CONTRACT

Supply Agreement

You are currently viewing:

This Supply Agreement involves

CABLEVISION SYSTEMS CORP | RAINBOW DBS COMPANY LLC | LOCKHEED MARTIN CORPORATION | DBS Company LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: CONTRACT
Date: 3/16/2005

CONTRACT, Parties: cablevision systems corp , rainbow dbs company llc , lockheed martin corporation , dbs company llc

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.56

CONFIDENTIAL TREATMENT
REQUESTED BY CABLEVISION
SYSTEMS CORPORATION AND
CSC HOLDINGS, INC

Contract No. 11182004

CONTRACT BETWEEN

RAINBOW DBS COMPANY LLC

AND

LOCKHEED MARTIN CORPORATION
ACTING THROUGH
LOCKHEED MARTIN COMMERCIAL SPACE SYSTEMS

FOR

RAINBOW KA-BAND SPACECRAFT

Date: November 21, 2004

PROPRIETARY NOTICE

This contract and the information contained herein is proprietary and confidential to Rainbow DBS Company LLC and LOCKHEED MARTIN CORPORATION ACTING THROUGH LOCKHEED MARTIN COMMERCIAL SPACE SYSTEMS and shall not be published, reproduced, copied, disclosed, or used for other than its intended purpose without the express written consent of a duly authorized representative of Rainbow DBS Company LLC and LOCKHEED MARTIN CORPORATION ACTING THROUGH LOCKHEED MARTIN COMMERCIAL SPACE SYSTEMS.

TABLE OF CONTENTS

			PAGE
1.		DEFINITIONS	1
2.		SCOPE OF WORK	8
	2.1	Elements of Work	8
	2.2	Attachments	10
	2.3	Options	11
3.		DELIVERABLE ITEMS AND DELIVERY SCHEDULE	11
	3.1	Deliverable Items/Promised Delivery Dates	11
	3.2	Time of the Essence	12
	3.3	Contractor Responsibility	12
	3.4	Customer Responsibility	13
4.		PRICES	13
	4.1	***	13
	4.2	Taxes	13
	4.3	***	13
5.		METHOD OF PAYMENT	14
	5.1	Spacecraft	14
	5.2	Performance Incentives	15
	5.3	Invoices	15
	5.4	Disputed Payments	15
	5.5	Currency/Place of Payment	15
	5.6	Late Payment	16
6.		DELIVERY, TITLE AND RISK OF LOSS OR DAMAGE	17
	6.1	Spacecraft Delivery	17
	6.2	Delivery of Other Deliverable Items	17
	6.3	Title	17
7.		CERTIFICATION, INSPECTION, ACCEPTANCE, WAIVERS	17
	7.1	General Requirements	17
	7.2	Waivers	17
	7.3	Inspections	18
	7.4	Spacecraft Acceptance Procedure	18
	7.5	Acceptance Procedures for Other Deliverable Items	21
	7.6	Remedy of Defects	21
	7.7	Post Launch Remedies	21
8.		LAUNCH VEHICLE SELECTION	22
	8.1	Customer Responsibility	22
	8.2	Launch Vehicle Availability Date	22
9.		INSURANCE	22
	9.1	Launch and On-Orbit Insurance	22

***

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. Copies of the exhibit containing the redacted portions have been filed separately with the Securities and Exchange Commission subject to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.

			PAGE
	9.2	Insurance Claims	23
	9.3	"Work-in-Progress" Insurance	23
10.		SUBCONTRACTS	23
	10.1	Subcontracts	23
	10.2	Key Subcontracts	24
	10.3	Indemnification/Release	24
11.		PROPERTY ACCOUNTING	24
	11.1	Identification and Control	24
	11.2	Use of Inventory Parts/Use of Customer's Parts	24
12.		CHANGES REQUESTED BY CONTRACTOR OR CUSTOMER	25
	12.1	Contract Change Notice	25
	12.2	Acceptance of Change	25
	12.3	Non Refusal	25
	12.4	Price of Changes	25
	12.5	Changes To Meet Specifications	25
	12.6	Change of Designated Orbital Position of Satellite Ka-5	26
13.		CONTRACT TECHNOLOGY	26
	13.1	Disclosure of Contract Technology	26
	13.2	Rights Granted in Contract Technology	27
	13.3	***	27
14.		RIGHT OF ACCESS, REPORTS, TESTING, MONITORING	28
	14.1	Access	28
	14.2	Reports	29
	14.3	Performance Testing	29
	14.4	Monitoring	30
	14.5	Export Laws Compliance	30
15.		WARRANTY	31
	15.1	Spacecraft Warranty	31
	15.2	Warranty for Deliverable Items Other Than Spacecraft	31
	15.3	Disclaimer	32
	15.4	Assistance	32
16.		DEFICIENCIES NOTED IN OTHER SPACECRAFT	32
	16.1	Qualification Heritage	32
	16.2	Notice	33
17.		TERMINATION FOR CONVENIENCE	34
	17.1	Termination	34
	17.2	Termination Expense	34
	17.3	Termination Charges	34
	17.4	Subcontractor Settlements	34
	17.5	Inventory	34
	17.6	Subcontracts	34

***

iii

			PAGE
	17.7	***	35
18.		TERMINATION FOR CAUSE	35
	18.1	Termination by Customer	35
	18.2	Improper Termination	35
	18.3	Termination by Contractor	36
19.		EXCUSABLE DELAYS	36
20.		KEY PERSONNEL	37
21.		DISPUTES	37
	21.1	Notice	37
	21.2	Escalation	37
	21.3	Further Escalation	37
	21.4	Litigation	38
	21.5	Other Remedies	38
22.		INDEMNIFICATION	38
	22.1	Contractor's General Indemnification	38
	22.2	Customer's General Indemnification	39
	22.3	Contractor's Intellectual Property Indemnification	39
	22.4	Intellectual Property Indemnification Exclusion	39
	22.5	Indemnification For Taxes	40
	22.6	Procedures	40
23.		LIMITATION OF LIABILITY	41
	23.1	Limitation	41
	23.2	Exceptions	41
24.		DAMAGE TO PERSONS OR PROPERTY, ASSOCIATED WITH LAUNCH, INTERPARTY WAIVER	41
25.		REPRESENTATIONS AND WARRANTIES	42
	25.1	Mutual Representations and Warranties	42
	25.2	Contractor's Special Representations and Warranties	42
26.		ASSIGNMENT	43
27.		CONFIDENTIALITY	43
	27.1	Identification of Proprietary Information	43
	27.2	Restrictions on Use, Disclosure	43
	27.3	Company Restricted Information	44
	27.4	Standard of Care	44
28.		PUBLIC RELEASE OF INFORMATION	44
29.		NOTICES AND REPORTS, AUTHORIZED REPRESENTATIVES	44
	29.1	Notices	44
	29.2	Authorized Representatives	45
30.		CUSTOMER FURNISHED INFORMATION AND PROPERTY	46

***

			PAGE
	30.1	Title	46
	30.2	Risk of Loss	46
	30.3	Use	46
	30.4	Taxes	46
	30.5	Encumbrances	46
	30.6	Return Transportation	46
	30.7	Damages	47
31.		HAZARDOUS MATERIAL IDENTIFICATION AND MATERIAL SAFETY DATA	47
32.		APPLICABLE LAWS	47
33.		GENERAL	47
	33.1	Severability	47
	33.2	Cumulative Rights/Waivers	47
	33.3	Gender/Captions	48
	33.4	Relationship of the Parties	48
	33.5	Permitted Access to Work in Progress, Inspections, Etc.	48
	33.6	Construction	48
	33.7	Including	48
	33.8	Survival	48
	33.9	Entire Agreement	49
	33.10	Counterparts	49

ATTACHMENTS

[Omitted]

CONTRACT FOR RAINBOW KA BAND SPACECRAFT
AND ASSOCIATED EQUIPMENT AND SERVICES

THIS CONTRACT (the "Contract") is entered into this 21 ^st day of November, 2004, (the "Effective Date of Contract" or "EDC"), by and between Lockheed Martin Corporation, a corporation organized under the laws of Maryland, acting through Lockheed Martin Commercial Space Systems, with its principal place of business located at 100 Campus Drive, Newtown, Pennsylvania ("Contractor"), and RAINBOW DBS COMPANY LLC, a Delaware limited liability company, with its principal place of business located at 200 Jericho Quadrangle, Jericho, New York 11753, U.S.A. ("Customer").

W I T N E S S E T H T H A T:

WHEREAS Customer desires to procure five (5) Ka-band satellites, associated launch services and ground equipment subject to the terms and conditions hereof; and

WHEREAS Contractor desires to supply such satellites, associated launch services and ground equipment in accordance with the terms and conditions hereof;

NOW THEREFORE THIS CONTRACT WITNESSETH THAT, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows:

1. DEFINITIONS

As used in this Contract:

" Acceptance" with respect to any Deliverable Item other than a Spacecraft shall be as defined in Paragraph 7.5. " Acceptance" with respect to a Spacecraft shall be as defined in Paragraph 7.4.

" Authorized Representative " shall have the meaning set forth in Article 29.

" Bill of Sale " means a bill of sale in the form of Attachment 11 attached hereto.

" Business Day " means a Day on which Customer and Contractor are open for business, excluding Saturday, Sunday and a Day on which banking institutions in New York City are required or authorized to be closed.

" Certification " means a certification to be provided to Customer by Contractor upon Delivery of each Spacecraft and other Deliverable Item in the form of Attachment 10 attached hereto.

"CFE" means Customer furnished equipment.

" Company Restricted Information " shall have the meaning set forth in Paragraph 27.3.

" Conditional Acceptance " means (i) that a Spacecraft does not meet the criteria for Unconditional Acceptance, but such Spacecraft is not a Total Loss or a Constructive Total Loss, and (ii) that Customer has accepted the Spacecraft in accordance with Paragraph 7.4.3(b).

" Constructive Total Loss " means that at the time of Acceptance: (i) less than*** of the Frequencies on a Spacecraft are Successfully Operating Communications Channels, (ii) the Orbital Maneuver Life of a Spacecraft is less than*** Days, (iii) it is predictable that there will be continuously available during the Service Life less than*** of the power allocated for communications payload operations (including during eclipse periods) with simultaneous operations of all Spacecraft functions in a mode reasonably required to maintain the health and other performance parameters of the Spacecraft or, (iv) any combination of the foregoing rendering the Spacecraft unable to operate at least*** of its contemplated capacity for its Service Life.

" Contract " means this document, including any amendments made pursuant to Paragraph 33.9, herein embodying the agreement between Contractor and Customer and including the Attachments which are annexed hereto and made a part of this Contract.

" Contract Background Data " means all Information other than Contract Foreground Data, including Information which is generated by the Contractor primarily at its own expense in connection with the design, or research and development of its standard baseline products or "off-the-shelf" items for other programs, or for other non-Customer projects to the extent such Information is incorporated in, utilized in, or useful to the performance of Work and/or relating to any Deliverable Items and/or used in connection with or useful to the Contract Foreground Data.

" Contract Change Notice " means a notice proposing a change in any requirement of this Contract as described in the Statement of Work and in accordance with Article 12.

" Contract Foreground Data " means all Information, including Deliverable Data, directly generated or developed in the performance of Work and/or relating to any Deliverable Items or which is generated as a result of (i) significant design, research or development efforts under this Contract or (ii) routine engineering of

***

Contractor's standard baseline products or other items incorporated into the Work.

" Contract Intellectual Property " means all Patents, patent applications and patent disclosures; all patentable or unpatentable inventions, discoveries, improvements, and innovations; all trademarks, trademark applications, and all registrations and recordings thereof; all U.S. and foreign service marks, service mark applications, and all registrations and recordings thereof; trade names; all copyrights, copyright registrations, and applications to register copyrights; confidential or proprietary technical information and trade secrets; know-how; show-how; licenses (including in the form of an immunity from suit) to use the intellectual property of third parties (to the extent that the licensee can sublicense); software; technical manuals and documentation used in connection with the foregoing; and other intellectual property and proprietary information generated, developed and/or utilized in the performance of the Work hereunder.

" Contract Technology " means any and all Contract Foreground Data and Contract Background Data and such Contract Intellectual Property that is incorporated in, utilized in, or useful to the performance of Work and/or relating to any Deliverable Items and/or used in connection with or useful to the Contract Foreground Data.

" Contractor " shall have the meaning set forth in the preamble.

" Customer " shall have the meaning set forth in the preamble.

" Day " in the context of Performance Incentives, means a continuous twenty-four (24) hour period commencing at 0001 Greenwich Mean Time. For all other purposes it means a twenty four (24) hour period commencing at the occurrence of an event.

" Defect " means, with respect to any Deliverable Item and any and all components thereof, any deficiency or nonconformance in design, material or workmanship, or failure to perform in accordance with the specifications and requirements set out or referred to in this Contract.

" Deliverable Data " means all data and documentation required to be delivered to Customer under this Contract, as set forth in the Statement of Work, Attachment 3 and Attachment 5.

" Deliverable Hardware " means all property other than Deliverable Data required to be delivered to Customer under this Contract, including, without limitation, Spacecraft and the tangible media on which Deliverable Data is delivered.

" Deliverable Items " means any and all Deliverable Hardware and Deliverable Data.

" Delivery " for Deliverable Items other than a Spacecraft shall occur upon Acceptance as described in Paragraph 6.2. " Delivery " for a Spacecraft shall be as described in Paragraph 6.1.

" Designated Launch Agencies " means the Launch Vehicle providers selected in accordance with Article 8 hereof to Launch the Spacecraft into geostationary transfer orbit and provide the Launch Vehicles, the Designated Launch Sites and related facilities and equipment necessary to accomplish such Launches.

" Designated Launch Sites " means the Launch facilities provided by the Designated Launch Agencies including any off-site processing facilities.

" Designated Orbital Positions " means the 62 ^o , 71 ^o , 77 ^o , 119 ^o and 129 ^o west longitude positions in geostationary earth orbit at which Customer intends to locate and operate the Spacecraft, or any alternative orbital positions obtained by Customer in lieu of the foregoing.

" Dollar " or " $ " means a dollar of United States currency.

" Export Laws" shall have the meaning set forth in Paragraph 3.3.

" Export Laws Compliance Program" means the program described in Attachment 9 that Contractor has implemented to obtain or amend, as applicable, all United States or other Governmental Approvals necessary to provide Customer, its employees, representatives and consultants, and the Designated Launch Agencies, insurance brokers and underwriters, with access to the Spacecraft, facilities and information as described herein and as necessary to enter into and perform their obligations under the Launch Agreements and the Insurance Agreements.

" Effective Date of Contract' or " EDC " shall have the meaning set forth in the preamble.

" Escrow Agreement " shall have the meaning set forth in Paragraph 13.3.4.

" FCC" means the U.S. Federal Communications Commission and any successor agency.

"Frequency" is a unit of 38 MHz of usable bandwidth on a Spacecraft.

" Governmental Approvals " means any permit, license or approval of any government, governmental department or agency or relevant regulatory authority required for the performance of this Contract.

" In Service Date " means the date of Acceptance of a Spacecraft.

" 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, software, pictorial representations and graphs. Except as otherwise provided in the Contract, Information shall not include the Contractor's financial reports, cost analyses and other data and internal information incidental to contract administration.

"Inoperative Frequency " means a Frequency that does not meet the standards of a Successfully Operating Communications Channel (i) for***, (ii) for a cumulative total of***, or (iii) during any eclipse period.

" Insurance Agreements " mean the agreements providing for insurance of the Spacecraft between Customer and insurance underwriters as described in Article 9.

" Intentional Ignition " means the intentional ignition by a Designated Launch Agency of the main or first stage engines of a Launch Vehicle or such other definition as is contained in the relevant Launch Agreement.

" IOT " means in orbit tests as specified in the Statement of Work and Attachment 3.

" Key Subcontract " shall have the meaning set forth in Paragraph 10.2.

" Key Subcontractor " shall have the meaning set forth in Paragraph 10.2.

" Launch " means the launch of a Spacecraft as defined in the relevant Launch Agreement.

" Launch Agreement(s) " means the agreement(s) providing for the Launch of the Spacecraft between Customer and the Designated Launch Agencies as described in Article 8.

" Launch Support " means Contractor's activities at the Designated Launch Sites in support of the Launches, as specified in the Statement of Work.

" Launch Vehicles " mean the launch vehicles selected for the Launch of the Spacecraft, in accordance with Article 8.

" Letter of Credit " means the letter of credit that may be established by Customer in favor of Contractor in accordance with Paragraphs 5.1.2 (b) through (d), inclusive and Attachment 15.

***

" License to Practice " means a right to use, lease, offer for sale, market, advertise, promote, sell, dispose of and otherwise practice, subject to the terms and conditions contained herein.

" Major Subcontractor " shall have the meaning set forth in Paragraph 7.3.

" Milestone Payment Plan " means the milestone payment plan for each Spacecraft and the TT&C and Pilot Uplink Station Equipment attached hereto as Attachment 7.

" NSP " means Deliverable Items that are not separately priced hereunder.

" Option " means any of the options described in Attachment 12.

" Orbital Maneuver Life " means the period of time following the In Service Date of a Spacecraft for which such Spacecraft has sufficient fuel to be operated at its Designated Orbital Position, in accordance with the requirements and standards set forth in the Spacecraft Performance Requirements and allowing sufficient fuel to de-orbit such Spacecraft at the end of its life in accordance with applicable governmental requirements.

" Patent " means a patent for an invention or a similar form of statutory protection such as a utility model or registered design.

" Party " or " Parties" means Customer and/or Contractor, who are the principals to this Contract.

" Payment Due Date " shall have the meaning set forth in Paragraph 5.1.1.

" Performance Incentives " means the monies that may be earned by Contractor, as specified in item 6 of Tables 4.1.1 - 4.1.5, based on the performance of the Spacecraft, which monies shall be payable to Contractor under the conditions set forth in Paragraph 5.2.

" Promised Delivery Dates " mean the dates promised for Delivery of the Spacecraft or for Delivery of other Deliverable Items (as applicable) pursuant to Article 3.

" Proprietary Information " shall have the meaning set forth in Paragraph 27.1.

"Restored Communications Channel " means a Frequency that has become an Inoperative Frequency and has subsequently been restored to operate in full compliance with the standards of a Successfully Operating Communications Channel for a period of***.

***

" Right to Use " means a right to copy, duplicate, reproduce, modify and otherwise use, subject to the terms and conditions set forth herein.

" Satellite Simulators " means the dynamic satellite simulators to be delivered by Contractor to Customer as defined in the Statement of Work.

" Security Agreement " shall have the meaning set forth in Paragraph 5.1.2(e).

" Service Life " for a Spacecraft means the five thousand four hundred seventy-nine (5,479) Day period following final Acceptance of the Spacecraft.

" Spacecraft " means one (1) or more of the satellites to be constructed and launched as provided hereunder and delivered in-orbit to Customer by Contractor.

" Spacecraft Performance Requirements " means the spacecraft performance specifications for each Spacecraft attached hereto as Attachment 2.

" Spacecraft Pre-Shipment Review " or " SPSR " shall have the meaning set forth in Paragraph 7.4.1.

" Spacecraft System Price " shall have the meaning set forth in Paragraph 4.1.

" Spacecraft Product Assurance Requirements" means the spacecraft product assurance plan attached hereto as Attachment 4.

" Statement of Work " means the statement of work attached hereto as Attachment 1.

" Subcontract " means a subcontract, including purchase orders, memoranda of understanding and all similar forms of agreement between Contractor and any Subcontractor at any tier, to provide a portion of the Work under this Contract.

" Subcontractor " means a person, firm, corporation or business entity which has been awarded a Subcontract by Contractor to provide a portion of the Work covered by this Contract.

" Successful Injection " means that at the time of separation of a Spacecraft from the Launch Vehicle,***. Damage to the Spacecraft following separation from the Launch Vehicle but caused by the Launch Vehicle shall be deemed to have occurred prior to separation from the Launch Vehicle.

"Successfully Operating Communications Channel " means ***.

"Successfully Operating Spacecraft " means ***:

***

" TT&C and Pilot Uplink Station Equipment " means the ground equipment as defined in the Statement of Work hereinafter referred to as "TT&C Station Equipment".

" Total Loss " of a Spacecraft means (i) the complete loss, destruction or failure of such Spacecraft or (ii)***.

" Total Verified Termination Expense " shall have the meaning set forth in Paragraph 17.2.

" Unconditional Acceptance " means that the Spacecraft meets the criteria for unconditional acceptance specified in Paragraph 7.4.3(a), and that Customer has accepted the Spacecraft in accordance with Paragraph 7.4.3(a).

" Work " means all acts, including tests to be performed, and materials, articles, data, documentation, and developments, equipment, matters and things to be furnished and rights to be transferred by Contractor or Subcontractor(s) under this Contract, or any contract or subcontract entered into by Contractor or Subcontractor(s).

2. SCOPE OF WORK

2.1 Elements of Work

2.1.1 General Scope. Subject to the terms and conditions of this Contract (including any Options as specified in Attachment 12), Contractor shall sell and Customer shall purchase five (5) Spacecraft, to be designated Rainbow Ka 1, Rainbow Ka 2, Rainbow Ka 3, Rainbow Ka 4, and Rainbow Ka 5, and Contractor shall furnish and perform all the elements of the Work for the purpose of such sale. Contractor shall furnish the Work in accordance with the provisions of this Contract, including all Attachments listed in Paragraph 2.2. The major elements of the Work include the following:

(a)

Spacecraft . Design, manufacture, in-plant test, prepare each Spacecraft for Launch, integrate each Spacecraft with the applicable Launch Vehicle, and following Successful Injection, in-orbit test and place each Spacecraft into its Designated Orbital Position and present each Spacecraft to Customer for Acceptance;

(b)

TT&C Station Equipment. Deliver, install and test the TT&C Station Equipment, for each Spacecraft, including all necessary equipment to monitor and control the five (5) Spacecraft simultaneously and independently in accordance with Attachments 5 and 6;

***

(c)

Simulators. Deliver two (2) Satellite Simulators per Spacecraft, as specified in the Statement of Work, meeting the performance requirements specified in Section 5 of Attachment 5, Satellite Control And Operations Requirements;

(d)

Satellite Database. Provide satellite databases as specified in Section 3 of Attachment 5, Satellite Control and Operations Requirements;

(e)

Management. Manage the program and conduct program reviews;

(f)

Data and Documentation. Prepare and provide to Customer data and documentation in accordance with the Statement of Work, Attachment 3 and Attachment 5;

(g)

Containers. Provide (as necessary) the temporary use of containers for shipping and storage of the Spacecraft;

(h)

Offices. Provide reasonable, full-time office accommodations for up to*** Customer resident technical representatives at Contractor's facilities and reasonable accommodations for up to*** Customer representatives visiting Contractor's facilities for periodic meetings;

(i)

Insurance Support. Assist Customer in entering into the Insurance Agreements, and in making any claims under any of the foregoing Insurance Agreements;

(j)

Initial Operations. Provide initial satellite control operations of each Spacecraft using the Contractor's own facilities and the Customer's TT&C Station Equipment, starting from Delivery of such Spacecraft, and continuing for a period of***, as outlined in Section 11 of Attachment 5;

(k)

Training. Provide Spacecraft Operator Training for each Spacecraft as outlined in Attachment 1; and

(l)

Governmental Approvals. Obtain all Governmental Approvals necessary to fulfill its obligations hereunder.

2.1.2 Inherent, Necessary, Customary Work. If any items, materials, or services not specifically described in this Contract are an inherent, necessary or customary part of the Work and/or Deliverable Items or are reasonably required for proper performance or provision of the Work and/or Deliverable Items in accordance

***

with this Contract, they shall be deemed to be included within the scope of the Work and/or Deliverable Items to be delivered as provided herein, as if such items, materials, or services were specifically described in this Contract; provided however that the foregoing shall not expand the scope of Contractor's obligations under the Statement of Work.

2.2 Attachments

The Work to be performed by Contractor under this Contract shall include, and be governed by, the Attachments listed below which are attached hereto and made a part hereof. In the event of any conflict or inconsistency among the provisions of the various parts of this Contract, including the Attachments attached to and incorporated into this Contract, such conflict or inconsistency shall be resolved by giving precedence to the terms and conditions of this Contract without the Attachments and then to the Attachments in the order listed below:

Attachment 7	—	Milestone Payment Plan, dated November 21, 2004
Attachment 8	—	Maximum Termination Liability and Letter of Credit Amount Requirements, dated November 21, 2004
Attachment 1	—	Statement of Work, dated November 5, 2004
Attachment 2	—	Spacecraft Performance Requirements, dated November 17, 2004
Attachment 3	—	Spacecraft Performance Verification Requirements, dated November 17, 2004
Attachment 4	—	Spacecraft Product Assurance Requirements, dated November 5, 2004
Attachment 5	—	Satellite Control and Operations Requirements, dated November 5, 2004
Attachment 6	—	Satellite Control and Operations Product Assurance Requirements, dated November 5, 2004
Attachment 9	—	Export Laws Compliance Program, dated November 21, 2004
Attachment 15	—	Letter of Credit—Form
Attachment 10	—	Certification—Form

Attachment 11	—	Bill of Sale—Form
Attachment 12	—	Options, dated November 21, 2004
Attachment 13	—	***
Attachment 14	—	***, dated November 21, 2004
Attachment 16	—	***, dated November 21, 2004

2.3 Options

Customer shall have the options to procure additional items specified in Attachment 12 which may be acquired from time to time under the terms and conditions set forth therein.

3. DELIVERABLE ITEMS AND DELIVERY SCHEDULE

3.1 Deliverable Items/Promised Delivery Dates

All Deliverable Items to be delivered and the corresponding Promised Delivery Dates and points of Delivery are set forth below:

Deliverable Item No.		Quantity	Description	Promised Delivery Date	Point of Delivery
1.(a	)	1	Spacecraft designated Rainbow Ka 2 as specified in Attachment 1 and Attachment 2	EDC + 1140 Days	129 ^o W
1.(b	)	1	Spacecraft designated Rainbow Ka 1 as specified in Attachment 1 and Attachment 2	EDC + 1231 Days	62W ^o
1.(c	)	1	Spacecraft designated Rainbow Ka 5 as specified in Attachment 1 and Attachment 2	EDC + 1322 Days	119 ^o W
1.(d	)	1	Spacecraft designated Rainbow Ka 4 as specified in Attachment 1 and Attachment 2	EDC + 1414 Days	71 ^o W
1.(e	)	1	Spacecraft designated Rainbow Ka 3 as specified in Attachment 1 and Attachment 2	EDC + 1506 Days	77 ^o W
2.		1 lot	All other documentation, software and data as specified in Attachment 1 and Attachment 2	Per Attachment 1 and Attachment 2	Customer's Designated Facility

***

Deliverable Item No.		Quantity	Description	Promised Delivery Date	Point of Delivery
3.		1 lot	Launch Support, insurance support, IOT, anomaly investigation support, and other support as specified in Attachment 1 and Attachment 2	Per Attachment 1 and Attachment 2	Per Attachment 1
4.(a	)	2 per Spacecraft	Satellite Simulators	Per Attachment 1	A2100 Satellite Operations Center, Newtown, PA
4.(b	)	1 lot	On-Station Operations Documentation, as specified in Attachment 5	Per Attachment 1	A2100 Satellite Operations Center, Newtown, PA
4.(c	)	1 lot at Primary Location(s) 1 lot at Back-up Location(s)	TT&C Station Equipment	Per Attachment 1	Prime and Back-up Stations in USA, Beacon Station in Canada for Ka-3 only. Final Locations TBC
4.(d	)	1 lot per Spacecraft	Satellite Databases	Per Attachment 1	A2100 Satellite Operations Center, Newtown, PA
4.(e	)	1 lot	Satellite Operations Training	Per Attachment 1	Newtown, PA

3.2 Time of the Essence

Subject to the terms and conditions of this Contract, Contractor understands and agrees that the times for the Promised Delivery Dates of the Spacecraft (Items 1 (a) through (e) set forth above are of the essence to this Contract. Contractor shall perform its obligations under this Contract in a timely manner. Contractor will support Customer requests in making necessary filings with and explanations to the FCC regarding the status of Spacecraft construction and Launch as it applies to required milestones.

3.3 Contractor Responsibility

Subject to the terms and conditions of this Contract, including payments of the amounts due by Customer hereunder, delivery of all Deliverable Items under this Contract shall be at Contractor's expense. Contractor shall be responsible for securing

any necessary Governmental Approvals, including any relating to import of items to be delivered to the Contractor by the Subcontractors and export of the Deliverable Items, in a timely manner, as necessary to perform its obligations under this Contract. All Governmental Approvals of any country required for compliance with Contractor's obligations under this Contract shall be referred to as "Export Laws". Customer agrees to cooperate with Contractor in executing such documents as shall be necessary for compliance with Governmental Approvals under the Export Laws.

3.4 Customer Responsibility

Subject to the terms and conditions of this Contract, including payments of the amounts due to Contractor hereunder, Customer shall be responsible for securing all FCC and ITU approvals (on ground and in-orbit), including frequency coordination for IOT and on-station operations. In addition to the above, Customer is responsible for providing TT&C facilities as specified in the TT&C facilities ICD referenced in the Statement of Work, Attachment 1.

4. PRICES

4.1 ***

4.2 Taxes

Each Spacecraft System Price and the prices for all other deliverables (including Options deliverables) under this Contract include all taxes, duties, transportation, insurance and all other costs and charges associated with the performance of all Work. Contractor shall be responsible for payment of all taxes and duties which may be required under any laws which become due by reason of performance of the Work, and Contractor shall comply with all requirements of said laws, including payment of any interest or penalties related to or arising from such taxes and duties.

4.3 ***

4.3.4 Other Remedies. Nothing contained in this Paragraph 4.3 shall affect any right or remedy available to Customer, under this Contract, for delay exceeding the number of Days stated in Paragraph 4.3.1.

4.3.5 Contractor Notice. Contractor shall immediately notify Customer of any circumstance that will cause or threaten to cause a delay in Delivery. Contractor shall provide Customer no less frequently than monthly with Contractor's best estimate of when Delivery will occur (liquidated damages shall only be assessed for actual delays, not anticipated delays).***

***

4.3.7 Failure to Notify. Contractor acknowledges and agrees that its failure to keep Customer informed of reasonably predictable delays in Delivery may cause damages to Customer related to the failure to give notice. In such a case, Customer may seek recovery for the damages caused by Contractor's failure to give notice of such delay within a reasonable period after Contractor knows that such a delay will occur. Contractor's damages under this provision shall be limited to the actual damages incurred by Customer proximately caused by the lack of notice, and such damages shall be capped at ***.

5. METHOD OF PAYMENT

5.1 Spacecraft

5.1.1 Milestones. Payment by Customer to Contractor of the amount due for each Spacecraft (less Performance Incentives) and other Deliverable Items as specified in items 1 through 5, 8 and 9 in Tables 4.1.1 - 4.1.5 of this Contract (as may be adjusted pursuant to Paragraph 4.3.1) shall be made in accordance with the Milestone Payment Plan for such Spacecraft and the conditions specified therein. The amounts specified in the Milestone Payment Plan for each Spacecraft and its related Deliverable Items shall in each case be paid by Customer to Contractor within thirty (30) Days after receipt by Customer of an invoice from Contractor (the "Payment Due Date"), accompanied by a certification from Contractor's Authorized Representatives, that the particular milestone events for which payment is being claimed in each case have been completed and enclosing any other documentation necessary to demonstrate the completion of such milestones. Contractor shall submit no more than one (1) invoice per calendar month per Spacecraft, which shall list all completed milestones with respect to such Spacecraft for that month. Contractor shall not submit invoices for a Spacecraft, the amounts of which, when paid, will cause the total amount paid under the Contract with respect to such Spacecraft to exceed the aggregate sum scheduled to be paid with respect to such Spacecraft to that point in time as provided in the Milestone Payment Plan. In accordance with Article 12, if a change is accepted and implemented, the Milestone Payment Plan will be modified to reflect the change in Spacecraft Price within thirty (30) Days following initial implementation of said change.

5.1.2 Further Assurances .***

(f)

Financial Information. In lieu of committing to a cash payment, Letter of Credit or Security Agreement under Paragraphs 5.1.2(a), (b), (c), (d), or (e), Customer may provide financial information, which, in the sole discretion of Contractor, is satisfactory for Contractor to allow Customer to make payments under the Milestone Payment Plan set forth in Attachment 7. Should such financial information not be available or satisfactory, Customer

***

shall provide further assurances under either Paragraphs 5.1.2(a), (b), (c), (d), or (e). If, after doing so, Customer financial information becomes available, which, in the sole discretion of Contractor, provides Contractor satisfactory payment assurance, then Contractor may at that time elect to waive any other further assurance requirements hereunder.

5.2 Performance Incentives

***

5.3 Invoices

All Contractor invoices shall be submitted in three (3) copies to:

RAINBOW DBS COMPANY LLC
200 Jericho Quadrangle
Jericho, New York 11753 U.S.A.

ATTN: Tom Greco

5.4 Disputed Payments

If Customer concludes that an item for which an invoice has been submitted is not payable in accordance with the terms of this Contract, or that any milestone or condition established by this Contract as a prerequisite to payment has not been fulfilled, Customer shall so notify Contractor within twenty (20) Days of receipt of the applicable invoice. Such notification shall state the areas, which are considered not to be in accordance with the terms and conditions of this Contract and state what is required to be submitted or performed to satisfy the discrepancy. Upon correction of the noted discrepancy(ies), the invoice shall be resubmitted for payment within ten (10) Days. Customer shall pay any undisputed amount of invoices within the payment terms in this Contract. If the Parties cannot agree that a discrepancy(ies) has been resolved, Contractor and Customer will utilize the dispute provision in accordance with Article 21.

5.5 Currency/Place of Payment

5.5.1 Currency/Method and Receipt of Payment. All payments and/or refunds due from either Party to the other shall be made in Dollars. Payments and/or refunds to a Party shall be made by wire transfer of funds, with reference to the invoice number being paid in the detail section of the payment, to such place for payments and/or refunds as the receiving Party's Authorized Representative may designate from time to time in writing. All payments and/or refunds due from either Party to the other shall be

***

deemed to have been made when the bank account of the receiving Party, as specified in Paragraph 5.5.2 or 5.5.3, has been credited with such payment, in the currency specified herein for such payment.

5.5.2 Payments to Contractor.> Unless Contractor otherwise notifies Customer, all payments of Contractor's invoices shall be made by Customer to:

***

5.5.3 Payments to Customer. Unless Customer otherwise notifies Contractor, all refunds, credits or other amounts due Customer hereunder shall be made by Contractor to:

***

5.6 Late Payment

5.6.1 Late Payment Charge. In the event either Party fails to pay any amounts due by it to the other Party within the times specified in this Contract, which amounts are not the subject of a good faith dispute, the receiving Party may impose a late payment charge of ***, assessable from the first Day the payment is late. Amounts that are disputed in good faith will not be subject to late payment charges so long as any undisputed portion is paid within the time period required.

5.6.2 Work Stoppage. In no way limiting the terms of Paragraph 5.6.1, in the event that Customer fails to pay any amounts due by it to the Contractor within the times specified in this Contract, which amounts are not the subject of a good faith dispute as set forth in Paragraph 5.6.1, Contractor may, by written notice to Customer, if such failure is not corrected by Customer within ten (10) Business Days after written notice is given by Contractor (or such longer period as Contractor may agree to in writing) stop Work under the Contract with respect to the Spacecraft for which payment is late until such failure is corrected. Contractor shall immediately resume Work under this Contract when the failure is corrected, and the Parties shall negotiate in good faith an equitable adjustment to schedule and price and any other affected terms and conditions to reflect the reasonable impacts on Contractor resulting from such Work stoppage. The Milestone Payment Plan will be modified to reflect the increase of Spacecraft Price within thirty (30) Days. If Customer's failure to pay has not been cured within thirty (30) Days after commencement of such Work stoppage, then Contractor shall be entitled to terminate this Contract pursuant to Paragraph 18.3.

***

6. DELIVERY, TITLE AND RISK OF LOSS OR DAMAGE

6.1 Spacecraft Delivery

Risk of loss for each Spacecraft shall pass at the time of Intentional Ignition. Title to each Spacecraft and its components shall transfer to Customer upon Acceptance. Delivery of each Spacecraft shall occur upon either Unconditional Acceptance in writing by Customer, Conditional Acceptance in writing by Customer or declaration of Total Loss or Constructive Total Loss, each pursuant to Paragraph 7.4.3, and delivery of a Bill of Sale for the Spacecraft.

6.2 Delivery of Other Deliverable Items

Risk of loss or damage and title to all Deliverable Items other than the Spacecraft shall transfer from Contractor to Customer upon Delivery. Delivery of such Deliverable Items shall occur upon Acceptance in writing by Customer pursuant to Paragraph 7.5. Contractor shall deliver a Bill of Sale with respect to the Deliverable Items set forth in Paragraph 3.1, Items 4(a) through 4 (e).

6.3 Title

Contractor warrants that title to all Deliverable Items delivered or transferred hereunder shall be good, marketable and rightfully conveyed, and shall be delivered free and clear of all liens, encumbrances, pledges and other interests whatsoever, other than those incurred by Customer. Furthermore, Contractor agrees to execute and deliver a Bill of Sale and all other instruments required, in Customer's reasonable discretion, to perfect or evidence such title in Customer.

7. CERTIFICATION, INSPECTION, ACCEPTANCE, WAIVERS

7.1 General Requirements

Contractor is responsible for testing, demonstrating, delivering, and certifying to Customer that each Spacecraft, and all other Deliverable Hardware and Deliverable Data as specified in Paragraph 3.1, Items 4(a) through 4(e), meet all of the requirements of this Contract, including the Spacecraft Performance Requirements. Customer's right of inspection or acceptance shall not be deemed a waiver of any Defect, except as may be expressly agreed in writing by Customer in accordance with Paragraph 7.2 below. Prior to asking Customer to accept any Deliverable Items and prior to Delivery, Contractor shall, subject to Paragraph 7.2 below, certify, in writing, in the form set forth in Attachment 10, that the Deliverable Items conform to all Contract requirements.

7.2 Waivers

Contractor shall, in a timely manner, notify Customer at such time that Contractor determines that it will not be able to meet a particular Contract requirement or specification and shall seek a waiver from Customer. Nothing herein shall be deemed to require Customer to grant a waiver, but, if it is willing to consider doing so, Customer

may grant the waiver. No waiver granted by Customer and no denial of a waiver by Customer shall affect the Promised Delivery Date of any Deliverable Item unless Customer expressly so agrees. Any waiver approved by Customer shall be deemed an amendment to the applicable performance specification for such Deliverable Item for all purposes hereunder, from and after such approval date; provided that a waiver granted with respect to a particular Spacecraft of other Deliverable Item shall not be deemed to apply to any other Spacecraft or Deliverable Item unless the waiver expressly includes such other Spacecraft or Deliverable Item.

7.3 Inspections

***

7.4 Spacecraft Acceptance Procedure

7.4.1 SPSR. Contractor shall conduct a review (a "Spacecraft Pre-Shipment Review" or "SPSR") of each Spacecraft prior to Contractor's shipment of such Spacecraft to its Designated Launch Site. The SPSR shall be conducted in accordance with the terms of this Paragraph 7.4 and Section 4.3.17 of the Statement of Work.

(a)

Time, Place and Notice of SPSR. Each SPSR shall take place at Contractor's facility. Contractor shall notify Customer in writing approximately thirty (30) Days prior to the date that each Spacecraft shall be available for SPSR, which shall be the scheduled date for commencement of such SPSR. If Customer cannot commence such SPSR on such scheduled date, Contractor shall make reasonable efforts to accommodate Customer's reasonable re-scheduling requests provided that any delay in completion of SPSR resulting directly from such rescheduling shall be deemed an excusable delay and such excusable delay period shall be excluded from any calculation of excusable delay Days set forth in Paragraph 18.1.

(b)

Conduct and Purpose of SPSR. The purpose of the SPSR shall be to review test data and analyses for each Spacecraft to determine whether such Spacecraft meets the applicable Spacecraft Performance Requirements and is therefore ready for shipment to its Designated Launch Site.

(c)

Pending Waivers. Any pending waiver requests, or any circumstances which Contractor reasonably believes will result in a Contractor request for waiver or deviation from, provisions(s) of the performance specifications applicable to a Spacecraft or other related Deliverable Item shall be submitted to Customer and

***

resolved prior to the commencement of the applicable SPSR.

(d)

Customer's Inspection Representatives. Customer may cause any representatives designated by Customer to observe each SPSR; provided, however, that the provisions of Article 27 shall apply to any such representatives.

(e)

SPSR Results. At completion of the SPSR for each Spacecraft, Contractor shall submit to Customer the SPSR results. Within ten (10) Business Days of its receipt of such results, Customer shall notify Contractor in writing of Customer's concurrence or disagreement with the results of the SPSR. In the event that Contractor and Customer concur that such SPSR demonstrates conformity of the applicable Spacecraft to the applicable requirements of the Spacecraft Performance Requirements (including any waivers or deviations previously approved by Customer), the Spacecraft shall be prepared and shipped to its Designated Launch Site for Launch. In the event that such SPSR discloses any non-conformance of the Spacecraft to the requirements of the Spacecraft Performance Requirements (not the subject of any prior waivers or deviations approved by Customer), Customer's notice shall state each such non-conformance (with reference to the applicable requirement of the Spacecraft Performance Requirements deemed not met), and Contractor shall correct or repair (in the manner determined by Contractor) each such non-conformance (except as may be subsequently waived by Customer), and resubmit the Spacecraft for SPSR in accordance with this Paragraph 7.4.1 as to each corrected or repaired element.

(f)

Inspection Costs Borne by Customer. All costs and expenses incurred by Customer and its representatives in connection with their activities under this Paragraph 7.4.1, including travel and living expenses, shall be borne solely by Customer.

(g)

Correction of Deficiencies After SPSR. If at any time following the SPSR for any Spacecraft, and prior to Intentional Ignition, such Spacecraft fails to meet the Spacecraft Performance Requirements (as may be modified or waived by Customer), Contractor shall promptly undertake to correct such deficiencies prior to Intentional Ignition at its own cost and expense.

7.4.2 Transport. Following a successful completion of the SPSR for each Spacecraft, Contractor shall ship such Spacecraft to its Designated Launch Site and proceed with the further testing and Launch of the Spacecraft and Launch Support in accordance with the Statement of Work and Attachment 3. Contractor shall notify Customer of the IOT schedule for each Spacecraft at least thirty (30) Days prior to the Launch of such Spacecraft. Each IOT shall be conducted in accordance with the

Statement of Work and Attachment 3, and in accordance with Article 14, Customer's representatives shall be permitted to observe all phases of the IOT.

7.4.3 Final Acceptance. When each IOT is completed, Contractor shall submit to Customer the test results and shall hold an acceptance review with Customer. At the conclusion of the acceptance review, including the resolution of any outstanding Spacecraft performance issues, Contractor shall deliver to Customer the final IOT report together with a Certification of one of Contractor's officers or the President or Senior Executive responsible for the Contractor's performing business unit that the applicable Spacecraft meets the criteria for Unconditional Acceptance as described in Paragraph 7.4.3(a) or for Conditional Acceptance as described in Paragraph 7.4.3

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates