UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended...............September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission file number 0-27206
SPACEHAB, Incorporated
1595 Spring Hill Road
Suite 360
Vienna, Virginia 22182
(703) 821-3000
Incorporated in the State of I.R.S.
Washington Identification
No. 91-1273737
The number of shares of Common Stock outstanding as of the close of business on
October 22, 1997:
Class Number of Shares Outstanding
Common Stock 11,149,737
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
<PAGE>
SPACEHAB, INCORPORATED AND SUBSIDIARY
SEPTEMBER 30, 1997 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART 1 FINANCIAL INFORMATION Page
Item 1. Unaudited Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1997 and September 30, 1997 3
Condensed Consolidated Statements of Operations for
the three months ended September 30, 1996 and 1997 4
Condensed Consolidated Statements of Cash Flows for the
three months ended September 30, 1996 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
PART 1: FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
SPACEHAB, INCORPORATED AND SUBSIDIARY
Condensed Consolidated Balance Sheets
June 30, September 30,
1997 1997
(audited) (unaudited)
-------------- --------------
ASSETS
<TABLE>
<S> ............................................ <C> <C>
Cash and cash equivalents ...................... $ 12,886,731 $ 18,468,930
Receivables .................................... 5,176,255 4,564,218
Prepaid and other current assets ............... 199,247 1,300,920
Total current assets ...................... 18,262,233 24,334,068
Property, plant and equipment, net of
accumulated depreciation and amortization
of $38,115,620 and $39,170,943 ................ 90,961,873 93,216,499
Goodwill, net of accumulated amortization of
$55,947 and $100,646 ........................... 3,394,773 3,350,074
Deferred mission costs ......................... 1,438,910 4,331,035
Other assets, net .............................. 392,587 2,289,602
------------- -------------
Total assets .............................. $ 114,450,376 $ 127,521,278
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable, current portion $ -- $2,823,805
Loan payable under credit agreement, ...... 500,000 500,000
current portion
Accounts payable and accrued expenses ..... 2,408,111 1,955,357
Accrued consulting and subcontracting ..... 9,052,308 5,512,251
services
Advanced billings ......................... 846,855 1,152,065
------------- -------------
Total current liabilities ............ 12,807,274 11,943,478
Notes payable to shareholder ................... 11,225,246 11,568,205
Loan payable under credit agreement, net of .... 1,500,000 1,000,000
current portion
Note payable, net of current portion ........... -- 11,295,220
Deferred flight revenue ........................ 2,295,898 10,723,369
------------- -------------
Total liabilities .................... 27,828,418 46,530,272
Commitments and contingencies
Stockholders' equity:
Common stock, no par value, authorized
30,000,000 shares, issued and outstanding
11,146,237 and 11,149,737 shares,
respectively ............................ 81,057,164 81,080,352
Additional paid-in capital ................ 16,299 16,299
Accumulated equity (deficit) .............. 5,548,495 (105,645)
------------- -------------
Total stockholders' equity ........... 86,621,958 80,991,006
Total liabilities and stockholders'
equity .............................. $ 114,450,376 $ 127,521,278
============= =============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
SPACEHAB, INCORPORATED AND SUBSIDIARY
Unaudited Condensed Consolidated Statements of Operations
Three months ended September 30,
<TABLE>
1996 1997
------------- ------------
<S> ............................................ <C> <C>
Revenue ........................................ $ 113,242 $ 2,537,257
Costs of revenues:
Integration and operations .................. 2,547,255 3,856,747
Depreciation ................................ 2,376,139 1,223,877
Insurance and other ......................... -- 115,085
Total costs of revenue ................... 4,923,394 5,195,709
------------ ------------
Gross loss ..................................... (4,810,152) (2,658,452)
Operating expenses:
Marketing, general and administrative ....... 1,360,407 2,734,826
Research and development .................... -- 291,808
------------ ------------
Total operating expenses ................. 1,360,407 3,026,634
------------ ------------
Loss from operations ..................... (6,170,559) (5,685,086)
Interest expense, net of capitalized
amounts ........................................ 360,282 201,576
Interest and other income ...................... (354,909) (232,522)
Other expense .................................. 897,649 --
Loss before income taxes ................. (7,073,581) (5,654,140)
------------ ------------
Income tax expense ............................. -- --
Net loss before extraordinary item (7,073,581) (5,654,140)
Extraordinary item - gain on early
retirement of debt, net of taxes ............... 3,274,029 --
------------ ------------
Net loss ................................. $ (3,799,552) $ (5,654,140)
============ ============
Net loss per common and common equivalent share:
Net loss before extraordinary item ........... $ (0.64) $ (0.51)
Extraordinary item ........................... 0.30 --
------------ ------------
Net loss per common and common ................. -- --
equivalent share ............................ (0. 34) (0. 51)
============ ============
Shares used in computing net loss
per common and common equivalent
share ..................................... 11,070,910 11,146,660
============ ============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
SPACEHAB, INCORPORATED AND SUBSIDIARY
Unaudited Condensed Consolidated Statements of Cash Flows
Three Months Ended September 30,
<TABLE>
1996 1997
------------ -------------
Cash flows provided by (used for) operating
activities:
<S> ............................................ <C> <C>
Net loss ................................. $ (3,799,552) $ (5,654,140)
Adjustments to reconcile net loss to
net cashprovided by operating activities:
Depreciation and amortization ........... 2,446,655 1,349,754
Gain on early retirement of debt,
net of taxes, .......................... (3,384,016) --
before legal expenses
Interest converted to notes payable ..... 316,823 --
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable ............................ (724,550) 612,037
Increase in prepaid and other
current assets ........................ (677,336) (1,101,673)
Increase in deferred mission costs .... (1,872,161) (2,892,125)
Increase in other assets .............. (6,053) (1,913,330)
Increase in deferred flight revenue ... 8,736,699 8,427,471
Decrease in accounts payable and
accrued expenses .................... (2,105,524) (452,165)
Increase in advanced billings ......... -- 305,210
Increase (decrease) in accrued
consulting and subcontracting
services ............................. (827,060) 116,765
------------ ------------
Net cash used for operating activities .... (1,896,075) (1,202,196)
------------ ------------
Cash flows used for investing activities:
Payments for modules under
construction ............................ (2,232) (6,043,161)
Payments for building under
construction ............................ -- (709,790)
Purchase of property and equipment ....... (634,368) (104,867)
------------ ------------
Net cash used by investing
activities ........................ (636,600) (6,857,818)
------------ ------------
Cash flows used by financing activities:
Payment of note payable to Insurers ...... (3,185,060) --
Payment of loan payable under credit
agreement .............................. -- (500,000)
Payment of legal fees on early
retirement of debt ..................... 109,986) --
Proceeds from note payable ............... -- 14,119,025
Proceeds from issuance of common stock ... 24,000 23,188
Net cash provided by (used
for) financing activities ....... (3,271,046) 13,642,213
------------ ------------
Net increase (decrease) in
cash and cash equivalents ......... (5,803,721) 5,582,199
Cash and cash equivalents at beginning
of period ................................ 50,795,548 12,886,731
------------ ------------
Cash and cash equivalents at end of
period ................................... $ 44,991,827 $ 18,468,930
============ ============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
SPACEHAB, INCORPORATED AND SUBSIDIARY
Notes to Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation:
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, consisting of only normal
recurring accruals, necessary for a fair presentation of the consolidated
financial position of SPACEHAB, Incorporated and subsidiary ("SPACEHAB" or the
"Company") as of September 30, 1997, and the results of their operations and
their cash flows for the three months ended September 30, 1996 and 1997.
However, the consolidated financial statements are unaudited, and do not include
all related footnote disclosures. The results of operations for the three months
ended September 30, 1997 are not necessarily indicative of the results that may
be expected for the full year. The Company's results of operations fluctuate
significantly from quarter to quarter. The interim unaudited condensed
consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements appearing in the Company's
Form 10-K for the year ended June 30, 1997.
2. Depreciation of Flight Modules:
Effective July 1, 1997, the Company extended the estimated useful lives of its
space modules through 2012. This change in accounting estimate is treated
prospectively and is based on current available information which extends the
estimated life of the Space Shuttle program through at least 2012.
3. Revenue Recognition:
Revenue is recognized upon completion of each module flight for the Mir
contract. Total contract price is allocated to each flight based on the amount
of services the Company provides on the flight relative to total services
provided for all flights under contract. Obligations associated with a specific
mission, e.g., integration services, are also recognized upon completion of the
mission. For new contract awards for which the capability to successfully
complete the contract can be reasonably assured and costs at completion can be
reliably estimated at contract inception, revenue recognition under the
percentage-of-completion method is being reported based on costs incurred over
the period of the contract. The percentage of completion method will result in
the recognition of revenue over the period of contract performance, thereby
decreasing quarter by quarter fluctuation of reported revenue. Revenue provided
by the Astrotech payload processing facilities is recognized ratably over the
occupancy period of the satellites in the Astrotech facilities.
4. Statements of Cash Flows - Supplemental Information:
(a) Cash paid for interest costs was $0 and $62,585 for the three months ended
September 30, 1997 and 1996, respectively. The Company capitalized interest of
approximately $343,000 during the three months ended September 30, 1997. No
amounts were capitalized during the three months ended September 30, 1996. (b)
The Company paid $1,271,500 and $818,507 for income taxes during the three
months ended September 30, 1997 and 1996, respectively.
5. Credit Facilities:
On June 16, 1997, the Company entered into a $10.0 million line of credit
agreement with a financial institution. Outstanding balances on the line of
credit accrue interest at either the lender's prime rate or a LIBOR-based rate.
This loan is collateralized by certain assets of the Company. The term of the
agreement is through October 1998. At September 30, 1997, the Company has not
drawn against the line of credit.
On July 14, 1997, the Company's subsidiary, Astrotech, entered into a credit
facility with a financial institution for loans of up to $15.0 million. This
loan is collateralized by the assets of Astrotech and certain other assets of
the Company, and is guaranteed by the Company. Interest accrues at LIBOR plus
three percent. As of September 30, 1997, the Company had drawn $14.12 million on
this loan.
6. Subsequent Event - Note Offering:
On October 21, 1997 the Company completed an offering of $55 million of its 8%
Convertible Subordinated Notes due 2007 and on October 22, 1997 the Company
completed the exercise of the over- allotment for an additional $8,250,000 of
its 8% Convertible Subordinated Notes due 2007. The notes are convertible into
the common stock of the Company at a rate of $13.625 per share. This offering
provided the Company with net proceeds of approximately $59.80 million to be
used for capital expenditures associated with the development and construction
of space related assets and for general corporate purposes.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
This document may contain "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including (without limitation) under the "General" and
"Liquidity and Capital Resources" sections of this Item 2. Such statements are
subject to certain risks and uncertainties, including those discussed herein,
which could cause actual results to differ materially from those projected in
such statements.
SPACEHAB was incorporated in 1984 to commercially develop space habitat
modules to operate in the cargo bay of the Space Shuttles.
The Company currently operates under one contract with NASA, the Mir
Contract, with a total contract value of $90.2 million. To date the Company has
recognized $52.2 million of this contract value, representing the completion of
the first four missions. The remaining $38.0 million represents the three Mir
option missions scheduled to be flown during fiscal 1998.
SPACEHAB generates revenue by leasing lockers and/or volume within the
SPACEHAB Modules and by integration and operations support services provided to
scientists and researchers responsible for the experiments and/or logistics
supplies for missions aboard the shuttle system. Under the Mir Contract, the
Company recognizes revenue only at the completion of each Space Shuttle mission
utilizing Company assets. Accordingly, the Company's quarterly revenue and
profits have fluctuated dramatically based on NASA's launch schedule and will
continue to do so under the Mir Contract and any other contract for which
revenue is recognized only upon completion of a mission. For new contract awards
for which the capability to successfully complete the contract can be
demonstrated at contract inception, revenue recognition under the
percentage-of-completion method is being reported based on costs incurred over
the period of the contract. The percentage-of-completion method results in the
recognition of revenue over the period of contract performance, thereby
decreasing the quarter-by-quarter fluctuations of reported revenue.
The expenses associated with the operations of SPACEHAB are recorded based
on the type of expense. Costs of revenue include integration and operations
expenses associated with the performance of two types of efforts: (i) sustaining
engineering in support of all missions under a contract and (ii) mission
specific experiment support. Expenses associated with sustaining engineering are
expensed as incurred. Mission specific expenses relating to the Mir Contract are
recorded as assets and not expensed until the specific Space Shuttle mission is
flown and the related revenue is recognized. Costs associated with performance
of the NASDA/ESA Contract, completed in fiscal 1997, were expensed as incurred.
Other costs of revenue include depreciation expense and costs associated with
the Astrotech payload processing facilities. Flight related insurance covering
transportation of the SPACEHAB Modules from SPACEHAB's payload processing
facility to the Space Shuttle, in-flight insurance and third-party liability
insurance are also included in costs of revenue and are recorded as incurred.
Marketing, general and administrative and interest and other expenses are
recognized when incurred.
Astrotech revenue is derived from various multiyear fixed price contracts
with satellite and launch vehicle manufacturers. The services and facilities
Astrotech provides to its customers support the final assembly, checkout and
countdown functions associated with preparing a satellite for launch. This
preparation includes: the final assembly and checkout of the satellite,
installation of the solid rocket motors, loading of the liquid propellant,
encapsulation of the satellite in the launch vehicle, transportation to the
launch pad and command and control of the satellite during pre-launch countdown.
Revenue provided by the Astrotech payload processing facilities is recognized
ratably over the occupancy period of the satellites in the Astrotech facilities.
Results of Operations
For the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996.
Revenue. The Company recognized revenue of $2.54 million and $0.11 million
for the three months ended September 30, 1997 and 1996, respectively. Although a
Shuttle was launched which contained a SPACEHAB module during the three months
ended September 30, 1997, the mission was not completed and the modules returned
to the Company until October 1997. In accordance with the Company's revenue
recognition policy, revenue will be recognized for this fifth Mir mission
during the second quarter of fiscal year 1998 at the completion of the mission.
Revenue for the quarter ended September 30, 1997 was generated primarily from
Astrotech, whereas revenue for the quarter ended September 30, 1996 was
generated from the NASDA/ESA contract.
Costs of Revenue. Costs of revenue for the quarter ended September 30, 1997
increased by approximately 5.5% to $5.20 million, as compared to $4.92 million
for quarter ended September 30, 1996. The primary components of costs of revenue
for the quarter ended September 30, 1997 include integration and operations
costs under the Mir contract ($2.91 million) and Astrotech operations ($0.82
million), and depreciation expense of $1.22 million. Conversely, for the quarter
ended September 30, 1996, the primary components of costs of revenue included
integration and operations costs under the Mir contract ($1.79 million), the
NASDA/ESA contract ($0.09 million), and the CMAM contract ($0.56 million), and
depreciation expense of $2.38 million. The decrease in depreciation expense is
attributable to the impact of extending the useful lives of the Company's
modules. This change in accounting estimates is treated prospectively and is
based on current available information from NASA, which extends the estimated
life of the space shuttle program to at least 2012.
Operating Expenses. Operating expenses during the quarter ended September 30,
1997 increased by approximately 122.4% to $3.03 million as compared to $1.36
million for the quarter ended September 30, 1996. This increase is primarily
attributable to the Company's continued efforts to increase the strength of its
engineering, design and research and development capabilities and reflects the
additional costs of operating the Astrotech subsidiary.
Interest Expense. Interest expense, net of amounts capitalized, was
approximately $0.20 million for the quarter ended September 30, 1997 as compared
to $0.36 million for the quarter ended September 30, 1996. Interest capitalized
for the quarter ended September 30, 1997 was approximately $0.34 million , and
there was no interest capitalized for the quarter ended September 30, 1996.
Interest capitalized related to the construction of the Company's science module
with double module hardware, which will be placed in service beginning in late
1999, as well as the construction of an expanded facility for Astrotech.
Net Loss. Net loss before extraordinary item was $5.65 million, or $0.51 per
share for the quarter ended September 30, 1997, on 11,146,660 shares, as
compared to $7.07 million, or $0.64 per share, for the quarter ended September
30, 1996, on 11,070,910 shares. As a result of the early retirement of debt due
to a group of senior lenders, an extraordinary gain of $3.27 million, net of
taxes, or $0.30 per share, was recorded during the quarter ended September 30,
1996.
Liquidity and Capital Resources
The Company has historically financed its capital expenditures, research and
development and working capital requirements with progress payments under both
the CMAM Contract and the Mir Contract, and with proceeds received from private
equity offerings and borrowings under credit facilities. During December 1995,
SPACEHAB completed an initial public offering of common stock (the "Offering"),
which provided the Company with net proceeds of approximately $43.48 million. In
June 1997, the Company signed an agreement with a financial institution securing
a $10.0 million revolving line of credit (the "Revolving Line of Credit") that
the Company may use for working capital purposes. As of September 30, 1997, no
amounts were drawn on this line of credit. In July 1997, Astrotech obtained a
five-year term loan (the "Term Loan Agreement"), which is guaranteed by SPACEHAB
and provides for drawdowns of up to $15.0 million for general corporate
purposes. As of September 30, 1997, the Company had drawn $14.12 million on this
loan. Further, on October 21, 1997 the Company completed a private placement
offering of convertible subordinated notes (the "Notes Offering"), which
provided the Company with net proceeds of approximately $59.80 million to be
used for capital expenditures associated with the development and construction
of space related assets and for general corporate purposes.
Cash Flows from Operating Activities. Cash flows used for operating
activities for the three months ended September 30, 1997 and 1996, were ($1.20)
million and ($1.90) million respectively. The reduction in cash flows used for
operating activities is due to a variety of offsetting factors including the
reduced loss before extraordinary items.
Cash Flows from Investing Activities. For the three months ended September
30, 1997 and 1996, cash flows from investing activities consisted of capital
expenditures of approximately $6.86 million and $0.64 million, respectively. A
significant portion of the expenditures in the current year are attributable to
the construction of the Company's science module with double module hardware,
which is expected to be completed in late 1998. The Company anticipates that it
will spend between $35.0 million and $38.0 million cumulatively on the project.
In addition, the Company has spent approximately $1.0 million for the
construction of an expanded facility for Astrotech.
Cash Flows from Financing Activities. Cash flows provided by (used for)
financing activities were approximately $13.64 million and ($3.27) million for
the three months ended September 30, 1997 and 1996, respectively. On July 16,
1997 the Company received net proceeds of approximately $14.12 million under the
Term Loan Agreement. In August 1997, the Company also made the first payment of
$0.50 million under the Credit Agreement.
The Company believes that cash flows from the Notes Offering, the Term Loan
Agreement, the Revolving Line of Credit and current financing activities will be
sufficient to meet its cash flow deficit from operations and other funding
requirements for at least the next twelve months.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits. The separate Index to Exhibits accompanying this filing is
incorporated herein by reference.
(b)Reports on Form 8-K. No Report on Form 8-K was filed during the period
ended September 30, 1997. However, during October 1997 the following
Form 8-K was filed:
1. Report on Form 8-K filed on October 29, 1997 disclosing the
Registrant's completion of an offering of $55 million of its 8%
Convertible Subordinated Notes due 2007 and the closing on an
over-allotment option for an additional $8.250 million of its 8%
Convertible Subordinated Notes due 2007.
Exhibit No. Description of Exhibits
10.1 ESA Contract, dated October 10, 1997, between the Registrant
and INTOSPACE GmbH (the "ESA Contract")
11. Statement regarding Computation of Per Share Earnings.
21.* Subsidiary of the Registrant
* Incorporated by reference to the Registrant's Annual Report on Form
10-K for the year ended June 30, 1997 filed with the Securities and
Exchange Commission on September 12, 1997.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPACEHAB, INCORPORATED
Date: November 6, 1997 /S/ MARGARET E. GRAYSON
------------------ -----------------------
Margaret E. Grayson
Vice President of Finance (CFO)
Treasurer, and Assistant Secretary
(Principal Financial and Accounting
Officer)
Exhibit 11
SPACEHAB, INCORPORATED AND SUBSUDIARY
COMPUTATION OF EARNINGS PER COMMON SHARE
Three Months Ended
September 30,
1996 1997
<TABLE>
----------- ------------
Net loss and adjusted earnings:
Net loss applicable to common
shareholders used for primary
<S> .................................... <C> <C>
computations ..................... $ (3,799,553) $ (5,654,140)
============== ============
Fully diluted adjustments:
Savings in convertible note payable
interest expense, net of tax ...... 19,125 --
-------------- ------------
Adjusted net loss applicable to
common shareholders assuming full
dilution (1) .................... $ (3,780,480) $ (5,654,140)
============== ============
Average number of shares of common stock
and common stock equivalents used for
primary computation ................... 11,070,910 11,146,660
============== ============
Fully diluted adjustments (2):
Weighted average shares and share
equivalents outstanding:
Assumed exercise of options and
warrants ....................... -- 264,578
Assumed conversion of convertible
debt ........................... 75,000 --
-------------- ------------
Total number of shares assumed to be
outstanding after full dilution ..... 11,145,910 11,411,238
Earnings Per Share:
Income (loss) per common and common
equivalent share:
Net loss before extraordinary item . (0.64) (0.51)
Extraordinary item .................. 0.30 --
-------------- ------------
Primary (1) ......................... $ (0.34) $ (0.51)
============== ============
Net loss before extraordinary item . (0.64) (0.50)
Extraordinary item .................. 0.30 --
-------------- ------------
Fully Diluted (2): .................. $ (0.34 $ (0.50)
============== ============
</TABLE>
(1) The assumed exercise of options and warrants in periods of net loss are
anti-dilutive and are not included in the computation and presentation of
primary earnings per share.
(2) The assumed exercise of options, warrants, conversion of convertible debt,
and conversion of preferred stock are anti-dilutive but are included in the
calculation of fully dilutive earnings per share in accordance with
Regulation S-K Item 601 (a)(11).
11
AGREEMENT
This agreement ("Agreement") is made this 10th day of October, 1997,
between SPACEHAB, Incorporated ("SHI"), a Washington state corporation with its
principal office located in Vienna, Virginia and INTOSPACE GmbH, with its
principal office located in Hannover, Germany ("INTOSPACE"), as contractor to
the European Space Agency ("ESA", collectively "Buyer").
WHEREAS INTOSPACE desires to procure SPACEHAB pressurized module services
("SPACEHAB" or "Module") and retain SHI to act as the carrier and interface
between the U.S. National Aeronautics and Space Administration's ("NASA") Space
Shuttle fleet and the experiments listed in Exhibit A aboard a SPACEHAB Module
Mission currently manifested as STS-95.
WHEREAS SHI desires to supply to INTOSPACE such services and to act as the
carrier and interface between the NASA Space Shuttle fleet and the experiments
listed in Exhibit A aboard a SPACEHAB Module Mission currently manifested as
STS-95 ("Mission"); and
WHEREAS SHI must immediately begin to perform certain tasks associated
with the analytical and physical integration of the Exhibit A experiments into
the SPACEHAB Module in order to complete these tasks prior to the anticipated
launch date; and
WHEREAS INTOSPACE, ESA and SPACEHAB have mutually agreed to the Experiment
Chargeable Mass policy presented in the Exhibit B table.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:
1. Statement of Work
SHI will provide, at the times and locations set forth therein and
pursuant to the terms and conditions of this Agreement, the supplies and
services described in the Statement of Work ("SOW") in Exhibit C for the
payloads AGHF (chargeable mass 235 kg), FAST (chargeable mass 65 kg), APCF
(two units), BIOBOX and SSD/MOMO (together having a chargeable mass of 178
kg, 150 kg of which will be accommodated through the ESA/NASA Super Guppy
Barter Agreement leaving a net chargeable mass for these payloads of 28
kg) and Accelerometer (chargeable mass 10 kg) attached hereto as Exhibit A
and incorporated herein by this reference.
2. Price and Terms of Payment
INTOSPACE shall pay SHI a fixed price of 1997 US$ 9,030,000 for
performance of the SOW aboard STS-95 for all of the "Standard Services"
provided by SHI as set forth in the SOW, less INTOSPACE's commission as
set forth in the INTOSPACE/SPACEHAB Broker Agreement dated February 15,
1989.
* 97US$ 2,200,000.00 upon execution of this agreement, less $70,000.00
paid already as the reservation fee.
* 97US$ 1,300,000.00 upon ESA signature of the Exhibit A Core Interface
Control Documents (ICD's) for AGHF and FAST.
* 97US$ 3,400,000.00 Launch minus 6 months.
* 97US$ 1,100,000.00 Launch minus 3 months.
* 97US$ 1,030,000.00 after return of the shuttle and completion of all
tasks due under the contract.
Total 9,030,000.00
The actual Chargeable Mass (reference Exhibit B) for each experiment in
Exhibit A and its supporting flight hardware shall be determined by SHI
using a calibrated scale at the time of installation of each experiment
into the module. Any upward deviation in the measured Chargeable Mass and
flown on the mission from the Chargeable Mass referred to in Section 1
above shall result in an upward price adjustment for that experiment at
the rate of $28,000/kg (less the applicable commission to INTOSPACE). The
cumulative total of all experiment upward price deviations shall be paid
to SHI at the time of final contract payment above, in addition to the
final payment amount, also indicated above.
3. Payment Terms and Conditions
a. For the payments subsequent to the initial payment, SHI will invoice
INTOSPACE in accordance with the integration task completion
milestones as specified in Section 2 above. Invoiced amounts shall be
escalated from January 1, 1997 US$ as determined by the US Bureau of
Labor Statistics news release entitled "Productivity and Costs" to
the actual SHI invoice date for all payments. Payments shall be made
within 30 days of invoice date.
b. SHI shall send a Final Accounting/Billing to INTOSPACE as promptly
as possible after completion of the last service provided by SHI
under this Agreement. The Final Accounting/Billing will contain a
final accounting under the Agreement and address additional
payment requirements, if any, from INTOSPACE. If, as a result of
final Accounting/Billing, an additional INTOSPACE payment is
required, such payment shall be due 60 days after the billing date
of the Final Accounting/Billing.
4. Mission Delays
In the event STS-95 is delayed, suspended, or postponed, there may be
additional charges to INTOSPACE as specified in the following
circumstances:
a. Delay caused by NASA
INTOSPACE pays only additional service costs, if any,
required/provided by NASA and/or SHI.
b. Delay caused by SHI
INTOSPACE pays only additional service costs, if any,
required/provided by NASA.
c. Delay caused by INTOSPACE/ESA
INTOSPACE pays any additional NASA costs charged to SHI which may be
required or caused by any delay, suspension or postponement of the
launch in excess of the 72 hours allowable delay for which NASA does
not charge.
INTOSPACE pays for any additional costs incurred by SHI for
services provided by NASA and/or SHI.
5. Optional Services
There are currently no optional services priced under this Agreement.
Prices for any optional services will be negotiated on an individual basis
and will be in addition to the price as set forth in Section 2 above.
6. Applicability of NASA/SHI Space Shuttle Agreements
SHI and INTOSPACE acknowledge that performance of the services described
in this Agreement and the SOW depends upon the agreement(s) governing
NASA's lease of the Module for STS-95 or any other missions covered herein
("NASA Contracts"). Any changes to these NASA/SHI agreement(s) that are
imposed by NASA and which prevent SHI from providing the services
described herein shall not constitute a breach of this Agreement by either
SHI or INTOSPACE. In the event of such changes by NASA, SHI, and INTOSPACE
agree to negotiate an equitable adjustment to this Agreement that
satisfies both parties as well as NASA's new requirements. If there are
any conflicts between this Agreement and the requirements of the NASA
Contracts applicable to this Agreement, the NASA Contracts terms and
conditions shall take precedence.
7. Exchange of Documentation and Information
a. SHI and INTOSPACE shall exchange all documents and information
required for each party to fulfill its responsibilities under this
Agreement.
b. All technical data furnished to SHI under this Agreement shall be
provided with no restricted rights for use, duplication, and
disclosure in any manner and for any purpose whatsoever in
performance of this Agreement by SHI and its contractors and
subcontractors, and without a restrictive legend, except as
provided below. It is the intent of the parties that the
designation of proprietary technical data or trade secrets shall
be kept to a minimum in order to facilitate implementation of this
Agreement.
c. In the event any of the technical data required to be furnished to
SHI under this Agreement is considered by INTOSPACE to be
proprietary or a trade secret (such as detailed design,
manufacturing and processing information) and INTOSPACE desires to
maintain proprietary or trade secret rights for such data,
INTOSPACE shall inform SHI that the data is considered proprietary
or a trade secret and any data so provided shall be conspicuously
marked by INTOSPACE "Proprietary" or "Trade Secret" prior to
submittal to SHI. SHI agrees that the data will not, without
permission of INTOSPACE, be duplicated, used or disclosed by SHI
or its contractors and subcontractors for any purpose other than
as necessary to carry out SHI's obligations pursuant to the
agreements referenced in Section 5 above or this Agreement. If
required by such contractors and/or subcontractors, the data will
only be furnished after the contractors and/or subcontractors have
agreed with SHI in writing to protect the data from unauthorized
use, duplication and disclosure.
d. SHI considers all data (including data reduction and analysis)
obtained or derived from the Exhibit A experiments as a result of
the activities for which INTOSPACE has paid SHI under this
Agreement to be property of INTOSPACE, and, in order to protect
trade secrets and other property rights of INTOSPACE in such data,
SHI will maintain such data in confidence. SHI will not acquire,
as a result of launch and associated services under this
Agreement, any rights to INTOSPACE's copyrights, trademarks, trade
secrets, inventions, or patents which may be used in or result
from Exhibit A experiments or any rights to INTOSPACE's
proprietary or trade secret data, except the right to use
duplicate, and disclose such data as set forth above.
8. Permits and Licenses
SHI shall obtain any permit or license that may be required to provide the
services to be furnished under this Agreement. INTOSPACE will be
responsible for obtaining any permit or license that may be required to
perform an activity unique to the Exhibit A experiments that is not
included in the foregoing, such as tests involving use of radioactive
materials or particular requirements of INTOSPACE's own government(s), or
governmental authorities outside the United States.
9. Allocation of Certain Risks and Limitation of Liability
a. Inter-Party Waiver of Liability.
In carrying out this Agreement, SHI, ESA/INTOSPACE, and NASA, will
respectively utilize their property and employees in the SPACEHAB
Payload Processing Facility ("SPPF"), NASA facilities, and during
payload processing activities and STS Operations in close proximity
to one another and to others. Furthermore, the parties recognize that
all participants are engaged in the common goal of meaningful
exploration, exploitation and utilization of outer space. In
furtherance of this goal, the parties hereto agree to a no-fault,
no-subrogation, inter-party waiver of liability pursuant to which
each party agrees not to bring claims in arbitration or otherwise
against or sue the other party or other customers of SHI, and agrees
to absorb the financial and any other consequences arising out of
damage to its own property and employees as a result of participation
in the payload processing activities and STS Operations, irrespective
of whether such damage is caused by SHI, ESA, INTOSPACE, other SHI
customers, NASA, or other NASA customers participating in payload
processing activities and STS Operations and regardless of whether
such damage arises through negligence or otherwise.
b. Extension of Inter-Party Waiver.
The parties agree that this common goal will also be advanced through
extension of the inter-party waiver of liability to other
participants in the payload processing activities and STS Operations.
Accordingly, the parties agree to extend the waiver as set forth in
Section 8a above to the other party's and NASA's contractors and
subcontractors at every tier, as third party beneficiaries, whether
or not such contractors or subcontractors causing damage bring
property or employees to SHI's SPPF or retain title to other interest
in property provided by them to be used, or otherwise involved, in
the payload processing and Launch Activity. Specifically, the parties
intend to protect these contractors and subcontractors from claims,
including "products liability" claims, which might otherwise be
pursued by the parties, or the contractors or subcontractors of the
parties, or other customers of SHI or the contractors or
subcontractors of such other customers. Moreover, it is the intent of
the parties that each will take all necessary and reasonable steps to
foreclose claims for damage by any participant in a payload
processing and Launch Activity, under the same conditions and to the
same extent as set forth in Section 8a above, except for claims
between INTOSPACE and its contractors or subcontractors and claims
between SHI and its contractors and subcontractors.
c. Broad Construction of Inter-Party Waiver.
The parties intend that the inter-party waiver of liability set forth
above be broadly construed to achieve be intended objectives.
d. Definitions of "payload processing activity" and "STS Operations".
"Payload processing activity" means all activity conducted at the
SPPF or a NASA facility associated with the preparation of the
payload(s) (including but not limited to the Exhibit A experiments)
for launch and SHI and/or NASA storage of all or a portion of the
payload(s), and the handling and transportation of all or a portion
of the payload(s) outside the confines of SHI's facility by SHI,
NASA, or their contractors or subcontractors:
"STS Operations" means:
A. All Space Shuttle System Activity
B. All payload operations
C. Use of all tangible personal property (including ground support,
test, training and simulation equipment related to A & B above).
D. Research, design, development, test, manufacture, assembly,
integration, transportation, or use of materials related to the
above items, A, B & C.
E. Performance of any activities related to A through D.
e. The protection of cross waiver of liability for STS Operations herein
agreed to shall cover a period of time during which STS Operations
are being performed as follows:
Beginning with the signature of an Agreement or Arrangement with NASA
for Space Transportation System services and (i) when any employee,
payload or property arrives at a United States Government
Installation, or (ii) during transportation of such to the
installation by a United States Government Conveyance, or (iii) at
ingress of such into an Orbiter, for the purpose of fulfilling such
Agreement or Arrangement, or (iv) the commencement of extravehicular
activities by the Shuttle Crew for the purpose of retrieval of the
payload, whichever occurs first and Ending with regard to any
employee, payload or property, when such employee, payload or
property departs (i) a U.S. Government Installation, or (ii) the
Orbiter if it lands at other than such Installation, or (iii) a U.S.
Government conveyance which transports the employee and/or payload
and related property from such Installation or Orbiter.
f. Risk of Patent Infringement
(i) SHI agrees to indemnify INTOSPACE, its officers, employees
and agents against any United States Patent infringement
costs (including, but not limited to, any judgment against
INTOSPACE by a court of competent jurisdiction, reasonable
administrative and litigation costs, and settlement payments
made as a result of an administrative claim) incurred by
INTOSPACE which are attributable to products, processes or
articles of manufacture used in the facilities and Services
to be furnished to INTOSPACE by SHI hereunder.
(ii) INTOSPACE agrees to indemnify SHI and NASA, their officers,
employees and agents against any United States Patent
infringement costs (including, but not limited to, judgment
against SHI by a court of competent jurisdiction, reasonable
administrative and litigation costs, and settlement payments
made as a result of an administration claim) incurred by SHI
and/or NASA which are attributable to products, processes or
articles of manufacture used in Exhibit A experiments and
any supporting equipment and facilities brought to the SHI
SPPF by INTOSPACE or INTOSPACE's contractors or
subcontractors and any activity performed at SHI or NASA
facilities by INTOSPACE or INTOSPACE's contractors or
subcontractors and any activity performed at SHI or NASA
facilities by INTOSPACE or INTOSPACE's contractors or
subcontractors.
g. Limitation of SHI and INTOSPACE Liability
Notwithstanding any other provisions herein, to the extent that a
risk of damage is not dealt with expressly in this Agreement, SHI's
and INTOSPACE's liability under this Agreement, whether or not
arising as a result of an alleged breach of this Agreement, shall be
limited to direct damages only and shall not include any loss of
revenue, profits or other indirect or consequential damages.
10. Assistance with Third Party Claims
In the event a third party claim is asserted against SHI or INTOSPACE as a
result of patent infringement, use of proprietary data, or damage,
including claims of their respective contractors or subcontractors,
arising from or in connection with the Services provided by SHI under this
Agreement, SHI and INTOSPACE each agree to give prompt notice to the other
of any such claim and agree to provide each other with any assistance
practicable in the defense against such claim. If a claim asserted against
one party is a claim under this Agreement, the party who has agreed to
indemnify shall have the right to intervene and defend, the right to
control litigation of, and the right to determine the appropriateness of
any settlement related to such claim.
11. Warranties
SHI makes no warranties of any kind, express or implied, including any
implied warranty of merchantibility or fitness for a particular purpose.
12. Publicity relating to Agreement
In cases where one Party intends to use results obtained from this
Agreement or advertise his role in this Agreement, it shall first request
the other Party for its prior written approval, which shall not be
unreasonably withheld.
13. Applicable Law
The Agreement shall be governed by German law, except to the extent that
an issue involves the U.S. Federal Government, in which case US Federal
law shall apply.
14. Arbitration/Disputes
Disputes arising out of the interpretation or execution of this Agreement
which cannot be resolved by negotiation shall, at the request of either
Party, (after giving 30 days notice to the other Party) be submitted to
arbitration. The arbitration tribunal shall sit in Hannover, Germany.
Disputes shall be finally settled in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by
one or more arbitrators designated in conformity with those Rules. The
decision to submit a dispute shall not excuse either party from the timely
performance of its obligations hereunder which are not the subject matter
of the dispute. Further, if the lack of resolution of the matter in
dispute will adversely impact the timely completion of preparation for
launch activities, INTOSPACE and SHI will perform the matter in dispute in
the manner determined by SHI, within the framework of this Agreement and
without prejudice to the final resolution of the matter in dispute.
15. Termination of Services
Both parties have the right to terminate this Agreement pursuant to the
following conditions only:
a. SHI may terminate this Agreement:
(i) In the event ESA delivers any payload described in the SOW
so late beyond the mutually agreed upon delivery date that
SHI, in its sole reasonable judgment, is unable to process
such payload in time to meet the launch schedule, SHI will
terminate this Agreement and shall retain all payments made
by INTOSPACE to the date of termination, and INTOSPACE is
further liable for all costs incurred by SHI as a result of
such ESA failure, or
(ii) In the event of a material breach by INTOSPACE which INTOSPACE
fails to cure the breach within a reasonable time after written
notice received from SHI (or immediately upon a non-curable
breach), in which case SHI shall retain all payments made to the
date of the termination, and INTOSPACE is further liable for all
costs incurred by SHI resulting from INTOSPACE's breach of the
Agreement or,
(iii)as a result of any actions or inactions by NASA which prevent
the manifesting of the Exhibit A experiments on STS-95, in which
case SHI shall be entitled to all applicable payments hereunder
received, plus the Integration and Optional Services (if any)
actual costs incurred up to the time of termination, as well as
all termination charges which may be imposed by third parties
(such as NASA or SHI subcontractors).
b. INTOSPACE may terminate this Agreement:
(i) without cause at any time before installation of the Exhibit
A experiments into the SHI module upon sufficient written
notification to SHI of such intent, in which case INTOSPACE
shall be liable for and SHI shall retain all applicable
payments hereunder received, plus the Integration and
Optional Services (if any) actual costs incurred up to the
time of termination, as well as all termination charges which
may be imposed by third parties (such as NASA or SHI
subcontractors), or,
(ii) in the event of material breach by SHI which SHI fails to cure
in a reasonable time after written notice of such material
breach is received from INTOSPACE, in which case INTOSPACE will
be relieved from making any further payments to SHI subsequent
to the material breach hereof.
c. Termination In Special Cases: INTOSPACE may at any time terminate
this Agreement by giving written notice with immediate effect in
any of the following events:
(i) if SHI becomes insolvent or if its financial position is such
that within the framework of its national law, legal action
leading towards bankruptcy may be taken against it by its
creditors;
(ii) if SHI resorts to fraudulent practices in connection with the
contract, especially by deceit concerning the nature, quality or
quantity of the supplies, and the methods or processes of
manufacture employed or by the giving or offering of gifts or
remuneration for the purpose of bribery to any person in the
employ of an ESA Member State or of ESA or acting on its behalf,
irrespective of whether such bribes or remuneration are made on
the initiative of SHI or otherwise.
16. Assignments
a. Assignment, delegation or use as security on a first mortgage of this
Agreement or rights or duties hereunder by SHI is hereby consented to
by INTOSPACE.
b. INTOSPACE shall not assign to another person or entity any of its
rights under this Agreement, including but not limited to rights for
services related to scheduled launches, except to ESA for the Exhibit
A experiments, and as otherwise expressly agreed to by SHI in
writing, and as may be required pursuant to law.
c. In the event that INTOSPACE receives notice that this Agreement
has been assigned to a lending institution, INTOSPACE agrees (1)
to acknowledge such assignment; (2) that any Agreement or
agreement so assigned may neither be amended in any material
respect nor terminated by INTOSPACE without the prior consent of
such lending institutions; and (3) to promptly notify the lending
institutions of any default by SHI and provide the lending
institution with a reasonable opportunity for the cure of such
default.
17. Notices
All notices, requests, demands, and other communication hereunder shall be
in writing and shall be either (1) personally delivered, (2) sent by mail
or reputable overnight delivery service, or (3) transmitted by facsimile
machine as follows:
To SHI: Nelda Wilbanks
Contracts Administrator
SPACEHAB, Inc.
1595 Spring Hill Road, Suite 360
Vienna, VA 22182
<PAGE>
To INTOSPACE: Thomas Hauschild
INTOSPACE GmbH
Sophienstrasse 6
D-30159 Hannover 1 Germany
The effective date of each notice, demand, request or other communication
shall be deemed to be: (1) the date of receipt if delivered personally or
by mail or overnight delivery service, or (2) the date of transmission if
by facsimile. Either party may change its address or designee for purposes
hereof by informing the other party in writing of such action and the
effective date of such change.
18. Force Majeure
Neither party shall be liable for delays or breaches hereof resulting from
events or acts beyond the control of such party, including but not limited
to acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations, and natural disasters. Upon the occurrence of
such event, the party whose performance is affected shall use reasonable
efforts to notify the other party of the nature and extent of any such
condition and negotiate its affects.
19. INTOSPACE/ESA Agreement
This agreement is subject to the terms and conditions of the INTOSPACE/ESA
Contract No. 12177/96, a copy of which is provided to SHI and hereby
incorporated as an integral part of this Agreement as Appendix I.
Amendments to the INTOSPACE/ESA Contract No. 12177/96 to accommodate the
APCF, BIOBOX, SSD/MOMO, and Accelerometer payloads must be reviewed and
approved in writing by SHI. Upon such approval, the INTOSPACE/ESA Contract
No. 12177/96, as amended, will be incorporated into this Agreement.
20. Complete Agreement
This Agreement constitutes the complete agreement and understanding with
respect to the subject matter hereof between the parties.
INTOSPACE SHI, Inc.
BY: J.K. von der Lippe By: /s/ David Rossi
Name:/s/ J.K. von der Lippe Name: /s/ David Rossi
Title: Managing Director Title: Sr.Vice President
<PAGE>
EXHIBIT A
Experiment List
1. ESA's Advanced Gradient Heating Facility (AGHF)
2. ESA's Facility for Adsorption and Surface Tension studies (FAST)
3. ESA's Self-Standing Drawer/Morphological Transition and Model
Substances experiment (SSD/MOMO)
4. ESA's Advanced Protein Crystallization Facility (APCF), two units
5. ESA's BIOBOX
6. SPACEHAB provided Accelerometer
<PAGE>
The following table provides a more detailed listing of experiment-chargeable
items as defined on Page 7 of the SPACEHAB SSUP Program Status presentation,
dated May 1996. This table should be used during Mission Complement Assessment
(MCA) process to assist SPACEHAB, Inc. in determining experiment-chargeable mass
for pricing. In general, only SPACEHAB provided hardware (e.g., cables, ducts,
locker, rack) which interfaces directly with the experiment is not considered to
be experiment-chargeable mass.
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<S> <C>
EXPERIMENT-CHARGEABLE MASS MODULE SYSTEMS MASS (Non Experiment-Chargeable)
- --------------------------------------------------------------------------------------------------------------
All customer-provided hardware None
- --------------------------------------------------------------------------------------------------------------
Locker and adapter plate None
- --------------------------------------------------------------------------------------------------------------
Locker trays and foam None
- --------------------------------------------------------------------------------------------------------------
Soft stowage(R) bag and mounting hardware (support None
plate/straps)
- --------------------------------------------------------------------------------------------------------------
Experiment adapter and mounting plates (single, None
double, triple)
- --------------------------------------------------------------------------------------------------------------
% of rack structure used by experiment front panels Rack FSS
- --------------------------------------------------------------------------------------------------------------
Rack adaptive hardware* None
- --------------------------------------------------------------------------------------------------------------
Power cables from EXCP to bulkhead mounted experiment None
- --------------------------------------------------------------------------------------------------------------
Power cables from EPSU to rack mounted experiment EPSU, Rack DC power cables (Subfloor-RUIP, RUIP-EPSU,
EPSU-EPDP),Rack AC power cables (Subfloor-RUIP,
RUIP-EPSU, EPSU-EWPP)
- --------------------------------------------------------------------------------------------------------------
Data cables from EXCP or SCU to bulkhead mounted SCU, SCU-EXCP data cable, SCU-EXCP power cable
expreiment
- --------------------------------------------------------------------------------------------------------------
Data cables from RUIP or EPDP to rack mounted EPDP, Rack data cables (Subfloor-RUIP, RUIP-EPDP,
experiment EPDP-DATM, PGSC EC, DATM PGSC EC-EPDP), SCU,SCU-RUIP
data cable, SCU-Subfloor data cable
- --------------------------------------------------------------------------------------------------------------
Video cables from VSU to experiment VSU, VSU-EXCP video cable
- --------------------------------------------------------------------------------------------------------------
Water cooling loop supply and return lines to Rack Water Cooling System(EWPP, EHX, lines and water)
rack experiment interface
- --------------------------------------------------------------------------------------------------------------
EWPP mounting plate and water cooling loop supply Water Cooling System
and return lines to unique locker experiment (EWPP, EHX, lines and water)
interface
- --------------------------------------------------------------------------------------------------------------
Suction air cooling ducting from stubs to rack Rack Suction Cooling System (Fan assembly, main mounted
experiment supply duct with stubs)
- --------------------------------------------------------------------------------------------------------------
Vacuum vent line from module overhead valve to Module overhead vacuum vent valve
experiment interface, SH provided isolation valve
- --------------------------------------------------------------------------------------------------------------
GFE items (e.g., camera, camcorder, PGSC, rack foot None
restraint).Total mass of dedicated GFE items is
charged to experiment. Mass of shared GFE items is
allocated by the experiment's total weight percentage
of the total payload mission mass.
- --------------------------------------------------------------------------------------------------------------
*Not charged to experiment if a Spacelab reflight payload
</TABLE>
<PAGE>
17
SHI-INTOSPACE (ESA) Statement of Work:
I. General Description of SHI Integration and Flight Services
SHI will provide and maintain a pressurized module ("SPACEHAB") that fits
in the cargo bay of the National Aeronautics and Space Administration's
("NASA") Space Shuttle Orbiter ("Shuttle") to act as the carrier and
interface between the Shuttle and the Self-Standing Drawer / Morphological
Transition and Model Substances ("SSD/MOMO") payload. Power, thermal
control, command and data management, environmental control, and
structural support facilities and systems are available to support the
SSD/MOMO. Adaptive SPACEHAB rack hardware to permit physical integration
of the SSD/MOMO into the SPACEHAB are also provided by SHI. The SSD/MOMO
will be analytically, physically and operationally integrated with other
user payloads into the SPACEHAB. SHI services will include SSD/MOMO launch
into orbit, in-orbit operation by a trained flight crew, return of
SSD/MOMO to the launch site and to the SPACEHAB Payload Processing
Facility (SPPF), deintegration of all SSD/MOMO hardware, and return of
SSD/MOMO hardware to ESA. All SHI (and NASA) provided services for the
SSD/MOMO are considered "standard" and are included in SHI's basic
contract price. There are no known requirements for SPACEHAB or
NASA-provided "optional" services (e.g. late access/early retrieval) for
the SSD/MOMO payload.
II. Responsibilities of SPACEHAB, Inc. (SHI)
A. Provision of Standard Services
In support of the flight of the ESA-sponsored SSD/MOMO experiment aboard
the SPACEHAB module on STS 84, SHI shall perform the following "standard"
services.
1. Provision of the required agreements with NASA to provide Space Shuttle
transportation on STS-84.
SHI will negotiate and execute all agreements with NASA which are required
to manifest the SSD/MOMO experiment aboard SPACEHAB on STS 84. SHI will
pay NASA's required transportation charges according to established
payment methods and milestones.
2. Provision of Experiment Interface Definition and Analytical
Integration
SHI will assess ESA developed SSD/MOMO data, performance analyses, and
SPACEHAB subsystem resource requirements and perform the following
experiment requirements synthesis and analysis tasks:
a. Development of the core SPACEHAB/SSD/MOMO Interface Control Document
(ICD); the ICD Appendix A (Ground Operations Interface Requirements); the
ICD Appendix B (Safety/Verification Requirements); and the ICD Appendix C
(Flight Operations Interface Requirements).
b. Integration and submittal of flight and ground safety review packages
to NASA (Phase II, III) as required.
c. Development of experiment stowage requirements.
d. Analysis of all experiment test/analytical data as it pertains to the
physical (structural) interface with the SPACEHAB rack and module.
e. Performance of a mass/center of gravity (c.g.) analysis.
f. Performance of an experiment materials analysis.
g. Performance of an experiment SPACEHAB resource requirements assessment.
3. Provision of Mission Analytical Integration
Based upon the SSD/MOMO's data and operational requirements, provided by
ESA, SHI will locate the SSD/MOMO in a SPACEHAB rack within the SPACEHAB
pressurized volume (with a compatible complement of payloads), will
integrate the SSD/MOMO resource requirements and safety data with those of
other payloads, and will develop flight procedures and timelines for
operation of the experiment in-orbit. Specifically, SPACEHAB will perform
the following mission integration tasks for ESA:
a. Development of an integrated Mission Requirements and Allocations
Document (MRAD) which incorporates the SPACEHAB module and Shuttle mission
resource requirements necessary for the successful implementation of
SSD/MOMO experiment objectives.
b Development and submittal to NASA of the required Shuttle Payload
Integration Plan (PIP) data as it pertains to the SSD/MOMO requirements
for Shuttle resources.
c. Development and implementation of an integrated Crew Training Plan
which includes documentation of all requirements for SSD/MOMO flight crew
training, scheduling of all SSD/MOMO crew training sessions with the NASA
Training Coordinator, coordination of all SSD/MOMO training sessions with
the affected SSD/MOMO Principle Investigators and Payload Element
Developers, and direction of all integrated timeline training sessions at
the SPPF.
d. Development and production of a flight qualified SSD/MOMO Experiment
Operations Checklist (EOC) for onboard use by the flight crew.
e. Development of SSD/MOMO crew activity timeline inputs for inclusion by
NASA in the integrated Shuttle Crew Activity Plan.
f. Integration of ESA-provided SSD/MOMO flight and ground safety data into
mission safety packages for review by the NASA Flight and Ground Payload
Safety Review Boards.
g. Representation of ESA and the SSD/MOMO to NASA at all NASA payload
integration process forums and meetings, including payload safety reviews.
4. Provision of Hardware Physical Integration and Deintegration
This category involves the preparation for and execution of
SSD/MOMO-to-SPACEHAB and SPACEHAB-to-Shuttle physical integration and
deintegration tasks to support the SSD/MOMO's flight on STS 84. It
includes logistics and ground operations planning, ground procedures
development, integrated schedule development, hardware physical
installation, and ESA personnel accommodation elements. The activities
associated with this function are performed within the SPACEHAB Payload
Processing Facility (SPPF) at Cape Canaveral, Florida. Specifically, SHI
will provide to ESA the following services:
a. Coordination of shipping and receiving of flight and training hardware
to and from the SPPF.
b. Provision of a SPPF Customer Work Area with the necessary security and
administrative/laboratory equipment to control, store and prepare for
flight all SSD/MOMO parts, experiment materials and supporting equipment.
c. Provision at the SPPF of a high fidelity mockup of the SPACEHAB module
for use in experiment interface checks and in integrated timeline training
with the flight crew.
d. Integration of the SSD/MOMO into the SPACEHAB rack and into the
SPACEHAB module and performance of a SPACEHAB resource accommodations
Interface Verification Test (IVT) prior to the module's delivery to KSC;
and deintegration of the same hardware following the SPACEHAB module's
post-flight return to the SPPF.
5. Provision of Flight Operations Support
For the Flight Phase, SHI will provide accommodations for ESA and
INTOSPACE management, technical and scientific personnel in the Mission
Control Center (MCC) at the NASA Johnson Space Center. The following
services will be provided at the MCC:
a. Physical accommodations for personnel to monitor real-time operations
during the Prelaunch, Flight, and Postlanding phases of the STS 84
mission.
b. Telemetry, voice and video data as required to monitor the progress of
the SSD/MOMO experiment operations over the duration of the mission.
c. Provision of a Mission Console Handbook which provides administrative,
technical and logistics information about the SSD/MOMO and other
experiments aboard the SPACEHAB module as well as about the cadre of NASA,
ESA, INTOSPACE and SHI personnel supporting the mission.
d. Administrative services for acquiring/copying and routing of
mission-related data and correspondence to local and remote locations.
6. Provision of Support to Post-Flight Data Analysis
SHI will provide or coordinate the provision of the required historical
SSD/MOMO flight data and timeline information in support of SSD/MOMO post
flight analysis activities.
8. Provision of SSD/MOMO Project Management
To organize, schedule and manage the provision of the standard and
optional services as described above, SHI shall provide the following
SSD/MOMO project management personnel and methods:
a. SHI will designate an SHI Contract Development and Implementation
Manager (CDIM) who will be responsible for coordinating with the INTOSPACE
CDIM all financial, scheduling, implementation progress reporting and
policy matters related to this contract. The CDIM will:
1.) Coordinate SHI inputs to the development and maintenance of
this contract with INTOSPACE and ESA personnel as required
2.) Establish methods for communication of contract implementation
activities to all participants (e.g. teleconferences, e-mail lists, key
meetings).
b. SHI will designate an SHI SSD/MOMO Payload Coordinator (PC) for the
SSD/MOMO experiment. The PC will:
1.) Be the principal SHI advocate for the successful flight of the
SSD/MOMO.
2.) Be responsible for coordinating with the SHI, ESA, and NASA technical
points of contact all SHI support related to the technical and operational
implementation of the standard services described above.
3.) Be responsible for the identification and resolution of all technical
and operational issues pertaining to the flight of the SSD/MOMO
experiment.
9. Provision of SSD/MOMO Project Reporting
In order to facilitate the routine exchange of mission integration and
scheduling information and a team-oriented approach to problem
identification and resolution, the following methods of communication will
be established:
a. The PC will hold biweekly teleconferences with key project participants
to plan and/or status integration activities and to resolve issues.
b. The PC will develop and maintain a detailed, date-specific SSD/MOMO
Integration Milestones Template (IMT) which identifies all key
deliverables as well as all key mission preparation milestones.
c. The SHI CDIM will provide monthly reports to INTOSPACE on the status of
SSD/MOMO mission integration activities.
B. Provision of Optional Services
There have been no optional services identified for the SSD/MOMO
experiment flight aboard SPACEHAB on STS 84.
III. Responsibilities of INTOSPACE
INTOSPACE will serve as ESA's administrative agent for establishing a
contract relationship with SHI. Therefore, it is INTOSPACE's
responsibility to establish and maintain this contract directly with SHI,
on ESA's behalf, in order for ESA to obtain from SHI the necessary lease
and integration services required for the successful flight of the
SSD/MOMO in the SPACEHAB module. Acting in this capacity, INTOSPACE will:
A. Facilitate ESA's completion of the following critical preparatory
functions in support of the flight of the SSD/MOMO experiment:
1. Timely selection and identification of all ESA-sponsored PI's
2. Timely selection of all MOMO hardware and materials for flight in the
SSD facility. All SSD/MOMO hardware and experiment materials shall conform
to established NASA payload safety requirements documentation and are
subject to review and approval by the NASA Flight and Ground Safety Review
Boards.
3. Timely coordination with the SHI Payload Coordinator in the development
of experiment functional objectives and flight and ground operations
protocols and procedures.
4. Timely delivery of all SSD/MOMO to the SPPF for preflight processing.
5. ESA support to meetings, teleconferences, flight crew training
sessions, integrated mission simulations and real-time missions operations
6. Designation of ESA technical points of contact who will be responsible
for coordinating with the SHI Payload Coordinator all technical activities
to be performed under this Agreement
B. Designation of an INTOSPACE Contract Development and Implementation
Manager (CDIM) who will be responsible for coordinating with the SHI CDIM
all financial, scheduling, implementation progress reporting and policy
matters related to this contract.
C. Establishment and maintenance of the required contract(s) with ESA to
facilitate ESA sponsorship of the flight of the SSD/MOMO on STS 84.
D. Establishment and maintenance of the required contract with SHI to
obtain SHI lease and integration services necessary for the flight of the
SSD/MOMO in SPACEHAB on STS 84
E. Receipt of established contract milestone payments from ESA and
provision of established contract milestone payments to SHI for
performance of these required services.
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