Document:

exv10w38

 

EXHIBIT 10.38

	 	 	CONFIDENTIAL TREATEMENT REQUIRED
	 
	 	 	The asterisked (“*****”) portions of this document have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for
confidential treatment.

Intelsat LLC

North Tower, 2nd Floor

90 Pitts Bay Road

Pembroke, Bermuda HM 08

Amendment No. 2

Telstar 13 Amended and Restated Agreement

Dated July 7, 2003

between

INTELSAT LLC

and

SPACE SYSTEMS/LORAL, INC.

for

EchoStar 9/Telstar 13

 

 

Telstar 13 

Amendment 2

     This Amendment Number 2 (the “Amendment”) to the Amended and Restated
Agreement (dated July 7, 2003) is entered into as of this 17th day of March
2004, by and between Intelsat LLC, a Delaware limited liability company,
having an office and place of business at North Tower, 2nd Floor, 90 Pitts
Bay Road, Pembroke HM 08, Bermuda (hereinafter referred to as “Intelsat
LLC”) and Space Systems/Loral, Inc., a corporation organized and existing
under the laws of the State of Delaware, having an office and place of
business at 3825 Fabian Way, Palo Alto, California 94303 (hereinafter
referred to as “Contractor”).

WITNESSETH THAT:

WHEREAS, Contractor and Loral SpaceCom Corporation (doing business as Loral
Skynet) were originally parties to the agreement effective as of February
22, 2000, as such agreement has been amended and restated, effective as of
November 16, 2001, and further amended and restated by Amendment 1 to the
Amended and Restated Agreement, effective as of July 7, 2003, hereinafter
referred to as the “Agreement”, to procure a C-Band payload (designated as
“Telstar 13”) which is included as a separate and distinct payload on the
EchoStar 9 satellite manufactured by Contractor under separate contract (as
amended and restated as of July 1, 2003, the “Satellite Contract”) with
EchoStar Orbital Corporation (“EchoStar”), and the EchoStar 9 Satellite and
Telstar 13 deliverables have been delivered to, and accepted by, their
respective purchasers, and title and risk of loss thereto have been
transferred to EchoStar and Skynet respectively; and

WHEREAS, Intelsat, Ltd., a Bermuda corporation, Intelsat (Bermuda), Ltd.,
a Bermuda corporation (“Buyers”), and Loral Space & Communications
Corporation, a Delaware corporation (“Loral Space”), Loral SpaceCom
Corporation, a Delaware corporation (“Loral SpaceCom”), and Loral
Satellite, Inc., a Delaware corporation (together with Loral Space and
Loral SpaceCom, the “Sellers”) have entered into the Asset Purchase
Agreement dated as of July 15, 2003, as amended (hereinafter “Asset
Purchase
Agreement” or “APA”) pursuant to which the Sellers have agreed to sell and
the Buyer has agreed to purchase certain assets, including Telstar 13, and
that Intelsat LLC will purchase all remaining In-Orbit Incentives on a
discounted, non-recourse basis; and

WHEREAS, in connection with the APA transaction, Loral SpaceCom and
Intelsat LLC agreed that, upon the Closing (as defined below), Intelsat LLC
will assume the remaining rights and obligations of Skynet under the
Agreement for Telstar 13, including the right to receive Deliverable Data
and Support and Training services referenced in Section 3.1 of the
Agreement (title to Telstar 13 to be obtained from Skynet pursuant to the
APA) and the assumption of that certain launch risk management insurance
policy with coverage and terms as described below (the “Launch Risk
Insurance Policy”), all in accordance with Annex H of the APA; and

WHEREAS, Contractor will accept Intelsat LLC as the substitute party for
Skynet under the Telstar 13 Agreement from and after the time of Closing
for all purposes thereunder

2

 

Telstar 13 

Amendment 2

and to furnish the Deliverable Data and Support and Training services as
described in Section 3.1 of the Agreement and the Launch Risk Insurance
Policy, all in accordance with Annex H of the APA;

NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties hereto agree as follows:

	1.	 	From and after the effective date of this Amendment (which
shall be the date of “Closing” as defined in Section 4 of this Amendment
below), “Intelsat LLC” shall replace “Skynet” for all purposes
under the Agreement, and Intelsat LLC agrees to be bound by the terms
thereof. The parties further acknowledge and agree:

	 	a.	 	that all payments required to be made by Skynet to Contractor
pursuant to the Agreement (including without limitation Section 2 (payment
obligation of Skynet), Section 4 (risk management), and Section 5
(In-Orbit Incentives)) have been paid, or are hereinafter deemed paid, in full;
and
	 
	 	b.	 	that delivery, Acceptance, title transfer and risk of loss
to Telstar 13 have
already occurred, and Intelsat LLC has no rights of
termination/default
under the Agreement and Contractor has no obligations for a
replacement
satellite, replacement of Telstar 13, refund or partial or total
loss damages,
or any other financial obligation including loss or repayment of
any
amount representing In-Orbit Incentives; and
	 
	 	c.	 	that all references and provisions in the Agreement dealing
with the future
(from and after the date of Closing) earning, payment or repayment
of In-Orbit Incentives are deleted (and Article 5 is deleted in its
entirety and
shall in future be designated as “Reserved”). Intelsat LLC and
Contractor
acknowledge that Intelsat LLC has purchased (pursuant to the APA)
Contractor’s future rights to earn In-Orbit Incentives on a
non-recourse
basis, and Contractor has no obligation or liability to Intelsat
LLC to repay
any amounts based on the performance of the Satellite in orbit;
and
	 
	 	d.	 	that the Performance Specification, Statement of Work,
Product Assurance
and Test Plan as currently incorporated into the Satellite
Contract are
applicable hereto in relevant part.

	2.	 	Contractor shall provide to Intelsat LLC, at no additional charge, the
Deliverable Data and Support and Training services described in Section
3.1 of the Agreement on a mutually acceptable schedule to be
established by good faith negotiations between the parties.

3

 

Telstar 13

Amendment 2

	3.	 	Contractor has provided to Intelsat LLC, to become effective as of
the date of
Closing, a Launch Risk Insurance Policy, the sufficiency and acceptance of which
Intelsat LLC hereby acknowledges, and Intelsat LLC agrees to be bound by all
terms contained therein, effective as of the Closing. Under the Launch Risk
Insurance Policy, effective as of Closing, Intelsat LLC shall be named as the
sole
named insured and loss payee for Telstar 13 claims with coverage limits of
***** covering the period from Launch (7 August 2003) through 12
months after Launch to cover both partial and total losses of Intelsat LLC’s
C-Band payload and ownership interest in the common satellite
elements, which policy also includes the following terms:

	 	•	 	Launch plus twelve (12)-month coverage period,
	 
	 	•	 	*****
	 
	 	•	 	*****
	 
	 	•	 	*****

	4.	 	Effective Date. This Amendment Number 2 shall become effective as of
the date of the closing of the purchase and sales transaction provided
for in the Asset Purchase Agreement (“Closing”).

Except as expressly modified herein, the terms and conditions of the Agreement
remain in full force and effect.

4

 

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 2 to the
Amended and Restated Agreement effective as of the date specified in
Section 4 above.

	 	 	 	 	 	 	 
	

	 	Space Systems/Loral, Inc.
	 	 	 	Intelsat LLC
	

	 	(“Contractor”)
	 	 	 	(“Intelsat”)
	 
	 	 	 	 	 	 
	By:

	 	/s/ Janet T. Yeung
	 	By:
	 	/s/ Ramu Potarazu

	

	 	
 
	 	 	 	
 
	

	 	(Signed)
	 	 	 	(Signed)
	 
	

	 	Janet T. Yeung
	 	 	 	Ramu Potarazu
	

	 	
 
	 	 	 	
 
	

	 	(Typed)
	 	 	 	(Typed)
	 
	 	 	 	 	 	 
	Title:

	 	Vice President
	 	Title:
	 	President
	

	 	 	 	 	 	Intelsat LLC

Amendment No. 2 - EchoStar 9/Telstar 13exv10w39

 

EXHIBIT 10.39

	 	 	CONFIDENTIAL TREATMENT REQUESTED

The asterisked (“*****”) portions of this document have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment.

AMENDED AND RESTATED AGREEMENT

This Amended and Restated Agreement (the “Agreement”), is made and
effective as of this 1st day of July, 2003, by and between EchoStar
Orbital Corporation II, with a place of business at 5701 South Santa Fe
Drive, Littleton, Colorado 80120 (“EchoStar”) and Loral Skynet, a division
of Loral SpaceCom Corporation, with a place of business at 500 Hills Drive,
Bedminister, New Jersey 07921 (“Skynet”) and amends and restates that
certain Agreement entered into as of February 22, 2000, between EchoStar
and Skynet. EchoStar and Skynet are hereinafter referred to collectively as
the “Parties” and individually as a “Party”.

WHEREAS, EchoStar is in the
business of providing commercial satellite-based
broadcast services and is interested in operating such a service in the
Ku-Band and Ka-Band frequencies from the 121° W.L. orbital location;

WHEREAS, Skynet is in the business of providing commercial satellite
services and is interested in operating such a service in the C-Band
frequencies from the 121° W.L. orbital location; and

WHEREAS, EchoStar and Skynet are interested in the construction, purchase
and operation of a hybrid C/Ku/Ka-Band satellite to be placed in the 121°
W.L. orbital location, with EchoStar owning and operating the Ka-Band and
Ku-Band payloads, Skynet owning and operating the C-Band payload, and
EchoStar and Skynet jointly owning and operating the elements that are
common to and/or shared by the Ka-Band, Ku-Band and C-Band payloads;

NOW THEREFORE, the Parties agree as follows:

1. Purchase of the Satellite. Contemporaneously with the execution
of this Agreement, EchoStar shall enter into the amended and restated contract
attached as Exhibit A hereto (the “Satellite Contract”) with Space Systems/Loral
Inc. (“SS/L”) for the construction and purchase of a hybrid C/Ku/Ka-Band satellite
to be delivered in-orbit to the 121° W.L. orbital location (hereinafter referred to as
“EchoStar 9”). Capitalized terms used and not otherwise defined herein shall
have the meanings as defined in the Satellite Contract.

2. Ownership, Title and Operation. EchoStar shall exclusively own
and operate the Ka-Band and Ku-Band payloads on the EchoStar 9
satellite.
Skynet shall exclusively own and operate the C-Band payload on the EchoStar 9
satellite. EchoStar and Skynet shall jointly own, as tenants in common on a
***** percent basis in favor of EchoStar (the “Ownership Ratio”), the
elements of the EchoStar 9 satellite that are common to and/or shared by
the Ka-Band, Ku-Band and C-Band payloads (the “Common Elements”). Title
to the C-

Confidential and Proprietary

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Band payload and to Skynet’s ownership interest in the Common Elements shall
automatically and immediately pass from EchoStar to Skynet upon transfer of
title to the EchoStar 9 satellite from SS/L to EchoStar pursuant to the
Satellite Contract; provided, however, that following such passage of title to
Skynet, in the event of a partial or total loss of the C-Band payload and/or
Skynet’s ownership interest in the Common Elements, Skynet’s title shall be
subject to any salvage value remedies included in the applicable risk
management insurance policies for the EchoStar 9 satellite procured by SS/L
pursuant to Article 39 of the Satellite Contract. *****. Each Party may grant security interests in and otherwise encumber
its payload (s) and its ownership interest in the Common Elements, provided
that in the event of foreclosure upon any security interest in or other
encumbrance upon a Party’s ownership interest in the Common Elements, the
foreclosing entity shall take such interest subject to the terms and
conditions of this Agreement, and provided further that following such
foreclosure the Party whose interest was not foreclosed upon shall have the
right to *****. In the
event that a payload design change made by either Party pursuant to Section 5
of this Agreement results in an adjustment to the Firm Fixed Price, then the
Ownership Ratio shall be adjusted accordingly.

3. Payment of the Purchase
Price. EchoStar shall be responsible for paying *****
of the Firm Fixed Price (as defined in the Satellite Contract) for the EchoStar
9 satellite subject to and upon the terms and conditions set forth in
the Satellite Contract. Skynet shall be responsible for paying SS/L
the remaining ***** of the Firm Fixed Price subject to and upon the terms and conditions
of this Agreement and of a separate agreement(s) to be mutually
agreed upon between Skynet and SS/L. Design changes made pursuant to
Section 5 of this Agreement shall result in an adjustment to the
Firm Fixed Price and the Ownership Ratio as and to the extent set forth in
Section 5. *****.

4. Insurance.

4.1 EchoStar and Skynet shall each have the right to procure their own
insurance for their respective payload(s) and their respective ownership
interests in the Common Elements with such coverage terms and conditions
(including without limitation sums insured) as each Party shall determine in
its sole judgment; provided that neither Party shall be entitled to take
more than the following percentage of the maximum sum insurable under the
existing bulk-buy

Confidential and Proprietary

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proposed by Willis without the prior written consent of the other Party which
consent shall not be unreasonably withheld or delayed: (i) EchoStar: ***** and
(ii) Skynet: *****

4.2 Each Party shall, at its own cost and expense, timely provide the other
Party with all reasonable assistance requested by the other Party in
connection with the procurement of insurance as contemplated under this
Section 4.

5. Payload Design Changes.

5.1 Either Party may at any time and from time to time make changes in the
design of its payload(s), provided that such change does not negatively impact:
(i) the scheduled launch date for the EchoStar 9 satellite, (ii) the
performance of the other Party’s payload(s), or (iii) the designed operational life of the other
Party’s payload or the designed orbital maneuver life of the Echostar 9 satellite,
unless the other Party has otherwise agreed in writing (which agreement may be
withheld in the other Party’s sole judgment).

5.2 ******.

5.3 The Party making a design change to its payload(s) shall be solely
responsible for paying any increases to the Firm Fixed Price that result from
such change (including changes to the Common Elements necessitated by the design
change made to such Party’s payload). Similarly, the Party making a design
change to its payload(s) shall receive the full benefit of any reductions in
the Firm Fixed Price resulting from such change to its payload. In either case, the
Ownership Ratio shall be adjusted accordingly.

6. Satellite Management. Skynet shall, *****, provide
EchoStar with support from its staff of Loral Skynet Spacecraft and Launch
Engineers for oversight of satellite design, fabrication, testing and
integration and for oversight of launch integration, including without
limitation supporting EchoStar at the launch site during the launch campaign
and providing technical consultation during transfer orbit operations and in
orbit testing of the satellite, that is reasonably acceptable to EchoStar and
designed to ensure that SS/L manufactures, launches and delivers the EchoStar
9 satellite in accordance with the terms and conditions of the Satellite
Contract (the “Satellite Management Services”). In performing the Satellite
Management Services, Skynet shall assign at least ***** to be dedicated
to the EchoStar 9 program on a full-time basis, who will be stationed on-site
at SS/L’s facility in Palo Alto, California. Such on-site ***** shall report
solely and exclusively to EchoStar for matters

Confidential and Proprietary

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dealing with the Ka-Band and Ku-Band payloads, solely and exclusively to Skynet
for matters dealing with the C-Band payload, and jointly to both EchoStar and
Skynet for matters dealing with the Common Elements. The Satellite
Management Services shall be performed by Skynet under the same terms and
conditions ***** as set forth in that certain Agreement between
EchoStar Satellite Corporation and AT&T Corp. Concerning Technical Support,
dated March 25, 1996, and the Statement of Work attached as Exhibit A thereto as such
 Exhibit A was amended on February 12, 1999 (the “Technical Support
Agreement”); provided that the license granted to EchoStar with
respect to certain Delivered Information pursuant to Section 17.A of the Technical Support
Agreement shall be expanded to include defined business purposes of designing,
constructing and delivering FSS, DBS and Ka-Band Satellites. *****.

7. TT&C Services. Skynet shall, *****, provide telemetry, tracking, and control (“TT&C”) services for
the EchoStar 9 satellite, beginning at Acceptance of such satellite and
continuing for the actual orbital maneuver life of the EchoStar 9 satellite,
under the same terms and conditions ***** as set forth in that
certain Amended and Restated Tracking, Telemetry and Control Services
Agreement between EchoStar Satellite Corporation and AT&T Corp.,
effective as of March 26, 1996, as amended and assigned to Skynet (the “TT&C
Agreement”); provided that the license granted to EchoStar with respect to
certain Delivered Information pursuant to Sections 8.A and 8.D of the TT&C
Agreement shall be expanded to include the defined business purpose of
providing services to Customer’s FSS, DBS and Ka-Band satellite(s)).
*****. The Parties

Confidential and Proprietary

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agree that (a) in-orbit testing (“IOT”) for the Ka-Band and Ku-Band payloads
will be conducted at EchoStar’s uplink facility in Cheyenne, Wyoming or
Gilbert, Arizona, at EchoStar’s option, with support from Skynet facilities as
reasonably needed, (b) IOT for the C-Band payload shall be performed at
Skynet’s uplink facility in Hawley, Pennsylvania, (c) IOT for the Common
Elements shall be performed at a facility to be mutually agreed upon by the
Parties after consultation with SS/L, (d) the Satellite IOT Review shall be
held at a single location to be mutually agreed upon by the Parties after
consultation with SS/L, and (e) each Party shall be entitled to have
representatives present at each of the events described in Subsections (a)
through (d) above.

8. Decision-Making Authority. Each Party
shall have final decision-making
authority with respect to all matters regarding the construction
and operation of the EchoStar 9 satellite that solely and exclusively impact
its respective payload(s). *****

9. Power Sharing Parties. *****

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*****

10. Cooperation.

10.1 Each Party shall, *****, timely provide the other
Party with all reasonable assistance requested by the other Party in
connection with: (i) the preparation, coordination and filing of any and all
applications required to be filed by the other Party for licenses with the
Federal Communications Commission, or any successor agency thereto (the “FCC”)
and any other governmental agencies in connection with the construction,
launch and operation of the EchoStar 9 satellite and/or the Substitute
Satellite; (ii) the filing of any technical filings required to be made by the
other Party with the FCC or any other governmental agency; and (iii) all
filings required to be made by the other Party with the International
Telecommunication Union (or any successor agency thereto) regarding radio
frequency and orbital position coordination.

10.2 Skynet shall give all reasonable assistance requested by EchoStar, ***** necessary for EchoStar to perform under the
Satellite Contract with respect to the C-Band payload and Skynet’s interest
in the Common Elements, including without limitation the timely provision of
all purchaser-furnished equipment, facilities and services applicable to the
C-Band payload described in the Statement of Work in good working condition
and adequate for the required purpose.

11. Taxes. EchoStar shall be responsible for the payment of any and
all sales, use, gross receipts, excise and other taxes (collectively “Taxes”)
assessed solely and exclusively on the construction, use and operation or
addition of value to the Ka-Band or Ku-Band payloads on the EchoStar 9
satellite, and EchoStar shall indemnify Skynet from any such Taxes in
accordance with the provisions of Section 17 below. Skynet shall be
responsible for the payment of any and all Taxes assessed solely and
exclusively on the construction, use and operation or addition of value to
the C-Band payload on the EchoStar 9 satellite, and Skynet shall indemnify
EchoStar from any such Taxes in accordance with the provisions of Section 17
below. *****

Confidential and Proprietary

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*****

12. Sale, Abandonment and Substitute Satellite.

*****

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*****

13. Termination. Unless terminated sooner pursuant to Section 12.1(c)
above,
this Agreement shall continue in full force and effect until the end of
the actual
orbital maneuver life of the EchoStar 9 satellite.

14. Confidentiality.

14.1 Confidential Information. Each Party will treat as confidential the
terms of this Agreement, together with all information whether of a technical
nature or otherwise relating in any manner to the business, technical,
operational, legal or other affairs of the other Party as may be communicated to it
hereunder or otherwise in connection with this Agreement, both prior and
subsequent to its execution (the “Confidential Information”).
Each Party undertakes that except as authorized in writing by the
other Party, it will neither disclose any Confidential Information to
any person, including the media, nor use the Confidential
Information other than for purposes permitted under this
Agreement. Each Party shall use all reasonable efforts and shall
take every reasonable precaution to protect and maintain
the confidentiality of the Confidential Information, which
precautions shall be at least equivalent in scope and effect to the
measures taken by that Party to protect its own most
confidential proprietary information. Each Part hereby agrees to
limit disclosure of Confidential Information to those of its
employees who need to know such information in the performance of
their duties in relation to the EchoStar 9 satellite and to
consultants who (i) require access to the information in the
performance of their duties in relation to the EchoStar 9 satellite
and (ii) have executed a written non-disclosure agreement, the
provisions of which are sufficiently wide to protect the
confidentiality of the information being disclosed. Each Party shall
be liable to the other Party for the acts and omissions of its
employees and consultants in breach of the provisions of this Section
14.

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Notwithstanding the foregoing, the terms of this Agreement and any amendments
thereof may be disclosed to SS/L and to the Parties’ respective insurance
brokers and underwriters in connection with any and all bona fide attempts to
place insurance as contemplated by Section 4 above.

14.2 Exclusions. The provisions of this Section 14 shall not apply to
any information that (i) is in the public domain, or which becomes generally
known to the public, other than by default of the recipient Party; (ii) was in
the
lawful possession of the recipient Party prior to the disclosure, and was not
obtained either directly or indirectly from the disclosing Party; (iii) is, or
had
already been, verifiably independently generated by the recipient Party,
without
reference to the disclosing Party’s Confidential Information; (iv) is required
to be
disclosed by law or the valid order of a court of competent jurisdiction or the
request of any governmental or other regulatory authority or agency in which
event the Party required to disclose such Confidential Information shall so
notify
the other Party as promptly as practicable (and if possible prior to making any
disclosure) and shall use reasonable commercial efforts to seek confidential
treatment of such information.

14.3 Injunctive Relief. The Parties agree that any breach of this Section
14 by the recipient Party will result in the substantial likelihood of irreparable
harm and injury to the disclosing Party and that in the event of such a breach,
monetary damages alone would not be an adequate remedy and which damages are
difficult to accurately measure. Accordingly, in the event of such a
breach or threatened breach by the recipient Party, the disclosing Party shall
be entitled to injunctive relief in any court of competent jurisdiction,
without prejudice to the other remedies available to the disclosing Party at
law, in equity or otherwise for such breach or threatened breach.

14.4 No Implied License. Except as expressly set forth to the contrary
herein, this Agreement shall not be construed as granting or conferring any
interests or rights, by license or otherwise, in any of the Confidential
Information,
including, without limitation, any patent or patent application or any copyright
in which the disclosing Party now has or subsequently may obtain any right, title
or interest or any other intellectual property rights. Except as otherwise
expressly contemplated herein or agreed by the Parties, all materials created or
fabricated by the recipient Party, including without limitation evaluations, based upon
the Confidential Information are deemed to be Confidential Information and are
owned by and are the exclusive property of the disclosing Party, and shall be
returned by the recipient Party to the disclosing Party immediately upon
request by the disclosing Party or termination or expiration of this Agreement.

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14.5 Prior Agreements. The confidentiality obligations set forth in this
Agreement are in addition to, and not in lieu of, any agreements between the
Parties and/or any of their Affiliates (as defined in Section 19.3 below)
respecting confidentiality that were executed on or before the date first set
forth above.

15. Publicity. Neither Party shall issue a press release
regarding this Agreement or the transactions contemplated hereby, without the express written
consent of the other Party, which consent shall not be unreasonably withheld
or delayed; provided that nothing in this Section 15 shall be construed as
limiting a Party’s right to disclose certain information in accordance with Section
14.2(iv)
above.

16. Dispute Resolution.

*****

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*****

17. Indemnification.

17.1 Each Party shall defend, indemnify and hold harmless the other Party,
and
its Affiliates, and their respective directors, officers, employees,
shareholders,
agents and representatives from and against all losses, damages, liabilities,
suits and expenses (including, but not limited to, reasonable attorneys’
fees) (collectively “Losses”) attributable to *****.

17.2 The right to any indemnity specified in this Section 17 shall be subject
to the following conditions:

(i)    The Party seeking indemnification shall promptly advise the other
Party in writing of the filing of any suit or of any written or oral claim
for indemnification upon receipt thereof and shall provide the other Party,
at its request, with such

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assistance and information available to the indemnified party as is relevant
to the defense such suit or claim. Any such assistance or information that is
furnished by the indemnified Party at the request of the indemnifying Party
*****

(ii)   The Party seeking indemnification shall not make any admission nor shall
it reach a compromise or settlement without the prior written approval of the
other Party, which approval shall not be unreasonably withheld or delayed.

(iii)   The indemnifying Party shall assist and shall have the right to
assume, when not contrary to the governing rules of procedure, the defense
of any claim or suit in settlement thereof and shall satisfy any judgments
rendered by a court
of competent jurisdiction in such suits and shall make all settlement
payments.

(iv)   The Party seeking indemnification may participate in any defense ***** using counsel reasonably acceptable to the indemnifying Party,
provided there is no conflict of interest and that such participation would
not and does not adversely affect the conduct of the proceedings.

(v)       *****(i) the indemnifying Party and such indemnified Party shall have mutually
agreed to retention of such other counsel; or (ii) the named parties to any
proceeding (including without limitation any impleaded parties) include both
the indemnifying Party and such indemnified Party and representation of both
the indemnifying Party and such indemnified Party by the same counsel would
be inappropriate due to actual or potential conflicts of interest between
them.

18. LIMITATION OF LIABILITY. THE LIMITATION OF
 LIABILITY PROVISION OF THE TT&C
AGREEMENT SHALL EXCLUSIVELY CONTROL LIABILITIES ARISING OUT OF THE PROVISION OF
TT&C SERVICES. THE LIMITATION OF LIABILITY, PROVISION OF THE TECHNICAL
SUPPORT AGREEMENT SHALL EXCLUSIVELY CONTROL LIABILITIES ARISING OUT OF THE
PROVISION OF SATELLITE MANAGEMENT SERVICES. EXCEPT WITH RESPECT TO BREACHES OF
SECTION 14 OR 15 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE
DIRECTLY OR INDIRECTLY TO THE OTHER PARTY, ITS AFFILIATES, OR THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AGENTS, CUSTOMERS, CONTRACTORS OR
SUBCONTRACTORS AT ANY TIER (INCLUDING WITHOUT LIMITATION SUPPLIERS OF ANY
KIND), OR TO ANY OTHER PERSON OR ENTITY
CLAIMING BY OR THROUGH SUCH PARTY FOR ANY AMOUNTS REPRESENTING LOSS OR
PROFITS, LOSS OF BUSINESS, OR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY,
CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING FROM OR RELATING TO THE PERFORMANCE

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OR NONPERFORMANCE OF THIS AGREEMENT OR ANY ACTS OR OMISSIONS ASSOCIATED
THEREWITH, WHETHER THE BASIS OF THE LIABILITY IS BREACH OF CONTRACT, TORT,
STATUTES OR ANY OTHER LEGAL THEORY. THIS LIMITATION OF LIABILITY SHALL NOT
BE CONSTRUED TO LIMIT A PARTY’S INDEMNIFICATION OBLIGATIONS PURSUANT TO
SECTIONS 11 AND 17.

19. Miscellaneous.

19.1 Relationship of the Parties. This Agreement defines the cooperative
activities of the Parties in the acquisition, manufacture and operation of a
C/Ku/Ka-Band hybrid satellite under the terms contained herein. Except for the
covenants contained herein, no legal entity or relationship of any kind, including
but not limited to a joint venture, pooling arrangement, agency, partnership or
other form of business relationship shall be deemed to arise herefrom between
the Parties or between any other individuals, organizations or corporation. Each
Party shall act as an independent contractor and not as an agent for the other
and no Party shall have any authority to bind the other Party except to the extent
specifically provided herein.

19.2 Applicable Law and Construction. This Agreement shall be construed, and
the relations between the Parties determined, in accordance with the laws of the
state of New York, except for its choice of laws provisions. The descriptive
headings contained in this Agreement are included for convenience and
reference only and shall not be held to expand, modify, amplify or aid in the
interpretation, construction or meaning of this Agreement. Skynet and EchoStar
acknowledge and agree that they and their counsel have reviewed, or have been
given a reasonable opportunity to review, this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement or
any amendments or attachments hereto.

19.3 Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective heirs, legal
representatives, successors and permitted assigns. Neither this Agreement
nor any rights, duties or obligations hereunder may be assigned, delegated
or otherwise transferred, in whole or in part, by either Party, ***** without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld; *****

Confidential and Proprietary

13

 

*****. Any attempted assignment, delegation, sale or other transfer in
contravention of the above provisions shall be void ab initio.

19.4 Notices. All notices and other communications
 that may be or are
required to be given hereunder shall be in writing and shall be sent via
first-class registered or certified mail, return receipt requested and
postage prepaid, or via overnight courier service, charges prepaid, to the
party to be notified at the following address(es), or sent by facsimile
transmission to the party to be notified at the following fax number(s), or
to such other persons, address(es) or fax number(s) as such party may have
substituted by written notice to the other parties in accordance with the
provisions of this Section 19.4:

In the case of EchoStar:

Echostar Orbital Corporation II

5701 S. Santa Fe Drive

Littleton, Colorado 80120

Attn: Rohan Zaveri, Director of Space Programs

Fax: (303)723-1099

With a copy to:

Echostar Orbital Corporation II

5701 S. Santa Fe Drive

Littleton, Colorado 80120

Attn: David K. Moskowitz, Senior Vice President and General Counsel

Fax: (303) 723-1699

In the case of Skynet:

Loral Skynet

500 Hills Drive

P.O. Box 7018

Bedminster, NJ 07921

Attn: Robert DeMartini, Director, Supplier Relations

Facsimile Number: (908) 470-2453

Confidential and Proprietary

14

 

With a copy to:

Loral Skynet

500 Hills Drive

P.O. Box 7018

Bedminster, NJ 07921

Attn: Sundaram Moorthy

Fax: (908) 470-2457

The sending of such notice with confirmation of successful receipt of the
complete transmission (in the case of facsimile transmissions) or receipt of
such notice (in the case of delivery by first class registered or certified
mail or by overnight courier service) shall constitute the giving thereof.

19.5 Unrestricted Activities. Nothing contained herein shall be deemed to
restrict a Party from quoting, offering to sell, selling to, receiving quotes,
offering to purchase or purchasing from others *****.

19.6 Entire Agreement. The original agreement between EchoStar Orbital
Corporation (“EOC”) and Skynet dated February 22, 2000 (the
“Original Agreement”), is hereby amended, restated and superceded in its entirety by
this Amended and Restated Agreement effective as of July 1, 2003. This Amended
and Restated Agreement constitutes the entire understanding and agreement
between the Parties with respect to the subject matter hereof, and supersedes
all such prior representations and agreements, oral or written. This
Agreement shall not be modified or altered, except in a writing executed
by a duly authorized representative of each Party. EOC assigned the
Original Agreement in whole to EchoStar (an entity under common control
with EOC), and EchoStar hereby acknowledges and agrees that it assumed
all of the obligations of EOC under the Original Agreement, effective as
of November 14, 2002 (the “Assignment”). *****, Skynet
hereby grants its approval of the Assignment.

19.7 Compliance with Export Control and Other Laws and Regulations. The
Parties shall comply with all United States Export Control Regulations and all
other laws and regulations which apply to this Agreement; and further will not
directly or indirectly perform or fail to perform any act which will constitute a
violation of such laws or regulations in the performance of the Agreement.

19.8 Waiver. The failure or delay of either Party at any time to exercise or
enforce any right or remedy available to it under this Agreement with respect
to any breach or default by the other Party shall not be construed to be a waiver of
such right or remedy with respect to any other breach or default by the other Party.
The

Confidential and Proprietary

15

 

delay or failure of either Party to give notice
 of breach or default shall
not be deemed to be a waiver of the right to do so for that or any subsequent
breach or default or for the persistence in a breach or default of a
continuing nature.

19.9 Counterparts. This Agreement may be signed in counterparts, each
of which shall constitute an original and all of which together shall constitute one
and the same agreement.

19.10 Severability. The Parties agree that each provision of this Agreement
shall be construed as separable and divisible from every other provisions and
that the enforceability of any one provision shall not limit the enforceability, in
whole or in part, of any other provision hereof. In the event that a court of
competent jurisdiction or a panel of arbitrators selected pursuant to Section 16.2 above
determines that any term or provision herein, or the application thereof to any
person, entity or circumstance, shall to any extent be invalid or
unenforceable, then such term or provision shall be enforced to the maximum
extent deemed by such court or panel of arbitrators to be permissible, and
the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and
effect.

19.11 Survival of Obligation. The obligations of the Parties
under this
Agreement, which by their nature logically would be expected to survive
termination, cancellation, or expiration of this Agreement, including without
limitation those set forth in Sections 7 ***** 14, 15, 16, 17, 18, 19.2 and 19.4, shall
survive termination, cancellation or expiration of this Agreement for the applicable
time period specified in such section or, if no time period is specified, for a
reasonable period of time under the circumstances.

19.12 Remedies Cumulative. Except as otherwise expressly set forth herein,
it is agreed that the rights and remedies herein provided in case of default or
breach of this Agreement are cumulative and shall not affect in any manner any
other remedies that any Party may have by reason of such default or breach,
except as expressly limited in this Agreement. Except as otherwise expressly set
forth herein, the exercise of any right or remedy herein provided shall be without
prejudice to the right to exercise any other right or remedy provided herein, at
law, or in equity.

19.13 Order of Precedence. Any conflict between the terms of this
Agreement and those of any document attached hereto as an Exhibit shall be
resolved by precedence to the provisions of this Agreement.

19.14 Marketing Name. *****

Confidential and Proprietary

16

 

*****

Confidential and Proprietary

17

 

IN WITNESS WHEREOF, the Parties have caused their duly
authorized representatives to execute this Agreement as of the date first set
forth above.

	 	 	 	 
	LORAL SPACECOM CORPORATION
	 
	 	 
	By:

	 	/s/ TERRY J. HART
	

	 	
 
	

	 	Name: 	Terry J. Hart
	

	 	Title: 	President, Lorel Skynet
	 
	 	 
	ECHOSTAR ORBITAL CORPORATION II
	 
	 	 
	By:

	 	/s/ CHARLES W. ERGEN
	

	 	
 
	

	 	Name:	Charles W. Ergen
	

	 	Title:	President & CEO

Confidential and Proprietary

18

 

EXHIBIT A

AMENDED AND RESTATED CONTRACT

BETWEEN

ECHOSTAR ORBITAL CORPORATION II

AND

SPACE SYSTEMS/LORAL, INC.

EchoStar 9 Satellite Program

(121°W.L.) 

This document contains data and information proprietary to Space Systems/Loral,
Inc. and EchoStar Orbital Corporation II. This data shall not be disclosed,
disseminated or reproduced, in whole or in part, without the express prior
written consent of Space Systems/Loral, Inc. and EchoStar Orbital Corporation
II except as otherwise provided in this Contract.

SS/L-TP99022 Contract

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the data contained on this sheet is subject to the restriction on the
title page.

 

 

TABLE OF CONTENTS

	 	 	 
	PREAMBLE
	 	  4
	RECITALS
	 	  5
	ARTICLE 1 DEFINITIONS
	 	  6
	ARTICLE 2 SCOPE OF WORK
	 	12
	ARTICLE 3 DELIVERABLE ITEMS AND DELIVERY SCHEDULE
	 	13
	ARTICLE 4 PRICE
	 	14
	ARTICLE 5 PAYMENTS
	 	16
	ARTICLE 6 PURCHASER-FURNISHED ITEMS
	 	20
	ARTICLE 7 COMPLIANCE WITH U.S. EXPORT LAWS AND
DIRECTIVES
	 	23
	ARTICLE 8 ACCESS TO WORK IN PROGRESS
	 	24
	ARTICLE 9 SATELLITE PRE-SHIPMENT REVIEW (SPSR)
	 	28
	ARTICLE 10 SATELLITE ACCEPTANCE
	 	31
	ARTICLE 11 ACCEPTANCE INSPECTION FOR DELIVERABLE
ITEMS OTHER THAN SATELLITES
	 	33
	ARTICLE 12 DELIVERY, TITLE AND RISK OF LOSS
	 	36
	ARTICLE 13 *****
	 	43
	ARTICLE 14 RESERVED
	 	42
	ARTICLE 15 WARRANTY
	 	43
	ARTICLE 16 CHANGES
	 	47
	ARTICLE 17 FORCE MAJEURE
	 	49
	ARTICLE 18 PURCHASER DELAY OF WORK
	 	53
	ARTICLE 19 PATENT INDEMNITY
	 	54
	ARTICLE 20 INDEMNITY FOR BODILY INJURY AND PROPERTY
DAMAGE
	 	57

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TABLE OF CONTENTS (CONTINUED)

	 	 	 	 	 
	ARTICLE 21 TERMINATION FOR CONVENIENCE 
	 	 	60	 
	ARTICLE 22 ***** 
	 	 	64	 
	ARTICLE 23 DEFAULT 
	 	 	72	 
	ARTICLE 24 RESERVED 
	 	 	69	 
	ARTICLE 25 ARBITRATION 
	 	 	70	 
	ARTICLE 26 INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH 
	 	 	72	 
	ARTICLE 27 CORRECTIVE MEASURES 
	 	 	74	 
	ARTICLE 28 RESERVED 
	 	 	81	 
	ARTICLE 29 ***** 
	 	 	76	 
	ARTICLE 30 ***** 
	 	 	77	 
	ARTICLE 31 RESERVED 
	 	 	78	 
	ARTICLE 32 RESERVED 
	 	 	79	 
	ARTICLE 33 GROUND STORAGE 
	 	 	80	 
	ARTICLE 34 LIMITATION OF LIABILITY 
	 	 	82	 
	ARTICLE 35 DISCLOSURE AND HANDLING OF PROPRIETARY
INFORMATION 
	 	 	93	 
	ARTICLE 36 INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN
DATA 
	 	 	88	 
	ARTICLE 37 PUBLIC RELEASE OF INFORMATION 
	 	 	90	 
	ARTICLE 38 NOTICES 
	 	 	91	 
	ARTICLE 39 RISK MANAGEMENT 
	 	 	93	 
	ARTICLE 40 ORDER OF PRECEDENCE 
	 	 	96	 
	ARTICLE 41 GENERAL 
	 	 	97	 
	ARTICLE 42 ATTACHMENTS 
	 	 	101	 

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TABLE OF CONTENTS (CONTINUED)

	 	 	 	 	 
	ARTICLE 43 RESERVED
	 	 	116	 
	ARTICLE 44 RESERVED
	 	 	117	 
	ARTICLE 45 ANTICIPATED LIFE OF SATELLITE
	 	 	118	 
	ARTICLE 46 KEY PERSONNEL
	 	 	119	 

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PREAMBLE

This Amended and Restated Contract is made and effective as of July 1, 2003 by
and between EchoStar Orbital Corporation II, a corporation organized and
existing under the laws of the State of Colorado, having an office and place of
business at 5701 South Santa Fe Drive, Littleton, Colorado 80120 (hereinafter
referred to as “Purchaser”), and Space Systems/Loral, Inc., a corporation
organized and existing under the laws of the State of Delaware, having an
office and place of business at 3825 Fabian Way, Palo Alto, California 94303
(hereinafter referred to as “Contractor”) regarding the EchoStar 9 Satellite
Program (121° W.L.) (the “Contract”) and amends and restates that certain
Contract entered into as of February 22, 2000 (the “Effective Date of Contract”
or “EDC”) and as previously amended between Purchaser and Contractor.

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RECITALS

WHEREAS, Purchaser desires to procure one (1) communications satellite, known
as EchoStar 9, to be delivered to the Launch Site, Launch Services, certain
risk management services, and all required ground equipment and support and
training services, to the extent and subject to the terms and conditions set
forth herein, and

WHEREAS, Contractor is willing to furnish such Satellite, Launch Services, risk
management services, and ground equipment and support and training services, to
the extent and subject to the terms and conditions set forth herein, in
consideration of Purchaser’s share of the Firm Fixed Price and other valid
consideration.

NOW, THEREFORE, the Parties hereto agree as follows:

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ARTICLE 1 – DEFINITIONS

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

	1.1	 	“Acceptance” (i) with respect to a Satellite shall be as provided for in
Article 10, and (ii) with respect to any Deliverable Item other than a
Satellite shall be as provided for in Article 11.
	 
	1.2	 	“Affiliate” means, with respect to a Party, any person or entity directly
or
indirectly controlling, controlled by or under common control with such
Party.
	 
	1.3	 	“Contract” means the articles of this executed Contract, its Exhibits and
its Attachment(s), as may be amended from time to time in accordance
with the terms hereof.
	 
	1.4	 	“Contractor” has the meaning set forth in the Preamble and any
successor or assignee permitted hereunder.
	 
	1.5	 	“Deliverable Data” means the data and documentation required to be
delivered to Purchaser as specified in the Statement of Work.
	 
	1.6	 	“Deliverable Item” means any of the items listed in Article 3.1, and any
other items ordered by Purchaser pursuant to Article 29, and, collectively,
the “Deliverable Items”.
	 
	1.7	 	“Delivery” (i) with respect to a Satellite shall be as provided for in
Article 12.1, and (ii) with respect to any Deliverable Item other than a
Satellite shall be as provided for in Article 12.2.
	 
	1.8	 	“Effective Date of Contract” or “EDC” has the meaning set forth in the
Preamble.

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	1.9	 	“FCC” means the Federal Communications Commission or any
successor agency or governmental authority.
	 
	1.10	 	“Firm Fixed Price” has the meaning set forth in Article 4.1.
	 
	1.11	 	“Force Majeure” has the meaning set forth in Article 17.
	 
	1.12	 	“Gross Negligence” means *****.
	 
	1.13	 	“In-Orbit Testing” or “IOT” means the testing of a Satellite on-orbit in
accordance with the Program Test Plan.
	 
	1.14	 	“Intellectual Property Claim” has the meaning set forth in Article 19.
	 
	1.15	 	“Intentional Ignition” means, with respect to a Satellite and in the case
of the Zenit 3SL Launch Vehicle, the start of the ignition process for the
purpose of the Launch which is the time at which the command signal is
sent to the Launch Vehicle.
	 
	1.16	 	“Launch” means, with respect to a Satellite, Intentional Ignition
followed by Lift-Off or total loss or destruction of the Satellite,
provided that a Launch shall not be deemed to have occurred in the event
of a terminated ignition.
	 
	1.17	 	“Launch Agency” means Sea Launch Limited Partnership.
	 
	1.18	 	“Launch Services” means those services provided by the Launch
Agency pursuant to the Launch Services Agreement.
	 
	1.19	 	“Launch Services Agreement” or “LSA” means the contract between
Contractor and the Launch Agency which provides for Launch Services for a
Satellite, as such contract may be amended from time to time in accordance
with its terms.

					
	 	 	 	 	 
	
	 	 	 	 
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	1.20	 	“Launch Site” means the location that will be used by the Launch
Agency for purposes of launching a Satellite, *****.
	 
	1.21	 	“Launch Support” or “Launch Support Services” means those services
specified in the Statement of Work to be provided by Contractor in support
of Launch.
	 
	1.22	 	“Launch Vehicle” means the expendable Launch Vehicle, Zenit 3SL as
selected by Purchaser and used for Launch of a Satellite.
	 
	1.23	 	“Launch Vehicle Failure” means that *****.
	 
	1.24	 	“LIBOR” means the rate of interest per annum, at any relevant time, at
which thirty (30) day U.S. dollar deposits are offered at such time in the
London interbank market.

					
	 	 	 	 	 
	
	 	 	 	 
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	1.25	 	“Lift-Off” means release of the hold-down constraints
following Intentional Ignition.
	 
	1.26	 	“Mission Operations Support Services” means the orbit-raising, IOT and
related services specified in the Statement of Work to be performed by
Contractor for a Satellite.
	 
	1.27	 	“NSP” means not separately priced.
	 
	1.28	 	“Party” or “Parties” means Purchaser, Contractor or both, as the context
requires.
	 
	1.29	 	“Payment Plan” means the payment plan for the applicable Deliverable
Item, attached as Attachment A.
	 
	1.30	 	“Performance Specification” means the Satellite performance specification
attached as Exhibit B, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
	 
	1.31	 	“PMO” means the Purchaser’s program management office.
	 
	1.32	 	“Product Assurance Program Plan” means the product assurance program plan
attached as Exhibit C, as such Exhibit may be amended from time to time in
accordance with the terms of this Contract.
	 
	1.33	 	“Program Test Plan” means the Satellite program test plan attached as
Exhibit D, as such Exhibit may be amended from time to time in accordance
with the terms of this Contract.
	 
	1.34	 	“Proprietary Information” has the meaning set forth in Article 35.
	 
	1.35	 	“Purchaser” has the meaning set forth in the Preamble and any
successor or assignee permitted hereunder.
	 
	1.36	 	“Satellite” means a communications satellite that is to be manufactured
by Contractor pursuant to this Contract.

					
	 	 	 	 	 
	
	 	 	 	 
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	1.37	 	“Satellite IOT Review” has the meaning set forth in Article 10.2.
	 
	1.38	 	“Satellite Anomaly” means, with respect to any Satellite, any *****.
	 
	1.39	 	“Satellite Pre-Shipment Review” or “SPSR” has the meaning set forth in
Article 9.
	 
	1.40	 	“Satellite Stated Life” means fifteen (15) years, commencing (30) days
after Launch.
	 
	1.41	 	“SCF” means satellite control facility.
	 
	1.42	 	“Skynet” means and refers to Loral SpaceCom Corporation, a
corporation organized and existing under the laws of the State of
Delaware, doing business as Loral Skynet®, and having a place of
business at 500 Hills Drive, Bedminster, New Jersey 07921.
	 
	1.43	 	“Statement of Work” or “SOW” means the statement of work attached as
Exhibit A, as such Exhibit may be amended from time to time in accordance
with the terms of this Contract.
	 
	1.44	 	“TT&C” means telemetry, tracking and control.
	 
	1.45	 	“Transponder” means individually those sets of equipment within the
communications subsystem of a Satellite that provide a discrete path to
receive communications signals from earth, translate and amplify such
signals and transmit them to earth.
	 
	1.46	 	“Transponder Failure” means, *****.

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	*****.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 2 – SCOPE OF WORK

	2.1	 	Provision of Services and Materials
	 
	 	 	Contractor shall provide the necessary personnel, material, services,
and facilities to: design, manufacture, test, Launch and deliver to
Purchaser, one (1) Satellite, together with all other Deliverable
Items referred to in Article 3.1, in accordance with the following
Exhibits, which are attached hereto and made a part hereof:
	 
	2.1.1	 	Exhibit A, Statement of Work, dated 12 October 2000;
	 
	2.1.2	 	Exhibit B, Satellite Performance Specification, dated 13 November 2002;
	 
	2.1.3	 	Exhibit C, Product Assurance Program Plan, Part One (revision 1) dated
11 May 2000;
	 
	2.1.4	 	Exhibit C, Product Assurance Program Plan, Part Two (revision 4) dated
14 February 2000; and
	 
	2.1.5	 	Exhibit D, Satellite Program Test Plan, dated 17 October 2000.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 3 – DELIVERABLE ITEMS AND DELIVERY SCHEDULE

	3.1	 	Deliverable Items
	 
	 	 	Subject to the other terms and conditions of this Contract, the items
to be delivered under this Contract are specified in the table below
and the corresponding delivery schedules and locations are as follows:

	 	 	 	 	 	 	 
	Item
	 	Description
	 	Delivery Schedule
	 	Delivery Location

	1.

	 	(Satellite

EchoStar 9)
	 	***** months after EDC
	 	Launch Site
	 
	 	 	 	 	 	 
	2.

	 	Launch Services
	 	At Launch
	 	Launch Site
	 
	 	 	 	 	 	 
	3.

	 	Deliverable Data
	 	Per SOW, Exhibit A
	 	PMO
	 
	 	 	 	 	 	 
	4.

	 	Support and Training
	 	Per SOW, Exhibit A
	 	Contractor’s
facilities and
Purchaser’s SCF
	 
	 	 	 	 	 	 
	5.

	 	Ground Equipment
	 	Per SOW, Exhibit A
	 	Purchaser’s SCF
	 
	 	 	 	 	 	 
	6.

	 	Risk Management

Insurance
	 	Per Article 39
	 	Launch Site

	 	 	Contractor shall, at its cost, use its reasonable best efforts to
obtain all U.S. and foreign Government approvals necessary to export
and import the applicable Satellite, all Deliverable Items and
Deliverable Data required hereunder, the Launch Services and the
individual components of the applicable Satellite, such Deliverable
Items and Deliverable Data, and the Launch Services.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 4 – PRICE

	4.1	 	Firm Fixed Price
	 
	 	 	The total price to be paid by Purchaser and Skynet to Contractor for
the Deliverable Items 1 through 6 set forth in Article 3.1 within the
scope of work detailed in the Statement of Work, shall be a firm fixed
price of ***** (the “Firm Fixed Price”). The prices for those
Deliverable Items subject to an option under this Contract, if any,
are described in the particular Articles that set forth those options.
The itemization of the Firm Fixed Price is as follows:

	 	 	 	 	 
	Item Description
	 	Amount

	Satellite (EchoStar 9)
	 	 	*	****
	Launch Services
	 	 	*	****
	Deliverable Data
	 	 	*	****
	Support and Training
	 	 	*	****
	Ground Equipment
	 	 	*	****
	Risk Management
	 	 	*	****
	Total FFP *****
	 	 	*	****

*                                                                        
                                      *****

**                                                                       
                                     *****

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	The item price for such Satellite includes all design, manufacturing, tests, *****,
Deliverable Data, training, placement into the assigned
orbital location, Launch Services, Launch Support Services, Mission Operations
Support Services, ground equipment and shipment and transportation, all in
accordance with the terms and conditions of this Contract, as specified herein.
The item price also includes, and Contractor shall indemnify, defend and hold
Purchaser, its Affiliates, directors, officers, employees, shareholders and
agents harmless from and against, all applicable taxes, duties and similar
liabilities whatsoever imposed by any governmental entity in connection with
this Contract, except any tax on the sale to Purchaser resulting from
Purchaser’s election to exercise the Ground Storage option in Article 33.
	 
	 	 	Purchaser’s share of the Firm Fixed Price is *****. The remaining ***** shall be
paid by Skynet directly to Contractor *****. Purchaser does not guarantee
payment of the Skynet Portion, and Contractor agrees to look solely and
exclusively to Skynet for payment of the Skynet Portion. Failure of Skynet to
make payment of the Skynet Potion, when due, shall not be considered a breach
or default of this Contract and Contractor shall nonetheless still be obligated
to fully perform its obligations and duties under this Contract. Contractor
acknowledges and agrees that Purchaser shall have no liability to Contractor
whatsoever in the event that Skynet fails to make timely payment of the Skynet
Portion, and that Contractor shall have no recourse whatsoever against
Purchaser in such case.

 

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 5 – PAYMENTS

	5.1	 	Payment Plan
	 
	 	 	Absent a bona fide dispute, payments by Purchaser to Contractor of
its portion of the Firm Fixed Price set forth in Article 4 and of the
amounts for options, if any, exercised by Purchaser pursuant to this
Contract, shall be in accordance with the Payment Plan applicable
thereto.
	 
	5.2	 	Payment Conditions

	5.2.1	 	Payments. Absent a bona fide dispute, all payments
due from Purchaser shall be paid no later than the date
specified therefor as set forth in the Payment Plan, provided
that: (i) Contractor submits to Purchaser an invoice with
respect to each such payment no later than ***** days
prior to such due date; and (ii) Contractor completes the
applicable milestone set forth in Attachment A no later than
***** days prior to such due date. Notwithstanding
the foregoing, in the event that Contractor does not deliver an
invoice to Purchaser at least ***** days prior to such
due date and/or does not achieve the relevant milestone,
*****, at least ***** days prior to such due date, Purchaser may suspend all payments
until such time as the relevant invoice is received and
milestone is completed. Within ***** days following
Purchaser’s receipt of the relevant invoice or
***** days following Contractor’s completion of the relevant
milestone, whichever occurs later, Purchaser shall pay
Contractor for all payments that were required to have been
made but were not as a result of the suspension.

					
	 	 	 	 	 
	
	 	 	 	 
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	5.2.2	 	Milestones. Notwithstanding the milestones set forth in Attachment A, if
it becomes reasonably clear that problems with deliverables are reasonably
likely to cause schedule delays, then all payments may be suspended, at
Purchaser’s option, and the date for payment of each subsequent payment
delayed, by an amount of time equal to the difference between the
originally scheduled delivery date for the Satellite set forth in Article
3 and the revised forecast delivery date. *****. Further, if, following completion of a milestone, a problem
arises which requires rework of elements of the milestone, then payments
may be suspended, at Buyer’s option, until the milestone is again
complete.
	 
	5.2.3	 	Non-Warranty Payments. Absent a bona fide dispute, all amounts payable
to Contractor with respect to non-warranty work performed pursuant to
Article 15.3 shall be paid no later than ***** days after submission
of an invoice by Contractor certifying that such non-warranty work has
been completed.
	 
	5.2.4	 	Obligation to Pay. *****. If Contractor shall not have delivered
any invoice required hereunder within the time specified therefor, subject
to the terms and conditions of this Article 5, the relevant payment due
from Purchaser shall be payable ***** days after receipt of such
invoice.

					
	 	 	 	 	 
	
	 	 	 	 
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	5.3	 	Late Payment
	 
	 	 	Except in the case of a bona fide dispute, in the event that any
payment owed by one party to the other party is not made when due
hereunder, without prejudice to the second party’s other rights and
remedies under this Contract, at law or in equity, the first party
shall pay the other party interest at the rate of ***** on the unpaid
balance thereof from the date such payment is due hereunder until such
time as payment is made. If a payment due to Contractor from Purchaser
is not made by the date ***** days after the date due hereunder,
without prejudice to Contractor’s other rights and remedies under this
Contract, at law or in equity, Contractor may elect to cease
performance of its obligations under this Contract, without prejudice
or penalty. *****. Notwithstanding the foregoing, in the event of a
bona fide dispute between the Parties regarding a payment due
hereunder, such dispute shall be resolved pursuant to Article 25
hereof, and Contractor shall have no right pending resolution of such
dispute to stop work under this Contract because of such dispute.

					
	 	 	 	 	 
	
	 	 	 	 
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	5.4	 	Invoices
	 
	 	 	Invoices required to be delivered by Contractor hereunder shall be
submitted to Purchaser (original plus one (1) copy) at the
following address:

EchoStar Orbital Corporation II

5701 South Santa Fe Drive

Littleton, CO 80120

ATTN.: Rohan Zaveri

(with copies to David Moskowitz and Charlie Ergen)

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

	5.5	 	Payment Bank
	 
	 	 	All payments made to Contractor hereunder shall be in U.S. currency
and shall be made by electronic funds transfer to the following
account:

BANK OF AMERICA
SPACE SYSTEMS/LORAL, INC.

ACCOUNT NO. 75-69165
CHICAGO, ILLINOIS

ABA #071-000-039

or by check to:

Space Systems/Loral

3825 Fabian Way

Palo Alto, CA 94303

Attn: Robert Goold

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

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 6 – PURCHASER-FURNISHED ITEMS

	6.1	 	Purchaser-Furnished Support
	 
	 	 	To enable Contractor to perform Launch Support and Mission Operations
Support Services, Purchaser shall timely make available to Contractor
the Purchaser-furnished equipment, facilities and services described
in the Statement of Work. Such equipment, facilities and services
shall be in good working condition and adequate for the required
purpose and shall be made available free of charge for Contractor’s
use (including Acceptance inspection pursuant to Article 11) during
the period commencing sixty (60) days prior to such Launch and
continuing through completion of the Satellite IOT Review. Purchaser
and Contractor will conduct an interface meeting approximately one
hundred eighty (180) days prior to such Launch to confirm the
availability and adequacy of Purchaser-furnished equipment,
facilities and services.
	 
	6.2	 	Communications Authorizations
	 
	 	 	Purchaser shall be responsible, at its cost and expense, for
preparing, coordinating and filing all applications for licenses with
the FCC, if required to do so, for the Launch and operation of the
Ku-Band and Ka-Band payloads on a Satellite. Contractor shall timely
provide Purchaser with all reasonable assistance, at no additional
cost to Purchaser, requested by Purchaser in connection with
Purchaser’s performance of the above-specified tasks, and in
connection with the filing of any technical filings required to be
made by Purchaser with the FCC.

					
	 	 	 	 	 
	
	 	 	 	 
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	6.3	 	Radio Frequency Coordination
	 
	 	 	Purchaser shall be responsible for the timely preparation and
submission of all filings required by the International
Telecommunication Union (or any successor agency thereto) regarding
radio frequency and orbital position coordination for the Ku-Band and
Ka-Band payloads. Such filings shall be made in accordance with the
Radio Regulations of the International Telecommunication Union (or
any successor agency). Contractor shall timely provide Purchaser with
all reasonable assistance, at no additional cost to Purchaser,
requested by Purchaser in connection with Purchaser’s performance of
the above-specified tasks.
	 
	6.4	 	Licenses and Permits
	 
	 	 	Except as set forth in Articles 6.2 and 6.3 above, Contractor shall
be responsible, at its sole cost and expense, for securing any and
all permits and licenses for the construction, transportation and
Launch of a Satellite (other than FCC construction permits for the
Ku-Band and Ka-Band payloads).
	 
	6.5	 	Satellite Performance Data
	 
	 	 	In the event of a Satellite Anomaly that occurs during the life of a
Satellite, Purchaser shall timely provide Contractor with or give
Contractor access to any data Contractor may reasonably require to
investigate or correct (if Contractor is able to do so) such Satellite
Anomaly.
	 
	6.6	 	*****

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	*****.

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

	7.1	 	Technical Information, Deliverable Data and Technical Services

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

	7.2	 	No Retransfer
	 
	 	 	The Parties shall not transfer to any “foreign person”, as defined in
the International Traffic in Arms Regulations (22 C.F.R. §120.1)
technical information, Deliverable Data or technical services
furnished hereunder, except as expressly authorized by the U.S.
Government in accordance with U.S. export control laws. THE PARTIES
UNDERSTAND AND WARRANT THAT THEY SHALL NOT RE-EXPORT, TRANSFER OR
DIVERT ANY ITEM EXPORTED UNDER OR IN CONNECTION WITH THIS CONTRACT TO
ANY “FOREIGN PERSON” WITH A NATIONALITY OTHER THAN CONTRACTOR’S OR
PURCHASER’S, RESPECTIVELY, WITHOUT THE PRIOR WRITTEN APPROVAL OF THE
U.S. GOVERNMENT.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 8 – ACCESS TO WORK IN PROGRESS

	8.1	 	Work in Progress at Contractor’s Plant
	 
	 	 	Subject to Article 7 and Article 8.5 and to compliance with
Contractor’s safety and security regulations, Purchaser’s and
Skynet’s employees (and representatives, consultants or agents,
subject to the prior approval of Contractor, which approval shall not
be unreasonably withheld or delayed) shall be allowed access to work
being performed at Contractor’s facility for the Satellite and other
Deliverable Items, for the purpose of observing the progress of such
work and otherwise confirming Contractor’s compliance with this
Contract. Notwithstanding anything to the contrary set forth herein,
the fact that Purchaser and/or Skynet have observed work performed
hereunder shall not be deemed Purchaser’s Acceptance or approval of
such work.
	 
	8.2	 	Work in Progress at Subcontractors’ Plant
	 
	 	 	Subject to Article 7 and Article 8.5, to the extent permitted by
Contractor’s subcontractors supplying services or goods in connection
with the Satellite and subject to each such subcontractor’s safety and
security regulations, Contractor shall allow Purchaser’s and Skynet’s
employees (and representatives, consultants or agents, subject to the
prior approval of Contractor, which approval shall not be unreasonably
withheld or delayed) access to work being performed with respect to
the Satellite in each such subcontractor’s plants for the purpose of
observing the progress of such work and otherwise confirming
Contractor’s compliance with this Contract, subject to the right of
Contractor to accompany Purchaser and/or Skynet on any such visit to a
subcontractor’s plant; provided, however, that Purchaser and/or Skynet
may conduct an unaccompanied observation in the event that Contractor
fails to furnish a representative after reasonable written

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	notice of Purchaser’s or Skynet’s observation request. Contractor
will use reasonable efforts to obtain permission for such access to
subcontractor’s facilities.
	 
	8.3	 	Remedy for Non-Compliance
	 
	 	 	Purchaser may inform Contractor in writing of any particulars in
which Purchaser observes that work being performed under this
Contract is non-compliant, and Contractor shall remedy such
non-compliance at Contractor’s expense, promptly upon receipt of
notice thereof.
	 
	8.4	 	On-Site Facilities for Purchaser’s Personnel
	 
	 	 	Subject to Article 7 and Article 8.5, for the purpose of monitoring
the progress of the work to be performed by Contractor hereunder and
otherwise confirming Contractor’s compliance with this Contract,
Contractor shall provide private office facilities at or proximate to
Contractor’s plant (which private office facilities shall in all cases
at least be co-located with Contractor’s program management office)
for ***** resident employees of Purchaser (or Purchaser’s duly
appointed representatives, consultants and agents, subject to the
prior approval of Contractor, which approval shall not be unreasonably
withheld or delayed) through a reasonable period of time after the
completion of the Satellite IOT Review of the last Satellite ordered
hereunder. The office facilities to be provided shall include *****.

					
	 	 	 	 	 
	
	 	 	 	 
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	8.5	 	*****. Foreign Persons as Purchaser Representatives
	 
	 	 	*****. Purchaser shall notify
Contractor in writing of the name, title or function, business
relationship, employer and such other information as may be reasonably
requested by Contractor, with respect to each of its intended
representatives, consultants and agents, and cause each such
representative, consultant and agent to execute a confidentiality
agreement directly with Contractor in form and substance reasonably
satisfactory to Contractor and containing terms substantially the same
as those set forth in Article 35. *****
	 
	 	 	Contractor shall apply for and, once issued, maintain all U.S.
Government export licenses and approvals needed for Purchaser’s
employees and representatives, agents and consultants who are citizens
of a country other than the U.S., to access Contractor’s and its
subcontractors’ facilities or technical data in connection with the
performance of this Contract. Purchaser shall cooperate with
Contractor and provide the support necessary for Contractor to apply
for and maintain such export licenses and approvals, and shall
promptly notify Contractor of any occurrence or change in
circumstances of which it becomes aware that is relevant to or affects
such export license and approvals. IN NO EVENT SHALL CONTRACTOR BE
OBLIGATED UNDER THIS CONTRACT TO PROVIDE ACCESS TO CONTRACTOR
FACILITIES, TO TRANSFER

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	ANY TECHNICAL INFORMATION OR DELIVERABLE DATA OR TO PROVIDE ANY
TECHNICAL SERVICES, TO ANY PERSON EXCEPT IN COMPLIANCE WITH
APPLICABLE U.S. EXPORT CONTROL LAWS, REGULATIONS, POLICIES AND
LICENSE CONDITIONS, AS REASONABLY CONSTRUED BY CONTRACTOR.
	 
	8.6	 	Interference with Operations
	 
	 	 	Purchaser shall exercise its rights under this Article 8 in a manner
that does not unreasonably interfere with Contractor’s or its
subcontractors’ normal business operations or Contractor’s performance
of its obligations under this Contract or any agreement between
Contractor and its subcontractors.
	 
	8.7	 	Notification
	 
	 	 	Notwithstanding any other provision of this Contract, Contractor shall
advise Purchaser immediately by telephone and confirm in writing any
event, circumstance or development which materially threatens the
quality of, or the delivery schedule for, any Satellite or component
part thereof, as well as any other Deliverable Items to be provided
hereunder.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 9 – SATELLITE PRE-SHIPMENT REVIEW (SPSR)

	9.1	 	Purchaser to Review
	 
	 	 	Purchaser shall conduct a review of each Satellite prior to shipment
by Contractor to the Launch Site in accordance with the terms of this
Article 9 and the Statement of Work (each a “Satellite Pre-Shipment
Review” or “SPSR”).
	 
	9.2	 	Time, Place and Notice of SPSR; Failure to Conduct
	 
	 	 	Each SPSR shall take place at Contractor’s facility. Contractor shall
notify Purchaser in writing at least ***** days prior to the
date that each Satellite shall be available for SPSR, which shall be
the scheduled date for commencement of such SPSR. If Purchaser cannot
commence such SPSR on such scheduled date, Contractor shall make
reasonable efforts to accommodate Purchaser’s scheduling
requirements.
	 
	9.3	 	Conduct and Purpose of SPSR
	 
	 	 	Each SPSR shall be conducted in accordance with the pertinent
Sections of the Statement of Work. The purpose of each SPSR shall be
to review test data and analyses for the subject Satellite to
determine whether such Satellite meets applicable Performance
Specification requirements and is therefore ready for shipment to the
Launch Site.
	 
	9.4	 	Waivers or Pending Waivers
	 
	 	 	At the earliest possible time, but at least ***** days before the
commencement of the SPSR for the Satellite or the Acceptance
inspection for any Deliverable Item pursuant to Article 11, Contractor
shall submit to Purchaser any request for a waiver of, or deviation
from, provisions(s) of the Performance Specification applicable to the
Satellite or Deliverable Item. Each such waiver or deviation approved
by Purchaser shall be deemed an amendment to the Performance

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	Specification permitting such waiver thereof, or deviation therefrom,
effective on or after the date of such approval for the Satellite or
Deliverable Item. *****
	 
	9.5	 	Purchaser’s Inspection Agents
	 
	 	 	Purchaser may, subject to prior written notice to Contractor, cause
any representative, consultant or agent designated by Purchaser to
observe the SPSR pursuant to this Article 9; provided, however, that
the provisions of Article 7 and Article 8.5 shall apply to any such
representative, consultant or agent.
	 
	9.6	 	SPSR Results
	 
	 	 	Within a reasonable time after completion of the SPSR for the
Satellite, Purchaser shall notify Contractor in writing of the results
of the SPSR pursuant to this Article 9 with respect to the Satellite.
***** such Satellite shall be prepared and shipped to the Launch
Site for Launch upon successful completion of the SPSR in accordance
with Contractor’s standard commercial practices, and Contractor shall
proceed with the Launch of such Satellite. During the period between
the successful completion of SPSR and Launch, Purchaser shall have the
continuing right to monitor, observe, evaluate and inspect the
Satellite. In the event that such SPSR discloses any non-conformance
of the Satellite to the requirements of the Performance Specification
not the subject of any waivers or deviations approved by Purchaser
pursuant to Article 9.4, Purchaser’s notice shall state each such
non-conformance (with reference to the applicable requirement of the
Performance Specification deemed not met), and Contractor shall
correct or repair each such non-

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	conformance and resubmit such Satellite for SPSR in accordance with
this Article 9 as to each corrected or repaired element.
	 
	9.7	 	Inspection Equipment and Facilities
	 
	 	 	Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser and its
agents to dispatch its personnel for pre-shipment inspections,
including travel and living expenses, shall be borne solely by *****.
	 
	9.8	 	Correction of Deficiencies after SPSR
	 
	 	 	If at any time following the SPSR for a Satellite, but prior to
Launch, Contractor becomes aware that such Satellite fails to meet
the Performance Specification, as may be modified as of such time
pursuant to Article 9.4, Contractor shall promptly correct such
deficiencies at its own cost and expense.
	 
	9.9	 	Warranty Obligations
	 
	 	 	In no event shall Contractor be released from any of its warranty
obligations as set forth in Article 15 hereof as a result of any
Satellite having successfully passed the pre-shipment inspection set
forth in this Article 9.
	 
	9.10	 	Repaired or Replaced Satellites
	 
	 	 	The provisions of this Article 9 shall apply to corrected, repaired
or replaced Satellites.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 10 – SATELLITE ACCEPTANCE

	10.1	 	Satellite Acceptance
	 
	 	 	Acceptance of a Satellite by Purchaser shall occur *****.
	 
	10.2	 	In-Orbit Test (IOT) Services
	 
	 	 	***** days prior to Launch of a Satellite, Contractor shall
notify Purchaser of the IOT schedule. Purchaser may observe IOT at
Purchaser’s or Contractor’s location, at Purchaser’s election,
subject to applicable U.S. Government or Contractor security or
export restrictions.
	 
	 	 	When, in the reasonable assessment of Contractor, IOT has been
completed for a Satellite, Contractor shall submit the IOT
results to Purchaser.
	 
	 	 	Within ***** after Contractor provides the certified
IOT results to Purchaser with respect to a Satellite, Contractor and
Purchaser shall hold a Satellite IOT Review as defined in the SOW.
	 
	 	 	Contractor may elect to conduct from Contractor’s facilities the IOT
eclipse test set forth in the Program Test Plan with respect to a
Satellite during the first eclipse season after IOT is otherwise
completed. The results of the later IOT eclipse test will be
provided to Purchaser for Satellite performance characterization and
insurance purposes only.
	 
	10.3	 	TT&C
	 
	 	 	If a Satellite experiences a material Anomaly at or prior to the point
in time when Purchaser actually assumes responsibility for performing
telemetry, tracking and control services for the relevant Satellite,
Contractor agrees to fly the Satellite until the earlier to occur of:
(i) all material anomalies being resolved; (ii) insurance for all
material

					
	 	 	 	 	 
	
	 	 	 	 
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	 	 	anomalies being paid to Purchaser; or (iii) Purchaser informing Contractor that
it desires to use the Satellite for commercial purposes (provided that, in such
instance, Contractor shall continue to fly the Satellite until such time as all
material anomalies are fully understood by both Parties and Contractor has
properly trained Purchaser how to fly the Satellite in such anomalous
condition).

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 11 – ACCEPTANCE INSPECTION FOR DELIVERABLE ITEMS

OTHER THAN SATELLITES

	11.1	 	Inspection of Deliverable Items of Hardware Other Than Satellites
	 
	 	 	With respect to each Deliverable Item of hardware other than Satellites,

Purchaser shall perform Acceptance inspection within *****  business
days after Contractor has notified Purchaser that such Deliverable Item
has arrived at the location designated for delivery thereof in Article
3.1. Such Acceptance inspection shall be conducted in accordance with the
procedures described in the Statement of Work. The purpose of the
Acceptance inspection shall be to determine whether each such Deliverable
Item meets applicable Performance Specification requirements as of the
date of such delivery, as such requirements may have been modified
pursuant to Article 11.3.
	 
	11.2	 	Purchaser’s Inspection Agents
	 
	 	 	Purchaser may, upon giving prior written notice to Contractor, cause
any representative, consultant or agent designated by Purchaser to
conduct the Acceptance inspection pursuant to this Article 11 in whole
or in part; provided, however, that the provisions of Article 7 and
Article 8.5 shall apply to any such representative, consultant or
agent and representative, consultant or such agent shall comply with
Contractor’s safety and security regulations.
	 
	11.3	 	Pending Waivers
	 
	 	 	Waivers of or deviations from the Performance Specification applicable
to any Deliverable Item subject to Acceptance inspection pursuant to
this Article 11 shall be addressed in the same manner as set forth in
Article 9.4.

					
	 	 	 	 	 
	
	 	 	 	 
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	11.4	 	Acceptance Inspection Results
	 
	 	 	Within ***** completion of Acceptance inspection
pursuant to this Article 11 for any Deliverable Item, Purchaser shall
notify Contractor in writing of the results of such Acceptance
inspection. In the event that such Acceptance inspection demonstrates
conformity of such Deliverable Item to the applicable requirements of
the Performance Specification, such Deliverable Item shall be deemed
accepted by the Purchaser for all purposes hereunder (“Acceptance”
with respect to each such Deliverable Item other than a Satellite),
and Purchaser’s notice shall so state. In the event that such
Acceptance inspection discloses any non-conformance of such
Deliverable Item to the applicable requirements of the Performance
Specification, Purchaser’s notice shall detail each such
non-conformance (with reference to the applicable requirement of the
Performance Specification deemed not met), and Contractor shall
correct or repair such non-conformance and resubmit such Deliverable
Item for Acceptance inspection in accordance with this Article 11 as
to each such corrected or repaired element.
	 
	11.5	 	Acceptance Inspection; Equipment and Facilities
	 
	 	 	Contractor shall make available to Purchaser such equipment and
facilities as Purchaser may require to conduct any preshipment
inspections. All costs and expenses incurred by Purchaser or its
agents to dispatch its personnel for acceptance inspections, including
travel and living expenses, shall be borne solely by *****.
	 
	11.6	 	Warranty Obligations
	 
	 	 	In no event shall Contractor be released from any of its warranty
obligations applicable to any Deliverable Item as a result of such
Deliverable Item having been Accepted as set forth in this Article
11.

					
	 	 	 	 	 
	
	 	 	 	 
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	11.7	 	Repair or Replace Deliverable Items.
	 
	 	 	The provisions of this Article 11 shall apply to corrected, repaired
or replaced Deliverable Items other than Satellites.
	 
	11.8	 	Deliverable Data
	 
	 	 	Purchaser shall, within ***** days of delivery by
Contractor to the location designated in Article 3.1 of Deliverable
Data requiring Purchaser approval pursuant to the Statement of Work,
notify Contractor in writing that such Deliverable Data has been
accepted in accordance with the Statement of Work (“Acceptance” with
respect to each such item of Deliverable Data), or advise Contractor
in writing that such Deliverable Data does not comply with the
applicable requirements of the Statement of Work, identifying each
particular of such non-compliance. Contractor shall promptly correct
any non-compliant aspect of such Deliverable Data described in such
Notice from Purchaser, and re-submit it to Purchaser for inspection
pursuant to this Article 11.7.

					
	 	 	 	 	 
	
	 	 	 	 
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ARTICLE 12 – DELIVERY, TITLE AND RISK OF LOSS

	12.1	 	Satellites
	 
	 	 	Delivery of the Satellite shall occur upon arrival of the Satellite
at the Launch Site, and risk of loss of, and title to, the Satellite
shall pass from Contractor to Purchaser, upon Acceptance of such
Satellite pursuant to Article 10.1.
	 
	 	 	EXCEPT WITH RESPECT TO *****, UPON AND AFTER LAUNCH OF THE LAUNCH VEHICLE FOR A
SATELLITE, CONTRACTOR’S SOLE FINANCIAL RISK, AND THE SOLE AND
EXCLUSIVE REMEDIES OF PURCHASER OR ANY PARTY ASSOCIATED WITH
PURCHASER, WITH RESPECT TO THE USE OR PERFORMANCE OF SUCH SATELLITE
(INCLUDING WITH RESPECT TO ANY ACTUAL OR CLAIMED DEFECT CAUSED OR
ALLEGED TO BE CAUSED AT ANY TIME BY CONTRACTOR OR ANY OF ITS
SUBCONTRACTORS), SHALL BE AS SET FORTH IN ARTICLES 4.1 (SOLELY WITH
RESPECT TO CONTRACTOR’S INDEMNIFICATION OBLIGATIONS), 13,15,19 AND 20.
*****
	 
	12.2	 	Deliverable Items Other Than Satellites
	 
	 	 	Delivery and risk of loss of, and title to, each Deliverable Item of
hardware other than Satellites shall pass from Contractor to Purchaser
upon Acceptance of such Deliverable Item pursuant to Article 11.4.
Purchaser’s rights in Deliverable Data are as set forth in Article 36.

					
	 	 	 	 	 
	
	 	 	 	 
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************************************

Pages 37-41 of Exhibit A to Exhibit 10.39 have been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.

 

ARTICLE 14 – RESERVED

 

					
		 	 	 	 
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ARTICLE 15 – WARRANTY

	15.1	 	Terms and Period of Warranty

	15.1.1	 	Satellites. Contractor warrants that each Satellite delivered
under this Contract shall be free from any defects in design,
material or workmanship and shall be manufactured and perform in
conformity with the Performance Specification (as may be waived
pursuant to Article 9.4) applicable to the Satellite in every
respect. Prior to Launch, Contractor shall, at its sole cost and
expense, correct any defects in design, material and workmanship
in compliance with Article 9. After Launch, Contractor’s sole
obligation and liability with respect to fulfillment of this
warranty is to *****. Nothing in this Article
15.1.1 shall be construed to limit or otherwise affect
Contractor’s obligations under Articles 19 and 20.
	 
	15.1.2	 	Deliverable Items of Hardware Other Than Satellites. Contractor
warrants that each Deliverable Item of hardware other than the
Satellite delivered under this Contract shall be manufactured and
will perform in conformity with the Performance Specification (as
may be waived pursuant to Article 11.3) applicable to such
Deliverable Item in every respect and will be free from defects
in design, materials and workmanship during the period commencing
on the date of Acceptance of such Deliverable Item pursuant to
Article 11 and ending on the ***** anniversary thereof.
	 
	15.1.3	 	Disclaimer. EXCEPT AND TO THE EXTENT PROVIDED IN ARTICLE 15.1
AND ARTICLE 15.4, CONTRACTOR HAS

					
		 	 	 	 
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	 	 	NOT MADE NOR DOES IT HEREBY MAKE ANY REPRESENTATION OR
WARRANTY, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF DESIGN,
OPERATION, CONDITION, QUALITY, SUITABILITY OR
MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR
PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, WITH REGARD TO ANY SATELLITE OR ANY OTHER
DELIVERABLE ITEM.

	15.2	 	Repair or Replacement

	15.2.1	 	Satellite Anomalies.
	 
	 	 	Contractor shall investigate any Satellite Anomaly in any
Satellite arising during the life of the Satellite, and use
reasonable best efforts to correct any such Satellite
Anomaly that is correctable by Contractor from Purchaser’s
SCF using the facilities and equipment available at such
site.
	 
	 	 	WITHOUT PREJUDICE TO PURCHASER’S RIGHTS UNDER ARTICLES 19
AND 20, CONTRACTOR SHALL HAVE NO LIABILITY TO PURCHASER OR
TO THIRD PARTIES ARISING FROM ANY ADVICE OR ASSISTANCE THAT
CONTRACTOR OR ANY SUBCONTRACTOR OR AGENT OF CONTRACTOR MAY
PROVIDE IN RESPECT OF A SATELLITE AFTER LAUNCH, REGARDLESS
OF CAUSE OR LEGAL THEORY, INCLUDING NEGLIGENCE, EXCEPT WITH
RESPECT TO: (1)*****, AND (2) PURCHASER’S RIGHTS AND CONTRACTOR’S
DUTIES AND OBLIGATIONS UNDER ARTICLES 13 and 15.2.1. IN

					
		 	 	 	 
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	 	 	*****

	 
	15.2.2	 	Deliverable Items of Hardware Other Than Satellites.
	 
	 	 	Without prejudice to Purchaser’s right and Contractor’s duties and
obligations under Articles 19 and 20, during the period specified in
Article 15.1.2 for any Deliverable Item of hardware other than a
Satellite, as Purchaser’s sole and exclusive remedy, any defect in
such Deliverable Item discovered by Purchaser shall be remedied by
Contractor at Contractor’s expense by repair or replacement of the
defective component (at Contractor’s election). For any such
Deliverable Item, Contractor shall determine if repair or replacement
is required to be performed at Contractor’s plant. If required,
Purchaser shall ship to Contractor’s designated facility any such
Deliverable Item. Contractor shall be responsible for the cost of
shipment to such facility in accordance with its standard commercial
practice (including any taxes and/or duties) of any such Deliverable
Item, and the cost of return shipment, in accordance with its
standard commercial practice, of any such Deliverable Item once
repaired or replaced to Purchaser at the location designated therefor
in Article 3.1. Risk of loss for such Deliverable Item shall transfer
to Contractor upon delivery of such Deliverable Item to the shipping
carrier by Purchaser, and risk of loss shall transfer to Purchaser
for any such Deliverable Item once repaired or replaced pursuant to
this Article 15.2.2 upon receipt thereof by Purchaser at the location
designated therefor in Article 3.1. When necessary,

					
		 	 	 	 
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	 	 	Contractor shall provide free of charge temporary equipment
to be used while a repair is being performed.

	15.3	 	Use Conditions Not Covered by Warranty
	 
	 	 	With respect to Deliverable Items of hardware other than Satellites,
the warranty under this Article 15 shall not apply if adjustment,
repair, or parts replacement is required as a result, directly or
indirectly, of *****. The
warranty provided pursuant to this Article 15 is conditioned upon
Contractor being given access, if required, to Deliverable Items
delivered at Purchaser’s facility in order to effect any repair or
replacement thereof. If the defect repaired or remedied by Contractor
is not covered by the warranty provided pursuant to this Article 15,
Purchaser shall pay Contractor the reasonable cost of such repair or
replacement, transportation charges, and a ***** percent (*****%)
profit. Such repair costs shall be invoiced to Purchaser pursuant to
the provisions of Article 5.
	 
	15.4	 	Warranty for Training and Services
	 
	 	 	Contractor warrants that the training and other services it provides
to Purchaser pursuant to this Contract will conform to reasonable
industry standards at the time such training or other services are
provided. In the event Contractor breaches this warranty, as
Purchaser’s sole remedy, Contractor shall apply reasonable efforts to
correct the deficiencies in the provision of such training and other
services where it is practicable to do so.

					
		 	 	 	 
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ARTICLE 16 – CHANGES

	16.1	 	Right to Adjustment
	 
	 	 	Purchaser may from time to time, in writing, request a change within
the general scope of this Contract to:

	a)	 	Order work in addition to the work provided for herein; or
	 
	b)	 	Modify the whole or any part of the work provided for herein.

	 	 	If such change request causes an increase or decrease in the cost, or
the time required for completion, of the work to be provided herein,
or otherwise affects any other provision of this Contract, an
equitable adjustment shall be made in the price, or delivery schedule,
or both, and this Contract shall be modified in writing accordingly.
Any claim by Contractor for adjustment under this Article 16 shall be
deemed waived unless asserted in writing within ***** days from
the receipt by Contractor of the relevant change order. If the cost of
supplies or materials made obsolete or excess as a result of a change
is included in Contractor’s claim for adjustment, Purchaser shall have
the right to prescribe the manner of disposition of such supplies or
materials. Nothing in this Article 16 shall excuse Contractor from
promptly proceeding with the Contract as changed.
	 
	16.2	 	Cost Adjustments
	 
	 	 	If Contractor or Purchaser claims a right to adjustment pursuant to
Article 16.1 above, Contractor shall prepare and furnish to Purchaser
the evidence reasonably necessary to establish the amount of any
increase or decrease in the cost of, or the time required for, the
performance of this Contract caused by the relevant change order.

					
		 	 	 	 
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	 	 	Subject to Article 16.3 below, the amount of any such cost increase or
decrease will be calculated in accordance with Contractor’s regularly
established accounting practices and include a profit margin of *****
percent (*****%). If requested by Purchaser, the amount of a particular
claim shall be verified, at ***** expense ***** by *****.
	 
	16.3	 	Equitable Adjustment
	 
	 	 	The Parties shall attempt to reach agreement as to any equitable
adjustment that is appropriate pursuant to Article 16.1 above. Without
relieving Contractor of the obligation to proceed promptly with the
Contract as changed, in the event that the Parties are unable to reach
agreement as to an equitable adjustment, the matter shall be
determined in accordance with Article 25. During the pendency of such
proceedings, Contractor shall proceed with the work required under
this Contract as changed and Purchaser shall pay Contractor all
amounts not in dispute.

					
		 	 	 	 
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ARTICLE 17 – FORCE MAJEURE

	17.1	 	Contractor and Purchaser shall not be responsible for late Delivery,
delay of the final completion date or nonperformance of its contractual
obligations due to Force Majeure. Force Majeure shall be any event beyond
the reasonable control of a Party or its suppliers and subcontractors and
shall include, but not be limited to: (1) acts of God; (2) acts of a
public enemy; (3) acts of a government in its sovereign capacity
(including any action or inaction affecting the import or export of
items); (4) war and warlike events; (5) catastrophic weather conditions
such as hurricanes, tornadoes and typhoons; (6) fire, earthquakes, floods,
epidemics, quarantine restrictions, strikes, lockouts and other industrial
disputes, sabotage, riot and embargoes; (7) ***** and (8) other unforeseen and extraordinary events, which in every case are
beyond the reasonable control and without fault or negligence of a Party
or its suppliers and subcontractors (“Force Majeure”). Upon the occurrence
of Force Majeure, an equitable adjustment shall be negotiated in the
schedule and other portions of this Contract affected by Force Majeure.
The Party affected by a Force Majeure event shall provide reasonable
notice to the other Party of a Force Majeure event. In the event that a
Force Majeure event ***** occurs that extends for ***** or
more days or that the Parties reasonably believe will extend for
***** or more days, either Party shall have the
right to terminate this Contract upon delivery of written notice to the
other party. In the event of a termination pursuant to the immediately
preceding sentence, Contractor shall refund all payments made by Purchaser
for Deliverable Items not previously Accepted by Purchaser and Purchaser
shall have no further obligation to make any further

					
		 	 	 	 
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	 	 	payments of Purchaser’s share of the Firm Fixed Price to Contractor
hereunder.
	 
	17.2	 	Special Provision For Launch Vehicle Unavailability.
	 
	 	 	Contractor intends to Launch each Satellite using a Zenit 3SL Launch
Vehicle provided by the Sea Launch Limited Partnership (a “Sea Launch”).
In the event that: (i) there is an actual or anticipated single or
cumulative postponement that results or is anticipated to result in a
schedule delay of ***** months or more from the presently scheduled Launch
date of August 7, 2003, which is caused by any reason attributable to Sea
Launch, or (ii) either of the ***** Sea Launch launches preceding the Launch
experience a Launch Vehicle Failure, then (provided that Sea Launch honors
its obligations set forth in the e-mail sent from Terry A. Bohlen to R.
Stanton Dodge on June 30, 2003, at 2:17 p.m. Mountain Time, a copy of
which has previously been provided to Contractor and a copy of which is
also attached hereto as Attachment B) Purchaser shall have the right to
direct Contractor to instead use the launch vehicle listed below that is
expected to have the ability to launch the Satellite in the shortest
period of time (plus or minus ***** after occurrence of the relevant
event described in Subsections (i) or (ii) above, taking into
consideration all relevant factors including without limitation
integration and the procurement of any and all additional licenses
necessary in connection therewith: (a) an Ariane 44L, (b) Delta IV, (c)
Atlas V or (d) Proton M/Breeze M (assuming that the Proton Breeze M can
accommodate the Satellite) (such direction a “Launch Vehicle Switch
Direction”). In the event of a Launch Vehicle Switch Direction, then
Contractor shall use its best efforts to secure the lowest price for the
substitute launch vehicle. Purchaser shall be responsible for the payment
of ***** of any additional Contractor costs between the cost of the
substitute launch vehicle only and the cost of the Zenit 3SL

					
		 	 	 	 
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	 	 	***** and shall be entitled to ***** of any reductions in Contractor
costs between the cost of the substitute launch vehicle only and the cost
of the Zenit 3SL *****, to switch from a Sea Launch to an Atlas V, Delta
IV, Proton M/Breeze M, or Ariane 44L Launch Vehicle. Upon receiving a
Launch Vehicle Switch Direction, Contractor shall procure a new Launch
Vehicle in accordance with the procedures set forth in this Article 17.2
and Contractor shall use its reasonable best efforts to ensure that such
new Launch Vehicle is available for Launch with the least delay possible.
Purchaser understands and acknowledges that in all likelihood Contractor
will not be able to Launch the Satellite on the new Launch Vehicle until
at least ***** months after Contractor receives a Launch Vehicle
Switch Direction. Contractor understands and acknowledges that in all
likelihood the launch campaigns for the launch vehicles listed in
Subsections (a) through (d) above will be at least ***** shorter
than the Launch campaign for a Zenit 3SL. Without limitation of
Contractor’s obligations under this Article 17.2, a Launch Vehicle Switch
Direction shall constitute a change requested by Purchaser for purposes
of Article 16; provided that Contractor shall not be entitled to an
equitable adjustment in price under Article 16 in connection with a
Launch Vehicle Switch Direction other than as specified in this Article
17.2.
	 
	17.3	 	Special Provision Regarding Management of Launch Services Agreement.
	 
	 	 	Contractor shall consult with Purchaser (and/or its designee), and
Purchaser shall be entitled to make recommendations to Contractor, with
respect to all technical matters relating to the Launch of the Satellite.
Purchaser (and/or its designee) shall have the right to attend and
participate in all meetings and teleconferences between the Launch Agency
and Contractor. Contractor shall provide written notice of all such
meetings and teleconferences to Purchaser (and/or its designee)

					
		 	 	 	 
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	 	 	immediately upon any such meeting or teleconference being requested or
scheduled by the Launch Agency, Contractor or any other person. Purchaser
(and/or its designee) shall have the right to review all documentation prepared
by the Launch Agency and/or Contractor in connection with the Launch of the
Satellite. Purchaser shall design and provide the payload fairing logo artwork
directly to the Launch Agency. Contractor shall consult with Purchaser, and
Purchaser shall be entitled to make recommendations to Contractor, with respect
to all customer relations functions (i.e., public relations, events, special
requests, etc.).

					
		 	 	 	 
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ARTICLE 18 – PURCHASER DELAY OF WORK

Except in the case of a Force Majeure event, if the performance of all or any
part of the work required of Contractor under this Contract is delayed or
interrupted by Purchaser’s failure to perform its contractual obligations
within the time specified in this Contract or within a reasonable time if no
time is specified, or an act by Purchaser that unreasonably interferes with
Contractor’s performance of its obligations under this Contract, Contractor
shall give notice to Purchaser of the failure or act causing such delay or
interruption. If Purchaser does not promptly cease such act or correct such
failure, this Contract shall be *****.

	 	 	 	 	 
		 	 	 	 
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ARTICLE 19 – PATENT INDEMNITY

	19.1	 	Indemnification
	 
	 	 	Purchaser agrees that Contractor has the right to defend and, at
Contractor’s sole option to settle, and Contractor, at its own
expense, hereby agrees to defend or, at Contractor’s sole option to
settle, and to indemnify and hold harmless Purchaser, and its
Affiliates, and their respective officers, directors, employees,
shareholders, agents and representatives from and against any and all
claims, actions, suits or proceedings based on an allegation that the
design or manufacture of any Deliverable Item or part thereof or the
normal intended use, lease, sale or other disposition of any
Deliverable Item or part thereof infringes any patent or other
intellectual property right (“Intellectual Property Claim”), and shall
pay any royalties and other liabilities adjudicated to be owing to the
claimant (or, in Contractor’s sole discretion, provided in settlement
of the matter) as well as costs incurred in defending (including court
costs and reasonable attorneys’ fees) such Intellectual Property
Claim; provided that Purchaser promptly notifies Contractor in writing
of any such Intellectual Property Claim and gives Contractor the
authority and all such assistance and information as may be requested
from time to time by Contractor for the defense of such Intellectual
Property Claim. Any such assistance or information which is furnished
by Purchaser at the request of Contractor shall be at Contractor’s
expense.
	 
	 	 	In any proceeding relating to an Intellectual Property Claim, any
person or entity entitled to indemnification hereunder (an
“Indemnified Party”) shall have the right to retain its own counsel at
its own expense. Notwithstanding the foregoing, Contractor shall pay
the fees and expenses of counsel retained by an Indemnified Party in
the event that: (i) Contractor and such Indemnified Party shall have
mutually

					
		 	 	 	 
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	 	 	agreed to retention of such other counsel; or (ii) the named parties
to any proceeding (including without limitation any impleaded parties)
include both Contractor and such Indemnified Party and representation
of both Contractor and such Indemnified Party by the same counsel
would be inappropriate due to actual or potential conflict of interest
between them.
	 
	19.2	 	Infringing Equipment
	 
	 	 	If the design or manufacture of any Deliverable Item or the normal
intended use, lease, sale or other disposition of any Deliverable Item
under this Contract is enjoined as a result of an Intellectual
Property Claim or is otherwise prohibited, Contractor shall (i)
resolve the matter so that the injunction or prohibition no longer
pertains, (ii) procure for Purchaser the right to use the infringing
item or (iii) modify the infringing item so that it becomes
non-infringing while remaining in compliance with the Performance
Specification (as may be waived pursuant to Article 9.4) in all
respects. If Contractor is unable to accomplish (i), (ii) or (iii) as
stated above, Purchaser shall have right to terminate this Contract
with respect to such Deliverable Item, return such Deliverable Item to
Contractor (in space, with respect to an in-orbit Satellite), and
receive a refund of the price paid for such Deliverable Item (less
amounts unpaid for such item plus a reasonable allowance for
depreciation).
	 
	19.3	 	Combinations and Modifications
	 
	 	 	Contractor shall have no liability under this Article 19 for any
Intellectual Property Claim arising solely from (i) use of any
Deliverable Item in combination with other items, unless Contractor
sold them as a combination intended to be so used or (ii)
modifications of Deliverable Items after Acceptance, unless Contractor
or one of its subcontractors (with the knowledge and consent of
Contractor) made or specifically recommended such modifications.

					
		 	 	 	 
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	19.4	 	Sole Remedies
	 
	 	 	Except in the case of ***** by Contractor, the
remedies set forth in this Article 19 are Purchaser’s sole and exclusive
remedies for or related to any Intellectual Property Claim, *****.

					
		 
	 	 	 
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ARTICLE 20 – INDEMNITY FOR BODILY INJURY AND PROPERTY DAMAGE

	20.1	 	Contractor’s Indemnification of Purchaser
	 
	 	 	Contractor shall defend, indemnify and hold harmless Purchaser, and
its Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all losses,
damages, liabilities, suits and expenses (including, but not limited
to, reasonable attorneys’ fees) (collectively “Losses”) attributable
to third party claims for bodily injury or property damage, but only
if such Losses were caused by, or resulted from, negligent acts or
omissions, Gross Misconduct or willful misconduct by Contractor or
its employees, agents, consultants or representatives. For the
avoidance of doubt, and except for Losses resulting from  ***** Contractor shall have
no indemnity obligation under this Article 20.1 for any Losses with
respect to the operation or use of a Satellite after Launch, even if
such Losses are attributable to an act or omission of Contractor or
its employees prior to Launch. *****.
	 
	20.2	 	Purchaser’s Indemnification of Contractor
	 
	 	 	Purchaser shall defend, indemnify and hold harmless Contractor, and
its Affiliates, and their respective directors, officers, employees,
shareholders, agents and representatives from and against all Losses
attributable to third party claims for bodily injury or property
damage, but only if such Losses were caused by, or resulted from,
negligent acts or omissions, Gross Negligence or willful misconduct
by Purchaser or its employees, agents, consultants or
representatives.
	 
	20.3	 	Conditions to Indemnification
	 
	 	 	The right to any indemnity specified in Article 20.1 or 20.2 shall be
subject to the following conditions:

					
		 	 	 	 
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	a.	 	The Party seeking indemnification shall promptly advise
the other
Party in writing of the filing of any suit or of any written or
oral
claim for indemnification upon receipt thereof and shall provide
the other Party, at its request, with such assistance and
information available to the indemnified party as is relevant to
the
defense of such suit or claim. Any such assistance or information
which is furnished by the indemnified Party at the request of the
indemnifying Party shall be at the indemnifying Party’s expense.
	 
	b.	 	The Party seeking indemnification shall not make any
admission
nor shall it reach a compromise or settlement without the prior
written approval of the other Party, which approval shall not be
unreasonably withheld or delayed.
	 
	c.	 	The indemnifying Party shall assist and shall have the
right to
assume, when not contrary to the governing rules of procedure,
the defense of any claim or suit in settlement thereof and shall
satisfy any judgments rendered by a court of competent
jurisdiction in such suits and shall make all settlement
payments.
	 
	d.	 	The Party seeking indemnification may participate in
any defense
at its own expense, using counsel reasonably acceptable to the
indemnifying Party, provided there is no conflict of interest and
that such participation would not adversely affect the conduct of
the proceedings.
	 
	e.	 	Notwithstanding the foregoing, the indemnifying party
shall pay
the fees and expenses of counsel retained by an indemnified
party in the event that: (i) the indemnifying party and such
indemnified party shall have mutually agreed to retention of such
other counsel; or (ii) the named parties to any proceeding
(including without limitation any impleaded parties) include both
the indemnifying party and such indemnified party and
representation of both the indemnifying party and such

					
		 	 	 	 
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	 	 	indemnified party by the same counsel would be
inappropriate due to actual or potential conflicts of
interest between them.

					
		 	 	 	 
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ARTICLE 21 – TERMINATION FOR CONVENIENCE

	21.1	 	Reimbursement of Contractor

	 	 	Purchaser may terminate this Contract without cause, in whole or in
part, by giving Contractor written notice * * * * * days prior to
the date of such termination. In the event of such termination,
Contractor will immediately cease work as directed in the termination
notice and it is agreed that the termination charges shall be
negotiated. In no event shall the termination charges pursuant to
this Article 21.1 exceed the lesser of: (i) Purchaser’s share of the
Firm Fixed Price, as the same may be modified in accordance with the
terms of this Contract, less the price of work not terminated if a
price has been established for such work; or (ii) the sum of: (x) the
amount provided in paragraph (a) below and (y) ***** of the amounts provided in paragraphs (b) through (d)
below (less (A) amounts previously paid and (B) amounts representing
Contractor’s costs of segregable items of inventory for the work
terminated hereunder not desired by Purchaser and which Contractor
elects to retain for its own use).

	a.	 	The price set forth in Article 4 for Deliverable
Items completed prior to such termination and accepted by Purchaser before or
after termination for which payment had not been made by
Purchaser.
	 
	b.	 	Actual out-of-pocket costs incurred by Contractor in
performance of work on Deliverable Items for which this Contract has been
terminated pursuant to this Article 21.1, that have not been
accepted by Purchaser or for which a price has not been
established.
	 
	c.	 	Actual out-of-pocket costs incurred by Contractor in
completing the termination process.
	 
	d.	 	Actual out-of-pocket costs incurred by Contractor in settling claims of subcontractors
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	 	 	connection with such termination; provided that Contractor shall
use reasonable efforts to minimize such costs.

	 	 	In no event will the aggregate of the amounts previously paid by
Purchaser under this Contract and the amounts to be paid by Purchaser
under this Article 21.1 exceed Purchaser’s share of the Firm Fixed
Price, as the same may be modified in accordance with the terms of
this Contract.

	21.2	 	Partial Termination

	 	 	If the termination by Purchaser is partial, the price for the
non-terminated portion of this Contract shall be increased by an
amount equal to the reasonable additional actual, out-of-pocket costs,
if any, which must be borne by such portion because of the partial
termination, plus a ***** profit on such additional costs; however, in
no event will the aggregate of the amounts previously paid by
Purchaser under this Contract and the amounts to be paid by Purchaser
for the non-terminated portion of this Contract, as increased under
this Article 21.2, exceed Purchaser’s share of the Firm Fixed Price,
as the same may be modified in accordance with the terms of this
Contract.

	21.3	 	Title Transfer

	 	 	In the event of a termination pursuant to this Article 21, a
termination settlement meeting shall be held at a mutually agreed time
and place no later than * * * * * days after submission of a claim by
Contractor pursuant to Article 21.1. At or prior to the date of such
termination settlement meeting, Contractor shall provide Purchaser
with such documentation of the costs set forth in Articles 21.1 and
21.2 as Purchaser may reasonably request. Upon mutual agreement of the
termination settlement, Contractor may submit an invoice to Purchaser
for payment in accordance with the terms of Article 5.2. Upon mutual
agreement of the termination settlement, subject to applicable U.S.
Government export laws, Contractor shall, at Contractor’s or
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	subcontractor’s plant, transfer title and risk of loss to Purchaser
of all Deliverable Items referred to in Article 21.1 (a), and all
other partially completed or incomplete Deliverable Items for which
Contractor is entitled to payment under this Article 21 at the time
of the termination settlement. Purchaser may direct Contractor to
undertake to reallocate to other uses, and/or to otherwise assist
Purchaser in disposing/selling, items subject to termination under
this Article 21 for the purpose of receiving a price refund or offset
against Contractor’s termination claim. Upon receipt of such
direction, Contractor shall, on a * * * * * efforts basis, attempt
to reallocate, and/or to otherwise assist Purchaser in
disposing/selling, the items and provide a refund (in cases where the
amounts generated are greater than Contractor’s termination claim) to
Purchaser or an offset (in cases where the amounts generated are less
than or equal to Contractor’s termination claim) against Contractor’s
termination claim, less any reasonable selling expenses.

	21.4	 	Minimize Termination Costs

	 	 	In the event of termination pursuant to this Article 21, Contractor
shall take all actions necessary to reduce the termination costs due
from Purchaser, including but not limited to, the immediate
discontinuance of the terminated work under this Contract and the
placing of no further orders for labor, materials or services
required under the terminated portion of the Contract. Contractor
agrees to take such action as may be necessary or as Purchaser may
direct for protection of property in Contractor’s possession in which
Purchaser may have acquired an interest.

	21.5	 	Continued Efforts

	 	 	Contractor shall continue performance of the portion of this Contract
not terminated. Purchaser shall have no obligations to Contractor
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	 	 	respect to the terminated portion of this Contract except as set forth
in this Article 21.

	21.6	 	Settlements

	 	 	Contractor agrees to advise Purchaser in writing of all proposed
settlements with vendors in excess of * * * * * in the event of termination under this Article 21, and
Contractor further agrees not to enter into any binding settlements
until Purchaser has approved the proposed settlement or * * * * *
days have elapsed from the date Purchaser was first notified of such
proposed settlement.

	21.7	 	Measurement of Costs

	 	 	Costs shall be determined in accordance with generally accepted
accounting principals and verified by an independent certified
accounting firm of national reputation mutually acceptable to
Purchaser and Contractor with costs therefor * * * * *.
	 
	 	 	 

					
	
	 	 	 	 
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************************************

Pages 64-65 of Exhibit A to Exhibit 10.39 have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential treatment.

 

 

ARTICLE 23 – DEFAULT

	23.1	 	Failure to Perform by Contractor

	 	 	Subject to Article 23.4 below, if: (i) Delivery of a Satellite does
not occur within the time specified for delivery thereof * * * * *; (ii) Acceptance of any other Deliverable Item does not
occur within the time specified for delivery thereof in this Contract
(or, in either case, such longer time as may be agreed to in writing
by Purchaser), or (iii) Contractor fails to prosecute the work
hereunder or to perform any other material provision of this Contract,
thereby endangering performance of this Contract within the time
period set forth in Subsection (i) above, * * * * *. Purchaser may terminate
this Contract in whole or in part by written notice to Contractor.

	23.2	 	Termination Liability

	 	 	In the event of a termination for default pursuant to Article 23.1,
Contractor shall refund all payments made by Purchaser for the
terminated work except with respect to items referred to in Article
23.3, plus * * * * *. In addition, Contractor shall pay to Purchaser
all excess costs above the prices set forth herein reasonably incurred
by Purchaser in reproducing the work and Deliverables described
herein, according to the delivery schedules set forth herein. Such
refund, * * * * * and excess reprocurement costs shall be
Purchaser’s sole remedy in case of a termination pursuant to Article
23.1, except in the case of * * * * *
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	* * * * *.

	23.3	 	Partially Completed Items and Work In Process; Contractor’s
Reimbursement for Terminated Work

	 	 	In the event of termination pursuant to Article 23.1, upon
Purchaser’s request, Contractor shall deliver to Purchaser all
partially completed items or services and work-in-process.
	 
	 	 	In the event of termination pursuant to Article 23.1, Contractor
shall not be required to refund any amounts, and Purchaser shall
remain liable for payment of all amounts, with respect to Deliverable
Items for which Acceptance has occurred pursuant to the terms of
Article 10 or Article 11, or that are retained by Purchaser whether
or not completed, as follows: (i) at the price set forth in this
Contract for such items for which an itemized price is set forth
herein and (ii) at the reasonable out-of-pocket cost incurred by
Contractor for (a) such items for which no itemized price is set
forth herein and (b) partially completed items or services and
work-in-progress.

	23.4	 	Invalid Default Termination

	 	 	If, after termination pursuant to Article 23.1, it is finally
determined by arbitration, legal proceeding or mutual agreement that
Contractor was not in default, or that the default was excusable, the
rights and obligations of the Parties shall be the same as if the
termination had occurred under Article 21; except that, * * * * *.

	23.5	 	Contractor Termination

	 	 	Contractor may terminate this Contract upon Purchaser’s failure to
comply with any material provision of this Contract by giving written
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	notice to Purchaser of its intention to so terminate. Such notice shall
        set forth the provision or provisions with which Purchaser has failed
        to comply and a reasonably detailed description of such failure. Such
        termination shall become effective upon Purchaser’s failure to correct
        such nonperformance within ***** days (or such longer period as may
        be agreed to in writing by Contractor) after receipt of such notice from
        Contractor.
	 
	 	 	In the event of termination pursuant to this Article 23.5, Contractor
        shall be paid as if the termination were for convenience pursuant to Article 21.
        Further, and without limiting Contractor’s other rights or remedies,
        Contractor may *****. In such case, the fair market value of any Deliverable
        Items or Contract work-in-progress retained by Contractor shall be offset
        against Purchaser’s termination liability. If, after termination
        pursuant to this Article 23.5, it is finally determined by arbitration
        pursuant to Article 25 that Purchaser did not fail in the performance
        of its obligations under this Contract, Contractor shall be liable to
        Purchaser for ***** resulting from such termination of this Contract (in
        no event exceeding amounts payable to Purchaser pursuant to Articles 23.2
        and 23.3, except in the case of *****.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 24 – RESERVED

 

					
	
	 	 	 	 
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ARTICLE 25 – ARBITRATION

	25.1	 	Arbitration

	 	 	Any dispute (except as set forth in Article 25.2) arising between the
Parties with respect to the performance of obligations under, or
interpretation of, this Contract that cannot be settled by negotiation
between the Parties within ***** days of written notice from one
Party to the other stating such first Party’s intent to resort to
arbitration (“Notice of Arbitration”), shall be determined by submission
to binding arbitration in accordance with the provisions of the “Uniform
Arbitration Act of 1975”, part 2 of article 22 of title 13, Colorado
Revised Statutes, as amended from time to time, and not by a lawsuit or
resort to court process except as Colorado law provides for judicial
review of arbitration proceedings. Any such arbitration shall be
conducted in the City and County of Denver, Colorado by a panel of three
arbitrators who shall be selected within ***** days of such Notice
of Arbitration, as follows: (i) one arbitrator shall selected by each
Party; and (ii) the third arbitrator shall be selected by the arbitrators
chosen by the Parties. In resolving any dispute, the arbitrators shall
apply the substantive laws of the State of New York (without regard to
its conflict of law rules), ***** and shall take into account
usages, customs and practices in the performance of contracts for the
purchase and sale of commercial communications satellites. Proceedings
and documents provided and generated in connection with any arbitration
hereunder shall be in the English language. Each Party shall bear its own
costs and expenses (including the costs and expenses of the arbitrator it
selected) and one-half of the costs and expenses of the third arbitrator,
unless otherwise determined in the arbitral award. The parties agree
that, in no event, shall the arbitrators’ decision include a recovery
under any theory of liability, or award in any amount, not expressly
allowed under this Contract. In furtherance and without
	 
	 	 	 

					
	
	 	 	 	 
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		 	Limitation of the foregoing, any award made by the arbitrators shall be
*****.

	25.2	 	*****
	 
	 	 	 

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

	26.1	 	Launch Services Agreement Inter-Party Waiver of Liability

	 	 	The Parties hereby agree to be bound by the no-fault, no-subrogation
inter-party waiver of liability and related indemnity provisions
provided in the Launch Services Agreement with respect to the Launch
of the Satellite and to use reasonable commercial efforts to cause
their respective contractors and subcontractors at any tier
(including suppliers of any kind) that are involved in the
performance of this Contract and any other person having an interest
in the Satellite or any Transponder thereon (including customers of
Purchaser), as required by the Launch Services Agreement and as
specified by Buyer, to accede to such waiver. The Parties shall
execute and deliver any instrument that may be required by the Launch
Agency to evidence their agreement to be bound by such waiver.
Purchaser and Contractor also shall use reasonable commercial efforts
to obtain, from their insurers, and shall use reasonable commercial
efforts to cause their respective contractors and subcontractors at
any tier (including suppliers of any kind) that are involved in the
performance of this Contract and any other person having an interest
in any Satellite or any Transponder thereon (including customers of
Purchaser) to obtain from their insurers, as required by the Launches
Services Agreement and as specified by Buyer, an express waiver of
such insurers’ rights of subrogation, subject to terms and conditions
as are then customarily available regarding such waivers, with
respect to any and all claims that have been waived pursuant to this
Article 26.

	26.2	 	Indemnity Related to the Inter-Party Waiver of Liability

	 	 	Each Party shall indemnify against and hold the other Party harmless
from any claim against the other Party, its contractors and
subcontractors at any tier (including suppliers of any kind) that are
involved in the performance of this Contract, made by the Launch
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	Agency or any of its contractors and subcontractors (including
suppliers of any kind) that are involved in the performance of the
Launch Services Agreement, resulting from the failure of the first
Party to waive any liability against, or to use reasonable commercial
efforts to cause any other person such Party is obligated to use
reasonable commercial efforts to cause to waive any liability against,
the Launch Agency or its contractors and subcontractors at any tier
(including suppliers of any kind).

	26.3	 	Survival of Obligations

	 	 	The indemnification and hold harmless obligations provided in this
Article 26 shall survive and remain in full force and effect,
notwithstanding the expiration or termination of this Contract.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 27 – CORRECTIVE MEASURES

	27.1	 	Unclenched Satellites

	 	 	If the performance data from any launched satellite manufactured by
Contractor shows that such launched satellite will not or may not
meet the performance specifications for such launched satellite at
any time during its mission, then Contractor shall, at its sole cost
and expense, if applicable, take appropriate corrective measures in
the Satellite before it is Launched so as to eliminate therefrom the
deficiencies noted in the launched satellite.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 28 – RESERVED

 

					
	
	 	 	 	 
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ARTICLE 29 – *****

 

					
	
	 	 	 	 
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ARTICLE – 30 *****

30.1

					
	
	 	 	 	 
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ARTICLE 31 – RESERVED

 

					
	
	 	 	 	 
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ARTICLE 32 – RESERVED

 

					
	
	 	 	 	 
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ARTICLE 33 – GROUND STORAGE

	33.1	 	Notification

	 	 	Purchaser may direct Contractor to store the Satellite after
completion of SPSR.

	33.2	 	Storage Location

	 	 	Ground Storage shall be performed at a Contractor controlled facility
and shall be conducted in accordance with the satellite storage plan
section(s) of the Statement of Work.

	33.3	 	Storage Prices

	 	 	There shall be no charge for storage and reverification work if the
Contractor’s failure to perform is the reason the Satellite is stored,
or if the Satellite is stored for less than ***** months.
	 
	 	 	The firm fixed price for Ground Storage of the Satellite in all other
circumstances shall be ***** per month storage cost while the Satellite is in Ground Storage. In addition,
Purchaser shall also pay directly or reimburse Contractor for all reasonable costs related to re-verification of system flight
assurance and re-verification testing (plus a *****) and for all reasonable additional costs which Contractor would not have incurred had
Purchaser not elected Ground Storage of the Satellite (including taxes, tariffs, duties, transportation, insurance, and Launch preparation
service-related expenses).
	 
	 	 	 

					
	
	 	 	 	 
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	33.4	 	Payments

	 	 	Payments shall be made on the thirtieth day of each month for the
prior month’s storage, provided an invoice is received at least
***** days prior to the payment date.

	33.5	 	Title and Risk of Loss

	 	 	Title and risk of loss to a Satellite delivered for Ground Storage
shall remain with Contractor at the storage site. Contractor shall
assume full responsibility for any loss or damage to the Satellite
during Ground Storage.

	33.6	 	Notification of Intention to Launch a Previously Stored Satellite

	 	 	Purchaser shall notify Contractor in writing that a Satellite in
Ground Storage should be removed from Ground Storage and delivered to the
Launch Site. This notification must be received by Contractor not
less than ***** prior to the scheduled date for Delivery to the
Launch Site of the Satellite. Failure to notify Contractor in a
timely manner will result in an adjustment to the Delivery schedule for such
Satellite. Contractor shall use its reasonable best efforts to obtain the
next available Launch slot, subject to completion of all necessary
verification tests.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 34 – LIMITATION OF LIABILITY

	 	 	NEITHER PARTY SHALL BE LIABLE DIRECTLY OR INDIRECTLY TO THE OTHER PARTY OR ITS
AFFILIATES, OR THEIR OFFICERS, DIRECTORS, EMPLOYEES, CONTRACTORS OR
SUBCONTRACTORS AT ANY TIER (INCLUDING SUPPLIERS OF ANY KIND), AGENTS OR
CUSTOMERS, TO ITS PERMITTED ASSIGNEES OR SUCCESSOR OWNERS OF ANY SATELLITE OR
OTHER DELIVERABLE ITEM OR TO ANY OTHER PERSON CLAIMING BY OR THROUGH SUCH PARTY
FOR ANY AMOUNTS REPRESENTING LOSS OF PROFITS, LOSS OF BUSINESS, OR INDIRECT,
SPECIAL, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING
WITHOUT LIMITATION LOST PROFITS, LOST REVENUES OR COSTS OF RECOVERING A
SATELLITE (EXCEPT WITH RESPECT TO A THIRD PARTY’S DAMAGES FOR WHICH A PARTY HAS
AN INDEMNIFICATION OBLIGATION UNDER ARTICLE 19 OR 20), ARISING FROM OR RELATING
TO THE PERFORMANCE OR NONPERFORMANCE OF THIS CONTRACT OR ANY ACTS OR OMISSIONS
ASSOCIATED THEREWITH OR RELATED TO THE USE OF ANY ITEMS DELIVERED OR SERVICES
FURNISHED HEREUNDER, WHETHER THE BASIS OF SUCH LIABILITY IS BREACH OF CONTRACT,
TORT, STATUTE OR OTHER LEGAL OR EQUITABLE THEORY, EXCEPT THAT IN THE EVENT OF
*****.
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	 *****.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 35 – DISCLOSURE AND HANDLING OF PROPRIETARY

INFORMATION

	35.1	 	Definition of Proprietary Information

	 	 	For the purpose of this Contract, “Proprietary Information” means all
information (other than Deliverable Data, which is subject to the
provisions of Article 36), in whatever form transmitted, that is
disclosed by such Party (hereinafter referred to as the “disclosing
party”) to the other Party hereto (hereinafter referred to as the
“receiving party”) relating to the performance by the disclosing
party of this Contract and: (i) is identified as proprietary by means
of a written legend thereon, or (ii) if disclosed orally, is
identified as proprietary at the time of initial disclosure.
Proprietary Information shall not include any information disclosed
by a Party that (i) is already known to the receiving party at the
time of its disclosure, as evidenced by written records of the
receiving party, without an obligation of confidentiality at the time
of disclosure; (ii) is or becomes publicly known through no wrongful
act of the receiving party; (iii) is independently developed by the
receiving party as evidenced by written records of the receiving
party; (iv) such Party is legally compelled to disclose; or (v) is
obtained from a third party without restriction and without breach of
this Contract.

	35.2	 	Terms for Handling and Use of Proprietary Information

	 	 	For a period of ***** years after receipt of any Proprietary
Information (or until such time as such Proprietary Information
becomes publicly known as provided in Article 35.1), the receiving
party shall not disclose Proprietary Information that it obtains from
the disclosing party to any person or entity except its and Skynet’s
employees and agents who have a need to know in order to perform
under this Contract and who have been informed of and have agreed to
abide by the receiving party’s obligations under this Article 35. The
receiving party shall use not less than the same degree of care to
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	avoid disclosure of such Proprietary Information as it uses for its
own Proprietary Information of like importance; but in no event less
than a reasonable degree of care. Proprietary Information shall be
used only for the purpose of performing the obligations under this
Contract, or as the disclosing party otherwise authorizes in writing.
	 
	 	 	IN NO EVENT SHALL EITHER PARTY DISCLOSE OR TRANSFER TECHNICAL
INFORMATION OR PROVIDE TECHNICAL SERVICES TO INSURANCE BROKERS,
UNDERWRITERS OR OTHER THIRD PERSONS OR ENTITIES WITHOUT THE OTHER
PARTY’S PRIOR WRITTEN APPROVAL (WHICH SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED) AND, WHERE REQUIRED, PRIOR APPROVAL OF THE U.S.
DEPARTMENT OF STATE.

	35.3	 	Legally Required Disclosures

	 	 	Notwithstanding the foregoing, in the event that the receiving party
becomes legally compelled to disclose Proprietary Information of the
disclosing party, including this Contract or other supporting
document(s), the receiving party shall, to the extent practicable
under the circumstances, provide the disclosing party with written
notice thereof so that the disclosing party may seek a protective
order or other appropriate remedy, or to allow the disclosing party to
redact such portions of the Proprietary Information as the disclosing
party deems appropriate. In any such event, the receiving party will
disclose only such information as is legally required, and will
cooperate with the disclosing party (at the disclosing party’s
expense) to obtain confidential and proprietary treatment for any
Proprietary Information being disclosed.
	 
	 	 	 

					
	
	 	 	 	 
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	35.4	 	Title; Return

	 	 	All Proprietary Information disclosed under this Contract in tangible
form (including without limitation information incorporated in
computer software or held in electronic storage means) shall be and
remain the property of the disclosing party. All notes, memoranda or
other materials created or fabricated by the receiving party,
including without limitation evaluations, based upon Proprietary
information or prepared by the receiving party which includes
Proprietary Information shall be considered Proprietary Information
for all purposes under this Contract. Upon request of the disclosing
party, all such Proprietary Information shall be returned to the
disclosing party or shall be destroyed by the receiving party and
shall not thereafter be retained in any form by the receiving party.
Upon request of the disclosing party, the receiving party shall
certify in writing that such party has either returned or destroyed
all Proprietary Information previously received from the disclosing
party. The rights and obligations of the parties under this Article
35 shall survive any such return or destruction of Proprietary
Information.

	35.5	 	Specific Performance

	 	 	The parties acknowledge and agree that the unauthorized use or
disclosure by the receiving party of any Proprietary Information
disclosed by the disclosing party would result in irreparable injury
to the disclosing party. The parties agree that the disclosing
party shall, in addition to and not in lieu of any other available
legal or equitable remedies or damages, be entitled to a temporary
injunction
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	to restrain threatened or actual breaches of the terms of this
Article 35 by the receiving party, its agents, employees,
representatives and all other persons acting for any of the
above-mentioned persons or entities.

	35.6	 	Disclosure of Contract Terms

	 	 	Notwithstanding anything to the contrary in this Article 35, and
subject to applicable export restrictions, the terms and conditions of
this Contract may not be disclosed by either Party to any person
except with the prior written consent of the other Party, provided, in
each case, that the recipient of such information agrees to treat such
information as confidential and executes and delivers a
confidentiality agreement reasonably acceptable to both Parties or is
otherwise subject to confidentiality obligations reasonably
satisfactory to both Parties; provided, further, that either Party
shall have the right to disclose such information as is required under
applicable law or the binding order of a court or government agency;
and provided further that Purchaser shall have the right to disclose
any or all of the terms and conditions of this Contract to Skynet and
to its and Skynet’s insurance brokers and underwriters as Purchaser
deems necessary in its sole judgment.
	 
	 	 	 

					
	
	 	 	 	 
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ARTICLE 36 – INTELLECTUAL PROPERTY RIGHTS - RIGHTS IN DATA

	36.1	 	Intellectual Property Rights

	 	 	Contractor hereby grants to Purchaser a fully-paid up, royalty free,
irrevocable, and non-exclusive license to practice and have practiced
throughout the world exclusively for the purpose of (i) operating,
maintaining or using the Deliverable Items, or (ii) developing,
operating, maintaining or using ground equipment with such Deliverable
Items any inventions (including without limitation software), whether
patented or unpatented or otherwise subject to intellectual property
protections, now or hereafter owned by Contractor, or to which
Contractor has or may acquire rights, which inventions are
incorporated in any Deliverable Item or required in order to practice
or have practiced any invention incorporated in any Deliverable Item.

	36.2	 	Rights in Data

	 	 	Contractor shall retain title to all Deliverable Data utilized or
developed by Contractor during the performance of this Contract.
Subject to U.S. export regulations and applicable export
restrictions, Purchaser’s officers, directors, employees, consultants
and representatives shall have the non-exclusive right to obtain and
use the Deliverable Data for any and all purposes related to the
testing, operation, use and maintenance of the Satellite. With the
sole exception of Skynet, Purchaser’s officers, directors, employees,
consultants and representatives shall not disclose Deliverable Data
to other companies, organizations or persons without the express
prior written consent of Contractor, which consent shall not be
unreasonably withheld or delayed. Purchaser shall have no rights in
Deliverable Data other than as expressly stated in this Contract, and
title to
	 
	 	 	 

					
	
	 	 	 	 
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	 	 	Deliverable Data shall not pass to Purchaser or any other
entity pursuant to the terms hereof.

	36.3	 	No Additional Obligation

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

					
	
	 	 	 	 
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ARTICLE 37 – PUBLIC RELEASE OF INFORMATION

Either Party intending to disclose publicly whether through the issuance of
news releases, articles, brochures, advertisements, prepared speeches or other
information releases concerning this Contract or the transactions contemplated
herein shall obtain the prior written approval of the other Party with respect
to the content and timing of such issuance. A Party’s approval under this
Article 37 shall not be unreasonably delayed or denied. Notwithstanding the
above, either Party may release information described herein as required by
securities laws or other applicable laws.

	 	 	 	 	 	 	 
	

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ARTICLE 38 – NOTICES

	38.1	 	Written Notification

Each notice or correspondence required or permitted to be given
hereunder shall be given in writing (except where oral notice is
specifically authorized) to the respective addresses or facsimile
numbers and to the attention of the individuals set forth below by
facsimile transmission, overnight courier or first class registered
or certified mail, return receipt requested, postage prepaid. The
sending of such notice with confirmation of successful receipt of the
complete transmission (in the case of facsimile transmissions) or
receipt of such notice (in the case of delivery by first class
registered or certified mail or by overnight courier service) shall
constitute the giving thereof.

In the case of Purchaser:

Echostar Orbital Corporation II

5701 South Santa Fe Drive

Littleton, CO 80120

Attn: David Moskowitz, Esq.

Telephone No.: (303) 723-1040

Facsimile No.: (303) 723-1608

With a separately delivered copy to:

Charlie Ergen and Rohan Zaveri

(at the same address)

	 	 	 	 	 	 	 
	

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In the case of Contractor:

Space Systems/Loral, Inc.

3825 Fabian Way, Mailstop G-28

Palo Alto, CA 94303-4697

Attn.: Karen Carissimi

Telephone No.: (650) 852-5403

Facsimile No.: (650) 852-4623

	38.2	 	Change of Address
	 
	 	 	Either Party may from time to time change its notice address or the
persons to be notified by giving the other Party written notice (as
provided above) of such new information and the date upon which such
change shall become effective.

	 	 	 	 	 	 	 
	

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ARTICLE 39 – RISK MANAGEMENT

	39.1	 	Contractor, using Willis or such other broker as may be designated by
Purchaser from time to time as its broker, shall use its reasonable best
efforts to obtain quotes for launch and/or in-orbit insurance on such
terms and conditions (including without limitation the sum insured) as
Purchaser may from time to time request. In the event that Purchaser, in
its sole discretion, elects to accept one of the quotes obtained by
Contractor, then Purchaser shall direct Contractor in writing to procure
such insurance (the “Insurance Policy”). Upon Contractor’s receipt of such
written request, Contractor shall promptly procure the Insurance Policy.
Upon procurement of the Insurance Policy, this Contract shall be modified
to incorporate the price of the Insurance Policy (on a pass-through basis,
without Contractor mark-up) and the Payment Plan attached hereto as
Exhibit A shall be updated accordingly to reflect that Purchaser’s payment
to Contractor of any amounts due under the Insurance Policy from
Contractor shall be made *****.
	 
	39.2	 	Purchaser shall be the named insured and loss payee under
any insurance policy placed by Contractor under this Article 39. In
the event that, notwithstanding the foregoing, any loss is paid to
Contractor under the Insurance Policy, then Contractor agrees to hold
such amounts in trust for Purchaser and to pay such amounts to
Purchaser within ***** days after Contractor receives the

	 	 	 	 	 	 	 
	

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	 	 	corresponding payment from the insurers and, for the avoidance of
doubt, Contractor shall only be obligated to make payment to Purchaser
under this Article 39.2 to the extent that Contractor receives payment
from the insurers. Notwithstanding the foregoing, Contractor shall
reasonably cooperate with Purchaser in recovering all amounts due from
the insurers under the Insurance Policy, in which case Purchaser shall
be entitled to direct and control any litigation and settlement
negotiations arising in connection therewith and Purchaser shall
(whether incurred by Purchaser or Contractor) pay all costs of
litigation and administrative costs and expenses, including attorney’s
fees, incurred in connection with the prosecution of any such
litigation. Purchaser shall comply with all material terms and
conditions in the Insurance Policy necessary for the payment of
claims, including any terms and conditions relating to salvage.
	 
	39.3	 	Regardless of whether Purchaser or Contractor is attempting to
procure insurance regarding risks relating to the Launch or in orbit
operation of the Satellite, Contractor shall, at its own cost and
expense, timely provide all reasonable assistance requested by
Purchaser in connection with the procurement of insurance for a
Satellite, provide such Contractor information regarding a Satellite as
is reasonably requested by Purchaser’s or Contractor’s brokers and
underwriters, and perform technical presentations to brokers and
underwriters. In addition, Contractor shall provide such Contractor
information regarding a Satellite as is reasonably requested by the
insurer(s) of a Satellite and will cooperate in any insurance reviews.
	 
	39.4	 	Contractor shall obtain and at all times maintain insurance coverage
against all risks of loss and damage to a Satellite and its
components
during the period from EDC until Launch in an amount equal to the
then-current amount necessary to pay all amounts owing to Purchaser
hereunder in the event of loss or destruction of the applicable
Satellite.

	 	 	 	 	 	 	 
	

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	39.5	 	Third Party Indemnity Insurance
	 
	 	 	Contractor shall cause Purchaser to be named as an additional insured
under any and all insurance policies procured by the Launch Agency
with respect to the Launch of any Satellite.
	 
	39.7	 	Other Insurance Terms
	 
	 	 	Contractor shall have Purchaser and/or its designees named as an
additional insured on the insurance policy referenced in Articles 39.4
above. Contractor agrees to furnish to Purchaser certificates of
insurance and the underlying policies evidencing that all insurance
required pursuant to Articles 39.4 is in full force and effect.
Contractor covenants and agrees not to change any of the material
terms and conditions of said policies of insurance which are relevant
to this Contract without first obtaining the written consent of
Purchaser (which consent shall not be unreasonable withheld). The
certificates of insurance and underlying policies shall contain an
endorsement setting forth that the insurer cannot terminate or
materially amend the provisions of the insurance without prior written
notification to Purchaser at least ***** days before such
termination or amendment. Contractor shall use reasonable commercial
efforts to cause such insurance policies to contain a waiver of
subrogation rights by the insurer against Purchaser, its Affiliates
and their owners, officers, directors, employees, agents,
subcontractors, and customers.

	 	 	 	 	 	 	 
	

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ARTICLE 40 – ORDER OF PRECEDENCE

In the event of conflict among the terms of the Preamble, Articles 1 to 46 and
the Attachments to this Contract, on the one hand, and the Exhibits, on the
other hand, the following order of decreasing precedence shall apply:

	•	 	This Contract (Preamble and Articles 1 through 46 and
Attachments
A and B)
	 
	•	 	Exhibit A     Statement of Work
	 
	•	 	Exhibit B     Performance Specification
	 
	•	 	Exhibit C     Product Assurance Program Plan
	 
	•	 	Exhibit D     Test Plan

	 	 	 	 	 	 	 
	

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ARTICLE 41 – GENERAL

	41.1	 	Binding Effect; Assignment
	 
	 	 	This Contract shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. Except
as otherwise expressly set forth to the contrary herein, this Contract
may not be assigned, either in whole or in part, by either Party
without the express written approval of the other Party. Such approval
shall not be unreasonably withheld or delayed. Contractor may require,
as a condition of approving an assignment by Purchaser, that the
proposed assignee establish irrevocable letters of credit, guarantees
or other comparable assurances satisfactory to Contractor prior to
such assignment becoming effective and that Purchaser remain primarily
or secondarily liable hereunder. Either Party, upon prior written
notice to the other Party, may grant security interests in its rights
hereunder to lenders that provide financing for the performance by
such Party of its obligations under this Contract or for the subject
matter hereof. In the event that either Party is sold to or merged
into another entity that shall be deemed an assignment requiring the
other party’s approval hereunder. Notwithstanding anything to the
contrary herein, Purchaser may assign this Contract, in whole or in
part without Contractor’s approval and without regard to the
conditions set forth in the fourth sentence of this Article 41.1, to a
person or entity that directly or indirectly controls, is controlled
by or is under common control with Purchaser.
	 
	41.2	 	Severability
	 
	 	 	If any provision of this Contract is declared or found to be illegal,
unenforceable or void, the Parties shall negotiate in good faith to
agree upon a substitute provision that is legal and enforceable and is
as nearly as possible consistent with the intentions underlying the
original

	 	 	 	 	 	 	 
	

	 	 	97	 	 	 
	 
	 	 	 	 	 	 
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	 	 	provision. If the remainder of this Contract is not materially
affected by such declaration or finding and is capable of substantial
performance, then the remainder shall be enforced to the extent
permitted by law.
	 
	41.3	 	Captions
	 
	 	 	The captions contained herein are for purposes of convenience only
and shall not affect the construction of this Contract.
	 
	41.4	 	Relationships of the Parties
	 
	 	 	It is expressly understood that Contractor and Purchaser intend by
this Contract to establish the relationship of independent
contractors only, and do not intend to undertake the relationship of
principal and agent or to create a joint venture or partnership or
any other relationship, other than that of independent contractors,
between them or their respective successors in interests. Neither
Contractor nor Purchaser shall have any authority to create or
assume, in the name or on behalf of the other Party, any obligation,
expressed or implied, or to act or purport to act as the agent or the
legally empowered representative of the other Party, for any purpose
whatsoever.
	 
	41.5	 	Entire Agreement
	 
	 	 	The original contract between EchoStar Orbital Corporation (“EOC”)
and Space Systems/Loral, Inc. dated February 22,2000, regarding the
EchoStar 9 Satellite Program (121° W.L.), as previously amended (the
“Original Contract”), is hereby amended, restated and superceded in
its entirety by this Amended and Restated Contract effective as of
July 1, 2003. This Amended and Restated Contract including all
Exhibits and the Attachments hereto, represents the entire
understanding and agreement between the Parties hereto with respect
to the subject matter hereof, and supersedes all prior negotiations
and agreements with respect to the subject matter hereof. This
Contract may not be modified or amended, and the Parties’ rights and
obligations may not

	 	 	 	 	 	 	 
	

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	 	 	be waived, except by the written agreement of both Parties. EOC
assigned the Original Contract in whole to Purchaser (an entity under
common control with EOC) effective as of November 14, 2002 (the
“Assignment”). Although not required under Section 41.1 but for the
avoidance of doubt, Contractor hereby grants its express written
approval of the Assignment.
	 
	41.6	 	Standard of Conduct
	 
	 	 	Both Parties agree that all their actions in carrying out the
provisions of this Contract shall be in compliance with applicable
laws and regulations and neither Party will pay or accept bribes,
kickbacks or other illegal payments, or engage in unlawful conduct.
	 
	41.7	 	Construction
	 
	 	 	This Contract, the Exhibits and the Attachment hereto have been
drafted jointly by the Parties and in the event of any ambiguities
in the language hereof, there shall be no inference drawn in favor
of or against either Party.
	 
	41.8	 	Counterparts
	 
	 	 	This Contract may be signed by facsimile and in any number of
counterparts with the same effect as if the signature(s) on each
counterpart were upon the same instrument.
	 
	41.9	 	Applicable Law
	 
	 	 	This Contract shall be interpreted, construed and governed, and the
rights of the Parties shall be determined, in all respects, according
to the laws of the State of New York without regard to its conflict
of law rules.

	 	 	 	 	 	 	 
	

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	41.10	 	Survival
	 
	 	 	Termination or expiration of this Contract for any reason shall not
release either Party from any liabilities or obligations set forth in
this Contract that (i) the Parties have expressly agreed shall
survive any such termination or expiration or (ii) remain to be
performed or by their nature would be intended to be applicable
following any such termination or expiration.
	 
	41.11	 	U.N. Convention on the International Sales of Goods
	 
	 	 	The U.N. Convention on the International Sales of Goods shall not
apply or otherwise have any legal effect with respect to this
Contract.
	 
	41.12	 	Waiver
	 
	 	 	No delay or omission by either party to exercise any right or power
shall impair any such right or power or be construed to be a waiver
thereof. No payment of money by any person or entity shall be
construed as a waiver of any right or power under this Contract. A
waiver by any party of any of the covenants, conditions or contracts
to be performed by the other party or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of any
other covenant, condition or contract herein contained. No change,
waiver or discharge hereof shall be valid unless in writing and
signed by a duly authorized representative of the party against which
such change, waiver or discharge is sought to be enforced.

	 	 	 	 	 	 	 
	

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ARTICLE 42 – ATTACHMENTS

The following Attachments are incorporated in this Contract:

     Attachment A     Payment Plan

     Attachment B     Sea Launch E-mail

	 	 	 	 	 	 	 
	

	 	 	101	 	 	 
	 
	 	 	 	 	 	 
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ARTICLE 43 – RESERVED

	 	 	 	 	 	 	 
	

	 	 	102	 	 	 
	 
	 	 	 	 	 	 
	Use or discloser of the data contained on this sheet is subject to the restriction on the title page.

 

 

ARTICLE 44 – RESERVED

	 	 	 	 	 	 	 
	

	 	 	103	 	 	 
	 
	 	 	 	 	 	 
	Use or discloser of the data contained on this sheet is subject to the restriction on the title page.

 

 

ARTICLE 45 – ANTICIPATED LIFE OF SATELLITE

Contractor hereby represents and warrants to Purchaser that each Satellite will
have an orbital maneuver life of at least 15 years after Acceptance of the
applicable Satellite pursuant to Article 10 above, with industry standard
margins, assuming that the Satellite is successfully Launched and operates in
accordance with the Performance Specification.

	 	 	 	 	 	 	 
	

	 	 	104	 	 	 
	 
	 	 	 	 	 	 
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ARTICLE 46 – KEY PERSONNEL

The Contractor will assign properly qualified and experienced personnel to the
program contemplated under the Contract. Personnel assigned to the following
positions shall be considered “Key Personnel”:

	a)	 	*****
	 
	b)	 	*****
	 
	c)	 	*****
	 
	d)	 	*****
	 
	e)	 	*****

The Purchaser shall have the right to approve the Contractor’s
*****. Key Personnel
shall not be assigned to other duties without the Contractor giving prior
written notice to and consulting with the Purchaser. The Contractor shall
provide a chart to the Purchaser of the program Key Personnel and shall keep
such chart current.

*****

	 	 	 	 	 	 	 
	

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IN WITNESS THEREOF, the Parties have executed this Contract by their duly
authorized officers as of the date first set forth above.

	 	 	 	 	 	 	 
	 	 	 	 	EchoStar Orbital
	Space Systems/Loral, Inc.	 	Corporation II
	 
	 	 	 	 	 	 
	By:

	 	/s/ C.P. DeWitt	 	By:	 	/s/ David K. Moskowitz
	

	 	

	 	 	 	

	Name:

	 	C.P. DeWitt	 	Name:	 	David K. Moskowitz
	

	 	

	 	 	 	

	Title:

	 	Exec V. P.	 	Title:	 	Senior Vice President & General Counsel
	

	 	

	 	 	 	

	 	 	 	 	 	 	 
	

	 	 	106	 	 	 
	 
	 	 	 	 	 	 
	Use or discloser of the data contained on this sheet is subject to the restriction on the title page.

 

 

ATTACHMENT A

PAYMENT PLAN

	 	 	 	 	 
	MONTHS	 	 	 	 
	AFTER	 	 	 	 
	EDC
	 	MILESTONES
	 	AMOUNT DUE

	

	 	SPACECRAFT MILESTONE	 	 
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	

	 	SUB-TOTAL
	 	*****

	 	 	 	 	 	 	 
	

	 	 	107	 	 	 
	 
	 	 	 	 	 	 
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	 	SEA LAUNCH MILESTONE (Estimated Payment Date)	 	 
	*****
	 	*****	 	—
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	*****	 	*****
	*****
	 	 	 	*****
	*****
	 	*****	 	*****
	

	 	SUB-TOTAL
	 	*****
	

	 	OTHER	 	 
	

	 	*****
	 	*****
	

	 	Total Insurance Premiums (if any) (premiums for
insurance covering Purchaser’s interests in the
Satellite (if any) shall be passed through to the
Purchaser as incurred by Contractor under Article 39)
	 	*****
	

	 	GRAND TOTAL PRICE (excluding insurance premiums, if any)
	 	*****

* “L” means the first day of the Launch Period, Launch Slot or
Launch Date (or terms of comparable meaning) as then currently in
effect under the terms and conditions Launch Services Agreement.

**

*****

	 	 	 	 	 	 	 
	

	 	 	108	 	 	 
	 
	 	 	 	 	 	 
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ATTACHMENT B

Sea Launch E-Mail

	 	 	 	 	 	 	 
	

	 	 	109	 	 	 
	 
	 	 	 	 	 	 
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  Exhibit A 
  
EchoStar IX Statement of Work
    

12 October 2000

Prepared for:

EchoStar Orbital Corporation

Prepared by

Space Systems/Loral

3825 Fabian Way

Palo Alto, California 94303-4201

	 	 	This document contains data and information proprietary to Space
Systems/Loral. This data shall not be disclosed, disseminated, or
reproduced, in whole or in part, without the express prior written
consent of Space Systems/Loral

 

 

***********************************

29 pages of Exhibit A to Exhibit A to Exhibit 10.39 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

 

13 November 2002

RAS Initials: 5 October 2001

Original: October 18, 2000

EXHIBIT B

ECHO 9 PERFORMANCE SPECIFICATION

Prepared for:

EchoStar Communications Corporation

5701 S. Santa Fe Drive

Littleton, CO 80120

Prepared by:

Space Systems/Loral

3825 Fabian Way

Palo Alto, California 94303-4201

	 	 	This document contains data and information proprietary to Space
Systems/Loral. This data shall not be disclosed, disseminated, or
reproduced, in whole or in part, without the express prior consent of
Space Systems/Loral.

 

 

***********************************

85 pages of Exhibit B to Exhibit A to Exhibit 10.39 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

 

EchoStar 8/9

Product Assurance Plan

May 11, 2000

This document contains data and information proprietary to

Space Systems/Loral. This data shall not be disclosed,

disseminated, or reproduced, in whole or in part, without the

express prior written consent of Space Systems/Loral.

Prepared for:

EchoStar Communications Corporation

5701 S. Santa Fe Drive

Littleton, CO 80120

Prepared by:

Space Systems/Loral

3825 Fabian Way

Palo Alto, CA 94303-4604

PROPRIETARY

 

 

***********************************

16 pages of Exhibit C-l to Exhibit A to Exhibit 10.39 have been omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

 

	 	 	 
	

	 	Document No. E038152, Rev. 4
	CAGE ODJH2
	 	 

ECHOSTAR SATELLITE SYSTEM

PART TWO

COMMERCIAL PROGRAMS

PRODUCT ASSURANCE PLAN

Revision 4

14 February 2000

Prepared by:

Space Systems/LORAL

3825 Fabian Way, Palo Alto, CA 94303-4604

	 	 	 
	PROPRIETARY
	©Loral

 

 

***********************************

143 pages of Exhibit C-2 to Exhibit A to Exhibit 10.39 have been omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

 

Exhibit D

EchoStar 9 Satellite Program

Test Plan

17 October 2000

Prepared for:

EchoStar Orbital Corporation

Prepared by

Space Systems/Loral

3825 Fabian Way

Palo Alto, California 94303-4201

	 	 	This document contains data and information proprietary to Space
Systems/Loral. This data shall not be disclosed, disseminated, or
reproduced, in whole or in part, without the express prior written
consent of Space Systems/Loral.

	 	 	 
	

	 	EchoStar 9
Test Plan
	 
	 	 
	Use or disclosure of the data contained on this sheet is subject to the restriction on the title page.

 

 

***********************************

109 pages of Exhibit D to Exhibit A to Exhibit 10.39 have been omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

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