Exhibit 10.1


 


CONFIDENTIAL TREATMENT OF
CERTAIN DESIGNATED PORTIONS OF THIS EXHIBIT HAS BEEN REQUESTED BY ICO GLOBAL
COMMUNICATIONS (HOLDINGS) LIMITED. SUCH CONFIDENTIAL PORTIONS HAVE BEEN
OMITTED, AS INDICATED BY A[*] IN THE TEXT, AND SUBMITTED TO THE COMMISSION.


 


EXECUTION
ORIGINAL


 


SPACE SEGMENT CONTRACT


 


Between


 


ICO Satellite Management LLC


 


And


 


Space Systems/Loral, Inc.


 


 


The
attached Contract and the information contained therein are confidential and
proprietary to ICO Satellite Management LLC 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shall not be published or disclosed to any third party except as permitted by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.


 


i

















 


TABLE OF CONTENTS


 


	
  Article

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Table of Contents

  	
   

  	
  ii

  
	
   

  	
   

  	
   

  
	
  Preamble

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Recitals

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  Article 1- Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Article 2- Scope of Work

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  Article 3- Deliverable Items and Delivery Schedule

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  Article 4 - Price

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  Article 5 - Payments

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  Article 6 - Purchaser-Furnished Items

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  Article 7 - Compliance with U.S. Laws and Directives

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  Article 8 - Access to Work-in-Process

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
  Article 9 - Satellite Pre-Shipment Review (SPSR) and
  Spacecraft Launch Readiness Review (SLRR)

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  Article 10 - Satellite and Space Segment Acceptance

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  Article 11 - Acceptance Inspection for Deliverable
  Items other than Satellite or Space Segment

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Article 12 - Transfer of Title and Risk of Loss

  	
   

  	
  65

  
	
   

  	
   

  	
   

  
	
  Article 13 – Satellite Orbital Performance
  Incentives and Space Segment Orbital Performance Incentives

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Article 14 - Corrective Measures in Satellite

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
  Article 15 - Warranty

  	
   

  	
  80

  
	
   

  	
   

  	
   

  
	
  Article 16 – Changes and Stop Work

  	
   

  	
  92

  



 


ii

















 


	
  Article 17 - Force Majeure

  	
   

  	
  96

  
	
   

  	
   

  	
   

  
	
  Article 18 - Purchaser Delay of Work

  	
   

  	
  98

  
	
   

  	
   

  	
   

  
	
  Article 19 - Intellectual Property Indemnity

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  Article 20 - Indemnity for Personal Injury and
  Property Damage

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Article 21 - Termination for Convenience

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Article 22 - Liquidated Damages

  	
   

  	
  108

  
	
   

  	
   

  	
   

  
	
  Article 23 - Termination for Default and Excessive
  Force Majeure

  	
   

  	
  112

  
	
   

  	
   

  	
   

  
	
  Article 24 - Options

  	
   

  	
  121

  
	
   

  	
   

  	
   

  
	
  Article 25 - Dispute Resolution

  	
   

  	
  130

  
	
   

  	
   

  	
   

  
	
  Article 26 - Inter-Party Waiver of Liability for a
  Launch

  	
   

  	
  134

  
	
   

  	
   

  	
   

  
	
  Article 27 - Major Subcontracts

  	
   

  	
  136

  
	
   

  	
   

  	
   

  
	
  Article 28 - Contractor Insurance Requirements

  	
   

  	
  137

  
	
   

  	
   

  	
   

  
	
  Article 29 - Personnel and Key Personnel

  	
   

  	
  141

  
	
   

  	
   

  	
   

  
	
  Article 30 - Limitation of Liability

  	
   

  	
  143

  
	
   

  	
   

  	
   

  
	
  Article 31 - Disclosure and Handling of Proprietary
  Information

  	
   

  	
  145

  
	
   

  	
   

  	
   

  
	
  Article 32- Intellectual Property Rights

  	
   

  	
  148

  
	
   

  	
   

  	
   

  
	
  Article 33- Public Release of Information

  	
   

  	
  157

  
	
   

  	
   

  	
   

  
	
  Article 34- Notices

  	
   

  	
  158

  
	
   

  	
   

  	
   

  
	
  Article 35- Risk Management Services

  	
   

  	
  160

  
	
   

  	
   

  	
   

  
	
  Article 36- Order of Precedence

  	
   

  	
  162

  
	
   

  	
   

  	
   

  
	
  Article 37- General

  	
   

  	
  163

  



 


	
  Attachment A

  	
  Form of Invoice

  
	
   

  	
   

  	
   

  
	
  Annex 1 to Attachment A

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1 to Annex 1 to Attachment

  	
   

  
	
   

  	
   

  	
   

  
	
  Attachment B

  	
  Key Personnel

  	
   

  



 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED. 


 


	
  Attachment C

  	
  GBBF-Unique Components and
  Functions on Board the Satellite

  
	
   

  	
   

  
	
  Attachment D

  	
  [*]

  
	
   

  	
   

  
	
  Attachment E

  	
  Major Subcontracts List

  



 


iv

















 


PREAMBLE


 


This Space
Segment Contract (the “Contract”)  is
executed as of November 29, 2005 (“Execution Date”) and deemed entered into as
of January 10, 2005 (the “Effective Date of Contract” or “EDC”) between ICO
Satellite Management LLC, a limited liability company organized and existing
under the laws of the State of Delaware, having an office and place of business
at 2300 Carillon Point, Kirkland, Washington, 98033 (hereinafter referred to as
“Purchaser”) and Space Systems/Loral, Inc., a corporation organized and
existing under the laws of the State of Delaware, having an office and place of
business at 3825 Fabian Way, Palo Alto, California 94303 (hereinafter referred
to as “Contractor”). This Contract restates and amends the Satellite Contract
entered into by Purchaser and Contractor as of January 10, 2005, as amended by
Amendment One (1) entered into as of June 23, 2005, Amendment Two (2) entered
into as of August 2, 2005, and Amendment Three (3) entered into as of September
23, 2005 (the “Original Satellite Contract”).


 


1

















 


RECITALS


 


WHEREAS, Purchaser desires to procure one (1)
communication Satellite, and an option for an additional one (1) communication
satellite, to be accepted on-orbit and integrated with a Ground-Based Beam
Forming Subsystem to form a Space Segment, launch 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, and


 


WHEREAS, Contractor is willing to furnish such
Satellite and such option satellite, integrated with a Ground-Based Beam
Forming Subsystem to form a Space Segment, launch 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 Fixed Firm Price and other valid consideration,


 


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


 


2

















 


ARTICLE
1- DEFINITIONS


 


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


 


1.1           “Acceptance” or “Accepted” (i)
with respect to the Satellite and the Space Segment shall be as provided for in
Article 10, and (ii) with respect to any Deliverable Item other than the
Satellite and the Space Segment (including, without limitation, the GBBF
Subsystem and the DSS) shall be as provided for in Article 11.


 


1.2           “Actual Costs” shall mean, without duplication, Contractor’s
direct labor (and allocated fringe, overhead and general and administrative
costs), materials (including subcontracts), and other direct costs (and
allocated general and administrative costs), all in accordance with Contractor’s
generally accepted accounting practices.


 


1.3           “Affiliate” means, with respect to an entity, any other
entity Controlling or Controlled by or under common Control with such entity.


 


1.4           “Applicable
Space Segment Rate” has the meaning set forth in Article 13.1 hereof.


 


1.5           “Asserting Party” has the meaning set forth in Article
32.2.3.


 


1.6           “Reserved”


 


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


 


1.8           “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.


 


1.9           “Change
Request” has the meaning set forth in Article 16.1.1.


 


3

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED. 


 


1.10         “Competitor
of Contractor” or words to that affect means any Person or any
Affiliate thereof engaged in the manufacture of commercial telecommunication
satellites.


 


1.11         “Conforming
Space Segment” [*]


 


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


 


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


 


1.14         “Contractor
Background Intellectual Property” means Intellectual Property
first made, developed, or created by Contractor (or by others acting on behalf
of Contractor including any subcontractor) prior to the negotiation or
performance of the Original Satellite Contract or otherwise first made,
developed, or created by Contractor (or by others acting on behalf of
Contractor including any subcontractor) other than in performance of or
pursuant to this Contract or the Original Satellite Contract and necessary to
the use of any Deliverable Item.


 


1.15         “Contractor
Notice of Default” has the meaning set forth in Article 23.2.1.


 


1.16         “Contractor
Space Segment Background Intellectual Property” means Intellectual Property
directly relating to (i) ground-based beam forming subsystems, (ii) the
interaction between a ground-based beam forming subsystem and a satellite, or (iii)
space segment-unique components of a satellite, first made, developed, or
created by Contractor (or by others acting on


 


4

















 


behalf of Contractor including any subcontractor) prior to the
negotiation or performance of the Original Satellite Contract or otherwise
first made, developed, or created by Contractor (or by others acting on behalf
of Contractor including any subcontractor) other than in performance of or
pursuant to this Contract or the Original Satellite Contract and necessary to
the use of any Deliverable Item relating to the Space Segment (other than the
Satellite) to be Delivered by Contractor hereunder. Anything in the foregoing
to the contrary notwithstanding, “Contractor Space Segment Background
Intellectual Property” shall not include any Intellectual Property in or
relating specifically to a satellite other than space-segment unique components
of a satellite.


 


1.17         “Contractor
Space Segment Foreground Intellectual Property” means Intellectual Property
first made, developed or created by Contractor (or by others acting on behalf
of Contractor including any subcontractor) in the performance of Contractor’s
obligations with respect to the GBBF Subsystem under the Original Satellite
Contract and/or the Space Segment under this Contract, including with respect
to the Space Segment-unique components of the Satellite required for Satellite
operation with the GBBF Subsystem, as set forth in Attachment C. “Contractor
Space Segment Foreground Intellectual Property” shall not include any
Intellectual Property in or relating specifically to the Satellite except as
set forth in the immediately preceding sentence.


 


1.18         “Contractor
Space Segment Intellectual Property” means, collectively, the
Contractor Space Segment Background Intellectual Property and the Contractor
Space Segment Foreground Intellectual Property.


 


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


 


5

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED. 


 


1.20         “Deadline
Date” shall have the applicable meaning set forth in Article 5.2.3A.


 


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


 


1.22         “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, and, collectively, the “Deliverable Items.”


 


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


 


1.24         “Dispute” has the meaning set forth in Article 25.


 


1.25         “DSS” means
Contractor’s Dynamic Satellite Simulator, together with all software necessary
to the proper function thereof, as more specifically described in Exhibit J,
ICO DSS SOW and Functional Requirements.


 


1.26         “Effective Date of Contract” or “EDC”
means the effective date of this Contract as specified in the Preamble, being
January 10, 2005.


 


1.27         “Equitably Adjusted” or “Equitable Adjustment”
means, with respect to a particular event necessitating an adjustment in the Contract
where an Equitable Adjustment is provided for, a reasonable good faith
adjustment to the terms of this Contract, including price, schedules, payment
schedules, delivery dates, and termination liability to the extent related to
the Work caused by such particular event. The adjustments shall either be
agreed to by the Parties in accordance with the terms of this Contract
(including the incorporation in a Contract Amendment in accordance with Article
37.5) or as determined in accordance with Article 25. [*]


 


1.28         “Execution
Date” means the execution date set forth in the Preamble.


 


6

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED. 


 


1.29         “Exhibit(s)” means the exhibit(s) identified in Article 2.1
and attached hereto and incorporated herein, as may be added, modified and
amended from time to time in accordance with the terms hereof. Without
limitation, Exhibits may be added to this Contract in accordance with Article
24.


 


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


 


1.31         “FCC
Event(s)” has the meaning set forth in Article 5.2.3A.


 


1.32         [*]


 


1.33         “Financing
Agreements” means any and all documents and agreements
evidencing and/or securing monies provided 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 Space Segment program.


 


1.34         “Financing
Entity” means any Person (other than Contractor, or Affiliates of Contractor,
or Competitors of Contractor), e.g., commercial bank, merchant bank, investment
bank, commercial finance organization, corporation, partnership or other entity
or individual, which has been specifically identified in a written notification
to Contractor providing money to Purchaser to fund the design, development,
construction, procurement, maintenance, or operation of all or any material
part of Purchaser’s Space Segment program.


 


1.35         “Firm Fixed Price” has the meaning set forth in Article 4.1.


 


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


 


1.37         “Foreground
Intellectual Property” means Intellectual Property, other than
Contractor Space Segment Foreground Intellectual Property and Purchaser Space
Segment Foreground Intellectual Property, first made, developed or created in
the performance of this Contract or the Original Satellite Contract, that is
incorporated into, or required for the use of, any Deliverable Item.


 


7

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


1.38         [*]


 


1.39         “GBBF
Incentive Payment” has the applicable meaning set forth in Article
5.2.3B.


 


1.40         “Ground-Based
Beam Forming Subsystem” or “GBBF Subsystem” means
the ground-based beam forming subsystem that is to be Delivered by Contractor
to Purchaser pursuant to this Contract, which GBBF Subsystem shall include but
not be limited to a subsystem with not less than (i) two (2) ground-based beam
forming assemblies, (ii) three (3) ground-based pointing beacon stations, and
(iii) related software, in conformance with the specifications contained in
Exhibit E, Space Segment Performance Specification, and as more fully described
in Exhibit G, Space Segment Statement of Work and as verified under the test
plan in accordance with Exhibit H, Space Segment Test Plan.


 


1.41         “In-Orbit Testing” or “IOT” means the
testing of the Satellite on-orbit in accordance with Article 10.1.1 and Exhibit
D, Satellite Test Plan.


 


1.42         “IOT Complete Date” has the meaning set forth in Article 10.1.1.


 


1.43         “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, know how, and similar matter in which an Intellectual Property Right
may subsist.


 


8

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


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


 


1.45         “Intellectual
Property Right(s)” means all common law and statutory proprietary
rights, including patent, patent application, 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.


 


1.46         “Intellectual
Property Documentation Dates” means each of the
following: [*]


 


1.47         “Intentional
Ignition” means, with respect to the Satellite, the start of
the ignition process for the purpose of Launch, which is the time at which the
command signal is sent to the Launch Vehicle. This definition shall be modified
to reflect the definition of “intentional ignition” in the Launch Services
Agreement applicable to Launch of the Satellite.


 


1.48         “Key
Personnel” has the meaning set forth in Article 29.2.


 


1.49         “Launch” means, with respect to the Satellite, Intentional
Ignition followed by lift-off. This definition shall be modified to incorporate
the definition of “launch” from the Launch Services Agreement applicable to the
Launch of the Satellite.


 


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


 


1.51         “Launch Agency” means the Person responsible for conducting
the Launch Services for the Satellite.


 


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


 


9

















 


1.53         “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.


 


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


 


1.55         “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.


 


1.56         “Launch Vehicle” means the launch vehicle used for Launch
Services for the Satellite.


 


1.57         “Less than Satisfactorily Operating Satellite” has the
meaning set forth in Article 13.2.1.


 


1.58         “Less than Satisfactorily Operating Space Segment” has the
meaning set forth in Article 13.2.1.


 


1.59         “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


 


10

















 


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.


 


1.60         “Losses” has the meaning set forth in Article 20.1.


 


1.61         “Major Subcontract” means a subcontract related to the
performance of this Contract and valued at Two Million Five Hundred Thousand
United States dollars (U.S. $2,500,000) or more and such other subcontracts
that have been agreed by Purchaser and Contractor as material.


 


1.62         “May FCC Order” has the meaning set forth in Article 5.2.3A.


 


1.63         “Milestone” means a specific numbered event as described in
Exhibit F, Payment Plan and Termination Liability Amounts.


 


1.64         “Milestone Date” means, with respect to a particular
Milestone, the date which such Milestone is scheduled for completion as set
forth in Exhibit F, Payment Plan and Termination Liability Amounts.


 


1.65         “Mission Operations Support Services” means the
orbit-raising, IOT, SSIOT and related services specified in Exhibit A,
Statement of Work and/or Exhibit G, Space Segment Statement of Work, to be
performed by Contractor for the Satellite and the Space Segment.


 


1.66         “Net Partial Termination Claim” has
the meaning set forth in Article 21.2.2.


 


1.67         “Net Whole Termination Claim” has
the meaning set forth in Article 21.2.1.


 


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


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


1.69         “Notice of Termination for Default” has
the meaning set forth in Article 23.


 


1.70         “Notice of Termination for Convenience” has the meaning set
forth in Article 21.1.


 


1.71         “Notice of Termination for Excessive Force Majeure” has the
meaning set forth in Article 23.3.


 


1.72         “Notice
to Stop Work” has the meaning set forth in Article 16.2.


 


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


 


1.74         “Option Space Segment” has the meaning set forth in Article
24.5.


 


1.75         “Orbital Performance Incentives” shall mean, collectively,
the Satellite Orbital Performance Incentives and the Space Segment Orbital
Performance Incentives.


 


1.76         “Orbital Storage” means, with respect to an otherwise
operational Satellite, any period of time of intentional non-use by Purchaser
of such Satellite after Acceptance.


 


1.77         “Original
Deadline Date” has the meaning set forth in Article 5.2.3A.


 


1.78         “Partial Termination Claim” has the meaning set forth in
Article 21.2.2.


 


1.79         [*]


 


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


 


12

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


1.81         “Payment Plan” means the payment plan for the Satellite, the
Space Segment and the DSS, as set forth in Exhibit F, Payment Plan and
Termination Liability Amounts. The Payment Plan shall be adjusted to include
other Deliverable Items in accordance with Article 24, if the applicable
options are exercised, as provided in Exhibit F. The Payment Plan shall also be
adjusted in accordance with Article 16, if Change Requests are implemented.


 


1.82         “Permitted
Purposes” means [*]


 


1.83         “Performance Specification” means the applicable performance
specifications for the Satellite, the Space Segment, the GBBF Subsystem, and
other Deliverable Items in the context of the applicable clause, as such
specification may be amended from time to time in accordance with the terms
hereof.


 


13

















 


1.84         “Person” means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union
or other entity.


 


1.85         “PMO” means the Purchaser program management office to be
designated by Purchaser.


 


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


 


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


 


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


 


1.89         “Purchaser Background Intellectual Property” means Intellectual Property first made, developed, or
created by Purchaser (or by others, other than Contractor or any of its
subcontractors, acting on behalf of Purchaser) prior to the negotiation or
performance of the Original Satellite Contract or otherwise first made, developed,
or created by Purchaser (or by others, other than Contractor or any of its subcontractors,
acting on behalf of Purchaser) other than in performance of or pursuant to this
Contract or the Original Satellite Contract and necessary for the use of any
Deliverable Item.


 


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


 


1.91         “Purchaser Space Segment Foreground Intellectual Property”
means Intellectual Property first made, developed or created by Purchaser (or
by others acting on behalf of Purchaser other than Contractor or its
subcontractors) with respect to the GBBF Subsystem under the Original Satellite
Contract and/or the Space Segment under this Contract. Notwithstanding the
foregoing, “Purchaser Space Segment Foreground Intellectual Property” shall not
include any Intellectual Property in or relating specifically to the Satellite
or any


 


14

















 


Intellectual Property first made, developed or created after Space
Segment Acceptance or after termination of this Contract.


 


1.92         “Satellite” or “Spacecraft”
means the communications satellite that is to be manufactured by Contractor and
to be Delivered to Purchaser pursuant to this Contract.


 


1.93         “Satellite Anomaly” means, with respect to the Satellite
on-orbit, a condition or occurrence that has, in Purchaser’s reasonable
opinion, a material adverse impact on the Satellite Stated Life or performance
of such Satellite.


 


1.94         “Satellite Option” has the
meaning set forth in Article 24.


 


1.95         “Satellite Option Exercise” has
the meaning set forth in Article 24.


 


1.96         “Satellite Orbital Performance Incentive Period” has the
meaning set forth in Article 13.1.


 


1.97         “Satellite Orbital Performance Incentives” has the meaning
set forth in Article 13.1.


 


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


 


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


 


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


 


1.101       “Satellite Storage Plan” has the meaning set forth in Article
24.4 (a).


 


1.102       “Satisfactorily Operating Satellite” has the meaning set
forth in Article 13.2.1.


 


1.103       “Satisfactorily Operating Space Segment” has the meaning set
forth in Article 13.2.1.


 


15

















 


1.104       “SCF” means satellite control facility.


 


1.105       “SCCS/E” has the
meaning set forth in Article 24.2.


 


1.106       “Space Segment” means the
space segment comprised of the Satellite and the GBBF Subsystem, integrated for
the purpose of communications services, Delivered by Contractor to Purchaser
pursuant to this Contract, as more fully described in Exhibit E, Space Segment
Performance Specification and Exhibit G, Space Segment Statement of Work.


 


1.107       “Space Segment Acceptance Deadline” has the meaning set forth
in Article 10.1.2.


 


1.108       “Space Segment Acceptance Payment” has the meaning set forth
in Article 5.2.3C.


 


1.109       “Space Segment IOT” or “SSIOT” means the Space Segment In-Orbit Test in accordance
with Article 10.1.2 and as more fully described in Exhibit G, Space Segment
Statement of Work and Exhibit H, Space Segment Test Plan.


 


1.110       “Space
Segment IOT Complete Date” has the meaning set forth in
Article 10.1.2.


 


1.111       “Space Segment Option” has the meaning set forth in Article
24.5.


 


1.112       “Space Segment Option Exercise” has the meaning set forth in
Article 24.5.


 


1.113       “Space Segment Option Price” has the meaning set forth in
Article 24.5.


 


1.114       “Space Segment Orbital Performance Incentive Period” has the
meaning set forth in Article 13.1.


 


1.115       “Space Segment Orbital Performance Incentives” has the
meaning set forth in Article 13.1.


 


1.116       “Space
Segment Test Plan” means the Space Segment test
plan attached as Exhibit H, as may be amended from time to time in accordance
with the terms hereof.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


1.117       “Space
Segment Warranty Termination Payment” has the meaning set forth in
Article 10.1.2.


 


1.118       “Spacecraft
Launch Readiness Review” or “SLRR” or “LRR” means the testing and review in accordance with
Article 9.2 of this Contract and Section 2.2.7.2 of Exhibit A, Statement of
Work.


 


1.119       “SSIOT Deadline” has the meaning set forth in Article 10.4.


 


1.120       “Special Adjustment Factors” means [*]


 


1.121       “Standard Adjustment Factors” means [*]


 


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


 


1.123       “Storage” has the meaning set forth in Article 24.4.


 


17

















 


1.124       “Summary In-Orbit Test Report” shall have the meaning set
forth in Exhibit A, Statement of Work.


 


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


 


1.126       “Terminated Ignition” means that, following the time when the
electronic signal is sent to command the opening of any first stage propellant
valves, the first stage engines of the Launch Vehicle are shut down for any reason
before the hold down mechanism is released and the launch pad is declared safe
by the Launch Agency. This definition shall be modified to incorporate the
definition of “terminated ignition” from the Launch Service Agreement
applicable to the Launch of the Satellite.


 


1.127       “Third Party Intellectual Property” means
Intellectual Property owned by any third party (other than a subcontractor
acting for or on behalf of Contractor or Purchaser, as applicable) that is
directly incorporated in and necessary for the continued use of any Deliverable
Item.


 


1.128       “Total Loss” means the destruction or total operational
failure of the Satellite or any other condition of the Satellite that precludes
the occurrence of the IOT Complete Date. This definition shall be modified to
reflect the definition of “total loss” or “total constructive loss” in the
Launch and In-Orbit Insurance Policy, if such policy of insurance is obtained.


 


1.129       “Whole Termination Claim” has the meaning set forth in
Article 21.2.1.


 


1.130       “Work-in-process”
or “WIP” has the meaning set forth in
Article 23.1.3.


 


18

















 


1.131       “Work”
means all design, development, construction, manufacturing, labor, and
services, including tests to be performed, and any and all Deliverable Items,
including the Satellite, the Space Segment, the DSS and the GBBF Subsystem, and
software, Deliverable Data, Mission Operations Support Services, Launch Support
Services, training, and equipment, materials, articles, matters, services, and
things to be furnished and rights (including, but not limited to, rights with
respect to Intellectual Property) to be transferred to Purchaser under this Contract,
or any subcontract hereunder entered into by Contractor.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


ARTICLE 2- SCOPE OF WORK


 


2.1        Provision of
Services and Materials.


 


Contractor hereby agrees to perform the Work in accordance with this
Contract, including the following Exhibits, which are attached hereto and made
a part hereof:


 


2.1.1        Exhibit A, Statement of
Work, [*]


 


2.1.2        Exhibit B, Satellite
Performance Specification, [*]


 


2.1.3        Exhibit C, Product Assurance
Program Plan, [*]


 


2.1.4        Exhibit D, Satellite Test
Plan, dated [*]


 


2.1.5        Exhibit E, Space Segment
Performance Specification, dated [*]


 


2.1.6        Exhibit F, Payment Plan and
Termination Liability Amounts, dated [*]


 


2.1.7        Exhibit G, Space Segment
Statement of Work, dated [*]


 


2.1.8        Exhibit H, Space Segment
Test Plan, dated [*]


 


2.1.9        Exhibit
J, ICO DSS SOW and Functional Requirements, dated [*]


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


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
Delivery by Contractor shall occur on or before the corresponding dates in the
table below and to the specified locations in the table below (or such other
locations as the Parties may agree):


 


	
  Item

  	
   

  	
  Description

  	
   

  	
  Delivery Date

  	
   

  	
  Delivery Location

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Space
  Segment

  	
   

  	
  Upon
  Acceptance under Article 10.1.2

  	
   

  	
  In
  orbit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Satellite

  	
   

  	
  [*]

  	
   

  	
  Contractor’s
  Facility in Palo Alto, CA

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GBBF
  Subsystem

  	
   

  	
  [*]

  	
   

  	
  Purchaser’s
  Gateways and Pointing Beacon Station Locations Per SOW, Exhibit G

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Deliverable
  Data

  	
   

  	
  Per
  SOW, Exhibits A and G

  	
   

  	
  PMO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Training

  	
   

  	
  Per
  SOW, Exhibits A and G

  	
   

  	
  Per
  SOW, Exhibits A and G

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Launch
  Support Services

  	
   

  	
  Per
  SOW, Exhibit A

  	
   

  	
  Per
  SOW, Exhibit A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Mission
  Operations Support Services

  	
   

  	
  Per
  SOW, Exhibits A and G

  	
   

  	
  Per
  SOW, Exhibits A and G

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Dynamic
  Satellite Simulator (DSS)

  	
   

  	
  [*]

  	
   

  	
  U.S.
  CONUS Location TBD Per Exhibit J

  



 


21

















 


3.2        Delivery.


 


Delivery of each Deliverable Item other than the Satellite and the
Space Segment, shall occur upon Acceptance of such Deliverable Item in
accordance with Article 11. Delivery of the Satellite shall occur upon
successful completion of the Satellite Pre-Shipment Review pursuant to Article
9. Delivery of the Space Segment shall occur upon Acceptance of the Space
Segment pursuant to Article 10.1.2.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


ARTICLE
4 - PRICE


 


4.1           Firm Fixed
Price.


 


Subject to Article 4.2 hereof, the price to be paid by Purchaser to
Contractor for the Deliverable Items set forth in Article 3.1 and for the other
rights and services to be provided to Purchaser pursuant to this Contract shall
be a firm fixed price of [*] (the “Firm Fixed Price”), which shall be allocated
among the Deliverable Items as follows (or such other allocations as the Parties
may agree):


 


	
  Description

  	
   

  	
  Price (U.S. $)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Satellite
  Construction

  	
   

  	
   

  	
   

  
	
  Construction of the ICO GEO Satellite,
  Deliverable Data, Training, Launch Support Services, Mission Operations
  Support Services, and other services as set forth in Article 3 and Exhibit A,
  Statement of Work

  	
   

  	
  [*]

  	
   

  
	
  Satellite Orbital Performance Incentives
  (note 1)

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Total
  Satellite Construction

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Space
  Segment/Ground Based Beam Forming Subsystem (Not Including Satellite)

  	
   

  	
   

  	
   

  
	
  Construction of the ICO Space Segment/GBBF
  Subsystem (not including Satellite), Deliverable Data, Training, and other
  services as set forth in Article 3 and Exhibit G, Statement of Work, and
  Space Segment Acceptance Payment set forth in Article 5.2.3C

  	
   

  	
  [*]

  	
   

  



 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


	
  GBBF Subsystem Delivery Incentive Payment
  (note 3)

  	
   

  	
  [*]

  	
   

  
	
  Space Segment Orbital Performance
  Incentives (note 4)

  	
   

  	
  [*]

  	
   

  
	
  Total
  Space Segment/Ground Based Beam Forming Subsystem

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dynamic
  Satellite Simulator

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total
  Contract Price

  	
   

  	
  [*]

  	
   

  



 






Note (1): The price indicated above includes the maximum potential
Satellite Orbital Performance Incentives, subject to the terms of Article 13


[*]


Note (3): The price indicated above includes the maximum potential GBBF
Incentive Payment, subject to the terms of Article 5.2.3B


Note (4): The price indicated above includes the maximum potential
Space Segment Orbital Performance Incentives, subject to the terms of Article
13. Notwithstanding the above, as provided in Article 13.1,  under certain circumstances, the Space
Segment Orbital Performance Incentives may increase up to U.S. [*]


 


Except as otherwise expressly provided in this Contract, the Firm Fixed
Price is not subject to any escalation or to any adjustment or revision. The
price for those items subject to an option under this Contract is set forth in
Article 24.


 


Except as expressly provided by this Contract, the item price for the
Satellite, the Space Segment, the GBBF Subsystem, and the other Deliverable
Items specified herein includes all parts and services to be provided pursuant
to this Contract including, without limitation, on-going design, manufacturing,
installation, tests,


 


24

















 


Deliverable Data, rights and interests in Intellectual Property as set
forth in this Contract, training, 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, 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 this Contract and the taxing
authorities having jurisdiction over Launch Services and the Launch Site  (“Taxes”) with respect to the  Work; provided, however, the Firm Fixed Price
does not include any Taxes on the sale of the GBBF Subsystem, the DSS or the SCCS/E  (if the applicable options are exercised), the
payment of which Taxes shall be the responsibility of Purchaser. Subject to
Article 12.3, Contractor has made or will make all the necessary filings in
order to deliver the Work (except the GBBF Subsystem, the DSS, and the SCCS/E
with respect to Taxes that are the responsibility of Purchaser under this
Contract) free and clear of any 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 (except as otherwise provided), Contractor
shall indemnify Purchaser for any Taxes, interest and penalties on such Taxes
paid by or assessed against Purchaser and shall reimburse Purchaser for the
reasonable actual costs incurred by Purchaser for defense of any action for
payment of such Taxes (whether or not Purchaser actually pays such Taxes).


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


4.3           The Firm Fixed
Price includes Launch Support Services for Launch of the Satellite on a U.S.
domestic Launch Vehicle, including the Sea Launch Launch Vehicle. In the event
that the Purchaser elects to Launch the Satellite on a non-U.S. domestic Launch
Vehicle, the Firm Fixed Price shall be increased by one of the following
amounts:


 


	
  i.      For Launch on an Ariane
  Launch Vehicle :

  	
   

  	
  U.S.[*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ii.     For Launch on a Proton
  Launch Vehicle:

  	
   

  	
  U.S.[*]

  	
   

  



 


26

















 


ARTICLE
5 - PAYMENTS


 


5.1           Payment Plan.


 


Payments by Purchaser to Contractor of the Firm Fixed Price set forth
in Article 4, and of the amounts for options, if exercised by Purchaser
pursuant to this Contract (other than pursuant to Article 24.5), shall be in
accordance with Exhibit F, Payment Plan and Termination Liability Amounts, as
applicable thereto. Contractor shall deliver the applicable invoice for payment
and any required certification within fifteen (15) days after the later of the
completion of the relevant Milestone or the applicable Milestone Date.


 


5.2           Payment
Conditions.


 


5.2.1        Orbital
Performance Incentive Payments. All Satellite Orbital Performance
Incentive and Space Segment Orbital Performance Incentive payments shall be
made in accordance with Article 13.


 


5.2.2        Milestone
Payments. Subject to Article 5.6, 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 the receipt by Purchaser of
an invoice and certification (delivered in accordance with Article 5.1 above)
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
Purchaser’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 or for completion of a Milestone prior to the applicable Milestone
Date. 


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


28

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


29

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


5.2.3B     GBBF Incentive
Payment.


 


Without limiting Contractor’s right to any Space Segment
Orbital Performance Incentives earned pursuant to Article 13, Contractor may
earn, and if earned Purchaser shall pay, [*] (the “GBBF Incentive Payment”)
upon Purchaser’s Acceptance of the GBBF Subsystem in accordance with Article
11.2.2 on or prior to [*]. If Purchaser’s Acceptance of the GBBF Subsystem does
not occur on or before [*], then, except as provided in this Article 5.2.3B, no
GBBF Incentive Payment shall be earned regardless of whether such failure is
due to Force Majeure or any other cause or event provided that the date may be
extended to the extent provided by and subject to Article 18.


 


[*]


 


The amount payable to Contractor under this Article 5.2.3B
shall be made no later than thirty (30) days after receipt of an invoice and
certification from Contractor that the GBBF event has been completed and is due
in accordance with this Article 5.2.3B and documented in accordance with the
requirements of this Contract together with the necessary or appropriate
supporting data and documentation as required under this Contract. Payment of
the GBBF Incentive Payment shall also be subject to the verification process
set forth in Article 5.2.2 with respect to Milestone payments as if such event
were a Milestone for purposes of this Contract.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


5.2.3C     Space Segment
Acceptance Payment.


 


Without limiting Contractor’s right to any Space Segment Orbital
Performance Incentives earned pursuant to Article 13, if (but only if) the
Space Segment is established to be a Conforming Space Segment at the time of
Space Segment Acceptance, Purchaser shall pay to Contractor an amount equal to [*]
The amount payable to Contractor under this Article 5.2.3C shall be made no
later than thirty (30) days after receipt of an invoice and certification from
Contractor that the Space Segment Acceptance Payment is due in accordance with
this Article 5.2.3C, together with the necessary or appropriate supporting data
and documentation supporting such certification as required under this Contract.
Payment of the Space Segment Acceptance Payment shall also be subject to the
verification process set forth in Article 5.2.2.


 


5.2.4        Other Payments.


 


Unless as otherwise specified herein, all amounts payable to Contractor
with respect to other payments not covered in Articles 5.2.1, 5.2.2 and  5.2.3 above, shall be made no later than
thirty (30) days after receipt of an invoice and certification in the form
attached hereto as Attachment A that such other 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 required
under this Contract, if any, or as Purchaser may reasonably request within ten
(10) days of receipt of invoice.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


5.2.5        Obligation to
Pay.


 


If Contractor shall not have delivered any invoice required hereunder
within the time specified therefor, the relevant payment due from Purchaser
shall be suspended (without interest) and shall become payable on or before
thirty (30) days after receipt of such invoice.


 


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 or at
law or in equity under this Contract of the Party entitled to such payment,
such Party shall also be entitled to interest at the annualized rate of [*] on
the unpaid balance thereof from the date such payment is due hereunder until
such time as payment is made.


 


5.3.2        Stop Work. If any
payment is not made by Purchaser by the date thirty (30) days after the due
date, Contractor may issue to Purchaser a written notice of reminder for
payment. Subject to Article 5.6, if Purchaser does not make the payment within
five (5) days of the receipt of the written reminder notice, without prejudice
to Contractor’s other rights and remedies under this Contract, Contractor may,
upon written notice to Purchaser, elect to suspend performance of the Work. If
Contractor subsequently resumes performance of the Work, this Contract shall be
Equitably Adjusted.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


5.4           Invoices.


 


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


 


ICO Satellite Management LLC


222 N. Sepulveda Boulevard


Suite 1770


El Segundo, CA  90245


Attn:  Contract Manager


Facsimile:  [*]


Telephone: [*]


 


 


With a copy to:


ICO Satellite Management LLC


2300 Carillon Point


Kirkland, WA  98033


Attn:  CFO


Facsimile: [*]


Telephone: [*]


 


 


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


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


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.


[*]


 


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 Milestone
covered by Contractor’s invoice has not been completed in accordance with the
requirements of this Contract, Purchaser shall so notify Contractor in writing
within fifteen (15) days of receipt of the invoice and applicable certification.
Such notification shall state in reasonable detail the area(s) Purchaser
considers not to be completed in accordance with the requirements of this
Contract. Upon completion of the Milestone in accordance with the requirements
of the Contract, the Contractor shall issue a replacement invoice. Until the
Milestone is completed in accordance with the Contract and issuance of the
replacement invoice not disputed by Purchaser in good faith, Purchaser shall
have no obligation for payment and no interest shall accrue. Notwithstanding
the foregoing, in the event that the noted discrepancy(ies) in Milestone
completion does not in Purchaser’s good faith judgment substantially impair the
completion of the Milestone, Purchaser shall still pay such invoice; Purchaser,
however, may withhold ten percent (10%) of the affected payment which
Contractor may immediately invoice upon correction of the discrepancy. Upon
receipt of notification from Purchaser contending a Milestone had not been
completed, the Parties’ respective program managers shall meet and use good
faith efforts to resolve such disagreement.


 


35

















 


5.7           Set Off.


 


In the event one Party has not paid any amount that is due and payable
under this Contract, the other Party shall have the right to set off such
amount against any payments due to the other 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.


 


36

















 


ARTICLE
6 - PURCHASER-FURNISHED ITEMS


 


6.1           Purchaser-Furnished
Support.


 


To enable Contractor to install the GBBF Subsystem and 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 2.4 (Purchaser Furnished Items) of
Exhibit A, Statement of Work and Section 2.4 (Purchaser
Furnished Items) of Exhibit G, Space Segment Statement of Work at the
applicable times set forth in such Exhibits, as the same may be adjusted. Such
equipment, facilities and services shall be in good working condition and
adequate for the required purposes and, for the installation of the GBBF
Subsystem and the Launch of and Mission Operations Support Services for the
Satellite hereunder, shall be made available free of charge for Contractor’s
use (solely for the purposes of this Contract) during the period(s) specified
in Exhibit A, Statement of Work or Exhibit
G, Space Segment Statement of Work, as the case may be. Purchaser and
Contractor will conduct an interface meeting on the date established therefor
at the technical interchange meeting described in Section 2.3 (Deliverable
Hardware, Software, and Services) of Exhibit A, Statement of Work to confirm
the availability and adequacy of such Purchaser-furnished equipment, facilities
and services.


 


6.2           Communications
Authorizations.


 


Contractor shall be responsible, at its cost and expense, for
preparing, coordinating and filing all applications, registrations, reports,
licenses, permits and authorizations required of Contractor to perform its
obligations under this Contract.


 


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,


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


launch and operation of the Satellite and Space Segment. Contractor
shall provide such reasonable cooperation and support as Purchaser may
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 Space Segment, 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 [*] with such Actual 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, at its own cost and expense,
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 Space Segment, 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 [*] with such Actual 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 such Satellite. Such report shall be
provided to


 


38

















 


Contractor on a monthly basis thereafter, delivered to Contractor
promptly after the end of each month during the Satellite Stated Life. 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 or 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. In no event shall Purchaser have liability for
failing to deliver any report under this Article 6.4 or for the contents
thereof except to the extent, if any, such failure to report is a material
reason Contractor shall fail to earn Satellite Orbital Performance Incentives
in accordance with Article 13 hereof (and then only with respect to such
unearned Satellite Orbital Performance Incentives).


 


6.5           Late Delivery
of Purchaser-Furnished Items or Services.


 


The late delivery of Purchaser-furnished items or services,
individually or combined, shall be subject to Article 18.


 


6.6           Launch Services.


 


Purchaser shall be responsible for furnishing Launch Services for the
Satellite and Purchaser shall no later than twelve (12) months prior to
Delivery of the Satellite, notify Contractor of its selection of the Launch
Vehicle for the Launch of the Satellite. The Launch Vehicle shall be one of the
candidate Launch Vehicles identified in Paragraph 2.1 (Launch Requirements) of
Exhibit B, Satellite Performance Specification, and the Launch Date shall be
compatible with the Satellite Delivery schedule set forth in Article 3.1
hereof.


 


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


 


7.1           General.


 


Each Party shall, at its expense, perform their 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        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 and shall provide Purchaser such assistance as Purchaser may reasonably
request.


 


7.2.2        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.


 


7.3           Licenses and
Other Approvals.


 


Contractor shall at its expense timely apply for and, once issued,
maintain all U.S. Government export licenses, agreements and other approvals
that are required for “foreign person” personnel and/or representatives of
Purchaser


 


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(including, but not limited to, all foreign Affiliates and related
entities of Purchaser involved with the procurement) as well as Purchaser’s
insurance providers 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 amended. As early as practicable, 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 if such personnel,
representatives, insurance providers 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) 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 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.


 


41

















 


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 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
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 7.2 AND 7.3 OR AS OTHERWISE EXPRESSLY
AUTHORIZED UNDER U.S. EXPORT CONTROL LAWS.


 


IF PURCHASER IS A “FOREIGN PERSON”, PURCHASER UNDERSTANDS AND WARRANTS
THAT IT 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 7.2 AND 7.3 OR
AS OTHERWISE EXPRESSLY AUTHORIZED UNDER U.S. EXPORT CONTROL LAWS.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


ARTICLE
8 - ACCESS TO WORK-IN-PROCESS


 


8.1           General.


 


Contractor represents and warrants that, subject to Article 7, the
access to the Work (which shall include access to the Work-in-process) to be
provided Purchaser personnel (and Purchaser’s 
consultants and agents) under this Contract is, or shall be,
substantially similar to the access Contractor provides to its other major
commercial customers. In the event Contractor becomes aware that the access to
the Work provided to Purchaser under this Contract is not as extensive as
required by this Contract, Contractor shall promptly remedy that situation.


 


8.2           Work-in-Process
at Contractor’s Facility.


 


Subject to Article 7 and compliance with Contractor’s normal and
customary safety and security regulations and practices, Purchaser personnel
(and Purchaser’s consultants and agents) shall be allowed access to all Work
being performed at Contractor’s facility for the Satellite,
the GBBF Subsystem, the Space Segment, the DSS and other Deliverable Items, for
the purpose of observing the progress of such Work. Subject to Article 7,
Purchaser shall be provided not less than [*] non-escort permanent badges and
not less than [*] escort badges to agreed work areas where the Work is being
performed. For Purchaser’s personnel, consultants and agents without such
badges, access to the Work shall be, upon reasonable prior notice to
Contractor, and shall occur during normal working hours or at such other hours
as Contractor may agree.


 


8.3           Work-in-Process
at Subcontractors’ Facilities.


 


In the case of Contractor’s Major Subcontracts (which, for purposes of
this Article 8.3, shall include Contractor’s subcontract with the principal GBBF
Subsystem supplier regardless of the value of such subcontract), and such other
non-major subcontracts under which the effort in support hereunder involves
significant design or qualification or the subcontractor is experiencing
performance


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


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) the right of Contractor to accompany Purchaser on any
such visit to a subcontractor’s facility.


 


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 not less than [*] resident Purchaser
personnel (and/or Purchaser’s duly appointed consultants and agents) through
Acceptance of the last Satellite ordered hereunder (or through Acceptance and
completion of all testing of the associated Space Segment, if Acceptance therefor
is later). The office facilities to be provided shall include such services as
Purchaser shall reasonably require including a reasonable amount of office
space, office furniture, local telephone service, reasonable long-distance
telephone usage, access to copy machines, facsimile machines, meeting and
conference rooms, internet access 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 at
the sites of such major subcontractors for up to [*] Purchaser personnel
(and/or Purchaser’s duly appointed consultants and agents) are provided on a
temporary basis to attend meetings or witness tests.


 


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8.5           Purchaser
Representatives as Competitors/Foreign Persons.


 


Purchaser’s consultants and
agents that are provided access to the Work shall not be in direct Competition
with and shall not currently be employed by companies or entities that are
Competitors of Contractor. 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 (ii) pursuant to Article 7, execute a
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. Contractor may in good faith deny any consultant or agent of Purchaser
access to Contractor facilities, products or information. 


 


8.6           Interference
with Operations.


 


Purchaser shall in good faith 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, and compliance with Contractor’s
normal and customary safety and security regulations and practices of which
Purchaser has received prior written notice, each Financing Entity shall have
access to the Work in the same manner and to the same extent as Purchaser’s
consultants and agents under this Article 8.


 


45

















 


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

LAUNCH READINESS REVIEW (SLRR)


 


9.1           Satellite
Pre-Shipment Review (SPSR).


 


9.1.1        Contractor to
Review Each Satellite Prior to Shipment. Contractor shall conduct a
review of the Satellite prior to Contractor’s shipment of such Satellite to the
Launch Site or placement in Storage, as applicable. Upon Contractor determining
in good faith that the Satellite is ready for Delivery, Contractor shall
conduct a Satellite Pre-Shipment Review. This review shall be in accordance
with the terms of this Article 9 and Section 2.2.4 (Satellite Pre-Shipment
Review) 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 scheduled date for the commencement of
such SPSR for the Satellite. If such time is not convenient for Purchaser,
Contractor shall make reasonable efforts to accommodate Purchaser’s scheduling
requirements. If Purchaser should fail to participate in the SPSR with respect
to the Satellite or fails to provide written notice of objections in accordance
with Article 9.1.5 within seventy-two (72) hours of completion of the SPSR.
Purchaser shall be deemed to have notified Contractor pursuant to Article 9.1.5
hereof that SPSR for such Satellite has been successfully completed.


 


9.1.3        Conduct and
Purpose of SPSR. Each SPSR shall be conducted in accordance with
the terms of this Article 9 and Section 2.2.4 (Satellite Pre-Shipment Review)
of Exhibit A, Statement of Work. The purpose of each SPSR 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 Test Plan, and (iii)
determine whether such Satellite meets applicable Satellite performance
specification requirements, as set forth in


 


46

















 


Exhibit B, Satellite
Performance Specification (except those requirements that have been waived
pursuant to Article 9.3 below), and is ready for shipment to the Launch Site.


 


9.1.4        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
Person.


 


9.1.5        SPSR Results. In the event
that such SPSR demonstrates (i) that all testing has been performed in
accordance with Exhibit D, Satellite Test Plan and (ii) conformity of such
Satellite to the applicable requirements of Exhibit B, Satellite Performance
Specification, (including any waivers or deviations approved by Purchaser
pursuant to Article 9.3), Purchaser shall within seventy-two (72) hours  of completion of the relevant SPSR direct
Contractor in writing either to ship the Satellite to the Launch Site for
Launch or place the Satellite in storage in accordance with Article 24.4. In
the event that such SPSR discloses:  (i)
a failure to conduct testing in accordance with Exhibit D, Satellite Test Plan,
or (ii) a non-conformance of such 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 9.3, Purchaser
shall, within seventy-two (72) hours after completion of the relevant SPSR,
deliver a written notice to Contractor setting forth the testing and/or
contractual requirements that Purchaser believes have not been met, and
Contractor shall correct or repair each such non-conformance and resubmit such
Satellite for additional testing, in accordance with applicable requirements of
Exhibit D, Satellite Test Plan and a second SPSR shall be held in accordance
with the procedures of this Article 9. Any additional testing and a subsequent
SPSR shall be conducted to the extent relevant


 


47

















 


and necessary to demonstrate
that the Satellite conforms to the requirements of Exhibit B, Satellite
Performance Specification. Upon direction from Purchaser to Contractor to ship
the Satellite to the Launch Site, Contractor shall transport such Satellite, in
accordance with Contractor’s standard commercial practices, to the Launch Site
and proceed with the Spacecraft Launch Readiness Review for such Satellite. In
no event shall Contractor be required to ship the Satellite to the Launch Site
until all non-conformances are corrected, repaired or have an approved waiver
(or deviation) pursuant to Article 9.3.


 


9.1.6        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.


 


9.1.7        Correction of
Deficiencies after SPSR. If at any time following the SPSR for the
Satellite and prior to Intentional Ignition (or, in the event of a Terminated
Ignition, prior to any subsequent Intentional Ignition), such Satellite fails
to meet Exhibit B, Satellite Performance Specification, as may be modified as
of such time pursuant to Article 9.3, Contractor shall, at Contractor’s expense
(except as provided in Article 12.1 relating to Purchaser’s responsibility for
the costs occurred as a result of Terminated Ignition)  promptly undertake to correct such
deficiencies prior to Intentional Ignition (or, in the case of a Terminated
Ignition, prior to any subsequent Intentional Ignition).


 


48

















 


9.2           Spacecraft
Launch Readiness Review (SLRR).


 


After shipment of the Satellite to the Launch Site and prior to Launch,
Contractor shall conduct a Spacecraft Launch Readiness Review in accordance
with the requirements of Section 2.2.7.2 (Spacecraft Launch Readiness Review)
of Exhibit A, Statement of Work. Contractor shall give Purchaser personnel
reasonable advance notice of such SLRR. The purpose of the SLRR is to verify
that all testing required under Exhibit D, Satellite 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
pursuant to Article 9.3). The SLRR will be deemed successfully completed when
Contractor has verified and the Parties agree that 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 this Contract or (ii) specific
non-conformances of such Satellite to the requirements of this Contract 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 this Contract deemed not met) it requires to be corrected or
repaired, and Contractor shall correct or repair each such non-conformance and
resubmit such Satellite for Purchaser’s concurrence. Purchaser’s failure to
provide notice of specific non-conformance within twenty-four (24) hours after
receipt of Contractor’s verification shall be deemed concurrence.


 


49

















 


9.3           Waivers and Deviations.


 


Contractor shall timely notify Purchaser in writing from time to time
of any failure of the Work to meet the requirements of the Contract. With respect
to any deviation or waiver from the Contract that Contractor shall in
reasonable good faith believe that Purchaser should waive or approve or that
Purchaser shall determine to waive or approve, Contractor shall submit to
Purchaser a request for a waiver of, or deviation from, the provisions(s) of
the Performance Specification applicable to the Satellite or Space Segment,
which request shall set forth in detail the extent of the impact on the
Performance Specifications. 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 and expressly approving the modification to the
Performance Specifications. Each such waiver or deviation approved by Purchaser
shall be deemed an amendment to the Performance Specification for such
Satellite or Space Segment, permitting such waiver thereof, or deviation
therefrom, effective on or after the date of such approval for such Satellite
or Space Segment. Purchaser shall consider each waiver or deviation request in
good faith.


 


50

















 


ARTICLE
10 - SATELLITE AND SPACE SEGMENT ACCEPTANCE


 


10.1         In-Orbit
Testing (IOT).


 


10.1.1      Satellite. Acceptance of
the Satellite shall be deemed to occur upon the earlier of: (i) the IOT
Complete Date (which shall occur as set forth below 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 a
Satellite). Upon arrival of the Satellite at its specified orbital location,
Contractor shall, in accordance with the Exhibit A, Statement of Work and
Exhibit D, Satellite Test Plan, perform the IOT. When the IOT has been
completed for the Satellite, Contractor shall conduct an IOT Data Review
Meeting (in accordance with Exhibit A, Statement of Work), during which
Contractor shall submit the IOT results to Purchaser. Within three (3) days
after the completion of such IOT Data Review Meeting, Purchaser shall notify
Contractor of its acceptance of the IOT results. The IOT Complete Date shall
occur upon the earlier of: (i) the date on which Purchaser shall have notified
Contractor in writing of its Acceptance of IOT results and (ii) the third day
following the IOT Data Review Meeting (“IOT Complete Date”). Notwithstanding
any of the foregoing, Purchaser may direct Contractor to perform testing other
than as required for IOT at any time during IOT or after receipt of the IOT
results and Contractor agrees to undertake such additional tests subject to:
(i) agreement on who will pay the costs of such additional tests, and (ii)
commencement of the Satellite Orbital Performance Incentive Period for purposes
of earning the Satellite Orbital Performance Incentives to be paid pursuant to
Article 13 hereof.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


10.1.2       Space Segment.


 


A.     Acceptance of the Space Segment shall
occur upon the earlier of (i) 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); (ii) the
establishment in accordance with Article 10.1.2B prior to the Space Segment
Acceptance Deadline that the Space Segment [*]


 


Nothing in
this Article 10.1.2 shall in any manner affect Acceptance of the Satellite under
Article 10.1.1 or otherwise establish obligations or liabilities of Contractor
with respect to the Satellite other than those set forth in this Contract
without this Article 10.1.2.


 


[*]


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


B.      Contractor shall perform the Space
Segment IOT in accordance with the applicable provisions of Exhibit G, Space
Segment SOW, and Exhibit H, Space Segment Test Plan. When the Space Segment IOT
has been completed, Contractor shall conduct a Space Segment IOT Review (in
accordance with Exhibit G, Space Segment Statement of Work), during which
Contractor shall submit the Space Segment IOT results to Purchaser. Within
seventy-two (72) hours after completion of such review meeting, Purchaser shall
notify Contractor of its acceptance of the IOT results (the “Space Segment IOT
Complete Date”). Should the results of Space Segment IOT reviewed at the Space
Segment IOT Review establish that the Space Segment is a [*] the Space Segment
shall be Accepted on such basis pursuant to the criteria set forth in subclause
(ii) of the first paragraph of Article 10.1.2A. Notwithstanding any of the
foregoing: (i) should the results of Space 


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


Segment IOT
reviewed at the Space Segment IOT Review establish that the Space Segment is a [*]
then Purchaser may direct Contractor, or Contractor may elect, at the review
meeting to continue appropriate efforts to achieve the performance of a [*]
(whichever shall first occur) up until Acceptance of the Space Segment upon the
Space Segment Acceptance Deadline; and (ii) Purchaser may direct Contractor to
perform testing other than as required of SSIOT at any time during the Space
Segment IOT or after receipt of the Space Segment IOT results and Contractor
agrees to undertake such additional tests subject to: (a) agreement on who will
pay the costs of such additional tests, and (b) commencement of the Space
Segment Orbital Performance Incentive Period for purposes of earning the Space
Segment Orbital Performance Incentives to be paid pursuant to Article 13 hereof.
Notwithstanding the above, all tests to establish that the Space Segment [*] shall
be borne by Contractor and Space Segment Orbital Performance Incentives shall
in no event commence prior to Acceptance of the Space Segment.


 


Purchaser
may, subject to prior written notice to Contractor, cause any Purchaser
personnel, consultant or agent designated by Purchaser to observe the Space
Segment IOT.


 


Unless
otherwise agreed, Acceptance of the Space Segment pursuant to subclause (ii) or
(iii) of the first paragraph of Article 10.1.2A shall not occur prior to the
SSIOT Complete Date.


 


C.      Except as the Parties may agree in their
discretion, SSIOT shall not commence prior to Acceptance of the GBBF Subsystem,
provided that upon the request of either Party, the other Party will give good
faith consideration to any request to commence SSIOT prior to Acceptance 


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


of the GBBF
Subsystem, taking into account pertinent factors including but not limited to
material non-conformances of the GBBF Subsystem with Annex B, Specification for
the GBBF Subsystem, of Exhibit E, Space Segment Performance Specification. Notwithstanding
the above, the FCC certification as described in Article 2.3.8 of Exhibit G,
Space Segment Statement of Work, may at the request of Purchaser commence prior
to Acceptance of the GBBF Subsystem.


 


D.      [*]


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


E.      [*]


 


10.2         Consequences of
Acceptance of the Satellite and Space Segment.


 


10.2.1      Consequences of
Acceptance of the Satellite. After Acceptance of the
Satellite, Contractor shall have no further obligation with respect to such
Satellite, except as otherwise provided in Articles 10.1.1 (if Purchaser orders
additional testing), 10.3, 15.2, and
35.2; moreover, except as otherwise provided in Article 15.1.3, 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.


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


10.2.2      Consequences of
Acceptance of the Space Segment. Upon and after Acceptance
of the Space Segment, Contractor shall have no further obligation with respect
to such Space Segment, [*] This Article 10.2.2 shall not affect Purchaser’s
other express rights under this Contract directly relating to the Space Segment
including under Articles 19 and 32.


 


10.3         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 Test Plan, and prepare and provide Purchaser an eclipse test
report detailing the Satellite’s performance against the applicable Satellite
performance requirements during an eclipse in accordance with Exhibit B,
Satellite Performance Specifications. If the Satellite does not meet all the
Exhibit B, Satellite Performance Specifications during such first solar eclipse
season, the Satellite Orbital Performance Incentives shall be subject to
adjustment in accordance with Article 13.2.10.


 


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ARTICLE
11 - ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS OTHER 

THAN SATELLITE OR SPACE SEGMENT


 


11.1         Deliverable Items
of Hardware Other Than Satellite, Space Segment and/or GBBF Subsystem.


 


11.1.1      Inspection. With respect
to each Deliverable Item of hardware (including software integrated in
hardware) other than the Satellite, the Space Segment and/or the GBBF Subsystem,
Contractor shall perform such review and testing, if any, required by Exhibit
A, Statement of Work or Exhibit G, Space Segment Statement of Work, as
applicable. Upon Contractor’s certification that the Deliverable Item meets the
requirements of this Contract and is available for delivery, Contractor shall
ship or transfer the Deliverable Item to the location designated in Article 3.1.
Purchaser shall perform an acceptance inspection within ten (10) days after
such Deliverable Item arrives and is otherwise ready for inspection. 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 11.7.


 


11.1.2      Acceptance
Inspection Results. Within fifteen (15) days after completion of the
acceptance inspection pursuant to this Article 11.1 for such Deliverable Item,
Purchaser shall notify Contractor in writing of the results of such acceptance
inspection with respect to such Deliverable Item. 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, the Space
Segment, and the GBBF Subsystem), and Purchaser’s notice shall so state. In the
event that Purchaser’s acceptance inspection discloses any non-conformance of 


 


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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 in accordance with this
Article 11 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 fifteen (15) day period, Acceptance shall be deemed to have occurred
with respect to such Deliverable Item.


 


11.2         GBBF Subsystem.


 


11.2.1      Notice and
Shipment. Contractor shall notify Purchaser in writing, at
least ten (10) days prior to shipment, that Contractor is prepared to ship the
GBBF Subsystem to Purchaser’s gateways and pointing beacon station locations
for final installation and testing. Upon Contractor’s certification that the
GBBF Subsystem meets the requirements of this Contract and is available for
delivery, Contractor shall ship the GBBF Subsystem (in its constituent parts as
appropriate) to the Purchaser’s gateways and pointing beacon station locations,
as applicable, for final integration and testing in accordance with the
applicable provisions of Exhibit G, Space Segment Statement of Work and Exhibit
H, Space Segment Test Plan.


 


11.2.2      Acceptance. Contractor
shall install and test the GBBF Subsystem as specified in the applicable
Exhibits and certify to Purchaser in writing at the GBBF Subsystem acceptance
test review meeting the results of the testing performed on the installed GBBF
Subsystem and confirming that the GBBF Subsystem meets the applicable
performance requirements of Annex B, Specification for the GBBF Subsystem, of
Exhibit E, Space 


 


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Segment Performance
Specification. Promptly (but in no event more than three (3) days) after the
completion of the acceptance review meeting, Purchaser shall either accept the
GBBF Subsystem in writing as complying with the applicable requirements of
Annex B, Specification for the GBBF Subsystem, of Exhibit E, Space Segment
Performance Specification (“Acceptance” for the GBBF Subsystem) or notify
Contractor in writing as to how the GBBF Subsystem fails to comply with the
applicable specified requirement(s). Upon receipt of Purchaser’s notice of
defects (if any), Contractor shall repair or replace any non-conforming unit(s)
of the GBBF Subsystem, at Contractor’s election and expense, and resubmit the
GBBF Subsystem for Acceptance with a written certification of the results of
the corrective action taken. Promptly (but in no event more than three (3)
days) after receipt of Contractor’s written certification, and provided that
Purchaser shall have determined in good faith that all applicable
non-conformities have been corrected, Purchaser shall provide written notice of
Acceptance of the GBBF Subsystem. If Purchaser fails to provide notice within
the periods set forth in this section, Acceptance shall be deemed to have
occurred with respect to the GBBF Subsystem.


 


If not earlier Accepted as
provided in the foregoing provisions of this Article 11 or terminated for
default pursuant to Article 23.1, the GBBF Subsystem shall [*]


 


11.3         Deliverable
Data.


 


Purchaser shall, within ten (10) days of delivery by Contractor to the
location designated in Article 3.1 of Deliverable Data requiring Purchaser
approval pursuant to the Exhibit A, Statement of Work or Exhibit G, Space
Segment Statement of Work, as the case may be, notify Contractor in writing
that such 


 


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Deliverable Data has been accepted in accordance with the applicable
Exhibit (“Acceptance” with respect to each such item of Deliverable Data), or
that such Deliverable Data does not comply with the applicable requirements of
the applicable Exhibit, identifying each such non-conformance (with reference
to the applicable requirement of the Exhibit 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 11.3. The provisions of this
Article 11.3 shall thereafter apply to the corrected Deliverable Data. If
Purchaser fails to provide notice within such ten (10) day period, Acceptance
shall be deemed to have occurred with respect to such Deliverable Data.


 


11.4         Training.


 


Acceptance of training, or any part thereof, required by Exhibit A,
Statement of Work or Exhibit G, Space Segment Statement of Work, as the case
may be, shall occur upon Contractor furnishing training, or such part thereof,
to Purchaser in accordance with the Delivery schedule and in a condition
conforming to the applicable Exhibit. 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 timely notify Contractor in writing that the training, or part
thereof, does not conform to the requirements of the applicable Exhibit,
identifying each such non-conformance (with reference to the applicable
requirement of the applicable Exhibit 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 11.4 shall
thereafter apply to the corrected training.


 


11.5         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 


 


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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
timely notify Contractor that the services, or part thereof, do not conform to
the requirements of the applicable Exhibit identifying each such
non-conformance (with reference to the applicable requirement of the applicable
Exhibit 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 11.5 shall thereafter apply to the
corrected services.


 


11.6         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.


 


11.7         Waivers and Deviations.


 


Contractor shall timely notify Purchaser in writing from time to time
of any failure of the Work to meet the requirements of the Contract. With
respect to any deviation or waiver from the Contract that Contractor shall in
reasonable good faith believe that Purchaser should waive or approve or that
Purchaser shall determine to waive or approve, Contractor shall submit to
Purchaser a request for a waiver of, or deviation from, the provisions(s) of
the Performance Specification applicable to the Deliverable Item, which request
shall set forth in detail the extent of the impact on the Performance
Specifications. A request for 


 


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waiver or deviation shall be deemed granted only if it has been
approved in writing by a duly authorized representative of Purchaser and
expressly approving the modification to the Performance Specifications. Each
such waiver or deviation approved by Purchaser shall be deemed an amendment to
the Performance Specification for such Deliverable Item, permitting such waiver
thereof, or deviation therefrom, effective on or after the date of such
approval for such Deliverable Item. Purchaser shall consider each waiver or
deviation request in good faith.


 


11.8         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.


 


11.9         Warranty
Obligations.


 


Except as expressly provided in Article 10.2.2 with respect to the
Space Segment, in no event shall Contractor be released from any of its
warranty obligations applicable to any Deliverable Item (other than a Satellite
as set forth in Article 15) as a result of Purchaser’s Acceptance pursuant to
this Contract.


 


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ARTICLE
12 - TRANSFER OF TITLE AND RISK OF LOSS


 


12.1         Satellite.


 


Except as provided in Article 21 or Article 23 or Article 24.4 (if the
Storage option is exercised), title (free and clear of all liens and
encumbrances of any kind) and risk of loss or damage to the Satellite to be
delivered under this Contract shall pass from Contractor to Purchaser at the
time of Intentional Ignition of the Launch Vehicle used for the Launch of such
Satellite; provided, however, in the event of a Terminated Ignition for the
Satellite, title to and risk of loss or damage to such 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 such Satellite.


 


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 SUCH 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
10.1.1 and 10.3, 13, 14 (AS REGARDS PROVIDING NOTIFICATION), 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 such
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.


 


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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 9.1.7 shall apply except as to any damage to such
Satellite that may have occurred as a result of the Intentional Ignition
followed by Terminated Ignition, the costs of which shall, as between the
Parties, be the responsibility of the Purchaser.


 


12.2         Deliverable
Items Other Than the Satellite.


 


Title (free and clear of all liens, claims and encumbrances of any
kind) and risk of loss of or damage to each Deliverable Item (including,
without limitation, the GBBF Subsystem and the DSS) other than the Satellite
shall pass from Contractor to Purchaser upon Acceptance of such Deliverable
Item pursuant to Article 11, except for Deliverable Data. With respect to
Deliverable Data, Purchaser’s rights in Deliverable Data are as set forth in
Article 32. With respect to the Space Segment, title (free and clear of all
liens, claims and encumbrances of any kind) and risk of loss of or damage shall
pass from Contractor to Purchaser only as and to the extent title and risk of
loss or damage pass from Contractor to Purchaser for each of the Satellite and
the GBBF Subsystem.


 


12.3         Liens.


 


Any reference to Contractor being obligated to provide title to any
Deliverable Item free and clear of liens or encumbrances shall be without
regard to any liens or encumbrances created by Purchaser.


 


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ARTICLE
13 – SATELLITE ORBITAL PERFORMANCE INCENTIVES AND SPACE SEGMENT ORBITAL
PERFORMANCE INCENTIVES


 


13.1         General.


 


Except as otherwise provided in this Article 13, Contractor shall earn,
and Purchaser shall pay Contractor to the extent earned, (i) the Satellite
Orbital Performance Incentives for the Satellite over the Satellite Orbital
Performance Incentive Period with respect thereto, and (ii) the Space Segment
Orbital Performance Incentives for the Space Segment over the Space Segment
Orbital Incentive Period with respect thereto, all in accordance with this
Article 13. As used herein, “Satellite Orbital Performance Incentives” means
with respect to the Satellite, an amount equal to [*] which may be earned by
Contractor based on on-orbit performance of such Satellite as set forth in this
Article 13. “Satellite Orbital Performance Incentive Period” means, with
respect to the Satellite, the period commencing at (and including) 12:01 a.m.
Greenwich Mean Time on the first day after Acceptance for such Satellite and
ending on (but not including) the same date fifteen (15) years thereafter.


 


“Space Segment Orbital Performance Incentives” means one and only one
of the following:


 


(a)           If at Space
Segment Acceptance, the Space Segment is a Conforming Space Segment, then an
amount up to [*]


 


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(b)           If at Space
Segment Acceptance, the Space Segment is a [*]


 


(c)           If at Space
Segment Acceptance, the Space Segment is a Fully Degraded Space Segment, then
the Contractor shall not be entitled to any Space Segment Orbital Performance
Incentives (regardless of the condition of the Space Segment after Acceptance).


 


“Space Segment Performance Incentive Period” means, with respect to the
Space Segment, the period commencing at (and including) 12:01 a.m. Greenwich
Mean Time on the first day after Acceptance of the Space Segment and ending on
but not including the [*]. “Applicable Space Segment Rate” means the applicable
daily rate for Space Segment Orbital Performance Incentives determined in
accordance with this Article 13.1.


 


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.


 


On-board redundancy and/or spare components shall be taken into
consideration to maintain service on the Satellite or the Space Segment, as
applicable, and such use shall be deemed normal operating procedure for
purposes of this Article 13 so long as the applicable criteria of Exhibit B,
Satellite Performance 


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


Specification or Exhibit E, Space Segment Performance Specification, as
applicable, are met.


 


13.2         Earning
Satellite and Space Segment Orbital Performance Incentives.


 


13.2.1      Daily Rate of
Satellite and Space Segment Orbital Performance Incentives.


 


A.     Contractor shall earn Satellite Orbital
Performance Incentives over the Satellite Orbital Performance Incentive Period
at a daily rate of [*] for each day that the Satellite is a Satisfactorily
Operating Satellite (the “Satellite Daily Rate”). “Satisfactorily Operating
Satellite” means that all performance parameters for the Satellite meet the
requirements of Exhibit B, Satellite Performance Specification. A “Less than
Satisfactorily Operating Satellite” means a Satellite that does not meet all of
the performance requirements of Exhibit B, Satellite Performance Specification.


 


B.      Subject to Article 13.1, Contractor
shall earn Space Segment Orbital Performance Incentives over the Space Segment
Orbital Performance Incentive Period at the Applicable Space Segment Rate for
each day that the Space Segment is a Satisfactorily Operating Space Segment
(the “Space Segment Daily Rate”). “Satisfactorily Operating Space Segment”
means that all performance parameters for the Space Segment meet the
requirements of Exhibit E, Space Segment Performance Specification. A “Less
than Satisfactorily Operating Space Segment” means a Space Segment that does
not meet all performance requirements of Exhibit E, Space Segment Performance
Specification.


 


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C.      For each day during the Satellite
Orbital Performance Incentive Period or the Space Segment Orbital Performance
Incentive Period where the Satellite Daily Rate or the Space Segment Daily
Rate, as the case may be, is not earned in whole or in part due to the
operation of this Article 13, such portion of the Satellite Orbital Performance
Incentive or the Space Segment Orbital Performance Incentive, as the case may
be, shall be lost (subject to Article 13.2.6 as applicable).


 


13.2.2      Partial
Incentives. For any day during (i) the Satellite Orbital
Performance Incentive Period that the Satellite is a Less than Satisfactorily
Operating Satellite, or (ii) the Space Segment Orbital Performance Incentive
Period that the Space Segment is a Less than Satisfactorily Operating Space
Segment, the Satellite Daily Rate or the Space Segment Daily Rate, as
applicable, shall be reduced to an amount calculated in accordance with the
tables and formulae set forth in this Article 13.2.2.


 


A.     [*]


 


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[*]


 


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[*]


 


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[*]


 


C. [*]


 


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D. The
Satellite Orbital Performance Incentives earned for each day will be determined
by application of the lowest “Maximum Incentives Earned” value derived from
tables 1 through 4 above, as provided for in paragraphs (A), (B), or (C) above,
applicable to such Satellite Orbital Performance Incentives.


 


E. The Space
Segment Orbital Performance Incentives earned for each day will be determined
by application of the lowest “Maximum Incentives Earned” value derived from
tables 1 and 3 above, as provided for in paragraphs (A), (B), or (C) above,
applicable to such Space Segment Orbital Performance Incentives.


 


13.2.3      Orbital
Storage. Except as provided in Article 13.2.5, if Purchaser places the
Satellite in Orbital Storage, Contractor shall earn Space Segment Orbital
Incentives with respect to the Space Segment and Satellite Orbital Performance
Incentives with respect to the Satellite at the same Satellite and/or Space
Segment Daily Rate as Contractor would be earning if the Satellite had not been
put in Orbital Storage.


 


13.2.4      [*]


 


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[*]


 


13.2.5      Complete Loss
of Unearned Incentives. Contractor shall no longer be entitled to
earn any remaining unearned Satellite Orbital Performance Incentives, if: (i)
Purchaser permanently withdraws the Satellite from operational service
(including use as an in-orbit spare or back-up) and gives Contractor written
notice thereof (which notice shall be given within thirty (30) days of the
expiration of the [*] period referred to below in this sentence), and
Contractor has lost [*] or more of Satellite Orbital Performance Incentives by
operation of Article 13.2.2 during the proceeding [*]; or (ii) Contractor has
lost more than [*] of the Satellite Orbital Performance Incentives pursuant to
operation of Article 13.2.2. With respect to loss of Satellite Orbital
Performance Incentives pursuant to clause (i) in the preceding sentence, if
Purchaser thereafter places the Satellite back in operational service
(including use as an in-orbit spare or back-up) for itself or any other Person,
Purchaser shall make a one-time payment to the Contractor for all Satellite
Orbital Performance Incentives that the Satellite would have otherwise earned
during the time it was withdrawn from service, plus interest calculated on such
amount in accordance with Article 13.3. Thereafter, Contractor shall earn the
remaining balance of the Satellite Orbital Performance Incentives in accordance
with this Article 13.


 


13.2.6      Purchaser
Operation of the Satellite or Space Segment/Non-Contract Elements. If, as a
result of any act or omission on the part of Purchaser or Purchaser’s
representatives, consultants or subcontractors in the Launch, operation of,
testing of, or communication with, the Satellite or the Space Segment, or as a
result of other elements of Purchaser’s system that are 


 


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not provided pursuant to
this Contract,  the Satellite or Space
Segment, as the case may be, operates in a manner that is not in accordance
with any requirements of Exhibit B, Satellite Performance Specification or
Exhibit E, Space Segment Performance Specification, as applicable, Contractor
shall continue to earn Satellite Orbital Performance Incentives with respect to
such Satellite and/or Space Segment Orbital Performance Incentives with respect
to such Space Segment at the rate that applied prior to the act or omission
resulting in degraded performance (subject to later adjustments pursuant to
Articles 13.2.2, 13.2.4, or 13.2.5 with respect to failures to meet the
requirements of Exhibit B, Satellite Performance Specification or Exhibit E,
Space Segment Performance Specification, as applicable, not resulting from any
such act or omission of Purchaser or Purchaser’s representatives, consultants
or subcontractors or other elements of Purchaser’s system that are not provided
pursuant to this Contract).


 


13.2.7              In-Orbit Data and Performance
Calculation. During the life of the Satellite, Contractor shall have access to applicable
performance data of the Satellite, Space Segment and GBBF Subsystem for
purposes of evaluating any degradation in the performance of the Satellite,
Space Segment and/or GBBF Subsystem resulting in any potential loss of
Satellite Orbital Performance Incentives or Space Segment Orbital Performance
Incentives as promptly notified by Purchaser. The Parties shall agree on or
before EDC plus eighteen (18) months as to the methodologies, precise equipment
and calibrations to be used for taking and/or making measurements
(incorporating measurement uncertainty), computations and analyses to determine
whether any reduction in Satellite Orbital Performance Incentives or Space
Segment Orbital Performance Incentives, that may be earned by the Contractor,
pursuant to Article 13.2.2 is warranted.


 


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13.2.8              Earn Back of Lost Incentives for
Extended Use. Should Purchaser elect to continue the use of the Satellite that is
operating beyond the Satellite Orbital Incentive Performance Period, Purchaser
shall pay to Contractor Satellite Orbital Performance Incentives at the Daily
Rate calculated in accordance with this Article 13.2 for each day during such
period of continued use by Purchaser (the “Extended Incentives”). In no event
shall Purchaser be obligated under this Article 13.2.8 to pay any Extended
Incentives to the extent that the cumulative Extended Incentives paid hereunder
exceed the amount, if any, of cumulative Satellite Orbital Performance
Incentives previously lost by Contractor under Article 13. In no event shall
the total Extended Incentives paid hereunder, when added to the total Satellite
Orbital Performance Incentives paid during the Satellite Orbital Performance
Incentive Period, exceed the amount set forth in Article 13.1 above [*] (not
including interest).


 


13.2.9              Total Loss. In the event that, at or after
Intentional Ignition but prior to completion of IOT, the Satellite is deemed to
be a Total Loss, Contractor shall not earn any Satellite Orbital Performance
Incentives or Space Segment Orbital Performance Incentives, unless the Total
Loss is primarily due to causes attributable to Purchaser or its suppliers or
contractors (including the Launch Agency, but not including Contractor or its
subcontractors), in which case the Contractor shall be entitled to earn (i) the
Satellite Orbital Performance Incentives for the Satellite Orbital Performance
Incentive Period; [*] (iv) the Space Segment Orbital Performance Incentives of [*]
for the Space Segment Orbital Performance Incentive Period (provided Delivery
and Acceptance of the GBBF Subsystem has occurred prior to the determination of
Total Loss); and (v) the Space Segment Acceptance Payment set forth in Article
5.2.3C. Payments of the Satellite 


 


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Orbital
Performance Incentives and the Space Segment Orbital Performance Incentives
shall be made in accordance with Article 13.3.


 


13.2.10    Eclipse. In the event the IOT or such
later testing in accordance with Article 10.3 shows non-compliance with the
applicable performance requirements during an eclipse, then there shall be an
equitable adjustment to the amounts Contractor may earn under Article 13
(considering without limitation the impact of operation during an eclipse) as
may be agreed by the Parties or determined in accordance with Article 25.


 


13.3         Payment
and Interest.


 


Amounts due
Contractor pursuant to Article 13 shall be paid as follows: (i) the first
payment shall be due no later than the end of the first full month following
Acceptance of the Satellite or the Space Segment, as applicable, and shall
cover the first partial month of earned Satellite Orbital Performance
Incentives or Space Segment Orbital Performance Incentives (as the case may
be), if any, and (ii) thereafter, all subsequent payments shall be due no later
than thirty (30) days following the end of each calendar month for the prior
month’s earned Satellite Orbital Performance Incentives or Space Segment
Orbital Performance Incentives, if any. Included with payment, if any,
Purchaser shall provide Contractor with a report of the Satellite Orbital
Performance Incentives and/or Space Segment Orbital Performance Incentives due
for the prior month. Purchaser shall pay interest on the Satellite Orbital
Performance Incentives payable for any period calculated from the date of Acceptance
of the Satellite and ending on the date the payment is made by Purchaser, at
the annual interest rate of [*]. For the avoidance of doubt, interest shall not
accrue on any Space Segment Orbital Performance Incentive.


 


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ARTICLE
14 - CORRECTIVE MEASURES IN SATELLITE


 


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, with the unlaunched Satellite (including any option
satellite) so as to eliminate therefrom the causes of such material deviation.


 


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ARTICLE
15 - WARRANTY


 


15.1         Terms and
Period of Warranty.


 


15.1.1      Satellite. Notwithstanding
any prior inspection, Contractor warrants that the Satellite shall be free from
defects in materials and workmanship and shall have been manufactured and will
perform in conformity with the requirements of the Contract including Exhibit
B, Satellite Performance Specifications (as may be modified or deviated from
pursuant to Article 9.3). After successful completion of the SPSR, but prior to
Intentional Ignition, Contractor’s only liability under the preceding sentence
shall be as and to the extent set forth in Article 9.1.7 hereof.
NOTWITHSTANDING THE ABOVE, 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 AND
35.2. NOTWITHSTANDING THE FOREGOING, CONTRACTOR SHALL CONTINUE TO PROVIDE ANY
NOTICES REQUIRED UNDER ARTICLE 14.


 


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15.1.2      Deliverable
Hardware Other Than the Satellite and GBBF Subsystem.


 


A.            Contractor warrants that
each Deliverable Item of hardware (other than the Satellite, which is treated
separately in Article 15.1.1 above, and the GBBF Subsystem, which is treated as
part of the Space Segment in accordance with Article 15.1.3 below), delivered
under this Contract and Accepted pursuant to Article 11 hereof, shall be
manufactured in conformity with the requirements of the Performance
Specification applicable to such Deliverable Item (as may be waived pursuant to
Article 11.7) and will be free from defects in materials and workmanship during
the period commencing on the date of Acceptance of the applicable Deliverable
Item and ending on the [*] thereafter, except that the warranty period for the
DSS shall be as set forth in Exhibit J.


 


B.            Any non-conformance or
defect discovered in any Deliverable Item of hardware subject to this Article
15.1.2 during the relevant warranty period set forth in subsection (A) above
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)
and, with respect to the DSS, as otherwise set forth in Exhibit J. For such
Deliverable Item, Contractor shall determine if repair or replacement is
required to be performed at Contractor’s plant or may be conducted at another
location. If required, Purchaser shall ship to Contractor’s designated facility
such Deliverable Item or defective component (as commercially reasonable).
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 such
Deliverable Item or defective component, and the cost of packing, return shipment
(including transportation and transit insurance) in accordance with its
standard commercial practice of any such Deliverable Item or defective
component once repaired or replaced to Purchaser at the 


 


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(HOLDINGS) LIMITED.


 


location designated therefor by Purchaser. Risk of loss for such
Deliverable Item or defective component shall transfer to Contractor upon
delivery of such Deliverable Item or defective component to the shipping
carrier by Purchaser, and risk of loss shall transfer to Purchaser for any such
Deliverable Item or defective component once repaired or replaced pursuant to
this Article 15.1.2(B) upon receipt thereof by Purchaser at the location
designated by Purchaser. If Contractor fails to use reasonable best efforts to
repair or replace such Deliverable Item or defective component within a
reasonable period of time after notification from Purchaser, Purchaser may, by
contract or otherwise, repair or replace such Deliverable Item or defective
component and Contractor shall be liable for the reasonable cost thereof.


 


15.1.3      Space Segment. Without
limiting Contractor’s obligations under Articles 15.1.1 and 15.1.2:


 


A.            Contractor warrants that,
from Space Segment Acceptance (or with respect to the GBBF Subsystem, if
earlier, Acceptance of the GBBF Subsystem) through the [*] of such Space
Segment Acceptance (as such warranty period may be extended), the Space Segment
shall perform in conformity with those requirements of Exhibit E, Space Segment
Performance Specification, that are tested and/or validated during Space
Segment IOT in accordance with Exhibit H, Space Segment Test Plan (as such
requirements may be waived or deviated from for purposes of Space Segment
Acceptance under Article 10.1.2), such that the baseline for the warranty shall
be the Space Segment’s condition as of Space Segment Acceptance; provided,
however, that such warranty baseline shall be subject to revision to reflect
improved performance pursuant to Article 15.1.3(C) below.


 


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B.            Contractor’s only liability
under the preceding subsection (A) shall be with respect to the GBBF Subsystem
and Satellite as follows:


 


(1)           With respect to the GBBF
Subsystem, the warranty set forth in Article 15.1.3(A) is based on the
condition of the GBBF Subsystem as Accepted, subject to revision of such
condition to reflect improved performance pursuant to Article 15.1.3(C). Any
non-conformance or defect discovered in the GBBF Subsystem during the warranty
period set forth in subsection (A) above and notified to Contractor shall be
remedied by Contractor at Contractor’s expense by repair or replacement of the
defective component or by other appropriate corrective measures with respect to
the GBBF Subsystem, including but not limited to GBBF hardware and/or software
modifications, as set forth in Section 2.3.7 of Exhibit G, Space Segment SOW
(at Contractor’s election). In fulfilling its obligations under this Article
15.1.3(B)(1) Contractor shall be responsible to correct only for defects or
non-conformances to the applicable requirements of Annex B, Specification for
the GBBF Subsystem, of Exhibit E, Space Segment Performance Specification (to
the extent of GBBF Subsystem compliance with such requirements upon GBBF
Subsystem Acceptance under Article 11), subject to revision of such warranty
baseline requirements to reflect improved performance pursuant to Article
15.1.3(C) below. Contractor shall determine whether such repair or replacement
shall be performed at Contractor’s plant. If necessary, Purchaser shall ship to
Contractor’s designated facility the defective component(s). Contractor shall
be responsible for the cost of shipment (including transportation and transit
insurance) to the facility in accordance with its standard commercial practice
(including any taxes and/or duties) of such defective component(s), and the
cost of packing, 


 


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return shipment (including transportation and transit insurance) in
accordance with its standard commercial practice of any such defective
component(s) once repaired or replaced to Purchaser at the location designated
therefor by Purchaser. Risk of loss for such defective component(s) shall
transfer to Contractor upon delivery of such defective component(s) to the
shipping carrier by Purchaser, and risk of loss shall transfer to Purchaser for
any such defective component(s) once repaired or replaced pursuant to this
Article 15.1.3(B)(1) upon receipt thereof by Purchaser at the location
designated by Purchaser. If Contractor fails to use reasonable best efforts to
repair or replace such defective component(s) within a reasonable period of
time after notification from Purchaser, Purchaser may, by contract or
otherwise, repair or replace such defective component(s) and Contractor shall
be liable for the reasonable cost thereof.


 


(2)           If the GBBF Subsystem does
not exhibit a defect or non-conformance subject to Article 15.1.3(B)(1), and
performance of the Space Segment nonetheless degrades with respect to the Space
Segment performance baseline for Space Segment Acceptance (as may be adjusted
in accordance with Article 15.1.3(C)), Contractor shall take reasonable steps
to analyze and recommend corrective action as set forth in Section 2.3.7 of
Exhibit G, Space Segment SOW. Purchaser shall provide reasonable investigation
support for possible causes in Purchaser furnished items, such as equipment in
the gateway. If and to the extent such analysis and recommended corrective
action pertain to the Satellite, the Parties shall proceed as set forth in
Article 15.1.3(B)(3). If and to the extent such analysis and recommended
corrective action pertain to the GBBF Subsystem and/or other elements of the
Space Segment (not including the Satellite), Contractor shall notify Purchaser
and 


 


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describe the proposed corrective action together with associated costs
(as applicable) and terms for proceeding with the action. Purchaser shall
approve or disapprove the proposed action and associated costs (as applicable)
and terms within a reasonable time. If Purchaser authorizes the proposed
action, Contractor shall proceed therewith: (a) at Contractor’s expense if the
degradation in Space Segment performance is primarily attributable to the GBBF
Subsystem and/or other elements of the Space Segment (not including the
Satellite), or (b) at Purchaser’s expense (but only to the extent set forth in
Article 15.1.3(B)(3)) if such degradation is primarily attributable to the
Satellite, or (c) at Purchaser’s expense if such degradation is primarily
attributable to Purchaser-furnished equipment, or (d) in any other cases, as
otherwise agreed by the Parties based on an equitable allocation of risk in the
circumstances. Annex B, Specification for the GBBF Subsystem, of Exhibit E,
Space Segment Performance Specification, shall be modified to incorporate any
changes thereto required to reflect the corrective actions approved by
Purchaser hereunder.


 


(3)           Without limiting Contractor’s
obligations under Article 15.2, in the event that, after the IOT Complete Date,
for causes attributable to Contractor (or any subcontractor, agent or
representative of Contractor), the Satellite fails to meet the applicable
requirements of Exhibit B, Satellite Performance Specification (as such
requirements may have been waived or deviated from for purposes of Satellite
Acceptance upon the IOT Complete Date), and the performance of the Space
Segment degrades with respect to the Space Segment performance baseline for
Space Segment Acceptance, Contractor shall take reasonable steps to analyze and
recommend corrective action as set forth in Section 2.3.7 of Exhibit G, Space
Segment SOW. The Contractor’s corrective action may 


 


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[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


include and is limited to analysis, diagnosis, testing, GBBF
procedures, coefficient updates, Satellite configuration commands, and
Satellite operating procedures. Contractor shall notify Purchaser and describe
the proposed corrective action together with associated costs (as applicable)
and terms for proceeding with the action. Purchaser shall approve or disapprove
the proposed action and associated costs (as applicable) and terms within a
reasonable time. If Purchaser authorizes the proposed action, Contractor shall
proceed therewith: (a) at Contractor’s expense, subject to a cumulative total
annual sum of [*] for the first year of the warranty and [*] for each extension
of the warranty pursuant to Article 24.3, for such corrective actions, and (b)
at Purchaser’s expense after the monetary threshold in clause (a) immediately
above is met, on the basis of [*] to be invoiced and paid in accordance with
Article 5. If for any reason the corrective action is unsuccessful, and, as a
result thereof, the Satellite suffers any loss, including but not limited to
degraded performance, 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 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.


 


(4)           The warranty under this
Article 15.1.3 with respect to the Space Segment shall terminate upon payment
in full of the Space Segment Warranty Termination Payment.


 


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[*]


 


(2)           Contractor shall notify
Purchaser of corrective actions identified as set forth in the immediately
preceding paragraph, and the Parties shall agree on the appropriate
implementation, or Purchaser may direct Contractor to proceed with the
recommended action. Contractor shall proceed therewith: (a) at Contractor’s 


 


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(HOLDINGS) LIMITED.


 


expense if the deficiencies in Space Segment performance are primarily
attributable to the GBBF Subsystem and/or other elements of the Space Segment
(not including the Satellite), or (b) at Purchaser’s expense (but only to the
extent set forth in Article 15.1.3(B)(3)) if such deficiencies are primarily
attributable to the Satellite, or (c) at Purchaser’s expense if such
deficiencies are primarily attributable to Purchaser-furnished equipment, or (d)
in any other cases, as otherwise agreed by the Parties based on an equitable
allocation of risk in the circumstances.


 


[*]


 


(4)           Except as set forth in the
applicable Articles referenced in Article 10.2.2, in no event shall Contractor
incur liability related to the use, condition or performance of the Space
Segment arising from its actions pursuant to this Article 15.1.3(C), [*]


 


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[*]


 


15.1.4      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 applicable 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 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).


 


15.1.5      Third-Party
Warranties. Without in any way relieving Contractor of its
obligations hereunder, Contractor shall assign to Purchaser to the extent
assignable, or make available to Purchaser to the extent permitted, the benefit
of all third party warranties Contractor has from any other party with respect
to any Deliverable Item.


 


15.1.6      Disclaimer. EXCEPT
AND TO THE EXTENT EXPRESSLY PROVIDED IN ARTICLES 15.1.1, 15.1.2, 15.1.3, 15.1.4
AND 15.1.5 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 


 


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DEFECTS, WHETHER OR NOT
DISCOVERABLE, WITH REGARD TO THE SATELLITE OR ANY OTHER DELIVERABLE ITEM.


 


15.2         Satellite Anomalies.


 


At no cost to
Purchaser, Contractor shall investigate any Satellite Anomaly in the Satellite
delivered on-orbit arising during the life of such Satellite and known to it or
as notified in writing by Purchaser and undertake anomaly resolution support
services in accordance with Section 2.3.9 (Standard On-Orbit Support) 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,
such Satellite suffers any 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 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. To the extent the occurrence of a Satellite
Anomaly is due to causes not attributable to Contractor (including any
subcontractor, agent or representative of Contractor), Purchaser shall pay
Contractor the Actual Costs reasonably incurred by Contractor associated with
such anomaly services, plus a markup of [*], which shall be invoiced and paid
pursuant to the provisions of Article 5. To the extent the causes are
attributable to Contractor (including any subcontractor, agent or
representative of Contractor), such costs shall be borne by Contractor.


 


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15.3         Use Conditions
Not Covered by Warranty.


 


With respect to
Deliverable Items other than the Satellite, the warranty under this Article 15
shall not apply to the extent 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 (including any subcontractor, agent or
representative of 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 accomplish any repair or replacement thereof. If
the defect repaired or remedied by Contractor is not covered by the warranty
provided pursuant to this Article 15, Purchaser shall pay Contractor the Actual
Costs reasonably incurred by Contractor associated with such repair or remedy,
plus a markup of [*], which shall be invoiced and paid pursuant to the
provisions of Article 5. Contractor makes no warranty with respect to the
performance of any Launch Vehicle.


 


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ARTICLE
16 – CHANGES AND STOP WORK


 


16.1         Changes
Requested by Purchaser.


 


16.1.1      Purchaser may at any time in writing
request a change to the Work in whole or in part including changes to any
Deliverable Item or service (as may be modified from time to time, a “Change
Request”).


 


Contractor shall respond in writing to a Change
Request within thirty (30) days after receipt thereof, which response shall
include Contractor’s reasonable good faith proposal of the changes to the
Contract that would be caused by such Change Request including, without
limitation, the estimated increase or decrease to the Firm Fixed Price [*] the
impact on the delivery schedule and other changes to the Contract necessitated
thereby. The proposal shall include reasonably sufficient detail setting forth
the basis used by Contractor (including a detailed description of the work to
be performed, break down showing estimated labor and major material costs
together with such other information/explanation as Purchaser may reasonably
request).


 


16.1.2      If Purchaser desires to implement the
Change Request, Purchaser and Contractor shall negotiate in good faith and in a
timely manner the changes, if any, to the Contract caused by implementation of
the Change Request. Except as provided in Article 16.1.3, any changes made
pursuant to this Article 16.1 shall be formalized by the execution of an
amendment to this Contract in accordance with Article 37.5. Except as set forth
in such amendment, the terms of the Contract shall remain unchanged.


 


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16.1.3      If the Parties are not able to agree on
the changes to the Contract necessitated by such Change Request, then within
ten (10) days of a request from either Party, each Party shall deliver to the
other a good faith offer of the changes to the Contract (the “Purchaser’s Offer”
and “Contractor’s Offer”). Thereafter, Purchaser has the right to direct
Contractor to implement the requested changes. In such event:


 


(a)           the Parties shall continue to negotiate
in good faith as to the terms of any changes to the Contract;


 


(b)           either Party shall have the right to
invoke the dispute resolution procedures of Article 25; and


 


(c)           Purchaser shall pay to Contractor the
sums as and when provided in the Purchaser’s Offer and pay any difference
between the Purchaser’s Offer and Contractor’s Offer relative to amounts as and
when due into an interest bearing escrow account, the establishment and terms
and conditions of which shall be subject to the reasonable mutual agreement of
the Parties. Upon the reaching of a resolution (either through mutual agreement
of the parties or through operation of Article 25), this Contract shall be
amended accordingly pursuant to Article 37.5, the escrow shall be closed and
any funds contained therein shall be disbursed accordingly.


 


16.1.4      If Purchaser directs that certain goods
or services be provided by Persons other than Contractor, Contractor agrees to
provide reasonable cooperation with such Persons, subject to Contractor’s
reasonable requirements concerning access, confidentiality and compliance with
law, as set forth in this Contract.


 


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16.2         Stop Work Order.


 


Purchaser shall
have the right at any time (and from time to time) to direct Contractor to stop
the Work. To exercise the right hereunder, Purchaser shall deliver a written
notice to stop the Work (the “Notice to Stop Work”). Upon delivery of the
Notice to Stop Work (and during the pendancy of the stop work): (a) Purchaser’s
liability under this Contract shall be limited to such liability as Purchaser
would have if Purchaser had delivered a Notice of Termination for Convenience
in whole pursuant to Article 21.1 at the date of the Notice to Stop Work; and
(b) Contractor may take all steps deemed necessary or prudent by Contractor in
order to minimize any losses Contractor would suffer if the Work was not
restarted, including terminating and reaching good faith settlements with third
parties performing any portion(s) of the Work. Upon request from Purchaser,
Contractor shall submit to Purchaser in accordance with Article 16.1, proposals
associated with the stop work, including proposals that if implemented in
accordance with Article 16.1.2 could increase the liability of Purchaser. If
after delivery of a Notice to Stop Work Purchaser elects thereafter to restart
the Work, then such request shall be treated as a Change Request and subject to
the procedures set forth in Article 16.1. In the event that Purchaser shall not
notify Contractor to recommence the Work within twelve (12) months after
delivery to Contractor of the Notice to Stop Work, then Contractor shall have
the right, upon written notice to Purchaser, to require the Purchaser either
to: (i) direct Contractor to resume Work hereunder in accordance with Article
16.1.2 or 16.1.3; or (ii) terminate this Contract in whole in accordance with
Article 21.1 effective as of the date of the Notice to Stop Work. In the event
Purchaser fails to elect within ten (10) days of written request from
Contractor, Purchaser shall be deemed to have elected to have terminated the
Contract in whole under Article 21.1 effective as of the date of the Notice to
Stop Work.


 


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16.3         Changes Requested by Contractor.


 


Contractor may at
any time request a change in the Work. Any proposed change shall contain a
written proposal identifying such change, the reasons therefore and the impact
thereof on the price, Delivery schedule, or other terms of this Contract. Purchaser
will attempt to respond to such change request from Contractor within thirty
(30) days of receipt. If the Parties reach an agreement on such change request
in writing, it shall be incorporated into the Contract by the execution of an
amendment to this Contract in accordance with Article 37.5. If the Parties are
unable to reach an agreement in writing on the proposed change request, then
such request shall be deemed rejected.


 


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ARTICLE
17 - FORCE MAJEURE


 


17.1         Force Majeure
Defined.


 


17.1.1      Subject to
Articles 5.2.3 and 23.3, Contractor shall not be responsible to Purchaser for
late Delivery, delay of the final completion date or nonperformance of its
contractual obligations due to Force Majeure. Force Majeure shall be any event
beyond the reasonable control of a Party or its suppliers and subcontractors
and shall include, but not be limited to: (1) acts of God; (2) acts of a public
enemy; (3) acts of a government in its sovereign 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) technical problems generally affecting the commercial
telecommunications industry, and (10) 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 subcontractors
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.


 


Any notice to be provided by
Contractor, as required by the preceding provisions, shall include a detailed
description of the performance of Contractor known to be affected by such delay
as well as Contractor’s plans for minimizing the effects of such event upon the
performance of its obligations under the Contract. In all cases, Contractor
shall use 


 


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reasonable best 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 as to Contractor appears to have ended and shall during the
period of Force Majeure provide such other reports as Purchaser may reasonably
request (including, without limitation, estimates when the matter is to be
rectified and the steps made to meet the applicable Contract requirements
thereafter).


 


17.1.2      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         Adjustment to
Delivery Schedule and Other Affected Terms.


 


17.2.1      Subject to
Articles 5.2.3 and 23.3, 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 of this Contract and
the Space Segment Acceptance Deadline, as applicable, affected by Force Majeure.
Such adjustment in Delivery schedules and/or Space Segment Acceptance Deadline
shall not affect any other provisions of this Contract (including the Firm
Fixed Price).


 


17.2.2      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.


 


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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 promptly give Purchaser written notice thereof. In the event
of a Purchaser Delay, Contractor shall cooperate with Purchaser to develop a
plan using best reasonable efforts to avoid or minimize and/or work around such
delay (including work-around plans, use of alternate sources, or other means to
minimize the delay). Within fifteen (15) working days of Contractor’s issuance
of its notice of Purchaser Delay, Contractor shall provide Purchaser with a
written estimate of the impacts to the Contract caused by such Purchaser Delay.
Subject to such notice, and issuance of the written estimate as provided
immediately above, Contractor shall be entitled to an Equitable Adjustment for
Purchaser Delay. Any Equitable Adjustment made pursuant to this Article 18
shall be incorporated into this Contract by the execution of an amendment in
accordance with Articles 16 and 37.5. 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.


 


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ARTICLE
19 - INTELLECTUAL PROPERTY INDEMNITY


 


19.1         Indemnification.


 


Contractor, at its
own expense, hereby agrees to defend and to indemnify and hold harmless
Purchaser and its Affiliates, and their respective officers, directors,
employees, shareholders, and agents and their successors and assigns from and
against any claim or suit based on, arising from, or in connection with any
allegation that the Work or 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 indemnification process set forth in
Article 20.3. This Article 19.1 shall be subject to the limitations set forth
in Article 32.6.


 


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 or its permitted successors and/or assigns
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 9.3
and/or 11.7). 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 within (x) one hundred twenty (120) days if the
injunction or 


 


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prohibition
relates to the Satellite, or (y) ninety (90) days if the injunction or
prohibition relates to any other Deliverable Item (including the Space Segment,
other than the Satellite), Purchaser shall have the right, notwithstanding any
other provision herein, 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 within thirty (30) days of such
return, Contractor shall refund the price paid for such terminated Deliverable
Item(s) less a reasonable allowance for use and depreciation. This Article 19.2
shall survive the termination of this Contract as to Deliverable Items Accepted
or otherwise retained and paid for prior to or promptly following such
termination.


 


19.3         Combinations
and Modifications.


 


Contractor shall
have no liability under this Article 19 for any Intellectual Property Claim to
the extent arising directly 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 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 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 directed in writing by Purchaser to which
Contractor has taken written exception including by way of disclaimer.


 


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.


 


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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 third party 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, representatives,
contractors or subcontractors at any tier (including suppliers of any kind). 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 such 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 third party 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 Purchaser
or its employees or representatives.


 


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20.3         Indemnification Process.


 


In connection with any claim for
indemnification under Article 20.1 and Article 20.2 the Parties agree as
follows:


 


20.3.1      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. A Notice of Election
shall require the indemnifying Party to assume the defense in full and without
reservation of rights.


 


20.3.2      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


 


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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 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. The indemnifying Party may not settle any claim on behalf of the
indemnified Party except claims solely for monetary damages paid by the
indemnifying Party in full.


 


20.3.3      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.


 


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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.


 


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ARTICLE 21 - TERMINATION FOR
CONVENIENCE


 


21.1         Right to Terminate. Purchaser may at any time terminate
this Contract without cause, in whole or in part, by giving Contractor written
notice of termination (“Notice of Termination for Convenience”); provided,
however, Purchaser may not terminate this Contract as to a Satellite after
Intentional Ignition of the Launch Vehicle for Launch of such Satellite and
provided further that, absent the consent of Contractor, if Purchaser shall
terminate the Satellite portion of this Contract, Purchaser shall be required
to terminate the Contract as a whole. Upon receipt by Contractor of the Notice
of Termination for Convenience, Contractor shall:  (a) stop Work under this Contract on the date
and to the extent specified in the Notice of Termination for Convenience;  (b) place no further orders or subcontracts
for materials, services, or facilities, except as may be necessary for
completion of such portion of the Work as is not terminated; (c) terminate
orders and subcontracts to the extent that they relate to the performance of
Work terminated by the Notice of Termination for Convenience; (d) settle all
outstanding liabilities and all claims arising out of such termination or
orders, subcontracts for materials, services, or facilities; and (e) with
respect to the portion(s) of the Work subject to the Notice of Termination for
Convenience, take such action as may be necessary, or as Purchaser may direct,
for the protection and preservation of the Work associated with this Contract
which is in the possession of Contractor or any subcontractor and in which
Purchaser has or may acquire an interest.


 


21.2         Termination Liability. Subject to Article 32.6:


 


21.2.1      Termination in Whole. If Purchaser terminates this Contract
in whole, Purchaser shall be liable to Contractor for the firm fixed price
amount set forth in the applicable Whole Termination Liability Schedules of
Exhibit F Payment Plan and Termination Liability Amounts as applicable on the
date of issuance of the Notice of Termination of Convenience (“Whole Termination
Claim”), reduced by all amounts already paid by Purchaser to


 


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Contractor (“Net Whole Termination Claim”). Contractor
shall, within fifteen (15) days of the Notice of Termination for Convenience,
provide Purchaser with a calculation of the Net Whole Termination Claim,
together with an invoice for payment of any deficiency, if any, which invoice
shall be paid in accordance with Article 5. In the event that the Net Whole
Termination Claim results in moneys being due to Purchaser, Contractor shall at
the time of delivery of its calculation of the Net Whole Termination Claim
refund to Purchaser said excess funds. In no event shall the amounts payable by
Purchaser pursuant to this Article 21.2.1 exceed the Net Whole Termination
Claim.


 


21.2.2      Termination in Part. If Purchaser terminates this Contract
only in part and with respect to a Deliverable Item for which a Termination
Liability Schedule exists as part of Exhibit F Payment Plan and Termination
Liability Amounts (a “Partial Termination for Convenience”), Purchaser shall be
liable to Contractor for the firm fixed price amount set forth in the
applicable Termination Liability Schedules of Exhibit F Payment Plan and
Termination Liability Amounts for such Deliverable Item(s) (“Partial
Termination Claim”), reduced by all applicable amounts already paid by
Purchaser to Contractor with respect to the terminated Work (the “Net Partial
Termination Claim”). Contractor shall, within fifteen (15) days of Purchaser’s
Notice of Termination for Convenience, provide Purchaser with a calculation of
the Net Partial Termination Claim, together with an invoice for payment of any
deficiency, if any, which invoice shall be paid in accordance with Article 5. In
the event that the Net Partial Termination Claim results in moneys being due to
Purchaser, Contractor shall at the time of delivery of its calculation of the
Net Partial Termination Claim refund to Purchaser said excess funds. In no
event shall the amounts payable by Purchaser pursuant to this Article 21.2.2
exceed the Net Partial Termination Claim. Further, the firm fixed price amount
set forth in the Termination Liability Schedule in Exhibit F with respect to
the Space


 


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Segment shall be deemed to include payment with
respect to the licenses by Contractor pursuant to Article 32 and no additional
sums shall be due to Contractor with respect to the ongoing rights of Purchaser
under Article 32.


 


21.3         Disposition of Work.


 


Title and/or the rights to all items of Work,
which would have been incorporated into a Deliverable Item or otherwise
conveyed to Purchaser under this Contract [*] (not including title to
Deliverable Data or any other portion of the Work to which Contractor would not
have otherwise been obligated to transfer title hereunder had the Contract been
completed) and which are in progress before the Notice of Termination for Convenience
shall, upon payment in full of the Net Whole Termination Claim or the Net
Partial Termination Claim, as applicable, vest in Purchaser, and Contractor
shall deliver, FOB Contractor’s plant, subject to U.S. Export Regulations for
which Contractor has no liability in the event of failure to obtain stated
export authorizations (other than due to Contractor’s fault or negligence), all
such items to Purchaser who shall remove such items from Contractor’s (or
applicable subcontractor’s) facility within ninety (90) days of the Notice of
Termination for Convenience. All terminated Work which is under the custody or
control of Contractor or any subcontractor shall be insured by Contractor at
its cost and risk, until the earlier of: (i) Purchaser’s removal of all such
items of Work from Contractor’s (or applicable subcontractor’s) facility or
(ii) ninety-one (91) days after the Notice of Termination for Convenience, and
risk of loss shall pass to Purchaser at such time. Alternatively, Purchaser may
request Contractor to make a reasonable, good faith effort to sell all or some
of the Work and to remit any sales proceeds to Purchaser less a deduction for
Actual Costs reasonably incurred in such sales efforts plus a markup of [*] Within
twenty (20) days after the written request of Purchaser, Contractor shall
submit a good faith long term storage proposal for the storage of the Work.


 


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ARTICLE 22 - LIQUIDATED
DAMAGES


 


22.1         Liquidated Damages for Late Delivery of
Satellite and/or GBBF Subsystem.


 


22.1.1      The Parties acknowledge and agree that failure
to meet the Delivery schedule specified in Article 3 for the Satellite and/or the GBBF
Subsystem may
result in 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 certain of the 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      If Delivery of the Satellite does not occur on
or before the date specified for Satellite Delivery in Article 3.1 (as such
date may be adjusted pursuant to Articles 16, 17 or 18), then Contractor shall
pay Purchaser as liquidated damages and not a penalty for Contractor’s late
Delivery the following per day amounts for each such late day:


 


[*]


 


Notwithstanding
the above, the maximum amount of liquidated damages that Contractor may be
required to pay Purchaser for late Delivery of the Satellite shall not exceed [*] for the Satellite.


 


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22.1.3      If Delivery of the GBBF Subsystem does not occur
on or before [*] then Contractor shall pay Purchaser as liquidated damages and
not a penalty for Contractor’s late Delivery the following per day amounts for
each such late day:


 


[*]


 


Notwithstanding
the above, the maximum amount of liquidated damages that Contractor may be
required to pay Purchaser for late Delivery of the GBBF Subsystem shall not
exceed [*]


 


In the event the
GBBF Subsystem has not been Accepted prior to the commencement of the earlier
of [*]


 


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22.2                 [*]


 


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22.3      Payment of Liquidated Damages.


 


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 receipt of an
invoice from Purchaser.


 


22.4      Remedy.


 


The liquidated damages
set forth in Articles 22.1 and 22.2 shall be Purchaser’s sole remedy and
compensation for Contractor delays with respect to late Delivery of the
Satellite and/or GBBF Subsystem and [*] and no other liquidated damages shall
be payable to Purchaser; provided, however, Purchaser retains all rights and
remedies under Article 21 and Article 23 (it being understood and agreed that
Purchaser shall have no right to terminate this Contract pursuant to Article
23.1.1 based solely on [*]


 


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ARTICLE 23 - TERMINATION FOR
DEFAULT AND EXCESSIVE FORCE MAJEURE


 


23.1         Contractor Default.


 


23.1.1A   Right to Terminate in Whole or in Part. Subject to Article 23.1.4 and further
subject to Articles 16, 17 and 18, Purchaser may terminate this Contract in
whole or in part by written notice to Contractor
(“Notice of Termination for Default”) if:


 


(a)           Contractor fails to Deliver the Satellite by the
date specified in Article 3.1 for Delivery of the Satellite plus [*] (or such
longer time as may be agreed to in writing by Purchaser);


 


(b)           [*]


 


(c)           Contractor commits a material breach of this
Contract and fails, [*] (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 in full.


 


A “material breach”
under subclause (c) of this Article 23.1.1A shall not include grounds for
termination set forth in subclauses (a) and (b) above or in Article 23.1.1B,
and shall not include delays in Delivery with respect to the Space Segment
except to the extent of Article 23.1.1A (a) and (b) and Article 23.1.1B.


 


23.1.1B   Right to Terminate Contract as it Relates to the
GBBF Subsystem.
In addition to and without limiting Article 23.1.1A, but subject to Article
23.1.4 and further subject to Articles 16, 17 and18, Purchaser may terminate
this Contract as it relates to the GBBF Subsystem, if:


 


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(a)           Contractor fails to Deliver the GBBF Subsystem
by [*] or such longer time as may be agreed to in writing by Purchaser; or


 


(b)           It is reasonably certain (or admitted by
Contractor) that Contractor shall be unable to Deliver the GBBF Subsystem by
the date set forth in subclause (a) 
above.


 


23.1.2      Termination Liability.


 


(a)           In the event of termination pursuant to Article
23.1.1A, but subject to Article 23.1.3, Purchaser shall be entitled to a refund
by Contractor of all payments made by Purchaser to Contractor in accordance
with this Contract for the terminated Work plus interest thereon at the
interest rate stipulated in Article 5.3.1 hereof from the date payment was
received by Contractor to the date the refund is received by Purchaser. In
addition, Purchaser shall be entitled to payment of any liquidated damages for
delay of the terminated Satellite and/or GBBF Subsystem [*] as applicable,
which accrued pursuant to Article 22 prior to the date of the Notice of
Termination for Default.


 


(b)           In the event of termination pursuant to Article
23.1.1B, but subject to Article 23.1.3, Purchaser shall be entitled to a refund
by Contractor of all payments made by Purchaser to Contractor in respect of the
“Space Segment/Ground Based Beam Forming Subsystem” as provided in Article 4.1
(but which shall not include payments made by Purchaser in respect of the
Satellite) plus interest thereon at the interest rate stipulated in Article
5.3.1 hereof from the date payment was received by Contractor to the date the
refund is received by Purchaser. In addition, Purchaser shall be entitled to
payment of any liquidated damages for delay of the


 


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GBBF Subsystem which accrued pursuant to Article
22 prior to the date of the Notice of Termination for Default.


 


(c)           Contractor shall pay any amounts owing to
Purchaser under this Article 23.1.2 no later than thirty (30) days after
Contractor’s receipt of the Notice of Termination for Default. Payment of such
amounts shall be Purchaser’s sole remedy in case of a termination pursuant to
this Article 23.1.


 


23.1.3      Contractor’s Reimbursement for Terminated Work. Purchaser shall not be deemed to retain
any Work-in-process other than Work-in-process designated by Purchaser in
writing to be retained (and, for example, Contractor shall be required to
refund Purchaser with respect to training even if such training had already
been completed). In the event of termination pursuant to Article 23.1.1A,
Purchaser may in its discretion elect to retain portions of the Work-in-process
(“WIP”) [*] Purchaser shall deliver notice of its intent to retain any WIP
within ten (10) days after the giving of any Notice of Termination for Default.
Subject to Article 32.6, the amounts not to be refunded with respect to any
retained Deliverable Items shall be: (i) at the price [*] Notwithstanding the
above, this Article 23.1.3 shall be subject to Article 32.6.


 


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23.1.4      Special Provision Limiting Purchaser’s Remedies. Purchaser shall have no right to
terminate this Contract pursuant to Article 23.1 with respect to the Satellite
after Satellite Delivery, or with respect to the GBBF Subsystem after GBBF
Subsystem Acceptance (including in the event of Space Segment Acceptance). Purchaser
shall have no right to terminate the Space Segment except to the extent of its
rights to terminate the Contract in whole in part in accordance with Article
23.1.1 and with respect to the GBBF Subsystem in accordance with Article
23.1.2.


 


23.1.5      Disposition of the Work. Unless Purchaser retains WIP pursuant
to Article 23.1.3 hereof, but subject to Purchaser’s rights under Article 32,
Contractor shall retain title to any and all Work, Work-in-process, parts or
other material, inventories, and any associated warranties, and any
subcontracted items Contractor has specifically produced, acquired, or entered
into in accordance with this Contract. If Purchaser elects to retain any WIP
pursuant to Article 23.1.3, Purchaser may require Contractor to transfer to
Purchaser in the manner and to the extent directed by Purchaser, title to and
possession of any items comprising all or any part of the WIP (including all
Work-in-process, parts and materials, all inventories, and associated
warranties) and Contractor shall, upon direction of Purchaser, protect and
preserve such WIP 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. Within twenty (20) days of request of Purchaser, Contractor shall
submit a good faith long term storage proposal for the storage of the WIP to be
retained by Purchaser and stored with Contractor.


 


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23.1.6      Invalid Default Termination. If, after termination pursuant to this
Article 23.1, it is 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 Purchaser had, rather than deliver Notice
of Termination for Default, delivered a Notice of Termination for Convenience
under Article 21 (whether in whole or in part shall be determined whether Purchaser’s
original Notice of Termination for Default was in whole or in part).


 


23.2         Purchaser Default.


 


23.2.1      Right to Terminate. Contractor may terminate this Contract
upon written notice to Purchaser (“Contractor Notice of Default”) if Purchaser
fails to cure any default in the payment of any amount that has become due and
payable hereunder within thirty (30) days after receiving written notice of
such default (or such longer period as may be agreed to in writing by
Contractor). Notwithstanding Article 23.2, Purchaser will not be considered in
default with respect to any amount that it is disputing in accordance with
Article 5.6 and will have ten (10) Business Days after the resolution (by
agreement or in accordance with Article 25.2) of such dispute to satisfy any
payment required by such resolution.


 


23.2.2      Termination Liability. In the event of termination pursuant to
this Article 23.2, it shall be treated as a termination for convenience of the
whole of the Contract pursuant to Article 21.1 (effective as of the date of the
Contractor Notice of Default). The rights and remedies provided to Contractor
under this Article 23.2.2 shall be exclusive and in lieu of any other rights
and remedies under this Contract or otherwise provided by law or in equity in
relation to the termination of this Contract for Purchaser’s default of its
obligations under this Contract.


 


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23.2.3      Disposition of the Work. Contractor may elect immediately upon
termination to take over all applicable Deliverable Items and Work-in-process
and use or dispose of the same in any manner Contractor may elect. In such
case, the fair market value of any applicable Deliverable Items or
Work-in-process retained or disposed of by Contractor shall be set-off against
Purchaser’s Net Whole Termination Claim as established in accordance with
Article 21. Upon payment of the amount due under this Article 23.2.3, Purchaser
may require Contractor to transfer to Purchaser in the manner and to the extent
directed by Purchaser, title to (not including Deliverable Data or any other
portion of the Work to which Contractor would not have otherwise been obligated
to transfer title hereunder had the Contract been completed) and possession of
any items comprising all or any part of the applicable Work terminated
(including all Work-in-process, parts and materials, all inventories, and
associated warranties) not used or disposed of by Contractor pursuant to the
foregoing sentence, 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
applicable 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 reasonably incurred by
Contractor in the sales of such items plus a markup of [*] Within twenty (20)
days of written request of Purchaser, Contractor shall submit a good faith long
term storage proposal for the storage of the applicable Work.


 


23.2.4      Invalid Default Termination. If, after termination pursuant to this
Article 23.2, it is finally determined pursuant to Article 25 or
written agreement of Contractor that Purchaser was not in default under Article


 


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23.2.1, the Contract shall be deemed to have
been terminated in whole pursuant to Article 23.1 and Purchaser shall have all
rights thereunder.


 


23.3         Excessive Force Majeure.


 


A.            Purchaser
may, upon written notice to Contractor (“Notice of Termination for Excessive
Force Majeure”), immediately terminate this Contract, in whole or in part: if
either: (i) Contractor fails to Deliver the Satellite by the date specified in
Article 3.1 for Delivery of the Satellite plus [*] due to a Force Majeure in
accordance with Article 17, or (ii) the cumulative delay in failure to Deliver
the Satellite due to Contractor Force Majeure plus any other non-excused
Contractor delay in Delivery of the Satellite by the date specified in Article
3.1 for Delivery of the Satellite shall equal or exceed [*] Upon the occurrence
of any of these events and issuance by Purchaser of a Notice of Termination for
Excessive Force Majeure, Purchaser shall have the right to terminate the
Contract in whole or in part and the rights and obligations of the Parties
shall be the same [*]. After the occurrence of an event that would otherwise
entitle Purchaser to deliver Notice of Termination for Excessive Force Majeure,
Contractor shall have the right to deliver a written request to Purchaser that
Purchaser advise Contractor whether Purchaser will deliver the Notice of
Termination for Excessive Force Majeure. Within thirty (30) days of receipt of
Contractor’s written request, Purchaser will notify Contractor as to its
decision to either terminate this Contract or to waive its rights to terminate
for such Excessive Force Majeure provided that it shall be a condition to any
obligation of Purchaser to provide the requested notice of election that
Contractor unconditionally acknowledge Purchaser’s rights to terminate in
accordance with this Article 23.3. Failure of Purchaser to provide such
requested notice of election in the thirty (30) day period specified above


 


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shall be deemed to be a waiver of Purchaser’s rights to terminate for
such Excessive Force Majeure under this Article 23.3.


 


B.            Purchaser
may, upon written notice to Contractor (“Notice of Termination for Excessive
Force Majeure”) terminate this Contract as to the GBBF Subsystem under Article
23.1.1B if: (i) due to a Force Majeure in accordance with Article 17,
Contractor fails to Deliver the GBBF Subsystem on or before the date specified
in Article 3.1 for Delivery of the GBBF Subsystem (as such date may be extended
pursuant to Article 18) [*] or (ii) due to a Force Majeure plus any other
non-excused Contractor delay in Delivery of the GBBF Subsystem, the cumulative
delay in failure to Deliver the GBBF Subsystem by the Delivery date therefor
(as such date may be extended pursuant to Article18) shall equal or exceed [*]
Upon the occurrence of any of these events and issuance by Purchaser of a
Notice of Termination for Excessive Force Majeure, Purchaser shall have the
right to terminate the GBBF Subsystem, and the rights and obligations of the
Parties shall be the same [*] After the occurrence of an event that would
otherwise entitle Purchaser to deliver Notice of Termination or [*] for
Excessive Force Majeure, Contractor shall have the right to deliver a written
request to Purchaser that Purchaser advise Contractor whether Purchaser will
deliver the Notice of Termination for Excessive Force Majeure. Within thirty
(30) days of receipt of Contractor’s written request, Purchaser will notify
Contractor as to its decision to either terminate this Contract as to the GBBF
Subsystem or to waive its rights to terminate for such Excessive Force Majeure.
Failure of Purchaser to provide such requested notice of election in the thirty
(30) day period specified above shall be deemed to be a waiver of Purchaser’s
rights to terminate for such Excessive Force Majeure under


 


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this Article 23.3B but shall not affect any other rights of Purchaser
hereunder.


 


23.4         Limitation on Right to Terminate.


 


Except as specified in this Contract, each
Party shall have no right to terminate or suspend this Contract.


 


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ARTICLE 24 - OPTIONS


 


24.1         Option
Satellite. 


 


Purchaser shall have an option (the “Satellite Option”), which
Purchaser may exercise in writing at any time (“Satellite Option Exercise”)
during the period from [*] to order an additional satellite (the “Option
Satellite”) [*]. Upon Satellite Option Exercise, Contractor shall construct and
Deliver the Option Satellite, and shall perform all Launch Support Services,
Mission Operations Support Services, 
training and other services in accordance with the terms and conditions
of this Contract, except as expressly modified by this Article 24. For purposes
of clarification, there will be no FFC Incentive Payments (Article 5.2.3A) or
liquidated damages for FCC Events (Article 22.2) with respect to the Option
Satellite. Contractor shall
Deliver the Option Satellite on or before [*]


 


24.1.1      The
total Option Satellite price includes Launch Support Services, Mission
Operations Support Services and other services required to be provided by
Contractor under this Contract. The payment plan for the Option
Satellite shall be the payment plan applicable at the time of the Satellite
Option Exercise set forth on Exhibit F, Payment Plan and Termination Liability
Amount (with reference to “Option Satellite Payment Plan”). The price for the
Option Satellite (the “Satellite Option Price”) shall be determined in
accordance with the following table based upon the date of the Satellite Option
Exercise:


 


	
  Option Exercise Date

  	
   

  	
  Satellite Option Price(*)

  	
   

  
	
  [*]

  	
   

  	
   

  	
   

  



 


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(*)
The Satellite Option Price assumes a Launch on a U.S. domestic Launch Vehicle. Additional
charges as noted in Article 4.3 shall apply for a non-U.S. domestic launch.


 


The
Satellite Option Price for the Option Satellite includes Orbital Performance
Incentive Payments in an amount equal to [*].


 


In the event that
the Purchaser directs Contractor to place the Optional Satellite into Storage
in accordance with Article 24.4 (Storage), Purchaser shall pay Satellite
Orbital Performance Incentives for that Optional Satellite in accordance with
Article 24.4(f) (Satellite Orbital Performance Incentives During Storage), but
shall not be obligated to pay the remaining Launch Milestone, unless Purchaser
directs Contractor to Launch a previously stored Satellite in accordance with
Article 24.4(e) (Notification of Intention to Launch a Previously Stored
Satellite), and that Launch Milestone has been completed and certified as
complete by Contractor. 24.1.2  Purchaser
shall be permitted to exercise the Satellite Option to order an Option


 


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Satellite [*]


 


24.1.3  The Parties shall promptly incorporate the
exercise of this option into the Contract through an Amendment according to
Article 37.5.


 


24.2         Satellite
Control Center Software/Equipment (SCCS/E).


 


Purchaser shall have an option, which Purchaser may exercise in writing
at any time prior to January 15, 2006, to order Contractor to provide standard
Satellite Control Software/Equipment, specifically Integrated Telemetry,
Analysis, Control, and Simulation (iTACS) and Analysis and Planning Software
(APS), to the designated Purchaser Primary Satellite Control and Backup Control
Center (collectively, “SCCS/E”). Delivery and installation of the SCCS/E shall
occur two (2) months prior to the scheduled Delivery of the Satellite. The
price for the SCCS/E is [*]. The payment plan and termination liability for the
SCCS/E shall be the payment plan and termination liability set forth on Exhibit
F, Payment Plan with reference to the SCCS/E.


 


24.3         Extended Warranties for Space Segment. Purchaser shall have four (4) options to extend the
entire Space Segment warranty set forth in Article 15.1.3 for additional [*]
(for a total warranty of up to approximately [*] for an option price of [*] per
option exercised, provided that Purchaser shall deliver written notice of its
election to purchase the Space Segment warranty for an additional [*] period
not less than thirty (30) days prior to the end of the initial or any
subsequent warranty period.


 


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24.4         Storage.


 


Purchaser, at its option to be exercised no
later than four (4) months prior to Delivery of the Satellite, may direct
Contractor to store the Satellite, after Delivery of the Satellite, for a
period of up to [*]


 


(a)           Storage Location. Storage for a Satellite shall be performed at
a Contractor controlled facility and shall be performed pursuant to Section 7
(Storage and Post-Storage Test) of Exhibit D, Satellite Test Plan, the
Satellite storage plan (“Satellite Storage Plan”).


 


(b)           Storage Prices. The price for Storage of the Satellite placed
into storage shall be [*] per month beginning on the first day of the [*] month
following commencement of storage for every month the Satellite is stored
longer than [*]. The price for Storage includes all costs associated with
storage including the post-storage testing as set forth in Section 7 (Storage
and Post-Storage Test) of Exhibit D, Satellite Program Test Plan. Purchaser may
direct Contractor, through a Change Request, to perform additional post-storage
verification testing in addition to those tests described in Section 7 (Storage
and Post-Storage Test) of Exhibit D, Satellite Test Plan.


 


(c)           Payments. The monthly payment for storage costs shall be
due thirty (30) days after delivery of the relevant invoice for payment
(provided that the first invoice shall not be issued prior to [*] days after
commencement of the storage period) and shall continue monthly until the
Satellite is removed from storage. Payments under this Article 24.4 shall be
made by in accordance with Article 5 hereof.


 


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(d)           Title and Risk of Loss. Except as may be agreed between
Purchaser and Contractor, title to a Satellite delivered to Storage and risk of
loss (except to the extent of any deductible amount on the policy of insurance
covering damage or destruction of the Satellite and allocable thereto, which
deductible amount shall be paid by Purchaser to Contractor in the event of any
insurance claim, in accordance with Article 5) shall remain with Contractor at
all times during storage.


 


(e)           Notification of Intention to Launch a Previously
Stored Satellite.
Purchaser shall notify Contractor in writing that a Satellite in Storage
pursuant to this option should be removed from storage and delivered to the
designated Launch Site. This notification must be received by Contractor not
less than six (6) months prior to the new date established by mutual agreement
between the Purchaser and Contractor (subject to approval by the Launch Agency
and consistent with any required U.S. export license obligations) for delivery
of the Satellite to the designated Launch Site. Failure to notify Contractor in
a timely manner may result in an Equitable Adjustment. Upon Purchaser direction
to Contractor to remove the Satellite from Storage, Contractor shall conduct
the post-storage verification tests as set forth in Section 7 (Storage and
Post-Storage Test) of Exhibit D, Satellite Test Plan, and ship the Satellite to
the designated Launch Site (or to such other location as Purchaser may direct).


 


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(f)            Orbital Performance
Incentives During Storage. If the Satellite is in Storage for more than [*],
then: (a) interest shall begin to accrue on the Satellite Orbital Performance
Incentives as if Acceptance of the Satellite had occurred on the [*] and (b)
Purchaser shall begin to pay monthly Space Segment Orbital Performance
Incentives, Satellite Orbital Performance Incentives, plus the Space Segment
Acceptance Payment, and applicable interest in accordance with Article 13 until
the Satellite is Accepted (the “Pre-Paid Orbitals”).


 


During such period in Storage, Contractor shall be paid the Space
Segment Acceptance Payment and Orbital Performance Incentives as if the
Satellite is a Satisfactorily Operating Satellite (i.e., 100% of applicable
incentives based on the applicable Daily Rate).


 


All payments of the Space Segment Acceptance Payment and Orbital
Performance Incentives paid during the Storage period shall be treated as
prepayments of the Space Segment Acceptance Payment and Orbital Performance
Incentives to be earned after Acceptance.


 


Upon Acceptance of the Satellite and Space Segment, as applicable,
Contractor shall be eligible to earn the Space Segment Acceptance Payment and
the Orbital Performance Incentives over the full fifteen (15) year Satellite
Orbital Incentive Performance Period as provided in Article 13, with Purchaser
being given credit for the Pre-Paid Orbitals (together with interest in
accordance with Article 13.3 from the time of payment until the credit is
applied).


 


Purchaser’s credit for the Pre-Paid Orbitals plus associated interest
would be applied as an offset to the Space Segment Acceptance Payment and any
amount of Orbital Performance Incentives thereafter earned by


 


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Contractor until all of the Pre-Paid Orbitals and the associated
interest has been completely applied.  After which, the Purchaser would
pay the Orbital Performance Incentives in accordance with Article 13. If
pursuant to Article 13 it is clear that the credit for Pre-Paid Orbitals will
not be completely applied during the Satellite Orbital Incentive Performance
Period, then the balance of any Pre-Paid Orbitals (including applicable
interest) shall be re-paid to Purchaser within thirty (30) days of this
determination.


 


(g)           Stored Satellite Refurbishment. By no later than [*] of storage of a
Satellite, Purchaser shall notify Contractor in writing of its desire to have
such Satellite refurbished once it is stored for [*] or to continue storage
past [*] (identifying the extended storage requirement). Within sixty (60) days
after receipt of Purchaser’s notice electing refurbishment or continued
storage, Contractor shall, at no cost to Purchaser, provide Purchaser with (i)
a plan for refurbishment and a retest plan to verify the Satellite as
launch-worthy (with the costs of implementation of said plan to be borne by
Purchaser in accordance with Article 16.1), or (ii) a plan for continued
storage, in either case together with proposed adjustments to the applicable
provisions of this Contract.


 


(h)           Delivery to
Purchaser other than for Launch. Purchaser shall have the right at any time
to require Contractor to deliver to Purchaser a Satellite which is in Storage. Upon
written request from Purchaser, Contractor shall at its own cost deliver the
Satellite to its loading dock and assist Purchaser in the transport of said
Satellite from Contractor’s facilities. Contractor shall also provide Purchaser
with an inventory of the Satellite and such other related documentation as
Purchaser may reasonably request. Title to the Satellite and risk of loss
thereto shall transfer to the Purchaser upon Contractor’s delivery of the
Satellite to its


 


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loading dock and Purchaser shall be responsible for payment of any
Taxes which may be imposed upon such transfer. In addition, in the event that
Purchaser does not Launch the Satellite within ninety (90) days of title
transfer pursuant to this paragraph, Contractor shall be entitled to the Space
Segment Acceptance Payment and to start earning its Satellite Orbital
Performance Incentives at one hundred percent (100%) of the Daily Rate which to
be paid, including interest thereon (to the extent not previously prepaid) in
accordance with Article 13, with the date of Acceptance of the Satellite being
deemed the date of title transfer thereto.


 


24.5         Space
Segment/GBBF Subsystem (Not Including Satellite) Option.


 


24.5.1      Purchaser
shall have an option (the “Space Segment Option”), which Purchaser may exercise
in writing at any time (“Space Segment Option Exercise”) during the period from
EDC until [*] to order an additional Space Segment (not including a satellite
but including the GBBF Subsystem and those related items and services
identified for the “Space Segment/Ground-Based Beam Forming Subsystem (Not
Including Satellite)” in Article 4.1) (the “Option Space Segment”) that is in
all material respects substantially similar to the Space Segment. Upon Space
Segment Option Exercise, Contractor shall construct and Deliver the Option
Space Segment and shall perform all training and other services in accordance
with the terms and conditions of this Contract, except as expressly modified by
this Article 24. Contractor shall Deliver the Option Space Segment on or before
[*] after exercise of this option, but in no event earlier than [*] after
Acceptance of the first Space Segment currently scheduled for Delivery in
accordance with Article 3.1.


 


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24.5.2      The option price of the
Space Segment Option (“Space Segment Option Price”) shall be as follows:


 


	
  Option Exercise Date

  	
   

  	
  Option Price

  	
   

  
	
  [*]

  	
   

  	
   

  	
   

  	
   

  
					



 


24.5.3      Purchaser shall be permitted
to exercise the Space Segment Option to order an Option Space Segment that is
not in all material respects substantially similar to the GBBF Subsystem, in
which case the Space Segment Option Price specified above shall be adjusted due
to the material differences between the Space Segment and the Option Space
Segment in accordance with Article 16 as applicable to changes requested by
Purchaser.


 


24.5.4      The
Parties shall
promptly incorporate the exercise of this option into the Contract through an
Amendment according to Article 37.5.


 


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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 (except that indemnity actions
under Article 19 and/or Article 20 shall be resolved as between the
indemnifying Party and a third party claimant in the applicable forum).


 


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:


 


25.1.1      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.


 


25.1.2      In the event agreement cannot be reached within
ten (10) days of receipt of written notice under Article 25.1.1, 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 Article
25.1.1 above for resolution of the Dispute.


 


25.1.3      In the event agreement cannot be reached within
twenty (20) days of receipt of written notice under Article 25.1.1, either
Party may request the Dispute be escalated, and the respective positions of the
Parties shall be forwarded to the Chief Executive Officer (CEO) or highest
senior executive of each Party for resolution of the Dispute.


 


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25.1.4      In the event (i) agreement cannot be reached
within thirty (30) days of receipt of written notice in 25.1.1, after
application of Articles 25.1.1, 25.1.2, 25.1.3 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 in accordance with
Article 25.2 or Article 25.3, as applicable.


 


25.2         Expedited Arbitration for Certain Disputes.


 


Any
Disputes regarding (i)  amounts not paid
by Purchaser to Contractor under Article 5.6, (ii) amounts in dispute under
Article 16.1.3 or 16.2, (iii) payment disputes arising under Article 13 and
Article 22, and/or (iv) as otherwise mutually agreed, shall be settled by final
and binding arbitration pursuant to the JAMS Streamlined Arbitration Rules and
Procedures. The expedited arbitration shall be before a single arbitrator and
shall be completed within ninety (90) days after appointment of the arbitrator.
The Parties shall have ten (10) days to mutually agree upon an arbitrator to
conduct the expedited proceeding. Should the Parties fail to reach agreement
within such ten (10) day period, a single arbitrator shall be appointed by
JAMS. In the case of disputed payments under Article 5.6, the arbitrator shall
determine whether Contractor completed the disputed Milestone(s) in accordance
with the requirements of the Contract. The Parties shall each bear half of the
costs of the arbitration (including arbitrator fees), except each Party shall
bear its own attorneys’ fees and any other such costs incurred by a Party on
its own behalf. Any determination hereunder shall be enforceable in any court
of competent jurisdiction as provided in Article 25.3. In the event that the
arbitrator rules that a payment is due, the Party owing such payment shall have
ten (10) Business Days to pay any and all amounts awarded by the arbitrator. A
failure to pay any amount awarded by the arbitrator within such ten (10)
Business Day period shall be an event of default pursuant to Article 23 hereof,
and shall not require further notice or period for cure.


 


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25.3         Litigation.


 


25.3.1      Notwithstanding Article 25.1 and 25.2, 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 or
other equitable 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.


 


25.3.2      Subject to Article
25.1 and 25.2, any Dispute shall be brought in the United States District Court
for the Central District of California, 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 Superior Court for the
County of Los Angeles. The Parties hereby irrevocably consent to the exercise
of personal jurisdiction by the state and federal courts in the State of
California concerning any Dispute between the Parties. If, for any reason,
neither the state nor federal courts in California 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.


 


25.3.3      [*]


 


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[*]


 


25.3.4      Nothing in this Contract precludes a Party
prevailing on any claim, from initiating litigation in any appropriate forum to
enter or enforce a judgment based on the 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 under
Article 5.6 shall not excuse failure to so perform the Work.


 


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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 from and against any claim the other Party or its
contractors and subcontractors at any tier


 


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(including suppliers of any kind) that are
involved in the performance of this Contract, 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 customers of Purchaser), or by
insurer(s) identified in Article 26.1, resulting from the failure of the
indemnifying Party to waive any liability 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 and
eighty (180) days before such Launch.


 


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ARTICLE 27 - MAJOR
SUBCONTRACTS


 


27.1         Selection of Major Subcontractors for Satellite.


 


27.1.1      Selection of any Major Subcontractor for the
Satellite, whether as an initial selection or as a replacement selection, shall
be subject to Purchaser’s prior written approval. [*] the Major Subcontractors
listed on the Major Subcontracts List dated November 19, 2005, for use as
either initial selection or as a replacement selection of Major Subcontractors.
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. The Parties further agree that [*] shall be the principal GBBF Subsystem
supplier (as reflected in Attachment E).


 


27.1.2      [*]
any Major Subcontractor or subcontractor shall not relieve Contractor from any
obligations or responsibilities under this Contract.


 


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ARTICLE 28 - CONTRACTOR
INSURANCE REQUIREMENTS


 


28.1         Insurance Requirements.


 


28.1.1      Coverages. Contractor represents that it has procured and
will maintain at all relevant 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 Satellite, the GBBF Subsystem, or DSS 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 Satellite, the GBBF Subsystem, DSS 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. For the Satellite, the GBBF
Subsystem, and DSS such insurance shall cover the period beginning at EDC up to
the moment risk of loss passes to Purchaser in accordance with this Contract.
The deductible on such policy shall not exceed standard deductibles in the
industry for like insurance.


 


B.            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 United States dollars (U.S. $1,000,000)


 


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per occurrence. Contractor shall maintain such
insurance until Acceptance of all Work, including remedial work, has occurred;
and


 


C.            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 United States dollars (U.S.
$1,000,000) per occurrence for combined bodily injury and property damage.
Contractor shall maintain such insurance until Acceptance of all Work,
including remedial work, has occurred; and


 


D.            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 named 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 28.1.1 above shall have a rating at least as
high as those insurers providing coverage on Contractor’s programs for its
other 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 written notice prior to any


 


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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 paragraph (a)
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 set forth in this Article 28 are
substantially comparable to those provided to Contractor’s other major
commercial customers.


 


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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.


 


28.2.1      Subject to compliance with Article 7, 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.


 


28.2.2      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 claim, Contractor shall provide
the support described in Article 35.2.


 


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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.


 


29.2         Key Personnel Positions.


 


Within fifteen (15) days after EDC,
Contractor shall notify Purchaser of the program Key Personnel. The Key
personnel (“Key Personnel”) shall be the personnel filling the following or
equivalent positions:


 


29.2.1      Contractor Program Manager;


 


29.2.2      Spacecraft Engineering Manager;


 


29.2.3      Payload Program Manager;


 


29.2.4      Assembly, Integration and Testing Manager; and


 


29.2.5      Space Segment Manager


 


29.2.6      Space Segment Technical Lead


 


29.3         Assignment of Key Personnel.


 


29.3.1      Contractor will assign individuals from within
Contractor’s organization to the Key Personnel positions to carry out the Work.
Such individuals shall be fully competent and skilled to perform the services
required of them pursuant to this Contract.


 


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


 


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29.3.3      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. The Key Personnel that have been
identified as of the Effective Date of Contract 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. Contractor shall use
reasonable best efforts to retain such personnel on Purchaser’s program for the
duration of such program.


 


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ARTICLE 30 - LIMITATION OF
LIABILITY


 


30.1         Limitation of Liability.


 


30.1.1      No Consequentials. WITHOUT PREJUDICE TO THE PARTIES’ OBLIGATIONS
SPECIFIED IN ARTICLES 4.2 (WITH REGARD TO TAXES), 19.1, 20, 26.1.1 AND 26.2,
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 THE 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 OR SPACE SEGMENT 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.


 


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


 


30.2         Cap on Liability.


 


WITHOUT LIMITING CONTRACTOR’S OBLIGATION TO
INDEMNIFY PURCHASER UNDER ARTICLES 19, 20 AND 26.2, IN NO EVENT SHALL
CONTRACTOR’S TOTAL LIABILITY UNDER OR IN CONNECTION WITH THIS CONTRACT EXCEED
AMOUNTS PAID TO CONTRACTOR HEREUNDER PLUS ANY INTEREST DUE PURSUANT TO ARTICLE
23.2.2 PLUS ANY LIQUIDATED DAMAGES DUE UNDER ARTICLE 22. WITHOUT LIMITING
PURCHASER’S OBLIGATION TO INDEMNIFY CONTRACTOR UNDER ARTICLE 20 AND ARTICLE
26.2, IN NO EVENT SHALL PURCHASER’S TOTAL LIABILITY UNDER OR IN CONNECTION WITH
THIS CONTRACT EXCEED PURCHASER’S LIABILITY AS SET FORTH IN ARTICLE 21.2.1. THIS
ARTICLE 30 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS CONTRACT FOR
WHATEVER CAUSE.


 


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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 (subject to the
exceptions contained in Article 31.1.2),” (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


 


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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.


 


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 (who are not
direct competitors of the disclosing party), attorneys, agents and consultants
(who 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         Reserved.


 


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


 


146

















 


document(s), the receiving party shall, to
the extent practicable under the circumstances, provide the disclosing party
with written notice thereof so that the disclosing party may seek a protective
order or other appropriate remedy, and shall cooperate in good faith with the
disclosing party to redact such portions of the Proprietary Information as the
disclosing party shall require and applicable law shall permit. 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         Reserved.


 


31.6         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.


 


31.7         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.


 


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ARTICLE 32- INTELLECTUAL
PROPERTY RIGHTS


 


32.1         Ownership of IP and IP Rights Generally.


 


32.1.1      Purchaser’s Intellectual Property.


 


Subject to the
licenses granted in Article 32.2 and Article 32.3, and except as otherwise
specified in Article 32.1.2, all Purchaser Background Intellectual Property,
Purchaser Space Segment Foreground Intellectual Property, 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.


 


32.1.2      Contractor’s Intellectual Property.


 


A.            Subject to the licenses granted in Article 32.2
and Article 32.3, all Contractor Background Intellectual Property, Contractor
Space Segment Intellectual Property, and Foreground Intellectual Property made,
developed, or created by Contractor (or by others acting on Contractor’s behalf
including any subcontractor), and all Intellectual Property Rights therein,
shall be the sole and exclusive property of Contractor. Subject to the licenses
granted in Article 32.2 and Article 32.3, and notwithstanding Article 32.1.1,
all Intellectual Property incorporated into the Satellite, and all Intellectual
Property Rights therein, are and shall be the sole and exclusive property of
Contractor.


 


B.            For the avoidance of doubt but subject to the
exceptions set forth in subsection (A) above, the Parties agree that Contractor
shall retain title to all Deliverable Data (excluding Purchaser Space Segment
Foreground Intellectual Property incorporated therein) and Contract Exhibits
and Attachments thereto utilized or developed by Contractor during the
performance of this Contract.


 


148

















 


32.1.3      Confidentiality. Intellectual Property shall be subject to the
protections for confidentiality under Article 31 to the extent such duties do
not conflict with enjoyment of the rights granted with respect to such
Intellectual Property under the licenses set forth in this Article 32.


 


32.2                 License Rights in Respect of Contractor Space Segment Intellectual
Property and Purchaser Space Segment Foreground Intellectual Property.


 


32.2.1   Grant by Contractor.


 


Subject to the
terms and conditions stated herein and expressly including Article 32.6, to the
extent Contractor has or acquires the right to grant such a license,  Contractor grants to Purchaser and its
permitted successors and assigns a fully paid-up,  perpetual, irrevocable, worldwide,
non-exclusive right and license, with right of sublicense, to use and have
used, reproduce, and modify solely and exclusively for (i) the purpose of
testing, operating, repairing, and/or maintaining any Deliverable Item
(including Deliverable Data), and (ii) the Permitted Purposes, all Contractor
Space Segment Intellectual Property including, to the extent necessary for the
purpose of this license, those associated Intellectual Property Rights therein,
now or hereafter owned by Contractor (and/or others acting on Contractor’s
behalf including any subcontractor).


 


32.2.2   Grant by Purchaser.


 


Subject to the
terms and conditions stated herein, to the extent Purchaser has or acquires the
right to grant such a license, Purchaser grants to Contractor and its permitted
successors and assigns a fully paid-up, 
perpetual, irrevocable, worldwide, non-exclusive right and license, with
right of sublicense, to use and have used, reproduce, and modify solely and
exclusively for the purpose of conducting Contractor’s business of designing,
developing, manufacturing and selling space systems all Purchaser Space Segment
Foreground Intellectual Property, including, to the extent necessary for the
purpose of this license, those associated


 


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[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


Intellectual
Property Rights therein, now or hereafter owned by Purchaser (and/or others
acting on Purchaser’s behalf including any third party). Notwithstanding the
above, Purchaser shall have no obligation to provide any documents, data,
materials or other manifestations of such Intellectual Property except as set
forth in Article 32.2.5 below.


 


32.2.3   Reciprocal Covenant Not to Interfere with Exercise of License Rights.


 


In no event shall
either Party be precluded from developing for itself or for others Intellectual
Property, materials or products which are competitive with, or similar to, the
Deliverable Items if such Intellectual Property, materials and products do not
include any of the other Party’s Intellectual Property or Proprietary Information
except pursuant to a license granted under Articles 32.2 or 32.3. [*]


 


150

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


32.2.5   Notification of Purchaser Space Segment Foreground Intellectual Property.


 


[*]


 


151

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


32.3              License Rights in Respect of Intellectual Property Other Than Contractor
Space Segment Intellectual Property and Purchaser Space Segment Foreground
Intellectual Property.


 


32.3.1   Grants by Contractor.


 


Subject to the terms and conditions stated
herein, and except for Contractor Space Segment Intellectual Property (which is
subject to Article 32.2 above), to the extent Contractor has or may acquire the
right to grant such a license, 
Contractor grants to Purchaser and its permitted successors and assigns
a fully paid-up, perpetual, irrevocable, worldwide, non-exclusive right and
license to use and have used, reproduce, and modify for the sole and exclusive
purpose of testing, operating, repairing, and/or maintaining any Deliverable
Item (including Deliverable Data), all Contractor Background Intellectual
Property, Third Party Intellectual Property and Foreground Intellectual
Property made, developed or created by Contractor (or by others acting on
behalf of Contractor including any subcontractor) or a third party, as the case
may be, 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) or a third party, as
the case may be. Purchaser shall have no rights in Deliverable Data other than
as expressly stated in this Contract.


 


152

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


32.3.2   Grants by Purchaser.


 


Subject to the terms and conditions stated
herein, and except for Purchaser Space Segment Foreground Intellectual Property
(which is subject to Article 32.2 above), to the extent Purchaser has or
acquires the right to grant such a license, Purchaser grants to Contractor and
its permitted successors and assigns a fully paid-up, perpetual, irrevocable,
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, Third Party Intellectual Property and
Foreground Intellectual Property, including, to the extent necessary for the
limited purpose of this license, those associated Intellectual Property Rights
therein, now or hereafter owned by Purchaser (or others acting on behalf of
Purchaser) or a third party, as the case may be.


 


32.4                Subcontracts and Other Affected Agreements.


 


A.      [*] In addition,
Contractor shall, unless otherwise authorized or directed in writing by
Purchaser, to the extent necessary to fulfill its obligations under Article
32.2 and Article 32.3 hereof, use reasonable efforts as practical to include in
each additional 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. Notwithstanding
any other provision of this Contract, this Article 32.4 (A) shall govern
Contractor’s obligations with respect to


 


153

















 


subcontracts, and no additional rights shall
arise, for example, because Intellectual Property of Contractor is defined to
include Intellectual Property of subcontractors and other third parties.


 


B.       Purchaser shall, unless otherwise authorized or directed in writing by
Contractor, to the extent necessary to fulfill its obligations under Article
32.2 and Article 32.3 hereof, use reasonable efforts as practical to include in
each applicable third party and/or related party agreement a license rights
clause pursuant to which each such party will grant to Contractor (through
Purchaser) license rights in Intellectual Property within the scope of the
licenses granted by Purchaser under Article 32.2 and Article 32.3, which
Intellectual Property is developed by such party, and all associated
Intellectual Property Rights therein, to the same extent as the license rights
granted by Purchaser in this Article 32. Notwithstanding any other provision of
this Contract, this Article 32.4 (B) shall govern Purchaser’s obligations with
respect to third party and/or related party agreements, and no additional
rights shall arise, for example, because Intellectual Property of Purchaser is
defined to include Intellectual Property of third parties.


 


C.       Upon execution of the subcontract with the GBBF Subsystem supplier,
Contractor shall provide Purchaser with copies of all provisions and terms
regarding Intellectual Property and will also furnish Purchaser with any
amendments pertaining thereto (and shall not amend such provisions to the
detriment of Purchaser without Purchaser’s written consent).


 


154

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


32.5       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), subject to compliance
with applicable laws and with no payment of additional compensation to use,
have used, deliver, lease, sell, or otherwise dispose of the Satellite, the
GBBF Network, the Space Segment or other Deliverable Item of hardware or any
part thereof. Without limitation, the Parties agree that Purchaser shall be
entitled to sublicense to any purchaser or lessee of a Deliverable Item from
Purchaser a sublicense of the license and rights under Article 32.2.1 to use,
reproduce and modify Contractor Space Segment Intellectual Property
incorporated into a Deliverable Item for the sole and exclusive purpose of
testing, operating, repairing and/or maintaining such Deliverable Item.


 


32.6       [*]


 


155

















 


[*] CONFIDENTIAL TREATMENT
REQUESTED BY ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED.


 


[*]


 


156

















 


ARTICLE 33- PUBLIC RELEASE OF INFORMATION


 


33.1         Generally.


 


Each Party shall obtain the prior written approval of the other Party,
which approval shall not be unreasonably withheld or delayed, concerning the
content and timing of news releases, articles, brochures, advertisements,
prepared speeches and other information releases concerning the Work performed
or to be performed hereunder, within a reasonable time prior to the release of
such information,   except to the extent
disclosure shall be required by law, which shall be subject to Article 31.4.


 


157

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


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:


 


ICO Satellite
Management LLC


222 N. Sepulveda
Boulevard


Suite 1770


El Segundo,
CA  98033


Attn: Contract
Manager


Telephone:  [*]


Facsimile:  [*]


 


With a copy to:


 


Davis Wright
Tremaine, LLP


1501 4th
Avenue, Suite 2600


Seattle, WA 98101


Attn:  [*]


Facsimile:   (206) 628-7699


 


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[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


	
  In the case of
  Contractor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Space
  Systems/Loral, Inc.

  	
   

  	
   

  
	
  3825 Fabian Way,
  M/S G-44

  	
   

  	
   

  
	
  Palo Alto, CA
  94303-4697

  	
   

  	
   

  
	
  [*]

  	
   

  	
   

  
	
  Telephone No.:

  	
  [*]

  	
   

  
	
  Facsimile No.:

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  
	
  With a
  separately delivered copy to:

  	
   

  	
   

  
	
  Space
  Systems/Loral, Inc.

  3825 Fabian Way,
  M/S G-40

  Palo Alto, CA
  94303-4697

  	
   

  	
   

  
	
  [*]

  	
   

  	
   

  
	
  Telephone No.:

  	
  [*]

  	
   

  
	
  Facsimile No.:

  	
  [*]

  	
   

  



 


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.


 


159

















 


ARTICLE 35- RISK MANAGEMENT SERVICES


 


35.1         Purchaser Responsibility.


 


Purchaser may, at its election, procure a Launch and in-orbit insurance
policy covering the risks of Launch and in-orbit failures with respect to
partial loss, total loss, or constructive total loss of such Satellite (“Launch
and In-Orbit Insurance Policy”).


 


IN NO EVENT SHALL PURCHASER
DISCLOSE OR TRANSFER CONTRACTOR-PROVIDED TECHNICAL INFORMATION OR PROVIDE
TECHNICAL SERVICES BASED ON CONTRACTOR-FURNISHED TECHNICAL INFORMATION TO
NON-U.S. INSURANCE BROKERS OR UNDERWRITERS OR OTHER NON-U.S. PERSONS OR ENTITIES
(AS DEFINED IN 22 CFR SECTION 120.15 AND SECTION 120.16, AS AMENDED)
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.


 


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[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


35.2.1      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 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 reasonable
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 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 its Launch and In-Orbit Insurance Policy has occurred.  For all claims that may arise on or before
Acceptance of the Space Segment as provided in Article 10 hereof, such
Contractor support 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 [*], to be invoiced and paid in accordance with Article 5.


 


161

















 


ARTICLE 36- ORDER OF PRECEDENCE


 


In the event of conflict among the terms of the Terms and
Conditions (Preamble, Recitals, Articles 1 to 37 and Attachments A through D)
of this Contract and the Exhibits, the following order of decreasing precedence
shall apply:


 


	
  Terms and Conditions

  	
   

  	
  (Preamble, Recitals, Articles 1 through 37 and
  Attachments A through D)

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Payment Plan and Termination Liability Amounts

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Satellite Statement of Work

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Satellite Performance Specification

  
	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  Space Segment Statement of Work

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Space Segment Specification

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Product Assurance Program Plan

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Satellite Test Plan

  
	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  Space Segment Test Plan

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  Ico Dss Sow andFunctional Requirements

  



 


 


162

















 


ARTICLE 37- GENERAL


 


37.1         Assignment.


 


37.1.1      General.  Except as set forth herein, this Contract may
not be assigned, either in whole or in part or by operation of law, 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, subject to
applicable export control restrictions, Purchaser may assign or transfer this
Contract or all its rights, duties, or obligations hereunder to (i) any
Person provided that such Person has sufficient financial resources to fulfill
Purchaser’s obligations under this Contract, and the net worth of such Person
is not less than the net worth of Purchaser immediately prior to such transfer,
or (ii) 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: (iii) any
Affiliate of Purchaser, or (iv) any Person who acquires (whether through
acquisition, merger or other similar transaction), all or substantially all of
the assets of Purchaser, provided in any case the assignee, transferee, or
successor to Purchaser has expressly assumed in writing all the obligations of
Purchaser and all terms and conditions applicable to Purchaser under this
Contract.


 


37.1.3      By Contractor.  Notwithstanding the foregoing, Contractor may
assign or transfer this Contract or all of its rights, duties, or obligations
hereunder (i) to any Affiliate of Contractor, or (ii) in connection
with a sale, transfer, merger, or other reorganization affecting Contractor or
its assets, provided in each such case pursuant to this Article 37.1.3: (a) such
assignment or transfer does not have a material adverse effect on the assignee’s,
transferee’s or successor to Contractor’s technical ability to fulfill its


 


163

















 


obligations under this Contract; (b) the net
worth of the assignee, transferee or successor to Contractor is not less than
the net worth of Contractor immediately prior to such assignment or transfer; (c) the
assignee, transferee or successor to Contractor has expressly assumed in
writing all the obligations of Contractor and all terms and conditions
applicable to Contractor under this Contract; and (d) neither the
assignee, transferee or successor to Contractor nor any Affiliate thereof is a
competitor of Purchaser engaged or engaging in the business of satellite based
delivery of mobile telephony.


 


37.1.4      Security Interests.  Either Party, upon prior written notice to
the other Party, may grant security interests in its rights hereunder to
lenders that provide financing for the performance by such Party of its
obligations under this Contract or for the subject matter hereof.


 


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.


 


164

















 


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
Schedules, Attachments, Annexes, 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.


 


165

















 


37.8         Entire
Agreement.


 


This Contract, including all its Schedules, Attachments, Annexes,
Exhibits and Appendices, represents the entire understanding and agreement
between the Parties hereto with respect to the subject matter hereof, and
supersedes all prior negotiations and agreements with respect to the subject
matter hereof.


 


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 California,  
without reference to its conflicts of laws rules.


 


166

















 


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.   Without limitation, the
following provisions shall survive termination or expiration of the Contract:
19, 20, 30, 31, 32 and 37.


 


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.


 


167

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


37.17       Mitigation and
Good Faith.


 


Each Party shall have a duty to mitigate damages and to act in good
faith.


 


37.18       Record
Retention and Audit Rights.


 


 Contractor and its
subcontractors shall maintain books, records, documents and other evidence
which sufficiently and properly reflects the accuracy of the costs assessed or
charged directly or indirectly to Purchaser. 
In the event that Contractor’s costs shall be subject to bona fide inquiry
(for example, under Articles 16, 21 and 23 hereof),  Purchaser shall have the right to audit
Contractor’s records provided that: (a) the scope of the audit shall be
limited to matters relevant to the bona fide inquiry; (b) the audit shall
be performed by a third party auditor reasonably satisfactory to Contractor; (c) all
costs of the auditor shall be borne by Purchaser; and (d) Purchaser shall
not be provided with confidential information (such as labor rates), which in
any report to Purchaser shall be excluded or otherwise redacted.


 


37.19       Time is of the
Essence.


 


Subject to the applicable remedies and procedures set forth in this
Contract, the Parties agree that time is of the essence in the performance of
this Contract.


 


37.20       [*]


 


168

















 


 


37.21       Representations.


 


Each Party hereby represents and warrants to the other:


 


(a)           Such Party is an entity duly formed,
validly existing and in good standing in its jurisdiction of formation, with
full  power and authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it purports to own  or use, and to
perform all its obligations under Contract.


 


(b)           This Contract constitutes the legal,
valid, and binding obligation of such Party, enforceable against it in
accordance with its terms.


 


(c)           This Contract has been duly executed and
delivered by such Party; and


 


(d)           Neither the execution and delivery of
this Contract nor the performance by the Party of its obligations hereunder: (i) contravene,
conflict with, or result in a violation of (A) any provision of the
organizational documents of the Party, (B) any resolution adopted by the
board of directors or the stockholders or its equivalent of a Party; or (C) any
contract or obligation of the Party; or (ii)  require, other than in the
case of licenses and permits referred to in Article 7, the consent of
approval of any Person including, in the case of Contractor, the approval of
the bankruptcy court.


 


169

















 


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


 


	
  Space Systems/Loral, Inc.

  	
   

  	
  ICO Satellite Management LLC

  
	
   

  	
   

  	
   

  
	
  By:

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Ron Haley

  	
   

  	
  Name: Dennis Schmitt

  
	
   

  	
   

  	
   

  
	
  Title: CFO

  	
   

  	
  Title: Director/CFO

  



 

















 


ATTACHMENT A


 




FORM OF INVOICE


 


[Date]]


 


ICO Satellite Management
LLC


2300 Carillon Point


Kirkland, Washington,
98033


 


	
  Attention:

  	
   

  	 

	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  Terms and
  conditions of the Amended and Restated Space Segment Contract, dated as of
                   
  (as amended, supplemented or modified from time to time, the “ICO Satellite
  Contract”), between ICO SATELLITE MANAGEMENT LLC (“PURCHASER” OR “ICO”) and
  SPACE SYSTEMS/LORAL, INC. (“CONTRACTOR”)

  
	
   

  	
   

  	
   

  



Ladies and Gentlemen:


 


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


 


 


Very truly yours,


 


 


	
  SPACE
  SYSTEMS/LORAL, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 

















 


Annex I to Attachment A


 


Form of Contractor Certificate


 


Reference:            Milestone
No.        /Time Payment No.             


 


[Date]


 


ICO Satellite Management
LLC


2300 Carillon Point


Kirkland, Washington, 98033


 


	
  Attention:

  	
  Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  Terms and
  conditions of the Amended and Restated Space Segment Contract, dated as of
             between ICO
  SATELLITE MANAGEMENT LLC (“PURCHASER” OR “ICO”) and SPACE SYSTEMS/LORAL, INC.
  (“CONTRACTOR”) (as amended, supplemented or modified from time to time, the
  “ICO Space Segment Contract”)

  
					



 


Ladies and Gentlemen:


 


This Certificate is delivered to you pursuant to Article 5
of the terms and conditions of the ICO Space Segment Contract.  Each capitalized term used herein and not
otherwise defined shall have the meaning assigned thereto in the terms and
conditions of the ICO Space Segment Contract.


 


We hereby certify, based
on information and belief, that, as of the date hereof:


 


1.             The ICO
Space Segment Contract is in full force and effect and except as set forth in Schedule I
hereto, has not been amended, supplemented or otherwise modified


 


2.             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 ICO Space Segment Contract or that could excuse us from liability for
non-performance thereunder.


 


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


 


A-I-1

















 


4.             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
ICO Space Segment Contract represents monies owed to us in respect of
Milestone  No.          /Time
Payment No.         .


 


b.             The
amount referred to in paragraph (a) above was computed in accordance with
the terms of the ICO Space Segment Contract.


 


c.             The
Milestone to which Milestone No.         
relates has been completed in accordance with the ICO Space Segment Contract.


 


Very truly yours,


 


	
  SPACE
  SYSTEMS/LORAL, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 


A-I-2

















 


SCHEDULE I
TO


 


ANNEX
I TO ATTACHMENT A


 


List of
Exceptions:


 


 


Amendments
to ICO Space Segment Contract:


 


 


Exceptions
Affecting Final Acceptance Date:


 


 


Exceptions
Affecting Contractor’s Performance:


 


A-I-1

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


ATTACHMENT B KEY PERSONNEL


 




	
  Key Personnel Position

  	
   

  	
  Individual

  
	
  Program Manager

  	
   

  	
  [*]

  
	
  Spacecraft Engineering Manager

  	
   

  	
  [*]

  
	
  Payload Program Manager

  	
   

  	
  [*]

  
	
  Assembly, Integration and Testing Manager

  	
   

  	
  [*]

  
	
  Space Segment Manager

  	
   

  	
  [*]

  
	
  Space Segment Technical Lead

  	
   

  	
  [*]

  






 


A-I-2

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


ATTACHMENT C


 


GBBF - UNIQUE COMPONENTS AND FUNCTIONS ON BOARD THE SATELLITE


 


[*]


 


A-I-3

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


ATTACHMENT D


 


[*]


 


A-I-4

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


[*]


 


A-I-5

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


[*]


 


A-I-6

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


[*]


 


A-I-7

















 


[*] CONFIDENTIAL TREATMENT REQUESTED BY ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED.


 


ATTACHMENT E


 


MAJOR SUBCONTRACTS LIST

[*]


 


	
  Item

  	
   

  	
  Subcontractor

  
	
  [*]

  	
   

  	
   

  



 


Suppliers on this list
approved for use as Major Subcontractors or as replacement Subcontractors for
the ICO Program for the respective items contained in this list.


 


A-I-8

















 


EXHIBIT A


 


ICO 2 GHz
GEO SATELLITE 

STATEMENT OF WORK


 


Confidential Treatment of This Entire Exhibit Has Been Requested, and
the Text Has Been Submitted to the Commission.


 

















 


EXHIBIT B


 


ICO 2-GHz
GEO SATELLITE 

PERFORMANCE SPECIFICATION


 


Confidential treatment of this entire Exhibit has been requested, and
the text has been submitted to the Commission.


 

















 


EXHIBIT C


COMMERCIAL PROGRAMS PRODUCT
ASSURANCE PLAN


 


Entire Exhibit Redacted
pursuant to

U.S. International Traffic in Arms Regulation (ITAR),

22 CFR 120-130


 

















 


EXHIBIT D


 


ICO 2-GHz
GEO SATELLITE 


TEST PLAN


 


Entire Exhibit Redacted pursuant to U.S. International Traffic in Arms
Regulation (ITAR), 22 CFR 120-130


 

















 





 


EXHIBIT E


 


ICO SPACE
SEGMENT PERFORMANCE 

SPECIFICATION


 


Confidential Treatment of This Entire Exhibit Has Been Requested, and
the Text Has Been Submitted to the Commission


 

















 


EXHIBIT F


 


ICO SATELLITE


PAYMENT PLAN AND TERMINATION


LIABILITY AMOUNTS


 


[*]


 


	
  Prepared
  for:

  	
   

  
	
  ICO
  Satellite Management LLC

  	
   

  
	
  2300
  Carillon Point

  	
  [*]

  
	
  Kirkland,
  Washington 98033

  	
  ICO
  Satellite Management LLC Approval Signature & Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  Prepared
  by:

  	
   

  
	
  Space
  Systems/Loral

  	
   

  
	
  3825 Fabian
  Way

  	
  [*]

  
	
  Palo Alto,
  California 94303-4201

  	
  Space
  Systems/Loral Approval Signature & Date

  



 


 


This
document contains data and information proprietary to Space Systems/Lord, Inc.,
and ICO Satellite Management LLC. This data is being furnished pursuant to the
provisions of the ICO Satellite Purchase Contract. The ICO Satellite Management
LLC customer shall have the right to duplicate, use or disclose the data to the
extent specified in the Purchase Contract.


 

















 


Exhibit F: Payment Plan and Termination
Liability Amounts


ICO 2 GHz GEO Satellite


Payment Plan


 


Confidential Treatment of This Entire Exhibit Has Been Requested, and
the Text Has Been Submitted to the Commission


 

















 


EXHIBIT G


 


ICO Space Segment


STATEMENT OF WORK


 


Confidential Treatment of This Entire Exhibit Has Been Requested, and
the Text Has Been Submitted to the Commission


 

















 


EXHIBIT H


 


ICO Space
Segment Test Plan


 


Entire Exhibit Redacted
pursuant to U.S. International Traffic in Arms Regulation (ITAR), 22 CFR
120-130


 

















 


EXHIBIT J


 


ICO DSS SOW
and FUNCTIONAL REQUIREMENTS


 


Entire Exhibit Redacted pursuant to U.S. International Traffic in Arms
Regulation (ITAR), 22 CFR 120-130