLE 15 – Warranty

   51

ARTICLE 16 – Changes

   55

ARTICLE 17 – Force Majeure

   58

ARTICLE 18 – Purchaser Delay of Work

   60

ARTICLE 19 – Intellectual Property Indemnity

   61

ARTICLE 20 – Indemnity for Personal Injury and Property Damage

   63

ARTICLE 21 – Termination for Convenience

   66

ARTICLE 22 – Liquidated Damages for Late Satellite Delivery

   69

ARTICLE 23 – Termination for Default and Excessive Force Majeure

   71

ARTICLE 24 – RESERVED

   78

ARTICLE 25 – Dispute Resolution

   79

ARTICLE 26 – Inter-Party Waiver of Liability for a Launch

   84

ARTICLE 27 – Major Subcontracts

   86

 

- i -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 28 – Contractor Insurance Requirements

   87

ARTICLE 29 – Personnel and Key Personnel

   91

ARTICLE 30 – Limitation of Liability

   93

ARTICLE 31 – Disclosure and Handling of Proprietary Information

   95

ARTICLE 32 – Intellectual Property Rights

   98

ARTICLE 33 – Public Release of Information

   102

ARTICLE 34 – Notices

   103

ARTICLE 35 – Risk Management Services

   105

ARTICLE 36 – Order of Precedence

   107

ARTICLE 37 – General

   108

ARTICLE 38 – Security Interest

   115

ARTICLE 39 – Storage

   120

 

Attachment A    Form of Invoice Attachment B    Key Personnel

 

- ii -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

PREAMBLE

This Amended and Restated Contract (the “Contract”) is executed as of
December 12, 2007 (“Revised Effective Date of Contract”) by and between
TerreStar Networks Inc., a corporation organized and existing under the laws of
the state of Delaware, having an office and place of business at 12010 Sunset
Hills Road, Reston, Virginia 20190 (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 94303-4604 (hereinafter referred to as “Contractor”,
and Purchaser and Contractor are hereinafter referred to collectively as the
“Parties” or individually as a “Party”) regarding the TerreStar Satellite
program, and amends and restates and supersedes the Original Contract (as
defined herein), only as to the TS-2 Satellite (defined below) and those
Deliverable Items as set-forth herein, as the Original Contract with respect to
the TS-1 Satellite and associated Deliverable Items has been amended, restated
and superseded by the Amended and Restated Contract for TerreStar-1, dated of
even date hereof (the “TS-1 Contract”). The TS-1 Contract together with this
Contract, completely restate and supersede the Original Contract and all the
rights and obligations contained in such Original Contract have been completely
apportioned and allocated between the TS-1 Contract and this Contract.

 

- 1 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

RECITALS

WHEREAS, TerreStar Networks (Canada) Inc. (“TerreStar Canada”) has been licensed
by the U.S. Federal Communications Commission (“FCC”) and by Industry Canada to
construct, launch and operate a communications system consisting of one
geostationary satellite in the 2 GHz band, a communications network and user
terminals to enable affordable access to advance communications services across
North America, including all of Canada (the “TerreStar Canada Licenses”),

WHEREAS, TerreStar Canada is subject to FCC and Industry Canada milestones,
relating to construction, launch and operational date of its system,

WHEREAS, Purchaser has agreed to purchase, and Contractor has agreed to furnish,
one (1) communications satellite to be accepted in-orbit under the TS-1 Contract
(“TS-1”), Launch Support Services, Mission Operations Support Services, risk
management insurance procurement support, Training services and other items and
services to the extent and subject to the terms and conditions set forth
therein,

WHEREAS, Purchaser desires to procure a second communications Satellite to be
accepted in-orbit under this Contract (“TS-2,” as further described in this
Contract), Launch Support Services, Mission Operations Support Services, risk
management insurance procurement support, Training services and other items and
services to the extent and subject to the terms and conditions set forth herein,

WHEREAS, Contractor is willing to furnish such Satellite, Launch Support
Services, Mission Operations Support Services, risk management insurance
procurement support, Training services and other items and services to the
extent of and subject to the terms and conditions set forth herein, in
consideration of the price and other valid consideration,

WHEREAS, the Parties desire to enter into this Amended and Restated Contract for
TS-2 for the TerreStar Satellite Program to replace and supersede the Original
Contract with respect to TS-2 and certain Deliverable Items associated
therewith,

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and intending to be legally bound, the Parties agree as
follows:

 

- 2 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 1 – DEFINITIONS

Capitalized terms used and not otherwise defined herein shall have the following
meanings:

 

1.1 “Acceptance” (i) with respect to the Satellite shall be as provided in
Article 10, and (ii) with respect to any Deliverable Item other than the
Satellite shall be as provided in Article 11.

 

1.2 “Affiliate” means, with respect to an entity, any other entity Controlling
or Controlled by or under common Control with such entity and shall also include
TerreStar Networks (Canada), Inc., as an “Affiliate” of Purchaser.

 

1.3 “Article” means any article or numbered paragraph thereof in the Contract
terms and conditions.

 

1.4 “ATC IP” means any Intellectual Property covering a system, method, base
station and/or wireless terminal (including any associated end user device) that
uses or reuses a satellite band frequency for terrestrial (aeronautical,
maritime or land-based) wireless communications, but excluding any
satellite-related technology.

 

1.5 “Attachment(s)” means any and all attachment(s) that are attached hereto and
incorporated herein (or are attached to any Exhibit and incorporated therein),
as amended from time to time in accordance with the terms hereof.

 

1.6 “Background Intellectual Property” means Intellectual Property first made,
developed, or created prior to the negotiation or performance of the Original
Contract or otherwise first made, developed or created other than in performance
of or pursuant to this Contract, the TS 1 Contract or the Original Contract and
necessary to the use of any Deliverable Item.

 

1.7 “Business Day” means any day other than the following: a Saturday, Sunday,
and any other day on which national banks are authorized to be closed in New
York City, New York.

 

1.8 “Collateral” has the meaning set forth in Article 38.1.

 

1.9 “Component” means every unit, system and subsystem of the Satellite and all
other hardware and software required to be provided by Contractor hereunder.

 

1.10 “Contract” means the terms and conditions (“Preamble”, “Recitals” and the
Articles) of this executed Amended and Restated Contract, its Exhibits and its
Attachment(s) as set forth in Articles 2.1 and 36, as amended from time to time
in accordance with the terms hereof.

 

1.11 “Contractor” has the meaning set forth in the “Preamble” of this Contract
and any successor or assignee permitted hereunder.

 

- 3 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.12 “Control” and its derivatives mean, with respect to an entity, the legal,
beneficial, or equitable ownership, directly or indirectly, of fifty percent
(50%) or more of the capital stock (or other ownership interest if not a
corporation) of such entity ordinarily having voting rights or the power to
direct the management policies of such entity, whether through the ownership of
voting stock, by contract, or otherwise.

 

1.13 “Daily Rate” has the meaning set forth in Article 13.2.1.

 

1.14 “Deliverable Data” means the data and documentation required to be
delivered to Purchaser as specified in Exhibit A, Statement of Work.

 

1.15 “Deliverable Item” means any of the items or services listed in Article
3.1, as may be amended from time to time in accordance with the terms hereof or
any optional items or services elected by Purchaser, and, collectively, the
“Deliverable Items”.

 

1.16 “Delivery” has the meaning set forth it in Article 3.2.

 

1.17 “Dispute(s)” has the meaning set forth in Article 25.

 

1.18 “Effective Date of Contract” or “EDC” means July 14, 2002.

 

1.19 “Exhibit(s)” means the exhibit(s) identified in Article 2.1 and attached
hereto and incorporated herein.

 

1.20 “FCC” means the Federal Communications Commission or any successor agency
or governmental authority.

 

1.21 “Financing Agreements” means any and all documents and agreements
evidencing and/or securing monies provided on a full or partial debt basis by
any Financing Entity to Purchaser to fund the design, development, construction,
procurement, maintenance, or operation of all or any material part of
Purchaser’s Satellite program.

 

1.22 “Financing Entity” means any entity (other than Contractor, or parties
related to Contractor, or competitors of Contractor), e.g., commercial bank,
merchant bank, investment bank, commercial finance organization, corporation, or
partnership, which has been specifically identified in a written notification to
Contractor providing money on a full or partial debt basis to Purchaser to fund
the design, development, construction, procurement, maintenance, or operation of
all or any material part of Purchaser’s Satellite program.

 

1.23 “Firm Fixed Price” or “FFP” means the firm fixed price applicable to the
Deliverable Items as set forth in Article 4.1.

 

1.24 “Force Majeure” has the meaning set forth in Article 17.

 

1.25 “Foreground Intellectual Property” means Intellectual Property first made,
developed or created in performance of the Original Contract, the TS-1 Contract
or this Contract that is incorporated into or employed in, or required for the
use of, any Deliverable Item.

 

- 4 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.26 “Forward Transmission Path” has the meaning set forth in Article 13.2.3.

 

1.27 “HNS” shall mean Hughes Network Services LLC.

 

1.28 “In-Orbit Testing” or “IOT” means the testing of the Satellite in-orbit in
accordance with Exhibit D, Satellite Program Test Plan.

 

1.29 “Intellectual Property” means all designs, methods, concepts, layouts,
software, inventions (whether or not patented or patentable), processes,
technical data and documentation, technical information and drawings, and
similar matter in which an Intellectual Property Right may subsist.

 

1.30 “Intellectual Property Claim” has the meaning set forth in Article 19.

 

1.31 “Intellectual Property Right(s)” means all common law and statutory
proprietary rights, including patent, patent application, patent registration,
copyright, trademark, service mark, trade secret, mask work rights, data rights
and similar rights existing from time to time under the intellectual property
laws of the United States, any state or foreign jurisdiction, or international
treaty regime.

 

1.32 “Intentional Ignition” means, with respect to any Satellite, the ignition
for the purposes of Launch of the first stage Vulcain engine of the Launch
Vehicle that has been integrated with the Satellite; provided that if a Launch
Vehicle is used that does not have such a Vulcain engine, this definition shall
be modified to reflect the Launch Vehicle that is employed.

 

1.33 “Junior Liens” has the meaning set forth in Article 38.5.

 

1.34 “Launch” means, with respect to the Satellite, the ignition of solid
propellant booster(s) if such event follows Intentional Ignition of the Launch
Vehicle that has been integrated with the Satellite. If a Launch Vehicle is used
that does not have a Vulcain engine, this definition shall be modified to
reflect the Launch Vehicle that is employed.

 

1.35 “Launch and In-Orbit Insurance Policy” has the meaning set forth in Article
35.1.

 

1.36 “Launch Agency” means the provider of Launch Services responsible for
conducting the Launch Services for the Satellite.

 

1.37 “Launch Services” means those services provided by the Launch Agency for
the Launch of the Satellite pursuant to the Launch Services Agreement.

 

1.38 “Launch Services Agreement” or “LSA” means the contract between Purchaser
and the Launch Agency that provides for Launch Services for the Satellite, as
such contract may be amended from time to time in accordance with its terms.

 

1.39 “Launch Site” means the location that will be used by the Launch Agency for
purposes of launching the Satellite, except in the case of Sea Launch it shall
mean the homeport located in Long Beach, CA.

 

- 5 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.40 “Launch Support” or “Launch Support Services” means those services
specified in Exhibit A, Statement of Work, to be provided by Contractor in
support of Launch Services.

 

1.41 “Launch Vehicle” means the launch vehicle used to provide Launch Services
for the Satellite.

 

1.42 “License” has the meaning set forth in the “Recitals” of this Contract.

 

1.43 “London Inter-Bank Offer Rate” or “LIBOR” means the rate per annum shown,
on the third (3rd) London business day preceding the day of commencement of an
interest calculation period, on page 3750 of the Dow Jones & Company Telerate
screen or any successor page as the composite offered rate for London interbank
deposits in an amount approximately equal to the amount on which the interest is
to be applied for a three-month period (the “Rate Base”), as shown under the
heading “USD” as of 11:00 a.m. (London Time); provided that in the event no such
rate is shown, LIBOR shall be the rate per annum (rounded to the nearest 1/100th
of one percent) based on the rates at which U.S. dollar deposits approximately
equal in principal amount to the Rate Base and for a three-month period are
displayed on page “LIBO” of the Reuters Monitor Money Rates Service or such
other page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks as of 11:00 a.m.
(London time) (it being understood that if at least two such rates appear on
such page, the rate will be the arithmetic mean of such displayed rates);
provided that in the event fewer than two such rates are displayed, or if no
such rate is relevant, LIBOR shall be the rate per annum equal to the rate
offered by Credit Suisse, New York Branch, at approximately 11:00 a.m. (London
Time) to prime banks in the London interbank market on deposits in U.S. dollars
in an amount approximately equal in principal amount to the aggregate principal
balance of the Rate Base for a three-month period.

 

1.44 “Loral Space” has the meaning set forth in Article 5.8.

 

1.45 “Major Subcontract” means a subcontract related to the performance of this
Contract and valued at Two Million Five Hundred Thousand U.S. dollars
(U.S.$2,500,000) or more.

 

1.46 “Milestone” means a portion of the Work upon completion of which a payment
is to be made in accordance with Exhibit E, TerreStar 2 Payment Plan and
Termination Liability Amounts.

 

1.47 “Mission Operations Support Services” means the orbit-raising, IOT and
related services specified in Exhibit A, Statement of Work, to be performed by
Contractor for the Satellite.

 

1.48 “MRP System” means Contractor’s then current internal material requirements
processing system used by Contractor in connection with the performance of
satellite construction contracts for its customers generally.

 

1.49 “Notice of Election” has the meaning set forth in Article 20.3.1.

 

- 6 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.50 [***]

 

1.51 [***]

 

1.52 “NSP” means not separately priced and included in the Firm Fixed Price.

 

1.53 “Orbital Performance Incentive Period” means the period commencing on the
day following Acceptance of the Satellite and ending on the last day of the
Satellite Stated Life.

 

1.54 “Orbital Performance Incentives” means an amount specified in Exhibit F
that may be earned by Contractor based on in-orbit performance of the Satellite
as set forth in Article 13.

 

1.55 “Orbital Storage” means any period of time of intentional non-use by
Purchaser of the Satellite provided that the Satellite has been placed into
orbit and is capable of performing in accordance with Exhibit B, Satellite
Performance Specification.

 

1.56 “Original Contract” means the contract entered into between the Parties,
dated July 14, 2002, as amended by the Parties from time to time prior to REDC
(including all Contract change notices thereto).

 

1.57 “Partial Loss” means that, based on data available after Intentional
Ignition, the Satellite does not meet all applicable requirements of Exhibit B,
Satellite Performance Specification, and is not a Total Loss.

 

1.58 “Party” or “Parties” means Purchaser, Contractor or both, as the context
requires.

 

1.59 “Payment Plan” means the payment plan for the applicable Deliverable Item,
as set forth in Exhibit E, TerreStar 2 Payment Plan and Termination Liability
Amounts , as may be amended from time to time in accordance with the terms
hereof.

 

1.60 “Percentage of Performance Earned” has the meaning set forth in Article
13.2.1.

 

1.61 “Performance Specification” means the applicable performance specification
for the Satellite or other Deliverable Item, as appropriate, in the context of
the applicable clause, as such specification may be amended from time to time in
accordance with the terms hereof.

 

1.62 “Permitted Debt” has the meaning set forth in Article 38.5.

 

1.63 “PMO” means the Purchaser’s program management office to be designated by
Purchaser.

 

- 7 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.64 “Product Assurance Program Plan” means the product assurance program plan
attached as Exhibit C hereto, as may be amended from time to time in accordance
with the terms hereof.

 

1.65 “Proprietary Information” has the meaning set forth in Article 31.

 

1.66 “Purchaser” has the meaning set forth in the “Preamble” and any successor
or assignee permitted hereunder.

 

1.67 “Purchaser Delay” has the meaning set forth in Article 18.

 

1.68 “Purchaser Parent Company” has the meaning set forth in Article 13.2.11.

 

1.69 “Quarterly Orbital Performance Incentive” means the amount specified in
Exhibit F as “Quarterly Orbital Performance Incentives,” which may be earned by
Contractor based on in-orbit performance of the Satellite as set forth in
Article 13.2.1.

 

1.70 “Raw Materials, Work-in-Process and Finished Goods” means (i) all
Deliverable Items (including the Satellite(s)); (ii) all Components; and
(iii) all rights in Intellectual Property, Proprietary Information, and other
data and information that are to be and/or actually are delivered to Purchaser
under this Contract. The foregoing shall constitute “Raw Materials,
Work-in-Process and Finished Goods” as the same shall be in the process of
performance, manufacture, assembly, integration, testing, delivery or completion
at any given point in time, whether raw materials, work in process or finished
goods, whether now owned or after-acquired and whether now existing or hereafter
coming into existence; but, in each case, only to the extent identified to this
Contract, which shall be deemed to occur only when such goods have been
installed on the Satellite or designated for the Satellite under the MRP System.

 

1.71 “Return Transmission Path” has the meaning set forth in Article 13.2.3.

 

1.72 “Revised Effective Date of Contract” or “REDC” means the date that this
Amended and Restated Contract is signed by the authorized representatives of
each Party.

 

1.73 “Satellite” means the communications satellite that is to be manufactured
by Contractor and to be delivered to Purchaser pursuant to this Contract.

 

1.74 “Satellite Anomaly” means, with respect to the Satellite in-orbit, a
condition or occurrence that has a material adverse impact on the Satellite
Stated Life or performance of the Satellite.

 

1.75 “Satellite Performance Specification” means the satellite performance
specification for the Satellite attached as Exhibit B hereto, as may be amended
from time to time in accordance with the terms hereof.

 

1.76 “Satellite Pre-Shipment Review” or “SPSR” has the meaning set forth in
Article 9.

 

- 8 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.77 “Satellite Program Test Plan” means the Satellite program test plan
attached as Exhibit D hereto, as may be amended from time to time in accordance
with the terms hereof.

 

1.78 “Satellite Stated Life” or “Satellite Mission Life” means the contracted
for life of fifteen (15) years for the Satellite as set forth in Section 2.7 of
Exhibit B, Satellite Performance Specification, commencing upon Acceptance of
the Satellite.

 

1.79 “SBN/SBAS Contract” means that certain Contract between TerreStar Networks
Inc. and Space Systems/Loral, Inc. for the TerreStar Space-Based Network, dated
January 25, 2007, as may be amended from time to time in accordance with the
terms thereof.

 

1.80 “SCF” means satellite control facility.

 

1.81 “Scheduled Orbital Performance Incentive” means, the amount specified in
Exhibit E as the “Scheduled Orbital Performance Incentive,” which may be earned
by Contractor based on in-orbit performance of the Satellite as set forth in
Article 13.2.2.

 

1.82 “Secured Obligations” means, collectively, all monetary obligations of
Contractor to Purchaser under this Contract (including without limitation
Contractor’s obligations to (i) pay liquidated damages under Article 22 hereof,
(ii) indemnify Purchaser under Articles 4.2 (solely with respect to Contractor’s
indemnification obligations), 19, 20 and 26.2 hereof; and (iii) make termination
payments under Article 21 and Article 23) and all damages payable to Purchaser
and its Affiliates by Contractor arising out of or relating to this Contract and
all reasonable costs and expenses incurred by Purchaser to recover such damages
(including reasonable attorney fees).

 

1.83 “Security Interest” has the meaning set forth in Article 38.1.

 

1.84 “Spacecraft Launch Readiness Review” or “SLRR” has the meaning set forth in
Article 9.2.

 

1.85 “Statement of Work” or “SOW” means the statement of work attached as
Exhibit A hereto, as may be amended from time to time in accordance with the
terms hereof.

 

1.86 “Summary In-Orbit Test Report” or “Summary IOT Report” has the meaning set
forth in Exhibit A, Statement of Work.

 

1.87 “Taxes” has the meaning set forth in Article 4.2.

 

1.88 “Terminated Ignition” means that, following Intentional Ignition, the first
stage engines of the Launch Vehicle are shut down for any reason before the
Launch occurs and the launch pad is declared safe by the Launch Agency. If a
Launch Vehicle is used that does not have a Vulcain engine, this definition
shall be modified to reflect the Launch Vehicle that is employed.

 

1.89 “Termination Default” has the meaning set forth in Article 38.7.

 

1.90 “TerreStar 1” or “TS-1” means the satellite procured under the TS-1
Contract.

 

- 9 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

1.91 “TerreStar 2” or “TS-2” means the Satellite.

 

1.92 “Total Loss” means with respect to the Satellite after Intentional
Ignition: (i) the complete loss, destruction or operational failure of the
Satellite, or (ii) a constructive total loss as defined in the Launch and
In-Orbit Insurance Policy, if any, for the Satellite, but in no event shall a
Total Loss be deemed to occur for purposes of Orbital Performance Incentives as
long as Contractor is entitled to earn such incentives based on the applicable
criteria set forth in Article 13.2.1, Article 13.2.2 and/or Article 13.2.3.

 

1.93 “Training” means the training specified in Exhibit A, Statement of Work, to
be provided by Contractor hereunder.

 

1.94 “Transmission Path” has the meaning set forth in Article 13.2.

 

1.95 “TS-1 Contract” has the meaning set forth in the Preamble.

 

1.96 “UCC” means the Uniform Commercial Code of the State of New York or, with
respect to the perfection and the effect of perfection or non-perfection of the
Security Interest in the Collateral as provided in Article 38.4, the state of
Delaware, in either case as in effect from time to time.

 

1.97 “Work” means all design, development, construction, manufacturing, labor,
and services, including tests to be performed, and any and all Deliverable
Items, including the Satellite, Deliverable Data, Mission Operations Support
Services, Launch Support Services, [***], Training, and equipment, materials,
articles, matters, services, and things to be furnished and rights to be
transferred to Purchaser under this Contract, or any subcontract entered into
hereunder by Contractor.

 

- 10 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 2 – SCOPE OF WORK

 

2.1 Provision of Services and Materials

Contractor shall provide the necessary qualified personnel, material, services,
facilities and know-how to: design, manufacture, test, provide Mission
Operations Support Services, Launch Support Services, and deliver for
Purchaser’s Acceptance (1) S-Band Satellite (in-orbit), with [***], together
with all other Deliverable Items referred to in Article 3.1, all in accordance
with this Contract, including the following Exhibits (as applicable), which are
attached hereto (or incorporated by reference) and made a part hereof:

 

  2.1.1 Exhibit A, Statement of Work, Revision 4 dated November 16, 2007

 

  2.1.2 Exhibit B, Satellite Performance Specification, Revision 6 dated
October 18, 2007

 

  2.1.3 Exhibit C, Commercial Programs Product Assurance Plan, Document No.
E038152, Revision 6 dated April 5, 2004

 

  2.1.4 Exhibit D, Satellite Program Test Plan, Revision 2 dated November 16,
2007

 

  2.1.5 Exhibit E, TerreStar 2 Satellite Program Payment Plan and Termination
Liability Amounts (not including Orbital Performance Incentive Payments), dated
November 9, 2007 (“TerreStar 2 Payment Plan and Termination Liability Amounts”
or “TerreStar 2 Payment Plan”)

 

  2.1.6 Exhibit F, TerreStar Satellite Orbital Performance Incentives Payment
Plan, dated November 16, 2007

 

  2.1.7 Attachments

 

  A. Form of Invoice (including the Annex 1 thereto, “Form of Contractor
Certificate” and “Schedule 1 to Annex I to Attachment A”)

 

  B. Key Personnel

 

- 11 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

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 Contractor
shall deliver such items on or before the corresponding Delivery dates and at
locations specified in the table below.

 

Item

  

Description

  

Delivery Date

  

Delivery Location

1.    Satellite with [***]    For TerreStar 2: [***]- Successful completion of
SPSR    [***] 2.    Deliverable Data    Per SOW, Exhibit A    PMO 3.    Training
   Per SOW, Exhibit A    Per SOW, Exhibit A 4.    Launch Support Services    Per
SOW, Exhibit A    Per SOW, Exhibit A 5.    Mission Operations Support Services
   Per SOW, Exhibit A    Per SOW, Exhibit A

 

3.2 Delivery

Delivery of each Deliverable Item shall occur upon Acceptance of such item in
accordance with Articles 10 or 11 as applicable, except in the case of the
Satellite, Delivery shall occur upon successful completion of Satellite
Pre-Shipment Review pursuant to Article 9.

 

- 12 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 4 – PRICE

 

4.1 Firm Fixed Price

 

  4.1.1 FFP. The Firm Fixed Price for each Deliverable Item is set forth in the
table below.

 

Item

  

Description

  

TerreStar 2Amount

1.    Satellite (TS-2)    US$[***] 2.    Deliverable Data    [***] 3.   
Training    [***] 4.    Launch Support Services    [***] 5.    Mission
Operations Support Services    [***] 6.    a) [***]    [***]    TOTAL   
US$191,697,000

 

  4.1.2 Firm Fixed Price.

 

  A. FFP for TerreStar 2. Subject to Article 4.2 hereof, the price to be paid by
Purchaser to Contractor for the Deliverable Items 1 through 5 set forth in
Article 3.1 hereof, within the scope of Work as detailed in Exhibit A, Statement
of Work, shall be a firm fixed price of [***] U.S. dollars (US$[***]) (the “TS-2
Firm Fixed Price”).

 

  4.1.3

Elements of FFP. Except as otherwise expressly provided in this Contract, the
Firm Fixed Price are not subject to any escalation or to any adjustment or
revision. The item price for the Satellite includes on-going design,
manufacturing, tests, Deliverable Data, Training, In-Orbit Testing, preparation
for shipment to Launch Site, Launch Support Services (including launch base
operations), Mission Operations Support Services and insurance support services
as required by Article 35, packing and transport of the Satellite to the Launch
Site, transit insurance and such other insurance as is required by Article 28
(but does not include: (i) Launch Services; or (ii) any insurance coverage for
loss or damage to the Satellite or Launch Vehicle from and after Intentional

 

- 13 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

Ignition, the responsibility for both of which shall reside exclusively with
Purchaser), all in accordance with the terms and conditions of this Contract, as
specified herein.

 

4.2 Taxes

The Firm Fixed Price includes all applicable taxes, duties and similar
liabilities (including interest, fines, penalties, or additions attributable or
imposed on or with respect to, any such taxes, duties and similar liabilities)
imposed by any United States federal, state, or local government in connection
with Contractor’s performance under this Contract and the taxing authority
having jurisdiction over Launch Support Services (“Taxes”). Contractor has made
or will make all the necessary filings in order to deliver the Work free and
clear of any Contractor incurred liens or encumbrances for Taxes. Subject to the
indemnification procedures set forth in Article 20.3, in the event any
governmental or taxing authority imposes or assesses Taxes against Purchaser in
connection with any Deliverable Item, Contractor shall indemnify Purchaser for
any Taxes paid by Purchaser and shall reimburse Purchaser for related costs of
defense (whether or not Purchaser actually pays such Taxes).

 

- 14 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 5 – PAYMENTS

 

5.1 Payment Plan

Payments by Purchaser to Contractor of the Firm Fixed Price set forth in Article
4 shall be in accordance with Exhibit E, TerreStar 2 Payment Plan and
Termination Liability Amounts.

 

5.2 Payment Conditions

 

  5.2.1 Time Payments. Subject to Article 5.2.5, all time payments due from
Purchaser shall be paid no later than thirty (30) days after the date specified
for invoice therefor as set forth in the applicable Payment Plan in Exhibit E.
Contractor shall give to Purchaser an invoice and certification in the form
attached hereto as Attachment A with respect to each such time payment. Subject
to Article 5.2.5, the failure of Contractor to deliver any invoice required
hereunder shall not affect Purchaser’s obligation hereunder to make any time
payments to Contractor.

 

  5.2.2 Milestone Payments. All payments due from Purchaser upon the completion
of a Milestone described in the Payment Plan shall be paid no later than thirty
(30) days after receipt by Purchaser of an invoice and certification in the form
attached hereto as Attachment A that the Milestone has been completed in
accordance with the requirements of this Contract, together with the necessary
or appropriate supporting data and documentation as required hereunder, if any,
or as Purchaser may reasonably request within ten (10) days of receipt of
invoice. Notwithstanding the foregoing, and without prejudice to Contractor’s
rights under Article 5.6, Purchaser, in its sole discretion, may agree to make a
partial payment to Contractor for partial completion of a Milestone event. In
the event of early completion by Contractor of a Milestone in advance of such
Milestone completion date as set forth in Exhibit E, TerreStar 2 Payment Plan
and Termination Liability Amounts, Purchaser shall not be obligated to make the
corresponding Milestone payment to Contractor in advance of the payment due date
that would apply under this Article 5.2 to the applicable invoice date therefor
set forth in Exhibit E, TerreStar 2 Payment Plan and Termination Liability
Amounts.

 

- 15 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  5.2.3 Cumulative Payments. In no event shall Contractor submit an invoice
whose amount, when paid, would exceed the aggregate, cumulative sum of payments
(time payments plus Milestone payments) scheduled to be paid to Contractor up to
such point of time of payment under Exhibit E, TerreStar 2 Payment Plan and
Termination Liability Amounts.

 

  5.2.4 Non-Warranty Payments. All amounts payable to Contractor with respect to
non-warranty work performed pursuant to Article 15.3 shall be paid no later than
thirty (30) days after receipt of an invoice and certification in the form
attached hereto as Attachment A that such non-warranty work has been completed
and documented in accordance with the requirements of this Contract together
with the necessary or appropriate supporting data and documentation as requested
under this Contract, if any.

 

  5.2.5 Obligation to Pay. If Contractor shall not have delivered any invoice or
certification required hereunder within the time specified therefor, the
relevant payment due from Purchaser shall be payable on or before thirty
(30) days after receipt of such invoice or certification.

 

5.3 Late Payment

 

  5.3.1 Interest. In the event that any payment due under this Contract is not
made when due hereunder, without prejudice to the other rights and remedies
under this Contract of the Party entitled to such payment, such Party shall also
be entitled to interest at the rate of LIBOR (90 day rate) + 300 basis points
per annum on the unpaid balance thereof from the date such payment is due
hereunder until such time as payment is made.

 

  5.3.2

Suspension of Performance. If any payment (other than a disputed payment as set
forth immediately below) is not made by Purchaser by the date thirty (30) days
after the date due in accordance with Article 5.2, or if a payment that is
disputed by Purchaser pursuant to Article 5.6 is not paid into an escrow account
as specified in such Article, then without prejudice to Contractor’s other
rights and remedies under this Contract or at law or in equity, Contractor may
elect to

 

- 16 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

suspend performance of its obligations under this Contract, without prejudice or
penalty, until the affected payment is made. If Contractor subsequently resumes
performance, the schedule and affected terms of this Contract shall be equitably
adjusted due to such work stoppage and the price shall be equitably adjusted to
compensate Contractor for actual costs reasonably incurred by Contractor
associated with such work stoppage, plus a markup of ten percent (10%) on those
costs, such costs and markup to be invoiced and paid pursuant to the provisions
of Article 5.

 

5.4 Invoices

Invoices required to be delivered by Contractor hereunder shall be submitted by
facsimile and airmail to Purchaser (original plus one (1) copy, including
supporting documentation and data) at the following address:

 

     TerreStar Networks Inc.PP   Attn.:    [***]      [***]     

12010 Sunset Hills Road,

Suite 900

     Reston, VA 20190 With a copy to:      TerreStar Networks Inc.   Attn.:   
[***]      [***]     

12010 Sunset Hills Road,

Suite 900

     Reston, VA 20190

or to such other address as Purchaser may specify in writing to Contractor.

 

- 17 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

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:

SPACE SYSTEMS/LORAL, INC.

ACCOUNT NO.[***]

BANK OF AMERICA NT&SA

CHICAGO, ILLINOIS

[***]

or such other account or accounts as Contractor may specify in writing to
Purchaser.

 

5.6 Disputed Amounts

In the event Purchaser determines in good faith that the event covered by a
Contractor Milestone payment invoice has not been substantially completed in
accordance with the requirements of this Contract, Purchaser shall so notify
Contractor in writing within thirty (30) days of receipt of the invoice. Such
notification shall state in reasonable detail the area(s) Purchaser considers
not to be in accordance with the requirements of this Contract. Within five
(5) Business Days of receipt of Purchaser’s notification, Contractor shall
notify Purchaser in writing if it disagrees with Purchaser’s determination,
stating its good faith basis for such disagreement. Within ten (10) Business
Days thereafter, the Parties’ respective senior executives shall meet and use
good faith efforts to resolve such disagreement. If the senior executives are
unable to resolve the disagreement within ten (10) Business Days, Purchaser
shall immediately place the payment amount in dispute into an escrow account
(which the Parties shall establish with a mutually acceptable escrow agent)
pending resolution pursuant to Article 25, Dispute Resolution. Should Contractor
agree with Purchaser’s notification, Contractor shall proceed to correct the
discrepancy(ies), and, upon correction, the invoice shall be reinstated for
payment. The Parties shall equally share in the third party escrow fees incurred
in connection with this Article 5.6.

 

5.7 Set Off

In the event one Party has not paid the second Party any amount that is due and
payable to the second Party under this Contract, such second Party shall have
the right to set off such amount against payments due to the first Party under
this Contract, provided any amount in dispute pursuant to Article 5.6 shall not
be considered eligible for setoff while the Dispute is being resolved.

 

- 18 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

5.8 Special Financial Terms

Prior to Intentional Ignition, in the event that: (a) [***]; or (b) [***].
Nothing in this Article 5.8 shall obligate [***].

 

- 19 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 6 – PURCHASER-FURNISHED ITEMS

 

6.1 Purchaser-Furnished Support

To enable Contractor to perform Launch Support Services and Mission Operations
Support Services, Purchaser shall timely make available to Contractor the
Purchaser-furnished equipment, facilities and services described in Section 2.6
of Exhibit A, Statement of Work. At all times, such Purchaser-furnished
equipment and facilities shall remain Purchaser’s property. Such equipment,
facilities and services shall be in good working condition and adequate for the
required purposes and, for the Launch of the Satellite hereunder, shall be made
available free of charge for Contractor’s use during the period commencing on
the date established therefor at the technical interchange meeting described in
Section 2.6 of Exhibit A, Statement of Work, and continuing through completion
of Acceptance for the Satellite. Contractor shall provide Purchaser with
reasonable prior written notice of its need (including the need of any of its
subcontractors, consultant and/or agent) to access any of the
Purchaser-furnished sites. Contractor shall not provide access to or use of the
Purchaser-furnished sites, equipment or other items to any third party other
than a subcontractor, consultant and/or agent of Contractor for purposes of
performing subcontracted Work hereunder. Contractor shall comply with the terms
of the lease for each site, as provided in writing to Contractor. Contractor
shall ensure that no lien, encumbrance, pledge or other interest whatsoever
attaches to the Purchaser-furnished equipment, sites and other items as the
result of acts or omissions of Contractor or its subcontractors. Purchaser and
Contractor will conduct an interface meeting on the date established therefor at
the technical interchange meeting described in Section 2.6 of Exhibit A,
Statement of Work, to confirm the availability and adequacy of such
Purchaser-furnished equipment, facilities and services.

 

6.2 Communications Authorizations

Purchaser shall be responsible, at its cost and expense, for preparing,
coordinating and filing all applications, registrations, reports, licenses,
permits and authorizations with the FCC, if required to do so, and with any
other national governmental agencies having jurisdiction over Purchaser, for the
construction, Launch and operation of the Satellite. Contractor shall provide
such reasonable cooperation and support as Purchaser may

 

- 20 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

reasonably request in support of Purchaser’s preparation, coordination and
filing of such applications, registrations, reports, licenses, permits and
authorizations. From and after Acceptance of the Satellite, for any support
provided by Contractor under this Article 6.2, Contractor shall be entitled to
reimbursement of actual costs reasonably incurred in connection with the
provision of such support plus a markup of ten percent (10%), with such costs
and associated markup to be invoiced and paid in accordance with Article 5.

 

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) and all relevant domestic communications regulatory authorities
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) and the laws and regulations
of all domestic communications regulatory authorities having jurisdiction over
Purchaser. Contractor shall provide such reasonable cooperation and support as
Purchaser may reasonably request in support of Purchaser’s efforts in the
preparation and submission of such filings. From and after Acceptance of the
Satellite, for any support provided by Contractor under this Article 6.3,
Contractor shall be entitled to reimbursement of actual costs reasonably
incurred in connection with the provision of such support plus a markup of ten
percent (10%), with such costs and markup to be invoiced and paid in accordance
with Article 5.

 

6.4 Satellite Performance Data

Commencing with the first full calendar month following Acceptance of the
Satellite, Purchaser shall provide a report to Contractor describing the general
health and operating status of the Satellite. Such report shall be provided to
Contractor on a monthly basis thereafter, delivered to Contractor promptly after
the end of each month during the Satellite Stated Life of the Satellite. In the
event of a Satellite Anomaly that occurs during the Satellite Stated Life,
Purchaser shall timely provide Contractor with, or give Contractor access to,
any data Contractor may reasonably require to investigate and correct (if
Contractor is able to do so) such Satellite Anomaly and/or support Purchaser in
making and perfecting claims for insurance recovery relating to such Satellite
Anomaly as set forth in Article 35.2.

 

- 21 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

6.5 Late Delivery of Purchaser-Furnished Items or Services

The late delivery of Purchaser-furnished items or services, individually or
combined, shall not be considered a default by Purchaser, but shall be
considered an event beyond the reasonable control of Contractor, and Contractor
shall be entitled to adjustments in price, schedule, performance requirements
and other terms of this Contract in accordance with Article 18.

 

6.6 Launch Services

Purchaser shall be responsible for furnishing Launch Services for the Satellite;
provided, however, Purchaser shall not be obligated to Launch the Satellite and
may elect to store the Satellite pursuant to Article 39 or make other
arrangements per Article 16. Purchaser shall, no later than twelve (12) months
prior to the expected Launch date for an Arianespace 5 Launch Vehicle or, for
any other Launch Vehicle, the lesser of (i) eighteen (18) months prior to the
expected Launch date or (ii) the notification period that is required to meet
the requirements of the alternative Launch Agency, notify Contractor of its
selection of the Launch Vehicle for Launch of the Satellite. The Launch Vehicle
shall be one of the candidate Launch Vehicles identified in paragraph 2.1 of
Exhibit B, Satellite Performance Specification.

 

- 22 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 7 – COMPLIANCE WITH U.S. LAWS AND DIRECTIVES

 

7.1 General

Each Party shall, at its expense, perform its respective obligations hereunder
in accordance with all applicable laws, regulations, and policies of the United
States and the conditions of all applicable United States Government approvals,
permits, or licenses.

 

7.2 Compliance with U.S. Export Control Laws

 

  7.2.1 Performance in Accordance with Law. Contractor shall, at its expense,
perform the Work in accordance with all applicable export control laws,
regulations, and policies of the United States and the conditions of all
applicable United States Government approvals, permits, and licenses. Without
limiting the generality of the foregoing, Contractor shall timely apply for and
use reasonable and diligent efforts to obtain U.S. and non-U.S. Government
approvals, permits and licenses necessary for export or import of the
Deliverable Items and services and other technical data and equipment related to
the SBAS or SBN and SBN Work being furnished by Contractor, pursuant to or to be
utilized in connection with this Contract. Purchaser agrees to cooperate with
Contractor in Contractor’s efforts to obtain any such approvals, permits and
licenses, including providing Contractor with requirement information in
Purchaser’s possession.

 

  7.2.2 Cooperation. Any obligation of Contractor hereunder to provide hardware,
software, Deliverable Data, other technical information or technical services to
Purchaser and its personnel and/or its representatives shall be subject to
applicable U.S. Government export control and security laws, regulations,
policies and license conditions, as construed by Contractor in good faith. The
Parties shall work cooperatively and in good faith to implement this Contract in
compliance with such laws, regulations, policies and license conditions. If and
to the extent required by U.S. law, Purchaser and its personnel and/or
representatives shall enter into U.S. Government-approved agreement(s), separate
from this Contract, governing Contractor’s provision of hardware, software,
Deliverable Data, other technical information or technical services in
connection with this Contract.

 

- 23 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

7.3 Licenses and Other Approvals

Contractor shall timely apply for and, once issued, maintain U.S. Government
export licenses, agreements and other approvals that are required for “foreign
person” personnel and/or representatives of Purchaser (including, but not
limited to, foreign subsidiaries and related entities of Purchaser involved with
the procurement) as well as Purchaser’s insurance providers and Canadian
authorities (as may be required under Canadian law) to have access to Contractor
facilities, hardware, software, Deliverable Data, other technical information or
technical services in connection with the performance of this Contract. A
“foreign person” shall be as defined in the International Traffic in Arms
Regulations, 22 C.F.R. §120.16. As early as practicable, and in no event later
than fifteen (15) days after REDC, Purchaser shall provide Contractor with a
list of countries (if other than the U.S.) of which “foreign person” personnel
and/or representatives of Purchaser (including, but not limited to foreign
subsidiaries and related entities of Purchaser involved with the procurement) as
well as Purchaser’s insurance providers and Canadian authorities (as may be
required under Canadian law) are citizens, if such personnel, representatives,
insurance providers and Canadian authorities will or may have access to U.S.
export-controlled items under this Contract. Purchaser shall provide the
reasonable cooperation and support necessary for Contractor to apply for and
maintain such required U.S. export licenses, agreements and other 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 licenses,
agreements and approvals. At Purchaser’s request, Contractor shall include
Purchaser (and related entities involved with the procurement, including any
foreign companies necessarily required to be part of the development,
procurement or integration) as a named party in any application to the U.S.
Government for approval of such export licenses, agreements and other approvals
so as to permit Purchaser to be present during any discussion or meetings where
Purchaser’s foreign subsidiaries/related entities, insurance providers and/or
Canadian authorities may receive from or discuss with Contractor
export-controlled technical data. Contractor shall provide the parties to such
export licenses and agreements copies of the export licenses and agreements,
including any U.S. Government provisos related to same.

 

- 24 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

NOTWITHSTANDING ANY PROVISION IN THIS CONTRACT, IN NO EVENT SHALL CONTRACTOR BE
OBLIGATED UNDER THIS CONTRACT TO PROVIDE ACCESS TO CONTRACTOR OR SUBCONTRACTOR
FACILITIES; PROVIDE ACCESS TO OR FURNISH HARDWARE, SOFTWARE, DELIVERABLE DATA OR
OTHER TECHNICAL INFORMATION; OR PROVIDE TECHNICAL/DEFENSE SERVICES, TO ANY
PERSON EXCEPT IN COMPLIANCE WITH APPLICABLE U.S. EXPORT CONTROL LAWS,
REGULATIONS, POLICIES AND LICENSE CONDITIONS, AS CONSTRUED BY CONTRACTOR IN GOOD
FAITH.

 

7.4 No Unauthorized Exports or Retransfers

PURCHASER SHALL NOT EXPORT OR TRANSFER TO ANY “FOREIGN PERSON” ANY HARDWARE,
SOFTWARE, DELIVERABLE DATA, OTHER TECHNICAL INFORMATION OR TECHNICAL/DEFENSE
SERVICES FURNISHED HEREUNDER, EXCEPT AS EXPRESSLY AUTHORIZED BY THE U.S.
GOVERNMENT IN ACCORDANCE WITH THE EXPORT LICENSES, AGREEMENTS AND OTHER
APPROVALS REFERENCED IN ARTICLES 7.1 AND 7.2 OR AS OTHERWISE EXPRESSLY
AUTHORIZED UNDER U.S. EXPORT CONTROL LAWS.

IF PURCHASER IS A “FOREIGN PERSON”, PURCHASER SHALL NOT RE-EXPORT, RE-TRANSFER
OR DIVERT TO ANY THIRD PARTY ANY ITEM EXPORTED TO PURCHASER UNDER OR IN
CONNECTION WITH THIS CONTRACT, EXCEPT AS EXPRESSLY AUTHORIZED BY THE U.S.
GOVERNMENT IN ACCORDANCE WITH THE EXPORT LICENSES, AGREEMENTS OR OTHER APPROVALS
REFERENCED IN ARTICLES 7.1 AND 7.2 OR AS OTHERWISE EXPRESSLY AUTHORIZED UNDER
U.S. EXPORT CONTROL LAWS.

 

- 25 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 8 – ACCESS TO WORK IN PROGRESS

 

8.1 General

Contractor represents and warrants that, subject to Article 7, the access to the
Work and Work-in-progress to be provided Purchaser personnel (and Purchaser’s
duly appointed consultants and agents) under this Contract is or shall be
substantially similar to the access to the Work and Work-in-progress Contractor
provides to its other major commercial customers. In the event Contractor
becomes aware that the access to the Work and Work-in-progress provided under
this Contract is otherwise, Contractor shall promptly remedy that situation.

 

8.2 Work-in- Progress at Contractor’s Facility

Subject to Article 7 and compliance with Contractor’s normal and customary
safety and security regulations, policies, procedures and practices of which
Purchaser has received prior written notice, Purchaser personnel (and
Purchaser’s duly appointed consultants and agents) shall be allowed unescorted
access to all Work being performed at Contractor’s facility for the Satellite
and other Deliverable Items, for the purpose of observing the progress of such
Work during normal program business hours and at such other hours as Contractor
may agree. Subject to Article 7, Purchaser shall be provided ten (10) non-escort
permanent badges and ten (10) escort badges to agreed work areas where the Work
is being performed.

 

8.3 Work in Progress at Subcontractors’ Facilities

In the case of Contractor’s Major Subcontracts, and such other non-major
subcontracts under which the effort in support hereunder involves significant
design or qualification or the subcontractor is experiencing performance
difficulties which may have a material adverse effect on the Delivery schedule
or performance or provision of a Deliverable Item, Contractor shall use
commercially reasonable efforts to require that each such subcontract contain a
provision substantially similar to this Article 8 with respect to access to the
applicable subcontractor’s facilities and performance of the Work. Such access
shall be subject to Article 7 and (i) each such subcontractor’s safety and
security regulations of which Purchaser is advised in writing prior to any
visit, and (ii) right of Contractor to accompany Purchaser on any such visit to
a subcontractor’s facility. Purchaser Personnel shall be allowed to attend all
the Major Subcontractor’s design and technical reviews.

 

- 26 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

8.4 On-Site Facilities for Purchaser’s Personnel

For the purpose of monitoring the progress of the Work being performed by
Contractor hereunder, Contractor shall provide office facilities at or proximate
to Contractor’s plant for up to five (5) resident Purchaser personnel (and/or
Purchaser’s duly appointed consultants and agents) through Acceptance of the
Satellite. The office facilities to be provided shall include a reasonable
amount of office space, office furniture, local telephone service, reasonable
long-distance telephone usage, internet access (at the same speed and quality
available to Contractor personnel), access to Contractor’s exchange network
specific to this Contract, access to copy machines, facsimile machines, meeting
rooms, and to the extent available, videoconference rooms, and car parking
facilities, to the extent necessary to enable Purchaser personnel to monitor the
progress of Work under this Contract. In the case of Contractor’s Major
Subcontracts related to the payload, Contractor shall use commercially
reasonable efforts to ensure that reasonable office facilities for up to three
(3) Purchaser personnel (and/or Purchaser’s duly appointed consultants and
agents) are provided on a temporary basis to attend meetings or witness tests.

 

8.5 Purchaser Representatives as Competitors/Foreign Persons

Contractor may, in its reasonable discretion, deny access to Contractor’s
facilities, products or information to any and all Purchaser consultants and
agents who are in direct competition with and/or currently employed by companies
or entities that are in direct competition with Contractor for the sale of
commercial telecommunications satellites. Purchaser shall notify Contractor in
writing of the name, title or function, business relationship, employer,
citizenship status under U.S. export laws and such other information as may be
reasonably requested by Contractor, with respect to each of its intended
consultants and agents, and cause each such consultant and agent to: (i) 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 31 and Article 32; and (ii) pursuant to
Article 7, execute a

 

- 27 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

Technical Assistance Agreement or other agreement to ensure compliance with
applicable U.S. export control laws and regulations to the extent required by
applicable U.S. export laws or regulations as interpreted by Contractor in good
faith. Where Purchaser has not complied with this Section 8.5, Contractor may,
in its discretion, deny any consultant or agent of Purchaser access to
Contractor facilities, products or information.

 

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 Financing Entities

Subject to the provisions of Article 7, each Financing Entity shall have access
to the Work in the same manner and to the same extent as Purchaser consultants
and agents under this Article 8.

 

- 28 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 9 – SATELLITE PRE-SHIPMENT REVIEW (SPSR) AND SPACECRAFT LAUNCH

AND SPACECRAFT LAUNCH READINESS REVIEW (LRR)

 

9.1 Satellite Pre-Shipment Review (SPSR)

 

  9.1.1 Contractor to Review the Satellite Prior to Shipment. Contractor shall
conduct a review of the Satellite prior to Contractor’s shipment of the
Satellite to the Launch Site. This review shall be in accordance with the terms
of this Article 9 and Section 2.4.9 of Exhibit A, Statement of Work (a
“Satellite Pre-Shipment Review” or “SPSR”).

 

  9.1.2 Time, Place and Notice of SPSR; Failure to Conduct. The SPSR shall take
place at Contractor’s facility. Contractor shall notify Purchaser in writing on
or before thirty (30) days prior to the date that the 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. If Purchaser shall fail to commence or complete the SPSR,
Purchaser shall be deemed to have notified Contractor pursuant to Article 9.1.6
hereof that SPSR for the Satellite has been successfully completed.

 

  9.1.3 Conduct and Purpose of SPSR. The SPSR shall be conducted in accordance
with the terms of this Article 9 and Section 2.4.9 of Exhibit A, Statement of
Work. The purpose of the SPSR with respect to the Satellite shall be to:
(i) review test data and analyses for the Satellite; (ii) demonstrate all
testing has been completed in accordance with Exhibit D, Satellite Program Test
Plan; and (iii) determine whether the Satellite meets applicable Exhibit B,
Satellite Performance Specification, requirements (except those that have been
waived pursuant to Article 9.1.4 below) and is ready for shipment to the Launch
Site.

 

  9.1.4

Waivers and Deviations. 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. A request for waiver or
deviation shall be deemed granted only if it has been approved in writing by a
duly authorized representative of Purchaser. Each such waiver or deviation
approved

 

- 29 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

by Purchaser shall be deemed an amendment to the Performance Specification for
the Satellite or Deliverable Item, permitting such waiver thereof, or deviation
therefrom, effective on or after the date of such approval for the Satellite or
Deliverable Item. Purchaser shall consider each waiver or deviation request in
good faith and shall not unreasonably withhold its consent to any such request.

 

  9.1.5 Purchaser’s Inspection Agents. Purchaser may, subject to prior written
notice to Contractor, cause any Purchaser personnel, 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 agent.

 

  9.1.6

SPSR Results. Within seventy-two (72) hours after completion of the SPSR,
Purchaser shall notify Contractor in writing of: (i) its concurrence with the
results of the SPSR including any waiver of its right to compel correction of
those non-conformances to the requirements of Exhibit B, Satellite Performance
Specification, specified by Purchaser in such notice; or (ii) specific
non-conformances of the Satellite to the requirements of Exhibit B, Satellite
Performance Specification, which require correction. In the event that such SPSR
demonstrates: (i) all testing has been performed in accordance with Exhibit D,
Satellite Program Test Plan; and (ii) conformity of the Satellite to the
applicable requirements of Exhibit B, Satellite Performance Specification
(including any waivers or deviations approved by Purchaser pursuant to Article
9.1.4), the Satellite shall be prepared and shipped to the Launch Site for
Launch. In the event that such SPSR discloses: (i) any failure to conduct
testing in accordance with Exhibit D, Satellite Program Test Plan; or (ii) any
non-conformance of the Satellite to the requirements of Exhibit B, Satellite
Performance Specification, either of which is not the subject of any waivers or
deviations approved by Purchaser pursuant to Article 9.1.4, Purchaser’s notice
shall state each such non-conformance (with reference to the applicable
requirement of Exhibit D, Satellite Program Test Plan, or Exhibit B, Satellite
Performance Specification, deemed not met) it requires to be corrected or
repaired, and Contractor shall correct or repair each such non-conformance and
resubmit the Satellite for additional testing in accordance with applicable

 

- 30 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

requirements of Exhibit D, and a second SPSR. Such additional testing and second
SPSR shall be conducted to the extent relevant and necessary to demonstrate the
Satellite conforms to the requirements of Exhibit B, Satellite Performance
Specification. If Purchaser fails to provide such notice within the time
specified, the SPSR shall be deemed to have been successfully completed. In the
event that the Satellite has successfully completed SPSR, whether pursuant to
the original SPSR or a subsequent SPSR, the Satellite shall be prepared and
shipped to the Launch Site for Launch. Contractor shall have no obligation to
ship the Satellite to the Launch Site until all non-conformances are corrected,
repaired or have an approved waiver or deviation. Following successful
completion of the SPSR for the Satellite in accordance with this Article 9,
Contractor shall transport the Satellite, in accordance with Contractor’s
standard commercial practices, to the Launch Site and proceed with the Launch
Readiness Review for the Satellite or, if directed by Purchaser, transport the
Satellite to the storage facility for storage pursuant to Article 39 and Exhibit
D.

 

  9.1.7 Inspection Costs Borne by Purchaser. All costs and expenses incurred by
Purchaser and its agents in the exercise of its inspection rights under this
Article 9, including travel and living expenses, shall be borne solely by
Purchaser.

 

  9.1.8 Correction of Deficiencies after SPSR. If at any time following the SPSR
and prior to Intentional Ignition (or in the event of a Terminated Ignition,
prior to any subsequent Intentional Ignition), the Satellite fails to meet
Exhibit B, Satellite Performance Specification, as may be modified as of such
time pursuant to Article 9.1.4, Contractor shall promptly undertake to correct
such deficiencies prior to Intentional Ignition (or in the case of a Terminated
Ignition, prior to any subsequent Intentional Ignition) and the Contract
Delivery schedule set forth in Article 3 shall be extended as necessary to
accommodate such corrective actions, and, in the event of a Terminated Ignition,
Contractor shall be entitled to such other compensation for such corrections, if
any, to the extent and as provided in Article 12.1.

 

- 31 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

9.2 Spacecraft Launch Readiness Review (SLRR)

After shipment of the Satellite to its intended Launch Site and prior to Launch,
Contractor shall conduct a Spacecraft Launch Readiness Review in accordance with
the requirements of Section 2.4.11 of Exhibit A, Statement of Work. Contractor
shall give Purchaser personnel reasonable advance notice of such Spacecraft
Launch Readiness Review. The purpose of the Spacecraft Launch Readiness Review
is to verify that all testing required under Exhibit D, Satellite Program Test
Plan, has been successfully completed and the Satellite meets all the parameters
required to be tested thereunder (including any waivers or deviations approved
by Purchaser). The SLRR will be deemed successfully completed when the Parties
agree the above-stated purposes of the SLRR have been met and the Satellite is
ready to be integrated with the Launch Vehicle. Within twenty-four (24) hours
after completion of the SLRR, Purchaser shall notify Contractor of its:
(i) concurrence with the results of the SLRR, including any waiver of its right
to compel correction of those non-conformances to the applicable provisions of
Exhibit A or Exhibit D; or (ii) specific non-conformances of the Satellite to
the requirements of Exhibit A or Exhibit D which are not the subject of any
waivers or deviations approved by Purchaser. Purchaser’s notice shall state each
such non-conformance (with reference to the applicable requirements of Exhibit A
or Exhibit D deemed not met) it requires to be corrected or repaired, and
Contractor shall correct or repair each such non-conformance and resubmit the
Satellite for Purchaser’s concurrence. Failure to provide such notice within the
time specified shall be deemed notice of Purchaser’s concurrence.

 

- 32 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 10 – SATELLITE ACCEPTANCE

 

10.1 In-Orbit Testing (IOT)

Thirty (30) days prior to the scheduled Launch of the Satellite, Contractor
shall notify Purchaser in writing of the IOT schedule with respect to the
Satellite. Purchaser may observe such IOT at Purchaser’s or Contractor’s
location, at Purchaser’s election, subject to Article 7 and Article 8.5 and
applicable U.S. Government and Contractor security restrictions.

Contractor shall: (i) conduct IOT in accordance with Exhibit D, Satellite
Program Test Plan; (ii) conduct the IOT review within three (3) days of
completing IOT, and submit the Summary In-Orbit Test Report at least 24 hours
prior to conducting the IOT review; and (iii) present the Satellite Acceptance
Certificate at the IOT review, all (i) – (iii) in accordance with Exhibit A,
Statement of Work, and Exhibit D, Satellite Program Test Plan and this Article
10. If, within 24 hours after completion of the IOT review, Purchaser notifies
Contractor, in good faith, that the conduct of the IOT or IOT review or the
contents of the Summary In-Orbit Test Report do not comply in all material
respects with the requirements of Exhibit A or Exhibit D, as applicable,
Contractor shall work with Purchaser in good faith to resolve such material
deficiencies. The “IOT Completion Date” shall occur: (i) 24 hours after
completion of the IOT review if Purchaser does not notify Contractor of any such
deficiencies within such 24 hour period; or (ii) upon correction of any material
deficiencies in the conduct of the IOT or IOT review or the contents of the
Summary In-Orbit Test Report.

 

10.2 Acceptance

Acceptance of the Satellite shall be deemed irrevocably to occur upon the
earlier of: (i) the IOT Complete Date (which shall occur as set forth above
unless there is a Total Loss of the Satellite); or (ii) the instant immediately
prior to an event on or after Intentional Ignition resulting in the Total Loss
of the Satellite (or the Satellite being reasonably determined to be a Total
Loss) (“Acceptance” for the Satellite).

 

- 33 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  10.2.1 Orbital Performance Incentives. After Acceptance of the Satellite,
Contractor shall have the right to earn Orbital Performance Incentives in
accordance with Article 13 hereof.

 

  10.2.2 No Further Liability. After Acceptance of the Satellite, Contractor
shall have no further obligation with respect to the Satellite, except as
otherwise provided in Articles 10.4, 15.2, 19 and 35.2; moreover, except as
otherwise provided in Articles 15.2, 19 and 35.2, Contractor’s loss of Orbital
Performance Incentives pursuant to Article 13 shall be Purchaser’s sole and
exclusive remedy with respect to the Satellite’s performance after Intentional
Ignition.

 

10.3 Reserved

 

10.4 Post-Eclipse Report

In the event no solar eclipse occurs during IOT, Contractor shall, at
Purchaser’s request, and subject to making the Satellite and necessary Purchaser
facilities available to Contractor, for the first solar eclipse following
completion of IOT, conduct eclipse testing in accordance with Exhibit D,
Satellite Program Test Plan, and prepare and provide Purchaser an eclipse test
report demonstrating the Satellite meets the applicable performance requirements
during an eclipse in accordance with Exhibit A, Statement of Work. In the event
the report shows non-compliance with the applicable performance requirements
during an eclipse, then the Parties shall agree to an equitable adjustment to
the amounts Contractor may earn under Article 13.

 

- 34 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 11 – ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER THAN SATELLITE

 

11.1 Deliverable Items of Hardware Other Than the Satellite

 

  11.1.1 Inspection. With respect to each Deliverable Item of hardware
(including software integrated in such hardware), other than the Satellite,
Purchaser shall perform acceptance inspection within ten (10) days after such
Deliverable Item arrives at the location designated for Delivery thereof in
Article 3.1. 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 11.6.

 

  11.1.2 Acceptance Inspection Results. Within fifteen (15) days 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 requirements of the
applicable Performance Specification, such Deliverable Item shall be accepted by
Purchaser for all purposes hereunder (“Acceptance” with respect to each such
Deliverable Item other than the 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 Performance
Specification, Purchaser’s notice shall identify 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 a second acceptance inspection in accordance
with this Article 11. Such second acceptance inspection shall be conducted by
Purchaser to the extent the Purchaser deems relevant and necessary to verify the
hardware (including integrated software) conforms to the requirements of the
applicable Performance Specification. If Purchaser fails to provide notice
within the time specified, Acceptance shall be deemed to have occurred with
respect to such Deliverable Item.

 

- 35 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

11.2 Deliverable Data

Purchaser shall, within fifteen (15) Business Days of Delivery by Contractor to
the location designated in Article 3.1 of Deliverable Data requiring Purchaser
approval pursuant to Exhibit A, Statement of Work, notify Contractor in writing
that such Deliverable Data has been accepted in accordance with Exhibit A,
Statement of Work (“Acceptance” with respect to each such item of Deliverable
Data), or that such Deliverable Data does not comply with the applicable
requirements of Exhibit A, Statement of Work, identifying each such
non-conformance (with reference to the applicable requirement of Exhibit A,
Statement of Work deemed not met). Contractor shall promptly correct any
non-compliant aspect of such Deliverable Data identified in such notice from
Purchaser, and re-submit it to Purchaser for a second acceptance inspection
pursuant to this Article 11.2. The provisions of this Article 11.3 shall
thereafter apply to the corrected Deliverable Data. If Purchaser fails to
provide notice within the time specified, Acceptance shall be deemed to have
occurred with respect to such Deliverable Data. Deliverable Data that does not
require Purchaser approval pursuant to Exhibit A, Statement of Work, shall be
deemed accepted upon Delivery of such Deliverable Data unless within fifteen
(15) Business Days of Delivery, Purchaser notifies Contractor in writing that
such Deliverable Data does not comply with the applicable requirements of the
Statement of Work, identifying each such non-conformance (with reference to the
applicable requirement of the Statement of Work deemed not met). Contractor
shall promptly correct any non-compliant aspect of such Deliverable Data
identified in such notice from Purchaser and re-submit it to Purchaser for a
second acceptance inspection. Failure to provide notice within the time
specified shall be deemed to be Acceptance for such item of Deliverable Data.

 

11.3 Training

Acceptance of Training, or any part thereof, required by Exhibit A, Statement of
Work, shall occur upon Contractor furnishing Training, or such part thereof, to
Purchaser in accordance with the Delivery schedule and in a condition conforming
to Exhibit A, Statement of Work. Any Training furnished to Purchaser shall be
accompanied by written notice from Contractor specifying that portion of the
Training being furnished. If such Training or part thereof is unacceptable,
Purchaser shall notify Contractor in writing

 

- 36 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

within fifteen (15) Business Days of completion of such Training or portion
thereof, that the Training, or part thereof, does not conform to the
requirements of the Exhibit A, Statement of Work, identifying each such
non-conformance (with reference to the applicable requirement of Exhibit A,
Statement of Work, deemed not met). Contractor shall, at its expense, promptly
correct such non-conformance and shall notify Purchaser that the corrections
have been made. The provisions of this Article 11.3 shall thereafter apply to
the corrected Training. If Purchaser fails to provide notice within fifteen
(15) Business Days of completion of Training or any part thereof, Acceptance
shall be deemed to have occurred with respect to such Training or part thereof.

 

11.4 Other Services

Acceptance of other services provided hereunder (e.g., Launch Support Services
and Mission Operations Support Services), or any part thereof, shall occur upon
Contractor furnishing such services, or such part thereof, to Purchaser in
accordance with the Delivery schedule set forth in Article 3.1 and in a
condition conforming to the requirements of this Contract. To the extent
feasible, any such services furnished to Purchaser shall be accompanied by
written notice from Contractor specifying that portion of the services being
furnished. If such services or part thereof are unacceptable, Purchaser shall
notify Contractor that the services, or part thereof, do not conform to the
requirements of Exhibit A, Statement of Work, identifying each such
non-conformance (with reference to the applicable requirement of Exhibit A,
Statement of Work, deemed not met). Contractor shall promptly correct such
non-conformance to the extent feasible and shall notify Purchaser that the
corrections have been made. The provisions of this Article 11.4 shall thereafter
apply to the corrected services.

 

11.5 Purchaser’s Inspection Agents

Purchaser may, upon giving prior written notice to Contractor, cause any
Purchaser personnel, consultant or agent designated by Purchaser to observe or
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 agent and such agent shall comply with Contractor’s normal and
customary safety and security regulations provided to Purchaser in writing in
advance of such inspection.

 

- 37 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

11.6 Waivers and Deviations

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 as set forth in Article 9.1.4.

 

11.7 Inspection Costs Borne by Purchaser

All costs and expenses incurred by Purchaser or its agents in the performance of
its inspection rights under this Article 11, including travel and living
expenses, shall be borne solely by Purchaser.

 

11.8 Warranty Obligations

In no event shall Contractor be released from any of its warranty obligations
applicable to any Deliverable Item other than the Satellite as set forth in
Article 15 as a result of such Deliverable Item having been Accepted as set
forth in this Article 11.

 

- 38 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 12 – TRANSFER OF TITLE AND RISK OF LOSS

 

12.1 Satellite

Title (free and clear of all Contractor-incurred liens and encumbrances of any
kind) and risk of loss or damage to the Satellite shall pass from Contractor to
Purchaser at the time of Intentional Ignition of the Launch Vehicle used for the
Launch of the Satellite; provided, however, in the event of a Terminated
Ignition for the Satellite, title and risk of loss or damage to the Satellite
shall revert to Contractor upon such Terminated Ignition and shall again pass to
Purchaser upon the subsequent Intentional Ignition of the Launch Vehicle used
for Launch of the Satellite. Notwithstanding the foregoing, in no event shall
Purchaser be entitled to Launch or take title to the Satellite unless and until
all amounts then-currently due to Contractor from Purchaser under this Contract
have been paid to Contractor in full (unless such amounts are in dispute
pursuant to Article 5.6). In addition, Purchaser’s right to take possession
and/or title to Work-in-Process, Raw Materials and Finished Goods shall be
subject to the terms and conditions as set forth in the applicable Articles
hereto.

UPON AND AFTER INTENTIONAL IGNITION OF THE LAUNCH VEHICLE FOR THE SATELLITE,
UNLESS AND TO THE EXTENT OF A TERMINATED IGNITION AS PROVIDED HEREIN,
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 THE SATELLITE (INCLUDING WITH RESPECT TO ANY ACTUAL OR CLAIMED
DEFECT CAUSED OR ALLEGED TO BE CAUSED AT ANY TIME BY CONTRACTOR’S OR ANY OF ITS
SUBCONTRACTORS’ NEGLIGENCE OF ANY DEGREE) SHALL BE AS SET FORTH IN ARTICLES 13,
15.2, 19, AND 35.2, IN ALL CASES SUBJECT TO THE LIMITATION OF LIABILITY SET
FORTH IN ARTICLE 30.

In the event of a Terminated Ignition, Contractor shall inspect the Satellite
and provide Purchaser with a report on the condition of the Satellite along with
a recommendation for repair or replacement, if any is required. Thereafter,
Purchaser shall direct Contractor pursuant to Article 16.1 as to how to proceed
with any required or desired repairs or storage.

 

- 39 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

In the event of a Terminated Ignition, after Contractor re-acquires title and
risk of loss to the Satellite pursuant to this Article 12.1, the provisions of
Article 9.1.8 shall apply except as to any damage to the Satellite that may have
occurred as a result of the Intentional Ignition followed by Terminated
Ignition, the costs of which shall be the responsibility of Purchaser.

 

12.2 Deliverable Items Other Than the Satellite

Title (free and clear of all Contractor-incurred liens and encumbrances of any
kind) and risk of loss of or damage to each Deliverable Item of hardware other
than the Satellite shall pass from Contractor to Purchaser upon Acceptance of
such Deliverable Item pursuant to Article 11.1. Purchaser’s rights in
Deliverable Data are as set forth in Article 32.

 

- 40 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 13 – ORBITAL PERFORMANCE INCENTIVES

 

13.1 General

In addition to the Firm Fixed Price, as set forth in Article 4.1, Contractor
shall have the opportunity to earn, and Purchaser shall pay to the extent
earned, the Orbital Performance Incentives for the Satellite in amounts as set
forth in Exhibit F, TerreStar Satellite Orbital Performance Incentives Payment
Plan, all in accordance with this Article 13. Orbital Performance Incentives are
comprised of two types: (i) the Quarterly Orbital Performance Incentives (based
on the initial quarter commencing at Acceptance), further described in Article
13.2.1, and (ii) the Scheduled Orbital Performance Incentive, payable in two
(2) payments as further described in Article 13.2.2. Both types of Orbital
Performance Incentives are payable on the dates determined in accordance with
Article 13.3. All measurements, computations and analyses made pursuant to this
Article 13 shall be made in accordance with good engineering practice applying
standards generally applicable in the aerospace industry.

 

13.2 Earning Orbital Performance Incentives

 

  13.2.1 Daily Rate of Quarterly Orbital Performance Incentives. Subject to
Article 13.2.7, for the Satellite Accepted pursuant to Article 10.2 hereof,
Contractor shall earn Quarterly Orbital Performance Incentives over the Orbital
Performance Incentive Period at the daily rate based on the formula below (the
“Daily Rate”), plus interest as provided in Article 13.3.

 

Daily Rate  =   Quarterly OPI Amount   x  Percentage of Performance Earned  
No. of Days in Quarter  

The “Quarterly OPI Amount” is set forth in Exhibit F under the column titled
“Quarterly Incentive Payment,” and the Percentage of Performance Earned shall be
the smaller of the following ratios: (i) (the number of operational Forward
Transmission Paths) ÷ 64 and (ii) (the number of operational Return Transmission
Paths) ÷ 160 where the number of operational Transmission Paths is defined in
Article 13.2.3; provided, however, the Daily Rate of Quarterly Orbital
Performance Incentives shall not be paid if the Percentage of Performance

 

- 41 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

Earned, as calculated above, is less than seventy-two and one-half percent
(72.5%). The Quarterly Orbital Performance Incentive amount to be paid is
illustrated in Exhibit F under the column titled “Quarterly Incentive Payment”
for the Satellite assuming that the Percentage of Performance Earned equals one
hundred percent (100%). The first day of the applicable Orbital Performance
Incentive Period shall be deemed to commence at 12:01 a.m. Greenwich Mean Time
on the first day after Acceptance of the Satellite.

 

  13.2.2 Scheduled Orbital Performance Incentives. Purchaser shall, promptly
after receipt of the Summary In-Orbit Test Report, assess the condition of the
Satellite based on the Summary In-Orbit Test Report and early operations
experience to determine whether, and to the extent that, Contractor has earned
the Scheduled Orbital Performance Incentive. Subject to Article 13.2.7,
Contractor shall have earned the Scheduled Orbital Performance Incentive (or
portion thereof as set forth below) as of the date that is ninety (90) days
after Launch (or thirty (30) days after receipt by Purchaser of the Summary
In-Orbit Test Report, whichever occurs later) (the “Scheduled OPI Commencement
Date”) according to the following formula:

 

Scheduled Orbital Performance Incentive amount earned = Scheduled OPI Amount ×
Percentage of Performance Earned × Percentage of Satellite Stated Life

where the “Scheduled OPI Amount” is identified in Exhibit F under the column
titled “Scheduled Orbital Performance Payments,” “Percentage of Performance
Earned” is calculated in accordance with Articles 13.2.1 and 13.2.3, and the
“Percentage of Satellite Stated Life” is the smaller of one hundred percent
(100%) of the Satellite Stated Life or the actual predicted Satellite life
divided by fifteen (15) years; provided, however, that the Scheduled Orbital
Performance Incentive shall not be paid if the Percentage of Performance Earned
multiplied by the Percentage of Satellite Stated Life as calculated above is
less than ninety percent (90%).

 

- 42 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  13.2.3 Basis of Measuring Satellite In-Orbit Performance. “Transmission Paths”
consist of two types of transmission paths on the Satellite. The “Forward
Transmission Paths” are individually those sets of equipment within the
communications subsystem of the Satellite that provide a discrete path to
receive communications signals from Earth at Ku band, translate and amplify such
signals through a hybrid matrix and transmit them to Earth at S band. The
“Return Transmission Paths” are individually those sets of equipment within the
communications subsystem of the Satellite that provide a discrete path to
receive communications signals from Earth at S-band (the service link),
translate and amplify such signals and transmit them to Earth at Ku-band (the
feeder link). The total number of Transmission Paths on the Satellite is 224 (64
Forward and 160 Return Transmission Paths). A Transmission Path shall be deemed
“operational” if the Satellite can provide full performance as required in
Exhibit B, Satellite Performance Specification through such Transmission Path,
after measurement and analysis uncertainty has been taken into consideration.
Specific test methods and precise criteria for “operational” shall be mutually
agreed by the Parties, applying reasonable engineering judgment and criteria, on
or before Satellite Technical Review Meeting 3.

For the purpose of determining an operational Forward Transmission Path only,
the N×N hybrids shall be viewed as individually connecting N separate inputs to
N separate outputs. For example, the failure on one input path into an 8×8
hybrid shall be considered the failure of only one Forward Transmission Path.

 

  13.2.4 On-Board Redundancy; Spares. In determining Orbital Performance
Incentives, on-board redundancy and/or spare components shall be taken into
consideration to maintain service on the Satellite, and such use shall be deemed
normal operating procedure for purposes of this Article 13 so long as the
applicable criteria for earning Orbital Performance Incentives are met by the
Satellite.

 

- 43 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  13.2.5 Storage

 

  A. Orbital Storage. If Purchaser places the Satellite in Orbital Storage
(other than due to the inability to operate for causes attributable to
Contractor), Contractor shall earn the Orbital Performance Incentives at the
same rate as Contractor would be earning such incentives if the Satellite were
in service.

 

  B. On-Ground Storage. If after Satellite Pre-Shipment Review of the Satellite,
Purchaser places the Satellite in on-ground storage, Contractor shall not be
entitled to any Scheduled Orbital Performance Incentives or any Quarterly
Orbital Performance Incentives during the initial nine (9) months of such
on-ground storage. If Purchaser places the Satellite in on-ground storage (other
than due to causes substantially attributable to Contractor and to the extent
not otherwise excused under Articles 17 or 18; for clarification, Contractor
shall not be liable hereunder for any delay in delivery of the SBAS Operational
Component (as defined in the SBN/SBAS Contract)) for more than nine (9) months,
Contractor shall be paid the Scheduled Orbital Performance Incentive and the
Quarterly Orbital Performance Incentives at the same rate as Contractor would be
earning such incentives if the Satellite were in service, commencing at the end
of such nine (9) month period (with the initial Scheduled Orbital Performance
Incentive payment to be made at the end of month ten (10) and the initial
Quarterly Orbital Performance Incentives payment to be made at the end of month
twelve (12)); provided, however, such amounts shall be subject to a refund as
described below. During each month of the initial nine (9) month storage period,
unless Purchaser’s placement of the Satellite in storage is due to causes
substantially attributable to Contractor and not otherwise excused under
Articles 17 or 18; for clarification, Contractor shall not be liable hereunder
for any delay in the delivery of the SBAS Operational Component), in addition to
other customary storage charges to be agreed, Purchaser shall pay Contractor the
non-refundable sum of [***]

 

- 44 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

[***] U.S. Dollars (US$[***]) per month of storage, representing interest on the
unpaid Orbital Performance Incentives. Once the Satellite is taken out of
on-ground storage, (i) Purchaser’s obligation to pay interest pursuant to this
Article 13.2.5.B shall terminate, and (ii) Purchaser shall not be obligated to
pay any Orbital Performance Incentives, unless or until (i) the Satellite is
subsequently placed into on-ground storage (other than due to causes
substantially attributable to Contractor), in which case this clause shall apply
as if the Satellite had remained in storage and/or (ii) Contractor has earned
such Orbital Performance Incentives following the actual Acceptance of the
Satellite. If the Satellite is Launched after Purchaser has paid any Orbital
Performance Incentives under this Article 13.2.5.B, such amounts shall be deemed
a pre-payment of the corresponding Orbital Performance Incentives due after
actual Acceptance in accordance with Article 10.2. To the extent that, after
actual Acceptance, Contractor does not earn the Orbital Performance Incentives
pre-paid by Purchaser under this Article 13.2.5.B, Contractor shall refund all
or a portion of the pre-paid Orbital Performance Incentives, as applicable, plus
interest on such refund, calculated at a rate of eight percent (8%) per annum,
compounded annually, from the time such corresponding Orbital Performance
Incentives were pre-paid by Purchaser. Contractor shall pay such refund and
interest on the earliest date upon which the invoices for such Orbital
Performance Incentive would have been issued.

 

  13.2.6 Temporary Outages. A Transmission Path shall not be considered
non-operational during a day if it is not operational during such day less than
two (2) minutes per day for such Transmission Path. Contractor shall forfeit the
Daily Rate of Quarterly Orbital Performance Incentives for any Transmission Path
that is not operational for a period of two (2) minutes or more; provided that
such outage is not attributable to the operation, directly or indirectly, of the
Satellite by Purchaser.

 

- 45 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  13.2.7 Total Loss of the Satellite. Without limiting the provisions of this
Article 13, and subject to Article 13.2.8, Contractor shall not be entitled to
unearned Orbital Performance Incentives for the Satellite from and after the
occurrence of a Total Loss of the Satellite; provided that any Orbital
Performance Incentives paid under Article 13.2.5.B shall not be considered
“earned” (until actually earned after Acceptance), and shall be refunded to
Purchaser in the event of a Total Loss.

 

  13.2.8

Losses Attributable to Purchaser. If, as a result of any act or omission on the
part of Purchaser or Purchaser’s representatives, consultants or subcontractors
(including the Launch Agency, but excluding Contractor and any of its
subcontractors at any tier) in the Launch, orbit-raising, operation of, testing
of, or communication with, the Satellite, or if due solely to causes not
attributable to Contractor or its subcontractors (other than extraordinary
events customarily listed as “Exclusions” under launch and in-orbit insurance
policies), the Satellite operates in a manner that is not in accordance with any
requirements for earning Orbital Performance Incentives (including the Satellite
being a Total Loss), Contractor shall earn or continue to earn Orbital
Performance Incentives with respect to the Satellite at the rate that applied
(or would have applied) prior to the act or omission resulting in degraded
performance or Total Loss (subject to later adjustments pursuant to Articles
13.2.6 and 13.2.7, with respect to failures to meet the requirements for earning
Orbital Performance Incentives, not resulting from any such act or omission). In
the event of a Total Loss attributable to Purchaser or its representatives,
consultants or subcontractors (including the Launch Agency), or due solely to
causes not attributable to Contractor or its subcontractors as provided above,
occurring in connection with an Acceptance based on an Acceptance in accordance
with Article 10.2(ii), so long as this Contract has not been terminated (and
continuing so long as TerreStar orders a replacement Satellite), the Orbital
Performance Incentives shall be paid at the same rate as Contractor would be
earning such incentives if the Satellite were in service. If this Contract is
terminated for other than Contractor’s default, or TerreStar 2 is a Total Loss
and TerreStar does not order a replacement satellite therefor, Contractor shall
be deemed to have earned the corresponding amount

 

- 46 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

of Orbital Performance Incentives, to be paid promptly upon the later of
(i) Purchaser’s receipt of the proceeds from Launch and in-orbit insurance or
(ii) such termination or determination of a Total Loss of TerreStar 2 where no
replacement is ordered.

 

  13.2.9 Access to In-Orbit Data and Measurements. During the life of the
Satellite, Contractor shall have access to the data records of the Satellite.

 

  13.2.10 Incentive for Extended Life of the Satellite. Should Purchaser elect
to continue the use of the Satellite operating beyond its Satellite Stated Life,
Purchaser shall pay to Contractor the amount of the Daily Rate for each day
during such period(s) of continued use by Purchaser, provided the Satellite is
not a Total Loss.

 

  13.2.11 Orbital Performance Incentive Payment Assurance. Within one (1) month
prior to SPSR, unless Purchaser or any company that Controls Purchaser
(“Purchaser Parent Company”) is filing periodic reports with the Securities and
Exchange Commission, Purchaser shall provide Contractor with a consolidated
balance sheet of Purchaser and Purchaser Parent Company, as of the end of the
prior fiscal year, and the related consolidated statements of income, changes in
equity and cash flows for such fiscal year. Such information shall be considered
“Proprietary Information” of Purchaser and shall be subject to Article 31. In
the event that such information indicates that payment of the Orbital
Performance Incentives in accordance with Article 13 is at high risk due to
Purchaser’s and Purchaser Parent Company’s financial condition, then the Parties
shall promptly meet to negotiate, in good faith, commercially reasonable steps
to reduce such risk and provide reasonable assurance that Purchaser will be able
to pay the Orbital Performance Incentives when they become due.

 

13.3 Payment and Interest

 

  13.3.1

Payment of Quarterly Orbital Performance Incentives. Quarterly Orbital
Performance Incentive amounts due Contractor pursuant to Article 13.2.1 shall be
invoiced on a Quarterly basis in arrears in an amount equal to the sum of the

 

- 47 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

Daily Rate earned each day of such quarter. Each invoice shall include data and
documentation reasonably required by Purchaser to substantiate the amount
invoiced. Such invoice shall be paid thirty (30) days after Purchaser’s receipt
of invoice.

 

  13.3.2 Payment of Scheduled Orbital Performance Incentives. Fifty percent
(50%) of the Scheduled Orbital Performance Incentive amount earned by Contractor
pursuant to Article 13.2.2 shall be invoiced thirty (30) days after the date
that is the later of (i) ninety (90) days after the Launch of the Satellite, or
(ii) thirty (30) days after delivery of the Summary In-Orbit Test Report to
Purchaser. Such invoice shall include data and documentation reasonably required
by Purchaser to substantiate the amount invoiced. Such invoice shall be paid
five (5) days after Purchaser’s receipt of invoice. Provided the first fifty
percent (50%) has been earned as set forth herein, the remaining fifty percent
(50%) of the Scheduled Orbital Performance Incentive amount earned by Contractor
pursuant to Article 13.2.2 shall be invoiced thirty (30) days prior to the end
of the date that is twelve (12) months after the Launch of the Satellite, and
shall be paid thirty (30) days after Purchaser’s receipt of such invoice.

 

 

13.3.3

Interest on Quarterly Orbital Performance Incentives. Interest shall be paid on
any Quarterly Orbital Performance Incentive payment amount, where such interest
is to be calculated over the period commencing upon Acceptance of the Satellite
by Purchaser (“Quarterly Orbital Performance Incentive Commencement Date”) and
ending on the last day of the quarter when the Quarterly Orbital Performance
Incentive payment amount is invoiced, at a rate equal to eight percent
(8%) compounded annually, as calculated in accordance with the following
formula: In =(Quarterly Orbital Performance Incentive payment amount earned
during a quarter) * [(1+8%)n*0.25-1], where “n” = the quarter number (i.e., 1 to
60). See Exhibit F for schedule of interest payments associated with the
Quarterly Orbital Performance Incentives to be made by Purchaser to Contractor.

 

- 48 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

13.4 Effect of Termination for Convenience on Orbital Performance Incentives

In addition to the Termination Liability Amount payable pursuant to Article
21.1.2 and Exhibit E, TerreStar 2 Payment Plan and Termination Liability
Amounts, in the event Purchaser terminates this Contract pursuant to Article 21
with respect to the Satellite, or in the event Contractor terminates this
Contract pursuant to Article 23.2 with respect to the Satellite, Contractor
shall be deemed to have earned its Orbital Performance Incentives, prorated as
follows: total Orbital Performance Incentives x (payments made or due at time of
termination divided by the Firm Fixed Price). Such amount shall be paid in
accordance with the applicable termination article. If Purchaser is unable to
pay the full amounts required hereunder, then Contractor may retain such Work in
progress as needed to cover the unpaid sums.

 

- 49 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 14 – CORRECTIVE MEASURES IN SATELLITES AND OTHER DELIVERABLE ITEMS

If the data available from any satellite manufactured by Contractor (whether
in-orbit or on the ground) shows that the performance of such satellite deviates
materially during the life thereof from that specified in the applicable
performance specification for such satellite, Contractor shall, (i) provide
Purchaser prompt written notice thereof, provided Contractor shall not be
required to disclose to Purchaser information that is confidential to a customer
of Contractor other than Purchaser and (ii) at Contractor’s sole cost, take
appropriate corrective measures, if any, in the unlaunched Satellite and other
Deliverable Items so as to eliminate therefrom the causes of such material
deviation. If required, Contractor shall be entitled to a reasonable extension
in the Delivery schedule for the unlaunched Satellite to effect the required
corrective measures.

 

- 50 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 15 – WARRANTY

 

15.1 Terms and Period of Warranty

 

  15.1.1 Satellite. Contractor warrants that the Satellite shall be manufactured
and will perform in conformity with Exhibit B, Satellite Performance
Specification (as may be waived pursuant to Article 9.4). Except as otherwise
set forth in the next paragraph of this Article 15.1.1, after completion of the
SPSR, Contractor’s only liability under the preceding sentence shall be as and
to the extent set forth in Article 9.1.8) hereof.

AFTER INTENTIONAL IGNITION OF THE LAUNCH VEHICLE FOR THE SATELLITE, UNLESS AND
TO THE EXTENT OF A TERMINATED IGNITION AS PROVIDED IN ARTICLE 12.1, NEITHER
CONTRACTOR NOR ITS SUPPLIERS OR AGENTS AT ANY TIER SHALL INCUR ANY LIABILITY
WHATSOEVER WITH RESPECT TO THE SATELLITE’S DESIGN, WORKMANSHIP, CONFORMITY TO
SPECIFICATION OR IN-ORBIT PERFORMANCE, INCLUDING ANY ASSISTANCE OR ADVICE
(ACTUAL OR ATTEMPTED) PROVIDED OR OMITTED AS CONTEMPLATED BY ARTICLES 15.2 AND
35.2 HEREOF, ARISING FROM ANY CAUSE OR LEGAL THEORY WHATSOEVER, INCLUDING
NEGLIGENCE OF ANY DEGREE, WHETHER ARISING BEFORE OR AFTER INTENTIONAL IGNITION,
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN ARTICLES 13 AND 19 HEREIN AND
EXCEPT TO PROVIDE THE SERVICES SET FORTH IN ARTICLES 15.2 AND 35.2.

 

  15.1.2 Deliverable Items of Hardware Other Than The Satellite

 

  A. Contractor warrants that each Deliverable Item of hardware other than the
Satellite shall be manufactured in conformity with the Performance Specification
applicable to such Deliverable Item (as may be waived pursuant to Article 11.6)
and will be free from defects in materials and workmanship during the period
commencing on the date of Acceptance of such Deliverable Item pursuant to
Article 11 and ending on the first anniversary thereof (the “Warranty Period”).

 

- 51 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  B. During the period specified in Article 15.1.2 (A) for any Deliverable Item
of hardware other than the Satellite, any non-conformance or defect discovered
in such Deliverable Item and notified to Contractor 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 (including transportation and transit insurance) 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 packing and return
shipment (including transportation and transit insurance) in accordance with its
standard commercial practice of any such Deliverable Item once repaired or
replaced to Purchaser at the location designated 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 15.1.2 (B) upon receipt thereof by Purchaser at the
location designated therefor in Article 3.1. If Contractor fails or is unable to
repair or replace such non-conforming or defective component within a reasonable
period of time after notification from Purchaser, Purchaser may, by contract or
otherwise, repair or replace such non-conforming or defective component and
Contractor shall be liable for the reasonable cost thereof.

 

  15.1.3

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 of the commercial aerospace and satellite communications
industry practice for work similar in type, scope, and complexity to the Work 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

 

- 52 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

reasonable efforts to correct the deficiencies in the provision of such Training
and other services where it is practicable to do so (e.g., cannot correct
deficiencies in or redo Launch Support Services from and after Launch).

 

  15.1.4 Deliverable Data. All Deliverable Data shall conform with the
requirements of this Contract. In the event Contractor breaches this warranty,
as Purchaser’s sole and exclusive remedy, Contractor shall promptly correct the
deficiencies in the Deliverable Data and re-submit such Deliverable Data to
Purchaser.

 

  15.1.5 Disclaimer. EXCEPT AND TO THE EXTENT EXPRESSLY PROVIDED IN ARTICLES
15.1.1, 15.1.2, 15.1.3, AND 15.1.4 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.
CONTRACTOR MAKES NO WARRANTY WITH RESPECT TO THE PERFORMANCE OF ANY LAUNCH
VEHICLE.

 

15.2 Satellite Anomalies

Contractor shall investigate any Satellite Anomaly in the Satellite arising
during the in-orbit life of the Satellite and known to it or as notified in
writing by Purchaser and shall undertake Satellite Anomaly resolution support
services in accordance with Section 2.5.8.1 of Exhibit A, Statement of Work. If
for any reason any such Satellite Anomaly cannot be or is not corrected (after
reasonable efforts to effect a correction) as set forth in the immediately
preceding sentence and, as a result thereof, the Satellite suffers any loss or
becomes a Total Loss, Purchaser’s sole and exclusive remedies with respect to
such loss and any consequences therefrom shall be those set forth in Articles 13
and 35.2.2 as applicable, subject to the conditions and limitations of such
Articles and in all cases subject to the limitation of liability stated in
Article 15.1 above and Article 30. In the event that the occurrence of a
Satellite Anomaly is due to causes not attributable solely

 

- 53 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

or substantially to Contractor (including any of its subcontractors), Purchaser
shall pay Contractor the actual costs reasonably incurred for all services
provided by Contractor associated with such Satellite Anomaly services, plus a
markup of ten percent (10%) of such costs, which costs and markup shall be
invoiced and paid pursuant to the provisions of Article 5.

 

15.3 Use Conditions Not Covered by Warranty

With respect to Deliverable Items of hardware other than the Satellite, 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, negligence, misuse, failure of
environmental control prescribed in operations and maintenance manuals, repair
or alterations by any party other than Contractor, 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 (or is outside the
Warranty Period), Purchaser shall pay Contractor the actual costs reasonably
incurred of such repair or replacement plus a markup of ten percent (10%) of
such costs, which costs and markup shall be invoiced and paid pursuant to the
provisions of Article 5.

 

15.4 Notice

Subject to the provisions of Article 18, if applicable, failure of TerreStar to
provide notice of anomalies or other failures, or other data and information
regarding the use and performance of Deliverable Items, as required by the
Contract, shall not be deemed a breach by TerreStar; however, TerreStar
acknowledges that such failure may limit Contractor’s ability to perform its
anomaly resolution activities under the Contract.

 

- 54 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 16 – CHANGES

 

16.1 Changes Requested by Purchaser

 

  16.1.1 Scope. Purchaser may, in writing, request a change in the Work 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; or

 

  C. Direct stop Work, by one or more orders, up to an aggregate of eighteen
(18) months; provided, however, to the extent Purchaser issues a stop Work order
on or after Milestone 24 (Complete Thermal Vacuum Testing) of Exhibit E,
TerreStar 2 Payment Plan and Termination Liability Amount, directing Contractor
to stop Work on the Satellite, such stop Work will not exceed cumulative twelve
(12) months (or the balance of 18 months, whichever is less).

 

  16.1.2

Response to Change Request. Contractor shall respond to any such requested
change in writing to Purchaser within thirty (30) days after receipt of such
requested change; provided, however, in the case of a stop Work direction,
Contractor shall stop Work immediately to the extent specified by Purchaser.
Contractor shall use commercially reasonable efforts to require its
subcontractors with Major Subcontracts to agree to a stop Work provision that
minimizes Contractor’s costs and is consistent with the terms of this Article
16.1.2. In the event of a stop Work, Contractor shall use commercially
reasonable efforts to mitigate costs and shall cooperate in good faith with
Purchaser in connection with actions taken by Contractor with respect to its
subcontractors. 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, such response shall
provide a non-binding preliminary estimate of the impact of the change request
on the Firm Fixed Price (including costs associated with processing of the
change request), Delivery schedules and other provisions of this Contract. Any
proposed increase to the price or extension of the Delivery schedule shall not
exceed the expected actual cost to

 

- 55 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

be incurred by Contractor, plus ten percent (10%) and the actual time required
by Contractor to implement the change. Any price or Delivery schedule adjustment
shall be reasonable and proposed in good faith. If Purchaser desires to proceed
with the change after receipt of Contractor’s preliminary estimate, Purchaser
and Contractor shall cooperate and negotiate in good faith and agree in a timely
manner to equitable adjustments in the Firm Fixed Price, Delivery schedules and
other affected provisions of this Contract, and this Contract shall be amended
in writing accordingly in accordance with Article 37.5. In the event the Parties
fail to agree on an adjustment (upward or downward) to the Firm Fixed Price,
Delivery schedule or other affected provisions of this Contract with respect to
a requested change, then Purchaser may direct Contractor to proceed with the
requested change, Contractor shall proceed with the directed change, the Parties
shall continue to negotiate the adjustments to the Contract, and pending
completion of such negotiations and as a condition for Contractor being
obligated to proceed with the directed change, the Parties in good faith shall
agree upon and establish a reasonable payment schedule adjustment to compensate
Contractor for the Work performed pursuant to the directed change, which payment
schedule shall be adjusted as part of the negotiated settlement for the directed
change.

 

  16.1.3

Tolling of Payments. Notwithstanding the foregoing, in the event Purchaser
directs a stop Work, all payments due Contractor (except for payments due and
payable prior to the date of the stop Work order) shall be tolled and shall not
accrue for the duration of the stop Work order (up to the cumulative maximum
period provided in Article 16.1.1 above), except that Contractor shall be
entitled in the event of a termination under (ii) below to payment of actual
direct costs incurred as a result of the stop Work order (e.g., reasonable
termination liabilities with subcontractors and suppliers but not overhead or
G&A costs). In the event Purchaser directs a stop Work, within twelve (12) or
eighteen (18) months thereafter, as the case may be (or within such portion of
the maximum stop Work period remaining as provided in Article 16.1.1), Purchaser
shall either: (i) direct Contractor to resume Work hereunder, and the schedule
and affected terms of this Contract shall be equitably adjusted due to such Work
stoppage and

 

- 56 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

the price shall be equitably adjusted to compensate Contractor for actual costs
reasonably incurred by Contractor associated with such Work stoppage plus a
markup of ten percent (10%), such costs and markup to be invoiced and paid
pursuant to Article 5 or (ii) terminate this Contract for convenience pursuant
to Article 21. In addition, if Purchaser issues a stop Work order after thermal
vacuum testing for the Satellite and subsequently re-starts the program as
provided herein, Purchaser shall, until Work has resumed, pay Contractor
interest on a pro rata share of the Orbital Performance Incentives on a
quarterly basis, calculated as follows: 0.67% per month of Work stoppage
multiplied by the pro rata Orbital Performance Incentives calculated as of the
date of the stop Work order in accordance with Article 13.4. In the event
Purchaser fails to elect either (i) or (ii) above, Purchaser shall be deemed to
have elected to terminate this Contract for convenience under Article 21. For
Purposes of Article 21, Purchaser’s termination liability (as may be adjusted
pursuant to the foregoing) will be based on the effective date of the stop Work
order being deemed the date upon which Contractor was given written notice of
Termination for purposes of Article 21.1.1.

 

- 57 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 17 – FORCE MAJEURE

 

17.1 Force Majeure Defined

 

  17.1.1 Definition. Contractor 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 Contractor 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 or contractual capacity (including any
action or inaction affecting the import or export of items); (4) war and warlike
events; (5) catastrophic weather conditions such as hurricanes, tornadoes and
typhoons; (6) fire, earthquakes, floods, epidemics, quarantine restrictions,
(7) strikes, lockouts and other industrial disputes (other than at the
facilities of Contractor); (8) sabotage, riot and embargoes; (9) reserved;
(10) technical problems generally affecting the commercial telecommunications
industry; and (11) other unforeseen and extraordinary events (“Force Majeure”);
provided written notice is given to Purchaser, in writing, within ten
(10) Business Days after Contractor’s performance has been impacted by the
occurrence of such Force Majeure and further provided such Force Majeure is not
caused by the failure of Contractor or its suppliers or subcontractor to perform
their obligations under this Contract. Notwithstanding the foregoing, in no
event will financial hardship or insolvency of Contractor or any of its
respective affiliates constitute Force Majeure. Such notice to be provided by
Contractor, as required by the preceding provisions, shall include a detailed
description of the portion of the Work known to be affected by such delay. In
coordination with Purchaser and subject to Purchaser’s prior written approval
(not to be unreasonably withheld, delayed or conditioned) where reasonably
appropriate under the circumstances, Contractor shall use best reasonable
efforts to avoid or minimize and/or work around such delay through the
implementation of any work-around plans, alternate sources, or other means
Contractor may reasonably utilize to minimize a delay in performance of the
Work. Contractor shall also provide Purchaser prompt written notice when the
event constituting Force Majeure appears to have ended.

 

- 58 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  17.1.2 Force Majeure Dispute. In the event Purchaser disputes any Force
Majeure, Purchaser shall inform Contractor in writing within ten (10) Business
Days from the date of receipt of written notice of the event purportedly
constituting the Force Majeure and, if the Parties have not resolved the Dispute
within ten (10) Business Days of Contractor’s receipt of such written notice
from Purchaser, the Dispute shall be resolved pursuant to Article 25.

 

17.2 Equitable Adjustments

 

  17.2.1 Equitable Adjustment. Upon the occurrence of Force Majeure that causes
a delay in Contractor’s performance of its obligations hereunder, an equitable
adjustment shall be negotiated in the Delivery schedules and other portions of
this Contract affected by Force Majeure; provided, however, Contractor
acknowledges and agrees, there shall be no adjustment to the Firm Fixed Price
due to Force Majeure.

 

  17.2.2 Amendment. Any adjustment made pursuant to this Article 17.2 shall be
formalized by the execution of an amendment to this Contract in accordance with
Article 37.5 wherein such adjustments shall be recorded.

 

17.3 Maximum Force Majeure

If the total aggregate amount of Force Majeure for any reason causes a delay in
Contractor’s performance of its obligations hereunder that exceeds one year or
is reasonably certain to exceed one year or Contractor notifies Purchaser that
such total aggregate is reasonably certain to exceed one year, then the
provisions of Article 23.3 shall apply.

 

- 59 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 18 – PURCHASER DELAY OF WORK

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 hereunder within the time specified in this Contract or
within a reasonable time if no time is specified, or by an act or failure to act
of Purchaser that unreasonably interferes with and delays Contractor’s
performance of its obligations under this Contract (“Purchaser Delay”),
Contractor shall be entitled to an equitable adjustment in the Firm Fixed Price,
performance requirements, Delivery schedule, and any other terms of this
Contract affected by such act or failure to act of Purchaser, provided, however,
there shall be an adjustment to the Firm Fixed Price only for actual costs
reasonably incurred by Contractor as a result of such Purchaser Delay, plus a
markup of ten percent (10%) of such costs, such costs and markup to be invoiced
and paid pursuant to the provisions of Article 5. Contractor shall provide
Purchaser written notice as soon as reasonably practicable after Contractor’s
performance has been impacted by a Purchaser Delay. Any adjustment made pursuant
to this Article 18 shall be formalized by the execution of an amendment to this
Contract in accordance with Articles 16 and 37.5 wherein such adjustments shall
be recorded. At Purchaser’s written request pursuant to Article 16, Contractor
shall use best reasonable efforts to avoid or minimize and/or work around any
delay resulting from such Purchaser Delay through the implementation of any
work-around plans, alternate sources, or other means Contractor may utilize or
expect to utilize to minimize a delay in performance of the Work.

 

- 60 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 19 – INTELLECTUAL PROPERTY INDEMNITY

 

19.1 Indemnification

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,
and agents from and against any claim or suit based on, arising from, or in
connection with any allegation that the manufacture of any Deliverable Item or
any part thereof or the normal intended use, lease or sale of any Deliverable
Item or any part thereof infringes any third party Intellectual Property Right
(“Intellectual Property Claim”), and shall pay any royalties and other
liabilities adjudicated (or provided in settlement of the matter) to be owing to
the third party claimant as well as costs and expenses incurred in defending or
settling (including court costs and reasonable attorneys’ fees and
disbursements, costs of investigation, expert fees, litigation, settlement,
judgment, interest and penalties) such Intellectual Property Claim. Contractor’s
obligations under this Article 19.1 shall be subject to the conditions to
indemnification set forth in Article 20.3.

 

19.2 Infringing Equipment

If the manufacture of any Deliverable Item or the normal intended use, lease or
sale of any Deliverable Item under this Contract is enjoined as a result of an
Intellectual Property Claim or is otherwise prohibited, Contractor shall at its
option and expense: (i) resolve the matter so that the injunction or prohibition
no longer pertains; (ii) procure for Purchaser the right to use the infringing
item; and/or (iii) modify the infringing item so that it becomes non-infringing
while remaining in compliance with the Performance Specification (as may be
modified or waived pursuant to Article 9.4). Purchaser shall reasonably
cooperate with Contractor to mitigate or remove any infringement. If Contractor
is unable to accomplish (i), (ii) or (iii) as stated above, Purchaser shall have
the right to terminate this Contract in whole or in part, with respect to such
Deliverable Item (and any other Deliverable Item whose utility has been
adversely impacted by Purchaser’s loss of use of the infringing Deliverable
Item), return such Deliverable Item(s) to Contractor (in space, with respect to
an in-orbit Satellite), and receive a refund of the price paid for such
terminated Deliverable Item(s) less: (a) amounts unpaid for such item; and (b) a
reasonable allowance for use and depreciation.

 

- 61 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

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 not provided, recommended, or approved by
Contractor or its suppliers or subcontractors; or (ii) modifications of any
Deliverable Item after Delivery by a person or entity other than Contractor (or
its suppliers or subcontractors acting through Contractor) unless, (A) in the
case of a Deliverable Item other than the Satellite, such modification was made
by such other person or entity due to Contractor’s failure to perform a
contractual obligation hereunder (except where Contractor believes such
modification would result in an infringement of a third party’s rights), or
(B) is authorized by written directive or instructions furnished by Contractor
to Purchaser under this Contract; or (iii) the manufacture, Delivery or use of
any Deliverable Item in compliance with the design, specification or
instructions of Purchaser.

 

19.4 Sole Remedies

The remedies set forth in this Article 19 are Purchaser’s sole and exclusive
remedies for or related to any Intellectual Property Claim.

 

- 62 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 20 – INDEMNITY FOR PERSONAL INJURY AND PROPERTY DAMAGE

 

20.1 Contractor’s Indemnity

Contractor, at its own expense, shall defend, indemnify and hold harmless
Purchaser and its Affiliates and their respective directors, officers,
employees, shareholders, and agents, from and against any losses, damages, and
other liabilities, adjudicated (or provided for in settlement of the matter) to
be owing to the claimant as well as costs and expenses (including court costs,
and reasonable attorneys’ fees and disbursements, costs of investigation, expert
fees, litigation, settlement, judgment, interest and penalties) (collectively,
“Losses”) based on, arising from or in connection with any allegations by third
parties regarding any of the following: (i) claims for injury to persons or
property damage, but only if such Losses were caused by, or resulted from, a
negligent act or omission or willful misconduct of Contractor or its employees
or representatives and (ii) Contractor’s breach of its obligations under Article
7. For the avoidance of doubt, Contractor shall have no indemnity obligations
pursuant to this Article 20 for any Losses with respect to the Satellite after
Intentional Ignition of the Launch Vehicle for the Satellite, unless and to the
extent of a Terminated Ignition as provided in Article 12.1, even if such Losses
are attributable, in whole or in part, to an act or omission of Contractor or
its employees, representatives, contractors or subcontractors at any tier
(including suppliers of any kind) prior to Intentional Ignition.

 

20.2 Purchaser’s Indemnity

Purchaser, at its own expense, shall defend, indemnify and hold harmless
Contractor and its Affiliates, and their respective directors, officers,
employees, shareholders and agents, from and against any Losses based on,
arising from or in connection with any allegations by third parties regarding
any of the following: (i) for claims for injury to persons or property damage,
but only if such Losses were caused by, or resulted from, negligent acts or
omissions or willful misconduct of Purchaser or its employees or representatives
and (ii) Purchaser’s breach of its obligations under Article 7.

 

- 63 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

20.3 Conditions to Indemnification

The right to any indemnity specified in Article 20.1 and Article 20.2 shall be
subject to the following conditions:

 

  20.3.1 Notice. 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 which it seeks indemnification upon receipt thereof and shall provide the
other Party, at its written request, with copies of all documentation relevant
to such suit or claim. Failure to so notify the indemnifying Party shall not
relieve the indemnifying Party of its obligations under this Contract except to
the extent it can demonstrate that it was prejudiced by such failure. Within
fifteen (15) days following receipt of written notice from the Party seeking
indemnification relating to any claim, but no later than a reasonable time
before the date on which any response to a complaint or summons is due, the
indemnifying Party shall notify the Party seeking indemnification in writing if
the indemnifying Party elects to assume control of the defense or settlement of
that claim (a “Notice of Election”) when not contrary to the governing rules of
procedure.

 

  20.3.2

Control of Action. If the indemnifying Party delivers a Notice of Election
relating to any claim within the required notice period, so long as it is
actively defending such claim, the indemnifying Party shall be entitled to have
sole control over the defense and settlement of such claim; provided that
(i) the Party seeking indemnification shall be entitled to participate in the
defense of such claim and to employ counsel (reasonably acceptable to the
indemnifying Party) at its own expense to assist in the handling of such claim
provided there is no conflict of interest and that such participation would not
adversely affect the conduct of the proceedings; (ii) where the Party seeking
indemnification is so represented, the indemnifying Party shall keep counsel of
the Party seeking indemnification informed of each step in the handling of any
such claim; and (iii) the Party seeking indemnification shall provide, at the
indemnifying Party’s request and expense, such assistance and information as is
available to the Party seeking indemnification for the defense and settlement of
such claim and (iv) the indemnifying Party shall notify the Party seeking
indemnification before entering

 

- 64 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

into any non-monetary settlement of such claim or ceasing to defend against such
claim. After the indemnifying Party has delivered a Notice of Election relating
to any claim in accordance with the preceding paragraph, the indemnifying Party
shall not be liable to the Party seeking indemnification for any legal expenses
incurred by the Party seeking indemnification in connection with the defense of
that claim. In addition, the indemnifying Party shall not be required to
indemnify the Party seeking indemnification for any amount paid or payable by
the Party seeking indemnification in the settlement of any claim for which the
indemnifying Party has delivered a timely Notice of Election if such amount was
agreed to without the prior written consent of the indemnifying Party.

 

  20.3.3 Right of Indemnified Party to Defend/Settle. If the indemnifying Party
does not deliver a Notice of Election relating to any claim within the required
notice period or fails actively to defend such claim, the Party seeking
indemnification shall have the right to defend and/or settle the claim in such
manner as it may deem appropriate, at the cost and expense of the indemnifying
Party. Provided that the Party seeking indemnification acts in good faith, it
may settle such claim on any terms it considers appropriate under the
circumstances without in any way affecting its right to be indemnified
hereunder. The indemnifying Party shall promptly reimburse the Party seeking
indemnification for all such costs and expenses.

 

20.4 Waiver of Subrogation

Each Party shall use best reasonable efforts to obtain a waiver of subrogation
and release of any right of recovery against the other Party and its Affiliates,
contractors and subcontractors at any tier (including suppliers of any kind) and
their respective directors, officers, employees, shareholders and agents, that
are involved in the performance of this Contract from any insurer providing
coverage for the risks such Party has agreed to indemnify against under this
Article 20.

 

- 65 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 21 – TERMINATION FOR CONVENIENCE

 

21.1 Reimbursement of Contractor

 

  21.1.1 Right to Terminate. Purchaser may terminate this Contract without
cause, in whole or in part, by giving Contractor written notice thirty (30) days
prior to the date of such termination; provided, however, Purchaser may not
terminate this Contract as to the Satellite after Intentional Ignition of the
Launch Vehicle for the Satellite. In the event of such termination, Contractor
will cease Work as directed in the termination notice.

 

  21.1.2 Termination Liability

 

  A. Termination in Whole. If Purchaser terminates this Contract in whole
pursuant to this Article 21, Contractor shall be entitled to payment of an
amount equal to the termination liability amount, applicable as of the effective
date of termination, as specified in Exhibit E, TerreStar 2 Payment Plan and
Termination Liability Amount under the column entitled, “Termination Liability
Amount,” and interest at the rate specified in Article 5 on any payment not made
when required to be made hereunder less all amounts previously paid under this
Contract.

 

  B. Partial Termination. In the event Purchaser terminates this Contract in
part pursuant to this Article 21, Purchaser shall pay to Contractor the sum of
(1) through (5) below less any amounts previously paid with respect to completed
and/or terminated Deliverable Items:

 

  1. The price set forth in Article 4 for Deliverable items completed prior to
such termination therefor whether or not Delivery has occurred with respect to
such Deliverable Item; and

 

  2. Actual costs incurred by Contractor in performance of Work on Deliverable
Items for which this Contract has been terminated pursuant to this Article
21.1.2, that have not been completed prior to such termination; and

 

- 66 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  3. Actual costs incurred by Contractor in completing the termination process;
and

 

  4. Actual costs incurred by Contractor in settling claims of subcontractors
and other suppliers and vendors in connection with such termination; provided
that Contractor shall use reasonable efforts to minimize such costs; and

 

  5. A fifteen percent (15%) profit on items (1) – (4) above.

If the termination by Purchaser is partial and as a result thereof Contractor
will incur additional costs for the portion of the Work not terminated, then
Contractor shall be entitled to an equitable adjustment in accordance with
Article 16.1.2.

 

  C. Termination Settlement Meeting. 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 sixty (60) 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 termination liability amounts permitted above as Purchaser
may reasonably request. Upon completion of the termination settlement meeting,
Contractor may submit an invoice to Purchaser for payment in accordance with the
terms of Article 5.

 

  D. Maximum Liability. In no event shall the amounts payable pursuant to this
Article 21.1 exceed the combined termination liability amount applicable on the
effective date of termination as set forth in Exhibit E, TerreStar 2 Payment
Plan under the column entitled “Termination Liability Amounts.”

 

  E. Limitation on Right to Terminate. Notwithstanding the foregoing, Purchaser
shall have no right to terminate for convenience as to any Deliverable Item
hereunder from and after such time as such Deliverable Item has been completed
and is ready for Delivery.

 

- 67 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

21.2 Disposition of Work

Upon payment by Purchaser to Contractor of the termination liability amounts due
under Article 21.2, subject to applicable U.S. Government export laws and
license conditions, Purchaser may require Contractor to transfer title and risk
of loss to Purchaser to any part of the Deliverable Items terminated (including
any associated Raw Materials, Work-in-Process and Finished Goods) and Contractor
shall, upon direction of Purchaser, protect and preserve property at Purchaser’s
expense in the possession of Contractor or its subcontractors in which Purchaser
has an interest and shall facilitate access to and possession by Purchaser of
items comprising all or part of the Work terminated. Alternatively, Purchaser
may request Contractor to make a reasonable, good faith effort to sell such
items and to remit any sales proceeds to Purchaser less a deduction for actual
costs of disposition reasonably incurred, and any Security Interest or other
right or interest that Purchaser has in such items shall be released and
extinguished, and Purchaser shall take all action reasonably requested by
Contractor to terminate any document or instrument filed of record (including
without limitation UCC financing statements) to perfect any such Security
Interest.

 

- 68 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 22 – LIQUIDATED DAMAGES FOR LATE SATELLITE DELIVERY

 

22.1 Liquidated Damages

 

  22.1.1 Late Delivery of Satellite. The Parties acknowledge and agree that
failure to meet the Satellite Delivery schedule specified therefor in Article
3.1 will cause substantial financial loss or damage being sustained by
Purchaser. The Parties further acknowledge and agree that the following
liquidated damages are believed to represent a genuine and reasonable estimate
of all losses (including non-productive time and increased cost of money) that
would be suffered by Purchaser by reason of any such delay (which losses would
be difficult or impossible to calculate with certainty).

 

  22.1.2 Liquidated Damages. If Delivery of the Satellite does not occur on or
before the date specified therefor in Article 3.1 (as such date may be adjusted
pursuant to Articles 16, 17 or 18), then Contractor shall pay Purchaser an
amount not to exceed [***] U.S. dollars (U.S.$[***]) for the Satellite, as
specified below, as liquidated damages and not a penalty for Contractor’s late
Delivery:

 

Number of Days

  

Per Day Charge

  

Period Maximum
Liquidated Damages

  

Cumulative

Liquidated

Damages

[***]

   $ [***]    $ [***]    $ [***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

[***]

   $[***]    $[***]    $[***]

 

- 69 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  22.1.3 Offset. Any amounts due in accordance with this Article 22 shall be, at
Purchaser’s election, either (i) credited to Purchaser against any outstanding
or future invoices hereunder or (ii) paid by Contractor to Purchaser within
thirty (30) days of issuance of an invoice from Purchaser.

 

22.2 Remedy

Such damages shall be Purchaser’s sole remedy and compensation for Contractor
delays with respect to late Delivery of the Satellite during the time period set
forth above; provided, however, Purchaser retains all rights and remedies under
Article 21 regarding termination for convenience and Article 23.3 regarding
termination for excessive force majeure.

 

- 70 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 23 – TERMINATION FOR DEFAULT AND EXCESSIVE FORCE MAJEURE

 

23.1 Purchaser Right of Termination

 

  23.1.1 Right to Terminate

 

  A.

Subject to extensions of time due to Article 17 and Article 18 and, in addition,
subject to Article 23.1.4 below, Purchaser may terminate this Contract in whole
or in part by written notice to Contractor if (i) Contractor fails to deliver
the Satellite within the time specified therefor plus the maximum number of days
for liquidated damages specified in Article 22 (or such longer time as may be
agreed to in writing by Purchaser); (ii) Contractor commits a material breach of
this Contract (other than failure to meet any scheduled Delivery due hereunder,
except as set forth in Article 23.1.1A(i)) and fails, within ninety (90) days
(or such longer period as may be agreed to in writing by Purchaser) after
receipt from Purchaser of written notice thereof, to cure such material breach;
(iii) it becomes reasonably certain from and after March 1, 2008, that
Contractor will fail to Deliver the Satellite within the time specified therefor
plus the maximum number of days for liquidated damages specified in Article 22
(or such longer time as may be agreed to in writing by Purchaser) and, in the
case of (ii) or (iii), Contractor fails, within ninety (90) days (or such longer
period as may be agreed to in writing by Purchaser) after receipt from Purchaser
of written notice thereof, to cure such material breach, (iv) an order is
entered rejecting the Contract in any case or proceeding pursuant to an
Insolvency Law (as defined below), or (v) following REDC, Contractor commences a
voluntary proceeding under the Bankruptcy Code or any other applicable
bankruptcy, insolvency, reorganization, adjustment of debt, relief of debtors or
similar laws (each an “Insolvency Law”); or an involuntary proceeding against
Contractor under an Insolvency Law has been commenced and the petition has not
been dismissed within ninety (90) days after the commencement of the proceeding;
or a receiver or custodian is appointed for or takes charge of all or a
substantial portion of property of the Contractor and such custodian or receiver
has not been

 

- 71 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

dismissed or discharged within ninety (90) days; or Contractor has taken action
toward the winding-up, dissolution or liquidation of the Contractor; or, other
than the Bankruptcy Case, Contractor has been adjudicated insolvent or bankrupt
or an order for relief or any other order approving a case or proceeding under
any Insolvency Law has been entered; or Contractor has made a general assignment
for the benefit of creditors or becomes unable to pay its debts generally as
they become due.

 

  23.1.2 Termination Liability. In the event of termination pursuant to this
Article 23.1, subject to Article 23.1.3, Purchaser shall be entitled to refund
by Contractor of all payments made by Purchaser for the terminated Work plus
interest thereon at the interest rate stipulated in Article 5.3.1 hereof from
the date payment was received to the date the refund is received (provided,
however, in the case of termination in part, the Parties shall negotiate an
equitable refund amount to be paid by Contractor to Purchaser for the portion of
the Work so terminated). In addition, Purchaser shall be entitled to payment of
any liquidated damages for delay accrued prior to the effective date of
termination pursuant to Article 22. Contractor shall pay the foregoing amounts
no later than thirty (30) days after Contractor’s receipt of Purchaser’s written
notice requesting such amounts. Payment of such amounts shall be Purchaser’s
sole remedy in case of a termination pursuant to this Article 23.1. Upon payment
in full of all amounts due in accordance with the preceding sentences of this
Article 23.1.2, any Security Interest or other right or interest that Purchaser
has in the terminated Deliverable Items, Raw Materials, Work-in-Process and
Finished Goods (except with respect to Deliverable Items retained by Purchaser
pursuant to Article 23.1.3) hereunder or otherwise shall be released and
extinguished and Purchaser shall take all action reasonably requested by
Contractor to terminate any document or instrument filed of record (including
without limitation UCC financing statements) to perfect any such Security
Interest.

 

  23.1.3

Contractor’s Reimbursement for Terminated Work. In the event of termination
pursuant to this Article 23.1, Contractor shall refund all amounts paid by
Purchaser under this Contract, except Contractor shall not be required to refund

 

- 72 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

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 (unless the utility to Purchaser of such
Deliverable Item has been materially adversely impacted by the terminated Work),
or with respect to Raw Materials, Work-in-Process and Finished Goods (including
Deliverable Items for which Acceptance has not occurred) which Purchaser has
requested to retain, 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
actual cost incurred by Contractor, plus a markup of ten percent (10%) of such
cost, for (a) such items for which no itemized price is set forth herein and
(b) partially completed items and Work-in-process. Subject to Purchaser making
payment to Contractor of any unpaid balance of amounts due in accordance with
the immediately preceding sentence, Contractor shall transfer to Purchaser in
the manner and to the extent directed by Purchaser title and risk of loss to
such Deliverable Items, Raw Materials, Work-in-Process and Finished Goods. In
addition, in the event that this Contract is terminated pursuant to Article
23.1.1 A(v), and Purchaser elects to retain the Deliverable Items, Raw
Materials, Work-in-Process and Finished Goods as provided above, in addition to
the foregoing, Contractor shall: (i) grant to Purchaser a right and license to
Contractor Intellectual Property necessary to have a third party complete the
manufacture of any undelivered Deliverable Item; and (ii) assign to Purchaser
rights and obligations in any affected subcontract issued hereunder, subject to
any condition on assignment in any such subcontract. In lieu of taking immediate
possession of Deliverable Items, Raw Materials, Work-in-Process and Finished
Goods retained by Purchaser as provided above, upon direction of Purchaser,
Contractor shall protect and preserve Deliverable Items, Raw Materials,
Work-in-Process and Finished Goods at Purchaser’s expense and shall facilitate
access to and possession by Purchaser to such Deliverable Items, Raw Materials,
Work-in-Process and Finished Goods.

 

  23.1.4

Special Provision Limiting Purchaser’s Remedies. Purchaser shall have no right
to terminate this Contract pursuant to this Article 23.1 above with respect to
the

 

- 73 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

Satellite after successful completion of SPSR of the Satellite. Purchaser’s sole
remedy with respect to delays in Delivery shall be as specified in Article 22
and this Article 23.1. Purchaser’s sole right to terminate this Contract for
Contractor’s default shall be as specified in this Article 23.1.

 

  23.1.5 Disposition of the Work. Unless and to the extent that Purchaser
retains Deliverable Items or portions thereof pursuant to Article 23.1.3 hereof,
upon payment in full of all amounts due in accordance with Article 23.1.2, any
Security Interest or other right or interest that Purchaser has in such items
(except with respect to Deliverable Items retained by Purchaser pursuant to
Article 23.1.3) hereunder or otherwise shall be released and extinguished and
Purchaser shall take all action reasonably requested by Contractor to terminate
any document or instrument filed of record (including without limitation UCC
financing statements) to perfect any such Security Interest.

 

  23.1.6 Invalid Default Termination. If, after termination pursuant to this
Article 23.1, it is finally determined pursuant to Article 25 or written
agreement of Purchaser that Contractor was not in default under Article 23.1.1,
or that the default was excusable under Articles 17 or 18, 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 its
additional actual costs reasonably incurred due to such invalid default
termination plus a markup of ten percent (10%) of such costs.

 

23.2 Contractor Right of Termination

 

  23.2.1

Right to Terminate. Contractor may terminate this Contract only upon written
notice to Purchaser if Purchaser fails to cure any default in the payment of any
amount that has become due and payable hereunder within sixty (60) days after
receiving written notice of such default (or such longer period as may be agreed
to in writing by Contractor), subject to Purchaser’s right to issue a stop Work
in accordance with Section 16.1. Purchaser’s issuance of a stop Work shall have
the effect of extending the cure period set forth herein during the term of the
Stop Work. Notwithstanding Article 23.2, Purchaser will not be considered in
default

 

- 74 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

with respect to any amount that it is disputing in good faith pursuant to
Article 5.6 (and that has been deposited in an escrow account pursuant to such
Article) and will have thirty (30) Business Days after the final resolution (by
agreement or arbitration) of such dispute to satisfy any payment required by
such resolution. Contractor may not terminate this Contract under any
circumstance, including for Purchaser’s breach of any obligation, except as set
forth in this Article 23.1.

 

  23.2.2 Termination Liability. In the event of termination pursuant to this
Article 23.2, Contractor shall be paid as if such termination were for
convenience pursuant to Article 21. Further, if Purchaser’s failure to perform
is a failure to pay Contractor invoiced amounts when due, Contractor shall be
entitled to late payment interest pursuant to Article 5.3. Payment of any amount
by any Financing Entity on behalf of Purchaser shall relieve Purchaser from its
obligation to make such payment in the corresponding amount. Payment of the
total amounts (termination for convenience amounts plus interest on outstanding
invoices) payable by Purchaser pursuant to this Article 23.2.2 shall constitute
a total discharge of Purchaser’s liabilities to Contractor for termination
pursuant to this Article 23.2.

 

  23.2.3

Disposition of the Work. Contractor may elect immediately upon termination to
take over all Deliverable Items and Raw Materials, Work-in-Process and Finished
Goods and use or dispose of the same in any manner Contractor may elect, and any
Security Interest or other right or interest that Purchaser has in such items
hereunder or otherwise shall be released and extinguished and Purchaser shall
take all action reasonably requested by Contractor to terminate any document or
instrument filed of record (including without limitation UCC financing
statements) to perfect any such Security Interest. In such case, the fair market
value of any Deliverable Items or Deliverable Items, Raw Materials,
Work-in-Process and Finished Goods used or disposed of by Contractor shall be
set-off against Purchaser’s termination liability under Article 23.2.2. Upon
completion of all payments to Contractor in accordance with Article 23.2.2,
Purchaser may require Contractor to transfer title and risk of loss to Purchaser
to such Deliverable Items, Raw Materials, Work-in-Process and Finished Goods. In
lieu of taking immediate

 

- 75 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

possession of Deliverable Items, Raw Materials, Work-in-Process and Finished
Goods as provided in the preceding sentence, upon direction of Purchaser,
Contractor shall protect and preserve Deliverable Items, Raw Materials,
Work-in-Process and Finished Goods at Purchaser’s expense and shall facilitate
access to and possession by Purchaser to such Deliverable Items, Raw Materials,
Work-in-Process and Finished Goods.

Alternatively, Purchaser may request Contractor to make a reasonable, good faith
effort to sell such items and to remit any sales proceeds to Purchaser less a
deduction for actual costs of disposition reasonably incurred by Contractor for
such efforts, and, if not previously released and extinguished, any Security
Interest or other right or interest that Purchaser has in such items hereunder
or otherwise shall be released and extinguished and Purchaser shall take all
action reasonably requested by Contractor to terminate any document or
instrument filed of record (including without limitation UCC financing
statements) to perfect any such Security Interest. Purchaser shall take all
action reasonably requested by Contractor to terminate any document or
instrument filed of record (including without limitation UCC financing
statements) to perfect any such Security Interest.

 

  23.2.4 Invalid Default Termination. If, after termination pursuant to this
Article 23.2, it is finally determined by arbitration pursuant to Article 25 or
written agreement of Contractor that Purchaser was not in default under Article
23.2.1, Contractor shall be liable to Purchaser for direct damages resulting
from such termination of this Contract (in no event exceeding amounts payable to
Purchaser pursuant to Article 23.1, and subject to the limitation of liability
set forth in Article 30).

 

23.3 Excessive Force Majeure

Purchaser may, upon written notice to Contractor, immediately terminate this
Contract, in whole or in part, if and when: (i) delay in Contractor’s
performance of its obligations hereunder exceeds one year due to Force Majeure
events under Article 17.3 or (ii) it becomes reasonably certain that the
aggregate delay due to Force Majeure events under Article 17.3 will exceed one
year; or (iii) Contractor notifies Purchaser that it is

 

- 76 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

reasonably certain that delay in Contractor’s performance of its obligations
hereunder due to Force Majeure events under Article 17.3 will exceed one year.
Upon the occurrence of any of these events, Purchaser will provide Contractor
written notice of its intent to terminate and the rights and obligations of the
Parties shall be the same as if such termination had occurred under Article
23.1. Within a reasonable period of time not to exceed thirty (30) days after
the occurrence of either (i) or (iii) above, Purchaser will notify Contractor as
to its decision to either terminate this Contract or to waive its rights to
terminate for such Force Majeure events. Failure to provide such notice in the
thirty-day period specified above shall be deemed to be a waiver of Purchaser’s
rights to terminate for such Force Majeure events under this Article 23.3.

 

23.4 Limitation on Right to Terminate

Except as specified in this Contract, neither Party shall have any right to
terminate or suspend this Contract.

 

- 77 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 24 – RESERVED

 

- 78 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 25 – DISPUTE RESOLUTION

Any dispute, claim, or controversy between the Parties arising out of or
relating to this Contract (“Dispute”), including any Dispute with respect to the
interpretation, performance, termination, or breach of this Contract or any
provision thereof shall be resolved as provided in this Article 25.

 

25.1 Informal Dispute Resolution

Prior to the initiation of formal Dispute resolution procedures, the Parties
shall first attempt to resolve their Dispute informally, in a timely and
cost-effective manner, as follows:

 

  A. If, during the course of the Work, a Party believes it has a Dispute with
the other Party, the disputing Party shall give written notice thereof, which
notice will describe the Dispute and may recommend corrective action to be taken
by the other Party. Contractor Program Manager shall promptly consult with
Purchaser Contract Manager in an effort to reach an agreement to resolve the
Dispute.

 

  B. In the event agreement cannot be reached within ten (10) days of receipt of
written notice, either Party may request the Dispute be escalated, and the
respective positions of the Parties shall be forwarded to an executive level
higher than that under (A) above for resolution of the Dispute.

 

  C. In the event agreement cannot be reached within twenty (20) days of receipt
of written notice, either Party may request the Dispute be escalated, and the
respective positions of the Parties shall be forwarded to the Chief Executive
Officer (CEO) of each Party for resolution of the Dispute.

 

  D. In the event (i) agreement cannot be reached under paragraphs A – C of this
Article 25.1 within a total of thirty (30) days after receipt of the written
notice described in Article 25.1 (A) or (ii) a Party determines in good faith
that amicable resolution through continued negotiation of the Dispute does not
appear likely, either Party may proceed with arbitration in accordance with
Article 25.2.

 

- 79 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

25.2 Arbitration

 

  25.2.1 Arbitration. Subject to Article 25.1 and 25.3, any Dispute arising
between the Parties shall be submitted for settlement by arbitration in
accordance with the rules of conciliation and arbitration of the Center for
Public Resources, as may be amended from time to time, which are incorporated
herein by reference (or if the Center for Public Resources no longer provides
rules or services, then the rules of conciliation and arbitration of the
American Arbitration Association). Notwithstanding the foregoing, to the extent
any provision of this Article 25.2 modifies, adds to, or is inconsistent with
any provision of such rules, the provisions of this Article 25.2 shall control.
Any such arbitration shall be conducted in Washington, DC by a panel of three
(3) arbitrators who shall be selected within forty-five (45) days of
commencement of the arbitration: one selected by each Party and the third
selected by the arbitrators chosen by the Parties. Should no agreement be
reached on the third arbitrator within the time specified, the third arbitrator
shall be appointed by the Center for Public Resources. Each arbitrator appointed
by the Parties shall be knowledgeable and experienced in the aerospace and/or
satellite telecommunications industries and shall have senior management and/or
legal/judicial experience.

 

  25.2.2 Discovery. Discovery shall be permitted as follows:

 

  A. The Parties shall be permitted to take discovery, if and as needed, by
deposition upon oral examination, requests for production of documents and
things, and requests for entry upon land for inspection and other purposes, as
those discovery methods are described and defined in the Federal Rules of Civil
Procedure; provided further that the Tribunal shall expand or limit discovery in
accordance with paragraph (B) below.

 

  B.

The scope of permissible discovery shall generally be as described in Federal
Rules of Civil Procedure Rule 26(b)(1), but the Parties shall use their best
reasonable efforts to focus and limit their discovery in accordance with the
nature of the Dispute and the need for expedited resolution. The arbitral
tribunal may expand or limit the scope of

 

- 80 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

permissible discovery, establish the time period within which discovery
responses must be served, and expand or limit the type and number of discovery
methods and requests as it shall determine is appropriate in the circumstances,
taking into account the needs of the Parties and the desirability of making
discovery expeditious and cost-effective. The tribunal may issue orders to
protect the confidentiality of proprietary information, trade secrets, and other
similar information disclosed in discovery and may order that discovery not be
had or that discovery may be had only on specific terms and conditions.

 

  25.2.3 Choice of Laws. In resolving any Dispute, the arbitrators shall apply
the laws of the State of New York without reference to its conflicts of laws
rules and shall take into account usages, customs and practices in the
performance of contracts for the purchase and sale of commercial communications
satellites.

 

  25.2.4 Language. Proceedings and documents provided and generated in
connection with any arbitration hereunder shall be in the English language.

 

  25.2.5 Costs and Expenses. 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.

 

  25.2.6 Offer. At any time more than ten (10) days before the commencement of
the arbitral hearing, any Party defending against any claim may serve upon the
adverse Party an offer to allow an award to be entered against the defending
Party on any claim for the money or property or to the effect specified in the
offer. If within ten (10) days after the service of the offer, the adverse Party
serves written notice that it accepts the offer, either Party may file the offer
and acceptance with the tribunal, which will thereupon promptly enter an award
on the claim as provided in the offer. An offer not accepted shall be deemed
withdrawn and shall not be admissible into evidence.

 

- 81 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  25.2.7 Expedited Arbitration. Time is of the essence in the initiation and
completion of the arbitration. The arbitral hearing shall be commenced and
conducted expeditiously. Unless the arbitral tribunal orders otherwise, the
Dispute should be submitted to the tribunal for decision within six (6) months
after the commencement of the arbitration, and the final award shall be rendered
within one (1) month thereafter. The Parties and the tribunal shall use their
best reasonable efforts to comply with this schedule, and the tribunal may
impose any remedy it deems just for any Party’s effort to unnecessarily delay,
complicate, or hinder the proceedings.

 

  25.2.8 Final and Binding Decision. Any arbitration hereunder shall be governed
by the United States Arbitration Act, 9 U.S.C. §§ 1 et seq. The arbitrators’
decision shall be final and binding on the Parties and enforceable in any court
of competent jurisdiction.

 

  25.2.9 Arbitration Award. The arbitral tribunal’s award may grant any remedy
or relief the tribunal deems within the scope of this Contract, but may not make
any award in any amount or on any theory of liability except as otherwise
allowed or provided in this Contract. Notwithstanding the foregoing, the
tribunal shall have no power or authority to amend or disregard any provision of
this Article 25.2 or any other provision of this Contract; in particular, but
without limiting the generality of the foregoing, the tribunal shall not have
the power or authority to exclude the right of a Party to terminate this
Contract when a Party would otherwise have such right. Any monetary award made
by the arbitrators shall be subject to the limitation of liability set forth in
Article 30.

 

25.3 Litigation

Notwithstanding the provisions of Article 25.1 and Article 25.2 above, if a
Party makes a good faith determination that (i) a breach by the other Party is
such that a temporary restraining order or other preliminary injunctive relief
to enforce its rights or the other Party’s obligations under the provisions of
this Contract and which is necessary or (ii) litigation is appropriate to avoid
the expiration of an applicable limitations period or to preserve a superior
position with respect to creditors, either Party shall have the right to bring
suit at any time, but requests for permanent injunctive relief shall be
arbitrated pursuant to Article 25.2.

 

- 82 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

Any such suit shall be brought in the United States District Court for the
Southern District of New York, and the Parties hereby waive any objection to
that venue and that court’s exercise of personal jurisdiction over the case;
provided further that if, for any reason, such court does not have or refuses to
exercise subject matter jurisdiction over the Dispute, then litigation as
permitted herein may be brought in the Supreme Court for New York County. The
Parties hereby irrevocably consent to the exercise of personal jurisdiction by
the state and federal courts in the State of New York concerning any Dispute
between the Parties. If, for any reason, neither the state nor federal courts in
New York will exercise jurisdiction over the Dispute, then litigation as
permitted herein may be brought in any court of competent jurisdiction in the
United States of America.

Nothing in this Contract precludes a Party prevailing on any claim, whether in
arbitration or litigation, from initiating litigation in any appropriate forum
to enter or enforce a judgment based on the Tribunal’s or court’s award on that
claim.

 

25.4 Continued Performance

Unless the Dispute involves a termination of the Contract under Articles 21 or
23 hereof: (i) pending final resolution of any Dispute, each Party shall, unless
directed otherwise by the other Party in writing, perform all its obligations
under this Contract to the extent undisputed and practical to do so, including
the obligation to take all steps necessary during the pendency of the Dispute to
ensure the Work will be performed within the time stipulated or within such
extended time as may be allowed under this Contract; and (ii) failure to pay
disputed amounts shall not excuse failure to so perform the Work, provided that
Purchaser has complied with its obligations set forth in Article 5.6.

 

- 83 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 26 – INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH

 

26.1 Launch Services Agreement Inter-Party Waiver of Liability

 

  26.1.1 Inter-Party Waiver. Each Party hereby agrees to be bound by the
no-fault, no-subrogation inter-party waiver of liability and related indemnity
provisions required by the Launch Services Agreement with respect to each Launch
and 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 (including
customers of Purchaser) to accede to such waiver and indemnity, which in every
case shall include claims against the Launch Agency, either Party and their
respective contractors and subcontractors at any tier (including suppliers of
any kind) that are involved in the performance of this Contract. The Parties
shall execute and deliver any instrument that may be reasonably required by the
Launch Agency to evidence their respective agreements to be bound by such
waivers.

 

  26.1.2 Waiver of Subrogation. The Parties also shall use best reasonable
efforts to obtain from their respective insurers, and shall require 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 (including non-consumer customers of
Purchaser) to use best reasonable efforts to obtain from their respective
insurers, an express waiver of such insurers’ rights of subrogation 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 harmless the other Party and its
contractors and subcontractors at any tier (including suppliers of any kind)
that are involved in the performance of this Contract, from and against any
claim made by the indemnifying Party or any of its contractors and
subcontractors (including suppliers of any kind) that are involved in the
performance of the Contract, or by any person having an interest in the
Satellite (including non-consumer customers of Purchaser), or by insurer(s)
identified in Article 26.1, resulting from the failure of the indemnifying Party
to waive any liability

 

- 84 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

against, or to cause any other person the indemnifying Party is obligated to
cause to waive any liability against, the Launch Agency, the other Party or
either of their contractors and subcontractors at any tier (including suppliers
of any kind) involved in the performance of this Contract. The Parties shall
execute and deliver any instrument that may be reasonably required by the Launch
Agency to evidence their respective agreements to be bound by such
indemnifications.

 

26.3 Survival of Obligations

The waiver, 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 Additional Insured

Purchaser shall use reasonable efforts to cause the Launch Agency to name, as
additional insured under any third-party liability insurance procured by the
Launch Agency under the Launch Services Agreement for the Launch of the
Satellite, Contractor and any other person identified by Contractor in writing
to Purchaser no later than one-hundred eighty (180) days before such Launch.

 

- 85 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 27 – MAJOR SUBCONTRACTS

 

27.1 Selection of Major Subcontractors

Selection of any Major Subcontractor, whether as an initial selection or as a
replacement selection, shall be subject to Purchaser’s prior written approval.
Contractor shall provide Purchaser with a copy of the full text of any Major
Subcontract (including technical content but excluding price and payment
schedule) promptly upon execution thereof. Purchaser hereby approves the list of
Major Subcontractors provided by Contractor to Purchaser by letter dated
July 11, 2002.

Purchaser’s approval of any Major Subcontractor or subcontractor shall not
relieve Contractor from any obligations or responsibilities under this Contract.

 

27.2 Step-In Payment Rights

Contractor shall notify Purchaser within five (5) business days of it becoming
aware of the occurrence of an event that with or without the passage of time or
the giving of notice, or both, would give rise to a right of termination or a
right to receive damages or a payment of penalties under any of the Contractor’s
Major Subcontracts that Contractor is not then disputing, in good faith, with
such subcontractor (a “Default”). Purchaser shall have the right (but not the
obligation) to cure any such Default, including by making any payment due
thereunder. The Firm Fixed Price shall be reduced by the amount of the cost to
cure such Default paid by Purchaser pursuant to the preceding sentence. Such
reduction in the Firm Fixed Price shall be applied against and used to reduce
the next payment due to Contractor under the Payment Plan (which shall be
adjusted accordingly). No action on the part of Purchaser under this Section
shall relieve Contractor from any obligations or responsibilities under this
Contract or the Major Subcontract.

 

- 86 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 28 – CONTRACTOR INSURANCE REQUIREMENTS

 

28.1 Insurance Requirements

 

  28.1.1 Coverages. Contractor represents that it has procured and will maintain
at all times during its performance of this Contract the following insurance
coverages:

 

  A. Ground insurance (“Property Insurance”) against all risks and loss or
damage to the Deliverable Items, and to any and all component parts thereof and
all materials of whatever nature used or to be used in completing the Work, in
an amount not less than the greater of (i) the replacement value of or (ii) the
amounts paid by Purchaser with respect to the Deliverable Items and component
parts thereof and all materials of whatever nature used or to be used in
completing the Work. Such insurance shall provide (i) coverage for removal of
debris, and insuring the structures, machines, equipment, facilities, fixtures,
and other properties constituting part of the Work, (ii) transit coverage,
including ocean marine coverage (unless insured by the supplier), (iii) off-site
coverage covering any key equipment, and (iv) off-site coverage covering any
property or equipment not stored on the construction site. The deductible for
Property Insurance is Two Million Five Hundred Thousand U.S. dollars
(U.S.$2,500,000) for finished goods and inventory. For each Deliverable Item,
such insurance shall cover the period beginning at EDC up to the moment risk of
loss passes to Purchaser pursuant to Article 12.

 

  B. Public liability insurance until Launch of the Satellite covering
Contractor and all its Subcontractors with respect to their performance under
this Contract and their liabilities to third parties. Such insurance shall be
for an amount not less than One Hundred Million U.S. dollars (U.S.$100,000,000)
per occurrence and shall contain no deductible in excess of Two Hundred Fifty
Thousand U.S. dollars (U.S.$250,000). Such insurance will be primary insurance
with regard to any insurance maintained by Purchaser; Contractor shall maintain
such insurance as to the Satellite until Launch of the Satellite.

 

- 87 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  C. Worker’s compensation insurance, including occupational illness or disease
coverage, or other similar social insurance in accordance with the laws of any
country, state, or territory exercising jurisdiction over the employee and
employer’s liability insurance in an amount not less than One Million U.S.
dollars (U.S. $1,000,000) per occurrence. Contractor shall maintain such
insurance until Acceptance of all Work, including remedial work, has occurred.

 

  D. Comprehensive automobile liability insurance against liability claims for
personal injury (including bodily injury and death) and property damage covering
all owned, leased, non-owned, and hired vehicles used by Contractor in the
performance of the Work. Such insurance shall be for an amount not less than One
Million U.S. dollars (U.S.$1,000,000) per occurrence for combined bodily injury
and property damage. Contractor shall maintain such insurance until Acceptance
of all Deliverable Items has occurred

 

  E. Such other insurance in types and amounts as is adequate to cover
Contractor’s potential liabilities under this Contract and applicable law.

 

  28.1.2 Additional Insured. Purchaser and each Financing Entity shall be named
as an additional insured under Contractor’s third-party liability coverages,
provided that, with respect to each Financing Entity, such Financing Entity has
an insurable interest recognized by the applicable insurance underwriters.

 

  28.1.3 Insurers Rating. The insurers selected by Contractor to provide the
insurance required by Article 28.1.1A shall have a rating at least as high as
those insurers providing coverage on Contractor’s programs for its major
commercial customers.

 

  28.1.4

Evidence of Insurance. Prior to commencing the Work, and whenever requested by
Purchaser, Contractor shall produce evidence that the insurance required by
Article 28.1.1 has been effected and is being maintained. Contractor shall, at
the written request of Purchaser, provide Purchaser with a certificate of
insurance evidencing the procurement of all required insurance policies and
thirty (30) days

 

- 88 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

written notice prior to any modification that diminishes the insurance coverage
required hereunder, cancellation, or non-renewal of such policies. If, after
being requested in writing by Purchaser to do so, Contractor fails to produce
evidence of compliance with Contractor’s insurance obligations within fourteen
(14) days, Purchaser may effect and maintain the insurance and pay the premiums.
The amount paid shall be a debt due from Contractor to Purchaser and may be
offset against any payments due Contractor by Purchaser. Purchaser may, at
reasonable times upon reasonable notice, inspect any insurance policy required
hereunder at Contractor’s offices.

 

  28.1.5 Claims. Contractor shall, as soon as practicable, inform Purchaser in
writing of any occurrence with respect to the Work that may give rise to a claim
under a policy of insurance required by Article 28.1.1A above. Contractor shall
ensure that its Subcontractors similarly inform Purchaser of any such
occurrences through Contractor.

 

  28.1.6 Waiver of Subrogation. Contractor shall use best reasonable efforts to
require its insurers to waive all rights of subrogation against Purchaser and
Purchaser’s Affiliates and their respective associates.

 

  28.1.7 Warranty. Contractor warrants and covenants that the insurance
coverages and deductibles to be obtained pursuant to this Article 28 are
substantially comparable to those provided to Contractor’s major commercial
customers.

 

28.2 Preparation of Claims

Each Party shall provide to the other Party any information that may reasonably
be required to prepare, present, and substantiate an insurance claim at the
other Party’s written request.

Each Party warrants and covenants that it will not intentionally withhold from
the other Party any material information it has or will have concerning
anomalies, failures, or non-conformances with or deviations from the
requirements of this Contract.

 

- 89 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

Upon written request of a Party, subject to Article 7, the other Party will
respond or permit the first Party to respond to any insurers in relation to all
specific and reasonable questions relating to design, test, quality control,
launch, and orbital information. In addition, in the event of a Launch and
In-Orbit Insurance Policy claim, Contractor shall provide the support described
in Article 35.2.

 

- 90 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 29 – PERSONNEL AND KEY PERSONNEL

 

29.1 Personnel Qualifications

Contractor shall assign properly qualified and experienced personnel to the
program contemplated under this Contract, and Contractor shall use best
reasonable efforts to retain such personnel on Purchaser’s program for the
duration of such program.

 

29.2 Key Personnel Positions

Key personnel (“Key Personnel”) shall be the personnel filling the following or
equivalent positions:

29.2.1 Contractor Program Manager;

29.2.2 System Engineering Manager;

29.2.3 Payload Program Manager;

29.2.4 Assembly, Integration and Testing Manager.

 

29.3 Assignment of Key Personnel

Contractor will assign individuals from within Contractor’s organization to the
Key Personnel positions to carry out the Work.

Key Personnel will be familiar with programs similar to Purchaser’s program.

Before assigning an individual to any Key Personnel positions, whether as an
initial assignment or a subsequent assignment, Contractor shall notify Purchaser
of the proposed assignment, shall introduce the individual to appropriate
Purchaser representatives and, upon request, provide such representatives with
the opportunity to interview the individual and shall provide Purchaser with the
individual’s resume. If Purchaser in good faith objects to the qualifications of
the proposed individual within fifteen (15) Business Days after being notified
thereof, then Contractor agrees to discuss such objections with Purchaser and
attempt to resolve such concerns on a mutually agreeable basis; however,
Contractor retains the unilateral right to make all decisions regarding the
assignment of Contractor personnel to the program. Notwithstanding the

 

- 91 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

foregoing, any change in the Contractor Program Manager shall be subject to
Purchaser’s prior written approval. The Key Personnel that have been identified
as of the REDC are listed in Attachment B (Key Personnel). Should the
individuals filling the positions of Key Personnel leave such positions for
whatever reason, Contractor shall follow the procedures set forth in this
Article 29 to select replacement personnel.

 

- 92 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 30 – LIMITATION OF LIABILITY

 

30.1 Limitation of Liability

 

  30.1.1 No Consequentials. NEITHER PARTY SHALL BE LIABLE DIRECTLY OR INDIRECTLY
TO THE OTHER, TO 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 PURCHASER
FOR ANY AMOUNTS REPRESENTING LOSS OF PROFITS, LOSS OF BUSINESS, OR INDIRECT,
SPECIAL, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING
WITHOUT LIMITATION COSTS OF EFFECTING COVER, LOST PROFITS, LOST REVENUES OR
COSTS OF RECOVERING THE SATELLITE, 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 (INCLUDING
NEGLIGENCE OF ANY TYPE AND STRICT LIABILITY), STATUTE OR OTHER LEGAL OR
EQUITABLE THEORY.

 

  30.1.2 Indemnity. PURCHASER SHALL INDEMNIFY CONTRACTOR AND HOLD CONTRACTOR
HARMLESS FOR AND AGAINST ANY CLAIM ASSERTED DIRECTLY OR INDIRECTLY AGAINST
CONTRACTOR THAT IS WITHIN THE SCOPE OF THE FOREGOING LIMITATION OF LIABILITY AND
DISCLAIMER.

 

30.2 Cap on Liability

IN NO EVENT SHALL CONTRACTOR’S TOTAL LIABILITY UNDER OR IN CONNECTION WITH THIS
CONTRACT EXCEED AMOUNTS PAID TO CONTRACTOR HEREUNDER. IN NO EVENT SHALL
PURCHASER’S TOTAL LIABILITY UNDER OR IN CONNECTION WITH THIS CONTRACT EXCEED THE
APPLICABLE TERMINATION AMOUNT CALCULATED PURSUANT TO ARTICLE 21.1.2 PLUS ANY

 

- 93 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ORBITAL PERFORMANCE INCENTIVES THAT WOULD APPLY CALCULATED IN ACCORDANCE WITH
ARTICLE 13.4. THIS ARTICLE 30 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF
THIS CONTRACT FOR WHATEVER CAUSE.

 

30.3 Exceptions

NOTWITHSTANDING THE FOREGOING THE LIMITATIONS OF LIABILITY SET FORTH IN THE
FOREGOING ARTICLES 30.1 AND 30.2 OR ANY OTHER PROVISION OF THIS CONTRACT SHALL
NOT APPLY TO (i) CLAIMS SUBJECT TO INDEMNIFICATION UNDER ARTICLE 4.2 (AS TO
TAXES AS DEFINED IN ARTICLE 4.2), ARTICLE 19, ARTICLE 20, OR ARTICLE 26 AND
(ii) CLAIMS ARISING OUT OF WILLFUL MISCONDUCT BY SENIOR MANAGEMENT PERSONNEL
(VICE PRESIDENT AND ABOVE).

 

30.4 Duty to Mitigate

Each Party shall have a duty to mitigate damages for which the other Party is
responsible.

 

- 94 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 31 – DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION

 

31.1 Definition of Proprietary Information

 

  31.1.1 Definition. For the purpose of this Contract, “Proprietary Information”
means all confidential and proprietary information (other than the Exhibits and
Attachments to this Contract and Deliverable Data, which are subject to the
provisions of Article 32) in whatever form transmitted, that is disclosed or
made available directly or indirectly by such Party (hereinafter referred to as
the “disclosing party”) to the other Party hereto (hereinafter referred to as
the “receiving party”) 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 and then summarized in a written
document, with the Proprietary Information specifically identified, that is
supplied to the receiving party within ten (10) days of initial disclosure. In
the case of Purchaser, Proprietary Information also shall include, whether or
not designated “Proprietary Information,” (i) correspondence under this Contract
and (ii)) all information concerning Purchaser (and/or its Affiliates) regarding
its operations, affairs and businesses, its financial affairs, and its relations
with its customers, employees and service providers (including business plans,
customer lists, customer information, account information and consumer markets).

 

  31.1.2 Exceptions. 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; or (iv) is rightfully obtained by the receiving party
from any third party without restriction and without breach of any
confidentiality obligation by such third party.

 

- 95 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

31.2 Terms for Handling and Use of Proprietary Information

Subject to Article 31.1.2, for a period of ten (10) years after receipt of any
Proprietary Information, the receiving party shall not disclose Proprietary
Information that it obtains from the disclosing party to any person or entity
except its employees, Affiliates, attorneys, agents and consultants (all of whom
are not direct competitors of the disclosing party) who have a need to know, who
have been informed of and have agreed in writing (or, in the case of employees
or attorneys are otherwise subject to confidentiality obligations consistent
with the obligations set forth herein) to abide by the receiving party’s
obligations under this Article 31, and who are authorized pursuant to applicable
U.S. export control laws and licenses or other approvals to receive such
information. 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.

 

31.3 Disclaimer of Representations and Warranties

Contractor makes no representation or warranty regarding the accuracy or
completeness of, or absence of defects in, the Proprietary Information disclosed
hereunder, or with respect to infringement of any rights, including Intellectual
Property Rights of others, arising from its disclosure of Proprietary
Information hereunder. Contractor shall not be liable for damages of whatever
kind as a result of Purchaser’s reliance on or use of the Proprietary
Information provided under this Article 31.

 

31.4 Legally Required Disclosures

Notwithstanding the foregoing, in the event that the receiving party becomes
legally compelled (including disclosures necessary or in good faith determined
to be reasonably necessary under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended), 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

 

- 96 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

appropriate remedy, or to allow the disclosing party to redact 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 proprietary treatment for any Proprietary
Information being disclosed.

 

31.5 Return of Confidential Information

Upon the request of the Party having proprietary rights to Proprietary
Information, the other Party in possession of such Proprietary Information shall
promptly return such Proprietary Information (and any copies, extracts, and
summaries thereof) to the requesting Party, or, with the requesting Party’s
written consent, shall promptly destroy such materials (and any copies,
extracts, and summaries thereof), except for one (1) copy which may be retained
for legal archive purposes, and shall further provide the requesting Party with
written confirmation of same; provided, however, where both Parties have
proprietary rights in the same Proprietary Information, a Party shall not be
required to return such information to the other Party.

 

31.6 No License

Except as expressly provided in this Contract, nothing in this Contract shall be
construed as granting the receiving party whether by implication, estoppel, or
otherwise, any license or any right to use any Proprietary Information received
from the disclosing party, or use any patent, trademark, or copyright now or
hereafter owned or controlled by the disclosing party.

 

- 97 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 32 – INTELLECTUAL PROPERTY RIGHTS

 

32.1 Ownership of IP and IP Rights

 

  32.1.1 Purchaser’s Intellectual Property

 

  A. Subject to the licenses granted in Article 32.2.2, all Background and
Foreground Intellectual Property made, developed, or created by Purchaser (or by
others, other than Contractor or any of its subcontractors, acting on behalf of
Purchaser), and all Intellectual Property Rights therein, shall be the sole and
exclusive property of Purchaser.

 

  B. Subject to the licenses granted in Article 32.2.2.B, Purchaser shall own
all Intellectual Property developed or created by Contractor (or its
subcontractors) that is ATC IP, and all Intellectual Property Rights therein,
shall be the sole and exclusive property of Purchaser. To the extent ATC IP is
developed or created by Contractor under this Contract, Contractor hereby
assigns all right, title and interest in and to all such ATC IP and, at
Purchaser’s request and expense, Contractor agrees to provide all reasonable
cooperation to help Purchaser perfect those rights, including the filing of
patents by Purchaser.

 

  32.1.2 Contractor’s Intellectual Property

 

  A. Subject to the licenses granted in Article 32.2.1, all Background
Intellectual Property, developed or created by Contractor (or its
subcontractors), and all Intellectual Property Rights therein, shall be the sole
and exclusive property of Contractor.

 

  B. Subject to the licenses granted in Article 32.2.1, all Foreground
Intellectual Property excluding any ATC IP, developed or created by Contractor
(or its subcontractors), and all Intellectual Property Rights therein, shall be
the sole and exclusive property of Contractor.

 

  C.

Contractor agrees that the obligations set forth in Article 31.2, subject to the
exceptions set forth in Article 31.1.2, shall apply to Contractor with

 

- 98 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

respect to the handling and use of Purchaser-specific information contained in
any Deliverable Data, Contract Exhibits and Attachments thereto, without regard
to the time limitation set forth therein.

 

32.2 License Rights

 

  32.2.1 Grant by Contractor

 

  A. Subject to the terms and conditions stated herein, Contractor grants to
Purchaser a fully paid-up, irrevocable, perpetual, worldwide, nonexclusive right
and license to use and have used, reproduce, and modify and sublicense to an
Affiliate for the sole and exclusive purpose of testing, operating, and/or
maintaining any Deliverable Item (including Deliverable Data), all Contractor
Background Intellectual Property and Foreground Intellectual Property (excluding
ATC IP) incorporated into such Deliverable Items (for the purposes of this
paragraph A, Deliverable Items includes Contract Exhibits and Attachments
thereto), including, to the extent necessary for the limited purpose of this
license, those associated Intellectual Property Rights therein, now or hereafter
owned by Contractor (and/or its subcontractors) for which Contractor (and/or its
subcontractors) has or may acquire the right to grant such a license. Purchaser
shall have no rights in Deliverable Data other than as expressly stated in this
Contract, except that, subject to compliance with the provisions of Article 7
hereof, Purchaser may provide portions of the Deliverable Data related to
operation or performance of the Satellite’s payload as is commercially necessary
and reasonable to market and sell the Satellite capacity to Purchaser’s
customers and potential customers. Title to Deliverable Data shall not pass to
Purchaser or any other entity pursuant to the terms hereof, except to the extent
that such Deliverable Data includes ATC IP.

 

  B.

Subject to the terms and conditions stated herein and in addition to the rights
granted to Purchaser pursuant to Article 32.1.1.B and 32.2.1.A, Contractor
grants to Purchaser a fully paid-up, irrevocable, perpetual,

 

- 99 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

worldwide, nonexclusive right and license to use and have used, reproduce, and
modify and sublicense to an Affiliate for the sole and exclusive purpose of
running its satellite program (including procurement of additional satellites
from vendors other than Contractor) Exhibit A, Statement of Work, and Exhibit B,
Satellite Performance Specification, including to the extent necessary for the
limited purpose of this license, all associated Intellectual Property Rights
therein now or hereafter owned by Contractor (and/or its subcontractors) for
which Contractor (and/or its subcontractors) has or may acquire the right to
grant such a license. The foregoing licenses shall be transferable to the
Financing Entities, any successor or permitted assign of Purchaser, and any
third party pursuant to Articles 23.1.3 or 38.12 and, subject to Contractor’s
prior written approval, which approval shall not be unreasonably withheld,
conditioned or delayed, any other entity.

 

  C. Right to Sublicense. The rights of Purchaser specified in this Article
32.2.1 to “have used” shall be construed, without limitation, so as to permit
sublicensing by Purchaser to its Affiliates and/or providers of Telemetry,
Tracking and Command (“TT&C”) services for the Satellite (and such service
providers’ subcontractors), subject in all cases to all of the provisions of
Article 32.2.1 and Article 7.

 

  32.2.2 Grant by Purchaser

 

  A. Subject to the terms and conditions stated herein, Purchaser grants to
Contractor a fully paid-up, irrevocable, perpetual, worldwide, non-exclusive
right and license to use and have used for the sole and exclusive purpose of
performing under this Contract, all Purchaser Background Intellectual Property,
and Foreground Intellectual Property (other than ATC IP which is subject to
Article 32.2.2.B), including, to the extent necessary for the limited purpose of
this license, those associated Intellectual Property Rights therein, owned by
Purchaser (or others acting on behalf of Purchaser) for which Purchaser has or
may acquire the right to grant such a license.

 

- 100 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  B. Purchaser grants to Contractor a fully paid-up, irrevocable, perpetual,
worldwide, non-exclusive right and license to use and have used all rights
relating to the ATC IP developed or created by Contractor (or its
subcontractors).

 

  32.2.3 Subcontracts. Contractor shall, unless otherwise authorized or directed
in writing by Purchaser, to the extent necessary to fulfill its obligations
under this Article 32.2 hereof, use reasonable efforts as practical to include
in each subcontract issued hereunder a license rights clause pursuant to which
each such subcontractor will grant to Purchaser (through Contractor) license
rights in Intellectual Property incorporated in Deliverable Items hereunder and
which Intellectual Property is developed by such subcontractor, and all
associated Intellectual Property Rights therein, to the same extent as the
license rights granted by Contractor in this Article 32.2. Contractor’s failure
to include such provision in any subcontract shall not limit Contractor’s
obligation to provide Purchaser with the license rights granted in this Article
32

 

32.3 No Limitation on Deliverable Items

This Article 32 shall not be construed as limiting any right of Purchaser
otherwise contained herein or at law (or any obligation of Contractor to grant
Purchaser the right) with no payment of additional compensation to use, have
used, deliver, lease, sell, or otherwise dispose of the Satellite or other
Deliverable Item of hardware or any part thereof.

 

32.4 No Additional Deliverable Data Obligation

Nothing contained in this Article shall require Contractor to provide any data
other than as set forth in Exhibit A, Statement of Work.

 

- 101 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 33 – PUBLIC RELEASE OF INFORMATION

 

33.1 Generally

Either Party intending to disclose publicly, whether through the issuance of
news releases, articles, brochures, advertisements, prepared speeches or other
information releases, information concerning the financial details of this
Contract or Proprietary Information of the other Party regarding the Work shall
obtain the prior written approval of the other Party with respect to the content
and timing of such issuance.

 

33.2 Exceptions

The obligations set forth in Article 33.1 shall not apply to the following:

 

  A. information that is publicly available from any governmental agency or that
is or otherwise becomes publicly available without breach of this Contract; and

 

  B. internal publications or releases which are clearly marked as not intended
for the public at large.

 

- 102 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 34 – NOTICES

 

34.1 Written Notification

Each notice or correspondence required or permitted to be given or made
hereunder shall be in writing (except where oral notice is specifically
authorized) to the respective addresses, facsimile and telephone numbers and to
the attention of the individuals set forth below, and any such notice or
correspondence shall be deemed given on the earlier to occur of (i) actual
receipt, irrespective of whether sent by post, facsimile transmission (followed
by mailing of the original copy), overnight courier or other method, and
(ii) seven (7) days after mailing by registered or certified mail, return
receipt requested, postage prepaid.

 

  In the case of Purchaser:    

TerreStar Networks Inc.

   

12010 Sunset Hills Road Suite 900

   

Reston, VA 20190

    Attn: [***]     Facsimile No.: 703-483-7978     With a separately delivered
copy to:    

TerreStar Networks Inc.

   

12010 Sunset Hills Road Suite 900

   

Reston, VA 20190

    Attn: [***]     Telephone No.: [***]     Facsimile No.: 703-483-7978     In
the case of Contractor:     Space Systems/Loral, Inc.     3825 Fabian Way    
Palo Alto, CA 94303-4697     Attn.: [***]     Telephone No.: [***]     Facsimile
No.: 650-852-9864  

 

- 103 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  With a separately delivered copy to:     Space Systems/Loral, Inc.     3825
Fabian Way     Palo Alto, CA 94303-4697     [***]     Telephone No.: [***]    
Facsimile No.: 650-852-9864  

 

34.2 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.

 

- 104 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 35 – RISK MANAGEMENT SERVICES

 

35.1 Purchaser Responsibility

Purchaser shall be responsible for procuring any Launch and in-orbit insurance
policy covering the risks of Launch and in-orbit failures with respect to
Partial Loss and Total Loss of the Satellite (“Launch and In-Orbit Insurance
Policy”) occurring from and after Intentional Ignition.

IN NO EVENT SHALL PURCHASER DISCLOSE OR TRANSFER CONTRACTOR- PROVIDED TECHNICAL
INFORMATION OR PROVIDE TECHNICAL/DEFENSE SERVICES BASED ON CONTRACTOR-FURNISHED
TECHNICAL INFORMATION TO NON-U.S. PERSONS INCLUDING INSURANCE BROKERS OR
UNDERWRITERS OR OTHER NON-U.S. PERSONS OR ENTITIES (AS DEFINED IN 22 C.F.R.
SECTION 120.15 AND SECTION 120.16) WITHOUT CONTRACTOR’S PRIOR WRITTEN APPROVAL
AND, WHERE REQUIRED, PRIOR APPROVAL OF THE U.S. GOVERNMENT.

 

35.2 Contractor Support

 

  35.2.1 Insurance Procurement. Contractor shall provide customary and normal
support to assist Purchaser in obtaining a Launch and In-Orbit Insurance Policy)
consisting of (i) providing a comprehensive presentation package on the
Satellite, suitable for presentation to the space insurance brokers and
underwriters, (ii) supporting Purchaser with all necessary presentations (oral,
written or otherwise), including attendance and participation in such
presentations where requested by Purchaser, (iii) providing on a timely basis
all reasonable and appropriate technical information, data and documentation,
and (iv) providing documentation and answers to insurer and underwriter
inquiries.

 

  35.2.2

Claims Support. Contractor shall cooperate with and provide reasonable support
to Purchaser making and perfecting claims for insurance recovery and as to any
legal proceeding as may be brought by Purchaser associated with any claim for
insurance recovery. Such support shall consist of (i) the support described in
Article 35.2.1, (ii) providing on-site inspections as required by Purchaser’s

 

- 105 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

insurers and underwriters, (iii) participating in review sessions with a
competent representative selected by the insurers and underwriters to discuss
any continuing issue relating to such occurrence, including information conveyed
to either Party, (iv) using its best efforts to secure access for the insurers
and underwriters to all information used in or resulting from any investigation
or review of the cause or effects of such occurrence, (v) making available for
inspection and copying all information (such copying subject to obtaining any
necessary copyright permissions) necessary to establish the basis of a claim,
and (vi) supporting Purchaser in establishing the basis of a total loss,
constructive total loss and partial loss as those terms are defined in the
Launch and In-Orbit Insurance Policy and provided Purchaser furnishes Contractor
with the definitions of such terms. Notwithstanding Contractor’s specifying such
basis, Purchaser shall make the final determination of whether a partial loss,
constructive total loss or total loss under Launch and In-Orbit Insurance Policy
has occurred. For all claims that may arise on or before Acceptance of the
Satellite as provided in Article 10 hereof, such Contractor support as described
above shall be provided within the overall price of this Contract; thereafter,
Contractor shall be entitled to reimbursement of actual costs reasonably
incurred in connection with the provision of such support plus a mark-up of ten
percent (10%), with such costs and markup to be invoiced and paid in accordance
with Article 5.

 

- 106 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 36 – ORDER OF PRECEDENCE

In the event of conflict among the terms of the Terms and Conditions (Preamble,
Recitals, and Articles 1 to 39) of this Contract and the Exhibits, the following
order of decreasing precedence shall apply:

 

•     Terms and Conditions

   (Preamble and Articles 1 through 39)

•     Exhibit E

   TerreStar 2 Payment Plan and Termination Liability Amounts

•     Exhibit F

   TerreStar Satellite Orbital Performance Incentive Payment Plan

•     Exhibit A

   Statement of Work

•     Exhibit B

   Satellite Performance Specification

•     Exhibit C

   Product Assurance Program Plan

•     Exhibit D

   Satellite Program Test Plan

•     Attachment A

   Form of Invoice (including Annex 1 and Schedule 1 to Annex 1)

•     Attachment B

   Key Personnel

 

- 107 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 37 – GENERAL

 

37.1 Assignment

 

  37.1.1 General. This Contract may not be assigned, either in whole or in part,
by either Party without the express written approval of the other Party. The
non-assigning Party shall provide its approval if in its reasonable judgment its
rights under this Contract are not and would not be adversely affected thereby.

 

  37.1.2 By Purchaser. Notwithstanding the foregoing, Purchaser may assign or
transfer this Contract or all its rights, duties, or obligations hereunder
(i) to any Affiliate of Purchaser provided that in the case of a transfer to an
Affiliate, the Affiliate has sufficient financial resources to fulfill its
obligations under this Contract, and the net worth of such Affiliate is not less
than the net worth of Purchaser immediately prior to such transfer, (ii) to any
or all Financing Entities in connection with obtaining financing for the payment
of Contractor’s invoices and any and all other fees, charges or expenses payable
under this Contract under any Financing Agreement; and (iii) as part of or in
connection with the granting of a security interest in its rights hereunder in
accordance with Section 37.1.4, , provided that in the case of clause (i), the
assignee, transferee, or successor to Purchaser has expressly assumed all the
obligations of Purchaser and all terms and conditions applicable to Purchaser
under this Contract in form and substance reasonably satisfactory to Contractor.

 

  37.1.3

By Contractor. Notwithstanding the foregoing, Contractor may assign or transfer
this Contract or all of its rights, duties, or obligations hereunder to: (i) any
Affiliate of Contractor, or (ii) any corporation in connection with the sale,
transfer or assignment of all or substantially all of Contractor’s assets or
capital stock, whether by way of merger, consolidation, or otherwise, subject to
the following conditions: (A) in the case of a transfer to an Affiliate, the net
worth of such Affiliate is not less than the net worth of Contractor immediately
prior to such transfer and, in the reasonable discretion of Purchaser such
Affiliate has the experience, resources, and personnel required to perform the
Work in accordance with this Contract; (B) in the case of a transfer or
assignment

 

- 108 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

 

contemplated in clause (ii), immediately after giving effect to such transaction
or series of related transactions, the net worth of Contractor (or in the event
Contractor is not the continuing person, the net worth of the person or entity
formed by such consolidation or into which Contractor is merged or to which its
properties are transferred substantially as an entirety) shall be no less than
the net worth of Contractor immediately before such transaction or series of
related transactions, and in the case of the sale of all or substantially all
the assets of Contractor, the assignee or transferee, in the reasonable
discretion of Purchaser, has the experience, resources and personnel required to
perform the Work in accordance with this Contract; and (C) the assignee,
transferee, or successor to Contractor has expressly assumed all the obligations
of Contractor and all terms and conditions applicable to Contractor under this
Contract in form and substance reasonably satisfactory to Purchaser.

 

  37.1.4 Security Interests. Either Party, upon prior written notice to the
other Party, may grant security interests in its rights hereunder. In the event
that either Party is sold to or merged into another entity, its responsibilities
under this Contract shall not be altered and the successor organization shall be
liable for performance of such Party’s obligations under this Contract.

 

37.2 Binding Effect

This Contract shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Assignment of this Contract
shall not relieve the assigning Party of any of its obligations nor confer upon
the assigning Party any rights except as provided in this Contract.

 

37.3 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 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.

 

- 109 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

37.4 Waiver of Breach of Contract

A waiver of any provision or any breach of a provision of this Contract shall
not be binding upon either Party unless the waiver is in writing, signed by a
duly authorized representative of the Party to be bound, as applicable, and such
waiver shall not affect the rights of the Party not in breach with respect to
any other or future breach. No course of conduct by a Party shall constitute a
waiver of any provision or any breach of a provision of this Contract unless a
written waiver is executed in accordance with the provisions of this Article
37.4.

 

37.5 Amendments

This Contract, including any and all its Attachments and Exhibits and
Appendices, may not be modified except by written instrument of subsequent date
signed by an officer of Contractor, or another person designated in writing by
any such officer to sign such an instrument and a senior vice president of
Purchaser, or another person designated in writing by any such Purchaser senior
vice president to sign such an instrument.

 

37.6 Captions

The captions contained herein are for purposes of convenience only and shall not
affect the construction of this Contract.

 

37.7 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.

 

- 110 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

37.8 Entire Agreement

This Amended and Restated Contract, including all its Attachments and Exhibits,
represents the entire understanding and agreement between the Parties hereto
with respect to the subject matter hereof, incorporates (to the extent still in
effect) the Original Contract as to all rights and obligations of whatever
nature related to the Deliverable Items and subject matter hereof (and as to
such Deliverable Items and subject matter hereof, any actions taken under the
Original Contract and any rights and/or liabilities accruing thereunder shall be
deemed to be actions taken and rights and/or liabilities accrued hereunder) and
supersedes all other prior agreements and negotiations with respect to the
subject matter hereof.

 

37.9 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.

 

37.10 Construction

This Contract, including all its Schedules, Attachments, Annexes, Exhibits and
the Appendices 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.

 

37.11 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.

 

37.12 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 reference to its conflicts of laws rules.

 

- 111 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

37.13 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.

 

37.14 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.

 

37.15 No Third-Party Beneficiaries

This Contract is entered into solely between, and may be enforced only by,
Purchaser and Contractor and their permitted assigns, and this Contract shall
not be deemed to create any rights in third parties, including suppliers,
customers and owners of a Party, or to create any obligations of a Party to any
such third parties.

 

37.16 Consents and Approvals

Except where expressly provided as being in the sole discretion of a Party,
where agreement, approval, acceptance, consent, or similar action by either
Party is required under this Contract, such action shall not be unreasonably
delayed or withheld. An approval or consent given by a Party under this Contract
shall not relieve the other Party from responsibility for complying with the
requirements of this Contract, nor shall it be construed as a waiver of any
rights under this Contract, except as and to the extent otherwise expressly
provided in such approval or consent.

 

37.17 Lender Requirements

 

  37.17.1 External Financing. The Parties recognize this Contract may be
financed through external sources. Contractor shall provide to any Financing
Entity the provisions of this Contract and any program information that such
Financing Entity reasonably requires (subject to confidentiality agreements
governing this Contract and such program information).

 

- 112 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

  37.17.2 Cooperation. Contractor agrees to work cooperatively to negotiate and
execute such documents as may be reasonably required to implement such financing
to the extent such financing or document does not impose any material
obligations not otherwise undertaken hereunder, require Contractor or its
Affiliates to violate any contractual obligations or covenants it may have with
third parties or adversely affect in any material respect Contractor’s interests
under this Contract.

 

37.18 Alignment of Interests

Contractor agrees to take no materially adverse position (in trade associations,
regulatory bodies, the press, or otherwise) with respect to Purchaser’s FCC
licenses or applications therefor associated with the Satellite or TerreStar 2.

 

37.19 Authorizations

Each Party represents and warrants (subject to Article 37.22 in the case of
Contractor) that:

 

  A. it has all requisite corporate power and authority to enter into this
Contract and to carry out the transactions contemplated by this Contract;

 

  B. the execution, delivery, and performance of this Contract and the
consummation of the transactions contemplated by this Contract have been duly
authorized by the requisite corporate action and do not conflict with any other
agreement or obligation to which it is a party or which binds its assets; and

 

  C. this Contract is a valid and binding obligation of the Party, enforceable
in accordance with its terms, except each Party makes no representation or
warranty as to the enforceability of remedies due to applicable bankruptcy,
insolvency, moratorium, reorganization, or similar laws relating to or affecting
the enforcement of creditor’s rights or by reason of general principles of
equity.

 

- 113 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

37.20 Covenant of Good Faith

Each Party agrees that, in respect to dealings with the other Party under or in
connection with this Contract, it shall act in good faith.

 

- 114 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 38 – SECURITY INTEREST

 

38.1 Grant of Security Interest

As security for the performance by Contractor of the Secured Obligations the
Contractor hereby grants to Purchaser, and pursuant to Section 364 of the
Bankruptcy Code, Purchaser shall have, a valid, binding, enforceable and
perfected first priority lien on and security interest in (collectively, the
“Security Interest”) all of Contractor’s right, title and interest in, to and
under the following property, whether now owned or hereafter acquired by
Contractor and whether now existing or hereafter coming into existence
(collectively, the “Collateral”):

A. all Raw Materials, Work-in-Process and Finished Goods; and

B. all proceeds (as defined in the UCC) of any of the foregoing.

Except as otherwise specifically provided herein, the Security Interest shall
not be subordinate or pari passu with any other lien or security interest or
right of setoff or recoupment, and no lien or security interest or right of
setoff or recoupment shall be permitted which shall be senior to or pari passu
with the Security Interest. The grant of the Security Interest pursuant to this
Article 38.1 is not in derogation of Purchaser’s rights as owner of any Raw
Materials, Work-in-Process and Finished Goods as to which title has passed to
Purchaser, and remains in Purchaser, as provided in this Contract. This Security
Interest shall automatically terminate upon Intentional Ignition or shall be
released and extinguished pursuant to Article 21.2, 23.1.2, 23.1.5 and 23.2.3.

 

38.2 Right to Make Filings

Should Purchaser, in its sole discretion (but not as a requirement hereunder),
from time to time choose to file financing statements or other notices,
instruments, agreement and documents or take other action to validate or perfect
the Security Interest and in furtherance of the grant of the Security Interest
pursuant to Article 38.1, Contractor shall, and does hereby irrevocably
authorize on behalf of Contractor and as Contractor’s attorney-in-fact to give,
execute, deliver, file, record, obtain, and authorize all financing statements
and any other notices, instruments, agreements and documents, and take such
other action as reasonably requested by Purchaser, to (i)

 

- 115 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

create, perfect, validate and preserve such Security Interest and the priority
thereof and (ii) enable Purchaser to exercise and enforce its rights hereunder
with respect to such Security Interest (and all such documents and instruments
shall be deemed to have been filed or recorded at the time and on the date of
the entry of the Bankruptcy Order).

 

38.3 Corporate Records

In furtherance of the grant of the Security Interest pursuant to Article 38.1,
Contractor shall indicate in Contractor’s corporate records the Security
Interest that Purchaser has in the Collateral to the extent provided in this
Article 38.

 

38.4 Perfected Security Interest

Contractor represents and warrants that the Security Interest granted to
Purchaser constitutes a legal, valid and enforceable first priority security
interest therein and upon the filing of UCC-1 financing statements in the office
of the Secretary of State of Delaware will be a perfected security interest in
those items that can be perfected by filing under the UCC subject to no other
liens or security interests other than after-acquired Junior Liens (as defined
below). Contractor acknowledges that Purchaser’s execution and delivery of this
Contract provides value to Contractor.

 

38.5 Junior Liens

Contractor shall not lend, rent, lease, transfer, pledge, grant a security
interest in, or otherwise dispose of or encumber any portion of the Collateral
or any right, title or interest therein except to Purchaser pursuant to this
Contract and Contractor shall keep the Collateral free from any security
interest, lien, encumbrance or claim. Notwithstanding the foregoing, Contractor
shall be permitted to grant “silent” junior liens (“Junior Liens”) on the
Collateral to secure indebtedness of Contractor and its Affiliates from time to
time, including without limitation reimbursement obligations in respect of
letters of credit (collectively, “Permitted Debt”), provided that the terms of
such Junior Liens shall be reasonably acceptable to Purchaser. Prior to granting
any Junior Lien on the Collateral, Contractor shall provide written notice to
Purchaser describing the circumstances of such Junior Lien (including without
limitation the identity of the proposed holder of such Junior Lien and the
nature of the Permitted Debt). Within ten

 

- 116 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

(10) Business Days after receipt of such notice, Purchaser shall provide the
terms for such Junior Lien that would be reasonably acceptable to Purchaser.
Contractor agrees and acknowledges that such reasonable terms may prohibit the
holder of such Junior Lien from seizing, foreclosing on, selling or otherwise
disposing of the Collateral or exercising other rights as a secured party, and
may include requirements that the holder of the Junior Lien hold in trust for
Purchaser any amounts received in respect of the Collateral, so long as the
Security Interest in favor of Purchaser remains in effect.

 

38.6 Periodic Inventory

Upon the reasonable request of Purchaser, Contractor shall provide Purchaser a
written inventory describing the Raw Materials, Work-in-Process and Finished
Goods as of the time of such request.

 

38.7 Remedies

Purchaser shall have and be entitled to exercise all the rights and remedies
with respect to the Collateral of a secured party under the UCC (whether or not
the UCC is in effect in the jurisdiction where Purchaser asserts the rights and
remedies), such additional rights and remedies as provided in this Contract, and
such additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where Purchaser may assert its rights and
remedies. Upon termination of this Contract pursuant to Article 23.1, or upon a
termination by Contractor under Article 23.2.4 that is determined to have been
wrongful, Purchaser shall have the right, subject to applicable export control
restrictions and security regulations, to take possession of the Collateral or
any part thereof upon ten (10) days notice to Contractor for the purpose of
effecting a sale or other disposition of the Collateral. Notwithstanding any
provision of this Contract to the contrary, Purchaser shall not be permitted to
exercise any remedy as a secured party in respect of the Security Interest
granted hereunder unless (i) Purchaser has terminated this Contract in whole
pursuant to, and within the time limits provided in, Article 23.1 or
(ii) Contractor has wrongfully terminated this Contract under Article 23.5, and
in either case, Purchaser retains a Security Interest as provided in this
Article 38 and Contractor has failed to perform its obligations in such
circumstances pursuant to Article 23 within thirty (30) days after required to
do so (with respect to Contractor, a “Termination Default”).

 

- 117 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

38.8 Deficiencies

If the proceeds of sale, collection or other realization of or upon the
Collateral pursuant to Article 38.7 or otherwise are insufficient to cover the
amounts due in clauses (i) and (ii) of the first sentence of Article 38.9,
Contractor shall remain liable for any deficiency. Purchaser shall not incur any
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Article 38.7 conducted in a commercially reasonable
manner and otherwise in compliance with the UCC and applicable export control
restrictions. Contractor hereby waives any claims against Purchaser arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price that might have been obtained at a
public sale or was less than the aggregate amount of the Secured Obligations,
even if Purchaser accepts the first offer received and does not offer the
Collateral to more than one offeree, so long as the sale was conducted in a
commercially reasonable manner.

 

38.9 Application of Proceeds

The Proceeds of any collection, sale or other realization of all or any part of
the Collateral pursuant to Article 38.7 shall be applied in the following order:
(i) first, to the payment of the reasonable costs and expenses of such
collection, sale or other realization; (ii) second, to the payment in full of
the Secured Obligations, and (iii) third, to the payment to the Contractor, or
its respective successors or assigns, or as a court of competent jurisdiction
may direct, of any surplus then remaining.

 

38.10 Limited Power of Attorney

Without limiting any rights or powers granted by this Article 38 to Purchaser
while no Termination Default has occurred and is continuing, upon the occurrence
and during the continuance of any Termination Default, Purchaser is hereby
appointed the attorney-in-fact of Contractor for the purpose of carrying out the
provisions of this Security Interest and taking any action and executing any
instruments that Purchaser may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest.

 

- 118 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

38.11 Contractor Cooperation

Contractor agrees that, from time to time upon the written request of the
Purchaser, Contractor will execute and deliver such further documents and do
such other acts and things as Purchaser may reasonably request in order fully to
effect the purposes of this Article 38.

 

38.12 Intellectual Property Rights

In connection with the exercise by Purchaser of its rights as a secured party
hereunder, Contractor hereby grants to Purchaser, to any person acquiring rights
in the Collateral as the result of the sale, collection or other realization of
or upon the Collateral, and to any successor owner of the Collateral, the
Intellectual Property rights and rights in data specified in Article 36, which
rights shall survive any termination of this Contract.

 

38.13 Allowed Administrative Expenses

The Secured Obligations of Contractor and the rights, claims and priorities of
Purchaser granted herein shall continue beyond and remain unimpaired and
unaffected by any termination of this Contract.

 

- 119 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ARTICLE 39 – STORAGE

Set forth below are options under which Purchaser may elect to store the
Satellite for up to eighteen (18) months and the associated storage and retest
costs. Details regarding the required retesting after various storage periods
are set forth in Exhibit D, Test Plan. No later than March 1, 2008, Contractor
agrees to provide Purchase with a commercially reasonable option to extend the
storage period for up to five additional years. Such proposal shall be given in
good faith and shall be consistent with FCC requirements.

 

    

<1 month

  

1-3 months

  

4-12 months

  

13 -18 months

Storage cost/month

   [***]    $[***]    $[***]    $[***]

Retest cost

   [***]    $[***]    $[***]    $[***]

 

- 120 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties have executed this Amended and Restated Contract
by their duly authorized officers as of the date set forth in the Preamble.

 

Space Systems/Loral, Inc.    TerreStar Networks Inc. By:  

/s/ R. A. Haley

   By:  

/s/ Neil Hazard

Name:   R. A. Haley    Name:   Neil Hazard Title:   Sr. V. P. and CFO    Title:
  Chief Financial Officer

 

- 121 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ATTACHMENT A

FORM OF INVOICE

[Date]

TerreStar Networks Inc.

12010 Sunset Hills Road

Suite 900

Reston, VA 20190

Attention:                     

 

  RE: Terms and Conditions of the Satellite Purchase, dated as of
                     (as amended, supplemented or modified from time to time,
the “TerreStar Satellite Purchase Contract”), between TERRESTAR NETWORKS INC,
(“PURCHASER” OR “TERRESTAR”) and SPACE SYSTEMS/LORAL, INC. (“CONTRACTOR”)

Ladies and Gentlemen:

This Invoice is delivered to TerreStar pursuant to Article 5 of the TerreStar
Satellite Purchase Contract and constitutes Contractor’s request for payment in
the amount of $                     for Milestone Payment No.
                     / Time Payment No.             .

Very truly yours,

 

SPACE SYSTEMS/LORAL, INC.

By:

 

 

Title:

 

 

 

- 122 -

[Use or disclosure of the data contained on this page is subject to the
restrictions set forth in this Contract.]

--------------------------------------------------------------------------------

ANNEX I TO ATTACHMENT A

FORM OF CONTRACTOR CERTIFICATE

Reference:        Milestone Payment No.         /Time Payment No.         

[Date]

 

TerreStar Networks Inc. 12010 Sunset Hills Road, Suite 900 Reston, VA 20190

Attention: Treasurer

 

  RE: Terms and Conditions of the Satellite Purchase Contract, dated as of
                     between TERRESTAR NETWORKS INC. (“PURCHASER” OR
“TERRESTAR”) and SPACE SYSTEMS/LORAL, INC. (“CONTRACTOR”) (as amended,
supplemented or modified from time to time, the “TerreStar Satellite Contract”)

Ladies and Gentlemen:

This Certificate is delivered to you pursuant to Article 5 of the Terms and
Conditions of the TerreStar Satellite Contract. Each capitalized term used
herein and not otherwise defined shall have the meaning assigned thereto in the
Terms and Conditions of the TerreStar Satellite Contract.

We hereby certify, after due inquiry, that, as of the date hereof:

 

1. The TerreStar Satellite Purchase Contract is in full force and effect and
except as set forth in Schedule I hereto.

 

2. Except as set forth in Schedule I hereto, we are not aware of any event that
has occurred or failed to occur which occurrence or non-occurrence, as the case
may be, could reasonably be expected to cause the date of Delivery of any
Deliverable Item under the TerreStar Satellite Contract to occur later than the
Delivery date therefor.

 

3. Except as set forth in Schedule I hereto, no event or condition is known to
exist that permits or requires us to cancel, suspend, or terminate our
performance under the TerreStar Satellite Contract or that could excuse us from
liability for non-performance thereunder.

 

4. Except with respect to amounts that are the subject of a Dispute or are
overdue (such overdue amounts and such disputed amounts being described in
reasonable detail in Schedule II hereto), all amounts due and owing to us have
been paid in full through the date of the immediately preceding Contractor
Certificate and are not overdue.

 

A-I-123

--------------------------------------------------------------------------------

5.            a.      The amount contained in the Invoice delivered to you
concurrently herewith in accordance with the terms of Article 5 of the Terms and
Conditions of the TerreStar Satellite Contract represents monies owed to us in
respect of Milestone Payment No.         /Time Payment No.         .    b.     
The amount referred to in paragraph (a) above was computed in accordance with
the terms of the TerreStar Satellite Purchase Contract.    c.      The Milestone
to which Milestone Payment No.          relates has been completed in accordance
with the TerreStar Satellite Contract (this only applies to invoices for
Milestone payments).

Very truly yours,

SPACE SYSTEMS/LORAL, INC. By:  

 

Title:  

 

A-I-124

--------------------------------------------------------------------------------

SCHEDULE I TO ANNEX I TO

ATTACHMENT A

List of Exceptions:

Amendments to TerreStar Satellite Purchase Contract:

Exceptions Affecting Final Acceptance Date:

Exceptions Affecting Contractor’s Performance:

 

A-I-125

--------------------------------------------------------------------------------

ATTACHMENT B

KEY PERSONNEL

 

Key Personnel Position

 

Individual

[***]   [***] [***]   [***] [***]   [***] [***]   [***] [***]   [***]

 

B-I-126

--------------------------------------------------------------------------------

Exhibit A

TerreStar

Satellite Statement of Work

 

 

Revision 4

   November 16, 2007   

 

Space Systems/Loral, Inc.    3825 Fabian Way    Palo Alto, California 94303-4201
  

 

TerreStar Networks Inc.    One Discovery Square    Suite 900    12010 Sunset
Hills Road    Reston, Virginia 20190   

 

This document contains data and information proprietary to Space Systems/Loral,
Inc. and TerreStar Networks Inc. This data is being furnished pursuant to the
provisions of the Contract between TerreStar Networks Inc. and Space
Systems/Loral, Inc. for the TerreStar Satellite Program. Space Systems/Loral,
Inc. and TerreStar Networks Inc. shall have the right to duplicate, use or
disclose the data and information to the extent specified in the Purchase
Contract.

The data/information contained herein has been reviewed and approved for release
by Space Systems/Loral Export Administration on the basis that this document
contains no export-controlled information.

Revision 4

11/16/07

Exhibit A

1/46

--------------------------------------------------------------------------------

DEFINITIONS, ABBREVIATIONS AND ACRONYMS

Definitions: Capitalized terms used in this Exhibit A (Satellite Statement of
Work) shall have the meaning ascribed to them as they appear herein or as
defined in the Contract.

Abbreviations and Acronyms:

 

AIT

  Assembly, Integration and Test

ALC

  Automatic Level Control

BOL

  Beginning of Life

C/I

  Carrier to Interference ratio

CDR

  Critical Design Review

CDRL

  Contract Data Requirements List

CIL

  Configuration Identification List

CLA

  Coupled Loads Analysis

CONUS

  Continental United States

COP

  Contingency Operations Procedure

DSS

  Dynamic Satellite Simulator

EDC

  Effective Date of Contract

EIDP

  End Item Data Package

EIRP

  Equivalent Isotropic Radiated Power

EMI/EMC

  Electromagnetic Interference/Electromagnetic Compatibility

EOL

  End of Life

EPS

  Electrical Power Subsystem

ESD

  Electrostatic Discharge

EST

  Emergency Support Team

FAX

  Facsimile

FCC

  Federal Communications Commission

FGM

  Fixed Gain Mode

FMECA

  Failure Modes, Effects and Criticality Analysis

G/T

  Gain to Noise Temperature ratio (Figure of merit)

GSE

  Ground Support Equipment

HOP

  Health Operations Procedure

IAW

  In Accordance With

ICD

  Interface Control Document or Drawing

IFRB

  International Frequency Registration Board

IOT

  In-Orbit Test

IOTE

  In-Orbit Test Equipment

IOTR

  In-Orbit Test Review

ITU

  International Telecommunications Union

 

Revision 4

11/16/07

Exhibit A

1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

LEOP   Launch and Early Orbit Phase LV   Launch Vehicle MCC   Mission Control
Center (at SS/L in Palo Alto, CA) MOP   Mission Operations Plan NCR  
Non-Conformance Report OML   Orbit Maneuver Life PA   Product Assurance PAPP  
Product Assurance Program Plan PDR   Program Development Review PIM   Passive
Intermodulation PMO   Program Management Office PMP   Program Management Plan
POC   Point of Contact PRR   Program Readiness Review PTP   Program Test Plan RF
  Radio Frequency RFP   Request for Proposal SAR   Satellite Acceptance Review
S/C   Spacecraft SFD   Saturated Flux Density SLRR   Spacecraft Launch Readiness
Review SOC   Satellite Operations Center SOE   Sequence of Events SOOH  
Satellite Orbital Operations Handbook SOP   Standard Operations Procedures SOW  
Statement of Work SPSR   Spacecraft Pre-shipment Review SPTP   Satellite Program
Test Plan SRR   System Requirements Review T&C   Telemetry and Command TAA  
Technical Assistance Agreement TBD   To Be Determined TBR   To Be
Revised/Reviewed TC&R   Telemetry, Command & Ranging TIM   Technical Interchange
Meeting TRR   Test Readiness Review TT&C   Telemetry, Tracking, & Command TTCP  
Technology Transfer Control Plan TWT   Traveling Wave Tube TWTA   Traveling Wave
Tube Amplifier WCA   Worst Case Analysis

 

Revision 4

11/16/07

Exhibit A

2

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

1 — SCOPE

This Statement of Work (SOW) defines the goods, hardware, equipment, services,
data and documentation to be provided by Space Systems/Loral, Inc. (hereinafter
“Contractor”) to TerreStar Networks Inc., (hereinafter “Purchaser”) for the
TERRESTAR-2 (TS-2) Satellite Program (hereinafter “Program”).

Contractor shall design, develop, manufacture, test, and transport the Satellite
to the Launch Site, prepare the Satellite for Launch, ensure Launch
Vehicle-spacecraft interface compatibility, provide Launch Services (provided
Purchaser exercises its Option for Launch Services in accordance with the
Contract) and Launch Support Services, Mission Operations Services, In-Orbit
Testing and associated spacecraft subsystems and Satellite operations training.
Contractor shall complete the Work in accordance with the Contract and the
requirements specified herein.

1.1 SUMMARY STATEMENT OF WORK

 

  a. Contractor shall conduct the Program as follows.

 

  •  

TS-2 shall be identical to TS-1 satellite, except for any changes that are
mutually agreed upon between Contractor and Purchaser, through Contract Change
Notifications (CCN) or otherwise through the change procedures specified in the
Contract.

 

  •  

The orbit location for TS-2 shall be assumed to be 111.0 deg West. Any changes
to the orbit location that requires a redesign of the satellite shall be
considered a change directed by Purchaser.

 

  b. Contractor shall provide one satellite (TS-2) meeting the Satellite
Performance Specifications, Exhibit B of the Contract, and tested in accordance
with (IAW) the Satellite Program Test Plan (SPTP), Exhibit D.

 

  c. Contractor shall, as directed by Purchaser, either store the satellite at
its facilities or deliver the Satellite to a Purchaser designated Launch Site.
Contractor shall be responsible for packaging, crating, and shipping the
Satellite to the Launch Site.

 

  d. Contractor shall provide necessary Ground Support Equipment (GSE) to permit
full checkout and test of the Satellite during acceptance testing and pre-launch
operations, as required.

 

  e. Contractor shall provide necessary Telemetry, Tracking, and Command (TT&C)
ground station capability to ensure proper functioning of the Satellite during
transfer orbit.

 

Revision 4

11/16/07

Exhibit A

3

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  f. Purchaser shall provide ground facilities, equipment, and personnel to
support Contractor in conducting In-Orbit Testing (IOT).

 

  g. Contractor shall provide training to familiarize Purchaser’s experienced
operations personnel with the systems and subsystems, and operation of the
Satellite.

 

  h. Contractor shall provide launch support services and the personnel, data
and documentation to support pre-launch activities and launch support services.

 

  i. Contractor shall provide Launch and Early Orbit Operations support (except
as set forth in Paragraph 2.6 of this SOW) from spacecraft-Launch Vehicle
separation through to completion of IOT, and post-IOT On-Orbit Operations
Support. Mission Operations during this period shall be performed and controlled
from Contractor’s Mission Control Center (MCC).

 

  j. Contractor shall provide data items as specified in the Contract Data
Requirements List (CDRL), Annex 1 of this SOW.

 

  k. Contractor shall conduct a product assurance program in accordance with
(IAW) the Commercial Programs Product Assurance Program Plan (PAPP), Exhibit C.

 

  l. Contractor shall provide Telemetry and Command Databases for the Satellite.

 

  m. Contract shall provide [***] per the Contract.

1.2 PROGRAM OPTIONS

Program options are per the Contract.

1.3 PROGRAM REQUIREMENTS

The Program shall be conducted as described herein.

1.3.1 CDR: System Engineering, Design and Development

Any design changes made to TS-2 from TS-1 shall have a detailed design review
covering the changes and presenting performance impacts to mass, power, thermal
and payload as applicable. All changes shall be supported by analysis as
required to verify that the change will function as required. Changes that are
initiated by Contractor shall not result in any cost and schedule impact to the
program.

1.3.2 Spacecraft Production and Deployment

Contractor shall perform the tasks associated with the manufacture, assembly,
integration and test of the Satellite. After successful completion of the PSR,
as directed by TerreStar, Contractor shall either

 

Revision 4

11/16/07

Exhibit A

4

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

store the Satellite or ship the Satellite to the Launch Site. After Launch of
the Satellite and subsequent IOTR, Contractor shall hand over the Satellite on
station in the orbital location as specified in the Exhibit B, Satellite
Performance Specifications, ready for service.

Contractor shall perform the following tasks:

 

  1. Manufacture and test the Satellite (TS-2) in accordance with the detailed
governing specifications (spacecraft bus and payload), plans, and interface
documents applicable to TS-1 spacecraft, which includes having Contractor’s
personnel (including any subcontractors) performing Work under this SOW assist
Contractor’s personnel performing Work under the SBN/SBAS Contract to ensure the
compatibility of the spacecraft with the beamformer.

 

  2. Provide, as required, test data on the Satellite to the Purchaser to ensure
overall system compatibility with the ground based beamformer.

 

  3. Initiate and complete spacecraft assembly, integration and acceptance
testing

 

  4. Deliver the Satellite to the Launch Site

 

  5. Provide Launch Support Services, including spacecraft preparation and test
at the Launch Site, coordination with the Launch Vehicle supplier,
spacecraft-Launch Vehicle interface and mate, and launch support

 

  6. Provide Mission Operations Support Services from spacecraft-Launch Vehicle
separation through transfer orbit, to In-Orbit Testing (IOT)

 

  7. Conduct technical reviews as required for any change.

 

  8. Evaluate impact of final determination of orbital location (at (TBD)
degrees West) on the antenna performance for Hawaii and Puerto Rico beams and
reposition if required or beneficial.

 

  9. Update antenna performance analysis (e.g., Gain, Xpol, pattern plots,
sidelobes at radio astronomy sites) to reflect the final determination of
orbital location at (TBD) degrees West. The update is to be incorporated in the
release following REDC.

 

  10. Update SOOH Vol I to incorporate changes in final orbital and gateway
locations as set forth in Exhibit B (Specifications). The update is to be
incorporated in the release following REDC.

 

Revision 4

11/16/07

Exhibit A

5

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2 — PROGRAM REQUIREMENTS

The requirements for the goods, hardware, equipment, services, data, and
documentation to be provided by Contractor are set forth herein.

Applicable Program Documents

The following Contract exhibits, listed in order of precedence, apply to the
Program. The Terms and Conditions lists the applicable version and/or issue date
of these exhibits:

Exhibit A — Satellite Statement of Work (this document)

Exhibit B — Satellite Performance Specifications

Exhibit C — Commercial Programs Product Assurance Program Plan

Exhibit D — Satellite Program Test Plan

2.1 PROGRAM MANAGEMENT

Contractor shall provide management throughout the Program, and progress
reporting as specified herein.

2.1.1 Program Management Office

Contractor shall establish a Program Management Office (PMO) led by an assigned
Program Manager who shall be responsible for managing all matters related to the
performance of the Contract. The Program Manager shall ensure that personnel,
facilities and other resources necessary for executing Contract provisions are
acquired, assigned and made available at the times and places needed to meet the
Contract delivery schedule. Contractor shall assign experienced technical and
managerial personnel to the PMO.

2.1.2 Progress Reporting and Meetings

Contractor shall hold weekly status teleconferences and formal, scheduled,
progress review meetings throughout the duration of the Program. Purchaser
personnel (and Purchaser’s duly appointed consultants and agents) shall be
entitled to attend the meetings and reviews (including meetings and reviews held
by electronic means) of Contractor and of Contractor with any subcontractor(s)
hereunder where such meetings and reviews (or portions of such meetings and
reviews) are related to

 

Revision 4

11/16/07

Exhibit A

6

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Purchaser’s project schedule, management, engineering, design, manufacturing,
integration, testing, or Launch. Contractor shall plan (including provision to
Purchaser of an agenda within a reasonable period in advance of the meeting or
review), organize (including arranging access for Purchaser and its duly
appointed consultants and agents), conduct (including the taking of minutes and
action items) and close the meetings (including circulation of the minutes and
action items within a reasonable period following the meeting), and, unless
mutually agreed to the contrary, all meetings shall be held at Contractor’s
facilities. The purpose of these meetings is to provide Purchaser with pertinent
Program implementation and execution data for review, and to mutually agree upon
appropriate courses of action to be taken on identified action items. The
following meetings shall be held as specified in Paragraph 2.4 of this SOW:

 

  •  

Quarterly Program Status Meetings

 

  •  

Program Readiness Review (PRR, Inaugural Meeting, Pre-CDR) – N/A

 

  •  

Program Development Review (PDR, Pre-CDR) – N/A

 

  •  

Critical Design Review (CDR), as required

 

  •  

Satellite Technical Reviews (STRs), as required

 

  •  

Test Readiness Review (TRR)

 

  •  

Spacecraft Pre-Shipment Review (SPSR)

 

  •  

Spacecraft Post Shipment Inspection

 

  •  

Spacecraft Launch Readiness Review (SLRR)

 

  •  

In-Orbit Test (IOT) Review (IOTR), and Handover )

Other meetings, e.g., Technical Interchange Meeting (TIM), as may be requested
by Purchaser, including their location, date/time, purposes and content, shall
be established by mutual agreement.

2.2 DELIVERABLE DATA ITEMS

Contractor shall provide the data items listed in Annex 1, Contract Data
Requirements List (CDRL), of this SOW. The location for delivery of data items
shall be as specified in the Contract or as

 

Revision 4

11/16/07

Exhibit A

7

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

otherwise mutually agreed. All deliverable data items shall comply with standard
commercial practice. Contractor shall submit changes to delivered data items (at
Contractor’s option) either as a complete revised edition of the delivered item,
or as change insertion sheets with a matrix indicating the latest revision
status of each page of the document.

Contractor shall submit CDRL data items for Purchaser approval/acceptance or
information as specified in Annex 1. “Approval” document delivery shall be as
specified in the Contract. Purchaser shall notify Contractor in writing that any
such Deliverable Data requiring Purchaser approval has been accepted/approved
(“Acceptance” with respect to each such item of Deliverable Data), or that such
Deliverable Data does not comply with the applicable requirements, identifying
each such non-conformance (with reference to the applicable requirement of the
Statement of Work deemed not met). Contractor shall promptly correct any
non-compliant aspect of such Deliverable Data identified in such notice from
Purchaser, and re-submit it to Purchaser for a second acceptance inspection. The
provisions of this paragraph shall thereafter apply to the corrected Deliverable
Data. If Purchaser fails to provide notice within the time specified, Acceptance
shall be deemed to have occurred with respect to such Deliverable Data.

“Information” documents shall be delivered to Purchaser Resident Representative
if assigned, or forwarded directly to Purchaser.

Purchaser access to other Program-related data under this Contract shall be
provided IAW Contractor’s and its subcontractor’s normal and customary
proprietary and security policies and regulations. Purchaser personnel (and
Purchaser’s duly appointed consultants and agents) shall have reasonable access
at the facilities of Contractor and its subcontractors to (and copies when
reasonably requested by Purchaser of) all data and documentation relevant to the
Work or Work-in-progress, including but not necessarily limited to Unit Design
Review Packages, Subsystem and Unit Specifications, System, Subsystem and Unit
Test Plans, test and qualification data and test reports, parts screening and
workmanship standards, subsystem and unit EIDPs. In addition, Purchaser (and
Purchaser’s duly appointed consultants and agents) shall be able to attend all
the Major Subcontractor’s meetings and design reviews.

Any data or documentation provided hereunder shall be in the English language
and, if in electronic form, shall be embodied in, or in a form compatible with,
commercially available software.

 

Revision 4

11/16/07

Exhibit A

8

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Electronic Access.

With respect to electronically generated information, Contractor will provide
Purchaser and Purchaser’s consultants, agents and sub-contractors with a copy of
and/or electronic access (via the Internet, Contractor e-mail, proprietary or
otherwise, or as agreed upon) to such information as is necessary to keep
Purchaser advised, on a current basis, of Program issues, decisions, and
problems. Contractor shall provide Purchaser personnel (and Purchaser’s duly
appointed consultants and agents) access to Contractor’s electronic mail systems
through the Internet. If requested in writing by Purchaser, Contractor shall
establish secure data links between its and Purchaser’s facilities such that
Purchaser has remote electronic access to all documentation generated in
performance of the Work and entered into Contractor’s documentation and data
management system; provided, however, Contractor shall be required to provide
such links for a high-data transfer rate (such as for Satellite telemetry) only
on an as needed basis, with each Party bearing the costs of establishing the
link at its end.

Contractor will also provide Purchaser personnel (and Purchaser’s duly appointed
consultants and agents) at no cost with “real time” access to all measured data
for the Work taken at the facilities of Contractor and/or its subcontractors
hereunder.

2.2.1 Program Management Plan (CDRL 01)

Contractor shall submit a Program Management Plan (PMP) IAW CDRL 01 that
describes Contractor’s Program organization, general management, and technical
baseline management. The major topics of the PMP shall be as a minimum:

 

  a. SS/L TERRESTAR Program Management Office

1) Program Management Office (PMO) Organization Chart

2) Key PMO personnel roles and responsibilities

3) Major Subcontractor(s)

 

  b. Program Management

 

  1. Contract Monitoring and Control

 

  2. Schedule Status and Control

 

  3. Configuration and Data Management

 

  4. Action Item Control

 

  5. Meeting Coordination

 

  6. Progress Reporting

 

  c. Technical Management

 

  1. System Engineering

 

  2. Product Assurance Plan

 

Revision 4

11/16/07

Exhibit A

9

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  3. Reliability Program

 

  4. Satellite Program Test Plan

 

  5. Technical Reviews (Design, Readiness)

 

  6. Subcontract Management

 

  7. Contract Work Breakdown Structure

 

  8. Contract Data Requirements List

 

  9. Shipping, Transportation and Storage

 

  10. Purchaser’s Resident Field Office

 

  d. Spacecraft Development

 

  1. Subsystem/Unit Model Philosophy and Development Plan

 

  (a) Subsystem/Unit Make/Buy Plan with Heritage

 

  (b) Subsystem/Unit Qualification Status

 

  (c) Heritage List

 

  (d) Spares Provision

Technical Parameter Control

 

  (a) Mass Properties

 

  (b) Power Budget

 

  (c) Antenna Pointing Error Budget

 

  (d) Propellant Budget

 

  (e) Payload Link Budgets

 

  (f) Telemetry, Command and Ranging (TC&R) Link Budgets

2.2.2 Program Master Schedule (CDRL 02)

Contractor shall provide a Program Master Schedule, CDRL 02, that establishes
and maintains the Contract delivery schedule (“Baseline Schedule”). The Master
Schedule shall be updated monthly and shall accurately track progress of Program
events or milestones against the Baseline Schedule:

 

  a. Hardware and software deliveries

 

  b. Subcontractor events and deliveries

 

  c. Major program reviews

 

  d. Subsystem and unit level acceptance test, and qualification tests, if any
for redesigned or changes parts as required

 

  e. System level verification tests

 

Revision 4

11/16/07

Exhibit A

10

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  f. Pre-launch, launch and post-launch activities up to and including in-orbit
test and post-eclipse test report

 

  g. Identification of critical paths

Status reports of progress against the Baseline Schedule shall be prepared and
furnished as part of the Monthly Progress Report.

2.2.3 Monthly Progress Report (CDRL 13)

Contractor shall provide monthly Progress Reports, CDRL 13. This report may be
combined with the TS-1 Program Monthly Report. The Monthly Reports shall show
program and technical accomplishments, highlighting significant events and
problems in design, deviations and/or non-conformances, schedule, subcontracts,
production, integration and test, mission operations, and product assurance. The
report shall include a section on the status of Launch Vehicle interfaces,
reliability, payload subsystem, propellant, thermal, weight, and power budgets
and contract documentation status, and will highlight any problems which impact
these activities.

Although included in the Monthly Report, the Contractor shall notify the
Customer of all major nonconformances of flight standard hardware IAW Exhibit C,
Commercial Programs Product Assurance Program Plan.

2.2.4 Spacecraft Configuration Data (CDRLs 22 and 03)

Contractor shall submit the following data for information:

 

  a. Spacecraft Preliminary Configuration Identification List (CIL), CDRL 03a.
The Preliminary CIL shall be delivered as mutually agreed between Purchaser and
Contractor.

 

  b. Spacecraft as-built CIL, CDRL 03b. The As-built CIL shall be delivered as
part of the Spacecraft End Item Data Package (CDRL 20).

 

  c. Spacecraft-to-Launch Vehicle Interface Control Drawing (ICD), CDRL 22. The
initial Spacecraft-to-Launch Vehicle ICD shall be delivered as mutually agreed
between Purchaser and Contractor.

2.2.5 Program Readiness Review Data (CDRL 05) – N/A

Contractor shall furnish agenda, invitation, data package, presentation
material, minutes, and closeout report for the Program Readiness Review (PRR) of
Pre-CDR as described in Paragraph 2.4.2, and deliver PRR data IAW CDRL 05. The
PRR data shall include:

 

  a. Program organization and management description

 

Revision 4

11/16/07

Exhibit A

11

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  b. Preliminary Program plan and master schedule

 

  c. Mission and system requirements and specifications

 

  d. Preliminary spacecraft and subsystems description

 

  e. Summary of deviations from heritage hardware

 

  f. Summary of preliminary budgets and margins

 

  g. Description of technical baseline configuration management

 

  h. Ground command and control subsystems description

2.2.6 Program Development Review Data (CDRL 06), AS REQUIRED

Contractor shall furnish agenda, invitation, data package, presentation
material, minutes, and closeout report for the Program Development Review (PDR)
IAW CDRL 06,as required.

2.2.7 Critical Design Review Data (CDRL 07), AS REQUIRED

Contractor shall provide agenda, invitation, data package, presentation
material, minutes, and closeout report for the Design Review (DR) IAW CDRL 07.
The DR data shall include:

 

  a. Technical description of any change in design and performance changes

Updates shall be provided as required.

2.2.8 Satellite Technical Review Data (CDRLs 26, 27 & 28) – N/A

Contract shall have three Satellite Technical Reviews (STR) in the post-CDR
phase of the Program. Each STR shall have it own separate CDRL requirement. For
each STR the Contractor shall furnish agenda, invitation, data package,
presentation material, minutes and a close out report. Each STR shall provide an
update on all the technical and programmatic aspects of the Satellite Program.
The data for each STR shall include status and updates on all items listed in
Paragraphs 2.2.5 (STR 1), Paragraphs 2.2.6 (STR-2) and Paragraphs 2.2.7 (STR-3).

2.2.9 Analysis Reports

Contractor shall perform mission analyses to evaluate the candidate launch
vehicles, and demonstrate the capability of the selected Launch Vehicle(s) to
place the Satellite in its final mission on-orbit position. The analyses shall
show there is sufficient propellant to perform all stationkeeping and
repositioning maneuvers for the required Orbit Maneuver Life (OML). The analyses
shall include Launch Vehicle dispersions, transfer orbit maneuver optimization,
OML maximization,

 

Revision 4

11/16/07

Exhibit A

12

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

stationkeeping, TC&R coverage, Sun angle/eclipse conditions and launch windows.
Other studies shall be performed that Contractor deems necessary to construct an
orbit-raising Sequence of Events (SOE). These mission analyses shall be
documented in the Mission Profile Description, CDRL 11, and Mission Operations
Plan, CDRL 15.

2.2.10 Program Test Plans and Procedures

2.2.10.1 Spacecraft Test Procedures (CDRL 08)

Contractor shall provide spacecraft hardware test procedures, CDRL 08, in
conformance with the Satellite Program Test Plan, Exhibit D. Purchaser access to
observe system-level tests shall be subject to Contractor’s normal and customary
proprietary, security and safety policies and procedures.

2.2.10.2 Spacecraft Launch Base Authorizing Document (CDRL 10)

Contractor shall prepare a Spacecraft Launch Base Authorizing Document that
conforms to the Satellite Program Test Plan and deliver IAW CDRL 10. This
document shall delineate:

 

  a. All launch base testing and pre-launch checkouts to be performed on the
Satellite to ensure flight worthiness,

 

  b. Support for integrating the Satellite with the Launch Vehicle,

 

  c. On-pad launch operations, and

 

  d. Coordination with the Launch Vehicle Supplier for Launching the Satellite.

2.2.10.3 In-Orbit Tests

Contractor shall provide an In-Orbit Test Description and In-Orbit Test
Procedures as prescribed in the following document item descriptions.

In-Orbit Test Description (CDRL 12a)

Contractor shall prepare and submit an In-Orbit Test (IOT) Description document,
CDRL 12a. This document, an expansion of the IOT Plan in the Satellite Program
Test Plan, Exhibit D, shall provide details of IOT that will be performed before
Satellite command authority is transferred to Purchaser. The IOT Description
document shall be the basis for preparing IOT Procedures and shall contain:

 

  a. Test Resources — Test resources such as facilities, equipment, and
personnel necessary to complete in-orbit testing shall be identified, including
both Contractor- and Purchaser-provided resources, and, pursuant to the SBN/SBAS
Contract, Contractor-provided resources shall include the ground based
beamformer for IOT to validate the overall system performance.

 

Revision 4

11/16/07

Exhibit A

13

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  b. Baseline IOT Schedule — A baseline IOT schedule shall be developed and
referenced to days after Launch (e.g., L+5 days). This schedule shall identify
IOT events after Launch up to and including handover of Satellite command
authority to Purchaser. The schedule shall be updated thirty (30) days before
Launch and during IOT on an as-required basis.

 

  c. Detailed Test Matrices — Comprehensive test matrices shall be developed and
associated test methods described in conformance with the Satellite Program Test
Plan.

 

  1. Bus Test Matrix

 

  2. TT&C Test Matrix

 

  3. Payload Test Matrix

 

  d. Antenna Pattern Measurement Method — Measurements shall be used to assess
antenna pattern pointing, beam shape and performance by comparison with ground
test data.

IOT Procedures (CDRL 12b)

Contractor shall prepare IOT Procedures and deliver IAW CDRL 12b. The procedures
shall be developed in conformance with the IOT Plan of the Satellite Program
Test Plan and prescribe acceptance criteria for verifying Satellite operation
during early orbit operations after successful injection into mission orbit.

The IOT Procedures document shall include:

 

  a. Detailed test matrix

 

  b. Detailed test methods

 

  c. Detailed test procedures

 

  d. Test conditions

 

  e. Method and procedure on how to establish Satellite test configuration

 

  f. Measurement equipment list

 

  g. Test data sheets

2.2.11 Satellite Coordination Data (CDRL 04)

Contractor shall provide Satellite Coordination Data, CDRL 04, that are required
to comply with Federal Communications Commission (FCC) and International
Telecommunications Union (ITU) rules, regulations and procedures. Contractor
shall further assist Purchaser, as requested, in preparing

 

Revision 4

11/16/07

Exhibit A

14

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

documents required by other third parties, such as International Frequency
Registration Board (IFRB), insurance agencies and other governmental or world
regulatory bodies for implementation of this Program.

Purchaser shall be responsible for preparing, coordinating, and filing all
applications, registrations, and reports. Contractor shall provide technical
support and coordination for such filings at Purchaser’s request on a time and
materials basis, as specified in the Contract.

2.2.12 Mission Profile Description (CDRL 11)

Contractor shall provide a Mission Profile Description, CDRL 11, that summarizes
all mission events covering the period from Launch through orbit raising, up to
and including on-station operations. The document shall provide an overview of
the entire profile from a mission analysis viewpoint, excluding procedures for
operating the Satellite, and shall include:

 

  a. Launch window

 

  b. Launch vehicle trajectory

 

  c. Orbit-raising maneuver plan

 

  d. TT&C coverage

 

  e. Sequence of major events

 

  f. Sun angles and eclipses

 

  g. Forces and torques analysis

 

  h. Stationkeeping maneuver strategy

2.2.13 Data Available On-Site

Contractor shall make available at its facilities the following Program-related
data for Purchaser review:

 

  a. Subsystem and unit-level specifications and interface control drawings
(ICDs)

 

  b. All past and present unit qualification documents

 

  c. System and unit-level test data

 

  d. Major Non-conformance Report (NCR), CDRL 18

 

  e. Class 1 Waiver/Deviation Requests and Engineering Change Proposals, CDRL 19

 

Revision 4

11/16/07

Exhibit A

15

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.2.14 Spacecraft End Item Data Package (CDRL 20)

Contractor shall deliver an End Item Data Package (EIDP), CDRL 20, following
completion of Spacecraft Pre-Shipment Review (SPSR). The EIDP shall contain:

 

  a. Spacecraft identification

 

  b. Configuration summary

 

  c. Test discrepancy logs

 

  d. Test verification matrix

 

  e. Certificate of Conformance

 

  f. Mass Control Log

 

  g. Log of Waivers/deviations and equipment rework

 

  h. List of Life-Limited Items

 

  i. Open Items Log.

2.2.15 Product Assurance Data (CDRLs 18 and 19)

Contractor shall submit a Major Nonconformance Report (NCR), CDRL 18, and Class
1 Waiver/ Deviation Requests and Engineering Change Proposals document, CDRL 19.
Product assurance requirements and definitions shall be as set forth in the
Commercial Programs Product Assurance Plan, Exhibit C.

2.2.16 Telemetry and Command Database (CDRL 14)

Contractor shall build and manage an electronic Telemetry & Command (T&C)
Database beginning with the spacecraft development phase and extending through
the spacecraft ground test cycle. T&C Database, CDRL 14, shall be made available
electronically to Purchaser subject to Contractor’s normal and customary
security rules and restrictions regarding such access. Contractor shall document
and control changes to the T&C Database; changes shall be allowed up to thirty
(30) days before Launch, at which time they shall be frozen. In the event
Purchaser procures its Ground Control Command Equipment/System from a supplier
other than Contractor, Contractor shall, at no additional cost, provide such
support and assistance to such supplier that is reasonably required to ensure
the T&C Database is properly integrated with such Equipment/System. The initial
T&C Database shall be delivered as mutually agreed between Purchaser and
Contractor.

 

Revision 4

11/16/07

Exhibit A

16

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.2.17 Mission Operations Plan (CDRL 15)

Contractor shall develop and publish a Mission Operations Plan (MOP), CDRL 15,
covering all activities and events planned to occur during the period from
pre-Launch rehearsals through to completion of IOT. The MOP shall contain the
information and data needed to guide activities of mission operations personnel
during this period. The plan shall include:

 

  a. Operations staff organization, functions and responsibilities

 

  b. Schedules and functions to be staffed for each operation

 

  c. Summary plans, including contingencies for anticipated anomalous behavior
of ground equipment, the communications network and the Satellite

 

  d. A summary of flight events from Launch to arrival on station in mission
orbit

 

  f. Description of the Contractor’s Mission Control Complex, communication
links, and orbit-raising TT&C stations

 

  g. a description of the mission software to be used during the mission,
including orbit and attitude determination, maneuver planning and any other
required functions

 

  h. a description of the planned transfer of control from the Mission Control
Center (MCC)

 

  i. a plan to avoiding RF interference with other operating satellites and how
this will be coordinated with other satellite agencies.

The preliminary MOP shall be delivered as mutually agreed between Purchaser and
Contractor. Contractor shall update the MOP and all mission planning for the
final orbital location of (TBD) degrees West.

2.2.18 Satellite Orbital Operations Handbook (CDRL 16)

Contractor shall develop and publish a Satellite Orbital Operations Handbook
(SOOH) as delineated in CDRL 16. The SOOH shall contain the information and data
needed to guide personnel responsible for operating the Satellite. The SOOH
information shall be the basis for commanding, controlling and maintaining the
Satellite in normal and contingency operational modes. The SOOH shall consist of
four (4) volumes in MS Word or PDF format:

 

  a. Volume I, Satellite Systems Summary — An overview of the Satellite and its
mission, including high level technical descriptions from a systems perspective.
Volume I shall be delivered as mutually agreed between Purchaser and Contractor.
For TerreStar-2, a Volume I, Addendum will be generated to detail the difference
(if any) from the TerreStar-1 spacecraft; provided, however, if the satellite
operator for TS-2 is not the same as TS-1, Contractor shall re-issue a
comprehensive volume.

 

Revision 4

11/16/07

Exhibit A

17

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  b. Volume II, Satellite Technical and Operations Description — A technical,
detailed engineering level description of the satellite subsystems and
associated operational functions to be used as a basis for operating the
Satellite on orbit. For TerreStar-2, a Volume II, Addendum will be generated to
detail the difference (if any) from the TerreStar-1 spacecraft; provided,
however, if the satellite operator for TS-2 is not the same as TS-1, Contractor
shall re-issue a comprehensive volume.

 

  c. Volume III, Operations Procedures — Standard, Contingency and Health
Operations Procedures (SOP, COP and HOP, respectively), to be used as a basis
for operating the Satellite on orbit. For TerreStar-2, a Volume II, Addendum
will be generated to detail the difference (if any) from the TerreStar-1
spacecraft; provided, however, if the satellite operator for TS-2 is not the
same as TS-1, Contractor shall re-issue a comprehensive volume.

 

  d. Volume IV, Satellite Parameters Handbook — Specific ground-collected
measurement and test data applicable to the satellite and used for reference
during the satellite’s service life

2.3 PURCHASER’S REPRESENTATIVES

Contractor shall allow Purchaser’s representatives, consultants, and agents
unescorted access to all phases of Program work being performed at Contractor’s
facility for the Satellite and other deliverable data items to monitor progress
of such work. Access by Purchaser’s representatives to Program-related data,
personnel, work in progress and facilities shall be provided IAW Contractor’s
normal and customary proprietary, security and safety policies and regulations
and the Terms and Conditions of the Contract.

Contractor shall provide accommodations at its facilities for five (5) Purchaser
representatives. The accommodations shall be as set forth in Article 8 of the
Terms and Conditions.

During normal working hours for the Program and other hours agreed to by
Contractor, Purchaser’s representatives may request access to Program work in
process, including Contractor’s Major Subcontractor activities. Upon such
requests and subject to the preconditions cited in this paragraph or as may be
proscribed in the Contract, Contractor shall arrange and schedule access of
designated Purchaser representatives to Contractor or Major Subcontractor
facilities wherein Contract work is being performed.

 

Revision 4

11/16/07

Exhibit A

18

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Contractor reserves the right to accompany Purchaser representatives on any
visit to subcontractor facilities. In no event shall activities of Purchaser’s
representatives relieve Contractor of any responsibility in performing the
Contract or interfere with any work in progress.

2.4 PROGRAM AND TECHNICAL REVIEWS

Contractor shall plan, organize, administer, conduct and close the reviews
listed herein. The objective of these reviews is to evaluate critical
programmatic and technical parameters and processes, and related documentation
to obtain information for deciding to proceed to the next Program phase.

2.4.1 Quarterly Program Status Meetings

A Quarterly Program Status Meeting shall be held on three (3) month intervals,
alternating between Contractor’s and Purchaser’s facility. The Meeting shall be
scheduled on a mutually agreed upon date and time. The Quarterly Program Status
Meeting for TS-2 may be combined with the Quarterly Program Status Meeting for
TS-1 program. Content of the review shall include all technical, programmatic,
quality, and contractual accomplishments and issues over the past three
(3) months or since the last Quarterly Management Review for both the spacecraft
and Launch Vehicle. Updated status of Launch Vehicle interfaces, reliability,
payload subsystem, propellant, thermal, weight, and power budgets shall be
presented. This shall include fuel budget updates. A report of previous and
current on-orbit anomaly experiences on other spacecraft that are applicable to
TERRESTAR shall also be provided. Any issues that impact spacecraft delivery or
compliance to the contractual requirements shall be highlighted. Significant
risks to the Program shall also be presented with actions identified for risk
management. As received, action items from the Meeting shall be tracked and
submitted to Purchaser for approval. The first Meeting shall be held as mutually
agreed between Purchaser and Contractor.

2.4.2 Program Readiness Review –N/A

Contractor shall conduct a Program Readiness Review (PRR; Pre-CDR Inaugural
Meeting) at its facility within one (1) month after EDC. The purpose of the PRR
is to review the planning, preparation and readiness for initiating Program
activities and executing the Contract. The PRR shall be considered closed upon
sign off of the minutes and action item list with closure dates established.

All data items listed in Paragraph 2.2.5 shall be addressed via the following
agenda topics:

 

  a. Program overview and management

 

  b. Program plan and master schedule

 

  c. Configuration and data management plan

 

Revision 4

11/16/07

Exhibit A

19

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  d. Product assurance plan

 

  e. Test plan

 

  f. Description of space and ground segments

 

  g. Performance requirements and technical specifications

 

  h. Budgets and margins

 

  i. Design and trades and analyses

2.4.3 Program Development Review (Pre-CDR) – N/A

Contractor shall conduct a Program Development Review (PDR) at its facility
within six (6) months after EDC. The purpose of the PDR is to review the
development and design feasibility of spacecraft subsystems and payload, and
ground subsystems hardware and software. Risks shall be evaluated on a
technical, schedule and cost basis. All items listed in Paragraph 2.2.6 of this
SOW, as appropriate, shall be addressed. The PDR shall be considered closed with
sign off of the minutes and action item list with closure dates established.

2.4.4 Critical Design Review (Pre-CDR ) – N/A

Contractor shall conduct a Critical Design Review (CDR) at its facility on a
date to be mutually agreed between Purchaser and Contractor. The purpose of the
CDR is to ensure that the design meets the requirements of the Satellite
Performance Specifications, Exhibit B. All items listed in Paragraph 2.2.7 of
this SOW, as appropriate, shall be addressed. The outcomes of the CDR shall be a
determination that the detailed designs and their development satisfy the
functional and performance requirements and verification that all system and
subsystem interfaces are compatible. The CDR shall be considered closed with
sign off of the minutes and action item list with closure dates established;
this also signifies the close of Pre-CDR.

2.4.5 Satellite Technical Reviews (Post-CDR) – N/A

Contractor shall conduct a minimum of three Satellite Technical Reviews (STR) in
the post CDR phase of the Program. Unlike TIMs the STRs shall be considered
formal technical reviews in which the Contractor provides a detailed technical
and programmatic overview of the Satellite Program. The first STR-1 shall be
held on or before two (2) months after Amendment Execution Date (AED) and will
provide updates on the planning and preparation being implemented for the
successful completion of the Contract. STR-1 will provide the delta updates on
all the data items listed in Paragraph 2.2.5 which include the following agenda
topics:

 

  a. Program overview, management plan and schedule

 

Revision 4

11/16/07

Exhibit A

20

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  b. Product assurance plan and Test plan

 

  c. Performance requirements and technical specifications

 

  d. System budgets and margins

 

  e. Description of space and ground segments

 

  f. Design and trades and analyses

 

  g. Configuration and data management plan

STR-1 shall also include a Qualification Status Review to provide the status on
all spacecraft units.

The second STR-2 shall be held at the Contractor’s facility on or before eight
(8) months after AED. STR-2 will provide an update on the development and design
credibility of the spacecraft subsystems and the hardware and software related
to the ground subsystem. The technical, schedule and cost risks shall be
addressed. STR-2 will provide a delta update on all the items listed in
Paragraph 2.2.6 of the SOW.

STR-3 shall be held at the Contractor’s facility on or before fourteen
(14) months after the AED. The purpose of the third STR will be to review the
final design of the spacecraft and to ensure that all requirements of the
Satellite Performance Specifications will be met. This will be the final major
review that will ensure that the detail designs and their development will
satisfy the functional and performance retirements and will verify that that all
of the systems interfaces are compatible.

All STRs shall be considered closed upon sign off by the Purchaser of the
minutes and action item list with closure dates established.

2.4.6 Integrated System Architectural Reviews (Post-CDR) – N/A

Contractor shall support periodic Integrated System Architectural Reviews to
ensure compatibility of the spacecraft design with ongoing parallel program in
ground based beamforming (GBBF) development. These meetings, to be held at
mutually agreed upon locations, shall include representatives of the Contractor,
Purchaser and GBBF subcontractor and will focus on developing the necessary
interface controls to ensure the compatibility of the spacecraft with the GBBF
for on-ground and in-orbit testing and for final on-orbit operations.

 

Revision 4

11/16/07

Exhibit A

21

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.4.7 Test Readiness Review

Contractor shall conduct a Test Readiness Review (TRR) to confirm readiness to
conduct spacecraft test activities in conformance with the Satellite Program
Test Plan, Exhibit D. The purpose of the TRR is to ensure that the system or
subsystem, and the performing organizations are ready to begin formal testing.
Contractor’s system engineering shall verify that planned and authorized tests
will yield the data needed to prove performance requirements have been
satisfied. The completed TRR shall confirm the completeness of test procedures
by a thorough review of:

 

  a. Personnel and facility readiness

 

  b. Test plan, procedures, cases and limits

 

  c. New or modified test support equipment, facilities and procedure manuals

 

  d. Bus and payload test predicts.

2.4.8 Mission Design Review

Contractor shall conduct a Mission Design Review (MDR) to address all aspects of
the satellite Mission Operations Support Services, including an overview of the
mission plan. The Contractor shall prepare and deliver a Mission Design Review
Data Package in accordance with CDRL 34. The MDR may be held as part of STR-3.

2.4.9 Spacecraft Pre-shipment Review

Contractor shall conduct a Spacecraft Pre-Shipment Review (SPSR) at its
facilities before the Satellite is shipped to the Launch Site IAW with this
Section 2.4.9 and Article 9 of the Terms and Conditions. The purpose of the SPSR
is to (i) review test data and analyses for the subject Satellite,
(ii) demonstrate all testing has been completed IAW Exhibit D Satellite Program
Test Plan, and (iii) determine whether such Satellite meets applicable Satellite
Performance Specifications requirements (except those that have been waived
pursuant to Article 9 of the Terms and Conditions) and is ready for shipment to
the Launch Site. The SPSR shall address spacecraft test results, configuration
of the spacecraft, nonconformance documentation, and relevant failure data.

Contractor shall submit the System Test Report, CDRL 09, before the SPSR that
shall contain relevant test data and information. Any existing waivers shall be
submitted before SPSR and resolved before the Satellite is shipped. Purchaser
shall provide written authorization for Contractor to ship the Satellite to the
Launch Site within seventy-two (72) hours of completion of the SPSR. Such
authorization shall constitute acknowledgment by Purchaser that the Satellite
conforms to the Satellite Performance Specifications, as of SPSR, for the
purpose of obtaining Purchaser’s authorization to ship. Purchaser disapproval,
if any, shall provide specific details of contractual non-compliance IAW Article
9 of the Terms and Conditions.

 

Revision 4

11/16/07

Exhibit A

22

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.4.10 Spacecraft Post Shipment Inspection

Contractor shall conduct a post-shipment inspection of the Satellite after it
has been delivered to the Launch Site. Visual inspections and verification tests
shall be performed to demonstrate the Satellite has not been degraded by
transportation from Contractor’s facility. The inspection and verification shall
be described in and performed according to the Satellite Program Test Plan.

2.4.11 Spacecraft Launch Readiness Review

Contractor shall conduct a Spacecraft Launch Readiness Review (SLRR) at the
Launch Site facility approximately two (2) weeks before the Satellite Launch
date with Purchaser representatives in attendance. The purpose of the SLRR is to
verify (i) all testing has been completed IAW Exhibit D, Satellite Program Test
Plan, (ii) the Satellite meets all parameters required to be tested under
Exhibit D, Satellite Program Test Plan and (iii) readiness of the Satellite for
Launch and of the ground network to support the mission. The SLRR shall cover
the status of all spacecraft subsystems and ground facilities used to support
Launch and flight operations up to station acquisition. The agreement between
Contractor and Launch Vehicle Supplier regarding Go/No-Go criteria shall be
finalized at the SLRR. The SLRR shall be in two parts: the first, covering
electrical tests, before moving the Satellite to the hazardous operation
facility, and the second, after fuel loading and final close-out, before final
spacecraft integration with the Launch Vehicle. The SLRR shall conclude upon the
Parties agreement that the purpose of the SLRR has been met and the Satellite is
ready to be integrated with the Launch Vehicle.

2.4.12 Mission Readiness Review

Contractor shall conduct a Mission Readiness Review approximately two (2) weeks
prior to Launch to ensure that all the elements required to conduct the mission
are in place.

2.4.13 In-Orbit Test Review and Handover

Contractor shall provide the Summary IOT Report (CDRL 12(c)) to Purchaser at
least twenty-four (24) hours prior to the In-Orbit Test Review (IOTR).
Contractor shall conduct an In-Orbit Test Review (IOTR) within three (3) days
after completing IOT and shall be held either at Purchaser’s Satellite Control
Facility or Contractor’s facility, by mutual agreement. The purpose of the IOTR
is to evaluate Satellite data obtained during the period from Launch through
completion of IOT to confirm the Satellite satisfies the acceptance criteria
defined in the IOT Procedures, CDRL 12b. The IOTR material shall be the IOT
Summary Report, CDRL 12c and Satellite Acceptance Certificate (CDRL 24). At the
conclusion of the IOTR, minutes shall be prepared and agreed to, which shall be
considered closed with sign off of the minutes and resolution of any open items.

 

Revision 4

11/16/07

Exhibit A

23

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Contractor shall provide the Satellite Acceptance Certificate, CDRL 24, at the
IOTR. The Satellite Acceptance Review (SAR) shall be held one (1) day after
completion of the IOTR where Purchaser shall provide its acceptance or rejection
of such Satellite IAW Article 10 of the Terms and Conditions.

After IOTR and before handover to Purchaser, Contractor shall provide updates,
as needed, of Satellite operational configuration data, telemetry limit files
and final changes to the T&C Database. Purchaser shall verify all data received
and readiness of its personnel and ground control facilities, whereupon
Contractor shall transfer Satellite command authority to Purchaser’s mission
operations team.

2.5 DELIVERABLE HARDWARE, SOFTWARE AND SERVICES

2.5.1 Satellite

Contractor shall provide one (1) Satellite (TS-2) meeting the requirements of
the Satellite Performance Specifications, Exhibit B, tested IAW the Satellite
Program Test Plan (STP), Exhibit D, and delivered to the Launch Site for
Acceptance on orbit as specified in the Contract.

2.5.2 Ground Support and Mission Operations Support Equipment and Service

Except for Purchaser-furnished facilities, equipment, and personnel for IOT as
specified in Paragraph 2.6 of this SOW, Contractor shall make available all
necessary ground and mission operations support equipment, software and
personnel to conduct checkout and test of the Satellite during acceptance
testing, pre-Launch, Launch, and IOT phases.

2.5.3 Dynamic Satellite Simulator (CDRL 25) – N/A

Contractor shall provide a Dynamic Satellite Simulator (DSS) per the quantity
specified in the Contract and that shall be documented IAW CDRL 25. The
simulator shall contain hardware and software components integrated so as to
simulate the Satellite adequately for checkout of the ground control subsystems
and for flight operations training.

2.5.4 Training of Purchaser Personnel (CDRLs 21a and 21b)

Contractor shall develop, produce and conduct a Training Program for Purchaser’s
personnel experienced in Satellite operations. The objective of the training is
to develop in Purchaser’s mission operations personnel the ability to
confidently command and control the TERRESTAR Satellite in its mission orbit.
The purpose is to provide the essential knowledge and skills experienced
personnel need to safely and reliably execute on-orbit operations of the
Satellite.

 

Revision 4

11/16/07

Exhibit A

24

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

The Training Plan shall be provided in CDRL 21a and contain descriptions of the
curriculum, learning objectives, topics and instructional methods. The Training
Program shall consist of four (4) total weeks of classroom sessions and
accommodate up to ten (10) trainees as listed in Table 2-1.

 

Revision 4

11/16/07

Exhibit A

25

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Table 2-1. Classroom Training Courses

 

Classroom Course

   Duration   

Location

   No. Trainees

Satellite Description Course

   2 weeks    Purchaser’s Prime Control Facility    10

Satellite Operations Course

   2 weeks    Purchaser’s Prime Control Facility    10

All class lecture notes and supporting materials shall be provided according to
CDRL 21b and shall be documented and presented in English. All training shall
conclude two (2) months before the scheduled Launch date. The Training Program
shall consist of three (3) basic courses:

 

  a. Satellite Description— This one- (2) week course shall present a technical
overview and description of each bus subsystem and payload, and shall be
conducted at Contractor’s facility.

 

  b. Satellite Operations— This two- (2) week course shall be conducted at a
Purchaser-provided facility, concluding approximately three (3) months before
Launch. This training shall focus on operational aspects of the Satellite and
subsystems for operational modes under normal and contingency conditions. It
shall cover TC&R operations and attitude/orbit maneuver planning and analysis.
The course topics shall include:

 

  1. System and Spacecraft Subsystems Overview

 

  2. Mission Operations

4) Stationkeeping Operations

5) Attitude Control

a.) Attitude control subsystem functions and modes, and key hardware
characteristics

b.) Telemetry and command interfaces, redundancy and recommended routine
analysis of attitude control parameters

c.) Operational characteristics, state of health monitoring, and performance and
trend analysis functions related to the attitude control subsystem

6) Eclipse Management

7) Contingency Operations

 

Revision 4

11/16/07

Exhibit A

26

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.5.5 Launch Operations Planning

2.5.5.1 Launch Planning and Integration

Contractor shall conduct launch phase planning, spacecraft integration and
organizational coordination meetings with the Launch Agency and others
supporting launch operations planning. Purchaser representatives shall be
invited to attend.

2.5.5.2 Interface Coordination

Contractor shall coordinate all spacecraft-related interfaces with the Launch
Agency and others to support Launch of the Satellite and its transfer on station
in mission orbit. Contractor shall identify and compile the required data and
information of CDRL 17, and deliver it to the Launch Agency.

2.5.5.3 Rehearsals

Contractor shall conduct rehearsals of mission operations personnel starting
approximately three (3) months before Launch. Rehearsals shall be conducted for
each mission phase at Contractor’s facility, placing particular emphasis on the
early orbit operations phase. Alternate operating modes of the ground command
and control complex shall be exercised and include selected Satellite and ground
system anomalies.

2.5.6 Launch and Early Orbit Operations

2.5.6.1 Launch Support Services

Contractor shall render launch support services to the Launch Agency.

2.5.6.2 Launch Support Services

Contractor shall perform the following spacecraft-related tasks:

 

  a. Conduct inspection and performance tests of the Satellite at the Launch
Site

 

  b. Conduct any necessary assembly and checkout, including propulsion subsystem
propellant loading and pressurization

 

  c. Support spacecraft-Launch Vehicle integration according to a schedule
coordinated with the Launch Vehicle Supplier

 

  d. Support spacecraft-Launch Vehicle integrated system tests

 

  e. Conduct flight readiness performance tests of the Satellite

 

  f. Conduct pre-Launch activities

 

Revision 4

11/16/07

Exhibit A

27

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  g. Support Launch Services during the period from Launch through
spacecraft-Launch Vehicle separation

 

  h. Update all launch documentation to show orbital location of (TBD) degrees
West.

2.5.6.3 Transfer Orbit Operations

Contractor shall provide equipment, personnel and services needed to:
(a) acquire Satellite telemetry and orbit data; (b) perform necessary
calculations and analysis; and (c) execute commands required to maneuver the
Satellite through transfer orbit to its specified mission orbit location.

2.5.6.4 Initial Satellite Operations

Contractor shall perform initial Satellite operations, including IOT, after the
Satellite is placed in its mission orbit. Contractor shall provide an IOT
Summary Report, CDRL 12c, containing an analysis confirming the Satellite
satisfies the acceptance criteria defined in the IOT Procedures (CDRL 12b), and
a Detailed IOT Report, CDRL 12d.

Contractor shall provide the following personnel to support IOT:

 

  a. IOT Director — One (1) IOT Director shall be stationed at Contractor’s
Mission Control Center (MCC) during orbit raising, and shall relocate to the IOT
Coordination Center before start of payload testing. Throughout the IOT period,
the IOT Director shall be Contractor’s single point of contact for matters
related to Satellite testing.

 

  b. Payload IOT Coordinators — Two (2) Payload IOT Coordinators shall be
stationed at the IOT Coordination Center during payload tests. One
(1) coordinator shall lead real-time payload tests on one (1) of two (2) work
shifts. Both shall be system engineers experienced in evaluating payload test
data, and shall review such data with Purchaser’s designated representatives.

 

  c. Bus IOT Coordinator — One (1) Bus IOT Coordinator shall be stationed at
Contractor’s MCC during IOT. This coordinator shall be a system engineer
familiar with evaluating bus test data, and shall review such data with
Purchaser’s designated representatives.

 

  d. Other Bus IOT Personnel — Other engineering personnel shall conduct bus IOT
and evaluate test data. These personnel shall be stationed at Contractor’s MCC.

 

  e. Other Payload IOT Personnel — Other engineering personnel and technicians
shall be stationed at the IOT Coordination Center, and shall conduct payload IOT
in two (2) shifts per day, calibrate and maintain Contractor’s In-orbit Test
Equipment (IOTE), and evaluate test data.

 

Revision 4

11/16/07

Exhibit A

155

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.5.6.5 Communications and Data Lines

Contractor shall provide the required communications and data lines to perform
the services specified in Paragraphs 2.5.6.3 and 2.5.6.4. Contractor shall
provide and maintain a list of telephone, fax and e-mail contacts for each
subsystem to be used by Purchaser personnel in a Satellite emergency.

2.5.7 Transfer Orbit TT&C Stations

Contractor shall make available the required transfer orbit TT&C sites and shall
provide its MCC as the control center for orbit raising and IOT. Contractor
shall verify compatibility of the interface between TT&C stations and the
Satellite before Launch. Purchaser shall provide TT&C station support for IOT
operations as prescribed in Paragraph 2.6.

2.5.8 Long-Term Support

Following completion of In-Orbit Testing (IOT), Contractor shall provide
Satellite emergency operations and anomaly resolution support services
throughout the Satellite Mission Life. Contractor shall issue and submit to
Purchaser preliminary in-orbit anomaly reports and final in-orbit anomaly
investigation reports”.

2.5.8.1 Satellite Emergency Operations and Anomaly Resolution Support Services

Contractor shall maintain the following throughout the Satellite Mission Life:

 

  a. Contractor shall provide a contact point that the Purchaser/operator can
reach twenty-four (24) hours per day, seven (7) days per week, for purposes of
requesting Satellite emergency operations and anomaly resolution support
services. The point of contact shall be in the form of a live person using
English as the primary language, who can be reached via telephone, email and
FAX. The Contractor point of contact shall have the capability to initiate the
assembly of a Contractor Emergency Support Team (EST) to perform the Satellite
emergency operations and anomaly resolution support services described below,
but shall not otherwise have any authority to speak on behalf of Contractor, nor
perform diagnostics, nor provide any type of corrective actions.

 

  b.

Upon Purchaser/operator’s request for emergency operations and anomaly
resolution support services, Contractor shall promptly establish an Emergency
Support Team (EST) at

 

Revision 4

11/16/07

Exhibit A

29

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

  Contractor’s facilities. The EST shall have the authority to perform
diagnostics and give recommendations for corrective actions. The EST shall have
the capability to communicate, using English as the primary language, via
telephone and FAX. The Purchaser/operator shall be responsible for promptly
providing the EST with the necessary and appropriate Satellite command and
telemetry data, as the EST support may by affected/limited by lack of real-time
telemetry. If it is later determined that the EST support was required as a
result of Purchaser/operator error, including lack of properly trained (by
Contractor) Purchaser/operator personnel, or due to negligence on the part of
Purchaser/operator, Purchaser shall reimburse Contractor for such EST support on
a time and materials basis.

 

  c. Contractor shall maintain equipment that is required at Contractor’s
facilities for Satellite emergency operations and anomaly resolution support.
Contractor shall maintain the capability of processing Satellite telemetry
during its mission lifetime, but said processing may not be in real-time.

 

  d. Contractor shall maintain a library of data and documents generated during
the Satellite build at the Contractor’s facilities. Contractor shall also
maintain a library of the latest released SOOH, schematics and TT&C databases at
Contractor’s facilities. Contractor shall correct, at Contractor’s expense, any
errors found in such documentation that is determined by Contractor to be a risk
to Satellite operations.

 

  e. Purchaser/operator shall be entitled to request Satellite emergency
operations support services when the Purchaser/operator cannot maintain the
Satellite in its required orbit and attitude or the Satellite is experiencing a
Satellite anomaly, as defined in f) below, which has resulted in or is likely to
result in the immediate loss of the Satellite. In this event, the EST will
promptly take reasonable actions consistent with accepted industry practices to
advise the operator in attempting to return the Satellite to an operational
condition. Such Satellite emergency operations support services shall cease when
the EST determines either that the Satellite can be returned to an operational
condition and maintained in its required orbit and attitude, or that the
Satellite cannot reasonably be returned to a full or partial operational
condition.

 

  f.

Upon Purchaser/operator’s request, Contractor shall provide an analysis of all
Satellite Anomalies occurring during the Satellite Mission Life. A Satellite
Anomaly includes: (i) any

 

Revision 4

11/16/07

Exhibit A

30

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

  malfunction on-orbit in a hardware unit that reduces the component redundancy;
(ii) any malfunction on-orbit that reduces the expected Satellite Mission Life;
(iii) any malfunction on-orbit that reduces the available power; (iv) any
malfunction on-orbit that produces a measurable reduction in EIRP or G/T;
(v) any malfunction on-orbit that causes a loss of Earth pointing; or (vi) any
improper functioning of software, due to viruses, inappropriate disabling code,
devices that bypass Purchaser’s security measures, and improper processing of
date specific fields.

Upon notification by Purchaser/operator of such a Satellite Anomaly, Contractor
shall promptly advise the purchaser/operator of reasonable actions consistent
with accepted industry practices to analyze the Anomaly and where possible
suggest and take corrective action that will minimize any operational impacts
arising from any such Satellite Anomaly. Purchaser/operator shall notify
Contractor of all Satellite Anomalies, as part of Purchaser’s monthly report to
Contractor, within thirty (30) days after the anomaly is first observed. In
addition, Purchaser shall provide an operational history of the Satellite and
appropriate Satellite command and telemetry data to allow Contractor to analyze
the Anomaly. Contractor shall provide a final written anomaly report, including
a description of the Anomaly, the cause of the Anomaly, when such cause can be
determined using reasonable efforts consistent with standard industry practices,
and any corrective action taken or recommended.

2.5.9 Insurance Support

Contractor shall support Purchaser in matters relating to spacecraft insurance
in Purchaser’s dealings with the insurance company(ies) as specified in the
Terms and Conditions. In addition, Contractor shall make necessary arrangements
for up to two (2) surveys related to insurance procurement to be conducted by
insurance company representatives at Contractor’s premises during performance of
the Contract. Contractor shall use its best efforts to obtain permission for
similar surveys on the premises of its Major Subcontractors, if required.

2.5.10 Spacecraft Storage (Option)

Should Purchaser direct ground storage of a Satellite IAW the Contract,
Contractor shall arrange to store the Satellite per the Contract. Purchaser
shall notify Contractor of the planned storage at least four (4) months before
the originally planned delivery date. Purchaser’s obligations in support of this
option shall be as specified in the Terms and Conditions. Upon recall from
storage, Contractor shall conduct visual inspections and verification tests to
confirm the Satellite has not degraded during the storage period as required by
the Storage Plan.

 

Revision 4

11/16/07

Exhibit A

31

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

2.6 PURCHASER FURNISHED ITEMS

2.6.1 Equipment, Facilities and Services

Purchaser and Contractor shall participate in a Technical Interchange Meeting
(TIM) at a mutually agreed to date to review and agree upon the availability and
adequacy of equipment, facilities and services listed below.

 

  a. Contractor shall be allowed access to Purchaser-owned Earth station sites
or facilities that are within the proper look angle of the Satellite at its
on-station orbital location. Such access shall include RF communications
equipment, TT&C facilities and equipment, standard communications test equipment
and support services and shall be limited to those items already in place,
functioning and available at Purchaser’s facilities. Contractor shall be
responsible for any additional required items to support Launch, IOT, and/or
on-orbit operation of the Satellite.

 

  b. Purchaser shall provide, operate, and maintain all payload-test Earth
stations required for IOT. These Earth stations shall be capable of performing
IOT and shall consist of antennas and RF equipment, high power amplifiers, low
noise amplifiers, etc., with interfaces to Contractor-provided In-Orbit Test
Equipment (IOTE). At each Earth station, Purchaser shall provide space and
interface support for temporary installation of Contractor-provided IOTE. One
Earth station shall be designated as the IOT Coordination Center.

 

  c. Contractor shall be allowed access to and use of Purchaser’s test and
support technicians during on-site installation, integration and test
activities.

 

  d. At or in close proximity to the Earth stations or facilities, Purchaser
shall provide space and interface support. Purchaser shall provide reasonable
office space, conference room, and administrative areas for Contractor personnel
during temporary installation of Contractor-provided IOTE and during orbit
raising and IOT. These locations shall be equipped with telephones, fax, and
copier.

 

  e. Purchaser shall provide appropriate personnel to participate in two
(2) technical reviews at Contractor’s facility, before Launch, for compatibility
testing and for one (1) mission rehearsal.

 

  f. Purchaser shall provide remote ranging site, including antenna, RF, and
frequency translation equipment to support turn-around ranging.

 

  g. Purchaser shall provide the following personnel to support IOT:

 

  1. IOT Director — An IOT Director who shall be stationed at the IOT
Coordination Center and work with Contractor’s IOT Director to support
day-to-day IOT operations

 

Revision 4

11/16/07

Exhibit A

32

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

 

  2. Earth Station Coordinators — An Earth Station Coordinator who shall be
stationed at the IOT Coordination Center, work with Contractor’s Payload IOT
Coordinators and operate Purchaser-provided antennas and RF equipment.

 

  3. Bus Technical Representative — A Bus Technical Representative who shall be
stationed at Contractor’s MCC and review and approve Bus IOT data with
Contractor’s Bus IOT Coordinator.

 

  4. Payload Technical Representatives —Payload Technical Representatives who
shall be stationed at the IOT Coordination Center, and review and approve
payload IOT data with Contractor’s Payload IOT Coordinator. The representatives
shall be responsible for approving transponder test data and antenna pattern
data.

 

  h. Purchaser shall provide an interim orbital location for IOT, if different
from the final mission orbit location, within twelve (12) months following the
start of Post-CDR. Purchaser shall be responsible for obtaining permission to
use this interim location for IOT.

 

  i. Purchaser shall provide documentation that supports calibration of
Purchaser-furnished items. Certification of calibration satisfactory to
Contractor shall be provided.

 

  j. If Purchaser desires Contractor to provide post-IOT long-term support to
on-orbit operations, in excess of that described in Section 2.5.8 (Long Term
Support) above, this SOW and the Contract shall be amended, or a separate
contract and SOW executed for such additional services.

2.6.2 Data

Purchaser shall provide:

 

  a. Telemetry and command RF frequencies at three (3) months after AED

 

  b. Periodic reports of Satellite in-orbit status

 

  c. Documentation to support calibration of Purchaser-provided equipment for
IOT listed in Paragraph 2.6.1.

2.7 SPECIAL REQUIREMENTS

Contractor shall treat all assigned command RF and command address codes as
Purchaser Proprietary Information and shall not publicize these except as
approved in writing by Purchaser prior to any disclosure.

 

Revision 4

11/16/07

Exhibit A

33

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

3. PRODUCT ASSURANCE SERVICES

The Contractor shall establish and manage a Product Assurance (PA) Program as
defined in Exhibit C—Commercial Programs Product Assurance Program Plan.

3.1 PRODUCT ASSURANCE AUDITS

Purchaser and their consultants shall be invited to participate in audits of
Major Subcontractors. When there are subcontractor changes that affect a
critical deliverable item, Purchaser and their consultants shall be informed and
shall have the right to participate in the supplier qualification process.
Purchaser and their consultants shall have the right to participate in the
selection of any supplier of critical items with unproven qualification status.

Purchaser and their consultants shall have the right to perform independent
audits of the implementation and effectiveness of the Contractor’s Product
Assurance Program. Specific ESD audits will be performed by Purchaser and their
consultants at various stages of the Program. Purchaser will notify and
coordinate all formal Program audits with the Contractor’s Program Management
Office. The results of Purchaser audits will be documented and transmitted to
the Contractor’s management for corrective action. Purchaser and their
consultants shall be notified of the corrective actions taken. Audits at
Subcontractor’s facilities will be coordinated with Contractor PA. Follow up
reviews if required, will be coordinated to ensure that adequate and continual
corrective actions have been implemented.

3.2 NON-CONFORMANCE REPORTING

The Contractor will notify the Purchaser and their consultants of major
non-conformances in accordance with CDRL item 18.

If a unit or subsystem develops two (2) identical failures or three
(3) different types of failures during testing, the Contractor shall halt
testing and convene a Failure Review Board, with participation by Purchaser
and/or their consultants, before any further action is undertaken.

The Contractor shall conduct a re-test, in accordance with Spacecraft
Performance Verification Requirements, for any test failure at unit or higher
level during acceptance, protoflight or qualification testing. The Contractor
shall conduct a system-level re-test for any return of the spacecraft from the
Launch Site for any reason. The scope of any re-test shall be mutually agreed
between Purchaser and the Contractor.

 

Revision 4

11/16/07

Exhibit A

34

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

3.3 PURCHASER RIGHT OF ACCESS

Purchaser representatives, including their consultants, shall be notified and
have the right to participate in all technical reviews, manufacturing reviews,
test, test readiness, and review board meetings relevant to the quality and
performance of flight hardware and software provided under this Contract. This
includes participation in formal reviews of all failures and non-conformance
dispositions.

Purchaser and their consultants shall have the right to monitor Engineering and
Breadboard model testing performed under the Contract, witness all
qualification, protoflight and acceptance tests, at both the Contractor and
Subcontractor’s facilities, and shall be given adequate notification in advance
of the commencement of such tests.

In the event that unit and system test data on parallel spacecraft programs are
directly related to the validation of this Contract, Purchaser and their
consultants shall have the right to witness such tests and review the pertinent
data.

All surveillance activities conducted by Purchaser or their consultants shall
not in any way replace the Contractor’s inspections, or relieve the Contractor
of the responsibility for ensuring the quality of the Deliverable Items.

Purchaser and their consultants shall be given access to all test data, and
shall be provided with copies of the test data, when requested. Purchaser and
their consultants shall also be given access to all instrument calibration data.

The Contractor shall provide Purchaser and their consultants with adequate
workspace at any unit, subsystem or system test location to allow real time
on-site test monitoring and data review. At system level testing, a terminal
shall be made available to Purchaser and their consultants in the test area to
review real-time and archived test data.

 

Revision 4

11/16/07

Exhibit A

35

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Annex 1 — Contract Data Requirements List

 

No.

  

Title

  

Class

   Quantity   

Due Date(1)

   SOW Paragraph 01    [***]    I    5       2.2.1 02    [***]    I    5   
[***]    2.2.2 03    [***]             2.2.4    [***]    I    3    [***]      
[***]    I    3    [***]    04    [***]    A    3    [***]    2.2.11 05    [***]
               [***]    I    5    [***]    2.2.5    [***]    I    As req’d   
[***]    2.2.5    [***]    A    5    [***]    2.2.5    [***]    A    4    [***]
   2.2.5    [***]    I    1    [***]    2.2.5    [***]    I    1    [***]   
2.2.5 06    [***]                [***]    I    5    [***]    2.2.6    [***]    I
   As req’d    [***]    2.2.6    [***]    A    5    [***]    2.2.6    [***]    A
   4    [***]    2.2.6    [***]    I    1    [***]    2.2.6    [***]    I    1
   [***]    2.2.6 07    [***]                [***]    I    5    [***]    2.2.7
   [***]    I    As req’d    [***]    2.2.7    [***]    A    5    [***]    2.2.7
   [***]    A    5    [***]    2.2.7    [***]    I    1    [***]    2.2.7   
[***]    I    1    [***]    2.2.7 08    [***]    I    5    [***]    2.2.10.1 09
   [***]    I    2    [***]    2.4.9 10    [***]    I    5    [***]    2.2.10.2
11    [***]    I    5    [***]    2.2.12, 2.2.8.13

A1-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

 

--------------------------------------------------------------------------------

Class Code   A= For Approval by Purchaser    I = For Information The Parties
will review the Class Codes and revise as appropriate upon mutual agreement.
Notes:   (1)EDC = Effective Date of Contract

 

No.

  

Title

  

Class

  

Quantity

  

Due Date(1)

   SOW Paragraph 12    [***]                [***]    I    5    [***]    2.2.10.3
   [***]    I    5    [***]    2.2.10.3    [***]    A    5    [***]    2.4.13   
[***]    A    5    [***]    2.5.6.4 13    [***]    I    5    [***]    2.2.3 14
   [***]    I   

Available in

agreed upon

electronic

format

   [***]    2.2.16 15    [***]    I    3    [***]    2.2.17 16    [***]    A   

Also

provided in

electronic

media; in

MS Word

format

      2.2.18    [***]       5   

[***]

[***]

   2.2.18(a)    [***]       5   

[***]

[***]

   2.2.18(b)    [***]       5    [***]    2.2.18(c)

A1-2

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

   [***]       5   

[***]

[***]

   2.2.18(d) 17    [***]    I    3    [***]    2.5.5.2 18    [***]    I    3   
[***]    2.2.15 19    [***]    A    3    [***]    2.2.15

A1-3

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

 

--------------------------------------------------------------------------------

No.

  

Title

   Class    Quantity   

Due Date(1)

   SOW Paragraph 20    [***]    I    2    [***]    2.2.14 21    [***]         
      [***]    A    5    [***]    2.5.4    [***]    I    As req’d    [***]   
2.5.4 22    [***]    A    3    [***]    2.2.4

No.

  

Title

   Class    Quantity   

Due Date(1)

   SOW Paragraph 23    [***]    I    *    [***]    2.2.9 24    [***]    A    1
   [***]    2.4.8

A1-4

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

 

--------------------------------------------------------------------------------

No.

  

Title

   Class    Quantity   

Due Date(1)

   SOW Paragraph 25    [***]             2.5.3    [***]    I    X    [***]      
[***]    I    X    [***]       [***]    I    3    [***]       [***]    I    3   
[***]       [***]    I    3    [***]       [***]    I    3    [***]    26   
[***]             2.2.8    [***]    I    5    [***]    2.2.8    [***]    I   
As req’d    [***]    2.2.8    [***]    A    5    [***]    2.2.8    [***]    A   
4    [***]    2.2.8    [***]    I    1    [***]    2.2.8    [***]    I    1   
[***]    2.2.8 27    [***]             2.2.8    [***]    I    5    [***]   
2.2.8    [***]    I    As req’d    [***]    2.2.8    [***]    A    5    [***]   
2.2.8    [***]    A    4    [***]    2.2.8    [***]    I    1    [***]    2.2.8
   [***]    I    1    [***]    2.2.8 28    [***]             2.2.8    [***]    I
   5    [***]    2.2.8    [***]    I    As req’d    [***]    2.2.8    [***]    A
   5    [***]    2.2.8    [***]    A    4    [***]    2.2.8    [***]    I    1
   [***]    2.2.8

A1-5

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

 

--------------------------------------------------------------------------------

   [***]    I    1    [***]    2.2.8

A1-6

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

No.

  

Title

  

Class

  

Quantity

  

Due Date(1)

   SOW Paragraph 29    [***]    I       [***]    30    [***]               
[***]    I    3    [***]       [***]    I    3    [***]       [***]    I    3   
[***]       [***]    I    3    [***]       [***]    I    X    [***]       [***]
   A    3    [***]    31    [***]                [***]    I    1    [***]      
[***]    A    1    [***]    2.4.11    [***]    I    3    [***]    2.4.13 32   
[***]                [***]    I    3    [***]       [***]    I    3    [***]   
   [***]    I    3    [***]       [***]    I    3    [***]       [***]    I    3
   [***]   

A1-7

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

 

No.

  

Title

  

Class

  

Quantity

  

Due Date(1)

   SOW Paragraph    [***]    I    3    [***]       [***]    A    3    [***]   
33    [***]             3    [***]    I    3    [***]    34    [***]            
   [***]    I    5    [***]    2.4.8

A1-8

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

Exhibit B

TerreStar

Satellite Performance

Specifications

 

Revision 6    October 18, 2007      

Space Systems/Loral, Inc.

3825 Fabian Way

Palo Alto, California 94303-4201

  

 

     

 

TerreStar Networks Inc.

One Discovery Square

9th Floor

12010 Sunset Hills Road

Reston, Virginia 20190

  

 

     

This document contains data and information proprietary to Space Systems/Loral,
Inc. and TerreStar Networks Inc. This data is being furnished pursuant to the
provisions of the Contract between TerreStar Networks Inc. and Space
Systems/Loral, Inc. for the TerreStar Satellite Program. Space Systems/Loral,
Inc. and TerreStar Networks Inc. shall have the right to duplicate, use or
disclose the data and information to the extent specified in the Purchase
Contract.

Information included in Figures 2a, 2b, 2c and 6 of this document is controlled
under the International Traffic in Arms Regulations (“ITAR”) by the U.S.
Department of State. Export or transfer of the information contained in these
Figures to a Foreign Person or foreign entity requires an export license issued
by the U.S. Department of State or an ITAR exemption prior to the export or
transfer.

Revision 6

10/18/07

Exhibit B

1/24

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

CONTENTS

 

Section

   Page CONTENTS    II 1 — SCOPE    1 2 — SATELLITE SYSTEM CHARACTERISTICS    1
   2.1    LAUNCH REQUIREMENTS    1    2.2    ORBIT AND POSITION    1       2.3
   ENVIRONMENT    1    2.4    SATELLITE SAFETY    1    2.5    SATELLITE
RELIABILITY    2       2.5.1    Pre-Synchronous Orbit Requirements    2      
2.5.2    Synchronous Orbit Requirements    2          2.5.2.1    Bus    2      
   2.5.2.2    Payload    2          2.5.2.3    Reliability    3       2.5.3   
General Conditions    3    2.6    ON-GROUND STORAGE    4    2.7    LIFETIME    4
   2.8    ORBITAL DEBRIS MITIGATION    4    2.9    DEFINITION OF COORDINATE AXES
AND ATTITUDE ANGLES    5    2.10    ANTENNA BEAM POINTING ACCURACY    5      
2.10.1    Ku-band Gateway Beams    5       2.10.2    S-band User Beams    6   
2.11    IN-ORBIT TESTING    6    2.12    FCC and ITU Requirements    6 3 —
COMMUNICATION SUBSYSTEM    1    3.1    DESCRIPTION    1    3.2    GENERAL
CONDITIONS    1    3.3    DEFINITIONS    2    3.4    COVERAGE REQUIREMENTS    6
      3.4.1    Gateway Beam    6       3.4.3    User Spot Beams    11      
3.4.4    POLARIZATION AND POLARIZATION ISOLATION    12       3.4.4.1    KU-BAND
TRANSMIT AN RECEIVE ISOLATION    13    3.5    FREQUENCY PLAN    13

 

  ii  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

    3.5.1   Forward Link    13     3.5.2   Return Link    15     3.5.3   GBBF
Doppler Compensation    15       3.5.3.1   Forward Doppler Compensation    15  
    3.5.3.2   Forward Reference Pilot    15       3.5.3.3   Return Beacon    16
      3.5.3.4   Return Beacon Signal    16     3.5.4   Return Frequency
Translation Stability    17   3.6   EQUIVALENT ISOTROPIC RADIATED POWER (EIRP)
   18     3.6.1   Forward Link Aggregate EIRP(AEIRP)    18     3.6.2   Return
Link    19     3.6.3   Ku-band Return EIRP Degradation over Redundant Paths   
19     3.6.4   Ku-band Return EIRP Stability    19   3.7   RECEIVE GAIN/NOISE
TEMPERATURE (G/T)    19     3.7.1   Forward Link G/T    19       3.7.1.1   G/T
Stability    19     3.7.2   Return Link G/T for Full Band Operation    19   3.8
  FLUX DENSITY (FD)    20     3.8.1   Forward Link Flux Density    20     3.8.2
  Return Link Flux Density    20     3.8.3   Transmission Path Gain Matching   
21   3.9   IN-BAND FREQUENCY RESPONSE    21     3.9.1   Forward Gain Flatness   
21     3.9.2   Return Gain Flatness    21     3.9.3   Forward and Return Phase
Frequency Response    21   3.10   AMPLITUDE LINEARITY    21     3.10.1   Input
Section    21     3.10.2   Overall    22   3.11   AMPLITUDE AND PHASE VARIATION
   22     3.11.1   Amplitude Stability    22     3.11.2   Transmission
Path-to-Path Amplitude Variation    23     3.11.3   Phase Stability    23    
3.11.4   Transmission Path-to-Path Time Delay Variation    23   3.12  
OUT-OF-BAND REQUIREMENTS    24     3.12.1   Forward Receive Out-of-Band
Rejection    24     3.12.2   Forward Transmit Out-of-Band Response for
Transmission Paths    24

 

  iii  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

    3.12.3   Forward Transmit Out-of-Band Response    24     3.12.4   Return
Receive Out-of-Band Response for Transmission Paths    24     3.12.5   Return
Receive Out-of-Band Response    25     3.12.6   Return Transmit Out-of-Band
Response    25   3.13   SPURIOUS OUTPUTS    25     3.13.1   In-Band Outputs   
25     3.13.2   Out-of-Band Outputs    26     3.13.3   Phase Noise    26    
3.13.4   Spurious Modulation    27   3.14   MULTIPACTION AND PASSIVE
INTERMODULATION (PIM)    28   3.15   OVERDRIVE    29   3.16   PAYLOAD TELEMETRY
   29   3.17   PAYLOAD COMMANDS    30

4 — ATTITUDE CONTROL SUBSYSTEM

   1   4.1   OPERATIONAL REQUIREMENTS    1   4.2   ATTITUDE DETERMINATION    1  
4.3   ATTITUDE CONTROL    1     4.3.1   Reacquisition    1     4.3.2  
Operational Attitude Control and Antenna Pointing    2     4.3.3   Control Bias
Capability    2     4.3.4   In-Orbit Antenna Pattern Measurement Capability    2
    4.3.5   Sun/Moon Interference    2     4.3.6   Safe Modes    3     4.3.7  
Shadow Mode    3   4.4   ACS REDUNDANCY    3   4.5   TELEMETRY AND COMMAND
REQUIREMENTS    4

5 — TRACKING, TELEMETRY, AND COMMAND

   1   5.1   GENERAL REQUIREMENTS    1     5.1.1   Command    1     5.1.2  
Telemetry    2     5.1.3   Ranging    2     5.1.4   TT &CICommunications
Compatibility    6     5.1.5   Command Security    6   5.2   TELEMETRY
PERFORMANCE    7     5.2.1   Dwell telemetry    8     5.2.2   Telemetry
Transmitter    8

 

  iv  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

  5.3   COMMAND EQUIPMENT PERFORMANCE    9   5.4   TT &C ANTENNA    10   5.5  
TELEMETRY REQUIREMENTS    11

6 — ELECTRICAL POWER SUBSYSTEM

   1   6.1   SOLAR ARRAY    1   6.2   BATTERY    2   6.3   POWER CONDITIONING
AND CONTROL    2   6.4   TELEMETRY REQUIREMENTS    4

7 — THERMAL CONTROL SUBSYSTEM

   1     7.1   SUBSYSTEM DESCRIPTION    1     7.2   TELEMETRY REQUIREMENTS    2

8 — PROPULSION SUBSYSTEM

   1   8.1   PROPELLANT LOAD    2   8.2   TELEMETRY REQUIREMENTS    3

9 — STRUCTURE SUBSYSTEM

   1   9.1   SAFETY MARGINS    1   9.2   ACCESSIBILITY    2

10 — MECHANISMS AND ACTUATORS

   1   10.1   ROTATING DEVICES    1   10.2   DEPLOYMENT MECHANISMS    1   10.3  
MECHANISM REDUNDANCY    1   10.4   TELEMETRY REQUIREMENTS    2

11 — PYROTECHNIC DEVICES

   1

ANNEX A — RADIATION, METEOROID, AND CHARGING ENVIRONMENT

   1   1   INTRODUCTION    1   2   RADIATION ENVIRONMENT    1   3   METEOROID
ENVIRONMENT    1   4   CHARGING ENVIRONMENT    9     4.1   Surface Charging    9
    4.2   Internal/deep Charging    9

ANNEX B — LAUNCH VEHICLE REQUIREMENTS

   1   1   INTRODUCTION    1   2   LAUNCH VEHICLE INTERFACE    1     2.1  
General Interface Requirements    1

 

  v  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

    2.2   Electrical Interfaces    1     2.3   Mechanical Interfaces    2    
2.4   RF Interfaces    2   2   LAUNCH VEHICLE INDUCED ENVIRONMENT    2     3.1  
Mechanical    2     3.2   Thermal    2   4   SAFETY REQUIREMENTS    2     4.1  
Design    2   5   CONTAMINATION REQUIREMENTS    3   6   LAUNCH SITE OPERATIONS
REQUIREMENTS    3   7   LAUNCH VEHICLE INTERFACE DELIVERABLE DATA REQUIREMENTS
   3     7.1   Spacecraft-to-Launch-Vehicle Interface Control Document    3    
7.2   Launch Site Operations Plan    4     7.3   Launch Site Safety Submissions
   4     7.4   Coupled Loads Model    5     7.5   Coupled Thermal Model    5    
7.6   Satellite Environmental Test Plan    6     7.7   Fit Check and Separation
Shock Test    6     7.8   Mission Analyses Inputs    6     7.9   Launch Site
Facilities Requirements Document    6     7.10   Launch Site Operations
Procedures    7     7.11   Launch Vehicle Mission Design Review Packages    7  
  7.12   launch Vehicle Launch Readiness Review Package    7     7.13   Launch
Vehicle Flight Readiness Review Package    8     7.14   Launch Vehicle
Pre-Shipment Review Package    8     7.15   Launch Vehicle Post Flight Report   
8     7.16   Launch Processing Photographs and Video    9     7.17  
Contractor-Provided Launch Documentation    9

 

  vi  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

ILLUSTRATIONS

 

Figure

   Page

Figure 1. Receive Polarization Isolation

   4

Figure 2a: Forward Ku to IF Block diagram (For Reference only)

   7

Figure 2b: Forward IF to S Block Diagram (For Reference Only)

   8

Figure 2c: Return Functional Block Diagram (For Reference Only)

   9

Figure 3. Spot Beam Coverage Area, Satellite at 111.1° West

   11

Figure 4. Reference Beam Plan for 7- fold Frequency Reuse

   12

Figure 5. TerreStar On-Station Frequency Plan

   15

Figure 6. TT&C Subsystem Block Diagram (For Illustration Only)

   5

TABLES

 

Table

   Page

Table 1.

   Not used   

Table 2.

   Forward AEIRP    18

Table 3.

   Return G/T    19

Table 4.

   Timer Value Options    6

Table 5.

   Telemetry Baseband Performance Summary    7

Table 6.

   Telemetry RF Performance    9

Table 7.

   Command RF Performance Summary    10

Table A-I.

   Electron Fluence (160W)    1

Table A-2.

   Proton Fluence (Including Solar Flares) and Alpha Particle    3

Table A-3.

   Cosmic Ray Spectrum    4

Table A-4.

   Meteroroid Flux Model by MASS    5

Table A-5.

   Meteoroid Velocity Distribution per NASA SP 8013 dated March, 1969    5

Table A-6.

   Meteoroid Penetration Thickness and Crater Diameter    6

Table A-7.

   Ultraviolet Radiation    6

Table A-8.

   Integral LET Spectra for Geostationary Orbit, M=3 for Single Event Effects   
8

 

  vii  

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

1 — SCOPE

This document specifies the performance characteristics of the TerreStar 2-GHz
GEO Satellite designed to relay digital voice and data traffic in the 2 GHz band
frequencies. The satellite shall be compatible with the launch constraints,
restrictions, environments, and limitations of the launch vehicles and shall be
capable of being placed in a geostationary orbit at the geostationary position
of 111.1° W longitude.

The TerreStar 2-GHz GEO Satellite Space Segment consist of a spacecraft,
ground-based beam forming (GBBF) subsystem, and tracking, telemetry and command
subsystems. Within this segment, two links are provided for communicating
between gateways and users.

 

  1. A forward link with Ku-band uplinks and 2-GHz band downlinks

 

  2. A return link with 2-GHz band uplinks and Ku-band downlinks

The 2-GHz band coverage is accomplished by employing spot beams, using the
Satellite and the Ground Based Beamforming (GBBF) subsystem. The Satellite shall
include a multi-element feed array and reflector antenna for the 2-GHz band
coverage. The GBBF processes the signals to and from the spacecraft S-band feed
array elements.

The TerreStar communications payload provides two distinct links between the
gateways and the users. These links are accomplished with a large number of spot
beams providing coverage to the continental United States, Canada, Alaska,
Hawaii, Puerto Rico and U.S. Virgin Islands.

[***] [The remaining 2 pages (pages 1-1 through 1-2) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

1-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

2 — SATELLITE SYSTEM CHARACTERISTICS

[***] [The remaining 6 pages (pages 2-1 through 2-6) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

2-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

3 — COMMUNICATION SUBSYSTEM

[***] [The remaining 30 pages (pages 3-1 through 3-30) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

3-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

4 — ATTITUDE CONTROL SUBSYSTEM

[***] [The remaining 4 pages (pages 4-1 through 4-4) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

4-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

5 — TRACKING, TELEMETRY, AND COMMAND

[***] [The remaining 11 pages (pages 5-1 through 5-11) of this section have been
omitted and filed separately with the Commission.

 

Revision 6

Exhibit B

5-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

6 — ELECTRICAL POWER SUBSYSTEM

[***] [The remaining 4 pages (pages 6-1 through 6-4) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

6-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

7 — THERMAL CONTROL SUBSYSTEM

[***] [The remaining 2 pages (pages 7-1 through 7-2) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

7-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

8 — PROPULSION SUBSYSTEM

[***] [The remaining 3 pages (pages 8-1 through 8-3) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

8-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

9 — STRUCTURE SUBSYSTEM

[***] [The remaining 2 pages (pages 9-1 through 9-2) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

9-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

10 — MECHANISMS AND ACTUATORS

[***] [The remaining 2 pages (pages 10-1 through 10-2) of this section have been
omitted and filed separately with the Commission.]

 

Revision 6

Exhibit B

10-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

11 — PYROTECHNIC DEVICES

[***] [The remaining page (page 11-1) of this section have been omitted and
filed separately with the Commission.]

 

Revision 6

Exhibit B

11-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

ANNEX A

TO

EXHIBIT B

RADIATION, METEOROID AND CHARGING ENVIRONMENT

 

Revision 6

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

ANNEX A — RADIATION, METEOROID, AND CHARGING ENVIRONMENT

[***] [The remaining 9 pages (pages A-1 through A-9) of this Annex have been
omitted and filed separately with the Commission.]

 

Exhibit B — Performance Spec

A-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

ANNEX B

TO

EXHIBIT B

LAUNCH VEHICLE INTERFACE REQUIREMENTS

 

Revision 4.1

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TerreStar Satellite Program – Technical Specifications

 

ANNEX B — LAUNCH VEHICLE REQUIREMENTS

LIST OF ACRONYMS

 

Acronyms    Definition EMC    Electromagnetic Compatibility EMI   
Electromagnetic Interference RF    Radio Frequency

1 INTRODUCTION

This Appendix B, Launch Vehicle Interface Requirements, outlines the
requirements for the interfacing the spacecraft with the launch vehicle.
Deliverable documentation as part of this contract is specified in Exhibit A,
Satellite Statement of Work.

2 LAUNCH VEHICLE INTERFACE

[***] [The remaining 9 pages (pages B-1 through B-9) of this Annex have been
omitted and filed separately with the Commission.]

 

Exhibit B — Performance Spec

B-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

ANNEX C

TO

EXHIBIT B

COVERAGE AREA POLYGON DEFINITION

 

Exhibit B

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

[***] [The remaining 46 pages (pages C-1 through C-46) of this Annex have been
omitted and filed separately with the Commission.]

 

Exhibit B

C-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

EXHIBIT C

COMMERCIAL PROGRAMS

PRODUCT ASSURANCE PLAN

[***] [Pages 1-220 of this Exhibit C have been omitted and filed separately with
the Commission.]

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

EXHIBIT D

TERRESTAR-2

SATELLITE TEST PLAN

Revision 2

November 16, 2007

 

Prepared for:

TerreStar Networks Inc.

12010 Sunset Hills Road, Suite 900

  

 

Reston, Virginia 20190    TerreStar Networks Inc. Approval Signature

Prepared by:

Space Systems/Loral, Inc.

3825 Fabian Way

  

 

Palo Alto, California 94303-4201    Space Systems/Loral, Inc. Approval Signature

 

i

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

This document contains data and information proprietary to Space Systems/Loral,
Inc. and TerreStar Networks Inc. This data is being furnished pursuant to the
provisions of the Contract between TerreStar Networks Inc. and Space
Systems/Loral, Inc. for the TerreStar Satellite Program. TerreStar Networks Inc.
shall have the right to duplicate, use or disclose the data to the extent
specified in the Purchase Contract.

This page intentionally left blank.

 

ii

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

CONTENTS

 

Section

   Page 1 — INTRODUCTION    1

1.1

   SCOPE    1

1.2

   TEST PLAN OBJECTIVES AND PHILOSOPHY    1    1.2.1    Objectives    1    1.2.2
   Test Philosophy    1 2 — GENERAL REQUIREMENTS    1

2.1

   TYPES OF TESTS    1    2.1.1    Development Tests    1    2.1.2   
Qualification Tests    1    2.1.3    Delta-Qualification (Protoflight) Tests   
1    2.1.4    Acceptance Tests    1    2.1.5    Life Tests    2

2.2

   TYPES OF UNITS    5   

2.2.1

   Flight Model    5    2.2.2    Protoflight Model    5    2.2.3   
Qualification Model    5    2.2.4    Engineering Qualification Model    6   
2.2.5    Engineering Model    7    2.2.6    Engineering Development Models    7

2.3

   EQUIPMENT CATEGORIES    7

2.4

   CATEGORY QUALIFICATION REQUIREMENTS    8

2.5

   DOCUMENTATION    9    2.5.1    Test Procedures    9    2.5.2   
Nonconformance Requirements    10    2.5.3    Log Book    10

2.6

   TEST DATA    11

2.7

   PROTECTING THE FLIGHT ARTICLE    11 3 — TEST CONDITIONS    1

3.1

   GENERAL TEST CONDITIONS    1    3.1.1    Ambient Environment    1    3.1.2   
Zero Gravity    1    3.1.3    Test Equipment Accuracy    1

 

iii

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

   3.1.4    Test Equipment Calibration    1    3.1.5    Test Software    2   
3.1.6    Responsible Personnel    2    3.1.7    Pass/Fail Criteria    2

3.2

   ENVIRONMENTAL TEST LEVELS AND DURATIONS    2    3.2.1    Basic Requirement   
2    3.2.2    Static Loads    2    3.2.3    Vibration    3       3.2.3.1   
Random Vibration    3       3.2.3.2    Sine Vibration    3       3.2.3.3   
Acoustic    4    3.2.4    Deployment Tests    4    3.2.5    Thermal/Thermal
Vacuum    4    3.2.6    Electromagnetic Interference/Electromagnetic
Compatibility/Electrostatic Discharge    4       3.2.6.1    Unit-Level ESD Tests
   4       3.2.6.2    Unit-Level EMI/EMC Tests    5       3.2.6.3   
System-Level EMC Tests    5    3.2.7    Special RF Tests    5    3.2.8    Unit
Operating Time    6 4 — UNIT TEST PLAN    1

4.1

   UNIT TESTING    1    4.1.1    Typical Unit Test Program    1    4.1.2    Unit
Functional and Operating Tests    1    4.1.3    Unit Test Summary Tables    2

4.2

   UNIT DEVELOPMENT AND QUALIFICATION PHILOSOPHY    3    4.2.1    Qualification
Process    3    4.2.2    Qualification Status List    4

4.3

   COMPONENT DETAIL    4    4.3.1    One-shot Components    4       4.3.1.1   
Dual Rod Cutter    4       4.3.1.2    Pyrotechnic Initiator    5       4.3.1.3
   Split Spool Device    5    4.3.2    Traveling Wave Tube Amplifier    5   
4.3.3    S-Band Antenna    6    4.3.4    Ku-Band Antenna    6

 

iv

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

5 — SUBSYSTEM AND SYSTEM TEST    1

5.1

   SUBSYSTEM TEST    1    5.1.1    Overview    1    5.1.2    Structure Subsystem
   1    5.1.3    Repeater Subsystem    2    5.1.4    Antenna Subsystem Tests   
3       5.1.4.1    S-Band Unfurlable Antenna    3       5.1.4.2    General
Guidelines – RF Range Testing    8       5.1.4.3    Ku-Band Integrated Antenna
Test    8    5.1.5    Propulsion    9    5.1.6    Attitude Control and Data
Handling    9    5.1.7    Solar Array    10    5.1.8    Battery Assembly    10
   5.1.9    Thermal Control Subsystem    12

5.2

   SYSTEM TEST    12    5.2.1    Overview    12    5.2.2    Objectives    18

5.3

   TEST READINESS REVIEWS    18

5.4

   DATA REVIEW    19

5.5

   TREND ANALYSIS    19

5.6

   SYSTEM TEST SEQUENCE    19    5.6.1    Initial Reference Performance Phase   
19       5.6.1.1    Propulsion/Bus Subsystem    19       5.6.1.2   
Communication Panel Level    20       5.6.1.3    Spacecraft Alignment    20   
   5.6.1.4    Initial Spacecraft Level Test    20    5.6.2    Thermal Vacuum
Phase    21       5.6.2.1    Overview    21       5.6.2.2    Pre-Thermal Vacuum
Validation    22       5.6.2.3    Thermal Vacuum Profile and Objectives    22   
   5.6.2.4    Test Phases    24       5.6.2.5    Performance Test in Thermal
Vacuum    25       5.6.2.6    Post-Thermal Vacuum and Pre-Dynamics Checks    25
   5.6.3    Dynamics Phase    25       5.6.3.1    Overview    25       5.6.3.2
   Dynamics Build    25

 

v

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

      5.6.3.3    Dynamics Testing    26       5.6.3.4    Pyro/SSD shock and
Deployment Testing    28       5.6.3.5    Launch Vehicle Adapter
Fitcheck/Separation    29       5.6.3.6    Alignment Verification    29    5.6.4
   Final Performance Phase    30       5.6.4.1 RF Test Range    30       5.6.4.2
   Satellite-Level ESD Tests    31       5.6.4.3    Bus Testing    31      
5.6.4.4    Ground Station Compatibility    31       5.6.4.5    Mission Control
Center (MCC) Compatibility    32       5.6.4.6    Electromagnetic Compatibility
Test    32          5.6.4.6.1    Radiated Emissions    32          5.6.4.6.2   
Spacecraft Self Compatibility    32          5.6.4.6.3    Radiated
Susceptibility    33       5.6.4.7    Intermodulation Tests    33       5.6.4.8
   Compatibility Test with GBBF Test Set    34    5.6.5    Final Operations
Phase    34       5.6.5.1    Overview    34       5.6.5.2    Mass Properties   
34       5.6.5.3    Mechanical Operations    35    5.6.6    Ship    36 6 —
LAUNCH BASE OPERATIONS    1

6.1

   LAUNCH BASE PREPAREDNESS, TESTING, AND OPERATIONS    1

6.2

   PRE-SHIPMENT READINESS    1

6.3

   LAUNCH BASE ACTIVITIES    2

6.4

   PHASE I    2

6.5

   PHASE II    3

6.6

   PHASE III    4

6.7

   PHASE IV — ON-PAD OPERATIONS    4 7 — IN-ORBIT TEST    1

7.1

   PURPOSE OF TESTS    1

7.2

   MAJOR ASSUMPTIONS    1

7.3

   IN-ORBIT TEST PLAN AND PROCEDURES    3

7.4

   ORGANIZATION    3    7.4.1    Ground Stations    3

 

vi

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

   7.4.2    Personnel    3    7.4.3    Work Shifts    4    7.4.4    Coordination
and Communication    5

7.5

   IOT CAMPAIGN SCHEDULE    5    7.5.1    Schedule Guidelines    5    7.5.2   
Baseline IOT Campaign Schedule    6    7.5.3    Detailed IOT Campaign Schedules
   7

7.6

   BUS TESTING    7    7.6.1    Bus Test Rationale    7    7.6.2    Bus Test
Sequence    8    7.6.3    Bus Test Matrix    9    7.6.4    Bus IOT Procedures   
11

7.7

   PAYLOAD TESTING    11    7.7.1    Payload Test Sequence    11    7.7.2   
TT&C Test Matrix    12    7.7.3    Turn-On and Quick-Look Tests    12    7.7.4
   Antenna Pattern Measurements    13    7.7.5    Transmission Pathway Testing
   15       7.7.5.1    Transmission Pathway Testing Rationale    15      
7.7.5.2    Transmission Pathway Testing Sequence    15       7.7.5.3   
Transmission Pathway Testing Matrix    15    7.7.6    Payload IOT Procedures   
15    7.7.7    IOT Data Review and Acceptance Process    15    7.7.8    IOT Data
Acceptance Criteria    16

7.8

   IN-ORBIT COMPATIBILITY TEST WITH GROUND BASED BEAMFORMER (GBBF)    17 1.   
GENERAL    1

1.1

   PRESHIPMENT STORAGE    1

1.2

   LAUNCH BASE STORAGE    2 2.    GROUND STORAGE    2

2.1

   ACCESS CONTROL    3

2.2

   MONITORING    3

2.3

   FACILITIES    3

2.4

   SATELLITE PREPARATION FOR LONG-TERM STORAGE    5

2.5

   SOLAR ARRAY STORAGE    6

 

vii

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

3.    LIMITED SHELF LIFE MATERIALS    6 4.    ACTIVATION AND POST-STORAGE
TESTING REQUIREMENTS    6    4.1    ZERO TO ONE MONTH CONSIDERATIONS    11   
4.2    ONE TO THREE & THREE TO TWELVE CONSIDERATIONS    11    4.3    GREATER
THAN TWELVE MONTH CONSIDERATIONS    12    4.4    STORAGE OF A FUELED SPACECRAFT
   12 1.    GENERAL    2 APPENDIX A — STORAGE PLAN    A-1 APPENDIX B — UNIT TEST
TABLES    B-1

 

viii

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

This page intentionally left blank.

 

ix

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

ILLUSTRATIONS

 

Figure         Page 3-1    Typical Unit Thermal, Thermal Vacuum Temperature
Profile    3-6 5-1    Unfurlable Reflector Test Flow    5-7 5-2    Solar Array
Qualification Test Flow    5-14 5-3    Solar Array Subsystem Acceptance Testing
   5-15 5-4    Test Flow    5-17 5-5    Thermal Vacuum Profile    5-23 6-1   
Launch Base Operations Sequence    6-3    TABLES    Table         Page
Table 2-1.    Unit Life Test/Orbital Life Comparison    3 Table 3-1.   
Vibration and Acoustic Test Criteria    3 Table 4-1.    Antenna Unit Summary
Test Matrix    7 Table 4-2a.    Ku-Band Repeater Unit Summary Test Matrix    10
Table 4-2b.    S-Band Repeater Unit Summary Test Matrix    11 Table 4-3.    TC&R
(RF) Unit Summary Test Matrix    14 Table 4-4.    Attitude Control Subsystem
Summary Test Matrix    14 Table 4-4.    Attitude Control Subsystem Summary Test
Matrix    15 Table 4-5.    Bipropellant Propulsion Unit Summary Test Matrix   
17 Table 4-6.    Solar Array Unit Summary Test Matrix    19 Table 4-7.   
Electrical Power Unit and Subsystem Summary Test Matrix    21 Table 4-8.    Data
Handling Subsystem - Unit and Subsystem Summary Test Matrix    23 Table 4-9.   
Thermal Unit Summary Test Matrix    25 Table 4-10.    Structure Unit Summary
Test Matrix    27 Table 4-11.    Mechanisms Unit Summary Test Matrix    28 Table
5-1.    Satellite Test Matrix    37 Table 5-1.    Satellite Test Matrix
(Continued)    46 Table 5-1.    Satellite Test Matrix (Continued)    49 Table
7-1.    Contractor’s Typical IOT Campaign Milestones    6 Table 7-2.   
Contractor’s Set of Bus Subsystem and Function Tests    9 Table 7-3.   
Contractor’s Set of TT&C Tests    13

 

x

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

Table 7-4.    Contractor’s Set of Payload Tests    18 Table 2.3-1.    Storage
Facilities    4 Table B-1.    Traveling Wave Tube    3 Table B-2.    Traveling
Wave Tube Amplifier    3 Table B-2.    Traveling Wave Tube Amplifier    4 Table
B-3.    Channel Amplifier    6 Table B-4.    Frequency Converter and Low Noise
Amplifier    6 Table B-4.    Frequency Converter and Low Noise Amplifier    7
Table B-5.    Filter    7 Table B-5.    Filter    8 Table B-6.    Switch    9

 

xi

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

This page intentionally left blank.

 

xii

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

1 — INTRODUCTION

1.1 SCOPE

This Spacecraft Test Plan (STP) defines the development, qualification,
protoflight, and acceptance tests that are performed as a standard on all Space
Systems/Loral (SS/L) spacecraft during factory testing, at the launch base, and
for in-orbit verification. Testing is performed at unit, subsystem, and
satellite levels. The ground test program is designed to demonstrate the
performance of flight units in environments more stressful than those expected
during the mission life. The purpose of this testing to show compliance with the
Terrestar-2 Satellite Performance Specification as defined in Exhibit B of the
Contract.

This plan is SS/L’s proven baseline. Testing details can be modified by mutual
agreement between Purchaser and SS/L.

1.2 TEST PLAN OBJECTIVES AND PHILOSOPHY

1.2.1 Objectives

The objective of the STP is to ensure that the satellite will satisfy and
fulfill its mission requirements over its lifetime. The STP is designed to prove
that the spacecraft is capable of meeting its required performance
specifications over the range of environments it shall encounter during its
operational lifetime, including ground, launch base, and launch phases. All
acceptance, protoflight, qualification, and development tests conducted on
spacecraft equipment shall follow the requirements of this test plan.

1.2.2 Test Philosophy

[***] [The remaining 2 pages (pages 1-1 through 1-2) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

1-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

2 — GENERAL REQUIREMENTS

[***] [The remaining 11 pages (pages 2-1 through 2-11) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

2-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

3 — TEST CONDITIONS

[***] [The remaining 6 pages (pages 3-1 through 3-6) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

3-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

4 — UNIT TEST PLAN

[***] [The remaining 28 pages (pages 4-1 through 4-28) of this section have been
omitted and filed separately with the Commission]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

4-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

5 — SUBSYSTEM AND SYSTEM TEST

[***] [The remaining 60 pages (pages 5-1 through 5-60) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

5-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

6 — LAUNCH BASE OPERATIONS

[***] [The remaining 5 pages (pages 6-1 through 6-5) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

6-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

7 — IN-ORBIT TEST

[***] [The remaining 19 pages (pages 7-1 through 7-19) of this section have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

7-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

Appendix A

SATELLITE STORAGE PLAN

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

This page intentionally left blank.

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

1. GENERAL

The Contractor shall provide the capability to store the Spacecraft beyond the
contracted shipment or launch date, should it be necessary. Spacecraft storage
shall be consistent with this Agreement. Systems Engineering will generate a
System Technical Information Request/Statement (STIRS) that will detail the any
spacecraft specific storage and testing requirements following storage.

The Contractor shall have provisions to store the Spacecraft if required, under
environmentally controlled conditions to be mutually agreed upon by the
Contractor and Customer. The Contractor shall provide the operators of the
storage facility with a procedure, detailing the frequency of inspection of the
Spacecraft, and recording of environmental data.

The storage of the satellite and its associated flight units will be
accomplished during the storage period using facilities, equipment, and
procedures that meet the requirements of this Storage Plan.

Terms and conditions for storage of the spacecraft shall be detailed in the
Contractual option directing the spacecraft storage.

1.1 PRESHIPMENT STORAGE

[***] [The remaining 13 pages (pages A-1 through A-13) of this Annex have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

A-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

Appendix B

UNIT TEST TABLES

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

B-1

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

TERRESTAR

Revision 2

 

[***] [The remaining 9 pages (pages B-2 through B-10) of this Annex have been
omitted and filed separately with the Commission.]

 

SS/L-TP20421 Exhibit D

Volume 2, Part B — Attachment 2

B-2

Use or disclosure of the data contained on this sheet is subject to the
restriction on the title page.

--------------------------------------------------------------------------------

EXHIBIT E – TerreStar Satellite Program – TerreStar 2

Payment Plan and Termination Liability Amounts

(not including Orbital Performance Incentive Payments)

November 16, 2007                     (US$)

[***]

 

Payment
Number

  

TerreStar 2

Commencement

Date + Month*

  

Payments

  

Cumulative

Payment Amount

& Termination

Liability Amount

**

  

Time Payments / Program Milestones

T2-1    [***]    [***]    [***]    [***] T2-2    [***]    [***]    [***]   
[***] T2-3    [***]    [***]    [***]    [***] T2-4    [***]    [***]    [***]
   [***] T2-5    [***]    [***]    [***]    [***] T2-5a    [***]    [***]   
[***]    [***] T2-6    [***]    [***]    [***]    [***] T2-7    [***]    [***]
   [***]    [***] T2-8    [***]    [***]    [***]    [***] T2-8a    [***]   
[***]    [***]    [***]    [***]    [***]    [***]    [***] T2-9    [***]   
[***]    [***]    [***]    [***]    [***]    [***]    [***] T2-10    [***]   
[***]    [***]    [***] T2-10a    [***]    [***]    [***]    [***]    [***]   
[***]    [***]    [***] T2-11    [***]    [***]    [***]    [***] T2-11a   
[***]    [***]    [***]    [***] T2-12    [***]    [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***]    [***]    [***]    [***] T2-13   
[***]    [***]    [***]    [***] T2-13a    [***]    [***]    [***]    [***]
T2-14    [***]    [***]    [***]    [***]    [***]    [***]    [***]    [***]
T2-15    [***]    [***]    [***]    [***] T2-15a    [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***]    [***]    [***]    [***]    [***]
T2-16    [***]    [***]    [***]    [***] T2-16a    [***]    [***]    [***]   
[***] T2-16b    [***]    [***]    [***]    [***]    [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***] T2-17    [***]    [***]    [***]   
[***]    [***]    [***]    [***]    [***] T2-18    [***]    [***]    [***]   
[***] T2-19    [***]    [***]    [***]    [***] T2-20    [***]    [***]    [***]
   [***] T2-21    [***]    [***]    [***]    Launch Satellite   

34

         Complete IOT **

 

* For this Payment Plan, TerreStar 2 Commencement Date to occur no earlier than
August 25, 2005, but no later than twelve (12) months after the Agreement
Execution Date.

** Orbital Performance Incentive amounts shall be paid in accordance with
Article 13.

Use or disclosure of the data contained on this page is subject to the
restrictions set forth on the first page of this Agreement.

--------------------------------------------------------------------------------

Exhibit F – Payment Plan for TerreStar Satellite Orbital Performance Incentives

    9-Nov-07

Payment Plan for TerreStar 2 Scheduled Orbital Performance Incentives

(in U.S. $s)

 

Months after Launch*

  

Scheduled Orbital Performance Payments

  

Cumulative Scheduled Orbital Performance Payments

0

   [***]    [***]

1

   [***]    [***]

2

   [***]    [***]

3

   [***]    [***]

4

   [***]    [***]

5

   [***]    [***]

6

   [***]    [***]

7

   [***]    [***]

8

   [***]    [***]

9

   [***]    [***]

10

   [***]    [***]

11

   [***]    [***]

12

   [***]    [***]

TOTAL

   [***]   

 

* Subject to Articles 13.2.2 and 13.2.5 (B) of the Contract.

Use or disclosure of the data contained on this page is subject to the
restrictions set forth on the first page of this Agreement.

--------------------------------------------------------------------------------

Exhibit F – Payment Plan for TerreStar Satellite Orbital Performance Incentives

    9-Nov-07

Payment Plan for TerreStar 2 Quarterly Orbital Performance Incentives

(in U.S. $s)    (based on Contractor earning 100% of the Quarterly Orbital
Performance Incentives over the entire 15 years after Acceptance)

 

Quarter No.

  

Months after Acceptance*

   Quarterly Incentive Payments    Quarterly Interest Charge**   
Total Quarterly Incentive & Interest Payments 1    3    275,000    5,342   
280,342 2    6    275,000    10,788    285,788 3    9    275,000    16,340   
291,340 4    12    275,000    22,000    297,000 5    15    275,000    27,770   
302,770 6    18    275,000    33,651    308,651 7    21    275,000    39,647   
314,647 8    24    275,000    45,760    320,760 9    27    275,000    51,991   
326,991 10    30    275,000    58,344    333,344 11    33    275,000    64,819
   339,819 12    36    275,000    71,421    346,421 13    39    275,000   
78,151    353,151 14    42    275,000    85,011    360,011 15    45    275,000
   92,005    367,005 16    48    275,000    99,134    374,134 17    51   
275,000    106,403    381,403 18    54    275,000    113,812    388,812 19    57
   275,000    121,365    396,365 20    60    275,000    129,065    404,065 21   
63    275,000    136,915    411,915 22    66    275,000    144,917    419,917 23
   69    275,000    153,074    428,074 24    72    275,000    161,390    436,390
25    75    275,000    169,868    444,868 26    78    275,000    178,510   
453,510 27    81    275,000    187,320    462,320 28    84    275,000    196,302
   471,302 29    87    275,000    205,457    480,457 30    90    275,000   
214,791    489,791 31    93    275,000    224,306    499,306 32    96    275,000
   234,006    509,006 33    99    275,000    243,894    518,894 34    102   
275,000    253,974    528,974 35    105    275,000    264,250    539,250 36   
108    275,000    274,726    549,726 37    111    275,000    285,406    560,406
38    114    275,000    296,292    571,292 39    117    275,000    307,391   
582,391 40    120    275,000    318,704    593,704 41    123    275,000   
330,238    605,238 42    126    275,000    341,996    616,996 43    129   
275,000    353,982    628,982 44    132    275,000    366,201    641,201 45   
135    275,000    378,657    653,657 46    138    275,000    391,355    666,355
47    141    275,000    404,300    679,300 48    144    275,000    417,497   
692,497 49    147    275,000    430,950    705,950 50    150    275,000   
444,664    719,664 51    153    275,000    458,644    733,644 52    156   
275,000    472,897    747,897 53    159    275,000    487,426    762,426 54   
162    275,000    502,237    777,237 55    165    275,000    517,336    792,336
56    168    275,000    532,728    807,728 57    171    275,000    548,420   
823,420 58    174    275,000    564,416    839,416 59    177    275,000   
580,723    855,723 60    180    275,000    597,347    872,347    TOTAL   
16,500,000    14,846,327    31,346,327

 

* – Subject to Articles 13.2.1 and 13.2.5 (B) of the Contract.

** – Calculated at Annual Interest Rate of 8.0% Compounded Annually

Use or disclosure of the data contained on this page is subject to the
restrictions set forth on the first page of this Agreement.