Document:

exv10w34

 

EXHIBIT 10.34

	 	 	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

Contract No. Intelsat-67700

with

Space Systems / Loral, Inc.

3825 Fabian Way

Palo Alto, California 94303

for

Intelsat Sigmasat Spacecraft

and Associated Equipment and Services

Date:

 

 

TABLE OF CONTENTS

	 	 	 
	 
	 	Article
	 
	 	Preamble
	1.
	 	Definitions
	2.
	 	Scope of Work
	3.
	 	Equipment and Services to be Furnished and Prices Therefor
	4.
	 	Delivery Schedule
	5.
	 	Milestone Payments
	6.
	 	Spacecraft Risk Money and Performance Payments
	7.
	 	Successful Injection
	8.
	 	Satisfactory Operation
	9.
	 	Deficiencies Noted in Launched Spacecraft
	10.
	 	Price Adjustments for Late and Early Delivery
	11.
	 	Price Adjustments for Spacecraft Dry Mass Compliancy
	12.
	 	Intelsat’s Right of Access
	13.
	 	Title and Risk of Loss or Damage
	14.
	 	Inspection and Final Acceptance
	15.
	 	Agreement to Indemnify, Hold Harmless and Defend
	16.
	 	Subcontracts
	17.
	 	Termination for Convenience
	18.
	 	Changes Directed by Intelsat
	19.
	 	Reserved
	20.
	 	Excusable Delays
	21.
	 	Termination for Cause
	22.
	 	Disputes

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	23.
	 	Reports
	24.
	 	Intellectual Property Rights
	25.
	 	Inventions
	26.
	 	Changes Requested by Contractor or Intelsat
	27.
	 	Public Release of Information
	28.
	 	Insurance
	29.
	 	Reserved
	30.
	 	Property Accounting
	31.
	 	Effective Date
	32.
	 	Assignment and Novation
	33.
	 	Key Personnel
	34.
	 	Inventions and Technical Data - Withholding of Payment
	35.
	 	Reserved
	36.
	 	Warranty
	37.
	 	Notices, Reports and Invoices
	38.
	 	Performance Testing
	39.
	 	Storage of Spacecraft
	40.
	 	Options
	41.
	 	Reserved
	42.
	 	Use of Launch Base Support
	43.
	 	Spacecraft Not Launched Within Five Years
	44.
	 	Reserved
	45.
	 	Contractor Provided Office Space
	46.
	 	Errors, Omissions and Inconsistencies
	47.
	 	Intelsat Furnished Information and Property

 - ii -

 

	 	 	 
	48.
	 	Confidentiality
	49.
	 	Reserved
	50.
	 	Technical Monitoring
	51.
	 	Hazardous Material Identification and Material Safety Data
	52.
	 	Reporting of Payments
	53.
	 	Security Interest and License Agreement
	54.
	 	Contractor Cooperation With Insurance Carrier
	55.
	 	Parent Guarantee
	56.
	 	Reserved
	57.
	 	Permits, Licenses and Compliance with Laws
	58.
	 	Reserved
	59.
	 	General
	60.
	 	Reserved

EXHIBITS

	 	 	 
	Exhibit A -
	 	Spacecraft Performance Specification
	 
	Exhibit B -
	 	Statement of Work
	 
	Exhibit C -
	 	Product Assurance Plan
	 
	Exhibit D -
	 	Spacecraft Test Plan
	 
	Exhibit E -
	 	Radiation Environment Specifications
	 
	Exhibit F -
	 	Milestone Payment Plan and Performance Payment Plan
	 
	Exhibit G -
	 	Termination for Convenience Liability Profile

 - iii -

 

     THIS CONTRACT, effective as of the Effective Date of Contract (as defined
herein) and entered into this 17th day of March 2004, by and between Space
Systems/Loral, Inc. (hereinafter referred to as the “Contractor”), a
corporation incorporated in Delaware, with its principal place of business
located at 3825 Fabian Way, Palo Alto, California 94303 and Intelsat LLC, a
Delaware limited liability company, having its office at 90 Pitts Bay Road,
Pembroke HM 08, Bermuda (hereinafter referred to as “Intelsat”); Intelsat and
the Contractor
hereinafter may be referred to individually as a “Party” or together as
“Parties”.

WITNESSETH THAT:

     The Parties hereto mutually agree as follows:

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ARTICLE 1. - DEFINITIONS

        As used in this Contract:

	A.	 	“Affiliate” means with respect to an entity, any other entity
controlling or controlled by or under common control with such entity.
	 
	B.	 	“Advanced Performance Payments” shall have the meaning as provided in the
payment table in Article 3 of this Contract, entitled Equipment and
Services to be Furnished and Prices Therefor.
	 
	C.	 	“ATP” shall have the meaning as provided in Article 31 of this
Contract, entitled Effective Date.
	 
	D.	 	“Asset Purchase Agreement” or “APA “ means the agreement between
Intelsat, Ltd., Intelsat (Bermuda), Ltd. (“Purchaser”), Loral Space &
Communications Corporation, Loral SpaceCom Corporation, Loral Satellite,
Inc., (together with Loral Space & Communications Corporation and Loral
SpaceCom Corporation, the “Sellers”) entered into July 15, 2003 (as
amended and as may be amended in the future), in which Sellers have
agreed to sell and Purchaser has agreed to purchase certain assets.
	 
	E.	 	“Associate” means, with respect to an entity, its directors,
officers, employees, agents, consultants, Affiliates, successors
and assigns.
	 
	F.	 	“Authorized Representative” shall be the individual holding the
office of or acting as the Director of Contracts, Intelsat (Bermuda)
Ltd. or their designee(s) under a written delegation of authority
communicated in writing to the Contractor.

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	G.	 	“Background Patent” means a patent issued presently or in the future on
an invention, other than on a Subject Invention (as defined below), which
invention is directly utilized or otherwise practiced or incorporated in
the performance of Work.
	 
	H.	 	“Closing” shall refer to the date of the closing of the purchase
and sales transaction provided for in the Asset Purchase Agreement.
	 
	I.	 	“Confidential Information” means all information, of any nature and
in any form, whether written, oral or recorded or transmitted
electronically or by tape or other similar manner, regarding the business,
finances, operations, prospects, plans, or affairs of a Party (including
its Associates and Subcontractors), and all data, processes, materials,
and software in source code and object code form, related documentation,
and other technical data that is confidential and embodies trade secrets
and other proprietary information of a Party, which information is
designated orally or in writing by such Party as confidential, provided,
however, that if disclosed orally, such information must be confirmed and
summarized in writing in summary form as confidential within thirty (30)
days of the time at which oral disclosure took place.
	 
	J.	 	“Deliverable Data” means all Information required to be delivered,
including, without
limitation, data and information contained in reports, documents,
computer programs, drawings and
graphs.
	 
	K.	 	“Deliverable Hardware” means all property other than Deliverable
Data required to be delivered under this Contract, including, without
limitation, Spacecraft, equipment, models, devices and the tangible media
on which Deliverable Data is delivered.
	 
	L.	 	“Deliverable Items” means any and all Deliverable Hardware and
Deliverable Data.
	 
	M.	 	“Failed Transponder” means a transponder in which the output power
(eirp) has
decreased by ***** or more, or the transponder’s saturation flux density
has changed

1 - 2

 

	 	 	by more than ***** compared to the nominal values specified in Exhibit A
hereof. A temporary decrease in output power caused by a spurious
shut-off (sso) which does not cause a switch to a redundant unit will not
be considered to be less than Satisfactory Operation under Article 8 of
this Contract, entitled Satisfactory Operation.

	N.	 	*****
	 
	O.	 	“Information” means all data and information, including, without
limitation, data and information of a technical, business or financial
nature which has been documented on any tangible media, including, without
limitation, writings, drawings, sound recordings, computer programs,
pictorial representations and graphs. Information, however, does not
include the Contractor’s or its Subcontractor’s (as defined below)
financial reports, cost analyses and other data and information incidental
to contract administration.
	 
	P.	 	“In-Orbit Performance Payments” shall have the meaning as provided
in the payment table in Article 3 of this Contract, entitled Equipment and
Services to be Furnished
and Prices Therefor.
	 
	Q.	 	“Intellectual Property” means all designs, methods, concepts,
layouts, software, inventions (whether or not patented or patentable),
processes, technical data and documentation, technical information and
drawings, and similar matter in which an Intellectual Property right
exists.
	 
	R.	 	“Intellectual Property Right” means any common law and statutory
proprietary right, including any patent, patent application, patent
registration, copyright, trademark, service mark, trade secret, mask work
rights, data rights and similar right existing

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	 	 	from time to time under the intellectual property laws or any
international treaty regime.
	 
	S.	 	“Lift-Off” means the intentional ignition of launch vehicle
propulsion systems causing upward acceleration of the launch vehicle
following the intentional removal of all mechanical restraints, if any,
designed to prevent such upward acceleration.
	 
	T.	 	“Loss” or “Losses” means all liabilities, damages, royalty
payments and claims, and all related costs and expenses (including
reasonable legal fees and disbursements and costs of investigation,
expert fees, litigation, settlement, judgment, interest, and penalties).
	 
	U.	 	“Patent” means a patent for an invention or a similar form of
statutory protection such as a utility model or registered design.
	 
	V.	 	“Performance Payments” means the combination of Advance
Performance Payments and In-Orbit Performance Payments as paid to
and earned by the Contractor pursuant to terms of this Contract.
	 
	W.	 	“Right to Sublicense” means a right of a licensee to grant another a
License to Use.
	 
	X.	 	“Right to Use” means a right to disclose, copy, duplicate,
reproduce, modify and
otherwise use.
	 
	Y.	 	“Risk Money” shall have the meaning as provided in the
payment table in Article 3 of this Contract, entitled Equipment and
Services to be Furnished and Prices Therefor.
	 
	Z.	 	“Satisfactory Operation” means that data is available from the
Spacecraft which shows that no conditions exist at any time during a
period following Successful Injection equal to the orbital design life
committed to in Exhibit A which adversely affect or can reasonably be
predicted to adversely affect the Spacecraft operation

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	 	 	and the Spacecraft meets all the requirements of Exhibit A.
Notwithstanding anything contained in the Exhibits concerning the estimated
probability of survival of a Spacecraft, or anything relating to the
behavior or performance of the Spacecraft under failure conditions,
*****
	 
	AA.	 	“Security Documents” shall have the meaning as defined in the Pledge
and Security
Agreement between Contractor and certain of its Affiliates and Intelsat
as defined in Article 53, paragraph H.
	 
	BB.	 	“Services” means all professional services and labor required to be
provided, including, without limitation, studies, development, research,
design, analysis, manufacture, product assurance, product integration,
transportation and testing.
	 
	CC.	 	“Spacecraft” means all space hardware necessary to fulfill the
Intelsat Sigmasat mission, which is separate from the launch vehicle.
	 
	DD.	 	“Space Segment” means telecommunications satellites, and the tracking,
telemetry, command, control, monitoring and related facilities and
equipment required to support the operation of these satellites.
	 
	EE.	 	“Subcontract” means a subcontract including purchase orders, memoranda
of understanding and all similar forms of agreement at any tier under this
Contract by the Contractor or Subcontractor.
	 
	FF.	 	“Subcontractor” means a contractor under any Subcontract.

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	GG.	 	“Subject Invention” means an invention, discovery, improvement or
innovation, of more than a trifling or routine nature, whether or not
patentable, conceived or first actually reduced to practice in the
performance of Work.
	 
	HH.	 	“Successful Injection or “Successfully Injected” shall have the
meaning provided in Article 7 of this Contract, entitled Successful
Injection.
	 
	II.	 	Unnecessary Background Patents” means a Background Patent which is
not necessary in order to practice any Subject Invention.
	 
	JJ.	 	“Work” means the production and delivery of all Items and the
providing of all Services under this Contract.

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ARTICLE 2. - SCOPE OF WORK

     The Contractor shall provide the necessary personnel, material,
equipment, services and facilities to perform the Work specified under the
provisions of this Contract, including the Exhibits listed below, which are
attached hereto and hereby made a part of this Contract, and to deliver to
Intelsat those Items listed under Article 3 of this Contract, entitled
Equipment and Services to be Furnished and Prices Therefor, in accordance with
the delivery schedule specified in Article 4 of this Contract, entitled
Delivery Schedule:

	 	 	 
	Exhibit A -
	 	Spacecraft Performance Specifications
	 
	Exhibit B -
	 	Statement of Work
	 
	Exhibit C -
	 	Product Assurance Plan
	 
	Exhibit D -
	 	Spacecraft Test Plan
	 
	Exhibit E -
	 	Radiation Environment Specifications
	 
	Exhibit F -
	 	Milestone Payment Plan and Performance Payment Plan
	 
	Exhibit G -
	 	Termination for Convenience Liability Profile

Note: The Parties acknowledge that due to the fact that this Contract is being
entered into both prior to the date upon which the ATP is issued by Intelsat
pursuant to Article 31 of this Contract, entitled Effective Date, some of the
Exhibits may be required to be updated, in accordance with other provisions
hereof to reflect the final design of the Spacecraft. Therefore, the Parties
shall work and cooperate in good faith as and when necessary to finalize the
required Exhibits and to update them accordingly.

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ARTICLE 3.- EQUIPMENT AND SERVICES TO BE FURNISHED AND PRICES THEREFOR

     Upon the full, satisfactory and timely completion and delivery, as
required by this Article and Article 4 of this Contract, entitled Delivery
Schedule, of the Items specified below, and acceptance by Intelsat thereof,
all in accordance with the requirements of this Contract, the Contractor shall
be entitled to payment by Intelsat of the applicable firm fixed prices
specified
below.

     The agreed firm fixed price includes all taxes, duties, transportation
(except for Spacecraft), insurance and all other costs and charges associated
with the performance of all Work. The
Contractor shall be responsible for payment of all taxes and duties which may
be required under any present or future laws and which become due by reason of
performance of the Work, and shall comply with all requirements of said laws,
including making of payment of any interest or penalties related to or arising
from such taxes and duties. For the purposes of this Contract, the price of
the Spacecraft authorized by Intelsat to be shipped shall be ***** and
the prices of all other Items authorized by Intelsat to be shipped shall be
***** Intelsat Global Service Corporation in Washington, D.C., unless otherwise
specified in writing by Intelsat.

	 	 	 	 	 	 	 	 	 
	

	 	 	Quantity
	 	Description
	 	Subtotal
	 	Total Price

	

	1

	 	1 each
	 	Intelsat Sigmasat Spacecraft	 	 	 	 
	

	

	 	 	 	   Recurring Component
	 	*****	 	 
	

	

	 	 	 	   Non-Recurring Component	 	*****	 	*****
	

	2

	 	1 each
	 	Ground Encryption Units	 	*****	 	 
	

	3

	 	Lot
	 	Documentation and Data per Exhibit B	 	*****	 	 
	

	4

	 	1 each
	 	Spacecraft Simulator	 	*****	 	 
	

	5

	 	1 lots
	 	Mission and Integration Services	 	*****	 	 
	

	

	 	 	 	SPACECRAFT BASE PRICE	 	*****	 	*****
	

	

	 	 	 	Less 10% Recurring Cost Put at Risk (The
“Risk Money”)	 	 	 	*****
	

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	 	 	 	TOTAL DELIVERABLE PRICE
	 	 	 	*****
	

	

	 	 	 	(Payable as Milestone Payments)	 	 	 	 
	

	

	 	 	 	The Risk Money and Performance
Payments (Article 6)	 	 	 	 
	

	

	 	 	 	Risk Money (as defined above)	 	*****	 	 
	

	

	 	 	 	Performance Payments	 	 	 	 
	

	

	 	 	 	Performance Payments paid in
advance (the “Advance
Performance Payments”)	 	*****	 	 
	

	

	 	 	 	Performance Payments paid over
the Orbital Design Life (the
“In-Orbit Performance
Payments”)	 	*****
*****	 	 
	

	

	 	 	 	TOTAL CONTRACT PRICE	 	 	 	*****
	

     *NSP = not separately priced

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ARTICLE 4. - DELIVERY SCHEDULE

	A.	 	The Contractor understands and agrees that the times for
delivery set forth below are of the essence to this Contract. For the
Spacecraft, Intelsat will be prepared to accept early delivery under
the conditions set forth in Paragraph B of Article 10 of this Contract,
entitled Price Adjustments for Late and Early Delivery. Intelsat shall
have the option to accept delivery of the Spacecraft FOB Origin, or if
the Launch Support and integration Service option specified in Article
40 of this Contract, entitled Options is exercised for a particular
launch vehicle, the Contractor shall be responsible for the air, ground
or sea transportation and delivery of the Spacecraft to the designated
launch site. Intelsat shall determine the delivery location for the
Spacecraft at the time the launch services option is exercised as set
forth in Article 40.
	 
	 	 	Delivery of all other Items under this Contract shall be by air or
ground transportation, FOB Intelsat Global Service Corporation in
Washington, D.C. or local Spacecraft Program Office, as specified by
Intelsat.

	 	 	 	 	 
	

	Item	 	Description	 	Delivery Date
	

	1

	 	Flight Spacecraft:	 	 
	

	 

	 	   Sigmasat Spacecraft Delivered
	 	*****
	

	2

	 	Spacecraft Simulator	 	*****
	

	3

	 	Ground Encryption Units (1)	 	*****
	

     *ATP is defined in Article 31, Effective Date.

	B.	 	For purposes of this Contract, delivery shall be deemed to have
occurred when all the Contract requirements for an Item, including those
required by the Article 14 of this Contract, entitled Inspection and
Final Acceptance, have been satisfactorily fulfilled, including, where
applicable, installation at the designated delivery site, except that,
with respect to the Spacecraft, delivery shall be deemed to have

4 - 1

 

	 	 	occurred at the time the Spacecraft has arrived at the site designated by
Intelsat and fully conforms to the requirements of this Contract, including
those required by Article 14 of this Contract. In the case of rejection of an
Item by Intelsat pursuant to the acceptance provisions of this Contract,
delivery shall not be deemed to have occurred until the defects that resulted
in such rejection have been remedied to the satisfaction of Intelsat.

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ARTICLE 5. - MILESTONE PAYMENTS

	A.	 	The Contractor shall be entitled to receive payment from
Intelsat in the amounts specified for the completion of the payment
milestones set forth in Exhibit F, Milestone Payment Plan and
Performance Payment Plan. Notwithstanding Article 31 of this
Contract, entitled Effective Date, the Contractor shall receive an
initial deposit of $50 million from Intelsat as provided for in the
APA, which deposit shall be applied against the first $50 million of
payment milestones pursuant to Exhibit F, until the entire $50 million
deposit has been earned by the Contractor.
	 
	B.	 	*****

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	 	 	*****
	 
	C.	 	Subject to the provisions of Paragraph A above, the amounts
specified in Exhibit F, Milestone Payment Plan and Performance Payment
Plan, shall in each case be paid electronically by Intelsat to the
Contractor within ***** after receipt by Intelsat of a properly
certified invoice, from the Contractor, noting that the particular
milestone event(s) have been completed for which payment has been claimed.
Notwithstanding the foregoing, for any milestone event (including Key
Milestones) for which a portion of the $50 Million deposit will be applied
as payment, the Contractor shall, instead of submitting an invoice as
provided above, submit to Intelsat a certificate executed by its
Authorized Representative confirming that the particular milestone
event(s) have been completed, including such detail as Intelsat may
reasonably require. The Contractor may submit only one invoice or
certificate per calendar month during the period of performance of this
Contract, which invoice or certificate shall list all newly completed
milestones for that month. A milestone shall not be regarded as completed,
and no payment shall be made/earned, until all Work relevant to that
milestone has been completed and approved by Intelsat in accordance with
the requirements of this Contract. Further, no milestone payment
invoiced/certified by the Contractor shall be made/earned if Intelsat
concludes that any condition established by this Contract as prerequisite
to payment/earning of the
specified milestone has not been fulfilled. In such event, the applicable
milestone

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	 	 	payment/certificate shall not be made until such time as Intelsat
determines that such milestone/certificate event has been completed or
such conditions fulfilled.
	 
	D.	 	Performance payments, as set forth. in Article 6 of this Contract,
entitled Spacecraft Risk Money and Performance Payments, and any other
amounts due to the Contractor shall be paid electronically by Intelsat to
the Contractor within ***** after receipt by Intelsat of a properly certified invoice from
the Contractor,
noting that the particular item has been completed for which payment is
claimed. No performance payment, or other amount, due to the Contractor shall be
made if Intelsat concludes that any condition established by this
Contract as prerequisite to payment for the event has not been fulfilled.
In such event, the applicable
performance payment(s) shall not be made until such time as Intelsat
determines that such conditions have been fulfilled.
	 
	E.	 	Intelsat shall make payment to the Contractor of all amounts payable
hereunder by wire transfer to the bank account set forth in Article 37 of
this Contract, entitled Notices, Reports and Invoices.
	 
	F.	 	Except as otherwise expressly stated herein, with respect to all other
payments (other than milestone payments) that may be due to the Contractor
by Intelsat pursuant to this Contract, such payments shall also be made by
wire transfer to the bank account identified above within ***** after receipt by Intelsat of an invoice therefor, such invoice to include
sufficient detail and supporting documentation concerning such payment.

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	G.	 	Subject to Intelsat’s right of offset pursuant to Paragraph H below,
Intelsat shall pay undisputed milestone payments and other charges when
such payments are due under this Article and Exhibit F. However, Intelsat
may withhold payment of particular charges that Intelsat disputes in good
faith, including where Intelsat does not agree that a milestone has been
satisfactorily completed. Intelsat shall notify the Contractor in writing
of any disputed charge by the date payment is otherwise due.
	 
	H.	 	Additionally, should an amount be due to Intelsat by the Contractor
on a contract other than this Contract and Contractor has failed to pay
this amount due within ***** of written request by Intelsat, the amount
due may then be offset against an amount owed to the Contractor from
Intelsat under this Contract.

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ARTICLE 6. - SPACECRAFT RISK MONEY AND PERFORMANCE PAYMENTS

	A.	 	The Contractor is entitled to earn and receive the Risk Money and
the Performance Payments for the Spacecraft which is in Satisfactory
Operation pursuant to the terms of this Contract.
	 
	B.	 	The Contractor shall be paid and earn the Risk Money and the Performance
Payments based on the following Spacecraft performance criteria:

	 	1.	 	Failure to Achieve Successful Injection
	 
	 	 	 	In the event that the Spacecraft, which has been accepted by
Intelsat, does not achieve Successful Injection, and such failure
to achieve Successful Injection is not attributable to the
Spacecraft, or the Contractor or its Subcontractors, the Contractor
shall be paid *****;
	 
	 	2.	 	Successful Injection.
	 
	 	 	 	(a) In the event that the Spacecraft (i) achieves Successful
Injection, and (ii) during the period of in-orbit testing is in
Satisfactory Operation, and (iii) immediately after its’ arrival
at the orbital location designated by Intelsat, achieves a
continuous ***** period of Satisfactory Operation,
provided that such ***** period shall include at least
***** the Contractor will be paid
*****. If such initial ***** period does not
include ***** the amount provided for in this
Paragraph shall be paid to the Contractor upon the completion of
said continuous ***** period of Satisfactory Operation;
provided that, if the Spacecraft does not achieve

6 - 1

 

	 	 	Satisfactory Operation throughout *****, the Contractor shall
refund the entire said amount to Intelsat within ***** of Intelsat’s demand for payment. For purposes of this Paragraph, a
Spacecraft shall be deemed to have arrived at the orbital location designated
by Intelsat within a period not to exceed ***** after apogee motor
firing, provided proper station-keeping capability has been demonstrated and
achieved. In the event of less than Satisfactory Operation, which is not
attributable to the Contractor or its Subcontractors, the Contractor shall be
entitled to receive *****.
	 
	 	 	(b) For each subsequent calendar quarter of continuous Satisfactory
Operation of the Spacecraft during such quarter, beginning with the second
calendar quarter through the *****, the Contractor shall be paid the balance of
the In-Orbit Performance Payments. In-Orbit Performance Payments shall be paid
in equal amounts of *****.
	 
	 	 	(c) Should the Contractor fail to earn 100% of the Performance
Payments amounts or the Risk Money set forth in subparagraphs B.2.(a) and
B.2.(b) above or in subparagraph B.2.(d) below, but earned reduced amounts in
accordance with the provisions of Article 8, subparagraph .B.2, of this
Contract, the Contractor shall continue to receive quarterly payments if the
Spacecraft continues to perform beyond the contractual orbital design life of
*****, provided that Intelsat continues to use the Spacecraft for
commercial purposes and at least ***** of the transponders on the Spacecraft meet
the requirements of Exhibit A.. The amount of the additional quarterly

6 - 2

 

	 	 	payments beyond the ***** shall be based on, and in no event be
more than the amount that was paid to the Contractor for the *****. In
addition, in no event shall the cumulative amount of the additional
payments
made beyond the ***** exceed the aggregate of the
Performance
Payments the Contractor previously failed to earn during the orbital
design life of the Spacecraft. There will be no application of interest
on any additional payments made by Intelsat after the *****.
	 
	 	 	(d) Earning of Advance Performance Payments. The Contractor shall be
entitled to retain and be deemed to have earned as performance incentives,
the entire Advance Performance Payment paid pursuant to Paragraph B.1
above or pursuant to subparagraph B.2.(a) above for each calendar quarter
period of continuous Satisfactory Operation of the Spacecraft during such
period, commencing immediately after its arrival at the orbital location
designated by Intelsat through the *****. The total amount
at risk under this Paragraph shall be the ***** The total amount of performance incentives associated with the
Advance Performance
Payments referred to in this Paragraph as being earned by the Contractor
pursuant to subparagraph B.2.(a) above shall *****; Exhibit F to this Contract
sets forth the schedule under which the Contractor earns the Advance
Performance Payments pursuant to subparagraph B.2.(a) above.

	3.	 	Acceptance of Spacecraft but Delayed Launch

In the event that a Spacecraft is accepted by Intelsat under the terms of
this Contract but is not launched within ***** after such acceptance,
the
Contractor shall be paid *****.

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	 	 	*****. Thereafter, if Intelsat decides to launch
such
Spacecraft the Contractor shall be so notified and the Contractor shall
refund
to Intelsat the entire sum of *****. Following the launch of such Spacecraft, the
Contractor shall be eligible to receive the applicable Risk Money and
Performance Payments for the Spacecraft in accordance with the provisions
of Paragraphs B.1, and B.2 above. Notwithstanding the foregoing
provisions,
if the Contractor fails to deliver the Spacecraft on or before the
delivery date
specified in Article 4 of this Contract, entitled Delivery Schedule,
and Intelsat, in its sole discretion, determines that the delayed
delivery has contributed to a launch delay, the Contractor shall not
be entitled to the aforementioned  amount specified in this
subparagraph, for a period equal to the launch delay.

	C.	 	In the event the Risk Money or the Performance Payments are not
paid within ***** from the receipt of the invoice by Intelsat, and it is
later determined that there were in fact amounts owed to the Contractor,
such amounts shall be repaid with simple interest. Beginning on the
***** after the receipt of the invoice, the interest rate to be applied to
each quarterly amount owed shall be the prime interest rate which will be
the rate published in the Wall Street Journal on the first business day of
each month.

6 - 4

 

ARTICLE 7. – SUCCESSFUL INJECTION

	A.	 	Injection of a Spacecraft shall be considered successful if both of
the following
circumstances occur (referred herein as either “Successful Injection”
or “Successfully
Injected”):

	1.	 	No damage to the Spacecraft occurs which can be shown to
have resulted
from launch vehicle malfunction; and
	 
	2.	 	At the time of separation from the launch vehicle, the
elements of the
Spacecraft orbit established by the launch vehicle and the Spacecraft attitude
states are within the limits specified by Intelsat.

	B.	 	If the Spacecraft does not achieve Successful Injection and the
amount provided for
in Article 6 of this Contract, entitled Spacecraft Risk Money and
Performance Payments, subparagraph B.1, is paid, the Contractor shall not be
eligible to receive
any further payments with respect to the Spacecraft regardless of the
use to which
the Spacecraft may be put.
	 
	C.	 	Alternatively, notwithstanding the failure of the Spacecraft to meet
the requirements
of subparagraphs A.1, and A.2. above, Successful Injection will be
considered to
have occurred if, within a period of ten (10) days following Lift-Off,
the Contractor
notifies Intelsat in writing that it elects to have the Spacecraft
considered
Successfully Injected.

7 - 1

 

ARTICLE 8. – SATISFACTORY OPERATION

	A.	 	Satisfactory Operation of the Spacecraft

	1.	 	A defect in the Spacecraft that can be satisfactorily
corrected by a switch to a redundant unit in the Spacecraft will
not be deemed to affect the Satisfactory Operation of the
Spacecraft. Notwithstanding the provisions in the preceding
sentence or any provisions in this Contract to the contrary,
if switching to a redundant unit in the Spacecraft results in a
Spacecraft configuration which no longer possesses any operational
redundant units at the system or subsystem level, and if any
additional failure or defect can no longer be corrected by
switching to a redundant unit, the Contractor shall pay Intelsat
for total loss of redundancy the sum specified in the schedule
below, and this payment would be in addition to any other remedies
due Intelsat under this Contract.
	 
	 	 	The loss of redundancy provision in the preceding Paragraph
applies only to key components whose failure would terminate or
severely curtail mission activities, such as: communications
receivers, up-converters, high power amplifiers, earth sensors,
momentum wheels, solar array/ solar array drives,
ACE processor, DHE processor, telemetry transmitter, command
receivers
and power control unit. This provision is not applicable
in cases where a
solution, such as a software “patch” or other agreed-upon
workaround can be implemented to provide an alternate source of
redundancy, nor where an otherwise functional unit is switched-off
due to partial loss of telemetry.

Table 8-1

	 	 	 
	

	Number of Years In	 	 
	Satisfactory Operation	 	 
	During Which Time
	 	Price Adjustment
	Total Loss of
	 	For Total
	

8 - 1

 

	 	 	 
	

	 Redundancy Occurred
	 	Loss of Redundancy

	*****
	 	*****
	

	*****
	 	*****
	

	*****
	 	*****
	

	*****
	 	*****
	

	*****
	 	*****
	

	 	 	If a price adjustment has been imposed by Intelsat in accordance
with this
subparagraph, but at a later time the failed unit causing the
price adjustment
is corrected or a work-around is devised by the Contractor, and
which is agreed to by Intelsat such that redundancy again exists,
Intelsat shall refund
the price adjustment or an agreed upon portion thereof.
	 
	2.	 	Should Intelsat elect to use a launch vehicle configuration
which leads to an
orbital maneuver life shorter than the orbital design life specified
in Exhibit A,
the definition of Satisfactory Operation shall be deemed modified,
to the
extent that the requirement to maintain the orbit’s inclination to
less than 0.05°
shall cease to be applicable after a time in orbit equal to the
orbital maneuver
life. The orbital maneuver life shall be calculated in accordance
with Exhibits
A and B of this Contract, taking into consideration the launch
vehicle
capabilities.
	 
	3.	 	Should the Spacecraft fail to provide Satisfactory Operation
the Contractor will
not be entitled to receive performance payments, except as provided
for in
Paragraph B of this Article, and the Contractor agrees not to enter
into any
agreement for purposes of mitigating directly or indirectly the loss
or reduction
of these performance payments through insurance or any other means.
Furthermore, the Contractor shall insert the substance of this
subparagraph
A.4 in all Key Subcontracts, if applicable.

	B.	 	Less Than Satisfactory Operation of a Spacecraft

8 - 2

 

	1.	 	During such period, or periods, of time during the orbital design life
committed to in Exhibit A, that all the conditions prescribed in this Contract
for Satisfactory Operation are not met for the Spacecraft, but Intelsat uses
such Spacecraft for commercial purposes, the Parties shall negotiate an
equitable adjustment to the unearned Performance Payments and/or Risk Money for
such use, which adjustment shall, in no event, ***** of the
total of the Advance Performance Payments and In-Orbit Performance
Payments that are yet to be earned pursuant to Article 6 of this Contract,
entitled Spacecraft Risk Money and Performance Payments, subparagraphs B.1 and
B.2 therein, with respect to the period or periods of such use. The amount of
the negotiated adjustment shall reflect three principal components:
(1) the operational capabilities of the Spacecraft with the
deficiencies as compared to the operational capabilities thereof
without the deficiencies; (2) the operating usefulness to Intelsat of
the Spacecraft in the total Intelsat system with the deficiencies as
compared to the operating usefulness thereof without the
deficiencies; and, (3) any additional costs Intelsat may incur and
any revenue it may lose as a result of the failure of the Spacecraft
to continuously meet the conditions prescribed in Paragraph A of this
Article. For purposes of such negotiation, it is the intent of the
Parties that the reduction of Performance Payments for each Failed
Transponder shall be
***** of the original Performance Payment which would otherwise be payable
for the periods of failure. As related to Ku-Band transponders on a
Spacecraft, the ***** deduction shall not apply until there are less
than ***** Ku-Band transponders operating nominally; and, as related to
C-Band
transponders, the ***** deduction shall not apply until there are less
than
***** C-Band transponders operating nominally. If Intelsat elects
not to
use such degraded Spacecraft for commercial communications purposes, no
further Performance Payments shall be made to the Contractor for such
Spacecraft. Intelsat’s decision on Spacecraft use shall be final and
conclusive. In the event that an equitable adjustment is negotiated as
set

8 - 3

 

	 	 	forth above, and subsequent thereto the Spacecraft either is
restored to Satisfactory Operation or its operations are otherwise
materially improved, the parties may, at Intelsat’s sole and
reasonable discretion, renegotiate the future unearned orbital
Performance Payments (from the time of return to Satisfactory
Operation or improved performance, as applicable) to reflect the
restored or improved operational performance of the Spacecraft.
	 
	2.	 	Any adjustment to the Performance Payments shall first be
applied to the future In-Orbit Performance Payments to be paid in
accordance with subparagraph B.2 of Article 6 of this Contract,
entitled Spacecraft Risk Money and Performance Payments, until such
adjustment exceeds the remaining unpaid balance of the In-Orbit
Performance Payments. Any additional
adjustment in excess of the balance of future In-Orbit Performance
Payments shall be made by a lump-sum refund from the Contractor of
such excess, as applicable, from the Advance Performance Payments.
Such refund shall  *****.

	C.	 	Determinations
	 
	 	 	The use of Intelsat measurements, computations and analyses for the
purpose of determinations relative to the definition in Paragraph A of
this Article shall be binding on the Contractor. The Contractor shall be
given access to this data.

8 - 4

 

ARTICLE 9. – DEFICIENCIES NOTED IN LAUNCHED SPACECRAFT

     Without affecting the rights, duties and obligations of the parties under
other provisions of this Contract, if the data available from a launched
spacecraft shows that conditions exist which adversely affect or can be
reasonably predicted to affect adversely the Spacecraft operation, or that the
Spacecraft performance or operation departs significantly from that expected
from the program documentation at any time during the period of the
Spacecraft’s in-orbit design lifetime, or that the Spacecraft does not meet all the requirements of Exhibit A, or can
reasonably be
predicted not to be able to meet the requirements of Exhibit A for the full
orbital design life, the Contractor shall take prompt appropriate corrective
measures at its sole cost in all of the unlaunched Spacecraft, whether or not
previously delivered to Intelsat, so as to satisfactorily
eliminate therefrom all the deficiencies noted in the launched spacecraft. The
Contractor shall have the foregoing responsibilities with respect to all
unlaunched Spacecraft regardless of whether Intelsat has or has not previously
accepted such Spacecraft, or whether title thereto has previously passed to
Intelsat. Intelsat shall have the right to reject any such unlaunched deficient
Spacecraft during preliminary inspection at the Contractor’s plant, as provided
for in Article 14 of this Contract, entitled Inspection and Final Acceptance.

9 - 1

 

ARTICLE 10. – PRICE ADJUSTMENTS FOR LATE AND EARLY DELIVERY

	A.	 	Late Delivery

     Intelsat intends to enter into one or more contracts with launch service
providers for launch of the Spacecraft to be delivered under this Contract.
Since the launch dates will be established to be consistent with the Spacecraft
delivery schedule contained in this Contract, the Contractor and Intelsat agree
that time is of the essence in this Contract and that delayed delivery of the
Spacecraft may cause Intelsat to incur additional costs, including launch
service postponement fees, loss of anticipated revenue, and other damages
difficult or impossible to measure. Accordingly, the Contractor and Intelsat
agree to liquidated damages for late delivery of the Spacecraft as provided
below, which damages are intended to be compensatory and do not constitute a
penalty. In the event any Spacecraft, and associated flight equipment, to be
delivered hereunder is not delivered on or before the delivery dates specified
in this Contract, excluding the number of days of excusable delay, if any,
within the meaning of Article 20 of this Contract, entitled Excusable Delays,
then: (i) if Intelsat elects to have the Spacecraft and associated flight
equipment delivered to storage pursuant to Article 39 of this Contract,
entitled Storage of Spacecraft, the Contractor shall provide such storage,
including necessary refurbishment/retest as required to demonstrate that the
Spacecraft performance is maintained free-of-charge, for a period not to exceed
*****; and (ii) until such Spacecraft and
associated flight equipment is delivered, commencing on the first day following
the specified
delivery date, the price of such a Spacecraft and associated flight
equipment shall be reduced
for each day of late delivery as follows:

	 	 	 	 	 	 	 	 	 	 	 
	

	Flight	 	 	 	 	 	 	 	Maximum Price
	Spacecraft	 	Price Reduction	 	Period	 	 	 	Reduction
	

	Sigmasat

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

	 

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

	 

	 	 	 	 	 	 
	 	*****
	

	1.	 	For purposes of price adjustments for late delivery, the price
reduction
specified above, shall be applicable to the Spacecraft and
associated flight

10 - 1

 

	 	 	equipment to be delivered hereunder.
	 
	2.	 	The price adjustments specified above for late delivery of a Spacecraft
and
associated flight equipment shall be deducted from the initial
Performance
Payment set forth in Paragraph B.1 of Article 6 of this Contract,
entitled
Spacecraft Risk Money and Performance Payments. In the event that such
initial Performance Payment does not become due, and the Contractor does
not pay within ***** of Intelsat’s demand for such payment, then
Intelsat shall have the sole right to determine against which payments due
to the Contractor, pursuant to the terms of this Contract the adjustment
will be offset. The determination by Intelsat under this subparagraph 2
shall be final and binding on the Contractor.
	 
	3.	 	In the event Intelsat designates a storage location rather than a launch
site as
a place of delivery for the Spacecraft and associated flight equipment to
be
delivered hereunder, the applicable date for determining the price
adjustments shall be the date that the Spacecraft and associated flight
equipment has passed all the in-plant tests required by this Contract and
has
arrived at the storage location designated by Intelsat.
	 
	4.	 	If the Contractor does not meet the delivery dates specified in the Contract
and Intelsat does not exercise its right to terminate this Contract
for cause in
accordance with Article 21 hereof, entitled Termination for Cause, the
price reduction provided for in Paragraph A hereof, shall be the sole
compensation to which Intelsat shall be entitled for delays in deliveries
of Spacecraft and associated flight equipment for the number of days
stated in this Paragraph A. However, if at any time prior to the
expiration of the period specified in this Paragraph, Intelsat exercises
its right to terminate this Contract for the Contractor’s default,
pursuant to the said Termination for Cause Article, Intelsat’s rights and
remedies shall be governed by the provisions of that Article and Paragraph
A hereof shall not apply.

10 - 2

 

	5.	 	Nothing contained in this Paragraph shall affect any
right or remedy available to Intelsat under this Contract or at law
for delay exceeding the number of days stated in Paragraph A hereof.

	B.	 	Early Delivery
	 
	 	 	Subject to the provisions of this Paragraph, the Contractor shall be
entitled to receive incentives for early delivery of the Spacecraft. The
following provisions shall apply with respect to early delivery of the
Spacecraft:

	1.	 	For each day the Spacecraft is delivered earlier than
the delivery date set forth in Article 4 of this Contract, entitled
Delivery Schedule, incentive  payments as described hereinbelow
shall be paid to the Contractor within 30 days of delivery and
acceptance by Intelsat. Incentive payments shall be calculated at
***** for ***** of early delivery, and
at ***** for ***** of early delivery;
provided, however, the maximum number of days for which early
incentives may be earned for any Spacecraft shall not exceed *****. Notwithstanding
the provisions in the preceding sentence concerning the maximum
number of days and incentives for early delivery and since Intelsat
is not obligated to accept delivery of any Spacecraft sooner than
***** after the actual delivery date of the preceding
Spacecraft as provided in Paragraph A of Article 4, the Contractor
shall not be entitled to receive early delivery incentives for those
days of early delivery which would make or cause the delivery of a
Spacecraft sooner than or within ***** of the actual
delivery date of the preceding Spacecraft.
	 
	2.	 	If the Contractor owes payments to Intelsat under this
Contract, Intelsat shall have the sole right to determine against
which payments due Intelsat, pursuant to the terms of this Contract,
the adjustments under Paragraph B

10 - 3

 

	 	 	hereof for early delivery of such Spacecraft and associated flight
equipment will be offset. The determination by Intelsat under this
subparagraph 2 shall be final and binding on the Contractor.
	 
	3.	 	In the event Intelsat designates a storage location rather than a
launch site as a place of delivery for any of the Spacecraft and associated
flight equipment to be delivered hereunder, the applicable date for determining
the adjustments, pursuant to this Paragraph B, shall be the date that
the said Spacecraft and associated flight equipment has passed all the
in-plant tests required by this Contract and has arrived at the storage
location designated by Intelsat. If the Contractor is in the position of making
early delivery of Spacecraft for which there are no reasonably available
launches, the Contractor will provide storage as set forth in Article 39 of
this Contract, entitled Storage of Spacecraft.

10 - 4

 

ARTICLE 11. –  PRICE ADJUSTMENTS FOR DRY MASS COMPLIANCE

	A.	 	Intelsat intends to enter into contracts with launch service
providers for launch of the Spacecraft to be delivered under this
Contract. Since the mass of the Spacecraft has been established in this
Contract to be consistent with the performance capability of the launch
service providers and to provide certain performance characteristics
specified in this Contract, the Contractor and Intelsat  recognize
that if the dry mass of the Spacecraft exceeds the maximum allowable
launch dry mass value specified herein below, Intelsat may incur
additional costs, including additional launch services fees, loss of
useful life of the Spacecraft, loss of anticipated revenue, and other
damages. Accordingly, the Contractor and Intelsat agree to certain
payments by the Contractor for excess mass as provided below, which
payments are intended to be compensatory and do not constitute a
penalty.
	 
	3.	 	In the event that the dry mass of the Spacecraft exceeds the
value for maximum allowable satellite dry mass as specified in Exhibit
A (“Maximum Allowable Mass”), the Contractor shall pay Intelsat an
amount of *****, which payment shall be considered as
payment for
excess mass. The provisions of this Paragraph shall be applicable to
the
Spacecraft to be delivered hereunder. Intelsat shall have the sole
right to offset
any such amount required under this Paragraph against any payments due
the Contractor pursuant to the terms of this Contract.
	 
	 	 	If the Contractor does not meet the dry mass requirement specified in
the Contract and Intelsat does not exercise its right to terminate this
Contract for default in accordance with Article 21, Termination For
Cause, or to pursue any other remedy available to Intelsat under the
Contract or by law, the price reduction provided for in Paragraph A of
this Article shall be the sole compensation to which Intelsat shall be
entitled for excess mass. Notwithstanding the foregoing, in the event
that

11 - 1

 

	 	 	the Contractor does not meet the dry mass requirement specified in the
Contract, but, nevertheless, such failure does not result in Intelsat
incurring additional Launch Service costs or in restricting Intelsat from
filling the Spacecraft with the maximum fuel prior to Launch, Intelsat
may consider waiving any mass penalty otherwise due hereunder.
	 
	D.	 	In the event that the dry mass of the Spacecraft supplied by the
Contractor weighs less than the Maximum Allowable Mass, Intelsat shall
pay the Contractor an amount of *****, which payment
shall be considered as payment for *****. The provisions of this
Paragraph shall be applicable to the Spacecraft to be delivered hereunder.

11 - 2

 

ARTICLE 12. - INTELSAT’S RIGHT OF ACCESS

	A.	 	Intelsat shall be allowed reasonable access to:

	1.	 	all Work and Work in progress, and all data and information
related to this
Contract, including all Subcontracts hereunder, and all facilities
therefor, for
purposes of observation, inspection, examination and evaluation, at
any
reasonable time prior to final acceptance (as set forth below) or
termination
of this Contract and thereafter to the extent such data and
information are of the type customarily retained in the
ordinary course of business; and
	 
	2.	 	all books, records, documents and other
supporting data and information directly pertinent to the
discovery or identification of any Intellectual Property to the
extent first developed under this Contract or incorporated into a
Deliverable Item and/or Subject Inventions or verification of
compliance with the provisions of Articles 24 and 25, entitled
Intellectual Property Rights and Inventions respectively, at any
reasonable time prior to the end of the ***** subsequent to final
acceptance of all deliverables hereunder or
termination of this Contract.

	B.	 	Intelsat shall provide the Contractor with reasonable advance
notice of its intent to
obtain such access.
	 
	C.	 	Intelsat shall be allowed full and free access and waiver
of liability or other
restrictions shall not be imposed in order to obtain such
access.
	 
	D.	 	Without affecting the Contractor’s obligation under other
provisions of this
Contract, and subject to the Contractor’s rights in data under
Article 24 of this
Contract, entitled Intellectual Property Rights, the Contractor shall
also deliver

12 - 1

 

	 	 	copies of design and test data, and other Foreground and Background Data,
to Intelsat at any time during the period of performance of the work.
	 
	E.	 	This Article shall be inserted by the Contractor in all Subcontracts.
	 
	F.	 	The access to data set forth in this Article is subject to the
limitations and
restrictions contained in the International Traffic in Arms Regulations
and the
United States State Department’s Office of Defense Trade Control granted
export
license.

12 - 2

 

ARTICLE 13. - TITLE AND RISK OF LOSS OR DAMAGE

	A.	 	Prior to the passing of title pursuant to this Article, any
loss or damage to Items to
be delivered under this Contract shall be at the Contractor’s risk.
Unless
otherwise provided in this Contract, title and risk of loss or
damage to all items
other than Spacecraft shall pass to Intelsat at the time of final
acceptance by
Intelsat, which final acceptance will be made or refused as provided
hereunder.
	 
	B.	 	Title and risk of loss or damage to a Spacecraft which is
delivered for the purpose
of launch shall pass to Intelsat at Lift-Off.
	 
	C.	 	Reserved
	 
	D.	 	Title and risk of loss or damage to a Spacecraft which is
delivered to storage by
the Contractor, at Intelsat’s option pursuant to Article 39 of this
Contract, entitled
Storage of Spacecraft shall be retained by the Contractor throughout
the storage
period. At the completion of the storage period, the Contractor shall
deliver the
Spacecraft to the launch site location, and title and risk of loss or
damage to the
Spacecraft shall be governed by Paragraph B.
	 
	E.	 	The Contractor warrants that title to Subject Inventions and to
Deliverable
Hardware conveyed pursuant to Article 25 of this Contract, entitled
Inventions,
subparagraph D.3, shall be good, marketable and rightfully conveyed,
and shall be
delivered free and clear of all liens, encumbrances, pledges and
other interests
whatsoever. Furthermore, the Contractor agrees to execute and deliver
all
instruments required, in Intelsat’s sole discretion, to perfect or
evidence such title
to Intelsat.

13 - 1

 

ARTICLE 14. - INSPECTION AND FINAL ACCEPTANCE

	A.	 	Preliminary inspections may be made by Intelsat or its designated
representative
at either the Contractor’s or a Subcontractor’s plant, as the case
may be. All such
inspections shall be in the company of a Contractor’s representative,
provided
that, if after reasonable notice (orally or in writing) of Intelsat’s
inspection plans,
the Contractor shall have failed to furnish such a representative,
then Intelsat may
conduct an unaccompanied inspection. Intelsat shall inform the
Contractor in writing of those particulars in which the work to
be performed under the Contract does not meet the requirements of
the Contract and the Contractor shall remedy such defects.
Further, Intelsat shall have the right to reject, at the
Contractor’s plant, any Spacecraft to be delivered under this
Contract which does not meet the requirements of the Contract.
	 
	B.	 	Final acceptance of the Work to be performed under the Contract
shall be in
accordance with the requirements of the Contract. Upon delivery to
Intelsat of the
Items to be delivered under this Contract, Intelsat’s Authorized
Representative
shall promptly conduct a final inspection and test of the Items and
shall either
accept the same in writing or notify the Contractor in writing of
those particulars in
which the Items do not meet the requirements of the Contract. Upon
receipt of a
notice that any Item does not meet the requirements contained in this
Contract,
the Contractor shall remedy such item. Upon remedy of such
particulars to meet
the requirements of the Contract, the Items shall be accepted by
Intelsat in writing. Title to such Items shall pass in accordance
with the provisions of this Contract.
	 
	C.	 	Remedy of any particulars or defects referred to in Paragraphs A
and B of this
Article shall be accomplished by the Contractor, at its expense,
promptly upon
receipt of notice thereof. Any Items found to be non-conforming
during or after

14 - 1

 

	 	 	testing required under this Contract shall, at Intelsat’s request and
without charge to Intelsat, be promptly retested by the Contractor after
the Contractor has remedied such non-conformance. If the Contractor fails
to remedy any such particulars promptly, Intelsat may elect to have any
or all such particulars remedied through other means, in which event the
Contractor shall pay the reasonable costs of so remedying such
particulars.
	 
	D.	 	After delivery to Intelsat by the Contractor of the Items to be
delivered under this Contract, including a Spacecraft which is delivered
for the purpose of a launch, and upon final acceptance by Intelsat of the
Work to be performed hereunder, the Contractor and Intelsat shall certify
in writing, on a form prescribed by Intelsat, that final acceptance and
delivery have occurred. For a Spacecraft delivered for the purpose of
launch, Intelsat’s final acceptance shall not occur until after successful
completion of all launch site testing and integration activities,
including the Flight Readiness Review in accordance with Exhibit B.

14 - 2

 

ARTICLE 15. - AGREEMENT TO INDEMNIFY, HOLD HARMLESS AND DEFEND

	A.	 	Personal Injury and Damage to Property

Each Party shall indemnify and hold the other Party and its Associates,
subsidiaries, successors and assigns, or any of them, harmless from any
and all Losses resulting from damage to all property (excluding the
Spacecraft after Lift-Off) and injuries, including death, to all
persons (natural or juridical), arising from any occurrence caused by an act or omission of such Party, its
Subcontractors, or
any of them, and such Party shall at its sole expense defend any
claims, actions, suits and proceedings, whether in law or equity,
brought against the other Party and its Associates, subsidiaries,
successors and assigns, or any of them, on account thereof, and shall
pay all expenses, including attorney’s fees, and satisfy all
judgments as may be incurred by or rendered against them, or any of
them, in connection therewith. The indemnitee shall provide, at the
indemnitor’s written request and sole expense, such assistance and
information as may be reasonably provided by the indemnitees in
connection with the defense of any such action.
	 
	B.	 	Indemnification for Taxes

The Contractor shall assume responsibility for, and shall hold
Intelsat and its Associates harmless from all taxes and duties, which
may be required under any present or future law or laws, and which
become due by reason of the performance of Work under this Contract
or any Subcontract hereunder, and shall execute and deliver such
other further instruments, and comply with such requirements of said
laws, as may be necessary thereunder to confirm and effectuate this
Contract, including making of payment of any interest or penalties
related to or arising from such taxes and duties.
	 
	C.	 	Indemnification for failure to Comply with Laws

15 - 1

 

	 	 	Each Party shall indemnify and hold the other Party and its Associates,
subsidiaries, successors and assigns, or any of them, harmless from any
and all Losses resulting from such Party’s failure to comply with
applicable laws.
	 
	D.	 	Intellectual Property Indemnification
	 
	 	 	(i) The Contractor shall, at the Contractor’s sole expense, defend
Intelsat and its Associates, subsidiaries, successors and assigns, or any
of them, from and
against all claims, actions, suits and proceedings, whether in law or
equity,
alleging that the manufacture or preparation of any Deliverable
Item in the
performance of Work or the use, lease, sale or other disposition of
any Deliverable Item by Intelsat, its Associates or agents infringes
any third party
Intellectual Property Right, worldwide, and shall indemnify and hold
harmless Intelsat and its Associates, subsidiaries, agents successors and
assigns, or any of them, and shall pay all costs and damages, including
attorney’s fees and royalties, associated with all settlements or awards.
Intelsat shall provide at the Contractor’s written request and sole
expense, such assistance and information as may be reasonably provided by
Intelsat.
	 
	 	 	(ii) If an injunction or other order is obtained against the
manufacture, preparation, use, lease, sale or other disposition of any
Deliverable Item, the Contractor agrees to use its best efforts either to
procure rights so that such Deliverable Item and the manufacture,
preparation, use, lease, sale or other disposition thereof is no longer
subject to said injunction or to modify or replace such Deliverable Item,
subject to Intelsat’s technical approval, so that it is no longer subject
to such order. In the event that neither of the foregoing alternatives is
suitably accomplished, the Contractor shall be liable to Intelsat, its
Associates, and their successors and assigns, or any of them, for any
additional direct damages arising as a result of such injunction,
including, without limitation, a refund of the amount paid for the
Spacecraft less the reasonable value attributable for the use of the
Spacecraft, plus any additional costs in reprocuring

15 - 2

 

	 	 	a replacement Spacecraft for the period of use that Intelsat has lost as
a result of the infringement.
	 
	 	 	(iii) Intelsat neither represents nor warrants that the performance
of any Work, including the manufacture, preparation, use, lease, sale or
other disposition of any Item required under this Contract will be free
from third party claims of infringement of any Intellectual Property
Rights worldwide.
	 
	E.	 	Indemnification Procedures
	 
	 	 	With respect to any claims under this Article, the following procedures
shall apply:
	 
	 	 	(i) Notice - Promptly after receipt by any entity entitled to
indemnification under this Contract of notice of the commencement or
threatened commencement of any civil, criminal, administrative, or
investigative action or proceeding involving a claim in respect of which
the indemnitee will seek indemnification pursuant to the applicable
provision under this Contract, the indemnitee shall notify the indemnitor
of such claim in writing. No failure to so notify an indemnitor shall
relieve it of its obligations under this Agreement except to the extent
that it can demonstrate damages attributable to such failure. Within
***** following receipt of written notice from the indemnitee
relating to any claim, but no later than ***** before the date on
which any response to a complaint or summons is due, the indemnitor shall
notify the indemnitee in writing if the indemnitor elects to assume
control of the defense and settlement of that claim (a “Notice of
Election”).
	 
	 	 	(b) Procedure Following Notice of Election - If the indemnitor
delivers a Notice of Election relating to any claim within the required
notice period, the indemnitor shall be entitled to have sole control over
the defense and settlement of such claim; provided that (i) the indemnitee
shall be entitled to participate in the defense of such claim and to employ
counsel at its own expense to assist in the handling of such claim, and
(ii) the indemnitor shall obtain the prior written

15 - 3

 

	 	 	approval of the indemnitee before entering into any settlement of such
claim or ceasing to defend against such claim, such approval shall not be
unreasonably withheld or delayed. After the indemnitor has delivered a
Notice of Election relating to any claim in accordance with the preceding
paragraph, the indemnitor shall not be liable to the indemnitee for any
legal expenses incurred by the indemnitee in connection with the defense
of that claim. In addition, the indemnitor shall not be required to
indemnify the indemnitee for any amount paid or payable by the indemnitee in the settlement of any claim for which
the indemnitor has delivered a timely Notice of Election if such amount was
agreed to without the written consent of the indemnitor.
	 
	 	 	(c) Procedure Where No Notice of Election Is Delivered - If the
indemnitor does not deliver a Notice of Election relating to any claim
within the required notice period, the indemnitee shall have the right to
defend or settle the claim in such manner as it may deem appropriate, at
the cost and expense of the indemnitor. The indemnitor shall promptly
reimburse the indemnitee for all such costs and expenses.
	 
	E.	 	Subrogation
	 
	 	 	In the event that an indemnitor shall be obligated to indemnify an
indemnitee pursuant to this Contract, the indemnitor shall, upon payment
of such indemnity in full, be subrogated to all rights of the indemnitee
with respect to the claims to which such indemnification relates.

15 - 4

 

ARTICLE 16. - SUBCONTRACTS

	A.	 	The Contractor has represented to Intelsat that in the
performance of the Work hereunder, it will be necessary for the Contractor to engage
Subcontractors to
perform certain portions of the Work. The Contractor shall provide a
list of all
Subcontracts, at unit level and above, having a contract value in
excess of ***** in support of this
Contract, and shall identify the portion of the Work to be
performed pursuant to each such Subcontract. This list shall be
updated and included in each Quarterly Report, to be provided by
the Contractor pursuant to Exhibit B and Article 37 of this
Contract, entitled Notices, Reports and Invoices.
	 
	B.	 	The Contractor further acknowledges and agrees that certain
Subcontracts
awarded by the Contractor are necessary for the successful completion
of the
Work to be performed hereunder and represent material elements of the
Work,
either by virtue of the size of the Subcontract awarded or the
strategic contribution
to Work (each a “Key Subcontract”). All Subcontracts with a contract
value of ***** or more shall be deemed Key
Subcontracts, as well
as any other Subcontracts that the Parties mutually agree to
designate as Key
Subcontracts. The Parties agree that the Contractor shall use its
best efforts to
enter into Key Subcontracts with the persons or entities
(hereinafter referred to as
“Key Subcontractors”) listed in Table 8.1 below, or such other
persons or entities as Intelsat may subsequently approve as meeting
Intelsat’s requirements. If, for any reason, the Contractor is unable
to enter into a Key Subcontract with one or more Key Subcontractors
listed below, the Contractor shall submit to Intelsat, for review and
approval, the names and qualifications of available substitute
Subcontractors of substantially equal abilities and qualifications in
order that Intelsat can confirm such proposed substitute will meet
its requirements, along with an explanation of the reasons for the
failure to enter into the Key Subcontract.

16 - 1

 

Table 8.1

	 	 	 
	Key Subcontractor

	 	Work
	1.    (TBD – prior to ATP)

	 	(TBD – prior to ATP)
	2.
	 	 
	3.
	 	 
	4.
	 	 
	5.
	 	 

	D.	 	Unless otherwise agreed to in writing by Intelsat’s Authorized
Representative, the
Contractor shall ensure that all Key Subcontracts include provisions
which
materially conform to the following provisions of this Contract:

	1.	 	Article 12, Intelsat’s Right of Access;
	 
	2.	 	Article 47, Intelsat Furnished Information and Property;
	 
	3.	 	Article 30, Property Accounting;

	 
	4.	 	Article 24, Foreground Data and Background Data;
	 
	5.	 	Article 25, Inventions;
	 
	6.	 	Article 48, Confidentiality;
	 
	7.	 	Article 28, Insurance;
	 
	8.	 	Article 52, Reporting of Payments; and
	 
	9.	 	Article 59, General.

	E.	 	The foregoing requirements for the inclusion of certain provisions in
Subcontracts
shall not be construed as relieving the Contractor of its obligation to
include in
Subcontracts any provisions which may otherwise be required.
	 
	F.	 	The Contractor shall submit the technical specifications of all Key
Subcontracts to
Intelsat for review and approval prior to award of the Key Subcontract.

16 - 2

 

	G.	 	The Contractor shall deliver to Intelsat two (2) copies of all Key
Subcontracts after execution thereof excluding all financial data,
including any modifications thereto, and at Intelsat’s request, any other
Subcontracts issued.
	 
	H.	 	Nothing in this Contract shall be construed as creating a
contractual relationship between Intelsat and any Subcontractor, including
any third party beneficiary rights in any Subcontractor. The Contractor is
fully responsible to Intelsat for the  acts or omissions of its
Subcontractors and all persons used by the Contractor or a Subcontractor
in connection with the performance of the Work. Any failure by a
Subcontractor to meet its obligations to the Contractor shall not
constitute a basis for Excusable Delay, except as provided in Article 21
of this Contract, entitled
Excusable Delays, and shall not relieve the Contractor from meeting any of
its
obligations under this Contract.

16 - 3

 

ARTICLE 17. - TERMINATION FOR CONVENIENCE

	A.	 	Intelsat may, prior to the Contractor’s completion of all Work,
by written notice
issued by Intelsat’s Authorized Representative, terminate this
Contract, in whole or
in part, for its convenience, whereupon the Contractor shall cease
Work in
accordance with the terms of said notice.
	 
	B.	 	Termination charges shall be calculated in accordance with the
termination profile
contained in Exhibit G, Termination for Convenience Liability
Profile.
	 
	C.	 	Termination charges, less (i) amounts previously paid by
intelsat pursuant to this
Contract and (ii) amounts representing termination charges
attributable to
Deliverable Hardware which the Contractor or any of its
Subcontractors elects to retain, shall be paid by Intelsat within
***** after receipt of the Contractor’s invoice therefor.
The minimum termination liability under this Paragraph is *****.
	 
	D.	 	The Contractor agrees to advise Intelsat of all proposed
settlements with vendors
and Subcontractors in event of termination, and the Contractor
further agrees not
to enter into any binding settlement until Intelsat has approved the
proposed
settlement or ***** have elapsed from the date when such
advice was
received by
Intelsat.
	 
	E.	 	In the event of such a termination, all inventory generated
under this Contract,
except that specified in subparagraph C.(ii) of this Article, shall
become the
property of Intelsat.

17 - 1

 

ARTICLE 18. - CHANGES DIRECTED BY INTELSAT

	A.	 	Intelsat may, from time to time, prior to final acceptance or
termination of this
Contract, by written change order issued by Intelsat’s Authorized
Representative
(i) require changes within the general scope of this Contract,
including, but not
limited to, changes in drawings, designs, specifications, method of
shipment or
packing, or time or place of delivery, (ii) require additional Work
within the general scope of this Contract or (iii) require the omission of portions
of the Work.
	 
	B.	 	If any such change order causes an increase or decrease in the
Contractor’s cost
or in the time required to complete all or portions of the Work, an
equitable
adjustment shall be made in the price, or delivery date or schedule,
or both, and this Contract shall be modified in writing accordingly.
Any claim by the Contractor for adjustment under this paragraph shall
be deemed waived unless asserted in writing within ***** from the date of receipt by the Contractor of the change order. The
amount of the claim together with information sufficient to support
the claim shall be submitted, in writing, within ***** from
the date of assertion of the claim. If the cost of supplies or
materials made obsolete or excess as a result of a change is included
in the Contractor’s claim for adjustment, Intelsat shall have the
right to prescribe the manner of disposition of such supplies
or materials. Nothing in this Article shall excuse the Contractor
from promptly
proceeding with the Contract
as changed.
	 
	C.	 	If the Contractor submits a claim for adjustment pursuant to
Paragraph A of this
Article, which claim is for an increase in the cost of this Contract,
the claim shall
be supported by evidence which details the increased cost the
Contractor will
sustain as a result of performing the changed work ordered by
Intelsat. Subject to
Paragraph D hereof, such increased cost, if any, will be calculated
in accordance
with the Contractor’s regularly established accounting system and
shall, if required

18 - 1

 

	 	 	by Intelsat, be verified at the Contractor’s expense, by the independent
Certified Public Accounting firm normally used by the Contractor.
	 
	D.	 	Upon the receipt by Intelsat of the Contractor’s claim, with supporting
evidence,
the Parties shall attempt to reach agreement on the pricing of the change
order, it
being understood, however, that without relieving the Contractor of the
obligation
to proceed promptly with the Contract as changed, in the event the
Parties are
unable to reach agreement on the pricing of the change order, the matter
shall be determined in accordance with Article 22 of this Contract,
entitled Disputes.
	 
	E.	 	The Contractor shall provide an updated claim which reflects the final
price of the
change.

18 - 2

 

ARTICLE 19. - RESERVED

19 - 1

 

ARTICLE 20. - EXCUSABLE DELAYS

	A.	 	Delays in delivery resulting from, but not limited to, acts of
God or of the public
enemy, acts of a government in its sovereign capacity, fires,
floods, natural
disasters, major utility disruptions, labor disputes, strikes,
epidemics, quarantine
restrictions and freight embargoes, which in every case are beyond
the
reasonable control and without the fault or negligence of the
Contractor and its
Subcontractors, shall constitute excusable delays if a written
claim thereof together with Information sufficient to support such
claim is received by Intelsat within ***** after the start
of each such act or occurrence. The Contractor shall provide written
evidence of the period of such delay. The delivery requirements shall
be extended by the amount of such period as is supported by the
evidence provided.
	 
	B.	 	Termination for Excusable Delay

	1.	 	Intelsat may, upon written notice to the Contractor,
immediately terminate
this Contract, in whole or in part, if and when it becomes
reasonably certain
that the aggregate of excusable delays in accordance with this
Article, with
respect to the Spacecraft to be delivered hereunder, will
exceed *****.
	 
	2.	 	In the event of termination under this Paragraph B, the Contractor
shall immediately refund to Intelsat ***** of the $50 million deposit) previously made
to the Contractor under this Contract for such Spacecraft, plus
***** of any unearned portion of the $50 million deposit paid by Intelsat pursuant to Article 5 of this Contract, entitled Milestone Payments.
	 
	3.	 	Upon completion of all payments to Intelsat in
accordance with this
Paragraph B, the Contractor shall be entitled to retain title
to any and all
Work, Work-in-progress, parts or other material, inventories,
and any
associated warranties, and any subcontracted items the
Contractor has

20 - 1

 

	 	 	specifically produced, acquired, or entered into in accordance with this
Contract.
	 
	4.	 	In the event it is determined pursuant to Article 31, Disputes, or
by written agreement of the Parties, that Intelsat wrongfully
terminated this Contract under this Article, such termination shall be
considered a Termination for Convenience by Intelsat and the provisions of
Article 17, Termination for Convenience shall apply.

20 - 2

 

ARTICLE 21. - TERMINATION FOR CAUSE

	A.	 	Intelsat may, by written notice issued by Intelsat’s Authorized
Representative,
terminate this Contract, in whole or in part, if the Contractor fails
(i) to perform any
of the Work within the time specified herein; or (ii) to comply with
any of the
provisions of this Contract; or (iii) to make progress so as to
ensure completion of
this Contract in accordance with its terms; and such failure under
either item (i), (ii)
or (ii) above is not cured within ***** from
the date of such notice; or (iv) if Contractor, makes a general
assignment for the benefit of creditors, voluntarily files for
protection from creditors under applicable bankruptcy laws or
similar laws, or has an involuntary bankruptcy petition filed
against it (this provision does not apply to the Contractor’s
current Chapter 11 Case Nos. (RDD) 03-41709 (RDD) through
03-41728, filed in the U.S. Bankruptcy Court for the Southern
District of New York on July 15th 2003). In such event Intelsat
may take over the Work, in whole or in part, and prosecute the
same to completion by contract or otherwise and may take
possession of and utilize in completing the Work, such materials,
appliances, and Work in progress as may be necessary therefor. If
Intelsat so terminates the Contractor’s right to proceed pursuant
to this Paragraph A, the Contractor shall be liable for, and pay
to Intelsat, any and all increased costs incurred by Intelsat in
completing the Work, including, as applicable, a refund of that
portion of the $50,000,000 deposit that is required so that in
the aggregate, Intelsat pays no more for the Work than the Total
Contract Price provided under Article 3. The rights and remedies
of Intelsat provided in this Paragraph A are in addition to any
other rights and remedies provided by law or under this Contract.
	 
	B.	 	Since the times for delivery of the Spacecraft set forth in
Article 4 are of the
essence to this Contract and the delayed delivery of any Spacecraft
required by
this Contract may cause Intelsat to incur additional costs, including
launch
postponement fees, loss of anticipated revenue and other damages, the
Contractor and Intelsat agree that if the Contractor’s delivery of
any Spacecraft

21 - 1

 

	 	 	required under this Contract is delayed or postponed for more
than ***** days after its scheduled delivery date specified in
Article 4 of this Contract, entitled Delivery Schedule, Intelsat shall have
the right to terminate any part of this Contract (including a part of the
Work corresponding to the construction and delivery of the delayed
Spacecraft or of any other Spacecraft not yet delivered under this
Contract) or the entire Contract by written notice to such effect to the
Contractor. Upon receipt by the Contractor of such notice, the Contractor
shall immediately refund to Intelsat ***** (including
the $50 Million deposit) under this Contract for the terminated part of the
Contract. By virtue of such termination, Intelsat shall not incur any
liability under this Contract for the terminated part of the Contract.
Intelsat’s rights and remedies under this Paragraph B are in addition to
any other rights and remedies provided by law or pursuant to Paragraph A of
this Article, Article 10 of this Contract, entitled Price Adjustments for
Late or Early Delivery, or any other provision of this Contract.
	 
	C.	 	If, after termination under the provisions of this Article, it is
determined for any reason that the Contractor was terminated without cause
under the provisions of this Article, or that the delay causing such
termination was excusable, the rights and obligations of the Parties shall
be the same as if termination had been
effected pursuant to Article 17 of this Contract, entitled Termination for
Convenience.

21 - 2

 

ARTICLE 22. - DISPUTES

     Any dispute, claim or other disagreement between the Parties arising out
of or relating to this Contract (each, a “Dispute”), including with respect to
the interpretation of any provision of this Contract and with respect to the
performance by Intelsat or the Contractor of their respective obligations
hereunder, shall be resolved as provided in this Article.

     
A. Informal Dispute Resolution

	1.	 	Prior to the initiation of any legal proceedings pursuant
to Paragraph B
below, the Parties shall first attempt to resolve their Dispute
on an informal basis in accordance with this Paragraph A,
excluding any Dispute concerning a decision of a Party which
decision is subject to that Party’s sole discretion.
	 
	2.	 	Invocation of Progressive Dispute Resolution - If
either Party believes that a
Dispute will not be amicably resolved informally and without
resort to the
procedures described in this Article, such Party may call for
progressively
senior management involvement in the dispute negotiation and
resolution
by providing written notice to the other Party.
	 
	3.	 	Progression of Management Involvement - Upon the
written request of a
Party, which may be included in the preceding notice, the
Parties shall
arrange personal meetings and/or telephone conferences as
needed, at
mutually convenient times at a location to be mutually agreed
by the
Parties, between negotiators for the Parties at the successive
management
and senior management levels:

Table 22 A

	 	 	 	 	 
	

	Level

	 	Intelsat Negotiator
	 	Contractor Negotiator
	

	Level 1

	 	Management Representative
	 	Management Representative
	

	Level 2

	 	Senior Management
	 	Senior Management
	

22 - 1

 

	 	 	 	 	 
	 

	 

	 	Representative
	 	Representative
	 

	4.	 	The designated negotiators specified above shall meet as
often as the
Parties reasonably deem necessary to discuss the Dispute and attempt to
resolve it without the necessity of any formal proceeding and in order to
gather and furnish all information with respect to the Dispute which the
Parties believe to be appropriate and germane in connection with its
resolution.
	 
	5.	 	The specific format for the discussions shall be left to the
discretion of the
designated negotiators.
	 
	6.	 	Time at Levels - The negotiators at Level 1 shall have
a period of twenty (20) business days in which to attempt to resolve
the dispute, unless otherwise agreed to by the Parties. The allotted
time for the Level 1 negotiations shall begin on the date of receipt
of the invoking Party’s notice. If a resolution is not achieved by
the negotiators at Level 1 at the end of the allotted twenty (20)
business day period, then the Dispute shall be referred to the Level
2 negotiators who shall be allotted five (5) business days to
resolve the Dispute. The allotted time for the negotiations at Level
2 shall begin immediately following the expiration of the allotted
time for negotiations at Level 1. If a resolution is not achieved by
the Level 2 negotiators within the allotted time for such
negotiations, then either Party shall have the right to commence
legal proceedings as contemplated by Paragraph B below.
	 
	7.	 	Nothing in this Paragraph A shall be construed to prevent a
Party from
instituting, and a Party is authorized to institute, formal
proceedings earlier to avoid the expiration of any applicable
limitations period, or to preserve a superior position with
respect to other creditors.

	B.	 	Legal Proceedings

22 - 2

 

	 	 	In the event that the Parties are unable to resolve the Dispute pursuant
to Paragraph A above, either Party may submit the Dispute exclusively to
the courts of the District of Columbia with such agreement on
jurisdiction being irrevocable. Notwithstanding the foregoing, the
Parties may mutually agree to submit the Dispute to arbitration pursuant
to the rules and procedures agreed by the Parties.
	 
	C.	 	Continued Performance
	 
	 	 	Each Party agrees to continue performing its obligations under this
Contract,
except where such Dispute is resulting from Intelsat’s termination
of the Contract,
while any Dispute is being resolved except for Disputes relating to the
termination of the Contract.
	 
	D.	 	Governing Law
	 
	 	 	This Contract, and all matters arising from or connected with it, shall be
governed by and construed in accordance with the laws of the State of New
York, without regard to its conflict of laws provisions.

22 - 3

 

ARTICLE 23. - REPORTS

	A.	 	The Contractor shall deliver to Intelsat written progress
and status reports, test data, and any final reports, in accordance
with the requirements of Exhibit B, Statement of Work, hereof.
	 
	B.	 	Key Subcontractors shall be required by the terms of their
Subcontracts to submit
copies of written progress and status reports to Intelsat
concurrently with the
Subcontractor’s submission to the
Contractor.
	 
	C.	 	All reports furnished pursuant to this Article may be
used and distributed by Intelsat in accordance with the provisions
of this Contract.

23 - 1

 

ARTICLE 24. - INTELLECTUAL PROPERTY RIGHTS

	A.	 	Intelsat’s Right to Use Contractor Intellectual Property
	 
	 	 	The Contractor does hereby grant to Intelsat and its Associates a
fully-paid, irrevocable, non-exclusive and worldwide Right to Use,
and Right to Sublicense to its Associates and agents and successor
and assigns a Right to Use any
Intellectual Property incorporated into any of the Deliverable Items
for any Intelsat purposes connected with the design, development,
construction, establishment, maintenance, and operation of
Deliverable Items. Intelsat acknowledges and agrees that any
Intellectual Property of the Contractor remains the property of
the Contractor subject to Intelsat’s rights granted hereunder.
	 
	B.	 	Intelsat’s Intellectual Property
	 
	 	 	The Contractor acknowledges and agrees that to the extent that
Intelsat provides any of its Intellectual Property to the Contractor
or its agents to be incorporated into the Deliverable Items,
including any Intelsat provided specifications in connection with the
Work being provided hereunder by the Contractor, the Contractor is
not granted any rights to such Intellectual Property except to use
such Intellectual Property for purposes of this Contract. The
Contractor further acknowledges and agrees that any Intellectual
Property of Intelsat remains the property of Intelsat.

24 - 1

 

ARTICLE 25. - INVENTIONS

	A.	 	Notification of Subject Inventions and Background Patents

	1.	 	***** after the ATP and at the end of each ***** period thereafter until completion of all Work or termination of this
Contract,
the Contractor shall deliver to Intelsat a written list, by subject,
of all not
previously reported Subject Inventions and Background Patents
under this
Contract or any Subcontract. The list shall set forth the
reference number, title, inventor(s) and date of conception,
reduction to practice, Patent application or Patent issuance,
whichever is latest as well as the assigned Patent
application number or Patent number, if any and specifically
identify any Unnecessary Background Patents and limitations
on authority to grant rights in Background Patents.
	 
	2.	 	Upon completion of all Work or termination
of this Contract and prior to final acceptance, the Contractor
shall deliver to Intelsat (i) a written list, by subject and
in the form set forth herein, of all Subject Inventions and
Background Patents under this Contract or any Subcontract,
whether or not previously reported, or (ii) a written
certification that there are no such Subject Inventions or
Background Patents. Such list shall be amended should any
limitations on the Contractor’s or any Subcontractor’s
authority to grant rights in Background Patents be
subsequently changed or removed.

	 	 	 	 	 	 	 	 	 
	

	Example Subject Inventions
	

	Reference	 	 	 	 	 	 	 	Applications
	Number
	 	Title
	 	Inventor(s)
	 	Date
	 	Patent Number

	Invention
No. 2359

	 	Analog Threshold

Decoder
	 	J.D. Jones
	 	30/5/83
	 	U.S. Application
No. 454,201
	

25 - 1

 

	 	 	 	 	 	 	 	 	 	 	 
	

	Background Patents
  
	

	 	 	 	 	 	 	Application/	 	 	 	 
	Title
	 	Inventor(s)
	 	Date
	 	Patent No.
	 	Necessary
	 	Limitation (*)

	Threshold
Decoder

	 	P.E. Smith
	 	25/1/82
	 	U.S. Patent
No.
5,903,267
	 	Yes
	 	None
	

* State any limitations on Contractor’s or any Subcontractor’s authority to
grant rights to this
item.

	B.	 	Disclosure of Subject Inventions

	 	 	Promptly, but in any event within ***** following
conception or first actual reduction to practice of each
Subject Invention, whichever occurs first under this Contract or any
Subcontract, and in all cases prior to final acceptance, the
Contractor shall deliver to Intelsat a written disclosure
(hereinafter referred to as “Invention Disclosure”) of each Subject
Invention not previously disclosed. The Invention Disclosure shall
be sufficiently complete in technical detail to convey to one
skilled in the art to which the Subject Invention pertains a clear
understanding of the nature, purpose, operation and, to the extent
known, the physical, chemical and electrical characteristics of the
Subject Invention. The Contractor shall transmit to Intelsat, within
***** after submission of the Invention Disclosure, a list of
those countries in which a Patent application claiming each such
Subject Invention will be filed by or on behalf of the Contractor.

	C.	 	Patent Applications

	1.	 	The Contractor shall, within ***** of delivery of
the Invention
Disclosure, file or cause to be filed Patent applications on
each Subject Invention in all countries listed by Contractor
pursuant to subparagraph B.1 of this Article. The ***** period may be extended for up to an

25 - 2

 

	 	 	additional ***** from the date of the original filing to enable the
filing of Patent applications in Paris Convention countries claiming
priority upon a Patent application filed within said initial ***** period.
	 
	2.	 	Intelsat shall have the right to prescribe in writing to the Contractor
any
countries in which Intelsat desires the filing of Patent applications for
each
Subject Invention and the Contractor shall, within ***** of
receiving such prescription, file or cause to be filed Patent
applications in all
such countries or notify Intelsat in writing of any countries prescribed
by
Intelsat in which the Contractor elects not to file or have filed Patent
applications. The ***** period may be extended for up to an
additional ***** from the date of the original filing to enable the filing
of
Patent applications in Paris Convention countries claiming priority upon
a
patent application filed within said initial ***** period or upon
a
Patent application filed pursuant to subparagraph C.1 of this Article.
	 
	3.	 	All Patent applications filed by or on behalf of the Contractor shall be
at its
sole expense.
	 
	4.	 	The Contractor shall deliver to Intelsat copies of each Patent application
and each Patent promptly after the filing or issuance thereof, as
applicable.
	 
	5.	 	The Contractor shall notify Intelsat of any election (i) to abandon any
Patent
application on a Subject Invention or (ii) to cause any Patent on a
Subject
Invention to become unenforceable no less than ***** prior to
the
date such Patent application or Patent shall be deemed abandoned or
unenforceable. Upon the written request of Intelsat, the Contractor shall
use its best efforts to maintain the viability of such Patent application
or
Patent until title thereto is conveyed in accordance with subparagraph
D.3
of this Article.

25 - 3

 

       D.  Rights Granted in Subject Inventions and Background Patents

	 	1.	 	The Contractor does hereby grant to
Intelsat and its Associates an irrevocable, non-exclusive
and worldwide Right to Use and Right to Sublicense to its
Associates and agents each Subject Invention for Intelsat
purposes relating to current or future satellite programs
with other satellite manufacturers.
	 
	 	2.	 	The Contractor does hereby agree to
grant solely for the purposes of enabling the practice of
any Subject Invention and/or the use of any Deliverable
Item to Intelsat, upon its request, an irrevocable,
non-exclusive and worldwide Right to Use and Right to
Sublicense to its Associates and agents and its successor
and assigns Background Patents
	 
	 	3.	 	Other provisions of this Contract to
the contrary notwithstanding, the Contractor does hereby
agree to convey or have conveyed to Intelsat, upon its
request and without charge, all right, title and interest
in each Subject Invention and any Patent applications
and/or Patents pertaining thereto, including the right to
place such Subject Invention in the public domain or, at
Intelsat’s sole expense, prosecute a Patent application
or maintain a Patent for such Subject Invention, (i) in
each country in which the Contractor fails to file or
have filed a Patent application on such Subject Invention
in accordance with subparagraph C.1 of this Article, (ii)
in each country in which the Contractor has elected not
to file or has failed to file or have filed a Patent
application on such Subject Invention in accordance with
subparagraph C.2 of this Article, (iii) in each country
in which there has been an election to abandon a Patent
application on such Subject Invention or to cause a
Patent on such Subject Invention to become unenforceable
and (iv) worldwide if the Contractor has failed to report
such Subject Invention in accordance with subparagraph
B.1 of this Article. The

25-4

 

	 	 	Contractor shall ensure the execution and delivery of all documents
required, in Intelsat’s sole discretion, to perfect and evidence
such conveyance, including instruments of assignment, Patent
applications and Patents. The Contractor agrees that each such
Subject Invention and any Patent applications and Patents
pertaining thereto and any benefits obtained therefrom shall be
deemed to have been held in trust, solely for the benefit of
Intelsat, until the Contractor has conveyed same to Intelsat.

	E.	 	Other Authorizations
	 
	 	 	Other provisions of this Article to the contrary notwithstanding, the
disclosure, making, use, lease, sale, other disposition and other
practice of any Subject Invention or Background Patent shall be: (i)
free, unconditional and unlimited from and after the time that such
Subject Invention or the right to practice such Subject Invention or
Background Patent comes into the public domain, or (ii) at the sole
discretion of the licensee, on other terms and conditions, from and after
the time such Subject Invention or rights to practice such Subject
Invention or Background Patent become otherwise lawfully available to
such licensee on such other terms and conditions.
	 
	F.	 	Invention Warranty

	 	 	The Contractor represents and warrants that it has or will obtain the authority
to effectuate the provisions of this Article and that no lien, encumbrance,
pledge or any other interest whatsoever will be applied against any Subject
Invention and/or Background Patent such that Intelsat and its Associates shall
be prevented, in any way, from exercising rights granted pursuant to Paragraph
D of this Article.

	G.	 	Intelsat and Jointly Developed Subject Inventions

25 - 5

 

	 	 	Notwithstanding anything in this Article to the contrary, to the extent it is
determined that any Subject Invention was developed by an Intelsat employee,
representative or agent, Intelsat reserves the right to take full control and
ownership of the Subject Invention and to the extent that the Contractor
desires any rights to use such Subject Inventions for any use outside of
Intelsat’s purposes, such use shall be based on negotiated terms and conditions
between the Parties. In the event that the Parties conclude that the Subject
Inventions were jointly developed by Intelsat and the Contractor (or their
respective representatives), the Parties shall negotiate mutual rights and
benefits based on the
intended use of the Subject Inventions.

25 - 6

 

ARTICLE 26. - CHANGES REQUESTED BY CONTRACTOR OR INTELSAT

	A.	 	Any changes requested by the Contractor during the performance
of this Contract, within the general scope of this Contract, which
will add or delete work, affect the design of the Spacecraft, change
the method of shipment or packing, or place or time of delivery, or
will affect any other requirement of this Contract shall be
submitted in writing to Intelsat ***** prior to the
proposed date of the
change. If such Contractor-requested change causes an increase or
decrease in
the total price of this Contract, the Contractor shall submit to
Intelsat, at the time
the requested change is submitted, or at a later date agreed to by
Intelsat, the details of such increase or decrease.
	 
	B.	 	Intelsat shall notify the Contractor in writing within ***** after receipt of
the requested change and price adjustment, if any, whether or not it
agrees with
and accepts such change. If Intelsat agrees with and accepts the
Contractor-
requested change, the Contractor shall proceed with the performance
of the
Contract as changed, and an amendment to the Contract reflecting such
change
and price adjustment, if any, shall be issued. The Contractor shall,
within a
reasonable time thereafter, provide an updated claim which reflects
the final
agreed price of the change. If Intelsat does not agree with such
Contractor-
requested change, the Parties shall attempt to reach agreement on
such change.
In the event the Parties are unable to reach agreement on such change
or price
adjustment, if any, or both, the Contractor shall proceed with the
performance of
the Contract as unchanged.
	 
	C.	 	For any changes requested by Intelsat during the performance of
this Contract,
within the general scope of this Contract, which will add or delete
work, affect the
design of the Spacecraft, change the method of shipment or packing,
or place or
time of delivery, or will affect any other requirement of this
Contract, the
Contractor shall respond to that request in writing to Intelsat
within *****

26 - 1

 

	 	 	after such request. If such Intelsat-requested change causes an increase or
decrease in the total price of this Contract, the Contractor shall submit to
Intelsat, at the time the response to the requested change is submitted, the
details of such increase or decrease, with a reasonable break down of the
price. Intelsat shall notify the Contractor in writing, within a reasonable
time after receipt of the Contractor’s response, whether or not it agrees
with and accepts the Contractor’s response. If Intelsat agrees with and
accepts the Contractor’s response, the
Contractor shall proceed with the performance of the Contract, as changed and
an amendment to the Contract reflecting such change and price
adjustment, if any, shall be issued. The Contractor shall, within a
reasonable time thereafter, provide an updated proposal which reflects
the final agreed price of the change. In the event the Parties are
unable to reach agreement on such change or price adjustment, if any, or
both, the Contractor shall proceed with the performance of the Contract
as unchanged.

26 - 2

 

ARTICLE 27. - PUBLIC RELEASE OF INFORMATION

     At least thirty (30) days prior to the release of news releases, articles,
brochures, advertisements, prepared speeches and other information releases
concerning the Work performed or to be performed hereunder by the Contractor or
any Subcontractor, the Contractor shall seek the approval of Intelsat
concerning the content and timing of such release, and no such release shall be
made until Intelsat’s written approval has been obtained. Such approval
shall not be unreasonably withheld.

27 - 1

 

ARTICLE 28. - INSURANCE

	A.	 	Throughout the period during which Work is being performed
under this Contract, the Contractor shall maintain, at its sole cost
and expense, the following insurance with an insurer(s) possessing a
rating of A-9 or better as rated in the A.M. Best Key Rating Guide
for Property and Casualty Insurance Companies.

	*****

	B.	 	The Contractor shall notify Intelsat immediately of any injuries,
damages, claims,
or suits which arise in connection with this Contract.
	 
	C.	 	The Contractor shall deliver to Intelsat, upon written request
from Intelsat, prior to
commencing Work under this Contract, certificates of insurance
evidencing that:

	(i)	 	such insurance is in effect;

28 - 1

 

	(ii)	 	that Intelsat is a named additional insured under the policies
described in
subparagraph A(3) and A(5) above;
	 
	(iii)	 	the insurer will
provide Intelsat within thirty (30) days prior written notice of
any change in or cancellation of such insurance; and
	 
	(iv)	 	with
respect to the insurance described in subparagraphs A(1) and A(5)
above, all subrogation rights of the insurer with respect to claims
against
Intelsat, its officers, agents, servants, employees, subsidiaries,
successors
and assigns, or any of them, have been waived by the insurer.

	D.	 	In addition to the above insurance requirements, the Contractor
agrees not to
enter into any agreement for the purposes of mitigating directly or
indirectly the rights and remedies of Intelsat for the Contractor’s
obligations under Article 6 of
this Contract entitled Spacecraft Performance Payments, Article 10 of
this Contract entitled Price Adjustments for Late and Early Delivery
and Article 11 of this Contract entitled Price Adjustments for Excess
Dry Mass through insurance or any other means. The Contractor shall
insert the requirements set forth herein in all Key Subcontracts, as
applicable.

28 - 2

 

ARTICLE 29. - LIMITATIONS OF LIABILITY

	A.	 	General

	1.	 	THE PARTIES TO THIS CONTRACT EXPRESSLY RECOGNIZE THAT
COMMERCIAL SPACE VENTURES INVOLVE SUBSTANTIAL RISKS
AND RECOGNIZE THE COMMERCIAL NEED TO DEFINE, APPORTION,
AND LIMIT CONTRACTUALLY ALL THE RISKS ASSOCIATED WITH
THIS COMMERCIAL SPACE VENTURE. THE PAYMENTS AND OTHER
REMEDIES EXPRESSLY SET FORTH IN THIS CONTRACT FULLY REFLECT THE
PARTIES’ NEGOTIATIONS, INTENTIONS, AND BARGAINED-FOR ALLOCATION OF
THE RISKS ASSOCIATED WITH THE COMMERCIAL SPACE VENTURES
CONTEMPLATED BY THIS CONTRACT.
	 
	2.	 	EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN
(THIS EXCEPTION DOES NOT APPLY TO ANY GENERAL STATEMENT HEREIN
REGARDING OTHER RIGHTS AND REMEDIES PROVIDED BY LAW), AND
SUBJECT TO THE EXCEPTIONS SET FORTH IN PARAGRAPH (3) BELOW,
NEITHER PARTY, UNDER ANY CIRCUMSTANCES OR UNDER ANY WARRANTY
(EXPRESS, IMPLIED, OR STATUTORY) OR UNDER ANY THEORY OF
LIABILITY (INCLUDING NEGLIGENCE, TORT, STRICT LIABILITY,
CONTRACT, OR OTHER LEGAL OR EQUITABLE THEORY) SHALL HAVE ANY
LIABILITY TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
AND/OR INCIDENTAL DAMAGES, WHETHER OR NOT FORESEEABLE, INCLUDING
LOST REVENUES OR PROFITS, COST OF CAPITAL, OR ANY OTHER FORM OF
ECONOMIC LOSS RESULTING FROM ANY BREACH OF THIS CONTRACT OR WITH
RESPECT TO ANY DEFECT, NON-CONFORMANCE, OR DEFICIENCY IN ANY
INFORMATION,

29 - 1

 

	 	 	INSTRUCTIONS, SERVICES, OR OTHER THINGS PROVIDED PURSUANT
TO THIS CONTRACT.

	3.	 	The limitations of liability set forth in Paragraph 2
above shall not apply with respect to:

	(a)	 	*****
	 
	(b)	 	Notwithstanding the foregoing subparagraph (a),
all third party
claims that are the subject of indemnification pursuant to
Article 28
of this Contract, entitled Indemnities.

	B.	 	Damage to Persons or Property

	1.	 	Each Party agrees that, with respect to persons
involved with, or property used in connection with, the performance
of agreements to launch the Spacecraft on the Launch Service
Providers (LSP) launch vehicles, each Party agrees to be responsible
for and to absorb, waive and otherwise make no claim against and to
hold harmless the other Party, the LSP, other customers of Intelsat
or the LSP, the applicable Government, their respective contractors,
subcontractors suppliers, Associates, consultants or agents, or any
of them, with respect to (i) injury to, or death of, the Party’s own
or its subcontractors’ Associates, consultants, agents; (ii) any
damage sustained by the Party or its subcontractors or its own or
its subcontractors’ Associates, consultants or agents; (iii) to any
damage sustained by the Spacecraft involved with or used in
connection with the performance of the agreements to launch such
Spacecraft on the LSP’s launch vehicles, resulting from such
activities for any reason whatsoever; including but not

29 - 2

 

	 	 	limited to grossly negligent acts or omissions committed by the Party or
its Associates which cause a launch failure.
	 
	2.	 	The Contractor agrees to the waiver of claims against the LSP as set
forth
in the preceding Paragraphs of this Article only to the same extent that
each of the LSPs agrees to comparable waivers of claims against the
Contractor.
	 
	3.	 	For the purposes of this Article, “damage” includes but is not limited to
direct, indirect, special and/or consequential damages, including
damages
to or loss of property, and loss of profit or revenues.
	 
	4.	 	To the extent that the allocation of risk provisions of the launch service
contract(s) are amended or modified, the Contractor agrees to amend the
foregoing Paragraphs of this Contract to reflect the changes in the
launch service contract.
	 
	5.	 	The Contractor shall ensure that all Subcontracts include the provisions
of
this Paragraph.

29 - 3

 

ARTICLE 30. - PROPERTY ACCOUNTING

	A.	 	The Contractor shall be directly responsible for and
accountable for all supplies,
parts, materials, components, subsystems or systems (whether in its
possession
or the possession of any of its Subcontractors) which are to become
the property
of Intelsat pursuant to the terms of this Contract and which are part
of the
deliverable Items called for by Article 4 of this Contract, entitled
Delivery
Schedule. For this purpose, the Contractor shall establish and
maintain a system to control, protect, preserve and identify, at
all times and until the last item to be delivered, pursuant to
Article 4, has been delivered to Intelsat, all of the
aforementioned property in its possession or the possession of
its Subcontractors.
	 
	B.	 	The Contractor shall require Subcontractors who are responsible
for developing or
manufacturing any of the Items to be delivered under the terms of
this Contract to
comply with the provisions of this Article.
	 
	C.	 	The Contractor shall, periodically, physically inventory all
Intelsat property in its
possession and shall cause Subcontractors to do likewise. The type
and
frequency of such inventory shall be established by the Contractor,
and
notification of the same shall be provided to Intelsat. The
Contractor shall retain
and cause Subcontractors to retain inventory records of Intelsat
property, until the
last item to be delivered, pursuant to Article 4 of this Contract,
has been delivered
to Intelsat and shall have such records available for Intelsat
review, upon
reasonable notice, at any time during the period of this Contract.
These records
shall be submitted to Intelsat within ***** after delivery
of the last item
under Article 4. If there is no Intelsat property in the Contractor’s
or
Subcontractor’s possession at that time, notification shall also be
provided to that
effect to Intelsat.

30 - 1

 

ARTICLE 31. - EFFECTIVE DATE

     This Contract shall become effective on the Closing (as defined in the
Asset Purchase Agreement) (hereinafter referred to as the “Effective Date of
Contract”).

     Following the Effective Date of Contract, the Contractor is not
authorized to proceed with the performance of any Work hereunder until
Intelsat’s Authorized Representative issues to the Contractor of a written
authorization to proceed with the performance of the Work (herein referred to
as either the “Authorization to Proceed” or the “ATP”). The Parties agree that
Intelsat shall submit the ATP no later than June 30, 2004. Prior to the
issuance by Intelsat and receipt by the Contractor of the ATP, Intelsat shall
have no obligation to the Contractor, financial or otherwise, except as
expressly provided herein. The Contractor shall, immediately upon receipt of
such notice, acknowledge same and proceed with the performance of the Work. To
the extent that the Contractor proceeds with any Work prior to receipt of the
ATP, it shall be at the Contractor’s sole risk regardless of any technical
changes required by Intelsat.

31 - 1

 

ARTICLE 32. - ASSIGNMENT AND NOVATION

     The Contractor may not assign, delegate or otherwise transfer this
Contract, or any of the rights, duties and obligations of the Contractor under
this Contract, without the express prior written consent of Intelsat. Any
attempted assignment or delegation by the Contractor, without such consent
shall be void and without effect. Intelsat may assign or novate this Contract
or any of its right, duties and obligations, including but not limited to any
warranties and indemnities, to a subsidiary or an Affiliate of Intelsat or to a
joint venture in which Intelsat is a majority participant without prior consent
by the Contractor; provided, however, that prior to any assignment or novation,
Intelsat will notify the Contractor of such assignment or novation and, in the
case of a novation, the Contractor shall promptly execute any required novation
documentation.

     Contractor shall cause any person to whom all or substantially all of
Contractor’s assets (whether now owned or hereinafter acquired) are sold,
leased or otherwise transferred, to assume in writing, all of Contractor’s
obligations under this Agreement, on terms reasonably acceptable to Intelsat.

32 - 1

 

ARTICLE 33. - KEY PERSONNEL

	A.	 	Personnel Qualifications

The Contractor shall assign properly qualified personnel to perform
the Work pursuant to this Contract for the duration of such
program.
	 
	B.	 	Assignment of Key Personnel Positions
	 
	 	 	It is agreed that key personnel (“Key Personnel”) shall be the
Contractor
personnel filling the following or equivalent positions, which
positions the Parties agree are necessary for the successful
performance of this Contract:
[Positions and Key Personnel to be
decided prior to issuance of the ATP]

	1.	 	Program Manager;
	 
	2.	 	 
	 
	3.	 	 
	 
	4.	 	 

	C.	 	The Contractor shall assign individuals from within the
Contractor’s
organization to the Key Personnel positions to carry out the Work.
Key
Personnel shall have significant work experience on programs of a
similar
size and scope as the Work under this Contract.
	 
	D.	 	Before assigning an individual to any Key Personnel position,
the
Contractor shall notify Intelsat of the proposed assignment,
introduce the
individual to appropriate Intelsat representatives, and, upon
Intelsat’s
request, provide Intelsat with the individual’s resume and the
opportunity
to interview the individual. If Intelsat, in good faith, objects to
the
qualifications of the proposed individual within fifteen (15) days
after being
notified thereof, then the Contractor agrees to discuss such
objections
with Intelsat and resolve such concerns on a mutually agreeable
basis or;

32 - 1

 

	 	 	if unable to do so the Contractor shall identify and propose to Intelsat
another candidate acceptable to Intelsat. Should the individuals filling the
positions of Key Personnel leave such positions for whatever reason, the
Contractor shall follow the procedures set forth in this Paragraph to select
replacement personnel with comparable levels of experience, qualifications and
ability to the Key Personnel being replaced.

32 - 2

 

		
	ARTICLE 34. -  	INVENTIONS AND TECHNICAL DATA - WITHHOLDING OF PAYMENT

          If, at any time prior to final payment under this Contract, the
requirements of Articles 24 and 25 of this Contract, entitled Intellectual
Property Rights and Inventions, have not been completed to the extent required
by said Articles, including, but not limited to, the submittal of fully
satisfactory inventions reports, Intelsat may, notwithstanding anything in this
Contract to the contrary, withhold payment to the Contractor of such amount as
Intelsat deems reasonable, up to ***** of the Contract price,
until such materials are delivered or deficiencies or inaccuracies therein are
corrected. Neither the withholding nor the payment of any amounts shall be
construed either as a waiver of any of Intelsat’s rights or as evidence of the
satisfactory performance of any of the Contractor’s obligations under this
Contract.

34 - 1

 

ARTICLE 35. - RESERVED

35 - 1

 

ARTICLE 36. - WARRANTY

	A.	 	The Contractor warrants that, notwithstanding prior inspection or
acceptance by
Intelsat:

	1.	 	All Deliverable Hardware shall be in good working
order and free from all
defects in workmanship and materials and shall conform with the
requirements of this Contract;
	 
	2.	 	All Deliverable Data shall conform with the
requirements of this Contract;
and
	 
	3.	 	All Services shall be performed in a skillful
and workmanlike manner and shall conform with the requirements
of this Contract and the highest of professional industrial
standards.

	B.	 	Promptly after receipt of written notification from Intelsat that
Work is defective or
non-conforming, the Contractor shall, in accordance with Intelsat’s
written
instructions, either (i) correct, repair or replace, at Intelsat’s
sole option and at
Contractor’s sole expense, any defective or non-conforming Work so as
to comply
with the above warranties, or (ii) reimburse Intelsat for such
portion of the price as
is equitable.
	 
	C.	 	The above warranties shall continue for a period of ***** from the date
of final acceptance except, however, all corrections, repairs and
replacements
made pursuant to this Article by the Contractor after final
acceptance shall be so
warranted for a period of ***** from the date of acceptance
of such
corrections, repairs or replacements. The warranties in this Article
shall not apply
to a Spacecraft after launch.

36 - 1

 

	D.	 	Except as otherwise set forth herein and in other articles of this
Contract, the
Contractor expressly disclaims any express or implied warranties,
including
without limitation, warranties of fitness for a particular purpose and
merchantability.
	 
	E.	 	The rights and remedies of Intelsat provided in this Article are in
addition to any
other rights and remedies provided by law or under this Contract.

36 - 2

 

ARTICLE 37. - NOTICES, REPORTS AND INVOICES

	A.	 	All notices, reports and invoices to be provided to Intelsat
LLC under this Contract shall be delivered to the appropriate Intelsat
entities as follows:

    	 

	Applicable Notices, Reports &
          Invoices 	 	Receiving Intelsat LLC Entity
          and Address 
	

	Original
            Contract Notices

            Copies of following Deliverable CDRLs*:

                B-22, B-24, B-25 and B-38** 
	 	Intelsat LLC

          c/o Intelsat (Bermuda), Ltd.

          Attn: ***** 

          Director of Contracts

          North Tower, 2nd Floor

          90 Pitts Bay Road

          Pembroke, HM 08

          Bermuda
 

          Telephone: *****

          Facsimile: *****
	
            

          

	Copies
            of Contract Notices

            Copy of Milestone invoices

            All Contract Correspondence 
	 	Intelsat Global Service Corporation

          Attn: *****

          Major Programs Department (Mail Stop 25)

          3400 International Drive, N.W.

          Washington D.C. 20008-3098

          U.S.A.
 

          Telephone: *****

          Facsimile: *****
	
            

          

	Copies
            of Contract Notices

            Original Milestone Payment

            Invoices/Certificates

            Reports and Deliverables*** 
	 	Intelsat Spacecraft Program Office (ISPO)

          Attn: *****

          3825 Fabian Way

          Palo Alto, California 94303

          U.S.A.
	
            

          

	Reports
            and Deliverables*** 
	 	Intelsat Global Service Corporation

          Export Compliance Dept (Mail Stop 33A)

          3400 International Drive, N.W.

          Washington D.C. 20008-3098

          U.S.A.
 

          Telephone: (202) 944-3256
	
            

          

	Original
            Performance (In-Orbit)

            Incentive Invoices 
	 	Intelsat LLC

          c/o Intelsat Global Service Corporation

          Accounts Payable (Mail Stop 14B)

          3400 International Drive, N.W.

          Washington D.C. 20008-3098

          U.S.A.
	

37 - 1

 

	*	 	Upon written notice, the Contractor shall also deliver to
Intelsat (Bermuda), Ltd. one copy of any additional CDRLs, including
CCNs, RDWs, Reports and Deliverables.
	 
	**	 	CDRL B-38 shall be delivered to
Intelsat (Bermuda), Ltd. in electronic format. All other CDRLs shall be
delivered in hard copy format unless otherwise requested by Intelsat
(Bermuda), Ltd. in writing.
	 
	***	 	The Contractor shall provide to Intelsat Global Service Corporation
and ISPO the requisite number of copies as agreed to by the Parties
in Exhibit B.
	 
	B.	 	All notices, reports and invoices to be provided to the
Contractor under this Contract shall be sent to the Contractor Address as
follows:

    	 

	Applicable Notices, Reports &
          Invoices 	 	Receiving Contractor Entity and
          Address 
	

	All Contract
            Correspondence 
	 	Space Systems/Loral, Inc.
	 
	 	Attn: *****

          Mail Stop L- 17

          3825 Fabian Way

          Palo Alto, California 94303

          U.S.A.
 

          Telephone: *****
	 
	 	Facsimile: *****
	

	C.	 	All invoices from the Contractor shall be paid to the following bank
account:

*****

37 - 2

 

ARTICLE 38. - PERFORMANCE TESTING

	A.	 	All developmental, qualification and acceptance testing of all
Items of equipment
required by the technical Exhibits of this Contract, or any other
provisions of this
Contract, may be witnessed by Intelsat’s representatives at the
Contractor’s or
Subcontractor’s plant.
	 
	B.	 	Intelsat reserves the right to specify the times and places for the
undertaking of
final acceptance testing of any Item of equipment to be delivered in
accordance with the requirements of this Contract.
	 
	C.	 	If the Contractor establishes the time, date, or location of any
testing required
under this Contract, the Contractor shall provide Intelsat with the
advance notice specified in this Contract, or if not specified, with
reasonable advance notice.
	 
	D.	 	Testing shall be undertaken in accordance with the Test Plan
(Exhibit D) specified
in this Contract.

38 - 1

 

ARTICLE 39. - STORAGE OF SPACECRAFT

     Within
***** following receipt from the Contractor of notice
that a particular Spacecraft has successfully completed the Shipment Readiness
Review and is ready for shipment to the launch site designated by Intelsat, in
accordance with the terms of this Contract, Intelsat, by written notice to the
Contractor, may elect to have a Spacecraft delivered
to storage at the Contractor’s facilities, or such other facilities as the
Contractor may arrange
$ for, which alternate facilities must have been approved by Intelsat. The
Contractor agrees to
store and perform any necessary testing or refurbishment on such
Spacecraft for a period of
***** at no cost to Intelsat. The Contractor also agrees to store such
Spacecraft for a period of up to ***** at the ***** specified in Article 40 of this Contract, entitled Options, and in
accordance with Exhibit B and the requirements commensurate with storing flight
hardware and equipment, including any required refurbishment/retest.

39 - 1

 

ARTICLE 40. - OPTIONS

A. Intelsat may, at its
option to be exercised in writing from time to time, within ***** from the Effective Date of this Contract, direct the Contractor to produce and
deliver an
additional replacement Spacecraft, launch support and integration services,
and other options
as listed in this Article, in accordance with the requirements of this
Contract. Such equipment
and services shall not exceed the maximum quantities for each as specified
below, and the
pricing schedule set forth below shall apply. Intelsat shall have the right to
exercise the option
for any or all of the items in this Article independently of each other. The
terms and conditions
of this Contact shall apply to any such option upon exercise of such option.
Milestone payment plans for each of these options are to be incorporated in
Exhibit F prior to ATP. In-orbit Performance Payments for these options, where
applicable, are noted below, and shall be paid according to the terms specified
in Article 6 of this Contract, entitled Spacecraft Risk Money and Performance
Payments.

B. Options to be Exercised Prior to ATP

	1.	 	Modifications to Spacecraft at No Cost to Intelsat

At any time prior to issuing the ATP Intelsat may modify the
following technical requirements:

	*****

40 - 1

 

	 	 	*****
	 	 	 
	 	 	Intelsat will make reasonable efforts to minimize the number of design
iterations.
	 	 	 
	 	 	2. Change of Spacecraft	 	 
	 	 	 
	 	 	At anytime prior to issuance of the ATP, Intelsat may, by notifying the
Contractor in writing, initiate negotiations with the Contractor to be
conducted in good faith by the Parties, within a timely manner, in the event
Intelsat desires to replace this procurement of the Sigmasat Spacecraft with
an order for one or more Intelsat VII replacement spacecraft. Upon receipt of
Intelsat’s notice pursuant to the foregoing, the Parties shall use all
commercially reasonable efforts to finalize all relevant terms and
conditions, including price and schedule related to the replacement
spacecraft procurement, however, in no event shall the
Contractor’s right to receive the $50 million deposit, as provided in Article
5 of this Contract,
entitled Milestone Payments, be
affected
	 	 	 
	C.	 	Additional Spacecraft	 	 
	 
	 	 	Intelsat shall have the option to purchase ***** following the launch of the Spacecraft, in
accordance with Exhibit B, at the prices set forth below.

*****

40 - 2

 

	D.	 	Launch Support and Integration Services

     Intelsat may, at its option, direct the Contractor to provide all necessary
launch site integration effort, hardware (perigee stage, airborne support
equipment, etc. as per Exhibit A) and launch support facilities, equipment
and services, including spacecraft transportation, in accordance with Exhibit
B, for the Spacecraft to be launched on any of the specified launch vehicles.
The firm fixed price for all launch site integration effort, hardware and
services, including transportation, required for launch of the Spacecraft on
each of the launch vehicles are presented below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(Dollars in Thousands)
	 	 	 	 	 	 	 	 
	 	 	 	 	0-12 Mths
	 	13-24 Mths
	 	25-36 Mths
	 	37-48 Mths
	 	49-60 Mths
	 	61-72 Mths

	Ariane
	 	NRE	 	 	*****	 	 		*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 
	 
	 	Rec	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Proton
	 	NRE	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 
	 
	 	Rec	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sea Launch
	 	NRE	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 
	 
	 	Rec	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Atlas
	 	NRE	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 
	 
	 	Rec	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Delta
	 	NRE	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****	 
	 
	 	Rec	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	E.	 	Spacecraft Extended Storage and Retest
	 
	1.	 	Intelsat may, at its option, and in connection with the
storage of the Spacecraft, elect to direct the Contractor to continue to
store the Spacecraft for an additional ***** after the
initial Contractor-provided ***** storage and retest period, and to
perform additional Spacecraft testing. The firm fixed price for such
Post-Storage testing, as set forth in Exhibits B and D, for each
Spacecraft, shall be *****.

40 - 3

 

	2.	 	The monthly storage rate shall include any replacement of equipment on
the
Spacecraft which may become necessary due to the length of storage time.
The firm fixed monthly storage rate per Spacecraft is *****.
Intelsat shall be responsible for any duties and taxes that may result
from extended storage of the Spacecraft.

40 - 4

 

ARTICLE 41. - RESERVED

41 - 1

 

ARTICLE 42. - USE OF LAUNCH BASE SUPPORT

     Intelsat will use its best efforts to make arrangements with providers of
launch services to authorize the Contractor to use, on a no-charge basis, in
the performance of the launch support requirements of this Contract,
facilities, equipment, supplies, materials, and services. Such launch base
support shall be furnished in such quantities and at such times as may
reasonably be required for the performance of this Contract.

42 - 1

 

ARTICLE 43. - SPACECRAFT NOT LAUNCHED WITHIN FIVE YEARS

     If
a Spacecraft has not been launched within ***** after its
acceptance by and delivery to Intelsat, the Contractor shall have no further
financial or other obligations to Intelsat with respect to that Spacecraft
unless the Parties reach agreement on the technical and financial elements of a
work program that is necessary to prepare such a Spacecraft for launch. In the
event such agreement is reached and the Spacecraft is launched, the Contractor
shall
promptly refund to Intelsat the amount previously paid to it pursuant to
Paragraph B.5 of Article
6 to this Contract, entitled Spacecraft Risk Money Performance Payments.
Following the launch of such Spacecraft, the Contractor shall be eligible to
receive applicable Performance Payments for such Spacecraft in accordance with
the provisions of this Contract.

43 - 1

 

ARTICLE 44. - RESERVED

44 - 1

 

ARTICLE 45. - CONTRACTOR PROVIDED OFFICE SPACE

     Upon request by Intelsat, at any time during the performance of this
Contract, the Contractor shall provide (and cause the Key Subcontractors
identified by Intelsat to do likewise) adequate office space for Intelsat
staff members and/or consultants at the Contractor’s or Subcontractor’s
facilities free of charge, in accordance with the requirements set forth in
Exhibit
B, Statement of Work. Such office space shall include office furniture,
telephones, an area for
copy and facsimile machines, as well as a library and a computer
room. In addition, the
Contractor or Subcontractor shall provide adequate parking spaces for
Intelsat on-site personnel. Intelsat personnel shall have 24-hour
access to such office space.

45 - 1

 

ARTICLE 46. - ERRORS, OMISSIONS AND INCONSISTENCIES

     By executing this Contract, the Contractor represents that it has
thoroughly examined all parts of this Contract, including all Attachments, and
that it believes them to be complete, consistent and accurate. If the
Contractor concludes during the performance of the Work that any portion of
this Contract is inaccurate or incomplete or that there are inconsistencies, it
shall promptly refer the matter to Intelsat for resolution before proceeding
with the portion of the
Work in question. Such resolutions shall result in no additional charge to
Intelsat since it shall
be the responsibility of the Contractor to fulfill the envelope of
the requirements. If the
Contractor proceeds with the portion of the Work in question before obtaining
such a resolution, it shall be deemed to have proceeded on its own account and
shall not be (i) relieved of its obligation to perform as intended or (ii)
entitled to any increase in price or extension of the delivery requirements by
reason thereof.

46 - 1

 

ARTICLE
47. - INTELSAT FURNISHED INFORMATION AND PROPERTY

     The Contractor agrees, with respect to all Information and property,
including but not limited
to equipment, models and devices, furnished by Intelsat under this
Contract:

	 	A.	 	That title to such Information and property shall remain exclusively in
Intelsat.
	 
	 	B.	 	To assume all risk of loss or damage, reasonable wear
and tear excepted, to such Information and property while in the
Contractor’s or any Subcontractor’s possession or control.
	 
	 	C.	 	To ensure that such Information and property are used
solely in the performance of the Contract.
	 
	 	D.	 	To be responsible for payment of all taxes which become
due by reason of the Contractor’s or any Subcontractor’s
possession, control or use of such Information and property and
to comply with all requirements of said laws, including making
payment of any interest or penalties related to or arising from
such taxes.
	 
	 	E.	 	To ensure that no lien, encumbrance, pledge or other
interest whatsoever attaches to such Information and property as
a result of the Contractor’s or any
Subcontractor’s acts or omissions.
	 
	 	F.	 	Except as may otherwise be provided in this Contract,
to return such Information and property to Intelsat upon
completion of all Work or termination of this Contract.
	 
	 	G.	 	That in no event will Intelsat be liable for special,
indirect or consequential damages related to such Information and
property or arising from the use thereof.

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ARTICLE 48. - CONFIDENTIALITY

	A.	 	During the course of the performance of the Work, either
Party, or any of their respective Associates (“disclosing Party”) in
connection with this Contract, may disclose certain Confidential
Information of such Party to the other Party (“receiving Party”).
Unless otherwise provided for in this Contract or consented to in
writing by
the disclosing Party, the receiving Party shall:

	1.	 	keep the Confidential Information in confidence and in
the same manner as
the receiving Party maintains its own Confidential Information,
or, at minimum,
as a reasonable person would under the circumstances;
	 
	2.	 	make no copies of the Confidential Information, in whole or in part,
except for
a reasonable number of copies necessary for performing the
Services. All copies shall reproduce, without modification, any
and all proprietary markings and other legends contained thereon;
	 
	3.	 	limit the disclosure of all Confidential Information
received under this Contract
inside its organization to persons having a need-to-know,
provided, however,
that, the receiving Party’s Subcontractors may be included within
the meaning
of “persons having a need-to-know” provided that such
Subcontractors and
their employees (as requested by Intelsat) have executed a
non-disclosure or
confidentiality agreement no less stringent than this Article;
	 
	4.	 	not disclose the Confidential Information (or any copy or
portion thereof) to
any third party; and
	 
	5.	 	use the Confidential Information only for the
purposes directly related to
performing the Services specified herein;

48 - 1

 

	B.	 	The restrictions on use and disclosure set forth in Paragraph A
above shall not apply to such Confidential Information if the same:

	1.	 	is within, or later falls within, the public domain,
through no fault of the
receiving Party and no breach of this Contract, provided
however that a
governmental entity, domestic or foreign, shall not be
considered as the
general public;
	 
	2.	 	is used or disclosed by the receiving Party in a manner
approved by Intelsat in
advance and in writing;
	 
	3.	 	is independently developed by the receiving Party without reference to
the
Confidential Information disclosed by Intelsat, which fact can be
shown by competent evidence upon request by Intelsat;
	 
	4.	 	becomes known to the receiving Party from a source other than
Intelsat who
has no obligation of secrecy with respect to the Confidential
Information;
	 
	5.	 	is made available by Intelsat to a third party on an
unrestricted, non-
confidential basis; or
	 
	6.	 	is used or disclosed as required by statute or judicial decree,
provided that
should the Confidential Information become subject to use or
disclosure through judicial or other request or decree made to the
receiving Party, the receiving Party shall promptly notify Intelsat
of same, and shall provide such assistance as is reasonable, at the
disclosing Party’s expense, to assist Intelsat in obtaining a
protective order, injunction, or such other protection as
Intelsat deems necessary to maintain the confidentiality of such
information.

	C.	 	Return of Information: When Intelsat’s Confidential Information is
no longer needed for the purpose of this Contract or upon termination of
this Contract all written copies

48 - 2

 

	 	 	thereof and portions thereof remaining in the receiving Party’s
possession shall immediately be returned to the disclosing Party or
destroyed, and such return or destruction certified to the disclosing
Party by the receiving Party.
	 
	D.	 	Licenses and Warranties: It is agreed that no license under any patent,
copyright,
mask work protection right, trade secret, or any other intellectual
property right of
Intelsat is granted by this Contract, or by any disclosure of Confidential
Information
hereunder, and such Confidential Information which may be transmitted or
exchanged by Intelsat shall not constitute any representation, warranty,
assurance,
guarantee, or inducement by Intelsat to the receiving Party with respect
to the
infringement of patents, copyrights, trade secrets, mask work protection
rights, or any
other intellectual property rights of others. Intelsat shall not be
responsible or liable
whatsoever under this Contract for any use of the Confidential Information
by the
receiving Party or its customers or agents.
	 
	E.	 	Survival: The provisions of this Article shall survive the termination or
expiration of
this Contract for a period of *****.

48 - 3

 

ARTICLE 49. - RESERVED

49 - 1

 

ARTICLE 50. - TECHNICAL MONITORING

     The Work to be performed under this Contract is subject to the technical
monitoring of Intelsat. Any review, concurrence or approval by Intelsat of
various activities performed by the Contractor in the connection with the Work
shall not relieve the Contractor from fulfilling its obligations in meeting the
requirements of the Contract.

50 - 1

 

		
	ARTICLE 51. -  	HAZARDOUS MATERIAL IDENTIFICATION AND MATERIAL SAFETY DATA

     The Contractor shall comply with applicable federal, state, and local
laws, codes, ordinances and regulations (including the obtaining of licenses
and permits) in connection with any hazardous material used during launch
processing and agrees to submit the necessary data before delivery of material
to CCAFS, KSC and non-Government commercial facilities as prescribed in U.S.
Federal Standard No. 313A. The Contractor agrees to provide the right to use
and disclose such data relating to hazardous materials as necessary to comply
with this Article.

51 - 1

 

ARTICLE 52. - REPORTING OF PAYMENTS

	A.	 	The Contractor agrees to provide to Intelsat any and all information
concerning any
form of inducement with a value exceeding U.S. $250 (“gratuity”) which
is given,
directly or indirectly, at any time, by or on behalf of the Contractor
to any Intelsat
Official in connection with this Contract. If the value of this
Contract exceeds U.S.
$500,000, the Contractor shall also cause its firm of independent
certified public accountants to certify to the internal auditor of
Intelsat annually that all such information known to such firm has been
so provided.
	 
	B.	 	If Intelsat determines that any such gratuity has been given for the
purpose of
obtaining this Contract or favorable treatment under this Contract,
Intelsat shall be
entitled to treat the giving of such gratuity as a material breach of
this Contract, and
to terminate this Contract under the provisions of Article 21 of this
Contract, entitled
Termination for Cause, and to receive from the Contractor, punitive
damages in
addition to any other damages.
	 
	C.	 	The rights and remedies of Intelsat under this Article are in
addition to any other
rights and remedies provided by law or under this Contract.
	 
	D.	 	For the purposes of this Article, “Intelsat Official” includes any
officer, agent, servant or employee of Intelsat, or its Associates.

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ARTICLE 53. - SECURITY INTEREST AND LICENSE AGREEMENT

	A.	 	In consideration of Intelsat’s promise to purchase the
Spacecraft hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Contractor hereby grants to Intelsat a first priority continuing
security interest in:

	1.	 	all now-owned or hereafter acquired equipment used in
connection with the Contractor’s performance of work under the
Contract, including all Spacecraft
and associated flight equipment, fabricated or unfabricated
parts, work in process, completed work, supplies, special
tooling, special test equipment
and other material produced or acquired for, and identified to
the Contract (collectively referred to as “Equipment”), except
for Equipment that is also regularly used or useable on contracts
and programs other than this Contract;
	 
	2.	 	all now-owned or hereafter acquired inventory used in
connection with the
Contractor’s performance under the Contract, including raw
materials, work in
process therefor and finished goods therefor in connection with
the
Contractor’s performance of work under the Contract (collectively
referred to
as “Inventory”), except for Inventory not designated or otherwise
identified by
the Contractor for use on this Contract;
	 
	3.	 	all contract rights relating to the above; and
	 
	4.	 	proceeds of any of the foregoing collateral, now or
hereafter existing by virtue
of sale, exchange, transfer or other disposition other than as
authorized or
contemplated by the Contract (collectively referred to as “the
Collateral”).

53 - 1

 

	B.	 	The Collateral shall secure the Contractor’s prompt and timely
performance under
the Contract.
	 
	C.	 	If Intelsat exercises the rights and remedies as a secured party under
the Uniform
Commercial Code or any other law, the Contractor grants to Intelsat, to
the extent it
is entitled to do so without the payment of additional fees to any third
party, a non-exclusive, royalty free license or sublicense to copyrights, patents,
patent
applications, inventions, and trade names owned or licensable by the
Contractor and
necessary for performance under the Contract (“the License”). The License
is for
the sole purpose of enabling Intelsat to complete or have completed
performance
under the Contract.
	 
	D.	 	The Contractor represents and warrants that:

	1.	 	the Contractor is owner of the Collateral and has authorized
the grant of a
security interest in the Collateral to Intelsat;
	 
	2.	 	no effective Uniform Commercial Code financing statement or any
other
instrument similar in effect covering all or any part of the
Collateral is on file in
any recording office, except such as may be filed in favor of
Intelsat relating to
this Article; and
	 
	3.	 	compliance with and performance of the terms and provisions
hereof and the
consummation of the transactions contemplated by this Article do not
contravene, conflict with, violate, result in a breach of, or
constitute a default
under, any agreement or instrument to which the Contractor is a
party or by
which it or any of its property or assets are bound.

53 - 2

 

	E.	 	The Contractor covenants and warrants that unless compliance is
waived by Intelsat in writing:

	1.	 	the Contractor shall not create, incur, assume or suffer to
exist, directly or
indirectly, any mortgage, pledge, hypothecation, encumbrances,
assignment,
lien (statutory or other) or preference or priority or other
security agreement of
any kind or nature whatsoever (“Liens”) upon any of the Collateral,
except the
security interest created hereby in favor of Intelsat; provided,
however, if the
Contractor provides Intelsat fifteen (15) days prior
written notice, the
Contractor may create Liens on the Collateral subordinate to
Intelsat’s security interest;
	 
	2.	 	except as expressly provided in this Article, the Contractor will keep
the
Collateral free and clear of all Liens, except the security
interest created hereby in favor of Intelsat and subordinate Liens
permitted under paragraph E.1 above;
	 
	3.	 	the Contractor will promptly notify Intelsat in writing of
any event which affects
the value of the Collateral, the ability of the Contractor or
Intelsat to dispose of
or use the Collateral, or the rights and remedies of Intelsat in
relation thereto;
	 
	4.	 	Intelsat shall have the right to file Uniform Commercial Code
financing
statements at any time during the term of this Contract to perfect
the security interest granted under this Contract; and
	 
	5.	 	the Contractor shall deliver to Intelsat quarterly
and annual financial
statements of the Contractor as soon as they become
available.

	F.	 	In the event that Intelsat exercises the right to file Uniform
Commercial Code
financing statements, the Contractor agrees to, and/or agrees to cause
its controlling entity or parent company to, execute any financing
statements, amended financing

53 - 3

 

	 	 	statements, continuation statements or other documents from time to time
which are deemed necessary or desirable by Intelsat to create, perfect,
confirm or validate the security interest granted under this Contract or
to enable Intelsat to obtain the full benefits of this Article, or to
enforce any of its rights, powers and remedies under this Contract in
respect of the Collateral.
	 
	G.	 	In the event of a material breach of the Contractor’s obligations
under the Contract,
or a breach or default of any term, representation, covenant or
conditions specified
in this Article, or the Contractor shall become insolvent, makes a
general assignment
for the benefit of creditors, voluntarily files under bankruptcy law or
similar law or has an involuntary bankruptcy petition filed against it
(any of the foregoing constituting a “default” for purposes of this
Article this provision does not apply to the Contractor’s current Chapter
11 Case Nos. (RDD) 03-41709 (RDD) through 03-41728, filed in the U.S.
Bankruptcy Court for the Southern District of New York on
July 15th
2003); then Intelsat may exercise all rights and remedies of a secured
party under the Uniform Commercial Code or any other law.
	 
	H.	 	1. In addition to the Collateral provided for under Paragraph A
above, as a condition to Intelsat’s payment of the $50 Million deposit as
provided for in Paragraph A of Article 5 of this Contract, entitled
Milestone Payments, the Contractor and its Affiliates have granted a
first
priority, perfected security interest in all their respective rights,
title and interest in the Collateral (as defined in the Pledge and
Security Agreement of even date herewith between Contractor and certain of
its Affiliates and Intelsat (the “Pledge and Security Agreement”). If a
“Security Event of Default” occurs under the Security Agreement, as
notified by Intelsat to the Contractor the Contractor shall immediately
return the unearned portion of the $50 million deposit paid by Intelsat
pursuant to Article 5 of this Contract, entitled Milestone Payments. If
the Contractor fails to return such amounts within thirty (30) days of
such notice , Intelsat may thereafter exercise all of its rights and
remedies as a secured party as provided in the Security Documents. In
the event of any inconsistency between the

53 - 4

 

	 	 	provisions of this Section H.1 and the Pledge and Security Agreement, the
Pledge and Security Agreement shall govern.
	 

	2.	 	For the avoidance of doubt, the Parties agree that while Intelsat may
exercise rights and remedies as a secured party if Contractor fails to return
the deposit within the period specified above, neither such failure to repay
nor any Security Event of Default shall be deemed a material breach of this
Contract, or be grounds for
termination hereunder, including without limitation Termination for Cause under
Article 21 hereof.

53 - 5

 

ARTICLE 54. - CONTRACTOR COOPERATION WITH INSURANCE CARRIER

     The Contractor shall cooperate with Intelsat, its Associates and their
insurance carrier in
connection with the procurement of any insurance policy relating to the
launch and the
Spacecraft, including the due diligence inquiry for and preparation of any
such policy. In the
event of a launch failure or a failure of the Spacecraft in-orbit, the
Contractor shall cooperate
with Intelsat, its Associates and their insurance carriers, in connection
with the investigation,
preparation filing and administration of any insurance claim pertaining to
such launch or
Spacecraft failure.

54 - 1

 

ARTICLE 55. - PARENT GUARANTEE

     If the Contractor is owned or controlled by another entity, the Contractor
shall cause its ultimate controlling or parent entity to provide a guarantee to
Intelsat for the full and satisfactory performance by the Contractor of all of
its obligations under this Contract. The terms of the guarantee shall be
satisfactory to Intelsat.

55 - 1

 

ARTICLE 56.- RESERVED

56 - 1

 

ARTICLE 57.- PERMITS, LICENSES AND COMPLIANCE WITH LAWS

	A.	 	Applicable Permits, Licenses, and Laws

	1.	 	The Contractor shall, at its own expense, obtain all
government approvals,
permits, and licenses (including any required for export from or
import into the
United States and other applicable jurisdictions), as may be
required for
performance of the Work. Intelsat agrees to cooperate with the
Contractor in
the Contractor’s efforts to obtain any such approvals, permits, or
licenses.
	 
	2.	 	The Contractor shall, at its expense, perform the Work in
accordance with all
applicable laws of any country, state, territory or jurisdiction
and the conditions
of all applicable government approvals, permits, or licenses.
	 
	3.	 	Without limiting the generality of the foregoing, the
Contractor shall not,
directly or indirectly, take any action that would cause Intelsat
or its
Associates to be in violation of U.S. anti-boycott laws under the
U.S. Export
Administration Act, the International Traffic in Arms
Regulations, or any
regulation thereunder as well as any applicable similar laws and
regulations of
foreign jurisdictions. Any obligation of Contractor hereunder to
provide
hardware, software, Deliverable Data, other technical information
or technical
services to Intelsat or its Associates, their and personnel,
agents and/or
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 in compliance with such laws,
regulations, policies and license conditions.

57 - 1

 

	4.	 	If and to the extent required by U.S. law, Intelsat,
its Associates and their personnel and/or representatives shall
enter into U.S. Government-approved agreement(s), separate from this
Contract, governing Contractor’s provision of hardware, software,
Deliverable Data, other technical information or technical services
in connection with this Contract.
	 
	5.	 	No Unauthorized Exports or Retransfers- Neither Party shall
export or transfer to any “foreign person” any hardware,
software, deliverable data, other technical information or technical
services furnished hereunder, except as expressly authorized by the U.S.
Government in accordance with the export licenses, agreements and other
approvals referenced in articles this Article or as otherwise expressly
authorized under U.S. export control laws.
	 
	6.	 	In its performance of this Contract, the Contractor shall not,
directly or
indirectly, make, offer, or agree to make or offer any loan, gift,
donation, or other payment, whether in cash or in kind, for the
benefit or at the direction of any candidate, committee, political
party, government or its subdivision, or any individual elected,
appointed, or otherwise designated as an employee or officer thereof
for the purpose of influencing any act or decision of such entity or
individual or inducing such entity or individual to do or omit to do
anything, in order to obtain or retain business or other benefits
except as may be expressly permitted under the U.S. Foreign Corrupt
Practices Act and the regulations promulgated thereunder.

	B.	 	Review of Applications
	 
	 	 	Prior to submission of an application, the Contractor shall review with
Intelsat any application the Contractor intends to submit to any
government, department, agency, or entity for an approval, permit,
license, or agreement, as may be required for performance of the Work. The
Contractor shall provide Intelsat a minimum of five (5) business days to
review such application prior to submission to a governmental

57 - 2

 

	 	 	entity, and the Contractor shall in good faith consider any comments and
proposed revisions made by Intelsat for incorporation into the
application. The Contractor shall deliver to Intelsat a copy of all
approvals permits or licenses within five (5) days of receipt.
	 
	C.	 	Marking ITAR Controlled Data

	1.	 	Contractor agrees to mark all ITAR controlled data and documentation
appropriately before providing it to Purchaser. PURCHASER SHALL NOT
BE RELIEVED OF ITS OBLIGATIONS UNDER THE ITAR REGARDING THE
RETRANSFER OF DATA AND DOCUMENTATION PROVIDED BY CONTRACTOR
REGARDLESS OF ANY CONTRACTOR MARKINGS (OR LACK THEREOF).
	 
	2.	 	Subject to paragraph 70.1.3 below, Contractor shall provide
ITAR
controlled technical data (as that term is defined in the ITAR) to
the
Program Manager, Intelsat Satellite Program Office, and to the
Director,
Office of Import/Export Controls, Washington, D.C; and shall mark
the data
as follows:
	 
	 	 	“This document contains technical data (22 CFR 120.10) and is
subject to the control of the International Traffic in Arms
Regulations 22 CFR 120-130.”
	 
	3.	 	To the extent that Contractor provides any ITAR controlled data
that is
“detailed design and manufacturing know-how data” as defined in
Intelsat
Global Service Corporation’s Technical Assistance Agreement TA
1377-01
the Contractor shall only provide such controlled data to:

*****

Director, Intelsat Satellite Program Office

57 - 3

 

	 	 	Palo Alto,
California 
and
	 
	 	 	*****

Director, Office of Import/Export
Controls 
Intelsat Global Service
Corporation
 Washington, D.C. 20008
	 
	 	 	Such controlled data shall be marked as follows:
	 
	 	 	“This document contains Technical Data (22 CFR 120.10) that
may only be released to U.S. persons as defined in 22 CFR
120.15.”

	D.	 	Contractor Violation of Law

	 	 	Intelsat shall not be responsible in any way for the consequences,
direct or indirect, of any violation by the Contractor, its
Subcontractors, or their respective Affiliates or Associates of any
law or of any country whatsoever.

57 - 4

 

ARTICLE 58. - RESERVED

58 - 1

 

ARTICLE 59. - GENERAL

     A.  All rights and remedies conferred hereunder or otherwise shall be
cumulative and
may be exercised singly or concurrently. Failure by either Party to
enforce any of its rights
hereunder or otherwise shall not be deemed a waiver of future enforcement
of such rights or
any other rights. The following provisions shall survive the expiration or
termination of this
Contract:

	1.	 	Article 12, Intelsat’s Right of Access
	 
	2.	 	Article 15, Agreement to Indemnify, Hold Harmless and Defend
	 
	3.	 	Article 22, Disputes
	 
	4.	 	Article 24, Intellectual Property Rights
	 
	5.	 	Article 25, Inventions
	 
	6.	 	Article 27, Public Release of Information
	 
	7.	 	Article 32, Assignment
	 
	8.	 	Article 35, Intellectual Property Indemnification
	 
	9.	 	Article 36, Warranty
	 
	10.	 	Article 47, Intelsat Furnished Information and Property
	 
	11.	 	Article 48, Confidentiality
	 
	12.	 	Article 53, Security Interest and License Agreement
	 
	13.	 	Article 54, Contractor Cooperation With Insurance Carrier
	 
	14.	 	Article 57, Permits, Licenses and Compliance with Laws
	 
	15.	 	Article 59, General

     B. Waiver

	 	 	All rights and remedies conferred hereunder or otherwise shall
be cumulative and may be exercised singly or concurrently. Failure by
either Party to enforce any of its rights hereunder or otherwise shall
not be deemed a waiver of future enforcement of such rights or any
other rights.

59 - 1

 

	C.	 	Severability
	 
	 	 	If any provision of this Contract is held to be invalid, it shall not
affect any other provisions of this Contract and the invalid provision
shall be replaced with an acceptable provision consistent with the
original intent of the Parties.
	 
	D.	 	Consents and Approvals
	 
	 	 	Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, or similar action
by either Party is required under this Contract, such action shall not be
unreasonably delayed or withheld. An approval or consent given by a Party
under this Contract shall not relieve the other Party from responsibility
for complying with the requirements of this Contract, nor shall it be
construed as a waiver of any rights under this Contract, except as and to
the extent otherwise expressly provided in such approval or consent.
	 
	E.	 	Lender Requirements

	1.	 	The Parties recognize this Contract may be financed by
Intelsat through external sources. Subject to compliance with U.S.
export control laws, the Contractor shall provide to any Financing
Entity any program information or certification (provided that such
certification does not materially affect or
increase Contractor’s obligations or liabilities hereunder) that
such Financing
Entity reasonably requires (subject to confidentiality agreements
governing such program information). For purposes of this Paragraph,
a “Financing Entity” shall mean any entity (other than the
Contractor, or parties related to the Contractor), including any
commercial bank, merchant bank, investment bank, commercial finance
organization, corporation, or partnership, providing money on a full
or partial debt basis to Intelsat to fund the construction,
Delivery, or launch of the Spacecraft to be delivered hereunder, but
does not include any entity that is a direct manufacturing
competitor of the Contractor.

59 - 2

 

	2.	 	The Contractor agrees to work cooperatively to negotiate and
execute such
documents as may be reasonably required to implement such financing
to the
extent such financing or document does not adversely affect the
Contractor’s
interests under this Contract.
	 
	3.	 	The Contractor agrees to execute such documents as may be
reasonably
required by any Financing Entity, including a contingent assignment
of this
Contract to such Financing Entity, under terms reasonably
acceptable to the
Contractor and to agree to such modifications to this Contract as
such
Financing Entity may reasonably require, provided the Contractor’s
interests under this Contract are not adversely affected.

	F.	 	Counterparts

This Contract may be executed in two (2) or more counterparts, which
taken together constitute one single contract between the Parties.
	 
	G.	 	Entire Agreement, Integration and Construction

	1.	 	This Contract: (1) consists of this document, and referenced
Exhibits in Article
2, Scope of Work: (2) constitutes the entire agreement of the
Parties with
respect to the subject matter hereof; and (3) supersedes all prior
correspondence, representations, proposals, negotiations,
understandings,
and agreements of the Parties, oral or written, with respect to the
subject
matter hereof, excluding the APA and related documentation. No
addition to,
deletion of, or deviation from the provisions of this Contract shall
be binding against Intelsat unless in writing and signed by
Intelsat’s Authorized Representative or against the Contractor
unless in writing and signed by an Authorized Representative of the
Contractor.
	 
	2.	 	In the event of any conflict or inconsistency between these
terms and
conditions, the Articles set forth in this Contract and the
provisions of the
various Exhibits, attachments, schedules or annexes of this
Contract, such

59 - 3

 

	 	 	conflict or inconsistency shall be resolved by giving precedence to the terms and conditions
set forth in the Articles of this Contract.
	 
	3.	 	With respect to each and every provision of this Contract,
the Parties
understand and agree that the same have been mutually negotiated,
prepared and drafted, and that if at any time the Parties hereto
desire or are required to interpret or construe any such provision,
no consideration shall be given to which Party hereto
actually prepared, drafted or requested any provision in this
Contract.

	H.	 	Headings and Number
	 
	 	 	The Article and Paragraph headings are for convenience of reference
only
and shall not be considered in interpreting the text of this
Contract. Words in the singular include the plural and vice versa.
	 
	I.	 	No Third-Party Beneficiaries
	 
	 	 	This Contract is entered into solely between, and may be enforced
only by, Intelsat and the Contractor and their permitted assigns,
and this Contract shall not be deemed to create any rights in third
parties, including suppliers and customers of a Party, or to create
any obligations of a Party to any such third parties.

59 - 4

 

ARTICLE 60. - RESERVED

60 - 1

 

     Each Party acknowledges that it has read, understands and agrees to be
bound by the provisions of this Contract.

     IN WITNESS WHEREOF, the Parties hereto have executed this Contract in
Bermuda effective as of the date set forth in Article 31 of this Contract,
entitled Effective Date.

	 	 	 	 	 	 	 
	

	 	Space Systems/Loral, Inc.
	 	 	 	Intelsat LLC
	

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

	 	/s/ Janet T. Yeung

(Signed)
	 	By:
	 	/s/ Ramu Potarazu

(Signed)
	

	 	 	 	 	 	 
	

	 	Janet T.
Yeung

	 	 	 	Ramu Potarazu

	

	 	(Typed)
	 	 	 	(Typed)
	

	 	 	 	 	 	 
	Title:

	 	Vice President

	 	Title:
	 	President,

	

	 	 
	 	 	 	Intelsat LLC

 

 

			
	

	 	 

Contract Intelsat-67700

Exhibit A

Spacecraft Performance

Specifications

Document Number:    IS-SIGMA-2003-RFP-0003

Version:    1.0

Last Updated: 03 December 2003

Electronic issue 04 Dec 2003 – verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s International Traffic in Arms
Regulations (ITAR) section 22 CFR § 120.10 and must be stored in an access-restricted location when not in use.
Export, transfer or other disclosure of this document, in whole or in part, to any non-US person or entity requires
prior written approval of the Office of Defense Trade Controls.”

 

 

Contract Intelsat — 67700

Exhibit A

1. GENERAL REQUIREMENTS

This contract exhibit specifies the technical performance requirements for the
Intelsat Sigmasat spacecraft. The specification herein is solely concerned with
the space segment of that system.

The detailed spacecraft requirements are defined in the following Attachments
to this Exhibit:

1) Attachment 1 — Communications Subsystem Performance Specifications

2) Attachment 2 — Telemetry, Commanding, and Ranging (TC&R) Performance Specifications

3) Attachment 3 — Spacecraft Systems Performance Specifications

	 	 	 	 	 
	Last Updated: 03 December 2003
	 	Page 1
	 	Doc. No.: IS-SIGMA-2003-RFP-0003

	 	 	 	 	 
	Electronic issue 10 Dec 2003 — verify document is latest version available.
	Issue No.: 1

Intelsat Restricted & Proprietary

Some or all of the data contained herein is “technical data” as defined under 22 C.F.R. 120.10 of the ITAR and may not be
transferred or otherwise disclosed to any foreign party without the
prior written approval of the U.S. Dept. of State.

 

 

			
	

	 	 

Contract Intelsat-67700

Attachment 1 to Exhibit A

Communications Subsystem

Performance Specifications

Document Number:    IS-SIGMA-2003-RFP-0001

Version:    1.0

Last Updated: 10 December 2003

Electronic issue 10 December 2003 – verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s international Traffic in Arms
Regulations (ITAR) section 22 CFR § 120.10 and must be stored in an access-restricted location when not in
use. Export, transfer or other disclosure of this document, in whole or in part, to any non-US person or
entity requires prior written approval of the Office of Defense Trade
Controls.”

 

 

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

114 pages of Attachment 1 to Exhibit A to Exhibit 10.34 have been
omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.

 

 

			
	

	 	 

Attachment 2 to Exhibit A

Telemetry, Commanding, and

Ranging (TC&R) Performance

Specifications

Document Number:    IS-SIGMA-2003-RFP-0003

Version:    1.0

Last Updated: 03 December 2003

Electronic issue 04 Dec 2003 – verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR § 120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part, to any
non-US person or entity requires prior written approval of the Office of
Defense Trade Controls.”

 

 

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

41 pages of Attachment 2 to Exhibit A to Exhibit 10.34 have been
omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.

 

 

			
	

	 	 
	
	 	Contract Intelsat-67700

Attachment 3 to Exhibit A

Spacecraft Systems

Performance Specifications

Document Number:
IS-SIGMA-2003-RFP-0002

Version: 1.0

Last Updated: 02 December 2003

Electronic issue 04 December 2003 — verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR § 120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part, to any
non-US person or entity requires prior written approval of the Office of
Defense Trade Controls.”

 

 

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

46 pages of Attachment 3 to Exhibit A to Exhibit 10.34 have been omitted and
filed separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.

 

 

			
	

	 	 
	
	 	Contract Intelsat-67700

Exhibit B

Statement of Work

Document Number:
IS-SIGMA-2003-RFP-0005

Version: 1.0

Last Updated: 10 December 2003

Electronic issue 10 December 2003 — verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR § 120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part, to any
non-US person or entity requires prior written approval of the Office of
Defense Trade Controls.”

 

 

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

144 pages of Exhibit B to Exhibit 10.34 have been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.

 

Contract Intelsat — 67700

Exhibit C

Product Assurance Program

Document Number: IS-SIGMA-2003-RFP-0004

Version: 1.0

Last Updated: 03 December 2003

Electronic issue 08 December 2003 — verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR
§120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part,
to any non-US person or entity requires prior written approval of the
Office of Defense Trade Controls.”

 

 

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

299 pages of Exhibit C to Exhibit 10.34 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

 

Contract Intelsat-67700

Exhibit D

Spacecraft Test Plan

Document Number: IS-SIGMA-2003-RFP-0004

Version: 1.0 Last Updated:
10 December 2003

Electronic issue 10
December 2003 — verify document is latest version
available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR
§ 120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part, to any
non-US person or entity requires prior written approval of the Office of
Defense Trade Controls.”

 

 

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

480 pages of Exhibit D to Exhibit 10.34 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

 

Contract Intelsat-67700

Exhibit E

Spacecraft Radiation

Environment Specifications

Document Number: IS-SIGMA-2003-RFP-0006

Version: 1.0

Last Updated: 10 December 2003

Electronic issue 10 December 2003 — verify document is latest version available.

“This document contains technical data as defined in the U.S. Government’s
International Traffic in Arms Regulations (ITAR) section 22 CFR
§120.10 and
must be stored in an access-restricted location when not in use. Export,
transfer or other disclosure of this document, in whole or in part, to any
non-US person or entity requires prior written approval of the Office of
Defense Trade Controls.”

 

 

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

13 pages of Exhibit E to Exhibit 10.34 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

 

CONTRACT Intelsat-67700

Exhibit F

Intelsat Sigmasat Spacecraft

and Associated Equipment and
 Services

Milestone Payment Plan and
 Performance Payment Plan

 

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

13 pages of Exhibit F to Exhibit 10.34 have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.

 

CONTRACT Intelsat-67700

Exhibit G

Intelsat Sigmasat Spacecraft

and Associated Equipment and 
Services

Termination for Convenience Liability 
Profile

 

 

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

1 page of Exhibit G to Exhibit 10.34 has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request
for confidential treatment.exv10w35

 

EXHIBIT 10.35

PLEDGE AND SECURITY AGREEMENT

          PLEDGE
AND SECURITY AGREEMENT, dated as of March 17, 2004 (this “Agreement”)
among: SPACE SYSTEMS/LORAL, INC., a corporation organized under the laws of the
State of Delaware and operating for the time being as a debtor and
debtor-in-possession (the “Seller” or “SS/L”); each of the affiliates of the
Seller identified under the caption “AFFILIATE PLEDGORS” on the signature pages
hereof (individually, an “Affiliate Pledgor” and, collectively, the “Affiliate
Pledgors” and, together with the Seller, the
“Obligors”); and INTELSAT LLC, as
the Purchaser under the Procurement Agreement referred to below (the “Buyer” or
“Secured Party”).

          The Seller and the Buyer have executed and delivered Contract No.
Intelsat-6770, as of even date herewith for Intelsat Sigmasat Spacecraft and
Associated Equipment and Services (the “Procurement Agreement”), providing,
subject to the terms and conditions thereof, for the construction of a
geosynchronous telecommunications satellite (the “Purchased Satellite”) and, in
connection therewith, the delivery of a $50 million cash deposit (the
“Deposit”) from the Buyer to Seller on terms and conditions described in the
Procurement Agreement (as defined below).

          It is a condition precedent to Buyer’s obligation to pay the Deposit to
the Seller under the Procurement Agreement that certain obligations of the
Seller under the Procurement Agreement be secured by a first priority,
perfected security interest in all right, title and interest of the Obligors in
certain collateral in the manner and to the extent described herein.

          To induce the Buyer to deliver its Deposit and thereby extend credit to
Seller under the Procurement Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Obligors have agreed to pledge, charge and grant a security interest in
their respective existing and future right, title and interest in the
Collateral (as hereinafter defined) to the extent described herein until
terminated in accordance with the terms of this Agreement.

          Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          SECTION
1.01. Defined Terms. As used herein:

          “Accounts” has the meaning assigned to such term in paragraph (e)
of Article III.

          “ANATEL” means the National Agency of
Telecommunications.

          “ANATEL Concession” means the license issued by ANATEL to Skynet/Brazil
for the provision of EDS Satellite capacity pursuant to the ANATEL Concession
Agreement.

-1-

 

          “ANATEL Concession Agreement” means the Agreement of Exploitation of
Rights of Brazilian Satellite for Telecommunications Signals Transport (ANATEL
Concession Agreement), between ANATEL and Skynet/Brazil, dated May 5, 1999, as
amended.

          “APA” means the Asset Purchase Agreement, dated as of July 15, 2003, as
amended, among Intelsat, Ltd., Intelsat (Bermuda), Ltd., Loral Space &
Communications Corporation, as debtor and debtor-in-possession, SpaceCom and
Loral Satellite, Inc., as debtor and debtor-in-possession.

          “Assigned Agreement” has the meaning assigned to such term in paragraph ()
of Article III.

          “Boeing Contract” means the Agreement, dated as of October 19, 2000 by and
between The Boeing Company and Skynet/Brazil, as amended.

          “Capacity Contracts” means all present and future contracts providing for
sale of EDS Satellite capacity, including the Boeing Contract.

          “Cash Equivalents” means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition, (ii) time deposits, banker’s acceptances and certificates
of deposit having maturities of not more than 12 months from the date of
acquisition of any domestic or foreign commercial bank having capital and
surplus in excess of $500,000,000, which has, or the holding company of which
has, a commercial paper rating meeting the requirements specified in clause
(iv) below, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clauses (i) and (ii)
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper rated at least A-2 or the equivalent thereof by
Standard & Poor’s Ratings Group (“S&P”) or P-2 or the equivalent thereof by
Moody’s Investors Service, Inc. (“Moody’s”) and in either case maturing within
270 days after the date of acquisition, (v) senior corporate obligations rated
at least BBB or the equivalent thereof by S&P or Baa or the equivalent thereof
by Moody’s and in either case maturing within 2 years of the date of
acquisition and (vi) any money market fund registered under the Investment
Company Act of 1940, as amended, which invests solely in underlying securities
of the types described in clauses (i) through (iv) above, provided that no more
than 25% of the aggregate amount of Cash Equivalents at any time may be rated
lower than A-l or P-l or A- or A3, as the case may be.

          “Collateral” has the meaning assigned to such term in Article III.

          “Copyrights” has the meaning assigned to such term in paragraph
(j) of Article III.

          “Documents” has the meaning assigned to such term in paragraph (i)
of Article III.

          “EDS Contract” means the Estrela do Sul Contract No. LS130A between Skynet
and SS/L entered into as of 22 February 2000, as amended.

-2-

 

          “EDS Satellite” means the satellite described in, constructed under and to
be
delivered pursuant to the terms of the EDS Contract, together with all
Deliverable Items (as defined in the EDS Contract) and including, without
limitation, the Intellectual Property.

          “Encumbrance” has the meaning assigned to such term in the APA.

          “Instruments” has the meaning assigned to such term in paragraph (f)
of Article III.

          “Insurance Policies” has the meaning assigned to such term in paragraph
(f) of Section 4.01.

          “Intellectual Property” means, collectively, all Copyrights, all Patents
and all Trademarks.

          “Inventory” has the meaning assigned to such term in paragraph (g) of Article
III.

          “Loral Ltd.” means Loral Space & Communications Ltd., a company organized
under the laws of Bermuda and operating as a debtor and debtor-in-possession.

          “Launch Insurance” has the meaning assigned to such term in paragraph (i)
of Article II.

          “LHL” means Loral Holdings Ltd., a company organized under the laws
of Bermuda.

          “LHL Transfer” means the transfer of ownership of LHL from Loral Ltd.
to SpaceCom.

          “Patents” has the meaning assigned to such term in paragraph (k) of
Article III.

          “Permitted Liens” means (i) liens junior and subordinate to the liens
created hereunder provided that the junior secured party agrees in writing in
form and substance satisfactory to Secured Party with Secured Party that (X) it
will not take any action in respect of the Collateral without giving the
Secured Party 180 days’ prior written notice, (Y) any proceeds from the
Collateral will be applied first as set forth in Section 5.05 and only
thereafter as set forth in the instruments, agreements or documents governing
such junior lien, and (Z) providing for reasonable and customary provisions for
non-interference and cooperation with the exercise of remedial provisions by
the Secured Party ; (ii) liens of record purported to be created by filings
under the Uniform Commercial Code or other applicable law that are not
authorized by any Obligor; (iii) liens for taxes not yet due and payable; and
(iv) transfers permitted under the Annex 1.

          “Permitted Transactions” means the transactions described in Annex
1 hereto.

          “Person” has the meaning assigned to such term in the
APA.

-3-

 

          “Pledged Collateral” has the meaning assigned to such term in paragraph
(c) of Article III.

          “Pledged Stock” has the meaning assigned to such term in paragraph
(a) of Article III.

          “Satellite Agreements” means the EDS Contract and the Skynet/Brazil
EDS Contract.

          “Secured Obligations” means the payment and performance of (x) the
obligation of Seller to refund to Buyer all or any remaining portion of the
unearned Deposit under Articles 20 and 21 of the Procurement Agreement, plus
(y) all obligations of the Seller under Section 6.03 (a) hereof. From and
after the earlier of (i) such payment and performance and (ii) such time as
Seller shall have earned $50 million of payments under the Procurement
Agreement,, the amount of Secured Obligations shall be zero. For clarity, the
maximum amount of Secured Obligations under clause (x) of the first sentence of
this definition shall not exceed $50,000,000 and shall be reduced dollar for
dollar as payments are earned under the Procurement Agreement.

          “Security Documents” means this Agreement, the Quota Pledge Agreement,
made as of the date hereof, by and among LHL, Loral Skynet International LLC,
Space/Brazil, and Intelsat (Bermuda), Ltd. (the “Space Quota Agreement”), the
Quota Pledge Agreement, made as of the date hereof, by and among Space/Brazil,
Loral Skynet International LLC, Skynet/Brazil, and Intelsat (Bermuda), Ltd.
(the “Skynet Quota Agreement”, and together with the Space Quota Agreement, the
“Quota Agreements”), all financing statements filed and other filings made in
respect thereof, and any other document delivered by any Obligor to confirm or
perfect the security interests intended to be created hereby.

          “Security Event of Default” means (i) the termination of the Procurement
Agreement pursuant Article 20.B, 21.A, or 21.B thereof and the failure of
Seller to repay the Deposit (or portion thereof) in the amount and within the
time period specified in the Procurement Agreement, and (ii) any Obligor fails
to observe, perform or comply with any of the provisions or terms contained in
any Security Document or shall be in breach of any representation or warranty
contained herein and such failure or breach could reasonably be expected to
have a material adverse effect on the Collateral, taken as a whole, or the
ability or such Obligor to perform its obligations under this Agreement, taken
as a whole, or the other Security Documents and such failure or breach shall
continue for a period of thirty (30) days (or, if such failure cannot be
reasonably cured within such thirty (30) day period but is capable of being
cured within ninety (90) days, then for a period of ninety (90) days, provided
such Obligor continues to exercise diligence to effect such cure throughout
such period) after written notice of such failure has been given by Purchaser
to Seller.

          “Skynet” means Loral Skynet, a division of SpaceCom.

          “Skynet/Brazil” means Loral Skynet do Brasil Ltda., a company organized
under the laws of Brazil.

-4-

 

          “Skynet/Brazil EDS Contract” means the Contract between Skynet/Brazil and
Loral Skynet, a division of SpaceCom, dated March 10, 2003, for the sale and
purchase of the EDS Satellite.

          “SpaceCom” means Loral SpaceCom Corporation, a corporation organized under
the laws of the State of Delaware and operating as a debtor and
debtor-in-possession.

          “Space/Brazil” means Loral Space do Brasil Ltda., a company organized
under the laws of Brazil and the 99.99997% share holder of Skynet/Brazil.

          “Trademarks” has the meaning assigned to such term in paragraph
(1) of Article III.

          “Uniform Commercial Code” means the Uniform Commercial Code as in effect
from time to time in the State of New York.

          SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”. The word
“will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an
amendment and restatement thereof, but subject to any restrictions on such
amendments, supplements or modifications set forth herein, (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns or, in the case of any Governmental Authority, any entity succeeding to
any or all of the functions of such Governmental Authority, (c) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Sections and Annexes shall be
construed to refer to Sections of, and Annexes to, this Agreement and (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

          Each Obligor represents and warrants to the Secured Party that as of
the date hereof:

          (a) Such Obligor (i) is a company validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has
all requisite power and authority to own its property and to carry on its
business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where the
failure to so qualify could not reasonably be expected to have a material
adverse effect on the Collateral or

-5-

 

the ability of such Obligor to perform its obligations under this Agreement
and the other Security Documents to which it is a party, and (iv) has the
power and authority to execute, deliver and perform its obligations under
the Satellite Agreements to which it is a party, this Agreement and the
other Security Documents to which it is a party.

          (b) The execution, delivery and performance of the Satellite Agreements
and Security Documents to which it is a party (i) have been duly authorized
by all requisite company action and (ii) will not (A) violate (x) any
provision of the certificate or articles of incorporation or other
constitutive documents or by-laws (or bye-laws) of such Obligor or of any
provision of any material law, statute, rule or regulation, (y) any judgment,
writ, injunction, decree of order applicable to such Obligor or (z) any
provision of any material indenture, material agreement or other material
instrument to which such Obligor is a party or by which the Collateral is
bound (other than prohibitions against the pledge and assignment of Capacity
Contracts to the extent such prohibitions are not rendered ineffective under
the Uniform Commercial Code), in each case in a manner which could reasonably
be expected to have a material adverse effect on the Collateral or the
ability of such Obligor to perform its obligations under this Agreement or
the other Security Documents to which it is a party (other than the approvals
described in the proviso set forth in paragraph (d) below) or (B) result in
the creation or imposition of any Encumbrance upon or with respect to any
Collateral now owned or hereafter acquired by such Obligor (other than any
Encumbrance created pursuant to or permitted by any Security Document or
created pursuant to the Satellite Agreements).

          (c) Each of the Satellite Agreements and Security Documents to which it
is a party has been duly executed and delivered by such Obligor and
constitutes a legal, valid and binding obligation of such Obligor enforceable
against such Obligor in accordance with its terms.

          (d) No action, consent or approval of, registration or filing with or
any other action by any governmental authority is or will be required in
connection with the execution, delivery and performance of the Satellite
Agreements or Security Documents, except for (i) the filing of Uniform
Commercial Code financing statements, (ii) approvals that may be required
pursuant to the terms of the ANATEL Concession Agreement, (iii) as
contemplated in Section 4.05 hereof, (iv) the registration of security
interests granted hereunder by Loral Ltd. under the laws of Bermuda, (v) the
consent of the Bermuda Monetary Authority to certain of the Permitted
Transactions contemplated hereby, (vi) other immaterial approvals,
registrations and filings, (vii) the registration of the Security Documents
before the Registry of Deeds and Documents in Brazil and (viii) such other
actions consents, approvals, registrations or filings that have been taken,
obtained or made.

          (e) Such Obligor is the sole beneficial owner of the Collateral in which
it purports to grant a security interest pursuant to Article III and no
Encumbrance exists or will exist upon such Collateral at any time (and no right
or option to acquire the same exists in favor of any other Person), except for:
(i) Encumbrances permitted under the Security Documents, (ii) Encumbrances
created or provided for by the Satellite Agreements or the agreements governing
the LHL Transfer in favor of an Obligor, and

-6-

 

(iii) the pledges, charges and security interests in favor of the Secured Party
created or provided for in the Security Documents, which pledges, charges and
security interests constitute first priority perfected pledges, charges, and
security interests in and to all of such Collateral.

          (f) The Pledged Stock under the name of such Obligor in Annex 2 is
duly authorized, validly issued, and non-assessable and none of the
Pledged Stock is or will be subject to any contractual restriction, or
any restriction under the charter, by-laws (or bye-laws) or other
organizational documents of the respective issuer thereof, upon the
transfer of such Pledged Stock (except for any such restriction in the
Security Documents or in the agreements governing the LHL Transfer or as
required by law or the ANATEL Concession Agreement).

          (g) Except as indicated on Annex 2, the Pledged Stock identified in
Annex 2 constitutes all of the issued and outstanding ownership
interests of the issuer thereof on the date hereof (whether or not
registered in the name of any Obligor) and said Annex 2 correctly
identifies, as at the date hereof, the respective issuers thereof, the
type or class and par value of such ownership interests (if any), the
respective number of shares or units thereof, and registered owners
thereof.

          (h) Seller has delivered to Buyer true and correct and complete
copies of each of the Satellite Agreements, the ANATEL Concession
Agreement and the Boeing Contract as in effect on the date hereof.

          (i) Seller has obtained launch insurance (the “Launch Insurance”)
for the EDS Satellite a true and correct copy of which has previously
been delivered to the Secured Party together with appropriate
certificates of insurance and endorsements designating the Secured Party
as a loss payee and providing for direct payment of proceeds as provided
in Section 4.04(e) hereof; the Launch Insurance is in full force and
effect; and no material dispute exists between the Obligors and the
insurers of the Launch Insurance with respect to the provision of
coverage pursuant to the terms of the Launch Insurance policy.

          (j) Except as noted on Annex 3 hereto, no Obligor has received
written notice from a counterparty to the ANATEL Concession or the
Boeing Contract asserting that such Obligor has failed to comply, in
any material respect, with such agreements.

          (k) The Collateral in Article III, sections (j) — (m) includes all
rights to use intellectual property as are necessary to be conveyed by a
satellite manufacturer to a purchaser of a satellite to enable such
purchaser to control and operate the EDS Satellite in a commercially
appropriate and lawful manner.

ARTICLE III

COLLATERAL

          As collateral security for the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the Secured Obligations,
(i) each of the Seller

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and SpaceCom hereby pledges, assigns, charges, hypothecates and transfers to
the Secured Party, and grants to, and charges in favor of, the Secured
Party a charge, lien on and security interest in, all of Seller’s and
SpaceCom’s right, title and interest in the EDS Satellite wherever
located, and whether on earth or in orbit, and (ii) each Obligor hereby
pledges, assigns, charges, hypothecates and transfers to the Secured
Party, and grants to, and charges in favor of, the Secured Party a charge,
lien on and security interest in, all of such Obligor’s right, title and
interest in the following additional property, whether now owned by such
Obligor or hereafter acquired and whether now existing or hereafter coming
into existence (such property, together with the EDS Satellite, all being
collectively referred to herein as “Collateral”):

          (a) all shares of capital stock, share capital or other evidence
of beneficial interest of whatever class of each corporation or company
identified in Annex 2 in each case together with the certificates
evidencing the same if such shares are in certificated form
(collectively, the “Pledged Stock”);

          (b) all shares, interests, securities, moneys or other property
representing a dividend on any of the Pledged Stock, or representing a
distribution or return of capital upon or in respect of the Pledged
Stock, or resulting from a split-up, revision, consolidation,
reclassification or other like change of the Pledged Stock or otherwise
received in exchange therefor, and all options, warrants and similar
rights issued to the holders of, or otherwise in respect of, the
Pledged Stock;

          (c) without affecting the obligations of such Obligor under any
provision prohibiting such action hereunder, in the event of any
consolidation, amalgamation or merger of a subsidiary identified in
Annex 2 in which such subsidiary is not the surviving entity, all
ownership interests of whatever class owned by such Obligor of the
successor entity formed by or resulting from such consolidation,
amalgamation or merger (the Pledged Stock, together with all shares,
interests, securities, moneys or property as may from time to time be
pledged or charged hereunder pursuant to clause (a) or (b) above and
this clause (c) being herein, and the proceeds of and to any such
property and, to the extent related to any such property or such
proceeds, all books, correspondence, credit files, records, invoices
and other papers, collectively called the “Pledged Collateral”);

          (d) the following contracts and agreements to which such
Obligor is a party:

          (i) the Boeing Contract;

          (ii) the Satellite Agreements; and

          (iii) all other agreements providing for sale of EDS
Satellite capacity;

(said contracts, agreements and obligations, as so amended,
supplemented renewed or modified, including any such replacement or
substitution contracts, agreements and obligations, being,
individually, an “Assigned Agreement”, and, collectively, the “Assigned
Agreements”), including, without limitation, (1) all rights of such
Obligor to receive moneys due and to become due under or pursuant to
the Assigned Agreements, (2) all rights to receive property, assets,
services or other performance thereunder, (3) all rights of such
Obligor under the Assigned Agreements to which it is a party to receive

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return of any premiums for or proceeds of any insurance, payment and/or
performance bond, indemnity, warranty or guaranty or to receive condemnation
proceeds thereof, (4) all claims of such Obligor for damages arising out of or
for breach of or default under the Assigned Agreements and (5) all rights of
such Obligor to terminate, amend, supplement, modify or waive performance under
the Assigned Agreements, to perform thereunder and to compel performance and
otherwise to exercise all remedies thereunder, in each case as such contract,
agreement and obligation may be amended, supplemented, renewed or otherwise
modified, including, without limitation, any agreement, contract or document
replacing or substituting for such contract, agreement or obligation from time
to time;

          (e) subject to the final paragraph of this Article III, all accounts and
general intangibles (each as defined in the Uniform Commercial Code, but
excluding all intellectual property of every type (including patents,
trademarks and copyrights) other than Intellectual Property) constituting any
right of such Obligor to the payment of money under or in respect of the
Assigned Agreements, whether at law or in equity (whether or not earned by
performance and whether arising directly or indirectly and including claims for
reimbursement, contribution, indemnity and subrogation) (such accounts and
general intangibles being herein called collectively “Accounts”);

          (f) all instruments, chattel paper or letters of credit (each as defined
in the Uniform Commercial Code) of such Obligor evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including (but not limited to)
promissory notes, drafts, bills of exchange and trade acceptances (herein
collectively called “Instruments”);

          (g) all spare parts inventory, consumable supplies inventory and
maintenance materials inventory and raw materials and work in progress
therefor, finished goods thereof, and materials used or consumed in the
manufacture or production thereof relating to the EDS Satellite and delivered
to Skynet pursuant to the EDS Contract (herein collectively called
“Inventory”);

          (h) all rights, claims and benefits of such Obligor in, and against any
Person arising out of, relating to or in connection with, the EDS Satellite
purchased by such Obligor, including, without limitation, any such rights,
claims or benefits against any Person storing or transporting the EDS Satellite
but excluding any rights, title, claims and benefits under any insurance
policies, whether owned by or payable to such Obligor, other than the Insurance
Policies (as hereinafter defined);

          (i) all documents of title (as defined in the Uniform Commercial Code) or
other receipts of such Obligor covering, evidencing or representing the EDS
Satellite or Inventory (herein collectively called “Documents”);

          (j) all copyrights, copyright registrations and applications for copyright
registrations, including, without limitation, all renewals and extensions
thereof, the right to recover for all past, present and future infringements
thereof, and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, in each case, only to the

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extent that such copyrights, copyright registrations, applications for
copyright registrations and other rights are actually included in the sale of
the EDS Satellite pursuant to the EDS Contract and then only to the extent so
included in the EDS Contract (herein collectively called
“Copyrights”);

          (k) all patents and patent applications, including, without limitation,
the inventions and improvements described and claimed therein together with the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, all income, royalties, damages and payments now
or hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for all past, present and future
infringements thereof, the right to sue for past, present and future
infringements thereof, and all rights corresponding thereto throughout the
world, in each case, only to the extent that such patents, patent applications
and the rights to such income, royalties, damages and payments and other rights
are actually included in the sale of the EDS Satellite pursuant to the EDS
Contract and then only to the extent so included in the EDS Contract (herein
collectively called “Patents”);

          (1) all trade names, trademarks and service marks, logos, trademark and
service mark registrations, and applications for trademark and service mark
registrations (including, without limitation, all renewals of trademark and
service mark registrations, and all rights corresponding thereto throughout the
world relating to the ownership, operation, exploitation or use, but excluding
any such registration that would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the Collateral), the
right to recover for all past, present and future infringements thereof, all
other rights of any kind whatsoever accruing thereunder or pertaining thereto,
in each case, only to the extent that such trade names, trademarks, service
marks, logos, registrations, applications and other rights are actually
included in the sale of the EDS Satellite pursuant to the EDS Contract and then
only to the extent so included in the EDS Contract (herein collectively called
“Trademarks”);

          (m) all information, identification of suppliers, data, plans, blueprints,
designs, models, recorded knowledge, surveys, architectural, structural,
mechanical and engineering plans and specifications, studies, reports and
drawings, test reports, manuals, material standards, processing standards,
performance standards, catalogs, computer and automatic machinery software and
programs, all accounting information and all media in which or on which any
information or knowledge or data or records may be recorded or stored and all
computer programs used for the compilation or printout of such information,
knowledge, records or data, prepared by or on behalf of such Obligor for the
operation of the EDS Satellite, in each case, only to the extent that such
items are actually included in the sale of the EDS Satellite pursuant to the
EDS Contract and then only to the extent so included in the EDS Contract;

          (n) the Insurance Policies, whether owned by or payable to such Obligor,
all loss proceeds and other amounts payable to such Obligor thereunder, any
indemnity, warranty or guaranty in respect of the property insured thereby, and
all eminent domain or similar proceeds or awards with respect thereto and all
other rights of such Obligor with respect thereto;

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          (o) all books, correspondence, credit files, records, invoices,
ledgers and other papers of every kind and nature, including without
limitation all tapes, cards, computer runs and other papers and documents
in the possession or under the control of such Obligor or any computer
bureau or service company from time to time acting for such Obligor
relating to the ownership, lease, sale, construction, use, operation or
exploitation of the EDS Satellite necessary for the operation of the EDS
Satellite, provided that, solely with respect to the Seller, SpaceCom and
Loral Ltd., the items set forth in this clause (o) shall be limited to
include only such items as are actually included in the sale of the EDS
Satellite pursuant to the EDS Contract and then only to the extent so
included in the EDS Contract; and

          (p) all proceeds, products, offspring, rents, profits, royalties,
revenues, issues, income, benefits, accessions, additions, substitutions
and replacements of and to any of the property of such Obligor
constituting Collateral under the preceding clauses of this Section
(including, without limitation, all causes of action, claims and
warranties now or hereafter held by any Obligor in respect of any of the
Collateral listed above).

          Notwithstanding the foregoing, (i) the Collateral does not include (1) any
account (as defined in the Uniform Commercial Code), contract or general
intangible (as defined in the Uniform Commercial Code) which contains, after
taking into account Sections 9-406 through 9-408 of the applicable Uniform
Commercial Code or other applicable law, a valid and enforceable prohibition on
the creation, perfection or enforcement of a security interest, but only to the
extent and for the duration of such prohibition, or (2) with respect to any
property pledged by an Obligor organized under the laws of Brazil, any
equipment required to be excluded for Skynet/Brazil to comply with its
obligation under Brazilian laws, regulations and/or the ANATEL Concession
Agreement, and (ii) nothing herein shall create an obligation on the part of
any Obligor to pay or transfer to the Secured Party, or a restriction on the
Obligors’ use of, any cash Collateral (other than cash proceeds from the
Insurance Policies, which shall be governed by Section 4.04(e)) of this
Agreement, other than during a period during which a Security Event of Default
has occurred and is continuing.

ARTICLE IV

COVENANTS AND OTHER AGREEMENTS

          In furtherance of the grant of the pledge, charge and security interest
pursuant to Article III and subject to Article V, the Obligors hereby jointly
and severally agree with the Secured Party as follows:

          SECTION 4.01. Delivery and Other Perfection. Each Obligor shall:

          (a) if any of the shares, interests, securities, moneys or property
required to be pledged or charged by such Obligor under clauses (a), (b)
and (c) of Article III are received by such Obligor, promptly either (i)
transfer and deliver to the Secured Party such shares or securities so
received by such Obligor (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied by undated
stock powers or share transfer forms duly executed in blank), all of which
thereafter shall be

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held by the Secured Party pursuant to the terms of this Agreement, as part of
the Collateral, (ii) with respect to any Pledged Collateral that is not
evidenced by a certificate, execute and deliver written instructions to the
issuer thereof to register the security interest created hereunder in such
Pledged Collateral in the registration books maintained by such issuer for such
purpose and cause the respective Obligor to execute and deliver to the Secured
Party a written confirmation to the effect that the security interest created
hereunder in such Pledged Collateral has been duly registered in such
registration books, all in form and substance satisfactory to the Secured Party
or (iii) take such other action as the Secured Party shall reasonably deem
necessary or appropriate to duly perfect the security interest created
hereunder in such shares, interests, securities, moneys or property in said
clauses (a), (b) and (c);

          (b) deliver, assign and pledge to the Secured Party any and all
Instruments included in the Collateral, endorsed and/or accompanied by such
instruments of assignment and transfer in such form and substance as the
Secured Party may reasonably request; provided that so long as no Security
Event of Default shall have occurred and be continuing, such Obligor may retain
for collection in the ordinary course any Instruments, Accounts or General
Intangibles received by such Obligor and the Secured Party shall, promptly upon
request of such Obligor, make appropriate arrangements for making any
Instrument pledged or assigned by such Obligor available to such Obligor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent reasonably deemed appropriate by the Secured Party,
against a trust receipt or like document);

          (c) give, execute, deliver, file and/or record any financing statement,
form, notice, instrument, document, agreement or other papers that may be
necessary or desirable (in the reasonable judgment of the Secured Party) to
create, preserve, perfect or validate the security interest granted pursuant
hereto or to enable the Secured Party to ensure the priority of, or exercise
and enforce its rights hereunder with respect to, such pledge, charge and
security interest (it being understood that the provisions of this Section will
apply to all Collateral, whether personal property or real property, whether
tangible or intangible, and wherever located and whenever acquired, including,
without limitation, Collateral located outside the United States or in space),
including, without limitation, when a Security Event of Default has occurred
and is continuing, but subject to receipt of required regulatory approvals
(which each Obligor shall use its best efforts to obtain and maintain in
effect) causing any or all of the Pledged Collateral to be transferred of
record into the name of the Secured Party or its nominee (and the Secured Party
agrees that if any Pledged Collateral is transferred into its name or the name
of its nominee, the Secured Party will thereafter promptly give to the
respective Obligor copies of any notices and communications received by it with
respect to the Pledged Collateral pledged or charged by such Obligor
hereunder), provided that notices to account debtors or unaffiliated parties in
respect of any Accounts, Instruments or other Collateral referred to in clause
(i) of Article III shall be subject to the provisions of clause (h) below;

          (d) keep full and accurate books and records in accordance with generally
accepted business practices relating to the Collateral, and stamp or otherwise
mark such

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books and records in such manner as the Secured Party may reasonably
require in order
to reflect the security interests granted by this Agreement;

          (e) upon reasonable notice, at any time during normal business
hours, permit representatives of the Secured Party to (i) inspect and
make abstracts from its books and records pertaining to the Collateral,
and (ii) be present at such Obligor’s place of business to receive copies
of all communications and remittances relating to the Collateral, and
forward copies of any material notices or material communications
received by such Obligor with respect to the Collateral, all in such
manner as the Secured Party may reasonably require; provided, however
that no Obligor shall be obligated to disclose any competitively
sensitive information other than during the period in which a Security
Event of Default has occurred and is continuing;

          (f) (i) maintain the Launch Insurance in full force and effect, (ii)
upon the expiry of Launch Insurance, cause “in orbit” coverage (with such
exclusions as the Obligors deem in good faith to be appropriate) to be
maintained on the EDS Satellite at least equal to the amount of the
Secured Obligations, if such coverage is available on commercially
reasonable terms as determined in good faith by the Obligors (such “in
orbit” coverage, together with the Launch Insurance, the “Insurance
Policies”), and (iii) designate prior to the date hereof and thereafter
maintain (pursuant to endorsements or other documents appropriate for the
purpose) the Secured Party as a loss payee in respect of all Insurance
Policies (to the extent of its interest therein with respect to the
Secured Obligations) and, in connection therewith, providing that the
first $50 million (or such lesser amount as may then constitute Secured
Obligations) be paid directly and solely to the Secured Party as set
forth in Section 4.04(e) of this Agreement; provided that at any time
when the Secured Obligation shall be less than the amount for which the
Secured Party has been so designated a loss payee, the Secured Party will
cooperate with the Obligors to amend such endorsements or other documents
to reduce such amount to an amount equal to the then outstanding Secured
Obligations;

          (g) within twenty (20) days after the end of each calendar quarter,
provide health status reports for the EDS Satellite to the Secured Party
as of the last day of such quarter, summarizing all spacecraft related
incidents and anomalies known to the Obligors and the status of the
subsystems on the EDS Satellite; and

          (h) upon the occurrence and during the continuance of any Security
Event of Default, upon request of the Secured Party, promptly notify (and
such Obligor hereby authorizes the Secured Party so to notify) each
account debtor in respect of any Accounts or Instruments that such
Collateral has been assigned to the Secured Party hereunder, and that any
payments due or to become due in respect of such Collateral are to be
made directly to the Secured Party to be applied to the payment of the
Secured Obligations.

          SECTION 4.02. Other Financing Statements and Encumbrances. Without the
prior written consent of the Secured Party, no Obligor shall authorize to be
filed, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Secured Party is not named as the sole
secured party except as to Permitted Liens.

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               SECTION 4.03. Preservation of Rights. The Secured Party shall not be
required
steps necessary to preserve any rights against prior parties
to any of the Collateral.

               SECTION 4.04. Special Provisions Relating to
Certain Collateral.

               (a) Pledged Collateral.

     (i) So long as no Security Event of Default shall have occurred
and be continuing, the Obligors shall have the right to exercise all
voting, consensual and other powers of ownership pertaining to the Pledged
Collateral, provided that each Obligor agrees that it will not vote the
Pledged Collateral pledged or charged by it hereunder in any manner that
is in violation of the terms of the Security Documents; and the Secured
Party shall execute and deliver to the Obligors or cause to be executed
and delivered to the Obligors all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse, as
the Obligors may reasonably request for the purpose of enabling the
Obligors to exercise the rights and powers that they are entitled to
exercise pursuant to this paragraph (a)(i).

     (ii) Nothing in this Agreement shall restrict any Subsidiary of
any Obligor set forth in Annex 2 from declaring and paying to any Obligor
any dividends or distributions in respect of its ownership interests held
by the Obligor, provided that following the occurrence and during the
continuance of a Security Event of Default all such dividends and
distributions shall be paid directly to a segregated interest-bearing cash
collateral account established by and in the name of the Secured Party
(for the benefit of such Obligor) and shall be held therein as additional
Collateral hereunder. If, notwithstanding the foregoing, such dividends or
distributions shall be paid to any Obligor following the occurrence and
during the continuance of a Security Event of Default, the same shall be
held by such Obligor in trust for the Secured Party and the other Secured
Party, segregated from the other funds of such Obligor, and promptly
turned over to the Secured Party for deposit into the aforesaid account.

     (b) Assigned and Other Agreements. Anything herein to the contrary
notwithstanding, each Obligor party to any Assigned Agreement or other
relevant agreement shall remain liable under such Assigned Agreement or
other agreement to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement
had not been executed. The exercise by the Secured Party of any of the
rights hereunder shall not release any Obligor from any of its duties or
obligations under any Assigned Agreement or any such other agreement,
except to the extent provided therein or any consent and agreement
relating thereto and upon foreclosure and assignment of such Assigned
Agreement. The Secured Party shall have no obligation or liability under
any Assigned Agreement or such other agreement, by reason of the existence
of this Agreement, nor shall the Secured Party be obligated to perform any
of the obligations or duties of any Obligor thereunder or to take action
to collect or enforce any claim for payment assigned hereunder, except to
the extent provided therein or any such consent and agreement. If any
Obligor fails to perform any agreement contained herein or in any of the
Assigned Agreements or other agreements constituting part of the
Collateral required to be performed by such Obligor, within 30

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days after receipt by the Seller of written notice from the Secured Party
informing it of such failure, the Secured Party may itself perform, or cause
the performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be payable by the Company and shall be
Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Article III.

     (c) Intellectual Property.

     (i) For the purpose of enabling the Secured Party to exercise rights
and remedies under Section 5.01 at such time as the Secured Party shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Obligor hereby grants to the Secured Party, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to such Obligor) to use, assign, license or
sublicense any of the Intellectual Property now owned or hereafter acquired by
such Obligor, wherever the same may be located, including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer programs used for the compilation or
printout thereof.

     (ii) Notwithstanding anything contained herein to the contrary, so
long as no Security Event of Default shall have occurred and be continuing, the
Obligors will be permitted to exploit, use, enjoy, protect, license,
sublicense, assign, sell, dispose of or take other actions with respect to the
Intellectual Property in the ordinary course of the business of the Obligors.
In furtherance of the foregoing, unless a Security Event of Default shall have
occurred and be continuing the Secured Party shall from time to time, upon the
request of the respective Obligor through the Company, execute and deliver any
instruments, certificates or other documents, in the form so requested, that
such Obligor through the Company shall have certified are appropriate (in their
judgment) to allow them to take any action permitted above (including
relinquishment of the license provided pursuant to paragraph (i) immediately
above as to any specific Intellectual Property). Further, upon the payment in
full of all of the Secured Obligations and cancellation or termination of the
Commitments or earlier expiration of this Agreement or release of the
Collateral, the Secured Party shall grant back to the Obligors the license
granted pursuant to said paragraph (i). The exercise of rights and remedies
under Section 5.01 by the Secured Party shall not terminate the rights of the
holders of any licenses or sublicenses theretofore granted by the Obligors in
accordance with the first sentence of this paragraph (ii).

     (iii) The security interests granted by each Obligor hereunder in
Intellectual Property are intended to assure the ownership, operation,
exploitation and use of the EDS Satellite by Secured Party or any transferee
following foreclosure, and the Secured Party shall not have any right to sell
or otherwise transfer any Intellectual Property independently of a transfer of
the EDS Satellite to a buyer on foreclosure. In addition, so long as the
foregoing license to the Intellectual Property is available to assure the
effective ownership, operation, exploitation and use of the EDS Satellite,
neither the Secured Party nor any successor shall have any right to acquire
ownership thereof.

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     (d) EDS Satellite. Each Obligor agrees and acknowledges that (i) the
Collateral includes a pledge by the Seller of the EDS Satellite, (ii) that the
Secured Party intends to perfect its security interest in and security
interest on such satellite, (iii) that the Obligors anticipate that, in due
course, ownership of the EDS Satellite is expected to be sold by Seller to
Skynet and by Skynet to Skynet/Brazil, and (iv) that any such sale of the EDS
Satellite is and shall at all times be permitted pursuant to the terms hereof,
provided, however, that any transfer thereof shall be fully subject, in all
respects, to the Secured Party’s continuing security interest therein until
released upon the payment and performance in full of all Secured Obligations.

     Without limiting in any respect any other provisions of this Agreement,
each Obligor agrees to assist the Secured Party in achieving and maintaining
perfection of its security interest in the EDS Satellite through whatever
method or methods the Secured Party may from time to time reasonably request,
including (i) filing UCC financing statements on the basis that satellites
constitute “mobile goods” under the Uniform Commercial Code, (ii) filing UCC
financing statements or other security interest perfection documents in each
jurisdiction in which the satellite is manufactured integrated or processed,
from where any satellite is launched, from where it is controlled or in which
it may from time to time be deemed located to the extent such filing in such
jurisdiction is reasonably required in order to perfect and maintain the
perfection of the Secured Party’s security interests therein and security
interest thereon, or priority (iii) taking all actions required to be
consistent with present and future practices of third-party creditors intending
to perfect security interests in satellites owned by United States persons
launched from any location and (iv) taking all actions responsibly required
from time to time to create, maintain, ensure the priority of and perfect
security interests in satellites like the EDS Satellite (both before and after
lunch and while in orbit and prior to and after any permitted sale) as
specified in any United States, foreign or international law, regulation,
convention or treaty relating to the creation, perfection and/or priority of
security interests and security interests in satellites.

     (e) Insurance. All cash proceeds of Insurance Policies, up to the maximum
amount of the then outstanding Secured Obligations shall be paid to and held by
the Secured Party as cash collateral hereunder in an account in Seller’s name
pursuant to a control agreement in customary form, pursuant to which Secured
Party has exclusive control thereof (including, for the avoidance of doubt and
without limitation, the right to make withdrawals in accordance with the terms
of this Agreement without consent of the Seller). The Secured Party agrees that
it will invest any such cash collateral only in Cash Equivalents. Proceeds of
such investments shall be held by the Secured Party as additional collateral
hereunder until it holds cash collateral (or investments thereof) equal to the
amount of the outstanding Secured Obligations, and thereof the Secured Party
shall promptly pay such excess over to the Seller.

     (f) Other Cash Collateral. Notwithstanding anything herein contained to
the contrary, so long as no Security Event of Default shall have occurred and
be continuing, the Obligors will be permitted without restriction to use any
cash Collateral (other than cash proceeds from the Insurance Policies, which
shall be governed by Section 4.04(e) of

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this Agreement) and nothing herein shall create any obligation for an
Obligor to transfer such cash Collateral to the Secured Party.

               SECTION 4.05. TT&C Deliverables. For the purpose of enabling the Secured
Party to exercise rights and remedies under Section 5.01, at such time as the
Secured Party shall be lawfully entitled to exercise such rights and remedies
the Obligors will furnish Buyer with the documentation, data and software
specified in Annex 4 hereto, one (1) set of encryption keys that are compatible
with the EDS spacecraft secure command system and one (1) command encryptor, in
each case which shall conform with the requirements of Exhibit A to the EDS
Contract (collectively, the “Deliverables”), subject to all requisite
government approvals and compliance with all governmental procedures, and agree
to use their respective commercially reasonable efforts to assist the Secured
Party in obtaining such approvals and complying with such procedures.

               The Buyer acknowledges that its access to certain of the Collateral will
be subject to U.S. laws (“Restricted Deliverables”), including without
limitation, U.S. export control laws. Accordingly, Buyer agrees that
notwithstanding anything contained herein to the contrary, Buyer shall not take
any action that would constitute a violation of applicable U.S. laws and shall
obtain all such approval and consent as may be necessary for it to obtain
access to the Restricted Deliverables, including without limitation, such
approvals and consents as may be required under U.S. export control laws.

               Notwithstanding anything contained herein to the contrary, Buyer shall
also not take any action relating to the Deliverables that would constitute a
violation of applicable Brazilian laws and regulations or of the ANATEL
Concession Agreement; or (ii) permit early termination or cause forfeiture of
the ANATEL Concession.

ARTICLE V

EVENTS OF DEFAULT; REMEDIES

               SECTION 5.01. Security Events of Default. During the period during which a
Security Event of Default shall have occurred and be continuing:

     (a) each Obligor shall, at the request of the Secured Party, assemble
the Collateral owned by it at such place or places, reasonably convenient
to both the Secured Party and such Obligor, designated in its request;

     (b) the Secured Party may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;

     (c) the Secured Party shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial
Code (whether or not said

-17-

 

Code is in effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including,
without limitation, the right, to the maximum extent permitted by law, to
exercise all voting, consensual and other powers of ownership pertaining
to the Collateral as if the Secured Party were the sole and absolute
owner thereof (and each Obligor agrees to take all such action as may be
reasonably necessary to give effect to such right) and the power of sale
and other powers specified in the Conveyance Act 1983 of Bermuda, as
varied or amended by this Agreement;

     (d) the Secured Party in its discretion may, in its name or in the
name of the Obligors or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or
in exchange for any of the Collateral, but shall be under no obligation
to do so; and

     (e) the Secured Party may, upon 30 days’ prior written notice to the
Obligors of the time and place, with respect to the Collateral or any
part thereof that shall then be or shall thereafter come into the
possession, custody or control of the Secured Party or any of their
respective agents, sell, transfer, lease, assign or otherwise dispose of
all or any part of such Collateral, at such place or places as the
Secured Party deems best, and for cash or for credit or for future
delivery, at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and any Secured Party or anyone else may
be the purchaser, transferee, lessee, assignee or recipient of any or all
of the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the
Obligors, any such demand, notice and right or equity being hereby
expressly waived and released. The Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned.

               Notwithstanding the foregoing, the Secured Party agrees that it will not
take, and will not require any Obligor to take, any action pursuant to this
Section 5.01 with respect to any Pledged Stock or other Collateral until such
time as any government approval or consent required in connection therewith,
including, without limitation, that of ANATEL has been granted or obtained and
will not take, and will not require any Obligor to take, any action pursuant to
this Section 5.01 with respect to any of the Deliverables in violation of any
applicable laws or regulations or of the ANATEL Concession Agreement. Following
the occurrence and during the continuance of any Security Event of Default the
Obligors shall at the request of the Secured Party use their reasonable best
efforts to assist the Secured Party in obtaining any governmental approval or
consent, including that of ANATEL, that may be necessary to allow for the
exercise remedies provided herein with respect to the Collateral.

               The proceeds of each collection, sale or other disposition under this
Section, including by virtue of the exercise of the license granted to the
Secured Party in Section 4.04(c),

-18-

 

shall
be applied in accordance with Section 5.05. Any such sale or other
disposition under this section shall be conducted in a commercially reasonable
manner.

               The Obligors recognize that, by reason of certain prohibitions
contained in the
securities Act of 1933, as amended, and applicable state securities laws, the
Secured Party may compelled, with respect to any sale of all or any part
of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Obligors acknowledge that any such private sales may be at prices and on
terms less favorable to the Secured Party than those obtainable through a
public sale without such restrictions, and, notwithstanding such
circumstances, agree that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Secured Party
shall have no obligation to engage in public sales and no obligation to
delay the sale of any Collateral for the period of time necessary to
permit the respective issuer thereof to register it for public sale.

               SECTION 5.02. Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.01 are
insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, SS/L (but not any other Obligor)
shall remain liable for any deficiency.

               SECTION
5.03. Removals, Etc. Except upon at least 30 days’ prior
written notice to the Secured Party, each Obligor shall not: (i) maintain
the original or “master” copies of any of its books and records with respect
to the Collateral at any office or maintain its principal place of business
at any place, or (except with respect to Collateral in the possession of the
Secured Party) permit any Collateral to be located anywhere other than at
one of the locations identified in Annex 5 under its name (other than the
EDS Satellite in orbit), or (ii) change its name from the name shown on the
signature pages hereto.

               SECTION 5.04. Private Sale. No Secured Party shall incur any liability
as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 5.01(e) conducted in a commercially
reasonable manner. Each Obligor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which the Collateral
may have been sold at such a private sale was less than the price that might
have been obtained at a public sale or was less than the aggregate amount of
the Secured Obligations, even if the Secured Party accepts the first offer
received and does not offer the Collateral to more than one offeree.

               SECTION 5.05. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization
of all or any part of the Collateral pursuant hereto, and any other cash at
the time held by the Secured Party under this Agreement, shall be applied by
the Secured Party:

     First, to the payment in full of the Secured Obligations; and

     Thereafter, to the payment to the respective Obligor, or their
respective successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.

-19-

 

               As used in this Article, “proceeds” of Collateral means cash,
securities and other property realized in respect of, and
distributions in kind of, Collateral, including any thereof received
under any reorganization, liquidation or adjustment of debt of the
Obligors or any issuer of or obligor on any of the Collateral.

               SECTION 5.06. Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Secured Party while no Security Event of Default
has occurred and is continuing, upon the occurrence and during the continuance
of any Security Event of Default the Secured Party is hereby appointed the
attorney-in-fact of each Obligor for the purpose of
carrying out the provisions hereof and taking any action and executing any
instruments that the Secured Party may reasonably deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Secured Party shall
be entitled under this Article V to make collections in respect of the
Collateral, the Secured Party shall have the right and power to receive,
endorse and collect all checks made payable to the order of any Obligor
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.

               SECTION 5.07. Perfection and Priority. Prior to or concurrently with the
execution and delivery of this Agreement, each Obligor shall (i) file such
financing statements and other documents in such offices as the Secured Party
may reasonably request to perfect or ensure the priority of the security
interests granted by Article III, (ii) take any action as the Secured Party
may reasonably request to perfect the pledge of any ownership interests for
purposes of Article 8 of the Uniform Commercial Code and/or (iii) deliver to
the Secured Party all certificates identified in Annex 2, accompanied by
undated stock or transfer powers or share transfer forms duly executed in
blank.

               SECTION
5.08. Release of Collateral; Termination.

     (a) Upon the earlier of (i) the performance and payment in full of
all Secured Obligations, (ii) prepayment by Seller to Secured Party of
an amount equal to $50 million less the sum of all milestone payments
earned by Seller to date pursuant to the Procurement Agreement, and
(iii) the termination of the Procurement Agreement by the Secured Party
pursuant to Article 17 thereof, this Agreement shall automatically
terminate.

     (b) At all times after the amount of cash Collateral (including
investments thereof) held by the Secured Party shall first equal the
then outstanding Secured Obligations, the sole Collateral under this
Agreement shall, subject to Section 5.08(c) below, be such cash
Collateral, and the Obligors shall be relieved from compliance with any
and all obligations, representations and warranties under this
Agreement with respect to any other Collateral, including, without
limitation, those set forth in Article IV.

     (c) If at any time the amount of cash Collateral (including
investments thereof) held by the Secured Party shall exceed the then
outstanding Secured Obligations, such excess cash Collateral shall
cease to constitute Collateral and the Obligors shall at all times
thereafter be relieved from compliance with any and all obligations,
representations

-20-

 

and warranties under this Agreement with respect to such excess cash
Collateral, Including, without limitation, those set forth in Article
IV. The Secured Party shall promptly pay to Seller such excess cash
Collateral.

     (d) At any time that any property of the Obligors shall cease to
constitute Collateral under this Agreement (including, for the avoidance of
doubt, upon termination of this Agreement), the Secured Party shall forthwith
cause to be assigned, transferred and delivered, against receipt but without
any recourse, warranty or representation
whatsoever (except that the Secured Party assigns, transfers and delivers
free of any Lien created with its consent), any such property and money received in
respect thereof, to or on the order of the respective Obligor and to be
released and canceled all licenses and rights referred to in Section
4.04(c) that cease to constitute Collateral. The Secured Party shall
also execute and deliver to the respective Obligor upon such release of
property of the Obligors such Uniform Commercial Code termination
statements and such other documentation as shall be reasonably
requested by the respective Obligor to effect the termination and
release of the security interest on such property. Nothing in the
foregoing shall be deemed to require a release of Buyer’s security
interest in all work-in-progress on the Purchased Satellite, which
shall continue in full force and effect pursuant to the terms of the
Procurement Agreement.

               SECTION 5.09. Further Assurances. Each Obligor agrees that, from time
to tune upon the written request of the Secured Party, such Obligor will
execute and deliver such further documents and do such other acts and things
as the Secured Party may reasonably request in order fully to effect the
purposes of this Agreement. Without limiting the foregoing, each Obligor
hereby authorizes the Secured Party to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of such Obligor where permitted by
law, provided that copies of any such statement or amendment thereto shall
promptly be delivered to the Company. Notwithstanding the foregoing, nothing
in this Agreement shall require any Obligor to obtain any “control
agreement” relating to accounts prior to the occurrence and continuance of a
Security Event of Default.

               SECTION 5.10. Standstill. Notwithstanding any provision of this
Agreement to the contrary providing rights to the Secured Party or imposing
obligations on any Obligor which are expressly available only after a
Security Event of Default shall have occurred, the Secured Party shall not
exercise any such rights and no Obligor shall have any such obligation
unless (i) the Secured Obligations are due and unpaid pursuant to the terms
of the Procurement Agreement, and (ii) the Secured Party shall given to the
Obligors at least 30 days’ prior written notice of intent to exercise such
right or to bind the Obligor to such obligation.

ARTICLE VI

MISCELLANEOUS

               SECTION 6.01. No Waiver. No failure on the part of the Secured Party or
any other Secured Party to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Secured Party or any other Secured Party of any right, power or

-21-

 

remedy
hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by law.

               SECTION 6.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at (i) in the case of each Obligor, c/o the Seller at the address
specified in the Procurement Agreement; and (ii) in the case of the Secured
Party at the address specified for it in the Procurement Agreement, and shall
be deemed to have been given at the times specified for such types of notices
in the Procurement Agreement.

               SECTION 6.03. Expenses.

     (a) Seller agrees to reimburse the Secured Party for all
reasonable costs and expenses of the Secured Party (including, without
limitation, the reasonable fees and expenses of legal counsel) in
accordance with the final sentence of this paragraph 6.03(a) in
connection with (i) any Security Event of Default and any enforcement
or collection proceeding resulting therefrom, including, without
limitation, all manner of participation in or other involvement with
(w) performance by the Secured Party of any obligations of the Obligors
in respect of the Collateral that the Obligors have failed or refused
to perform, (x) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings of any Obligor (other than those
in existence on the date hereof), or any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral
and defending or asserting rights and claims of the Secured Party in
respect thereof, by litigation or otherwise, including expenses of
insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section. Seller’s
obligation to reimburse the Secured Party for such reasonable costs and
expenses under this Section 6.03(a) shall be limited as follows: (1)
Seller shall reimburse up to the first $300,000 of the reasonable costs
and expenses of the Secured Party, (2) costs and expenses of the
Secured Party in excess of $300,000 and less than $800,000 shall be for
the Secured Party’s own account, and (3) Seller shall reimburse the
reasonable costs and expenses of the Secured Party in excess of
$800,000.

     (b) The Seller will pay all filing, registration and recording
fees or refiling, re- registration and re-recording fees, and all
expenses incident to the execution and delivery of this Agreement, any
agreement supplemental hereto and any instruments of further assurance,
and all federal, state, county and municipal stamp taxes and other
taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of any Security Document.

     (c) The Seller will pay, before any fine, penalty, interest or
cost attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies now or hereafter assessed or levied
against the Collateral or upon the Security interests provided for
herein as well as pay, or cause to be paid, all claims for labor,
materials or

-22-

 

supplies which, if unpaid, might by law become an
Encumbrance thereon, and will retain copies of, and, upon
request, permit the Secured Party to examine, receipts showing payment of any of the foregoing, in each case only to the extent that
nonpayment is reasonably likely to impair the Collateral or the
ability of the Obligors to perform their obligations under
this Agreement.

               SECTION 6.04. Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each
Obligor and the Secured
Party. Any such amendment or waiver shall be binding upon the Secured
Party, each other Secured Party and each Obligor.

               SECTION 6.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of
each Obligor and the Secured Party provided, however, that no Obligor shall
assign or transfer its rights hereunder without the prior written consent of
the Secured Party.

               SECTION 6.06. Captions. The caption and section headings used herein are
for convenience of reference only, are not part of this Agreement and shall
not affect the construction of, or be taken into consideration in
interpreting, this Agreement.

               SECTION 6.07. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.

               SECTION 6.08. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.

     (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

     (b) EACH OBLIGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS

-23-

 

AGREEMENT SHALL AFFECT ANY RIGHT THAT THE SECURED PARTY MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST
ANY OBLIGOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

     (c) EACH OBLIGOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

     (d) TO THE EXTENT THAT ANY OBLIGOR MAY BE OR BECOME ENTITLED, IN ANY
JURISDICTION IN WHICH JUDICIAL PROCEEDINGS MAY AT ANY TIME BE COMMENCED
WITH RESPECT TO THIS AGREEMENT, TO CLAIM FOR ITSELF OR ITS PROPERTY OR
REVENUES ANY IMMUNITY FROM SUIT, COURT JURISDICTION, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OF A
JUDGMENT OR FROM ANY OTHER LEGAL PROCESS OR REMEDY RELATING TO ITS
OBLIGATIONS UNDER THIS AGREEMENT AND TO THE EXTENT THAT IN ANY SUCH
JURISDICTION THERE MAY BE ATTRIBUTED SUCH AN IMMUNITY (WHETHER OR NOT
CLAIMED), SUCH OBLIGOR HEREBY IRREVOCABLY AGREES NOT TO CLAIM AND HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY TO THE FULLEST EXTENT PERMITTED BY THE
LAWS OF SUCH JURISDICTION.

               SECTION 6.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

               SECTION 6.10. No Third Party Beneficiaries. The agreements of the parties
hereto are solely for the benefit of the Obligors and the Secured Party, and no
other Person shall have any rights hereunder.

-24-

 

               SECTION 6.11. Agents and Attorneys-in-Fact. The Secured Party may employ
agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.

               SECTION 6.12. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.

               SECTION 6.13. Overriding Transactions; Savings. The parties hereby
consent to the transactions listed on Annex 1, but only to the extent that
any transaction subject to such consent would not materially adversely affect
the continued validity, enforceability and perfection of the security
interests provided for herein. In addition, the Secured Party hereby
acknowledges and agrees that Skynet/Brazil does not purport to grant any
security interest in the EDS Satellite hereunder, but merely confirms that
all right, title and interest it may acquire therein is or will be acquired
subject to any preexisting security interest created by Seller pursuant to
the terms hereof prior to the EDS Satellite being transferred to
Skynet/Brazil.

               SECTION 6.14. Conflicting Provisions. In the event of conflict or
inconsistency between the provisions of this Agreement and the provisions of
the Quota Pledge Agreement, the latter shall prevail.

-25-

 

                    IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered
as of the day and year first above written.

Consulado-Geral da
República Federativa do Brasil em Nova York

 Reconheço verdadeira a assinatura, por semelhança, no documento
anexo, de NORMAN GOODMAN, Tabelião do Foro do Condado de NOVA YORK,
Estado de NOVA YORK, Estados Unidos da América. E, para constar onde
convier, mandei passar o presente, que assinei e fiz selar o com Selo
de Armas desta Repartição consular, sendo dispensado o
reconhecimento de firma, no Brasil, da Autoridade consular, nos termos
do Decreto número 84.451, de
31/01/1980.

	 	 	 	 	 	 	 
	

	 	 	 	 	 	Nova York, 23 de março de 2004
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	
	Recebi:

	 	1x R20.00 (ouro) ou
	 	 	 	Andressa Agostini de Paula Carvalho

	

	 	1x US$20.00.
	 	 	 	   Vice-Cônsul
	

	 	Tabela 416.	 	 	 	 

A
LEGAIZAÇÃO DA ASSINATURA NÃO IMPLICA
ACEITAÇÃO OU APROVAÇÃO DO DOCUMENTO

The legalization of the signature does not imply acceptance or approval of the document

 

 

Consulado-Geral da
República Federativa do Brasil em Nova York

Reconheço verdadeira a assinatura, por semelhança, no documento
anexo, de NORMAN GOODMAN, Tabelião do Foro do Condado de NOVA YORK,
Estado de NOVA YORK, Estados Unidos da América. E, para constar
onde convier, mandei passar o presente, que assinei e fiz selar com
o Selo de Armas desta Repartiçéo consular, sendo dispensado o
reconhecimento de firma, no Brasil, da Autoridade consular, nos
termos do Decreto número 84.451, de 31/01/1980.

	 	 	 	 	 	 	 
	

	 	 	 	 	 	Nova York, 23 de março de 2004
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	
	Recebi:

	 	1x R20.00 (ouro) ou
	 	 	 	Andressa Agostini de Paula Carvalho

	

	 	1x US$20.00.
	 	 	 	   Vice-Cônsul
	

	 	Tabela 416.	 	 	 	 

A LEGALIZAÇÃO
DA ASSINATURA NÃO IMPLICA ACEITAÇÃO OU
APROVAÇÃO DO DOCUMENTO

The legalization of the signature does not imply acceptance or approval of the document

 

 

		 	 	 	 
	 	 	LORAL SPACECOM CORPORATION,
	

	 	 	 	as debtor and debtor in possession,
acting on its own behalf and on behalf of
LORAL SKYNET, its division.
	 
	 	 	 	 
	

	 	By
	 	/s/ Janet T. Yeung
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
		 	 	 	 

[SEAL OF NEW YORK COUNTY CLERK]

	 	 	 	 
	State of New York	}	ss.:	No. 370842   Form 1
	County of New York,	}

          I, NORMAN GOODMAN, County Clerk and Clerk of the Supreme Court
of the State of New York, in and for the County of New York, a Court
of Record, having by law a seal,

          DO
HEREBY CERTIFY pursuant to the Executive Law of the State of New
York, that

Maria A. Fekete

whose name is subscribed to the annexed affidavit, deposition,
certificate of acknowledgment or proof, was at the time of taking
the same a NOTARY PUBLIC in and for the State of New York duly
commissioned, sworn and qualified to act as such; that pursuant to law, a commission or a certificate
of his official character, with his autograph signature has been filed in my office; that at the time of taking
such proof, acknowledgment or oath, he was duly authorized to
take the same; that I am well acquainted with the handwriting of
such NOTARY PUBLIC
or have compared the signature on the annexed instrument with his autograph
signature deposited in my office, and I believe that such signature is genuine.

IN WITNESS WHEREOF, I have hereunto set my hand affixed my
official seal this

 

 

Consulado-Geral da
República Federativa do Brasil em Nova York

Reconheço verdadeira a
assinatura, por semelhança, no documento anexo,
de NORMAN GOODMAN, Tabelião do Foro do Condado de NOVA YORK, Estado de
NOVA YORK, Estados Unidos da América. E, para constar onde convier,
mandei passar o presente, que assinei e fiz selar com o Selo de Armas
desta Repartição consular, sendo dispensado o reconhecimento de firma,
no Brasil, da Autoridade consular, nos termos do Decreto número 84.451,
de 31/01/1980.

	 	 	 	 	 	 	 
	

	 	 	 	
	 	Nova York, 23 de março de
2004

	Recebi:

	 	1x R20.00 (ouro) ou
	 	 	 	Andressa Agostini de Paula Carvalho

	 
	 	1x US$20.00.	 	 	 	   Vice-Cônsul
	

	 	Tabela 416.	 	 	 	 

A
LEGALIZAÇÃO DA ASSINATURA NÃO IMPLICA
ACEITAÇÃO OU APROVAÇÃO DO DOCUMENTO

The legalization of the signature does not imply acceptance or approval of the document

 

 

	 	 	 	 	 
	 	 	LORAL SPACECOM CORPORATION,
	

	 	 	 	as debtor and debtor in possession,
acting on its own behalf and on behalf of
LORAL SKYNET, its division.
	 
	 	 	 	 
	

	 	By
	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:

Subscribed and sworn to before

me by Loral SpaceCom Corporation

this      day of March, 2004.

	 	 	 
	
	 	 
	NOTARY PUBLIC
	 	 

	 	 	 	 	 
		 	 	 	 
	 	LORAL SKYNET DO BRASIL LTDA.

 	 
	 	By  	/s/ Philip Joseph
      Rabito	 
	 	 	Name:  	PHILIP JOSEPH RABITO	 
	 	 	Title:  	OFFICE MANAGER 	 
	 

	 	 	 	 	 
	 	 	 
	 	By  	
/s/ Marcelo Sant’ Anna 	 
	 	 	Name:  	MARCELO SANT’ ANNA 	 
	 	 	Title:  	GENERAL MANAGER 	 
		 	 	 	 

 

 

	 	 	 	 	 

	 	SECURED PARTY

INTELSAT LLC,

     as Secured Party	 
	 	 	 	 	 
	 	By:  	                                      /s/ Ramu Potarazu
 	 
	 	 	Name: Ramu Potarazu	  	 
	 	 	Title: President	 	 
	 

Subscribed and sworn to before me

by Intelsat LLC

[SEAL OF NEW YORK COUNTY CLERK]

	 	 	 	 
	State of New York
County of New York,	}
}	 ss.:	No. 370843   Form
1          

          I,
NORMAN GOODMAN, County Clerk and Clerk of the Supreme Court of the
State of New York, in and for the County of New York, a Court of Record,
having by law a seal,

          DO HEREBY CERTIFY pursuant to the Executive Law of the State of
New York, that
 

Elaine Yi Zu Ho

whose name is subscribed to the annexed affidavit, deposition, certificate
of acknowledgment or proof, was at the
time of taking the same a NOTARY PUBLIC in and for the State of New York
duly commissioned, sworn and
qualified to act as such; that pursuant to law, a commission or a certificate
of his official character, with his
autograph signature has been filed in my office; that at the time of
taking such proof, acknowledgment or oath, he
was duly authorized to take the same; that I am well acquainted with the
handwriting of such NOTARY PUBLIC
or have compared the signature on the annexed instrument with his autograph
signature deposited in my office, and
I believe that such signature is genuine.

     IN
WITNESS WHEREOF, I have hereunto set my hand affixed my official seal this

 

 

Consulado-Geral da
República Federativa do Brasil em Nova York

Reconheço verdadeira a
assinatura, por semelhança, no documento anexo, de
NORMAN GOODMAN, Tabelião do Foro do Condado de NOVA YORK, Estado de NOVA
YORK, Estados Unidos da América. E, para constar onde convier, mandei passar
o presente, que assinei e fiz selar com o Selo de Armas desta
Repartição
consular, sendo dispensado o reconhecimento de firma, no Brasil, da
Autoridade consular, nos termos do Decreto número 84.451, de 31/01/1980.

	 	 	 	 	 	 	 
	

	 	 	 	 	 	Nova York, 23 de março de 2004
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	
	Recebi:

	 	1x R20.00 (ouro) ou
	 	 	 	Andressa Agostini de Paula Carvalho

	

	 	1x US$20.00.
	 	 	 	   Vice-Cônsul
	

	 	Tabela 416.	 	 	 	 

A
LEGALIZAÇÃO DA ASSINATURA NÃO IMPLICA
ACEITAÇÃO OU APROVAÇÃO DO DOCUMENTO

The legalization of the signature does not imply acceptance or approval of the document

 

 

ANNEX 1

PERMITTED TRANSACTIONS

	•	 	The LHL Transfer (provided that after giving effect thereto, all of the
outstanding ownership interests of LHL constitute Collateral hereunder).

	•	 	The Satellite Agreements and the transaction contemplated thereby.

	•	 	The redomiciliation of LHL as an entity organized under the laws of a
State of the United States of America.

Annex 1 to the Agreement

 

 

ANNEX 2

PLEDGED STOCK

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Number of
	 	 	 	 	 	 	Type or	 	Shares or
	 	 	Certificate	 	 	 	Class of	 	Interests and
	 	 	Nos.	 	Registered	 	Ownership	 	Percentage of
	Issuer
	 	(if any)
	 	Owner
	 	Interests
	 	Outstanding

	Loral Holdings Ltd.
	 	 	 	Loral Space &	 	1,200,000	 	 	 	 
	 
	 	 	 	Communications Ltd.*	 	ordinary shares	 	 	100.0000	%

* Subject to the LHL Transfer.

Annex 2 to the Agreement

 

 

ANNEX 3

COMPLIANCE NOTICES

     Letter, dated March 9, 2004, from ANATEL to Skynet/Brazil.

Annex 3 to the Agreement

 

 

ANNEX 4

DOCUMENTATION, DATA AND SOFTWARE

	 	 	 	 	 
	No.
	 	Title
	 	Quantity

	 
	 	Contract Documents	 	 
	
	

  
	1
	 	Program Management Plan	 	  5
	

	2
	 	Program Master Schedule	 	  5
	

	3
	 	Satellite Configuration Data	 	 
	

	 
	 	a. Preliminary CIL	 	  3
	

	 
	 	b. As-built CIL	 	  3
	

	4
	 	FCC and ITU Satellite Coordination Data	 	  3
	

	5
	 	PDR Data	 	 
	

	 
	 	a. Data Package	 	  5
	

	 
	 	b. Presentation material	 	As delivered
	

	 
	 	c. Minutes/ Action Items	 	  5
	

  
	 
	 	d. Close-out Report	 	  4
	

	 
	 	e. Agenda	 	  1
	

	 
	 	f. Invitation	 	  1
	

	6
	 	CDR Data	 	 
	

	 
	 	a. Data Package	 	  5
	

	 
	 	b. Presentation Material	 	As delivered
	

	 
	 	c. Minutes/ Action Items	 	  5
	

	 
	 	d. Close-out Report	 	  5
	

	 
	 	e. Agenda	 	  1
	

	 
	 	f. Invitation	 	  1
	

	7
	 	System Test Procedure (Satellite)	 	  5
	

	8
	 	System Test Report (Satellite)	 	  2
	

	9
	 	Prelaunch Test Procedure	 	  5
	

	10
	 	Mission Profile Description	 	  5
	

	11
	 	In-Orbit Test (“IOT”):	 	 
	

	 
	 	a. IOT Description	 	  5
	

	 
	 	b. IOT Procedures	 	  5
	

	 
	 	c. In-Orbit Test Summary Report	 	  5
	

	 
	 	d. Detailed In-Orbit Test Report	 	  5
	

	12
	 	Monthly Progress Report	 	  5
	

	13
	 	Telemetry and Command Databases	 	As delivered
	

	14
	 	Mission Operation Plan	 	  3
	

	15
	 	Satellite Orbital Operations
Handbook (“SOOH”)	 	 
	

	 
	 	a. SOOH, Volume I, Satellite Technical Description	 	10
	

	 
	 	b. SOOH, Volume II, Satellite On-Orbit Operations	 	10

Annex 4 to the Agreement

 

	 	 	 	 	 
	 
	 	c. SOOH, Volume III, Operations Procedures	 	10
	

	 
	 	d. SOOH, Volume IV, Satellite Parameters (Calibration Data)	 	10
	

	16
	 	Documentation Required by Launch Agencies	 	3
	

	17
	 	Major Non-conformance Report	 	3
	

	18
	 	Class I Waivers, Deviations, and
Engineering Change Proposals	 	3
	

	19
	 	Satellite End Item Data Package	 	2
	

	20
	 	a. Training Plan	 	5
	

	 
	 	b. Training Materials	 	As delivered
	

	21
	 	Satellite to Launch Vehicle ICD	 	3
	

	22
	 	Design Analysis Reports:	 	As delivered
	

	 
	 	a. Communication Subsystem Analysis Report	 	 
	

	 
	 	b. Thermal Analysis Report	 	 
	

	 
	 	c. Structural Analysis Report	 	 
	

	 
	 	d. EPS Analysis Report	 	 
	

	 
	 	e. Pointing Error Analysis Report	 	 
	

	 
	 	f. Propellant Requirements Analysis Report	 	 
	

	 
	 	g. Reliability Analysis Report	 	 
	

	 
	 	h. Mass Properties Analysis Report	 	 
	

	 
	 	i. Dynamics Analysis Report	 	 
	

	 
	 	j. Control Subsystem Analysis Report	 	 
	
	 	 
	 
	 	k. Radiation and Electrostatic Discharge Analysis Report	 	 
	

	 
	 	m. TT&C Subsystem Analysis Report	 	 
	

	23
	 	Satellite Acceptance Certificate	 	1
	

Annex 4 to the Agreement

 

 

ANNEX 5

LIST OF LOCATIONS

600 Third Avenue

New York, NY 10016

500 Hills Drive

Bedminster, NJ 07921

3825 Fabian Way Palo
Alto, CA 94303

Av. Rio Branco No. 1

20090-003

Rio de Janeiro, Brazil

Av. Barao de Teffe 7

20220-003

Rio de Janeiro, Brazil

Annex 5 to the Agreement

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