Document:

Exhibit 10.41

 

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.

 

Confirmation Advice

 

SATELLITE LAUNCH AND
IN-ORBIT INSURANCE POLICY

 

This is to certify that the policy described herein
has been issued to the Named Insured or agreed between the Named Insured and
the Insurer for the Policy Period indicated. Notwithstanding any requirement,
term or condition of any contract or other document with respect to which the
advice may be issued or may pertain, the insurance afforded by the policy
described herein is subject to all  terms, conditions and exclusions of the Policy.

 

Named Insured:

 

ICO
Satellite Services G.P.

 

Named
Insured’s Address:

 

2300
Carillion Point

Kirkland
WA 98033

 

Loss
Payee:

 

A
Partial Loss and/or Total Loss shall be adjusted with and payable to the Named
Insured or to any other loss payee (“Loss Payee”) as notified in writing by the
Named Insured to the Insurers.

 

Type
of Insurance:

 

Launch and
In-Orbit Insurance

 

Amount
of Insurance:

 

The total amount of insurance under this Policy shall be
[*].

 

Premium:

 

(a)           The premium is [*] (the “Premium”) and is due
from and payable by the Named Insured to
the Insurers in accordance with the following installments:

 

(i)            as a deposit, five percent (5%)
of the Premium is due and payable by the earlier of thirty (30) days after
inception of the Policy Period or thirty (30) days prior to the scheduled
launch date; and

 

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

 

1

 

(ii)           the
balance of the Premium (the “Balance Premium”) is due and payable no later than
thirty (30) days prior to the scheduled launch date. The Named Insured will
advise the Insurers of the scheduled launch date no later than forty five (45)
days prior to the scheduled launch date.

 

(b)           The Premium will be fully earned at Attachment of Risk.

 

(c)           If Launch has not and will not occur within the Policy
Period, the Insurers agree to return to the Named Insured any portion of the
Premium the Insurers have received, without interest, within thirty (30) days
of their receipt of notification from the Named Insured that the Launch has not
and will not occur within the Policy Period.

 

(d)           In the event Launch is delayed for more than one hundred
twenty (120) days after the date of the payment of the Balance Premium, then,
at the Named Insured’s request, the Insurers will return to the Named Insured
within thirty (30) days of their receipt of the Named Insured’s request, the
Balance Premium they have received without interest. The Balance Premium shall
again be due and payable thirty (30) days before the rescheduled launch date,
if such rescheduled launch date is within the Policy Period. The Named Insured
will provide the Insurers with the rescheduled launch date no later than forty
five (45) days prior to the rescheduled launch date.

 

Interest:

 

To pay the Named Insured the
Amount of Insurance in the event of a Total. In the event of a Partial Loss, to
pay the Named Insured by paying the Partial Loss Amount, as more fully set
forth in the wording.

 

Policy Term:

 

The Policy Period is from February 14,
2008 to February 14, 2009, both dates at 12:01 AM local time at the Named
Insured’s Address.

 

Policy Form:

 

Manuscript
Policy Form dated February 14, 2008

 

Coverage Overview:

 

The policy provides coverage
for a reduction of performance while operating in the Insured Operating
Configuration aggregated over the Mission Life. The policy contains details of
a specific method of Space Segment performance measurement (the Space Segment
Performance Factor or SSPF), based on the comparison of the measured
performance of [*] that form the Insured Operating Configuration against a
pre-agreed scale of indemnities.  The
policy also provides the opportunity for ICO to submit a claim

 

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

 

2

 

under an alternative basis
in the event that it is proved that the defined basis of evaluating SSPF cannot
be applied to a particular loss scenario

 

Territory:

 

Anywhere

 

Taxes
Payable by the Insured:

 

None

 

Endorsements:

 

The
following endorsements will be attached to the policy:

 

·      Loss payments not affected by the Guarantee
Amount

·      Loss payments not affected by the Guarantee
Amount and the Loss payments are different during pre-separation phase and the
post-separation phase

·      Loss payments not affected by the Guarantee
Amount and a [*]

·      [*]

·      Coverage not provided for [*] is declared in lieu
of a Total Loss

·      Coverage not provided for [*] and loss payments
not affected by the Guarantee Amount and the Loss payments are different during
pre-separation phase and the post-separation phase

·      DIC only coverage provided during the
pre-separation phase and full coverage during the post-separation phase

·      Launch only coverage

·      Coverage not provided for the [*]

 

Cancellation:

 

This Policy may be cancelled only by mutual agreement
between the Named Insured and the Insurers or unilaterally by the Insurers for
non-payment of Premium when due.

 

In the event of cancellation by mutual agreement between
the Named Insured and the Insurers, the Insurers shall return unearned Premium
to the Named Insured within thirty (30) days of the effective date of such
cancellation, if such cancellation contemplates a return of Premium by the Insurers.

 

In
the event of cancellation due to non-payment of Premium, the Insurers must
provide written notice of cancellation to the Named Insured at least fifteen
(15) days prior to the effective date of such cancellation. For the purposes of
this Condition 4, the fifteen (15) day period shall begin upon receipt of such
notice by the Named Insured. Payment of the due Premium within such notice
period shall void such notice of cancellation for non-payment of premium

 

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

 

3

 

Insurers:

 

	
  Insurer

  	
   

  	
  Maximum

  Participation

  
	
  AIG
  Europe (UK) Ltd./New Hampshire Insurance Company

  	
   

  	
  [*]

  
	
  Atrium
  Underwriting PLC/Lloyd’s of London

  	
   

  	
  [*]

  
	
  Catlin
  Underwriting Agencies Limited/Lloyd’s of London

  	
   

  	
  [*]

  
	
  Watkins
  Syndicate/Lloyd’s of London

  	
   

  	
  [*]

  
	
  ACE
  USA/Illinois Union Insurance Company

  	
   

  	
  [*]

  
	
  La Reunion Spatiale/Various Comp.

  	
   

  	
  [*]

  
	
  International
  Aerospace Insurance Services/Arch Insurance Company

  	
   

  	
  [*]

  
	
  Brit
  Syndicates Limited/Lloyd’s of London

  	
   

  	
  [*]

  
	
  DE
  Shaw

  	
   

  	
  [*]

  
	
  Global
  Aerospace Underwriting Managers/Various Companies

  	
   

  	
  [*]

  
	
  Hannover
  Reinsurance

  	
   

  	
  [*]

  
	
  Hisox
  Syndicates, Ltd./Lloyd’s of London

  	
   

  	
  [*]

  
	
  Munich
  Reinsurance Company/Great Lakes Reinsurance

  	
   

  	
  [*]

  
	
  PARIS
  RE America Insurance Company

  	
   

  	
  [*]

  
	
  Swiss
  Reinsurance Company/Swiss Re International Business Insurance Company Ltd

  	
   

  	
  [*]

  
	
  XL
  Aerospace/XL Specialty Insurance Co.

  	
   

  	
  [*]

  
	
  Amlin
  Aviation/Lloyd’s of London

  	
   

  	
  [*]

  
	
  AXA
  Corporate Solutions

  	
   

  	
  [*]

  
	
  Chaucer
  Syndicates Limited/Lloyd’s of London

  	
   

  	
  [*]

  
	
  ELSECO
  Limited/Various Companies

  	
   

  	
  [*]

  
	
  Glacier
  Re

  	
   

  	
  [*]

  
	
  Mitsui
  Sumitomo Insurance Company, Ltd.

  	
   

  	
  [*]

  
	
  Nissay
  Dowa

  	
   

  	
  [*]

  
	
  Samsung
  Fire & Marine Insurance Co Ltd

  	
   

  	
  [*]

  
	
  SATEC
  S.r.l./Various Comp.

  	
   

  	
  [*]

  
	
  Tokio
  Marine & Nichido Fire Insurance Company, Ltd.

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  

 

Claim Payment:

 

Payment for a Partial Loss or Total Loss (“Claim
Payment(s)”) shall be made within [*] days of either the:

 

(i)            Insurers agreement to
the Claim and the Named Insured’s and, if applicable,  the Insurer’s execution of a release agreement in a form to be agreed by
the Named Insured and the Insurers in respect of such Claim in accordance with
Condition 16 (b) (iv); or

 

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

 

4

 

(ii)           issuance of an
arbitration award in favor of the Named Insured with respect to a Partial Loss
or Total Loss for which a Claim has been submitted.

 

Issued By:

 

Robert C. Schenone, Managing Director, Marsh USA, Inc.,
New York

 

Issue
Date:

 

February 14,
2008

 

This advice is issued as a matter of information only. This advice does
not amend, extend or alter the coverage afforded by the policies described
herein.

 

5

 

FORM OF

SATELLITE LAUNCH AND

IN-ORBIT INSURANCE POLICY

 

DECLARATIONS

 

1.             NAMED INSURED:

 

ICO
Satellite Services G.P. (the “Named Insured”)

 

2.             NAMED INSURED’S ADDRESS:

 

11700
Plaza America Drive

Suite 1010

Reston, Va. 
20190 U.S.A.

 

3.             LOSS PAYEE:

 

A
Partial Loss and/or Total Loss shall be adjusted with and payable to the Named
Insured or to any other loss payee (“Loss Payee”) as notified in writing by the
Named Insured to the Insurers.

 

4.             POLICY PERIOD:

 

The Policy Period is from February 14,
2008 to February 14, 2009, both dates at 12:01 AM local time at the Named
Insured’s Address. If the Launch takes place during the Policy
Period, the Policy Period shall continue until the earlier of Declaration
7(a), 7 (b) or 7(c) (the “Policy Period”).

 

5.             AMOUNT OF INSURANCE:

 

The
total amount of insurance under this Policy shall be [*] (“Amount of Insurance”).

 

6.             ATTACHMENT OF RISK:

 

Risk
of loss under this Policy shall attach at Launch, provided this occurs during
the Policy Period (“Attachment of Risk”).

 

7.             TERMINATION OF RISK:

 

Risk of loss shall terminate (“Termination of Risk”) upon the
occurrence of the earliest of the following:

 

(a)           at 12:01 A.M. local time at the Named
Insured’s Address, on the date that 

 

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

 

1

 

(b)           is one (1) year
after Launch; or when Claim Payments equal the Amount of Insurance; or

 

(c)           when the Space Segment
is a Total Loss as agreed by the Named Insured and the Insurers.

 

8.             PREMIUM:

 

(a)           The premium is USD TBD (the “Premium”) and is due from and
payable by the Named Insured to the Insurers in accordance with the following
installments:

 

(i)            as
a deposit, five percent (5%) of the Premium is due and payable by the earlier
of thirty (30) days after inception of the Policy Period or thirty (30) days
prior to the scheduled launch date; and

 

(ii)           the
balance of the Premium (the “Balance Premium”) is due and payable no later than
thirty (30) days prior to the scheduled launch date. The Named Insured will
advise the Insurers of the scheduled launch date no later than forty five (45)
days prior to the scheduled launch date.

 

(b)           The Premium will be fully earned at Attachment of Risk.

 

(c)           If Launch has not and will not occur within the Policy
Period, the Insurers agree to return to the Named Insured any portion of the
Premium the Insurers have received, without interest, within thirty (30) days
of their receipt of notification from the Named Insured that the Launch has not
and will not occur within the Policy Period.

 

(d)           In the event Launch is delayed for more than one hundred twenty (120) days after the date of the payment of the Balance
Premium, then, at the Named Insured’s request, the Insurers will return to the
Named Insured within thirty (30) days of their receipt of the Named Insured’s
request, the Balance Premium they have received without interest. The Balance
Premium shall again be due and payable thirty (30) days before the rescheduled
launch date, if such rescheduled launch date is within the Policy Period. The
Named Insured will provide the Insurers with the rescheduled launch date no
later than forty five (45) days prior to the rescheduled launch date.

 

9.             MARGINS:

 

Prior to Attachment of Risk, the Named Insured shall provide
to the Insurers the propellant and power budgets for the Satellite (the “Final
Pre-Launch 

 

2

 

Calculations”).

 

With respect to the propellant margin, the Final Pre-Launch
Calculations shall be based on three (3) sigma Launch Vehicle and
Satellite performance dispersions. If it is demonstrated through the Final
Pre-Launch Calculations that the Fuel Life is projected to be less than [*], as
measured from ninety (90) days after Launch, then Mission Life shall be reduced
to be [*] less than the Fuel Life.

 

With respect to the
power margin, the Final Pre-Launch Calculations shall be based on worst case
Satellite performance over the Mission Life, with the payload operating at its
specified levels and assuming [*] failed. If it is demonstrated through the
Final Pre-Launch Calculations that, during all periods of Mission Life, a
minimum solar array power margin of at least [*] does not exist or the battery
depth of discharge is worse than [*], the Required Values listed in Appendix 2
shall be adjusted to reinstate such [*] solar array margin and battery depth of
discharge no worse than [*].

 

INSURING
AGREEMENT

 

In consideration of the payment of the Premium by the Named
Insured to the Insurers, in reliance upon the statements in the Declarations
and in the Underwriting Information, and subject to the Insuring Agreement,
Definitions, Declarations, Conditions, Exclusions, Appendices and as
applicable, Endorsements, of this Policy, the Named Insured and the Insurers
agree as follows:

 

(a)           In the event of a Total Loss occurring between Attachment of
Risk and Termination of Risk, the Insurers shall pay the Loss Payee the Amount
of Insurance less the Guarantee Amount, if the Guarantee Amount is payable
under the Launch Contract.

 

In the event of a Total Loss, the Named Insured shall have
the right to declare a Partial Loss in lieu of a Total Loss, in which case the
Claim Payments shall be in accordance with Insuring Agreement (b). If the Named
Insured exercises its right to declare a Partial Loss in accordance with the
preceding sentence, the Named Insured shall be entitled to submit a subsequent
Claim for any subsequent Partial Loss and/or Total Loss; however the Named
Insured shall not be entitled to make a Claim for a Total Loss for the Partial
Loss that was declared by the Named Insured in accordance with this paragraph.

 

(b)           In
the event of a Partial Loss occurring between Attachment of Risk and
Termination of Risk, the Insurers shall pay the Loss Payee an amount calculated
in accordance with the Partial Loss Amount less the Guarantee Amount, if the
Guarantee Amount is payable under the Launch Contract. 

 

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

 

3

 

(c)           In the event the Space Segment suffers a loss, damage or failure for
which Total Loss or Partial Loss Amount calculations or determinations do not
apply, then the associated Claim shall clearly demonstrate, with reasonable
certainty (1) why the existing formulae cannot be applied, and (2) the
alternative basis for the loss calculations or determinations. The Insurers
shall accordingly pay the Loss Payee up to the Amount of Insurance proven
pursuant to the Claim. A Claim filed under this paragraph must be demonstrated
by the Named Insured to result in the Space Segment’s inability to perform its
intended communications purposes. Any Claim filed under this paragraph shall be
computed with the same margins and limitations of coverage as those outlined in
this Policy.

 

(d)           In the event the Loss Payee has previously been
paid for any Claim, the amount payable for a subsequent Claim shall be adjusted
to eliminate any duplicative recovery for any previous Claim.

 

(e)           In the event of a Partial Loss or Total Loss,
the Named Insured shall utilize all applicable redundant and/or spare
components to minimize the amount payable under the Claim. However, the Named
Insured shall have the right to operate the Space Segment in any configuration.

 

(f)            In no event shall the
total amount of Claim Payments under this Policy exceed the Amount of
Insurance, subject to Condition 10.

 

(g)           A Partial Loss or Total Loss shall not be
deemed to have occurred unless such Partial Loss or Total Loss has manifested
itself by telemetry or payload performance data or lack thereof, or any other
ground measurement, recorded between Attachment of Risk and Termination of
Risk, and the Named Insured has complied with all of the terms of this Policy.
Telemetry data or any other ground measurement recorded after Termination of
Risk may be used in determining the amount submitted in the Claim.

 

(h)           In the event of:

 

(i)            a
Partial Loss or Total Loss occurring between Attachment of Risk and Termination of Risk;
and

 

(ii)           degradation
of the Satellite performance continues beyond Termination of Risk; and

 

(iii)          this
degradation is demonstrated by the Named Insured, with reasonable certainty, to
result from the event between
Attachment of Risk and Termination of Risk that caused the Partial Loss
or Total Loss in (i) above,

 

then such
degradation of the Satellite performance shall be included in the calculations
of the Claim and covered
under this Policy.

 

4

 

DEFINITIONS

 

1.                                       CLAIM:

 

“Claim” shall have the meaning set forth in Condition 16 (b) (iii).

 

2.                                       CLAIM PAYMENT:

 

“Claim Payment” shall have the meaning set forth in Condition
8 (a).

 

3.                                       FUEL LIFE:

 

“Fuel Life” shall mean the
period of time measured from the earlier of:

 

(a)                                  completion of the Satellite in-orbit testing at the Specified
Orbit Location; or

 

(b)                                 ninety (90) days after Launch,

 

until all available propellants
on the Satellite are projected to be used.

 

All Fuel Life calculations made
after Attachment of Risk shall follow the same methodology used to determine
the Final Pre-Launch Calculation for Fuel Life, except to the extent maneuvers
have been performed and/or the performance of the Satellite has been measured
in orbit, in which case propellant calculations shall be based on actual
in-orbit measurements. Values shall be used that are consistent with the Named
Insured’s ability to accurately measure and determine utilization and/or
performance.

 

Fuel Life will not be reduced
by a planned use of fuel to intentionally move the Satellite, with the
exception of end of life de-orbiting, from its Specified Orbit Location, unless
such a move is undertaken to avoid or diminish a Partial Loss or Total Loss.

 

5

 

4.                                       GBBF SUBSYSTEM:

 

“GBBF Subsystem” shall
mean the ground-based beam forming subsystem that is to be delivered by Space
Systems/Loral to the Named Insured pursuant to the Satellite Contract.

 

5.                                       GUARANTEE AMOUNT:

 

“Guarantee Amount” shall mean
any amounts payable under the Launch Contract from the launch services provider
to the Named Insured in the event of a Partial Failure, Constructive Total
Failure or Total Failure, all three terms as defined in the Launch Contract.
The maximum value of the Guarantee Amount is [*].

 

Insolvency and/or bankruptcy of
Lockheed Martin Commercial Launch Services shall not affect the Guarantee
Amount.

 

6.                                       INTENTIONAL IGNITION:

 

“Intentional Ignition” shall
mean the point in time during the launch countdown when the engine start
command is issued, causing the start bottle to be pressurized and hypergolics
to enter the chamber.

 

7.                                       LAUNCH:

 

“Launch” shall mean Intentional Ignition followed by either:

 

(a)                                  release of the Launch Vehicle
from the launcher hold down restraints for the purpose of lift off; or

 

(b)                                 total loss or destruction of
the Satellite or Launch Vehicle.

 

8.                                       LAUNCH CONTRACT:

 

“Launch Contract” shall mean
the contract between the Named Insured and Lockheed Martin Commercial Launch
Services, Inc., dated March 10, 2006, including Amendment 1.

 

9.                                       LAUNCH VEHICLE:

 

“Launch Vehicle” shall mean the
launch vehicle described in the Launch Contract.

 

10.                                 MISSION LIFE:

 

“Mission Life” shall mean [*]
after the earlier of:

 

(a)                                  completion of the Satellite
in-orbit testing at the Specified Orbit Location; or

 

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

 

6

 

(b)           ninety (90) days after Launch.

 

11.                                 PARTIAL LOSS:

 

“Partial Loss”
shall mean either:

 

(a)                                  the Partial Loss Amount is greater than [*] but none of the criteria for
a Total Loss are fulfilled; or

 

(b)                                 one (1) or
more of the criteria of a Total Loss are fulfilled, and the Named Insured, in
its discretion, claims a Partial Loss in accordance with the second paragraph
of Insuring Agreement (a).

 

12.                                 PARTIAL LOSS AMOUNT:

 

“Partial Loss
Amount” shall mean the amount payable as calculated in accordance with
Appendix 1.

 

13.                                 PERFORMANCE SPECIFICATIONS:

 

“Performance Specifications” shall mean the applicable
performance specifications for the Satellite and the Space Segment, including:

 

(a)                                  Exhibit B, Satellite
Performance Specification;

 

(b)                                 Exhibit E, Space Segment
Performance Specification.

 

14.                                 POLICY:

 

“Policy” shall mean this agreement including the Insuring
Agreement, Definitions, Declarations, Conditions, Exclusions, Appendices and as
applicable, Endorsements.

 

15.                                 SATELLITE:

 

“Satellite” shall mean
exclusively the telecommunications spacecraft known as ICO G1 as identified in
the Satellite Contract.

 

16.                                 SATELLITE CONTRACT:

 

“Satellite Contract” shall
mean the space segment contract for ICO G1 between ICO Satellite G.P. and Space
Systems/Loral, Inc., including Amendments [*].

 

17.                                 SPACE SEGMENT:

 

“Space Segment” shall mean the
combined Satellite and the GBBF Subsystem, 

 

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

 

7

 

integrated for the purpose of
communications services, delivered by Space Systems/Loral to the Named Insured
pursuant to the Satellite Contract.

 

18.                                 SPECIFIED ORBIT LOCATION:

 

“Specified Orbit Location”
shall mean the initial geosynchronous orbit location of 92.85° degrees west
longitude within [*].

 

19.                                 TOTAL LOSS:

 

“Total Loss” shall mean
any of the following:

 

(a)                                  the Satellite is lost
or is completely destroyed; or

 

(b)           the Satellite is not
capable of reaching or maintaining its Specified Orbit Location within one
hundred and eighty (180) days after Launch; or

 

(c)           [*]

 

or

 

(d)                                 the Space Segment
Performance Factor as defined in Appendix 1 is equal to or less than [*]
between Attachment of Risk and Termination of Risk on a permanent or
permanently intermittent basis.

 

20.                                 UNDERWRITING INFORMATION:

 

“Underwriting
Information” shall mean the written information provided to the Insurers by or
on behalf the Named Insured or by the Named Insured’s insurance broker (Marsh
Inc.), before Attachment of Risk, with respect to the Space Segment and/or
Launch Vehicle.

 

EXCLUSIONS

 

This Policy does not apply to loss, damage or
failure caused by or resulting from:

 

1.                                       War, invasion, hostile
or warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack by:

 

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

 

8

 

(a)                                  any government or
sovereign power (de jure or de facto); or

 

(b)                                 any authority
maintaining or using a military, naval or air force; or

 

(c)                                  a military, naval, or
air force; or

 

(d)                                 any agent of any such
government, power, authority or force.

 

2.                                       Any anti-satellite
device, or device employing atomic or nuclear fission and/or fusion, or device
employing laser or directed energy beams.

 

3.                                       Insurrection, strikes,
labor disturbances, riots, civil commotion, rebellion, revolution, civil war,
usurpation, or action taken by a government authority in hindering, combating
or defending against such an occurrence, whether there be declaration of war or
not.

 

4.                                       Confiscation, nationalization,
seizure, restraint, detention, appropriation, requisition for title or use by
or under the order of any government or governmental authority or agent
(whether secret or otherwise and/or whether civil, military or de facto) or
public or local authority or agency.

 

5.                                       Nuclear reaction, nuclear
radiation, or radioactive contamination of any nature, whether such loss or
damage be direct or indirect, except for radiation naturally occurring in the
space environment.

 

6.                                       Electromagnetic or radio
frequency interference, except for physical damage to the Satellite directly
resulting from such interference and from interference coming directly from the
Space Segment.

 

7.                                       Willful or intentional acts of
the Named Insured, with the exception of the range safety officer acting within
his authorized responsibilities, designed to cause loss or failure of the
Satellite; however, this exclusion shall not apply to actions of any employees,
contractors or subcontractors of the Named Insured while acting outside their
authorized responsibilities.

 

8.                                       Any act of one or more
persons, whether or not agents of a sovereign power, for political or terrorist
purposes and whether the loss, damage or failure resulting therefrom is
accidental or intentional.

 

9.                                       Any unlawful seizure or
wrongful exercise of control of the Space Segment and/or Launch Vehicle made by
any person or persons acting for political or terrorist purposes.

 

10.                                 Loss of revenue,
incidental damages, consequential loss or extra expenses, other 

 

9

 

than the expenses insured under Condition 10 of
this Policy.

 

11.                                 Third party liability.

 

12.                                 [*]

 

CONDITIONS

 

1.                                       ABANDONMENT:

 

In
no event shall the Named Insured abandon the Space Segment, or any portion
thereof, to the Insurers without the prior written agreement of the Insurers.

 

2.                                       ACTION AGAINST THE
INSURERS:

 

The
Named Insured will not take legal action or initiate an arbitration against the
Insurers with respect to a disputed Claim until [*] after the Named Insured
submits a completed Claim, in accordance with Condition 16.

 

3.                                       ARBITRATION:

 

Any dispute arising out of or related to this Policy shall
be determined by binding arbitration. 
Such arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.

 

Under
such arbitration, there shall be three (3) unbiased arbitrators, one (1) to
be chosen directly by each party within thirty (30) days of the notice by
either party of its intention to seek arbitration of a dispute, and the third
(3rd) arbitrator to be selected by the two (2) arbitrators so
chosen within thirty (30) days of the selection of the second arbitrator.  Each party shall pay the fees of the arbitrator
it selects and of its own attorneys, and the expense of its witnesses and all
other expenses connected with presenting its case.  Other costs of the arbitration, including the
cost of any record or transcripts of the arbitration, administrative fees, the
fee of the third arbitrator, and all other fees and costs shall be borne
equally by the parties unless directed otherwise by the arbitrators.

 

The arbitration shall be conducted in Washington D.C., U.S.A
and judgment on the award rendered by the arbitrator(s) may be sought and
entered in any court having jurisdiction.

 

4.                                       ASSIGNMENT:

 

The Insurers will not be bound by any assignment
of interest under this Policy unless prior to assignment the Named Insured
obtains the Insurers’ written 

 

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

 

10

 

agreement. Assignment of interest as such term is
used in the preceding sentence shall not be deemed to include any assignment of
the Policy or Claim Payments due under this Policy assigned as collateral
security under any security agreement securing any indebtedness of the Named
Insured or any of its affiliates.

 

5.                                       CANCELLATION:

 

This Policy may be cancelled only by mutual agreement
between the Named Insured and the Insurers or unilaterally by the Insurers for
non-payment of Premium when due.

 

In the event of cancellation by mutual agreement
between the Named Insured and the Insurers, the Insurers shall return unearned
Premium to the Named Insured within thirty (30) days of the effective date of
such cancellation, if such cancellation contemplates a return of Premium by
the Insurers.

 

In the event of cancellation due to non-payment of
Premium, the Insurers must provide written notice of cancellation to the Named
Insured at least fifteen (15) days prior to the effective date of such
cancellation. For the purposes of this Condition 4, the fifteen (15) day period
shall begin upon receipt of such notice by the Named Insured. Payment of the
due Premium within such notice period shall void such notice of cancellation
for non-payment of premium.

 

6.                                       CHANGES:

 

Notice to or knowledge possessed by any agent or
other person shall not effect a waiver or a change in any part of this Policy
nor estop the Insurers or the Named Insured from asserting any right under the
terms of this Policy. The terms of this Policy may be waived or changed only
upon mutual written agreement between the Named Insured and the Insurers. The
Insurers shall issue an endorsement recognizing such change.

 

7.                                       CHANGES IN UNDERWRITING
INFORMATION:

 

(a)                                  If, prior to Attachment of
Risk, one or more of the following occurs:

 

(i)                                     a material change in any of
the Underwriting Information; or

 

(ii)                                  a change in any material
fact or circumstance concerning the Space Segment and/or Launch Vehicle; or

 

(iii)                               a material amendment is executed under the Launch Contract
or Satellite Contract.

 

then the Named Insured shall promptly send a written
notification of any such change(s) (“Change”) to the Insurers as soon as
reasonably practicable.

 

11

 

If
the Named Insured does not notify the Insurers of the Change, and a Partial
Loss or Total Loss takes place as a result of the impact of such Change, the
Partial Loss or Total Loss shall not be covered under this Policy.

 

If, in the Insurers’ reasonable opinion, the Change results in a material increase in
risk of loss or a material change in insurable interest under this Policy (“Material
Change”), then the Insurers shall notify the Named Insured in writing as soon
as reasonably practicable, but in any event within ten (10) days of
Insurers’ receipt of the written notification of the Change. The Insurers will
be deemed to have accepted the Change as not being a Material Change if they do
not respond within ten (10) days of their
receipt of written notification of the Change.

 

(b)                                 In the event that the
Insurers notify the Named Insured in accordance with the last paragraph of (a) above,
the Insurers and the Named Insured shall promptly commence to renegotiate the
affected terms of this Policy. Such
renegotiation shall be conducted in good faith and without delay.

 

(c)                                  Unless and until such renegotiations result
in the Insurers agreeing in writing to cover the impact of the Change, any
Partial Loss and/or Total Loss resulting from such impact shall not be covered
under this Policy.

 

8.                                       CLAIM PAYMENTS:

 

(a)                                  Payment for a Partial
Loss or Total Loss (“Claim Payment(s)”) shall be made within [*] of either the:

 

(i)                                     Insurers agreement to
the Claim and the Named Insured’s and, if applicable,  the Insurer’s execution of a release agreement in a form to be agreed by
the Named Insured and the Insurers in respect of such Claim in accordance with
Condition 16 (b) (iv); or

 

(ii)                                  issuance of an
arbitration award in favor of the Named Insured with respect to a Partial Loss
or Total Loss for which a Claim has been submitted.

 

(b)                                 Where a Claim Payment
has been made under this Policy and the Insurers and the Named Insured subsequently
agree that because of additional information or subsequent events the Partial
Loss or Total Loss was eliminated or reduced, the Named Insured shall return to
the Insurers within [*] days of such agreement either:

 

(i)                                     in the event a Claim is
subsequently reduced to [*], the amount of Claim Payments under this Policy
with respect to such Claim, without interest; or

 

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

 

12

 

(ii)                                  in the event a Claim is
subsequently reduced but to greater than [*], the difference between the Claim
Payments related to such Claim(s) and the subsequently agreed Claim,
without interest.

 

Reasonable sums expended by the Named Insured to reduce
or eliminate the loss shall be deducted from any Claim Payments returnable to
the Insurers pursuant to this Condition 8(b).

 

In the event Termination of Risk has not occurred
by the time of the agreement to return any Claim Payments pursuant to this
Condition 8(b), the Amount of Insurance will be reinstated in an amount equal
to the amount by which the a Claim has been agreed to be reduced or eliminated.

 

9.                                       CONFORMITY WITH
STATUTES AND APPLICABLE LAW:

 

Terms of this Policy
which are in conflict with the statutes of the state wherein this Policy is
issued or under the law of which this Policy is construed are hereby amended to
the extent necessary to conform with such statutes.  All other terms and portions of terms of this
Policy shall remain unaffected by such requirement for statutory
conformance.  The law of the State of New York shall govern this Policy, without regard
to choice of law principles.

 

10.                                 CORRECTIVE MEASURES:

 

If a Partial
Loss or Total Loss can be satisfactorily corrected or compensated for within a
reasonable amount of time of the Partial Loss or Total Loss by additional
ground installations, procedural changes, software development or any other
reasonable corrective measures (“Corrective Measures”), the Insurers, after
consultation with the Named Insured, shall at the Insurers’ choice either:

 

(a)                                  pay the Loss Payee for
the Claim as set forth in this Policy; or

 

(b)                                 pay the Loss Payee for
all necessary cost and expenses incurred or to be incurred by the Named Insured
to implement the Corrective Measures. The Named Insured shall have no
obligation to implement any Corrective Measures prior to an agreement between
the Named Insured and the Insurers as to the amount and timing of payment by
the Insurers of the costs and expenses incurred or to be incurred by the Named
Insured to implement the Corrective Measures, and, if reasonably practical,
Insurers shall pay the Loss Payee in advance for such cost and expenses for the
Corrective Measurers that will be incurred or to be incurred by the Named
Insured. Nothing in this Condition 10 will be construed to amend or override
the Named Insured’s obligations as stated in Due Diligence.

 

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

 

13

 

In the event the Insurers
choose Condition 10 (b) above, the amount of the Claim shall be adjusted
to take into account the satisfactory correction of or compensation for the
Partial Loss or Total Loss. However, in the event that the Corrective Measures
do not eliminate the impact of the Partial Loss or Total Loss, the Insurers
will bear in addition to the incurred cost and expense in (b) above, the
Claim Payment.

 

Notwithstanding this Condition 10, Insurers shall
not be liable to pay for any corrective measures undertaken or obliged to be
undertaken by Space Systems/Loral Inc. in accordance with the Satellite
Contract

 

11.                                 CURRENCY:

 

The
Premium and Claim Payments under this Policy shall be paid in United States
currency.

 

12.                                 DECLARATIONS:

 

By acceptance of this Policy, the Named Insured
agrees that:

 

(a)                                  the statements in the
Declarations and in the Underwriting Information are its agreements and
representations; and

 

(b)                                 this Policy is issued in reliance upon
such agreements and the truth of such representations; and

 

(c)                                  this Policy embodies all agreements existing
between the Named Insured and the Insurers, relating to this Policy.

 

13.                                 DUE DILIGENCE:

 

The Named Insured shall use due diligence and do and concur
in doing all things reasonably practicable to avoid or diminish any loss under
this Policy and shall act at all times as if uninsured in actions or decisions
relating to this Policy or the subject matter of this Policy.

 

14.                                 EXPORT CONTROL:

 

(a)                                  All requirements or obligations
of the Named Insured under this Policy to provide:

 

(i)                                     information, documentation
or other materials;

 

(ii)                                  respond to questions or
requests for information;

 

(iii)                               transfer title to or
control of the Satellite,

 

14

 

may be subject to export control laws, regulations and/or
policies and government agency approvals of any government having jurisdiction
or authority with respect to the Space Segment or the Launch Vehicle or any
data and services related thereto. The Named Insured’s and the Insurer’s rights shall not be affected by
delays due to the relevant government’s approval process, in the delivery of any data or information requested
under this Policy, nor shall any such
delay relieve the Named Insured or Insurer’s from any of their duties and/or
obligations under this Policy.

 

(b)                                 The Named Insured warrants
that it will exercise all reasonable efforts to obtain, or cause the parties
having the obligation to obtain all necessary licenses and/or approvals in
order to comply with all requirements and obligations under this Policy to
provide such information or materials and respond to the Insurer’s questions or
requests for information.

 

In the event a government agency fails to grant a
necessary license or approval to permit transmittal of the information to the
Insurers, the Insurers and the Named Insured will exercise good faith efforts
to mutually agree an alternative method to proceed under this Policy.

 

15.                                 MISREPRESENTATION AND
FRAUD:

 

The Insurers shall have the right to declare this Policy null and void
by written notification to the Named Insured, if the Named Insured conceals or
knowingly misrepresents to the Insurers directly and/or through the Named
Insured’s agents any material fact(s) or material circumstance(s) concerning
the insurance provided under this Policy or the subject thereof, and/or if the
Named Insured defrauds or attempts to defraud the Insurers, whether before or
after a Partial Loss or Total Loss.

 

15

 

16.           NAMED INSURED’S DUTIES:

 

(a)           Upon
the written request of the Insurers, the Named Insured will respond to all
reasonable and specific written requests regarding design, test, manufacture,
quality control, launch, orbital and performance information concerning the
Space Segment and/or Launch Vehicle and/or the subject matter of this Policy
that is available to the Named Insured.

 

(b)                                 In the event of an occurrence
that, based on information available at the time, is reasonably likely to
result in a Partial Loss or Total Loss under this Policy, the Named Insured
shall:

 

(i)            Give written notice to
the Insurers as soon as practicable identifying the Named Insured and shall
contain all information available to the Named Insured regarding the occurrence
(“Notice of Loss”). In no event shall the Notice of Loss be provided later than
[*] after the earlier of:

 

(A)                              the date on which the
Senior Vice President, Space Systems and/or Senior Vice President, Corporate
Development or their designated representatives in their absence have been
notified or have become  aware of
such event; or

 

(B)                                Termination of Risk.

 

(ii)           If requested by the
Insurers, the Named Insured shall conduct review sessions with the Insurers to
discuss any issues relating to Notice of Loss; and

 

(iii)          Should the Named
Insured determine that the
occurrence will result in a claim under
this Policy, the Named Insured shall file a sworn and notarized proof of loss
with the Insurers as soon as practicable (“Claim”).

 

The Claim shall contain
sufficient detail to support the basis and amount of the Claim in accordance
with the terms of this Policy. In no event shall the Claim be filed more than
[*] following the Notice of Loss. At a minimum, the Claim shall state the date,
time, nature and the probable cause of the Partial Loss or Total Loss.

 

In the event the facts
necessary to complete the Claim (including the extent of loss and the amount of
loss claimed) are not fully available at the time the Claim is due, the
Insurers and the Named 

 

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

 

16

 

Insured will mutually agree to
an extension of the deadline to file the Claim, provided that the extension
does not adversely affect the Insurers’ nor the Named Insured’s rights under
this Policy including but not limited to the Insurers’ rights with respect to
Salvage.

 

The Insurers shall accept, reject, or request
further clarification regarding a filed Claim
within [*] of the Insurers’ receipt of the Claim.  If the Insurers require further
clarification, the Insurers and the Named Insured shall work promptly and in
good faith to come to an agreement regarding the Claim.

 

(iv)          In the event a Claim has been submitted to and
agreed by the Insurers, the Named Insured, upon request from the Insurers,
shall execute a release agreement, the terms of which shall be agreed between the Named Insured and
the Insurers and shall be conditioned on receipt by the Named Insured of the
agreed Claim Payment. The release agreement may be made bilateral and shall
include the details of any salvage agreement reached between the Named Insured
and the Insurers under Condition 19.

 

(c)           To
the extent that any information requested by the Insurers is subject to
non-disclosure or proprietary information provisions under any contract between
the Named Insured and its customers, contractors, or sub-contractors, the Named
Insured shall use all reasonable best efforts to provide such information to
the Insurers. In the event that it becomes obvious that the restrictions
referenced in the preceding sentence will lead 

 

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

 

17

 

(d)           to
a delay in providing the information requested by the Insurers, the Named
Insured will advise the Insurers of such delay before the expiration of the
applicable time limit and the Insurers and the Named Insured will work in good
faith to find a mutually acceptable alternative method to proceed under this
Policy.

 

17.           NOTICES

 

All correspondence, notices, consents, requests or other
communications due under this Policy shall be in writing and addressed as
follows:

 

Marsh
USA Inc.

1166
Avenue of the Americas

43rd
Floor

New
York, NY 10036 USA

Attention:
Robert Schenone

E-mail:
Robert.c.schenone@marsh.com

Facsimile:
(212) 948-8584

 

Marsh shall promptly forward such correspondence to
the Insurers or the Named Insured as applicable.

 

Notices shall be effective as to each recipient upon
actual receipt when delivered in person or by registered airmail, via email or
facsimile; provided however that any notices sent by email or facsimile shall
be effective upon receipt of such email, or if facsimile as evidenced by facsimile
delivery confirmation from the recipient.

 

18.           OTHER INSURANCE:

 

The Insurers acknowledge
that, in addition to this Policy, the Named Insured has placed separate
satellite insurance policies and the launch services provider has obligations
to provide the Guarantee Amount under the Launch Contract, together (“Other
Policies”), and agree that this Condition 18 shall not apply to these Other
Policies.

 

Permission is granted for the
Named Insured to secure other insurance in addition to the Other Policies, provided that:

 

(a)                                  the terms and conditions
of any other insurance secured by the Named Insured will not have a detrimental
effect on the Insurer’s rights and privileges under this policy;

 

(b)                                 the other insurance will
not affect the Named Insured’s duties and 

 

18

 

(c)                                  obligations under this
Policy;

 

(d)                                 in the event the Named Insured recovers on
claims under one or more other policies, not including Other Policies, for
which the Named Insured also recovers under this Policy or Other Policies for a
Partial Loss or Total Loss, the Named Insured’s recovery under this Policy and
Other Policies shall be in the ratio of the Amount of Insurance this Policy and
Other Policies bears to the whole amount of all valid insurance for a Partial
Loss or Total Loss.

 

This condition shall not apply to the extent the
Named Insured can demonstrate that such other insurance has been procured to
provide coverage for uninsured actual value of the Space Segment and/or the
Launch Vehicle and/or business interruption exposures.

 

19.           SALVAGE:

 

The Insurers acknowledge that rights in salvage may
exist under the Other Policies, and that the Named Insured retains rights in
salvage. Insurers agree that any salvage obtained hereunder from the Space
Segment following a Claim Payment for a Total Loss will be shared
proportionally among the Insurers under this Policy, the insurers under the
Other Policies, and the Named Insured. 
Each Insurer’s rights of Salvage under this Policy shall equal the
percentage defined by dividing the amount of the Claim Payment made by that
Insurer under this Policy by the Amount of Insurance (“Proportional Sharing
Arrangement”). For clarity, the Named Insured’s rights of Salvage under this
Policy shall equal the percentage defined by dividing the Named Insured’s
applicable amount of retention by the Amount of Insurance. The following
salvage provisions are subject to this Proportional Sharing Arrangement.

 

In the event of a Claim Payment for a Total Loss,
the Insurers shall have the right to the benefits of salvage in the Space
Segment including the right to take title to the Space Segment (“Salvage”).
Notwithstanding the amount of the self-retention by the Named Insured, the
proportion of the Named Insured’s retained rights in salvage, or any provision
of this Policy to the contrary, provided that the Named Insured receives, (i) a
right of first refusal on the same terms as negotiated with any third party by
the Insurers in the event of a sale of the Satellite following Insurers’ taking
title and (ii) in the event the Named Insured does not exercise its right
in (i), its proportional share of any benefits of Salvage so obtained, any
decision(s) by the Insurers under this Policy with respect to the manner
in which Salvage is to be obtained and the disposition of the Satellite in
connection with obtaining such salvage (including, but not limited to Insurers
taking title to the Satellite or transferring such title to a third party)
shall be binding upon the Named Insured

 

The Insurers will provide the Named Insured with
written notification by the date 

 

19

 

of the Claim Payment, whether as of the date of the
Claim Payment, the Insurers will either:

 

(a)                                  take title to the Space Segment and assume
sole responsibility for maintaining, monitoring or operating the Space Segment;

 

(i)            subject to Condition 14, the Named Insured
shall provide to the Insurers all:

 

(A)          documentation necessary to operate the Space Segment; and

 

(B)           information necessary to enable the Insurers to sell the Space Segment,
or parts thereof, to a third party, subject to the Insurers obtaining a
confidentiality agreement equivalent in form and in scope to that in place
between the Named Insured and the Insurers from any potential third party
purchaser of the Space Segment; and

 

(ii)           the Named Insured will not, under any circumstances, be required to
take any other action or grant any other right, including without limitation
assigning the Specified Orbit Location to the Insurers or be precluded from
replacing the Satellite at the Specified Orbit Location. The Insurers agree to
remove the Satellite from the Specified Orbit Location promptly upon taking
title to the Satellite; and

 

(iii)          the Insurers shall reimburse the Named Insured for all reasonable and
normal costs incurred by the Named Insured in operating the Space Segment for
the Insurers prior to the Insurers moving the Satellite from the Specified
Orbital Location in accordance with this Condition 19.

or

 

(b)           decline to take title to the Space Segment. In such case, if the Named Insured desires to continue to own, use
and/or operate the Space Segment for revenue generating purposes, then the Insurers agree to make themselves
available to meet with the Named Insured to decide upon the disposition of the
Space Segment and to negotiate any associated financial arrangements relating
to the Named Insured’s continued ownership, use and/or operation, or other
participation with respect to the Space Segment. In the event Insurers
choose not to seek Salvage, the Named Insured may use the Space Segment for scientific, testing and
demonstration purposes which do not produce revenue or equivalent goods and
services, or may otherwise dispose of the Space
Segment by ejecting it from its orbital position.

 

20

 

Except if the Insurers take title to the Space Segment, the
net salvage recoveries of the Insurers will be limited to the amount of any
Claim Payments.

 

Any requirements imposed on the Named Insured by the
Federal Communications Commission or under any law applicable to the Satellite
or the Named Insured shall supersede any obligations the Named Insured has
under this Policy.

 

There is no Salvage for a Partial Loss.

 

20.           SPACE SEGMENT AND LAUNCH
VEHICLE ANOMALY CONFIRMATION:

 

Prior to Attachment of Risk, the Named Insured shall obtain:

 

(a)           written confirmation from the Satellite
manufacturer that all known anomalies observed on other satellites of the same
model and series of the Satellite, whether on ground or in-orbit, have been
investigated and as necessary corrected on the Satellite; and

 

(b)           written confirmation from the launch services
provider that all known anomalies observed on other launch vehicles of the same
model and series as the Launch Vehicle have been investigated and as necessary
corrected on the Launch Vehicle, as far as applicable to the subject matter of
this Policy, in accordance with applicable quality procedures.

 

21.           SUBROGATION:

 

To the extent of any Claim Payments under this Policy, the
Insurers shall be subrogated to all of the Named Insured’s rights of recovery
against any person or organization. The Named Insured shall do nothing after
inception of the Policy Period to prejudice such rights and shall execute and
deliver all applicable instruments and papers and do whatever else is
reasonably necessary to secure such rights. The Named Insured shall cooperate
with the Insurers and, upon the Insurers’ written request, shall assist in
effecting settlement, securing evidence, and in the conduct of suit, at the
Insurers’ sole cost and expense.

 

Notwithstanding
the foregoing, the Insurers hereby agree to waive rights of subrogation against each of
those parties listed below on the condition that the Named Insured is obligated
to obtain waivers of rights of subrogation from the Insurers and to the same extent that the Named Insured has
waived its rights in writing prior to inception of the Policy Period:

 

(a)           any parent, affiliate or subsidiary of the Named
Insured or any company managed by the Named Insured; and any officer,
shareholder, agent, director or employee of any of these entities;

 

21

 

(b)           the launch services provider under the Launch
Contract and any employee, officer, director, subsidiary and affiliate;

 

(c)           Space Systems/Loral and any employee, officer,
director, subsidiary and affiliate; and

 

(d)           any contractor, subcontractor and supplier, at any
tier of the Named Insured,  the launch
services provider or Space Systems/Loral and the governments having
jurisdiction over such entities.

 

The Named Insured shall not
assume the obligation to obtain waivers of rights of subrogation from the Insurers after inception of the
Policy Period without the prior agreement of the Insurers.

 

22.           TITLES:

 

The titles of the various paragraphs and sections of
this Policy, and of any endorsements or supplemental agreements now or
hereafter attached to this Policy, are inserted solely for convenience and
shall not be deemed to limit or otherwise affect the terms contained in the
paragraphs to which they relate.

 

22

 

ENDORSEMENT

 

(Applicable to London
Placement Only with exception of Insurance Companies and

Lloyd’s Syndicates represented by Satec Srl)

 

It is hereby noted and agreed that with effect from
inception of the Policy Period, Condition 23, SERVICE OF SUIT AND DEMAND FOR ARBITRATION, is added to the Policy.

 

23.           SERVICE OF SUIT AND DEMAND FOR ARBITRATION:

 

It is agreed that service of process upon the Insurers
for the purpose of instituting any legal proceedings against them in connection
with this Policy may be made upon:

 

Mendes and Mount,

750 Seventh Avenue,

New York, NY 10019-6829

 

The above-named are authorized and directed to accept
service of process on behalf of the Insurers in any such proceedings and/or
upon the request of the Named Insured to give a written undertaking to the
Named Insured that they will enter a general appearance upon the Insurers’
behalf in the event that such proceedings shall be instituted.

 

Further,
pursuant to any statute of the state whose courts have jurisdiction in any
dispute arising under this Policy, the Insurers hereon hereby designate the
Superintendent, Commissioner or Director of Insurance or other officer
specified for that purpose in the statute, or his successor or successors in
office, as their true and lawful attorney upon whom may be served any lawful
process in any action, suit or proceeding instituted by or on behalf of the
Named Insured or any beneficiary hereunder arising out of this Policy, and
hereby designate the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.

 

All
other Terms, Conditions, Limitations and Exclusions, as contained in the
Policy, remain unaltered.

 

23

 

ENDORSEMENT

 

(Applicable to
Insurance Companies and

Lloyd’s Syndicates represented by Satec Srl Only)

 

It is hereby noted and agreed that with effect from
inception of the Policy Period Condition 23, SERVICE OF SUIT AND DEMAND FOR ARBITRATION, is added to the Policy.

 

23.            SERVICE OF SUIT AND DEMAND FOR ARBITRATION:

 

It is agreed that service of process upon the Insurers
for the purpose of instituting any legal proceedings against them in connection
with this Policy may be made upon:

 

Pino & Associates, LLP

Westchester Financial Center

50 Main Street

White Plains, New York 10606

 

The above-named are authorized and directed to accept
service of process on behalf of the Insurers in any such proceedings and/or
upon the request of the Named Insured to give a written undertaking to the
Named Insured that they will enter a general appearance upon the Insurers’
behalf in the event that such proceedings shall be instituted.

 

Further,
pursuant to any statute of the state whose courts have jurisdiction in any
dispute arising under this Policy, the Insurers hereon hereby designate the
Superintendent, Commissioner or Director of Insurance or other officer specified
for that purpose in the statute, or his successor or successors in office, as
their true and lawful attorney upon whom may be served any lawful process in
any action, suit or proceeding instituted by or on behalf of the Named Insured
or any beneficiary hereunder arising out of this Policy, and hereby designate
the above-named as the person to whom the said officer is authorized to mail
such process or a true copy thereof.

 

All
other Terms, Conditions, Limitations and Exclusions, as contained in the Policy,
remain unaltered.

 

24

 

ENDORSEMENT

(Applicable to PARIS RE America Only)

 

It
is hereby noted and agreed that with effect from inception of the Policy
Period, Condition 23, SERVICE OF SUIT AND DEMAND FOR ARBITRATION, is added to
the Policy:

 

23.           SERVICE OF SUIT AND DEMAND FOR ARBITRATION:

 

(a)                                  Pursuant to any statute of any state,
territory or district of the United States which provides for service of suit,
the undersigned Insurer hereby designates the Superintendent, Commissioner, or
Director of Insurance, or other officer specified in the statute, or his
successor or successors in office, as its true and lawful attorney upon whom
may be served any lawful process in any action, suit or proceeding instituted by
or on behalf of the Named Insured or any beneficiary hereunder arising out of
this Policy. PARIS RE America Insurance Company, 4800 Montgomery Lane, 11th
Floor, Bethesda, Maryland 20814is hereby designated as the person to whom the
officer specified in the statute is authorized to mail such process or a true
copy thereof.

 

(b)                                 Notwithstanding and provision in the
Commercial Arbitration Rules of the American Arbitration Association to
the contrary, any demand for arbitration made by the Named Insured to the
undersigned Insurer shall be made in writing and be to, 4800 Montgomery Lane,
11th Floor, Bethesda, Maryland 20814.

 

All other Terms, Conditions, Limitations and
Exclusions, as contained in the Policy, remain unaltered.

 

25

 

APPENDIX 1

 

LOSS DEFINITIONS

 

1.             BEAM

 

A
“Gateway Beam” means the uplink or downlink beam that communicates between the
gateway at North Las Vegas “NLV” and the Satellite using Ka band spectrum.

 

“User
Beams” means for this Policy’s Insured Operating Configuration:

 

(a)           [*];

 

(b)           [*];
and

 

(c)           [*]

 

(a) and (b) above
shall be collectively known as “User Spot Beams. “Beam” means any one User Beam
or Gateway Beam.

 

2.             FORWARD LINK:

 

“Forward Link” means the
equipment within the Space Segment that prepares and processes the outgoing
signals that are uplinked through the Gateway Beam, received by the Satellite,
and then processed, amplified and transmitted to the ground through  the S Band feed elements forming the forward
User Beams.

 

3.             RETURN LINK:

 

“Return Link” means the
equipment within the Space Segment that receives signals through S-band feed
elements on the Satellite, processes, amplifies and transmits them to the
ground via the Gateway Beam, and are processed on the ground to differentiate
the individual user beams.

 

4.             INSURED OPERATING CONFIGURATION:

 

“Insured Operating
Configuration” means the reference case Space Segment configuration as follows:

 

(a)           In the Forward Link, signals are:

 

(i)            uplinked to the Satellite through the Gateway Beam;

 

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

 

26

 

(ii)           downlinked from the Satellite through User Beams as follows:

 

[*]

 

(iii)          All User Beams shall be assumed to be operating [*]

 

(b)           In the Return Link, signals are:

 

(i)            Uplinked to the Satellite through User Spot Beams as follows:

 

A.            [*]

 

B.            [*]

 

C.            [*]

 

D.            [*]

 

(ii)           Downlinked from the Satellite through the Gateway Beam
operating at [*].

 

5.             PERFORMANCE CRITERIA

 

“Performance Criteria” shall
mean those parameters used to quantify the performance [*].

 

6.             REQUIRED VALUE:

 

“Required Value” means, with
reference to the Insured Operating Configuration the required level of the
Performance Criteria for the Named Insured’s intended communication purpose.

 

7.             ACTUAL VALUE:

 

“Actual
Value” means, with reference to the evaluation of the Performance Criteria for
the Insured Operating Configuration, [*].

 

8.             PAYLOAD PERFORMANCE FACTORS:

 

“Payload Performance Factors”
expresses the individual Performance Criteria [*].  The method of deriving the value of any
Payload Performance Factors is as follows:

 

(a)           determine applicable Payload Performance Factors impacted by
a loss;

 

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

 

27

 

(b)           [*]

 

(c)           [*]

 

(d)           [*]

 

Payload Performance Factors
shall be determined [*].

 

9.             SPACE SEGMENT PERFORMANCE FACTOR (“SSPF”):

 

“Space Segment Performance
Factor” shall express the overall operational capability of the Space Segment
and shall be evaluated, [*] in accordance with the following formula:

 

[*]

 

10.           PARTIAL LOSS AMOUNT:

 

“Partial Loss Amount” shall be
calculated in accordance with the following formula:

 

[*]

 

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

 

28

 

APPENDIX 2

 

PAYLOAD PERFORMANCE

FACTORS FOR LOSS EVALUATION

 

[*]

 

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

 

29

 

The
endorsements and binders that modify the terms of this form of policy for each
policy entered into between ICO and the respective insurer as well as specify
the amount each insurer is underwriting are omitted as permitted by instruction
2 to Item 601 of Regulation S-K.  A list
of the insurers is included in the confirmation advice included as the first
portion of this exhibit.

 

30QuickLinks
 -- Click here to rapidly navigate through this document

 

 
 

Exhibit 10.22    
    

THE
CONFIDENTIAL PORTIONS OF THIS EXHIBIT

WHICH HAVE BEEN REMOVED AND REPLACED

WITH AN ASTERISK HAVE BEEN OMITTED

AND FILED SEPARATELY WITH THE SECURITIES

AND EXCHANGE COMMISSION PURSUANT TO

A REQUEST FOR CONFIDENTIAL TREATMENT

UNDER RULE 405 PROMULGATED UNDER

THE SECURITIES ACT OF 1933 AND RULE 24b-2

UNDER THE SECURITIES EXCHANGE ACT OF 1934. 

 
 

SUPPLY AGREEMENT    
    

        THIS SUPPLY AGREEMENT (this "Agreement") is made and entered into
as of this 30th day of November 2007 (the "Effective
Date"), by and between Aldila Golf Corp., a Delaware corporation ("Purchaser"), and Carbon Fiber Technology LLC, a
Delaware limited liability company ("Supplier"). 

RECITALS:  

        A.    During
the period from October 29, 1999, to the Effective Date, (i) Aldila Materials Technology Corp., a Delaware corporation and affiliate of Purchaser
("AMTC") and SGL Carbon Fibers and Composites, Inc., a Nevada corporation ("SGL") each were
owners of a 50% interest in Supplier; and (ii) Supplier supplied carbon fiber products to Purchaser pursuant to the terms of a Supply Agreement dated October 29, 1999 (the
"Original Supply Agreement"). 

        B.    Pursuant
to a Membership Interest Purchase Agreement dated Nov. 27, 2007, SGL is acquiring AMTC's 50% ownership
interest in Supplier and AMTC will cease to be a member of Supplier (the "Buy-Out"). 

        C.    In
connection with the consummation of the Buy-Out, Purchaser and Supplier now wish to terminate the Original Supply Agreement and enter into this Agreement. 

        NOW, THEREFORE, the parties agree as follows: 

        1.     Products
to be Supplied; Specifications. 

        (a)   Upon
the terms and conditions of this Agreement, Supplier will manufacture, sell and deliver to Purchaser the carbon fiber products identified on  Exhibit A attached hereto (the "Products"). Such Products will be manufactured at Supplier's
plant in Evanston, Wyoming (the "Plant"), except as required to fulfill Supplier's obligations under Section 2(c) below. 

        (b)   All
Products to be supplied hereunder shall conform to the specifications set forth on Exhibits B-1, B-2, and
B-3 attached hereto, for [*], [*], and [*] filament Products, respectively (the
"Specifications"). The Specifications may only be revised and amended by written agreement of Purchaser and Supplier. However, the parties acknowledge
that the Specifications on Exhibit B-1 and Exhibit B-3 are
preliminary estimates of what the parties believe the Specifications should be for those new Products, and the parties anticipate finalizing these Specifications with some adjustments by mutual
written agreement of the parties within six (6) months after stable production conditions have been established for such new Products. Anything herein to the contrary notwithstanding, Supplier
will not introduce any material changes in raw materials used to make Products without the prior written consent of Purchaser. 

        (c)   Supplier
will provide to Purchaser all test data sufficient to characterize the quality of the material sold to Purchaser and certify that the material complies with the
Specifications. Purchaser will have the right to inspect all Products upon receipt at the designated delivery point (the "Delivery Point"); provided
that such inspection rights will be without prejudice to any subsequent claim arising from defects not reasonably discoverable at the time of inspection. 

 

        (d)   If
Purchaser believes that any of the Products delivered by Supplier fail to conform to the Specifications, Purchaser shall notify Supplier of its belief within a
reasonable time after such Products are delivered to Purchaser. Upon receipt of the notice, Supplier shall have the right to inspect all evidence of nonconformity, and Purchaser and Supplier shall
attempt to reach agreement as to whether there is a failure to conform. If Supplier agrees that such Products fail to conform, as Purchaser's sole and exclusive remedy, Supplier shall promptly replace
non-conforming quantities with conforming quantities at the Delivery Point. The return (at Supplier's request) and replacement of non-conforming quantities shall be at
Supplier's expense (including all costs generated by transportation, duties, taxes and insurance). 

        2.    Quantities.    

        (a)   Subject
to the terms and conditions hereof, Purchaser hereby agrees that it may purchase, and Supplier hereby agrees that it shall supply such quantities as Purchaser
may order, up to Seventy-Five Thousand (75,000) pounds of Products during each calendar month of the first Contract Year (defined below) of the term of this Agreement, and up to
Eighty-Three Thousand (83,000) pounds of Products during each calendar month of each Contract Year of the term of this Agreement after the first Contract Year (the "Maximum
Sale Commitment"); provided, however, Supplier's obligation to supply the
Maximum Sale Commitment shall be subject to the provisions of Section 2(b) and 2(c) below, the allocation of its precursor pursuant to Section 5(b) below, and an Event of Force Majeure
as described in Section 9 below. A "Contract Year" means a period of twelve (12) months commencing on the Effective Date or any annual
anniversary thereof. 

        (b)   As
of the Effective Date, the parties anticipate that Line 1 (defined below) will be able to produce at least [*] pounds of Products in any given
calendar month. In the event Line 1 is not able produce at least [*] pounds of Products in any given calendar month for any reason, at the option of Supplier, the Maximum Sale
Commitment may be reduced proportionately, upon written notice to Purchaser, for that calendar month and any subsequent calendar month until production capacity is restored to at least
[*] pounds of Product per calendar month. "Line 1" means the existing production line located at the Plant as of the Effective
Date. 

        (c)   After
July 1, 2009, in the event the Maximum Sale Commitment is reduced pursuant to Section 2(b) above, Supplier agrees to manufacture Products on Line 2
(defined below) and/or Line 17 (defined below), as necessary, to meet Purchaser's orders until the combined production of Products for Purchaser on Line 1, Line 2, and Line 17 equals
[*] of the original Maximum Sale Commitment described in Section 2(a) above (subject to the allocation of its precursor pursuant to Section 5(b) below and an
Event of Force Majeure as described in Section 9 below). Supplier agrees to ensure that its affiliate, SGL Technic Ltd., makes Line 17 available to Supplier for
the purpose of fulfilling its obligations under this Agreement to Purchaser. Supplier agrees to keep Purchaser reasonably informed regarding its progress on the construction and operation of Lines 2
and 17. "Line 2" means the production line Supplier currently plans to add at the Plant which Supplier anticipates will be fully operational by
July 1, 2009. "Line 17" means the production line Supplier's affiliate, SGL Technic Ltd., currently plans to add at its facility located
in Muir of Ord, Scotland, which Supplier anticipates will be fully operational by July 1, 2009. 

        (d)   To
the extent Purchaser orders any quantity of Products in excess of the monthly Maximum Sale Commitment (as the same may have been adjusted hereunder), such orders (and
any corresponding sales) are outside the scope of this Agreement and subject to the mutual agreement of the parties (as to all applicable terms and conditions, including without limitation pricing),
on a case-by-case basis. 

2

 

        3.    Prices.    

        (a)    Basis for Pricing.    The prices to be paid by Purchaser to Supplier under this Agreement for the Products
produced by Supplier and supplied to Purchaser hereunder shall be equal to: (i) the Full Cost (as calculated and defined in Exhibit C)
incurred by Supplier in the manufacture, sale and delivery of the Products to Purchaser under this Agreement, multiplied by (ii) [*]. Such prices shall be calculated on
a per pound basis, and billed, paid and reconciled in accordance with Section 4. 

        (b)    Verification by Purchaser.    Purchaser shall have the right to engage an independent auditing firm to inspect
the books and records of Supplier upon request, at mutually agreed upon times, to assess Supplier's computation of Full Cost and compliance with the terms of this Agreement. Purchaser shall bear its
own costs incurred as the result of Purchaser's audits or inspections, except to the extent such audits reveal overpayments by Purchaser exceeding ten percent (10%) of amounts actually due over the
applicable audit period (in which event the reasonable costs and expenses of the audit shall be reimbursed by Supplier). Purchaser will be reimbursed or credited for any overpayments accurately
revealed by an audit. 

        4.    Ordering; Invoicing and Payment.    

        (a)   Purchaser
shall submit written purchase orders to Supplier for the amount of Products which Purchaser wishes to purchase pursuant to the terms of this Agreement. Unless
otherwise agreed, such written purchase orders shall be submitted not later than 90 days prior to the date of required delivery and unless Supplier otherwise agrees, the delivery date for each
shipment must be at least 7 days after the delivery date for the previous shipment. Each purchase order must state the quantity of Products
ordered, specify the required date of delivery and specify the destination and mode of transportation requested. 

        (b)   Supplier
must use its commercially reasonable efforts to accept purchase orders for Products from Purchaser in quantities up to the Maximum Sale Commitment;  provided, however, Supplier's obligation to accept such purchase orders shall be subject to the
provisions of Section 2(b) and 2(c) above, the allocation of its precursor pursuant to Section 5(b) below, and an Event of Force Majeure as described in Section 9 below. 

        (c)   Supplier
will promptly confirm in writing Supplier's acceptance or rejection (to the extent permitted) of all written purchase orders submitted to it by Purchaser.
Supplier shall deliver the Products ordered by Purchaser hereunder F.O.B. carrier at the Plant (or F.O.B. carrier at Supplier's Muir of Ord facility to the extent Supplier produces Products there to
fulfill its obligations under Section 2(c) above) on the date set forth in the applicable written purchase orders from Purchaser. Supplier will not be liable for any delay in the delivery or
shipment of Products, or for any damages suffered by Purchaser by reason of such delay. Delivery is subject to Purchaser maintaining credit satisfactory to Supplier. Supplier may suspend or delay
performance or delivery at any time pending receipt by Supplier of assurances from Purchaser of the ability of Purchaser to pay, including the payment to Supplier of the purchase price of Products, in
full or in part, or the payment to Supplier of any outstanding amounts owed to Supplier. Failure of Purchaser to provide such assurances to Supplier shall entitle Supplier to delay delivery and/or
cancel orders without further liability or obligation to Purchaser. 

        (d)   Supplier
shall submit an invoice with each shipment of Products in an amount equal to the Standard Cost (defined below) for such shipped Products, multiplied by
[*]. "Standard Cost" means Supplier's good faith estimate of the anticipated Full Cost, as set by Supplier on an annual basis.
In the event the Standard Cost set by Supplier is more than ten percent (10%) less or greater than the Actual Cost (defined below) for two consecutive calendar quarters, Supplier shall establish a new
Standard Cost that is a more appropriate estimate. Any costs incurred by Supplier 

3

 

on
behalf of Purchaser not associated with a shipment of Products (including, by way of example, but not limitation, research and development work, any new product trials, pilot runs or special
production processes for Purchaser) will be invoiced at the end of the month in which such costs are incurred. 

        (e)   Promptly
following each calendar quarter during the term hereof, Supplier shall calculate the actual Full Cost for all Products supplied to Purchaser during such
calendar quarter (the "Actual Cost"). If the Actual Cost exceeds the Standard Cost for Products supplied during such calendar quarter, Supplier shall
submit an invoice to Purchaser for an amount equal to the difference times [*]. If the Actual Cost is less than the Standard Cost for Products supplied during such calendar
quarter, Supplier shall refund to Purchaser an amount equal to the difference times [*]. 

        (f)    Purchase
prices do not include any applicable taxes, and Purchaser shall pay all such taxes. The prices and taxes, if any, payable to Supplier pursuant to this
Section 4 shall be due and payable by Purchaser thirty (30) days after Supplier's shipment of the Product from the Plant (or from Supplier's Muir of Ord facility to the extent Supplier
ships Products from there to fulfill its obligations under Section 2(c) above). Any amounts payable to Purchaser pursuant to this Section 4 shall be paid in cash within thirty
(30) after the date of determination of such amount (or, at Purchaser's option, in the form of a credit to be applied to the current or next invoice). 

        (g)   Extension
of credit, if any, may be changed or withdrawn by Supplier at any time. Invoices not paid by their due date will be subject to interest charges. Interest
charges shall accrue and be added to the unpaid balance at the rate of one and one-half percent (11/2%) per month of any overdue unpaid balance, or the maximum rate
permitted by law, whichever rate is less. In the event either party fails to pay any fees when due under this Agreement and the other party files suit to collect such payment, the prevailing party
shall be entitled to reimbursement of its reasonable attorneys fees and costs associated with such suit. Purchaser may not retain or set-off any amounts owed to Supplier in satisfaction of
any claims asserted by Purchaser against Supplier. 

        5.    Forecasts; Precursor Allocations.    

        (a)    Rolling Forecasts.    On the first day of each month during the term of this Agreement, Purchaser shall provide
Supplier with its good faith written estimate, by quantity (expressed in pounds for each Product) and delivery date, of its anticipated need for the Products for each month in the next ensuing
12 month period (a "Rolling Forecast"). The Rolling Forecasts are to be used by Supplier for planning purposes only. Purchaser's Rolling
Forecasts shall not constitute binding purchase orders of Purchaser. 

        (b)    Sourcing and Allocation of Precursor.    Supplier will use good faith efforts to obtain high quality precursor
from [*] or [*] for use in connection with the manufacture of the Products. However, Purchaser acknowledges that Supplier does not currently have a
supply agreement with [*] or [*] and Supplier cannot guarantee or otherwise assure Purchaser that it will be able to obtain such precursor from
[*] or [*]. However, the parties agree to discuss in good faith alternative options for precursor in the event such case arises. 

        During
the term of this Agreement, Supplier shall allocate, by quantity (expressed in pounds for each Product) and delivery date, its precursor necessary to provide the Products to
Purchaser as follows: 

          (i)  if
Supplier does not have sufficient precursor to satisfy orders received by Supplier from Purchaser, SGL, and any third parties with respect to Products that require
[*] filament precursor sourced from [*], Supplier agrees to give Purchaser first priority on its orders up to the Maximum Sale Commitment; and 

4

 

         (ii)  if
Supplier does not have sufficient precursor to satisfy orders received by Supplier from Purchaser, SGL, and any third parties with respect to any Products that do
not require [*] filament precursor sourced from [*], Supplier's production capacity shall be allocated [*] to Purchaser, on the
one hand (up to the Maximum Sale Commitment), and [*] to SGL and any other third parties, on the other hand. 

        For
purposes of sourcing and allocation of precursor, Purchaser acknowledges that SGL or other affiliates of Supplier may have ownership, control or access to precursor and that nothing
in this Agreement shall be construed to require Supplier to secure any precursor from SGL or its affiliates for purposes of supplying Products to Purchaser, it being understood that SGL and its
affiliates have other commitments, obligations or purposes for such precursor. 

        (c)    Commitment to Supply.    Supplier shall use its commercially reasonable efforts to meet the purchase orders of
Purchaser for the Products up to the amounts referenced in Section 2. Notwithstanding the foregoing, in no event shall Supplier be obligated to make any additional investment of capital in the
Plant or otherwise to satisfy its obligations under this Section 5 beyond (i) the anticipated conversion of Line 1 to handle [*] precursor and
(ii) ordinary repair and maintenance. 

        6.    Restrictions on Resale of Products.    Purchaser shall not be entitled to resell any or
all of the Products purchased from Supplier hereunder and shall consume all of such Products in satisfaction of its internal demand therefor. For the avoidance of doubt, nothing in this Agreement
shall prohibit Purchaser or its affiliates from manufacturing or selling graphite prepreg or any product made of graphite prepreg. 

        7.    Term; Termination.    

        (a)   Unless
sooner terminated in accordance with the terms hereof, this Agreement shall have a term commencing on Effective Date and terminating on the five (5) year
anniversary of the Effective Date. 

        (b)   Either
party may, by delivering written notice thereof to the other party, terminate its obligations under this Agreement, effective immediately, if the other party
hereto: 

          (i)  is
rendered bankrupt or becomes insolvent, and such insolvency is not cured within 15 days after written notice, or files a written petition in bankruptcy
or an answer admitting the material facts recited in such petition filed by another, or discontinues its business or is unable to pay its bills as they become due, or has a receiver or other custodian
of any kind appointed to administer any substantial amount of its property; or 

         (ii)  commits
a material breach of its material duties, obligations or understandings under this Agreement, which breach is not cured within 90 days following written
notice of such breach from the nonbreaching party; provided, that a failure by Supplier to comply with its obligations under Sections 8(b) and
12(a) shall not constitute a material breach for purposes of this Section 7(b)(ii) unless Purchaser has incurred or is reasonably likely to incur an uncured material loss, liability or expense
as a consequence of such noncompliance. 

        Any
such termination shall be in addition to any other rights or remedies available at law or in equity to the terminating party and shall not affect any rights or obligations which have
accrued prior to the date of termination (including the obligation to fill or pay for outstanding purchase orders). 

        (c)   Each
party hereto agrees to consult in advance with the other party hereto and to bring to the attention of the other party any problems, differences of opinion,
disagreement or any other matters which may lead such party to terminate or seek to terminate this Agreement. The purpose and intent of the parties in including this provision is to ensure that both
parties to this Agreement 

5

 

are
made aware of any problems arising out of or relating to this Agreement or the relationship of the parties hereunder, so that the parties hereto may, in good faith, consult with one another
concerning such problems and, where possible, resolve such problems to the parties' mutual satisfaction, thereby preserving their contractual relationship and the goodwill and mutual respect presently
existing between the parties to this Agreement. 

        8.    Additional Terms of Purchase.    

        (a)   Payment
of any invoice by Purchaser does not constitute acceptance of Products covered by any invoice and is without prejudice to any or all claims Purchaser may have
against Supplier in connection therewith. 

        (b)   The
Products to be provided hereunder are each warranted by Supplier to equal or surpass all federal, state and local occupational safety and health standards applicable
thereto. 

        (c)   No
reasonable delay in inspecting or in rejecting Products shall be deemed an acceptance of them by Purchaser or a waiver of Purchaser's right to reject the Products for
any cause hereunder. Purchaser shall have the right to accept any portion of Products delivered by Supplier to Purchaser notwithstanding that it may reject the balance thereof. Acceptance by Purchaser
of all or any part of the Products shall not constitute a waiver of any claim which Purchaser may have regarding the Products. 

        (d)   EXCEPT
AS EXPRESSLY SET FORTH HEREIN, SUPPLIER DOES NOT MAKE ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, SUPPLIER SHALL NOT BE LIABLE TO PURCHASER FOR INJURIES, LOSSES OR DAMAGES RESULTING
FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF PURCHASER, NOR SHALL SUPPLIER BE LIABLE TO PURCHASER, IN ANY EVENT, FOR CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST
PROFITS, WHETHER ARISING FROM THE SALE OF THE PRODUCTS, ANY DEFECT IN THE PRODUCTS, ANY USE OF OR INABILITY TO USE THE PRODUCTS, OR OTHERWISE. 

        (e)   Purchaser
is solely responsible for proper selection and application of Products. Purchaser shall indemnify, defend and hold harmless Supplier, its managers, officers,
members and affiliates from and against any and all losses, damages, liabilities, obligations, claims, demands, suits and proceedings arising out of or allegedly caused by or resulting from the use or
application of the Products by Purchaser. 

        9.    Force Majeure.    Any failure or delay in the performance by Purchaser or Supplier of
their respective obligations hereunder (excluding any obligation to make payments due under this Agreement) shall not be a breach of this Agreement if such failure or delay arises out of or results
primarily from fire, storm, flood, earthquake, or other acts of God, explosions, wars, insurrections, strikes, work stoppages or slowdowns, terrorist activity, unavailability of fuel or utilities,
epidemic or quarantine restrictions, or inability to obtain essential raw materials (including without limitation any precursor required to produce the Products), despite commercially reasonable
efforts to do so (the occurrence of any of the foregoing shall be an "Event of Force Majeure"). Both Purchaser and Supplier shall use their commercially
reasonable efforts to avoid the occurrence and remove the causes of an Event of Force Majeure and to continue performance of their respective obligations hereunder promptly following the removal of
such causes. For purposes of clarification, the parties acknowledge that the Products shall only be manufactured at the Plant (or Supplier's Muir of Ord facility to the extent Supplier produces
Products there to fulfill its obligations under Section 2(c) above) and Supplier shall not be obligated to manufacture the Products in any other 

6

 

facility
or location in the event of an Event of Force Majeure which affects the Plant (and Supplier's Muir of Ord facility to the extent applicable under Section 2(c) above). 

        10.    Outsourcing; Operation of the Plant; Mitigating Purchases.    

        (a)   Supplier
will not outsource or subcontract for the manufacture or supply of Products hereunder, or produce such Products at any facility other than the Plant (except for
production at Supplier's Muir of Ord facility to the extent required to fulfill its obligations under Section 2(c) above), without the prior consent of Purchaser. 

        (b)   During
the term of this Agreement, Supplier will operate the Plant consistent with past practices of its operation in such a manner as to ensure, to the extent
commercially reasonable, an uninterrupted supply of Products meeting the Specifications. Supplier will promptly notify Purchaser of any circumstances which may result in a delay in delivery of
Products beyond the times specified in Purchaser's forecast or a purchaser order previously accepted by Supplier. In the event that Supplier is aware of circumstances beyond its reasonable control
that might reasonably interfere with its ability to meet Purchaser's forecasted requirements of Products or to satisfy a purchase order previously accepted by Supplier, Supplier shall promptly notify
Purchaser. 

        11.    Confidentiality.    Purchaser acknowledges that from time to time during the term of
this Agreement (including, without limitation, as contemplated by Sections 3(a) and 12(b)) it may come into possession of specifications, financial and sales data, engineering plans, business
plans, processes, drawings, trade secrets, know-how, prices, and other materials or information relating to Supplier or the Products ("Confidential
Information"). Purchaser agrees that Purchaser shall not, during or after the termination of this Agreement, directly or indirectly, (a) use the Confidential Information
except as authorized by Supplier during the term of this Agreement, (b) impair Supplier's right, title, and interest in the Confidential Information, or (c) reveal, divulge or disclose
to any third party any Confidential Information. The obligations of this Section shall not apply to information which is or becomes generally known to the public through no fault of Purchaser, or
information which can be shown to have been legally disclosed to Purchaser by a third party not subject to an obligation of confidentiality to Supplier. In the event of an actual or threatened
violation of this Section 11 by Purchaser, Supplier shall have the right (without limiting its other rights and remedies) to terminate this Agreement immediately upon written notice to
Purchaser and/or to obtain temporary and permanent injunctive relief and other equitable remedies to prevent any such violation. Purchaser shall return all Confidential Information to Supplier upon
request, or upon termination of this Agreement. 

        12.    Compliance with Laws and Regulations.    

        (a)   Supplier
represents and warrants that all Products sold to Purchaser pursuant to this Agreement will be manufactured substantially in accordance with all applicable
material laws and regulations of an agency or authority with power over the manufacture of such Products or the Plant. 

        (b)   Supplier
agrees to allow Purchaser's personnel to be present at Supplier's production runs of the Products at any reasonable time by reasonable notice to the extent
necessary for quality assurance of
Products and processes provided to Purchaser hereunder. Notwithstanding the authority granted to Purchaser hereby, Supplier shall not be relieved of any responsibility or liability hereunder or by
law. 

        13.    Insurance.    Purchaser shall, at its sole cost and expense, obtain and maintain from a
reputable insurance company adequate and suitable liability insurance coverage covering all claims (including, without limitation, personal injury and/or products liability claims) by third parties
allegedly caused by or resulting from the use or application of the Products by Purchaser, and such 

7

 

coverage
shall be reasonably satisfactory to Supplier. Purchaser shall give Supplier thirty (30) days' prior written notice of any termination of such insurance. 

        14.    Assignment.    Neither party hereto may assign this Agreement or any rights hereunder
(by operation of law or otherwise) to any other person or entity, without the prior written consent of the other party hereto, except that (a) Purchaser may assign any of its rights under this
Agreement to any direct or indirect wholly owned subsidiary of Purchaser, or any person or entity of whom Purchase is a direct or indirect wholly owned subsidiary, or any successor in interest to
Purchaser's line of business relating to this Agreement (by sale of assets, operation of law or otherwise) which assumes all of its obligations hereunder, without Supplier's prior written consent and
(b) Supplier may, without Purchaser's consent, assign this Agreement or its rights and obligations hereunder to any successor in interest to Supplier's line of business relating to this
Agreement (by sale of assets, operation of law or otherwise) which assumes all of its obligations hereunder. Any permitted assignment hereof shall be pursuant to a written assumption agreement whereby
the assignee agrees to be bound by all of the terms and conditions of this Agreement. Any attempt or effort at any unauthorized assignment shall be null and void and of no force or effect. Any
assignment by either party shall not relieve such party of its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the
parties hereto. 

        15.    Administrative Expenses.    Each party hereto shall pay all of its own administrative
expenses (including without limitation the fees and expenses of its agents, representatives and counsel) incident to the preparation and implementation of this Agreement. 

        16.    Waiver of Breach.    The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to constitute a waiver of any such provision nor in any way to affect the validity of this Agreement or any part hereof, including the right
of any party thereafter to enforce each and every provision. The waiver by any party to this Agreement of any breach or violation of any provision of this Agreement by the other party hereto shall not
operate or be construed to be a waiver of any subsequent breach or violation thereof. 

        17.    Severability.    The terms and conditions of this Agreement are hereby deemed by the
parties to be severable, and the invalidity or unenforceability of any one or more of the provisions of this Agreement shall not affect the validity and enforceability of the other provisions hereof. 

        18.    Notices.    Any notice contemplated by or required or permitted to be given under this
Agreement shall be in writing and (a) delivered personally, (b) sent via next day or overnight courier or delivery or (c) mailed by registered or certified mail, return receipt
requested, postage prepaid, to the parties' respective addresses below (or, in each case, to such other address as may be specified in writing to the other parties hereto): 

	Supplier:	 	Carbon Fiber Technology LLC

1375 Union Road

Evanston, Wyoming 82930
	

With a copy to:	
 	

SGL Technologies GmbH

Rheingauerstr 190-196

Building H-287 3rd Floor

65203 Wiesbaden GERMANY

Attn: V.P. & G.M. Carbon Fibers

8

 

	

and a copy to:	
 	

SGL Carbon, LLC

8600 Bill Ficklen Drive (for overnight courier)

Charlotte, North Carolina 28269

P.O. Box 563960 (for certified or registered mail)

Charlotte, North 28256

Attention: General Counsel
	

Purchaser:	
 	

Aldila Golf Corp.

14145 Danielson St. Ste. B

Poway, California 92064

Attention: Peter R. Mathewson

Telecopy No.: (858) 513-1870
	

With a copy to:	
 	

Seltzer Caplan McMahon Vitek

750 B Street, Ste. 2100

San Diego, California 92101

Attention: Andrew D. Brooks, Esq.

Telecopy No.: (619) 702-6853

        Such
notices, requests and other communications sent as provided hereinabove shall be effective: (x) upon receipt, when personally delivered; (y) the next business day, if
sent by overnight courier or delivery; and (z) if sent by registered or certified mail, return receipt requested, upon the expiration of the third business day after being deposited in the
United States mail. 

        19.    Labels and Headings.    The labels and headings of the sections and subsections of this
Agreement are for the convenience of the parties hereto only and are not part of the text of this Agreement. 

        20.    Governing Law.    This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its conflicts or choice of law principles. 

        21.    Relationship of the Parties.    The relationship between Supplier and Purchaser under
this Agreement shall be solely that of vendor and vendee. With respect to this Agreement only, it is expressly understood and agreed by the parties hereto that nothing in this Agreement, its
provisions or transactions and relationships contemplated hereby shall constitute either party as the agent, employee, partner or legal representative of the other for any purpose whatsoever, nor
shall either party hold itself out as such. Neither party to this Agreement shall have the authority to bind or commit the other party hereto in any manner or for any purpose whatsoever, except as may
be expressly provided for herein, but rather each party shall at all times act and conduct itself in all respects and events as an independent contractor. This Agreement creates no relationships of
joint venturers, partners, associates or principal and agent between the parties hereto. 

        22.    Construction of Agreement; Entire Agreement Amendments.    This Agreement may be
executed in counterparts (all of which together shall constitute one agreement). In that this Agreement was prepared as a result of negotiation and mutual agreement between the parties hereto; neither
this Agreement nor any provision hereof shall be construed against either party hereto as the party who prepared this Agreement or any such provision. This Agreement reflects the complete
understanding of the parties as of the date hereof and constitutes their entire agreement regarding the subject matter hereof, all prior negotiations, representations and statements having been merged
herein. Each party
acknowledges that it is not relying on any verbal communications not reduced to writing in this Agreement. This Agreement may not be changed or amended orally, but only by a written amendment signed
by both parties hereto. 

9

 

        23.    Mediation.    In the event a dispute arises out of or relates to this Agreement, or the
breach thereof, and the parties have not been successful in resolving the dispute through direct negotiation, the parties shall attempt to resolve the dispute in good faith through
non-binding mediation before resorting to litigation. The dispute shall be submitted to a neutral mediator selected by mutual agreement of the parties or, at the option of a party, to
mediation by the American Arbitration Association ("AAA"). The mediation will take place in San Diego, California; and will be held within thirty (30) days of selection of a mediator by the
parties or by the AAA. Each party shall bear its own expenses and an equal share of the expenses of the mediator and the fees of the AAA. The parties, their representatives, other participants and the
mediator shall hold in confidence the existence, content and result of the mediation. If the dispute is not resolved by the mediation, the parties shall have the right to resort to any remedies
permitted by law, including filing suit in a court of proper jurisdiction. Defenses based on the passage of time (such as statutes of limitations) shall be suspended upon submitting the dispute to the
mediator and during the mediation. 

        24.    Termination of Original Supply Agreement.    The Original Supply Agreement is hereby
terminated, except that it shall remain in full force and effect with respect to Product ordered and delivered prior to the Effective Date of this Agreement (including acceptance and returns and the
prior custom and practice of the parties under the Original Supply Agreement). Purchaser and Supplier agree that no further orders or deliveries shall be made under the Original Supply Agreement after
the Effective Date and that all future Product shall be ordered and delivered pursuant to this Agreement. All Variable Costs (as defined in the Original Supply Agreement) owed by Purchaser to Supplier
as of the date of this Agreement pursuant to the Original Supply Agreement shall be promptly paid to Supplier. 

(Signatures appear on the following page.)  

10

 

        IN WITNESS WHEREOF, the parties have executed this Agreement by the signature of their respective, duly authorized corporate officers as of the day and year first
above written. 

	 	 	CARBON FIBER TECHNOLOGY LLC
	

 	
 	

By:	

Alex Walk

	 	 	Title:	Managing Director

	

 	
 	
ALDILA GOLF CORP.
	

 	
 	

By:	

Peter R. Mathewson

	 	 	Title:	  

11

 

 
 

EXHIBIT A    
    
    PRODUCTS    
    

Continuous
filament carbon tows. 

        During
the first Contract Year of the term of this Agreement, such Products will be [*], [*], and/or [*] filament.
During subsequent Contract Years of the term of this Agreement, such Products will be [*] filament if available, otherwise such Products shall be [*]
filament, [*] filament, or [*] filament (in that order of preference) or as otherwise mutually agreed. 

 
 
 

EXHIBIT B-1    
    
    MATERIAL SPECIFICATION    
    

[*] 

2

 
 
 

EXHIBIT B-2    
    
    MATERIAL SPECIFICATION    
    

[*] 

3

 
 
 

EXHIBIT B-3    
    
    MATERIAL SPECIFICATION    
    

[*]

4

 
 
 

EXHIBIT C    
    
    FULL COST    
    

[*]

5

QuickLinks

Exhibit 10.22

SUPPLY AGREEMENT

EXHIBIT A PRODUCTS

EXHIBIT B-1 MATERIAL SPECIFICATION

EXHIBIT B-2 MATERIAL SPECIFICATION

EXHIBIT B-3 MATERIAL SPECIFICATION

EXHIBIT C FULL COST

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