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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1997
REGISTRATION NO. 333-19167
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ORION NETWORK SYSTEMS, INC.*
(Exact name of registrant as specified in its charter)
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Delaware ................... 4899 52-2008654
(State of organization) ... (Primary S.I.C. Code Number) (I.R.S. Employer & Identification Number)
</TABLE>
2440 RESEARCH BOULEVARD, SUITE 400, ROCKVILLE, MARYLAND 20850, (301) 258-8101
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
RICHARD H. SHAY, ESQ.
2440 RESEARCH BOULEVARD, SUITE 400, ROCKVILLE, MARYLAND 20850, (301) 258-8101
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
For Information regarding additional registrants, see "Table of Additional
Registrants."
Copies to:
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Anthony S. Harrington, Esq. Jerry V. Elliott, Esq.
Steven M. Kaufman, Esq. James S. Scott, Sr., Esq.
HOGAN & HARTSON L.L.P. SHEARMAN & STERLING
555 Thirteenth Street, N.W., Washington, D.C. 20004-1109 599 Lexington Avenue, New York, New York 10022
(202) 637-5600 (212) 848-4000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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EXPLANATORY NOTE
----------------
This Amendment is being filed solely for the purpose of filing Exhibit
10.52 to this Registration Statement.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses to be paid by the
Registrant in connection with the sale and distribution of the securities being
registered hereby, other than underwriting discounts and commissions. All
amounts are estimated except the Securities and Exchange Commission registration
fee and the National Association of Securities Dealers, Inc.
filing and listing fees.
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Securities and Exchange Commission registration fee ...... $ 181,818
National Association of Securities Dealers, Inc. filing
fee....................................................... $ 30,500
Blue sky fees and expenses (including fees of counsel) ... 12,500
Printing and engraving expenses........................... 350,000
Fees and expenses of counsel for the Company.............. 350,000
Accounting fees and expenses.............................. 200,000
Appraisal fees and expenses............................... 56,000
Transfer agent and registrar fees......................... 150,000
Miscellaneous............................................. 50,000
Total.................................................... $1,380,818
=============
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ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Orion. Orion's Certificate of Incorporation provides that its directors will
not be liable for monetary damages for breach of the directors' fiduciary duty
of care to the Company and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. In accordance
with the requirements of Delaware law, as amended, the Certificate of
Incorporation provide that the Company=s directors would remain subject to
liability for monetary damages (i) for any breach of their duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions not in good
faith or involving intentional misconduct or knowing violation of law, (iii)
under Section 174 of the Delaware Code for approval of an unlawful dividend or
an unlawful stock purchase or redemption and (iv) for any transaction from which
the director derived an improper personal benefit. This provision also does not
affect a director's responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
Orion's Certificate of Incorporation also provides that, except as expressly
prohibited by law, Orion shall indemnify any person who was or is a party (or
threatened to be made a party) to any threatened, pending or completed action,
suit or proceeding by reason of the fact that such person is or was a director
or officer of Orion (or is or was serving at the request of Orion as a director
or officer of another enterprise), against expenses, liabilities and losses
(including attorney's fees), judgments, fines and amounts paid or to be paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and a manner
such person reasonably believed to be in or not opposed to the best interests of
Orion, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Such indemnification shall not
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to Orion unless (and only to the extent that)
the Delaware Court of Chancery or the court in which such action or suit was
brought determines that, in view of all circumstances of the case, such person
is fairly and reasonably entitled to indemnity.
Old ONSI. Old ONSI's Certificate of Incorporation provides that its directors
will not be liable for monetary damages for breach of the directors' fiduciary
duty of care to Old ONSI and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. In accordance
with the requirements of Delaware law, as
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amended, the Certificate of Incorporation provide that Old ONSI's directors
would remain subject to liability for monetary damages (i) for any breach of
their duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or involving intentional misconduct or knowing
violation of law, (iii) under Section 174 of the Delaware Code for approval of
an unlawful dividend or an unlawful stock purchase or redemption and (iv) for
any transaction from which the director derived an improper personal benefit.
This provision also does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
Old ONSI's Certificate of Incorporation also provides that, except as
expressly prohibited by law, Old ONSI shall indemnify any person who was or is a
party (or threatened to be made a party) to any threatened, pending or completed
action, suit or proceeding by reason of the fact that such person is or was a
director or officer of Old ONSI (or is or was serving at the request of Old ONSI
as a director, officer, employee or agent of another enterprise), against
expenses, liabilities and losses (including attorney's fees), judgments, fines
and amounts paid or to be paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding.
OrionSat. OrionSat's Certificate of Incorporation provides that its directors
will not be liable for monetary damages for breach of the directors' fiduciary
duty of care to OrionSat and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. In accordance
with the requirements of Delaware law, as amended, the Certificate of
Incorporation provides that OrionSat's directors would remain subject to
liability for monetary damages (i) for any breach of their duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions not in good
faith or involving intentional misconduct or knowing violation of law, (iii)
under Section 174 of the Delaware Code for approval of an unlawful dividend or
an unlawful stock purchase or redemption and (iv) for any transaction from which
the director derived an improper personal benefit. This provision also does not
affect a director's responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
OrionSat's Bylaws provide that, except as expressly prohibited by law,
OrionSat shall indemnify any person who was or is a party (or threatened to be
made a party) to any threatened, pending or completed action, suit or proceeding
by reason of the fact that such person is or was a director, officer, employee
or agent of OrionSat (or is or was serving any other enterprise at the request
of OrionSat), against expenses, liabilities and losses (including attorney's
fees), judgments, fines and amounts paid or to be paid in settlement actually
and reasonably incurred by such person in connection with such action, suit or
proceeding.
OrionNet Finance Corporation. OrionNet Finance Corporation's Certificate of
Incorporation provides that its directors will not be liable for monetary
damages for breach of the directors' fiduciary duty of care to OrionNet Finance
Corporation and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. In accordance
with the requirements of Delaware law, as amended, the Certificate of
Incorporation provides that OrionNet Finance Corporation's directors would
remain subject to liability for monetary damages (i) for any breach of their
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or involving intentional misconduct or knowing
violation of law, (iii) under Section 174 of the Delaware Code for approval of
an unlawful dividend or an unlawful stock purchase or redemption and (iv) for
any transaction from which the director derived an improper personal benefit.
This provision also does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
OrionNet Finance Corporation's Bylaws provide that, except as expressly
prohibited by law, OrionNet Finance Corporation shall indemnify any person who
was or is a party (or threatened to be made a party) to any threatened, pending
or completed action, suit or proceeding by reason of the fact that such person
is or was a director, officer, employee or agent of OrionNet Finance Corporation
(or is or was serving any other enterprise at the request of OrionNet Finance
Corporation), against expenses,
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liabilities and losses (including attorney's fees), judgments, fines and amounts
paid or to be paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding.
Asia Pacific Space and Communications, Ltd. ("APSC"). APSC's Certificate of
Incorporation provides that the personal liability of its directors shall be
eliminated to the fullest extent provided by Section 7 of Subsection (b) of
Section 102 of the Delaware Code. This paragraph allows for the elimination of
all personal liability, provided that liability shall not be eliminated or
limited (i) for any breach of their duty of loyalty to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or involving
intentional misconduct or knowing violation of law, (iii) under Section 174 of
the Delaware Code for approval of an unlawful dividend or an unlawful stock
purchase or redemption and (iv) for any transaction from which the director
derived an improper personal benefit. This provision in the Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. This provision
also does not affect a director's responsibilities under any other laws, such as
the federal securities laws or state or federal environmental laws.
APSC's Certificate of Incorporation also provides that APSC shall indemnify
its directors, officers, employees and agents to the fullest extent permitted by
Section 145 of the Delaware Code, as the same exists or may hereafter be
amended. Section 145 currently covers expenses, liabilities and losses
(including attorney's fees), judgments, fines and amounts paid or to be paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and a manner
such person reasonably believed to be in or not opposed to the best interests of
APSC, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Such indemnification shall not
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to APSC unless (and only to the extent that) the
Delaware Court of Chancery or the court in which such action or suit was brought
determines that, in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity.
Orion Asia Pacific. Orion Asia Pacific's Certificate of Incorporation
provides that its directors will not be liable for monetary damages for breach
of the directors' fiduciary duty of care to Orion Asia Pacific and its
stockholders. This provision in the Certificate of Incorporation does not
eliminate the duty of care, and in appropriate circumstances equitable remedies
such as an injunction or other forms of non-monetary relief would remain
available under Delaware law. In accordance with the requirements of Delaware
law, as amended, the Certificate of Incorporation provides that Orion Asia
Pacific=s directors would remain subject to liability for monetary damages (i)
for any breach of their duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith or involving intentional misconduct
or knowing violation of law, (iii) under Section 174 of the Delaware Code for
approval of an unlawful dividend or an unlawful stock purchase or redemption and
(iv) for any transaction from which the director derived an improper personal
benefit. This provision also does not affect a director's responsibilities under
any other laws, such as the federal securities laws or state or federal
environmental laws.
Orion Asia Pacific's Bylaws provide that, except as expressly prohibited by
law, Orion Asia Pacific shall indemnify any person who was or is a party (or
threatened to be made a party) to any threatened, pending or completed action,
suit or proceeding by reason of the fact that such person is or was a director,
officer, employee or agent of Orion Asia Pacific (or is or was serving any other
enterprise at the request of Orion Asia Pacific), against expenses, liabilities
and losses (including attorney's fees), judgments, fines and amounts paid or to
be paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding.
OrionNet. OrionNet's Certificate of Incorporation provides that its directors
will not be liable for monetary damages for breach of the directors' fiduciary
duty of care to OrionNet and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would
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remain available under Delaware law. In accordance with the requirements of
Delaware law, as amended, the Certificate of Incorporation provides that
OrionNet's directors would remain subject to liability for monetary damages (i)
for any breach of their duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith or involving intentional misconduct
or knowing violation of law, (iii) under Section 174 of the Delaware Code for
approval of an unlawful dividend or an unlawful stock purchase or redemption and
(iv) for any transaction from which the director derived an improper personal
benefit. This provision also does not affect a director's responsibilities under
any other laws, such as the federal securities laws or state or federal
environmental laws.
OrionNet's Bylaws provide that, except as expressly prohibited by law,
OrionNet shall indemnify any person who was or is a party (or threatened to be
made a party) to any threatened, pending or completed action, suit or proceeding
by reason of the fact that such person is or was a director, officer, employee
or agent of OrionNet (or is or was serving any other enterprise at the request
of OrionNet), against expenses, liabilities and losses (including attorney's
fees), judgments, fines and amounts paid or to be paid in settlement actually
and reasonably incurred by such person in connection with such action, suit or
proceeding.
Orion Atlantic Europe, Inc. Orion Atlantic Europe, Inc.'s Certificate of
Incorporation provides that its directors will not be liable for monetary
damages for breach of the directors' fiduciary duty of care to Orion Atlantic
Europe, Inc. and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as an injunction or other forms of
non-monetary relief would remain available under Delaware law. In accordance
with the requirements of Delaware law, as amended, the Certificate of
Incorporation provides that Orion Atlantic Europe, Inc.'s directors would remain
subject to liability for monetary damages (i) for any breach of their duty of
loyalty to the corporation or its shareholders, (ii) for acts or omissions not
in good faith or involving intentional misconduct or knowing violation of law,
(iii) under Section 174 of the Delaware Code for approval of an unlawful
dividend or an unlawful stock purchase or redemption and (iv) for any
transaction from which the director derived an improper personal benefit. This
provision also does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal environmental
laws.
Orion Atlantic Europe, Inc.'s Certificate of Incorporation also provides
that, except as expressly prohibited by law, Orion Atlantic Europe, Inc. shall
indemnify any person who was or is a party (or threatened to be made a party) to
any threatened, pending or completed action, suit or proceeding by reason of the
fact that such person is or was a director or officer of Orion Atlantic Europe,
Inc. (or is or was serving at the request of Orion Atlantic Europe, Inc. as a
director or officer of another enterprise), against expenses, liabilities and
losses (including attorney's fees), judgments, fines and amounts paid or to be
paid in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding.
Section 145 of the Delaware Code empowers a corporation incorporated under
that statute to indemnify its directors, officers, employees and agents and its
former directors, officers, employees and agents and those who serve in such
capacities with another enterprise at its request against expenses, as well as
judgments, fines and settlements in nonderivative lawsuits, actually and
reasonably incurred by them in connection with the defense of any action, suit
or proceeding in which they or any of them were or are made parties or are
threatened to be made parties by reason of their serving or having served in
such capacity. The power to indemnify shall only exist where such officer,
director, employee or agent has acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation and, in the case of a criminal action, where such person had no
reasonable cause to believe his conduct was unlawful. However, in an action or
suit by or in the right of the corporation, unless a court shall determine to
the contrary, where such a person has been adjudged liable to the corporation,
the corporation shall have no power of indemnification. Indemnity is mandatory
to the extent a claim, issue or matter has been successfully defended.
Indemnification is not deemed exclusive of any other rights to which those
indemnified may be entitled, under any by-law, agreement, vote of stockholders
or otherwise. A Delaware corporation also has the power to purchase and maintain
insurance on behalf of the persons it has the power to indemnify, whether or not
indemnity against such liability would be allowed under the statute.
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International Private Satellite Partners, L.P. ("IPSP"). The Third Amended
and Restated Agreement of Limited Partnership of International Private Satellite
Partners, L.P. (the "IPSP Partnership Agreement") provides that neither the
general partner (OrionSat) nor any of its affiliates , nor any of their
respective partners, officers, directors, employees or agents, shall be liable
to IPSP or its limited partners for any losses sustained or liabilities incurred
as a result of any act or omission, so long as such conduct does not constitute
bad faith, fraud, gross negligence, willful misconduct or breach of any
fiduciary duty.
The IPSP Partnership Agreement also provides that, except as expressly
prohibited by law, IPSP shall indemnify OrionSat, its affiliates and their
respective partners, officers, directors, employees and agents from any and all
expenses, liabilities and losses (including attorney's fees), judgments, fines
and amounts paid or to be paid in settlement arising from any claims, demands,
actions, suits or proceedings, arising out of or incidental to the business or
activities relating to IPSP.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of Orion pursuant to the foregoing provision or
otherwise, Orion has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act and therefore unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by such person in
connection with the offering of the Securities (other than for the payment by
the corporation of expenses incurred or paid by a director, officer or
controlling person of the corporation in the successful defense of any action,
suit or proceeding), the either corporation will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of the issue.
Orion has insurance policies which will insure directors and officers against
damages from actions and claims incurred in the course of their duties and will
insure the corporations against expenses incurred in defending lawsuits arising
from certain alleged acts of the directors and officers.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, Orion (which completed an initial public
offering in August 1995) issued the following unregistered securities, adjusted
to reflect a 1.00-for-1.36 reverse stock split effected in July 1995. No
underwriting discounts or commissions were paid in connection with any of such
transactions, although a fee of $250,000 was paid to Salomon Brothers Inc for
serving as a financial advisor to Orion in connection with Orion's 1994 private
placement. There was no public offering in such transactions, and the
transactions were exempt from the registration requirements of the Securities
Act by reason of Sections 4(2) and 3(b) thereof, and Regulation D promulgated
thereunder. In each instance, the shares of Common Stock, shares of Preferred
Stock or warrants of Orion were issued to a limited group of purchasers, each of
which had access to and/or was furnished information concerning Orion. The
purchasers acquired the securities for investment only and not with a view to
the distribution thereof, and each of the certificates representing the shares
of Common Stock and Preferred Stock of Orion issued to such purchasers was
stamped with a legend restricting the transfer of the shares of Common Stock and
Preferred Stock representing thereby.
Common Stock
In December 1993, Orion issued an aggregate of 178,097 shares of Common Stock
as part of a private placement of its Common Stock to certain of its Directors
and affiliates of those Directors at a purchase price of $10.20 per share. The
terms of such issuance permitted the purchasers to receive the benefit of any
lower price at which Common Stock subsequently was issued in the private
placement or to receive any other security subsequently issued in the private
placement. In June 1994, when Orion issued shares of Common Stock as part of the
private placement of its Common Stock to a limited number of institutions and
other investors (including 64,705 shares to affiliates of Directors) at a
purchase price of $8.50 per share, Orion issued 100,326 additional shares to the
Directors and affiliates of Directors who purchased Common Stock in December
1993. In addition, after Orion issued Series A
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Preferred Stock (along with warrants and options to make an additional
investment) to CIBC, Fleet and Chisholm in June 1994, the Directors and
affiliates of Directors who purchased Common Stock in December 1993 each
exercised his or its right to receive Series A Preferred Stock (along with
warrants and options to make an additional investment) in exchange for the
Common Stock previously acquired, and Orion issued an aggregate of $3,000,000 of
Series A Preferred Stock to such persons and entities.
In May 1994, Orion entered into an agreement with SS/L whereby SS/L agreed to
purchase 588,235 shares of Common Stock for an aggregate purchase price of
$5,000,000. The agreement with SS/L includes a possible sale, under certain
circumstances, of an additional 588,235 shares of Common Stock for an aggregate
purchase price of $5,000,000. SS/L has the right to require the Company to
repurchase the 588,235 shares from SS/L if Orion selects a company other than
SS/L as the prime contractor in a contract for construction of a satellite to
serve the Asia Pacific region. SS/L has the right, during the three year period
after the sale of the initial shares of Common Stock, to receive more shares of
Common Stock; under certain circumstances, if Orion issues Common Stock or a
security convertible into or exchangeable for Common Stock for a price of less
than $8.50 per share.
In June 1994, Orion issued an aggregate of 174,844 shares of Common Stock as
part of a private placement of its Common Stock to a limited number of
institutions and other investors at a purchase price of $8.50 per share. The
terms of such issuance permitted the purchasers to receive the benefit of any
lower price at which Common Stock subsequently was issued in the private
placement or to receive any other security subsequently issued in the private
placement. When Orion issued Series A Preferred Stock (along with warrants and
options to make an additional investment) to CIBC, Fleet and Chisholm in June
1994, the institutions and other investors who purchased Common Stock in June
1994 each exercised his, her or its right to receive Series A Preferred Stock
(along with warrants and options to make an additional investment) in exchange
for the Common Stock previously acquired, and Orion issued an aggregate of
$3,000,000 of Series A Preferred Stock to such persons and entities.
In March 1995 (but pursuant to a contract signed in January 1994) Orion
issued an aggregate of 2,941 shares of Common Stock to a recruiting firm as
compensation for work performed for Orion.
In January 1997, Orion issued an aggregate of approximately 86,500 shares of
Common Stock to British Aerospace, one of the Company's principal stockholders
which has a representative on the Company's Board of Directors. Such issuance
was pursuant to the exercise of a warrant granted in December 1991 in connection
with the formation of Orion Atlantic.
Orion has, from time to time, issued Common Stock upon conversion of Series A
and Series B Preferred Stock.
Preferred Stock
In June 1994, CIBC, Fleet and Chisholm purchased $11.5 million in Series A 8%
Cumulative Redeemable Convertible Preferred Stock, which shares are convertible
into shares of Common Stock at an exercise price of $8.50 per share. See
"Description of Capital Stock -- Preferred Stock." CIBC, Fleet, and Chisholm
also were granted the right to invest an additional $3.8 million in similar
preferred stock, except that such similar preferred stock would be convertible
at any time into Common Stock at a price within a range from $10.20 to $17.00
per share of Common Stock based upon when the option is exercised and certain
other factors. CIBC, Fleet, and Chisholm also were granted a contractual
"preemptive" right to purchase a pro rata portion of any equity securities sold
by Orion in the future on the same terms and conditions as sold to others,
subject to certain exceptions for securities sold or granted to employees,
certain small offerings, and existing rights to acquire equity securities. CIBC,
Fleet and Chisholm also were granted certain warrants (issued concurrently with
the Series A Preferred Stock) to purchase Common Stock at the conversion price
of such Series A Preferred Stock. These warrants do not become exercisable
unless Orion exercise its right to repurchase the Series A Preferred Stock at
the liquidation value (plus accrued and unpaid dividends). In connection with
the transaction, CIBC and Fleet each were granted the right to elect one member
of Orion's Board of Directors.
After Orion issued Series A Preferred Stock (along with warrants and options
to make an additional investment) to CIBC, Fleet and Chisholm in June 1994, the
Directors and affiliates of Directors who purchased Common Stock in December
1993 and the institutions and other investors who pur-
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chased Common Stock in June 1994 each exercised his, her or its right to receive
Series A Preferred Stock (along with warrants and options to make an additional
investment) in exchange for the Common Stock previously acquired and Orion
issued an aggregate of $3.0 million of Series A Preferred Stock to such persons
and entities.
In June 1995, CIBC and certain Directors and affiliates of Directors who
purchased Series A Preferred Stock in June 1994 purchased approximately $4.2
million in Series B Preferred Stock of Orion. This purchase was pursuant to an
option granted in June 1994 to purchase $1 of preferred stock similar to the
Series A Preferred Stock for each $3 of Series A Preferred Stock purchased in
June 1994, except that such similar preferred stock would be convertible at any
time into Common Stock at a price within a range from $10.20 to $17.00 per share
of Common Stock based upon when the option is exercised. The Series B Preferred
Stock has rights, designations and preferences substantially similar to those of
the Series A Preferred Stock discussed above, except that the Series B Preferred
Stock is convertible into Common Stock at an initial price of $10.20 per share,
subject to certain anti-dilution adjustments, and purchase of Series B Preferred
Stock did not result in the purchasers receiving any rights to purchase
additional preferred stock. The purchasers of the Series B Preferred Stock also
were granted certain warrants (issued concurrently with the Preferred Stock) to
purchase Common Stock at the conversion price of such Series B Preferred Stock.
These warrants do not become exercisable unless Orion exercises its right to
repurchase the Series B Preferred Stock at the liquidation value (plus accrued
and unpaid dividends).
Warrants
In May 1994, in connection with the sale of Common Stock to SS/L discussed
under "Common Stock" above, Orion granted an option to SS/L to purchase 588,235
shares of Common Stock at a price of $8.50 per share prior to January 1, 1995,
which option has expired.
In June 1994, in connection with the sale of Series A Preferred Stock
discussed under "Preferred Stock" above, Orion granted an option to the holders
of Series A Preferred Stock to invest an additional $4.8 million in similar
preferred stock (except that such similar preferred stock would be convertible
at any time into Common Stock at a price based upon when the option is exercised
within a range from $10.20 to $17.00 per share of Common Stock). The purchase of
Series B Preferred Stock in June 1995 represented an exercise of the right to
invest approximately $4.5 million of this amount. Orion also granted the holders
of Preferred Stock certain warrants to purchase Common Stock at the conversion
price of such Preferred Stock. These warrants do not become exercisable unless
Orion exercises its right to repurchase the Preferred Stock at the liquidation
value (plus accrued and unpaid dividends).
In December 1996, Orion issued an option to DACOM to purchase 50,000 shares
of Common Stock at a price of $14.00 per share. The warrant is exercisable for a
six (6) month period beginning six (6) months after the commencement date, as
defined in the Joint Investment Agreement, and ending one (1) year after the
commencement date and will terminate at that time or at any time the Joint
Investment Agreement between DACOM and Orion is terminated.
II-7
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
1.1 Form of Underwriting Agreement
2.1 Agreement and Plan of Merger, dated January 8, 1997, by and among Orion
Network Systems, Inc., Orion Newco Services, Inc. and Orion Merger
Company, Inc. (Incorporated by reference to exhibit number 2.1 in
Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services,
Inc.) 3.1 Form of Restated Certificate of Incorporation of Orion Newco
Services, Inc. (Incorporated by reference to exhibit number 3.1 in
Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services,
Inc.)
3.2 Bylaws of Orion Newco Services, Inc. (Incorporated by reference to exhibit
number 3.2 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
3.3 Certificate of Incorporation of Orion Network Systems, Inc. (Incorporated
by reference to exhibit number 3.1 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.)
3.4 Bylaws of Orion Network Systems, Inc. (Incorporated by reference to
exhibit number 3.2 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
3.5 Certificate of Incorporation of Orion Satellite Corporation
3.6 Bylaws of Orion Satellite Corporation
3.7 Certificate of Limited Partnership of International Private Satellite
Partners, L.P.
3.8 Form of Third Amended and Restated Agreement of Limited Partnership of
International Private Satellite Partners, L.P.
3.9 Certificate of Incorporation of OrionNet, Inc.
3.10 Bylaws of OrionNet, Inc.
3.11 Certificate of Incorporation of Orion Asia Pacific Corporation
3.12 Bylaws of Orion Asia Pacific Corporation
3.13 Certificate of Incorporation OrionNet Finance Corporation
3.14 Bylaws of OrionNet Finance Corporation
3.15 Certificate of Incorporation of Asia Pacific Space and Communications,
Ltd.
3.16 Bylaws of Asia Pacific Space and Communications, Ltd.
3.17 Certificate of Incorporation of Orion Atlantic Europe, Inc.
3.18 Bylaws of Orion Atlantic Europe, Inc.
4.1 Form of Senior Note Indenture and Form of Note included therein
4.2 Form of Senior Discount Note Indenture and Form of Note included therein
4.3 Form of Collateral Pledge and Security Agreement
4.4 INTENTIONALLY OMITTED
4.5 Form of Warrant Agreement, by and between Orion and Bankers Trust Company,
and Form of Warrant included therein
4.6 Forms of Warrant issued by Orion. (Incorporated by reference to exhibit
number 4.1 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
4.7 Forms of Warrant issued by Orion to holders of Preferred Stock.
(Incorporated by reference to exhibit number 4.2 in Registration Statement
No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
4.8 Forms of Certificates of Designation of Series A 8% Cumulative Redeemable
Convertible Preferred Stock, Series B 8% Cumulative Redeemable Convertible
Preferred Stock and Series C 6% Cumulative Redeemable Convertible
Preferred Stock of Orion. (Incorporated by reference to exhibit number 4.3
in Registration Statement No. 333-19795 on Form S-4 of Orion Newco
Services, Inc.)
4.9 Forms of Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock certificates of Orion. (Incorporated by reference to
exhibit number 4.4 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
II-8
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
4.10 Form of Common Stock Certificate of Orion. (Incorporated by reference to
exhibit number 4.5 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
4.11 Forms of Certificates of Designation of Series A 8% Cumulative Redeemable
Convertible Preferred Stock and Series B 8% Cumulative Redeemable
Convertible Preferred Stock of Orion Network Systems, Inc. (Incorporated
by reference to exhibit number 4.4 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.).
4.12 Form of Warrant issued to DACOM Corp. (Incorporated by reference to
exhibit number 4.6 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
4.13 Debenture Purchase Agreement, dated January 13, 1997, with British
Aerospace and Matra Marconi Space (Incorporated by reference to exhibit
number 4.7 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
5.1 Opinion of Hogan & Hartson L.L.P.
8.1 Opinion of Hogan & Hartson L.L.P. with respect to certain tax matters
10.1 Second Amended and Restated Purchase Agreement, dated September 26, 1991
("Satellite Contract") by and between OrionSat and British Aerospace PLC
and the First Amendment, dated as of September 15, 1992, Second Amendment,
dated as of November 9, 1992, Third Amendment, dated as of March 12, 1993,
Fourth Amendment, dated as of April 15, 1993, Fifth Amendment, dated as of
September 22, 1993, Sixth Amendment, dated as of April 6, 1994, Seventh
Amendment, dated as of August 9, 1994, Eighth Amendment, dated as of
December 8, 1994, and Amendment No. 9 dated October 24, 1995, thereto.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.]
(Incorporated by reference to exhibits number 10.13 and 10.14 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.2 Restated Amendment No. 10 dated December 10, 1996, between Orion Atlantic
and Matra Marconi Space to the Second Amended and Restated Purchase
Agreement, dated September 26, 1991 by and between OrionSat and British
Aerospace PLC (which contract and prior exhibits thereto were incorporated
by reference as exhibit number 10.1). (Incorporated by reference to
exhibit number 10.2 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
10.3 Ground Support System Agreement, dated as of August 2, 1991, by and
between Orion Atlantic and Telespazio S.p.A. [CONFIDENTIAL TREATMENT HAS
BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.25 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.4 Italian Facility and Services Agreement, dated as of August 2, 1991, by
and between OrionSat and Telespazio S.p.A. as amended by the amendment
thereto, dated March 19, 1994. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED
FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit
number 10.26 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
10.5 Contract for a Satellite Control System, dated December 7, 1992, by and
between Orion Atlantic, Telespazio S.p.A. and Martin Marietta Corporation.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.31 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.6 Credit Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, OrionSat and General Electric Capital Corporation ("GECC").
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.32 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.7 Security Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, OrionSat and GECC. (Incorporated by reference to exhibit number
10.33 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.8 Assignment and Security Agreement, dated as of November 23, 1993, by and
between Orion Atlantic, OrionSat and GECC. (Incorporated by reference to
exhibit number 10.34 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.9 Consent and Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, Martin Marietta Corporation and GECC. (Incorporated by reference
to exhibit number 10.35 in Registration Statement No. 33-80518 on Form S-1
of Orion Network Systems, Inc.)
10.10 Deed of Trust, dated as of November 23, 1993, by and between Orion
Atlantic, W. Allen Ames, Jr. and Michael J. Schwel, as Trustees, and GECC.
(Incorporated by reference to exhibit number 10.37 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
II-9
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
10.11 Lease Agreement, dated as of November 23, 1993, by and between OrionNet,
Inc. and Orion Atlantic, as amended by an Amendment, dated January 3,
1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE
DOCUMENTS.] (Incorporated by reference to exhibit number 10.38 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.12 Note for Interim Loans, dated as of November 23, 1993, by and between
Orion Atlantic and GECC. (Incorporated by reference to exhibit number
10.42 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.13 Sales Representation Agreement and Ground Operations Service Agreement,
each dated as of May 1, 1994 and June 30, 1994, by and between each of
OrionNet, Inc. and Kingston Communications, respectively, and Orion
Atlantic, as amended by side agreements, dated May 1, 1994, July 12, 1994
and February 1, 1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number
10.43 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.14 Lease Agreement, dated as of October 2, 1992, by and between OrionNet and
Research Grove Associates, as amended by Amendment No. 1, dated March 26,
1993, Amendment No. 2, dated August 23, 1993, and Amendment No. 3, dated
December 20, 1993. (Incorporated by reference to exhibit number 10.39 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.15 Sales Representation Agreement and Ground Operations Service Agreement,
dated as of June 30, 1995, by and between MCN Sat Service, S.A. and Orion
Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS
DOCUMENT.] (Incorporated by reference to exhibit number 10.69 in Orion's
Registration Statement No. 33-80518 on Form S-1.)
10.16 Volume Purchase Agreement, dated January 18, 1995, by and between the
Company and Dornier GmbH. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number
10.66 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.17 Product Development, License and Marketing Agreement, dated January 18,
1995, by and between the Company and Dornier GmbH. [CONFIDENTIAL TREATMENT
HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by
reference to exhibit number 10.65 in Orion's Registration Statement No.
33-80518 on Form S-1.)
10.18 Sales Representation Agreement, dated as of June 8, 1995, by and between
Nortel Dasa Network Systems GmbH & Co. KG and Orion Atlantic.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.70 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.19 Orion 2 Spacecraft Purchase Contract, dated July 31, 1996, between Orion
Atlantic and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED
FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit
number 10.19 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
10.20 Orion's Amended and Restated 1987 Stock Option Plan as amended.
(Incorporated by reference to exhibit number 10.23 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.21 Purchase Contract, dated December 4, 1991, by and between OrionNet, Inc.,
Shenandoah Valley Leasing Company and MCI Telecommunications Corporation.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTION OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.30 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.22 Amended and Restated Partnership Agreement of Orion Financial Partnership,
dated as of April 15, 1994, by and between OrionNet and Computer Leasing
Inc. ("CLI"). (Incorporated by reference to exhibit number 10.44 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.23 Continuing Guaranty, dated as of April 15, 1994, of the Company of the
obligations of OrionNet Finance Corporation. (Incorporated by reference to
exhibit number 10.45 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.24 Release of Continuing Guaranty, dated as of December 29, 1994, by the
Orion Financial Partnership. (Incorporated by reference to exhibit number
10.46 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.25 Confirmation of Continuing Guaranty, dated as of December 29, 1994, of the
Company of the obligation of OFC. (Incorporated by reference to exhibit
number 10.47 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
II-10
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
10.26 Continuing Guarantee, dated as of December 29, 1994, by Lessor Capital
Funding Limited Partnership in favor of Orion Financial Partnership.
(Incorporated by reference to exhibit number 10.48 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.27 Master Lease Agreement, dated as of April 15, 1994, by and between
OrionNet and Orion Financial Partnership. (Incorporated by reference to
exhibit number 10.49 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.28 Collateral Assignment and Pledge and Security Agreement, dated April 22,
1994, by and between CLI and Orion Financial Partnership. (Incorporated by
reference to exhibit number 10.50 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.)
10.29 Purchase Agreement, dated as of April 22, 1994, by and between OrionNet
and Orion Financial Partnership. (Incorporated by reference to exhibit
number 10.51 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
10.30 Stock Purchase Agreement, dated as of April 29, 1994, by and between the
Company and SS/L. (Incorporated by reference to exhibit number 10.53 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.31 Registration Rights Agreement, dated as of April 29, 1994, by and between
the Company and SS/L. (Incorporated by reference to exhibit number 10.54
in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.32 Purchase Agreement, dated as of June 17, 1994, by and between the Company,
CIBC, Fleet and Chisholm. (Incorporated by reference to exhibit number
10.55 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.33 Stockholders Agreement, dated as of June 17, 1994, by and between the
Company, CIBC, Fleet, Chisholm and certain principal stockholders of the
Company. (Incorporated by reference to exhibit number 10.56 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.34 Registration Rights Agreement, dated as of June 17, 1994, by and between
the Company, CIBC, Fleet and Chisholm. (Incorporated by reference to
exhibit number 10.57 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.35 Purchase Agreement, dated as of June 19, 1995, by and among the Company,
CIBC, Fleet and an affiliate of Fleet. (Incorporated by reference to
exhibit number 10.58 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.36 Definitive Agreement, dated April 26, 1990, by and between Orion Asia
Pacific and the Republic of the Marshall Islands and a Stock Option
Agreement related thereto. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number
10.60 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.37 Option Agreement, dated December 10, 1996, by and between Orion Atlantic
and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number
10.37 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco
Services, Inc.)
10.38 Memorandum of Agreement for the Procurement of Orion 2 Spacecraft, dated
December 19, 1996, by and between Orion Atlantic and Matra Marconi Space.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.38 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.39 TT&C Earth Station Agreement, dated as of November 11, 1996, by and
between Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS
BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.39 in Registration Statement No. 333-19795 on Form S-4
of Orion Newco Services, Inc.)
10.40 Joint Investment Agreement, dated as of November 11, 1996, by and between
Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS BEEN
GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.40 in Registration Statement No. 333-19795 on Form S-4
of Orion Newco Services, Inc.)
10.41 Orion Network Systems, Inc. Employee Stock Purchase Plan (Incorporated by
reference to exhibit number 4.4 in Registration Statement No. 333-19021 on
Form S-8 of Orion Network Systems, Inc.)
10.42 Orion Network Systems, Inc. 401(k) Profit Sharing Plan (Incorporated by
reference to exhibit number 4.5 in Registration Statement No. 333-19021 on
Form S-8 of Orion Network Systems, Inc.)
II-11
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
10.43 Orion Network Systems, Inc. Non-Employee Director Stock Option Plan
(Incorporated by reference to exhibit number 10.43 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.44 Exchange Agreement dated June 1996 among Orion Network Systems, Orion
Atlantic, OrionSat and the Limited Partners (Incorporated by reference to
exhibit 10 in Current Report on Form 8-K dated December 20, 1996, of Orion
Network Systems, Inc.)
10.45 First Amendment to Exchange Agreement dated December 1996 among Orion
Network Systems, Orion Atlantic, OrionSat and the Limited Partners.
(Incorporated by reference to exhibit number 10.45 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.46 Redemption Agreement dated November 21, 1995, by and between STET and
Orion Atlantic, the promissory notes delivered thereunder and Instrument
of Redemption relating thereto. (Incorporated by reference to exhibit
number 10.1 in Current Report on Form 8-K dated November 21, 1995 of Orion
Network Systems, Inc.)
10.47 IPSP-Telecom Italia Agreement dated November 21, 1995, by and between
Telecom Italia and Orion Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN
GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.2 in Current Report on Form 8-K dated November 21, 1995
of Orion Network Systems, Inc.)
10.48 Indemnity Agreement dated November 21, 1995, by and among Telecom Italia,
Orion Atlantic, Orion and STET. (Incorporated by reference to exhibit
number 10.3 in Current Report on Form 8-K dated November 21, 1995 of Orion
Network Systems, Inc.)
10.49 Subscription Agreement dated November 21, 1995, by and between Orion and
Orion Atlantic, and the promissory note delivered thereunder.
(Incorporated by reference to exhibit number 10.5 in Current Report on
Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.).
10.50 First Amendment to the Italian Facility and Services Agreement dated
November 21, 1995, by and between Orion Atlantic and Nuova Telespazio.
(Incorporated by reference to exhibit number 10.7 in Current Report on
Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.).
10.51 Registration Rights Agreement, dated January 13, 1997, by and among Orion
Newco Services, Inc., British Aerospace Holdings, Inc. and Matra Marconi
Space. (Incorporated by reference to exhibit number 10.51 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.52 Orion 3 Spacecraft Purchase Contract, dated January 15, 1997, by and among
Hughes Space and Communications International, Inc., Orion Asia Pacific
Corporation and Orion Network Systems. [CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED FOR PORTIONS OF THIS DOCUMENT. THE CONFIDENTIAL PORTIONS HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21.1 List of subsidiaries of Orion. (Incorporated by references to exhibit
number 21.1 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hogan & Hartson L.L.P. (included in their opinion filed as
Exhibit 5.1).
23.3 Consent of Ascent Communications Advisors, L.P.
24.1 Powers of Attorney (included on the signature pages of the Registration
Statement).
26.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended of Bankers Trust Company as trustee.
99.1 Orders of FCC regarding OrionSat. (Incorporated by reference to exhibit
number 99.1 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.).
99.2 Valuation for Orion Atlantic as of December 1, 1996, by Ascent
Communications Advisors, L.P. (Included as 9 Attachment A to the
Prospectus which is a part of this Registration Statement.)
II-12
<PAGE>
(b) Financial Statements and Schedules:
(1) Financial Statements
Thefinancial statements filed as part of this Registration Statement are
listed in the Index to Financial Statements on page F-1.
(2) Schedules
The financial statement schedules of the Company have been omitted because
the information required to be set forth therein is not applicable or is
shown in the Financial Statements or Notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(c) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrants
pursuant to the foregoing provisions, or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission such
II-13
<PAGE>
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORION NEWCO SERVICES, INC.
By: /s/ W. Neil Bauer*
------------------------------------
W. Neil Bauer
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ----------------------- ------------------------------------ ------------------
/s/ W. Neil Bauer* President and Director January 28, 1997
- ---------------------- (Principal Executive Officer)
W. Neil Bauer
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ---------------------- Officer and Treasurer and
David J. Frear Financial Officer and
Director (Principal
Principal Accounting Officer)
/s/ Richard H. Shay* Director January 28, 1997
- ----------------------
Richard H. Shay
*By: /s/ David J. Frear
- -------------------------
David J. Frear
Attorney-in-Fact
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORION NETWORK SERVICES, INC.
By: /s/ W. Neil Bauer*
-------------------------------------
W. Neil Bauer
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- -------------------------- ------------------------------ ---------------------
/s/ W. Neil Bauer* President, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Treasurer
David J. Frear (Principal Financial Officer
and Principal Accounting Officer)
/s/ Gustave M. Hauser* Chairman and Director January 28, 1997
- -----------------------
Gustave M. Hauser
/s/ John V. Saeman* Director January 28, 1997
- -----------------------
John V. Saeman
/s/ John G. Puente* Director January 28, 1997
- -----------------------
John G. Puente
/s/ Richard J. Brekka* Director January 28, 1997
- -----------------------
Richard J. Brekka
/s/ Warren B. French, Jr.* Director January 28, 1997
- -----------------------
Warren B. French, Jr.
/s/ Sidney S. Kahn* Director January 28, 1997
- -----------------------
Sidney S. Kahn
Director January , 1997
- -----------------------
W. Anthony Rice
II-16
<PAGE>
SIGNATURE TITLE DATE
- ----------------------------- ------------------------- ----------------------
/s/ Robert M. Van Degna* Director January 28, 1997
- -----------------------
Robert M. Van Degna
/s/ Barry Horowitz* Director January 28, 1997
- -----------------------
Barry Horowitz
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORION SATELLITE CORPORATION
By: /s/ W. Neil Bauer*
--------------------------------------
W. Neil Bauer
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ Douglas Newman* President and Director January 28, 1997
- -----------------------
Douglas Newman
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
INTERNATIONAL PRIVATE SATELLITE
PARTNERS, L.P.
BY: ORION SATELLITE CORPORATION
By: /s/ W. Neil Bauer*
-----------------------------------------
W. Neil Bauer
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ Douglas Newman* President and Director January 28, 1997
- -----------------------
Douglas Newman
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORIONNET, INC.
By: /s/ W. Neil Bauer*
--------------------------------
W. Neil Bauer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORION ASIA PACIFIC CORPORATION
By: /s/ W. Neil Bauer*
-----------------------------------
W. Neil Bauer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ASIA PACIFIC SPACE AND
COMMUNICATIONS, INC.
By: /s/ W. Neil Bauer*
-------------------------------------
W. Neil Bauer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January285, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORIONNET FINANCE CORPORATION
By: /s/ W. Neil Bauer*
-------------------------------------
W. Neil Bauer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rockville, State of Maryland, on the 28th day of January, 1997.
ORION ATLANTIC EUROPE, INC.
By: /s/ W. Neil Bauer*
-------------------------------------
W. Neil Bauer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------------------ -------------------
/s/ W. Neil Bauer* Chairman, Chief Executive January 28, 1997
- ----------------------- Officer and Director
W. Neil Bauer (Principal Executive Officer)
/s/ David J. Frear Vice President, Chief Financial January 28, 1997
- ----------------------- Officer and Director
David J. Frear (Principal Financial Officer
and Principal Accounting
Officer)
*By: /s/ David J. Frear
- -----------------------
David J. Frear
Attorney-in-Fact
II-24
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1997
REGISTRATION NO. 333-19167
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
EXHIBITS
TO
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
ORION NETWORK SYSTEMS, INC.*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
================================================================================
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
<S> <C>
1.1 Form of Underwriting Agreement
2.1 Agreement and Plan of Merger, dated January 8, 1997, by and among Orion
Network Systems, Inc., Orion Newco Services, Inc. and Orion Merger
Company, Inc. (Incorporated by reference to exhibit number 2.1 in
Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services,
Inc.) 3.1 Form of Restated Certificate of Incorporation of Orion Newco
Services, Inc. (Incorporated by reference to exhibit number 3.1 in
Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services,
Inc.)
3.2 Bylaws of Orion Newco Services, Inc. (Incorporated by reference to exhibit
number 3.2 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
3.3 Certificate of Incorporation of Orion Network Systems, Inc. (Incorporated
by reference to exhibit number 3.1 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.)
3.4 Bylaws of Orion Network Systems, Inc. (Incorporated by reference to
exhibit number 3.2 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
3.5 Certificate of Incorporation of Orion Satellite Corporation
3.6 Bylaws of Orion Satellite Corporation
3.7 Certificate of Limited Partnership of International Private Satellite
Partners, L.P.
3.8 Form of Third Amended and Restated Agreement of Limited Partnership of
International Private Satellite Partners, L.P.
3.9 Certificate of Incorporation of OrionNet, Inc.
3.10 Bylaws of OrionNet, Inc.
3.11 Certificate of Incorporation of Orion Asia Pacific Corporation
3.12 Bylaws of Orion Asia Pacific Corporation
3.13 Certificate of Incorporation OrionNet Finance Corporation
3.14 Bylaws of OrionNet Finance Corporation
3.15 Certificate of Incorporation of Asia Pacific Space and Communications, Ltd.
3.16 Bylaws of Asia Pacific Space and Communications, Ltd.
3.17 Certificate of Incorporation of Orion Atlantic Europe, Inc.
3.18 Bylaws of Orion Atlantic Europe, Inc.
4.1 Form of Senior Note Indenture and Form of Note included therein
4.2 Form of Senior Discount Note Indenture and Form of Note included therein
4.3 Form of Collateral Pledge and Security Agreement
4.4 INTENTIONALLY OMITTED
4.5 Form of Warrant Agreement, by and between Orion and Bankers Trust Company,
and Form of Warrant included therein
4.6 Forms of Warrant issued by Orion. (Incorporated by reference to exhibit
number 4.1 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
4.7 Forms of Warrant issued by Orion to holders of Preferred Stock.
(Incorporated by reference to exhibit number 4.2 in Registration Statement
No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
4.8 Forms of Certificates of Designation of Series A 8% Cumulative Redeemable
Convertible Preferred Stock, Series B 8% Cumulative Redeemable Convertible
Preferred Stock and Series C 6% Cumulative Redeemable Convertible
Preferred Stock of Orion. (Incorporated by reference to exhibit number 4.3
in Registration Statement No. 333-19795 on Form S-4 of Orion Newco
Services, Inc.)
<PAGE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
4.9 Forms of Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock certificates of Orion. (Incorporated by reference to
exhibit number 4.4 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
4.10 Form of Common Stock Certificate of Orion. (Incorporated by reference to
exhibit number 4.5 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
4.11 Forms of Certificates of Designation of Series A 8% Cumulative Redeemable
Convertible Preferred Stock and Series B 8% Cumulative Redeemable
Convertible Preferred Stock of Orion Network Systems, Inc. (Incorporated
by reference to exhibit number 4.4 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.).
4.12 Form of Warrant issued to DACOM Corp. (Incorporated by reference to
exhibit number 4.6 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
4.13 Debenture Purchase Agreement, dated January 13, 1997, with British
Aerospace and Matra Marconi Space (Incorporated by reference to exhibit
number 4.7 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
5.1 Opinion of Hogan & Hartson L.L.P.
8.1 Opinion of Hogan & Hartson L.L.P. with respect to certain tax matters
10.1 Second Amended and Restated Purchase Agreement, dated September 26, 1991
("Satellite Contract") by and between OrionSat and British Aerospace PLC
and the First Amendment, dated as of September 15, 1992, Second Amendment,
dated as of November 9, 1992, Third Amendment, dated as of March 12, 1993,
Fourth Amendment, dated as of April 15, 1993, Fifth Amendment, dated as of
September 22, 1993, Sixth Amendment, dated as of April 6, 1994, Seventh
Amendment, dated as of August 9, 1994, Eighth Amendment, dated as of
December 8, 1994, and Amendment No. 9 dated October 24, 1995, thereto.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.]
(Incorporated by reference to exhibits number 10.13 and 10.14 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.2 Restated Amendment No. 10 dated December 10, 1996, between Orion Atlantic
and Matra Marconi Space to the Second Amended and Restated Purchase
Agreement, dated September 26, 1991 by and between OrionSat and British
Aerospace PLC (which contract and prior exhibits thereto were incorporated
by reference as exhibit number 10.1). (Incorporated by reference to
exhibit number 10.2 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
10.3 Ground Support System Agreement, dated as of August 2, 1991, by and
between Orion Atlantic and Telespazio S.p.A. [CONFIDENTIAL TREATMENT HAS
BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.25 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.4 Italian Facility and Services Agreement, dated as of August 2, 1991, by
and between OrionSat and Telespazio S.p.A. as amended by the amendment
thereto, dated March 19, 1994. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED
FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit
number 10.26 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
10.5 Contract for a Satellite Control System, dated December 7, 1992, by and
between Orion Atlantic, Telespazio S.p.A. and Martin Marietta Corporation.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.31 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.6 Credit Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, OrionSat and General Electric Capital Corporation ("GECC").
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.32 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
<PAGE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
10.7 Security Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, OrionSat and GECC. (Incorporated by reference to exhibit number
10.33 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.8 Assignment and Security Agreement, dated as of November 23, 1993, by and
between Orion Atlantic, OrionSat and GECC. (Incorporated by reference to
exhibit number 10.34 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.9 Consent and Agreement, dated as of November 23, 1993, by and between Orion
Atlantic, Martin Marietta Corporation and GECC. (Incorporated by reference
to exhibit number 10.35 in Registration Statement No. 33-80518 on Form S-1
of Orion Network Systems, Inc.)
10.10 Deed of Trust, dated as of November 23, 1993, by and between Orion
Atlantic, W. Allen Ames, Jr. and Michael J. Schwel, as Trustees, and GECC.
(Incorporated by reference to exhibit number 10.37 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.11 Lease Agreement, dated as of November 23, 1993, by and between OrionNet,
Inc. and Orion Atlantic, as amended by an Amendment, dated January 3,
1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE
DOCUMENTS.] (Incorporated by reference to exhibit number 10.38 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.12 Note for Interim Loans, dated as of November 23, 1993, by and between
Orion Atlantic and GECC. (Incorporated by reference to exhibit number
10.42 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.13 Sales Representation Agreement and Ground Operations Service Agreement,
each dated as of May 1, 1994 and June 30, 1994, by and between each of
OrionNet, Inc. and Kingston Communications, respectively, and Orion
Atlantic, as amended by side agreements, dated May 1, 1994, July 12, 1994
and February 1, 1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number
10.43 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.14 Lease Agreement, dated as of October 2, 1992, by and between OrionNet and
Research Grove Associates, as amended by Amendment No. 1, dated March 26,
1993, Amendment No. 2, dated August 23, 1993, and Amendment No. 3, dated
December 20, 1993. (Incorporated by reference to exhibit number 10.39 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.15 Sales Representation Agreement and Ground Operations Service Agreement,
dated as of June 30, 1995, by and between MCN Sat Service, S.A. and Orion
Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS
DOCUMENT.] (Incorporated by reference to exhibit number 10.69 in Orion's
Registration Statement No. 33-80518 on Form S-1.)
10.16 Volume Purchase Agreement, dated January 18, 1995, by and between the
Company and Dornier GmbH. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number
10.66 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.17 Product Development, License and Marketing Agreement, dated January 18,
1995, by and between the Company and Dornier GmbH. [CONFIDENTIAL TREATMENT
HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by
reference to exhibit number 10.65 in Orion's Registration Statement No.
33-80518 on Form S-1.)
10.18 Sales Representation Agreement, dated as of June 8, 1995, by and between
Nortel Dasa Network Systems GmbH & Co. KG and Orion Atlantic.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.70 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
<PAGE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
10.19 Orion 2 Spacecraft Purchase Contract, dated July 31, 1996, between Orion
Atlantic and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED
FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit
number 10.19 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
10.20 Orion's Amended and Restated 1987 Stock Option Plan as amended.
(Incorporated by reference to exhibit number 10.23 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.21 Purchase Contract, dated December 4, 1991, by and between OrionNet, Inc.,
Shenandoah Valley Leasing Company and MCI Telecommunications Corporation.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTION OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.30 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.22 Amended and Restated Partnership Agreement of Orion Financial Partnership,
dated as of April 15, 1994, by and between OrionNet and Computer Leasing
Inc. ("CLI"). (Incorporated by reference to exhibit number 10.44 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.23 Continuing Guaranty, dated as of April 15, 1994, of the Company of the
obligations of OrionNet Finance Corporation. (Incorporated by reference to
exhibit number 10.45 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.24 Release of Continuing Guaranty, dated as of December 29, 1994, by the
Orion Financial Partnership. (Incorporated by reference to exhibit number
10.46 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.25 Confirmation of Continuing Guaranty, dated as of December 29, 1994, of the
Company of the obligation of OFC. (Incorporated by reference to exhibit
number 10.47 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
10.26 Continuing Guarantee, dated as of December 29, 1994, by Lessor Capital
Funding Limited Partnership in favor of Orion Financial Partnership.
(Incorporated by reference to exhibit number 10.48 in Registration
Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.)
10.27 Master Lease Agreement, dated as of April 15, 1994, by and between
OrionNet and Orion Financial Partnership. (Incorporated by reference to
exhibit number 10.49 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.28 Collateral Assignment and Pledge and Security Agreement, dated April 22,
1994, by and between CLI and Orion Financial Partnership. (Incorporated by
reference to exhibit number 10.50 in Registration Statement No. 33-80518
on Form S-1 of Orion Network Systems, Inc.)
10.29 Purchase Agreement, dated as of April 22, 1994, by and between OrionNet
and Orion Financial Partnership. (Incorporated by reference to exhibit
number 10.51 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.)
10.30 Stock Purchase Agreement, dated as of April 29, 1994, by and between the
Company and SS/L. (Incorporated by reference to exhibit number 10.53 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
10.31 Registration Rights Agreement, dated as of April 29, 1994, by and between
the Company and SS/L. (Incorporated by reference to exhibit number 10.54
in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.32 Purchase Agreement, dated as of June 17, 1994, by and between the Company,
CIBC, Fleet and Chisholm. (Incorporated by reference to exhibit number
10.55 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.33 Stockholders Agreement, dated as of June 17, 1994, by and between the
Company, CIBC, Fleet, Chisholm and certain principal stockholders of the
Company. (Incorporated by reference to exhibit number 10.56 in
Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems,
Inc.)
<PAGE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
10.34 Registration Rights Agreement, dated as of June 17, 1994, by and between
the Company, CIBC, Fleet and Chisholm. (Incorporated by reference to
exhibit number 10.57 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.35 Purchase Agreement, dated as of June 19, 1995, by and among the Company,
CIBC, Fleet and an affiliate of Fleet. (Incorporated by reference to
exhibit number 10.58 in Registration Statement No. 33-80518 on Form S-1 of
Orion Network Systems, Inc.)
10.36 Definitive Agreement, dated April 26, 1990, by and between Orion Asia
Pacific and the Republic of the Marshall Islands and a Stock Option
Agreement related thereto. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number
10.60 in Registration Statement No. 33-80518 on Form S-1 of Orion Network
Systems, Inc.)
10.37 Option Agreement, dated December 10, 1996, by and between Orion Atlantic
and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR
PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number
10.37 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco
Services, Inc.)
10.38 Memorandum of Agreement for the Procurement of Orion 2 Spacecraft, dated
December 19, 1996, by and between Orion Atlantic and Matra Marconi Space.
[CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.]
(Incorporated by reference to exhibit number 10.38 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.39 TT&C Earth Station Agreement, dated as of November 11, 1996, by and
between Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS
BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.39 in Registration Statement No. 333-19795 on Form S-4
of Orion Newco Services, Inc.)
10.40 Joint Investment Agreement, dated as of November 11, 1996, by and between
Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS BEEN
GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.40 in Registration Statement No. 333-19795 on Form S-4
of Orion Newco Services, Inc.)
10.41 Orion Network Systems, Inc. Employee Stock Purchase Plan (Incorporated by
reference to exhibit number 4.4 in Registration Statement No. 333-19021 on
Form S-8 of Orion Network Systems, Inc.)
10.42 Orion Network Systems, Inc. 401(k) Profit Sharing Plan (Incorporated by
reference to exhibit number 4.5 in Registration Statement No. 333-19021 on
Form S-8 of Orion Network Systems, Inc.)
10.43 Orion Network Systems, Inc. Non-Employee Director Stock Option Plan
(Incorporated by reference to exhibit number 10.43 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.44 Exchange Agreement dated June 1996 among Orion Network Systems, Orion
Atlantic, OrionSat and the Limited Partners (Incorporated by reference to
exhibit 10 in Current Report on Form 8-K dated December 20, 1996, of Orion
Network Systems, Inc.)
10.45 First Amendment to Exchange Agreement dated December 1996 among Orion
Network Systems, Orion Atlantic, OrionSat and the Limited Partners.
(Incorporated by reference to exhibit number 10.45 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.46 Redemption Agreement dated November 21, 1995, by and between STET and
Orion Atlantic, the promissory notes delivered thereunder and Instrument
of Redemption relating thereto. (Incorporated by reference to exhibit
number 10.1 in Current Report on Form 8-K dated November 21, 1995 of Orion
Network Systems, Inc.)
10.47 IPSP-Telecom Italia Agreement dated November 21, 1995, by and between
Telecom Italia and Orion Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN
GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to
exhibit number 10.2 in Current Report on Form 8-K dated November 21, 1995
of Orion Network Systems, Inc.)
<PAGE>
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- -------- ----------- ------
10.48 Indemnity Agreement dated November 21, 1995, by and among Telecom Italia,
Orion Atlantic, Orion and STET. (Incorporated by reference to exhibit
number 10.3 in Current Report on Form 8-K dated November 21, 1995 of Orion
Network Systems, Inc.)
10.49 Subscription Agreement dated November 21, 1995, by and between Orion and
Orion Atlantic, and the promissory note delivered thereunder.
(Incorporated by reference to exhibit number 10.5 in Current Report on
Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.).
10.50 First Amendment to the Italian Facility and Services Agreement dated
November 21, 1995, by and between Orion Atlantic and Nuova Telespazio.
(Incorporated by reference to exhibit number 10.7 in Current Report on
Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.).
10.51 Registration Rights Agreement, dated January 13, 1997, by and among Orion
Newco Services, Inc., British Aerospace Holdings, Inc. and Matra Marconi
Space. (Incorporated by reference to exhibit number 10.51 in Registration
Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
10.52 Orion 3 Spacecraft Purchase Contract, dated January 15, 1997, by and among
Hughes Space and Communications International, Inc., Orion Asia Pacific
Corporation and Orion Network Systems. [CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED FOR PORTIONS OF THIS DOCUMENT. THE CONFIDENTIAL PORTIONS HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21.1 List of subsidiaries of Orion. (Incorporated by references to exhibit
number 21.1 in Registration Statement No. 333-19795 on Form S-4 of Orion
Newco Services, Inc.)
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hogan & Hartson L.L.P. (included in their opinion filed as
Exhibit 5.1).
23.3 Consent of Ascent Communications Advisors, L.P.
24.1 Powers of Attorney (included on the signature pages of the Registration
Statement).
26.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended of Bankers Trust Company as trustee.
99.1 Orders of FCC regarding OrionSat. (Incorporated by reference to exhibit
number 99.1 in Registration Statement No. 33-80518 on Form S-1 of Orion
Network Systems, Inc.).
99.2 Valuation for Orion Atlantic as of December 1, 1996, by Ascent
Communications Advisors, L.P. (Included as 9 Attachment A to the
Prospectus which is a part of this Registration Statement.)
</TABLE>
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE
COMMISSION.
The portions of this Exhibit for which confidential treatment has been requested
are marked by brackets([ ]). In addition, an asterisk (*) appears in the right
hand margin of each paragraph in which confidential information is included.
ORION 3 SPACECRAFT PURCHASE CONTRACT
BY AND AMONG
HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC.
AND
ORION ASIA PACIFIC CORPORATION
AND
ORION NETWORK SYSTEMS, INC.
Hughes Contract Number: Orion 3/001/97
PROPRIETARY NOTICE
------------------
The information contained in the Contract is proprietary to Hughes Space and
Communications International, Inc., Orion Asia Pacific Corporation and Orion
Network Systems, Inc. and may not be disclosed or provided to any third party
without the express written consent of Hughes Space and Communications
International, Inc., Orion Asia Pacific Corporation and Orion Network Systems,
Inc.
<PAGE>
TABLE OF CONTENTS
CONTRACT
Contract Articles
Exhibit A - Statement of Work
Exhibit B - Satellite Technical Specifications
Exhibit C - Satellite Product Assurance Plan
Exhibit D - Test Plan
Exhibit E - Ground Segment
Exhibit F - Payment Plan and Termination Liability Amounts
Exhibit G - Schedules to Article 15
Exhibit H - Payload Long - Lead Inventory Items
Exhibit I - Technical Performance
<PAGE>
ORION 3 SATELLITE PURCHASE CONTRACT
CONTRACT ARTICLES
<PAGE>
TABLE OF CONTENTS
-----------------
CONTRACT ARTICLES
ARTICLE 1. DEFINITIONS............................................... 3
ARTICLE 2. SCOPE OF WORK............................................. 15
ARTICLE 3. DELIVERY SCHEDULE......................................... 17
ARTICLE 4. CONTRACT PRICE, INVOICING, PAYMENT AND ADJUSTMENTS........ 18
ARTICLE 5. SATELLITE PERFORMANCE INCENTIVE PAYMENTS.................. 24
ARTICLE 6. LAUNCH VEHICLE DELAYS..................................... 32
ARTICLE 7. PERMITS AND LICENSES; GOVERNMENT APPROVALS............... 34
ARTICLE 8. PRE-SHIP REVIEW, LAUNCH READINESS REVIEW, IN-ORBIT
ACCEPTANCE AND FINAL ACCEPTANCE........................... 36
ARTICLE 9. TITLE AND RISK OF LOSS.................................... 43
ARTICLE 10. EXCUSABLE DELAYS.......................................... 44
ARTICLE 11. LIQUIDATED DAMAGES FOR LATE DELIVERY...................... 46
ARTICLE 12. ACCESS TO WORK-IN-PROGRESS AND DATA....................... 48
ARTICLE 13. INTER-PARTY WAIVER OF LIABILITY........................... 53
ARTICLE 14. HUGHES' REPRESENTATIONS, WARRANTIES AND COVENANTS......... 54
ARTICLE 15. ORION'S REPRESENTATIONS, WARRANTIES, COVENANTS AND
ACKNOWLEDGMENTS........................................... 57
ARTICLE 16. TAXES AND DUTIES.......................................... 63
ARTICLE 17. TERMINATION AND OTHER RIGHTS.............................. 65
ARTICLE 18. DATA AND SOFTWARE......................................... 74
ARTICLE 19. PATENT INDEMNIFICATION.................................... 76
ARTICLE 20. RIGHTS IN INVENTIONS...................................... 78
ARTICLE 21. PROPRIETARY INFORMATION................................... 81
ARTICLE 22. CHANGES................................................... 84
ARTICLE 23. PUBLICITY................................................. 86
ARTICLE 24. NOTICES................................................... 87
ARTICLE 25. INTEGRATION............................................... 88
ARTICLE 26. ASSIGNMENT OR CHANGE IN OWNERSHIP OR CONTROL.............. 89
ARTICLE 27. SEVERABILITY.............................................. 90
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ARTICLE 28. CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES............... 91
ARTICLE 29. CUSTOMER'S RESPONSIBILITIES................................ 92
ARTICLE 30. APPLICABLE LAW AND DISPUTE RESOLUTION...................... 94
ARTICLE 31. PERFORMANCE COMMENCEMENT DATE.............................. 97
ARTICLE 32. STORAGE.................................................... 98
ARTICLE 33. OPTIONS................................................... 102
ARTICLE 34. LIMITATION OF LIABILITY................................... 110
ARTICLE 35. MISCELLANEOUS............................................. 113
ARTICLE 36. SUBCONTRACTORS............................................ 116
ARTICLE 37. INSURANCE................................................. 117
ARTICLE 38. KEY PERSONNEL............................................. 118
ARTICLE 39. INDEMNIFICATION........................................... 119
Annex A - Form of Certification
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THE CONTRACT (the "Contract") is effective as of the ____ day of January 1997-,
BY AND AMONG:
HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC., a corporation organized and
existing under the laws of the State of Delaware, U.S.A., with a place of
business in El Segundo, California, U.S.A. (hereinafter referred to as "Hughes"
or "Contractor") and
ORION ASIA PACIFIC CORPORATION, a company organized and existing under the laws
of Delaware, U.S.A. with a place of business in Rockville, Maryland, U.S.A.
(hereinafter referred to as "Orion" or "Customer") and
ORION NETWORK SYSTEMS, INC., a company organized and existing under the laws of
Delaware, U.S.A., with a place of business in Rockville, Maryland, U.S.A.
(hereinafter referred to as "ONS").
As used in the Contract, "Party" means either Hughes or Customer or for purposes
of Article 15 and Paragraph 21.10 only, ONS, as appropriate, and "Parties" means
Hughes and Customer.
WHEREAS, Customer desires to procure an HS 601 HP satellite system consisting of
the Satellite to be delivered in orbit with an Operational Lifetime of fifteen
(15) years, related items, including Satellite Control Equipment and related
services, including Launch and Mission Operations and Launch Services, subject
to the terms and conditions hereof;
WHEREAS, Hughes desires to supply such a satellite system in accordance with the
terms and conditions hereof;
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WHEREAS, the Parties entered into an Authorization to Proceed Agreement (the
"ATP" or "ATP Agreement") dated December 13, 1996, pursuant to which Hughes
agreed to commence Work on the Satellite upon payment by Customer to Hughes of
[ ]; *
</TABLE>
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WHEREAS, the Parties agreed in the ATP to negotiate diligently and in good faith
with the aim of finalizing the terms and conditions for the procurement of the
Satellite and related items and services; and
WHEREAS, the Parties have reached agreement on such terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and intending to be legally bound hereby, the Parties agree as
follows:
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ARTICLE 1. DEFINITIONS
1.1 In the Contract, unless the context otherwise requires, the following
terms shall have the meaning stated hereunder:
A. "Affiliate" means, with respect to a Party, any direct or indirect
subsidiaries or parent company of such Party or another subsidiary
of any such parent company.
B. "Aggregate Predicted Transponder Life" or "APTL" means the sum of
the Predicted Transponder Life of each and every Successfully
Operating Transponder embodied in the Satellite.
C. "ATP" or "ATP Agreement" means the Authorization to Proceed
Agreement entered into between Customer and Hughes on December 13,
1996.
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D. "ATP Payment" means the [ ]*
paid by Customer and received by Hughes pursuant to the ATP and
which amount shall be credited as a Progress Payment under the
Contract.
</TABLE>
E. "Authorized Representative" means, in the case of Customer, its
President (or any person designated in writing by the President to
be an Authorized Representative of Customer), in the case of ONS,
its President (or any person designated in writing by the President
to be an Authorized Representative of ONS) and, in the case of
Hughes, its President (or any person designated in writing by the
President to be an Authorized Representative of Hughes).
F. "Available For Shipment" means that the Satellite or the Satellite
Control Equipment ("SCE"), as applicable, has successfully completed
the Pre-Ship Review and, with respect to the SCE, has been
preliminarily accepted by Customer as described in Article 8.
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G. "Balloon Payment" means the Progress Payment in the amount of [ ]*
[ ] required to be paid by
Customer to Hughes on or before [ ], pursuant to the*
Contract.
</TABLE>
H. "Beneficial Access" means, with respect to a Satellite Control
Facility, that all things which Customer is required to do have been
done, and the site is ready in all respects on a 24-hour per day
basis, to permit Hughes to commence SCE installation and/or
satellite tracking, as the case may be, as defined in Exhibit E
(Ground Segment).
I. "Business Day" means a day on which Hughes or Customer is open for
business, as applicable, but excluding Saturdays, Sundays and days
when commercial banks in the States of California or New York are
required or permitted to be closed.
J. "C-Band Repeater" means the repeater with ten (10) C-band
Transponders with beam coverage over all Asia.
K. "CDRL" or "Contract Data Requirements List" means the documentation
listed in Section 12 of Exhibit A (Statement of Work).
L. "Consultant(s)" means a person or organization retained by Customer
or Orion's customers to provide Customer or Orion's customers, as
applicable, with technical advice and identified by Customer to
Hughes as such in accordance with Article 12. For purposes of
Paragraphs 12.4 and 12.12, "Consultant(s)" shall also include any
person retained by Customer or Orion's customers to provide such
technical advice who is not both (i) a Customer employee and (ii) a
United States citizen; Consultant shall also include those Customer
employees who are not U.S. citizens.
M. "Contract" means this written instrument embodying the agreement
between Hughes and Customer and including the Annex and Exhibits
annexed hereto and made a part of the Contract.
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N. "Contract Deliverable Data" means any Technical Data and Information
generated in the performance of the Work under the Contract and
specifically listed in Exhibit A (Statement of Work) as being
deliverable under the Contract.
O. "Contract Price" means the total amount expressed in Article_4
(Contract Price, Invoicing Payment and Adjustments).
P. "Customer Personnel" means Orion employees or representatives,
Orion's Consultants' employees or Orion's customers' employees or
Consultants. See also the definition of "Consultant."
Q. "DACOM" means the Korean telecommunications company that has leased
capacity on the Satellite from Customer.
R. "Day" means a continuous 24-hour period commencing at Midnight
(Greenwich Mean Time).
S. "Deliver" and its derivatives (such as "Delivered" and "Delivery")
shall have the meaning set forth in Article 8.
T. "Delivery Schedule" means the timetable for Delivery set forth in
Article_3 (Delivery Schedule).
U. "Designated Launch Site" means the launch facility provided by the
Launch Provider.
V. "Documentation" means the documentation to be delivered by Hughes to
Customer under the Contract, as more fully described in Exhibit_A
(Statement of Work).
W. "Effective Date of Contract" ("EDC") means the date as of which the
Contract has been duly signed by both Parties.
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X. "Final Acceptance" has the meaning specified in Article 8 (Pre-Ship
Review, Launch Readiness Review, In-Orbit Testing and Final
Acceptance).
Y. "Financing Entity" means any entity (other than Hughes or parties
related to Hughes (e.g., commercial bank, merchant bank, investment
bank, commercial finance organization, corporation or partnership)
providing money on a full or partial debt basis to Customer to fund
construction and delivery of the Satellite.
Z. "Ground Control Software" means the proprietary computer software
programs and related documentation developed by Hughes and provided
under the Contract. Ground Control Software includes the software
program and documentation as they are originally provided, and any
modifications made by Customer and such modifications as may later
be provided in the form of subsequent releases or in any form they
may be converted into by Customer.
AA. "Ground Segment" means all the ground equipment, software, training
and related services including the equipment and software for one
(1) TT&C facility and two (2) Satellite Control Facilities, as more
particularly described in Exhibit E (Ground Segment) and, with
respect to training, Exhibit A (Statement of Work).
AB. "Including" and its derivatives (such as "include" and "includes")
means including without limitation. This term is as defined whether
or not capitalized in the Contract.
AC. "Initial Incentive Amount" means Ten Million U.S. Dollars (U.S.
$10,000,000).
AD. "Initial Payment" means the Eight Million U.S. Dollars (U.S.
$8,000,000) Progress Payment made simultaneously with the Effective
Date of the Contract.
AE. "In-Orbit Acceptance Report" or "In-Orbit Test Report" or "IOT
Report" means that document that is a deliverable item in the CDRL
and as described in Exhibit A (Statement of Work).
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AF. "Intentional Ignition" means the point in time in the ignition
process of a Delta III Launch Vehicle, for the purpose of launch,
when the command signal sent from the launch control console is
received by the Launch Vehicle, which command signal is intended to
and does ignite any of the first stage main engines.
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AG. "Ku-Band 1 Repeater" means the repeater with [ ]*
Ku-band Transponders split among the [ ],*
[ ] beams. *
AH. "Ku-Band 2 Repeater" means the repeater with [ ] Ku-band*
Transponders for [ ]. *
</TABLE>
AI. "Launch" means Intentional Ignition followed by the first
intentional ignition of a Delta III solid rocket motor.
AJ. "Launch and Mission Operations" means the launch
campaign/transportation, launch services, mission planning and
mission services up to the point of Final Acceptance of the
Satellite, as more particularly described in Exhibit A (Statement of
Work).
AK. "Launch Date" means the date scheduled by Hughes and the Launch
Provider as the date for Launch of the Satellite.
AL. "Launch Insurance" means insurance that covers the Satellite from
the period commencing at Intentional Ignition and ending no earlier
than six (6) months after Intentional Ignition.
AM. "Launch Provider" means McDonnell Douglas Corporation or any
successor entity, for example, Boeing.
AN. "Launch Readiness Review" ("LRR") means the review that verifies
that the Designated Launch Site Satellite testing and checkout as
described in Exhibit D
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(Test Plan) has been completed and the Satellite is deemed by the
Parties ready to be turned over to the Launch Provider for
integration with the Launch Vehicle.
AO. "Launch Services" means the standard services which the Launch
Provider provides under its customary launch services agreement.
AP. "Launch Vehicle" means a Delta III launch vehicle.
AQ. "MMS TT & C Software" shall have the meaning specified in Paragraph
33.1.C.
AR. "Operational Lifetime" means the fifteen (15) year performance
period of the Satellite. This performance period commences on (i)
the day when the Satellite is positioned at its Specified Orbital
Location or at a Storage Orbit specified by Customer inside the
stationkeeping box of plus or minus 0.05 degrees and in-orbit
testing has been completed, or (ii) forty-five (45) Days after
Launch, whichever is earlier. In the event that the Satellite has
been placed in a storage orbit, then any such in-orbit storage
period shall be counted in the fifteen (15) year performance period.
AS. "Option Satellite" shall have the meaning ascribed to it in Article
33 (Options).
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AT. [ ] means the [ ] satellite company. *
</TABLE>
AU. "Orion's customer" means DACOM or any other customer of Orion.
AV. "Paid-Over-Time Incentive" means Eight Million U.S. Dollars (U.S.
$8,000,000) to be paid over time by Customer in accordance with
Article_5.
AW. "Performance Commencement Date" (PCD) has the meaning specified in
Article 31 (Performance Commencement Date).
AX. "Performance Incentives" means the Initial Incentive Amount and
Paid-Over-Time Incentive.
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AY. "Person" means any individual, partnership, limited liability
company, corporation, association, trust or other entity, including
any government or political subdivision or any agency, department or
instrumentality thereof.
AZ. "Predicted Transponder Life" or "PTL" means the period of time,
measured in years, over which a Successfully Operating Transponder
can be operated, commencing from the date of Delivery of the
Preliminary In-Orbit Acceptance Report, this period of time being
equal to whichever is the shortest of:
(1) fifteen (15) years, or
(2) the Satellite predicted propellant life calculated in accordance
with HS 601 HP product line propulsion sub-system analysis
methods, the results of which will be documented in the In-Orbit
Acceptance Report, or
(3) the period of time over which there is predicted to be
sufficient solar array power to operate such Successfully
Operating Transponder co-extensively with all other Successfully
Operating Transponders, calculated in accordance with HS 601 HP
product line power sub-system analysis methods, the results of
which will be documented in the In-Orbit Acceptance Report.
BA. "Preliminary In-Orbit Acceptance Report" means that document that is
a deliverable item in the CDRL and as described in Exhibit A
(Statement of Work).
BB. "Pre-Ship Review" or "PSR" means the Hughes-conducted readiness
review specified in Exhibit_A (Statement of Work) authorizing
shipment of the Satellite to the Designated Launch Site.
BC. "Product Assurance Plan" means the Product Assurance Plan set forth
in Exhibit C (Satellite Product Assurance Plan).
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BD. "Properly Operated Satellite" means a Satellite which is being
monitored and commanded by Customer in accordance with the written
directives, computer media and instructions contained in the
recommended Spacecraft operating procedures (as such procedures may
be amended by the Parties) and any applicable service notes for the
Satellite, such having been furnished by Hughes to Customer under
the Contract.
BE. "Progress Payment" means any of those payments listed as payments in
Exhibit F (Payment Plan), including the ATP Payment, the Initial
Payment, and the Balloon Payment.
BF. "Satellite" or "Orion 3 Satellite" means the HS 601 HP Class
satellite to be provided to Customer as part of the Work (as defined
below). The term "Spacecraft" shall be interchangeable with the term
"Satellite" and has the same meaning.
BG. "Satellite Control Equipment" ("SCE") means the equipment specified
in Appendix A of Exhibit E (Ground Segment), including the
telemetry, tracking, and command equipment being manufactured and
delivered under the Contract as part of the Work thereof.
BH. "Satellite Control Facility" means a ground facility created or
modified to command the HS 601 HP Satellite delivered to Customer by
Hughes under the Contract.
BI. "Scheduled Delivery Date" means the date of delivery or performance
as specified in Article 3 (Delivery Schedule).
BJ. "Senior Executive Level" shall have the meaning set forth in
Paragraph 12.9.
BK. "Specified Orbital Location" means, with respect to a Satellite, the
geostationary orbit location specified in Exhibit B (Satellite
Technical Specification).
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BL. "Statement of Work" means the Statement of Work attached as Exhibit
A to the Contract.
BM. "Storage Orbit" means any geostationary orbital location other than
the Specified Orbital Location.
BN. "Subcontract" means a contract awarded by Hughes to a Subcontractor
or a contract awarded by a Subcontractor to another Subcontractor to
provide a portion of the Work covered by the Contract.
BO. "Subcontractor" means a Person which has been awarded a Subcontract
by Hughes or a Subcontractor.
BP. "Successfully Launched Satellite" means a Satellite that meets both
the following conditions:
(1) The elements of the Satellite's transfer orbit established by
the Launch Vehicle and the spin axis orientation and time of
separation are each within three (3) sigma limits of the Launch
Vehicle performance as established by Hughes with the Launch
Provider in the interface control document or equivalent
relating to the Satellite; and
(2) The Satellite has not suffered damage caused by any failure or
malfunction of the Launch Vehicle.
BQ. "Successfully Operating Transponder" means a Transponder in the
Satellite which meets any one of the following criteria:
(1) The Transponder is performing in compliance with the
requirements of Exhibit B (Satellite Technical Specification).
If a Transponder is not a Successfully Operating Transponder
during periods of eclipse, it shall be deemed to be not a
Successfully Operating Transponder from that time forward. Any
failure of a Transponder which is corrected by switching to a
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redundancy in the system immediately after the failure is
discovered shall not be deemed as failing to comply with the
requirements of Exhibit B (Satellite Technical Specification)
and shall not cause the Transponder to be considered anything
other than a Successfully Operating Transponder.
(2) The Transponder, while not performing in compliance with the
requirements of Exhibit_B, is being used, or is capable of being
used without material change to Customer's normal operating
procedures, by Customer to generate approximately the same level
of revenues as if it were operating as specified in Exhibit_B;
or
(3) The Transponder is not performing in compliance with the
requirements of Exhibit_B due to the Satellite not being a
Properly Operated Satellite; or
(4) The Transponder (not a TWTA) is being used as an in-orbit spare
or is turned off but would otherwise be capable of meeting one
of the above three criteria; or
(5) The Transponder is on the Satellite which is in a storage orbit.
(6) In the event Customer chooses to operate the Satellite
commercially from a Storage Orbit, then a Transponder will be
deemed to be a Successfully Operating Transponder provided it
can be shown that it would have been a Successfully Operating
Transponder had the Satellite been operating from the Specified
Orbital Location.
BR. "Test Plan" means the test plan set forth in Exhibit D (Test Plan)
to the Contract.
BS. "The Orion 3 Satellite Program" means the program to provide an
HS 601 HP-based telecommunications system, of which the Work under
the Contract is a part.
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BT. "Technical Data and Information" means documented information which
is directly related to the design, development, use, operation, and
maintenance of the Satellite and/or SCE. This includes, for example,
information in the form of drawings, photographs, technical
writings, pictorial reproductions and specifications. This term does
not include ground computer software, financial reports, cost
analysis and information incidental to Contract administration.
BU. "Transponder" means a communications signal path utilized in the
provision of a channel for a communications service as more
specifically defined in Exhibit B (Satellite Technical
Specification), and the term "Communications Channel" shall have the
same meaning.
BV. "Vendor Software" means the proprietary computer software programs,
in object code form, and related documentation developed by vendors
and delivered under the Contract.
BW. "Work" means all labor, services, acts (including tests to be
performed), items, materials, articles, data, documentation,
equipment, matters and things to be furnished, and rights to be
transferred, by Hughes to Customer under the Contract.
BX. "United States Government" means the government of the United
States, including any agencies, commissions, branches,
instrumentalities and departments thereof.
1.2 The Article and Paragraph headings are for convenience of reference only
and shall not be considered in interpreting the Contract. Where the
context so requires, words in the singular include the plural and vice
versa, and words imputing the masculine gender include the feminine and
neuter genders. The recitals of the Contract are descriptive only and
shall not create or affect obligations of the Parties.
1.3 In the Contract, "Article" generally refers to a complete section and
"Paragraph" to a subsection of an Article. For example, "Paragraph 3.5"
refers to the fifth subsection of
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the third Article of the Contract.
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ARTICLE 2. SCOPE OF WORK
2.1 In accordance with the terms and conditions of the Contract, Hughes shall
sell, and Customer shall purchase, the items referred to in Article 3
(Delivery Schedule). Hughes shall furnish and perform the Work in
accordance with the provisions of the Contract including the following
documents, which are attached hereto, incorporated herein and made a part
of the Contract:
Document Dated
-------- -----
Exhibit A - Statement of Work EDC
Exhibit B - Satellite Technical Specification EDC
Exhibit C - Satellite Product Assurance Plan EDC
Exhibit D - Test Plan EDC
Exhibit E - Ground Segment EDC
Exhibit F - Payment Plan and Termination Liability
Amounts EDC
Exhibit G - Schedules to Article 15 EDC
Exhibit H - Payload Long-Lead Inventory Items No later than
December 31, 1997
Exhibit I - Technical Performance EDC
2.2 In the event of any ambiguity, conflict or inconsistency among or between
the parts of the Contract, such inconsistency shall be resolved by giving
precedence in the order of the parts of the Contract as set forth below:
1 Contract Articles
2 Payment Plan and Termination Liability Amounts (Exhibit F)
3 Schedules to Article 15 (Exhibit G)
4 Statement of Work (Exhibit A)
5 Technical Performance (Exhibit I)
6 Satellite Technical Specification (Exhibit B)
7 Test Plan (Exhibit D)
8 Satellite Product Assurance Plan (Exhibit C)
9 Ground Segment (Exhibit E)
10 Payload Long-Lead Inventory Items (Exhibit H)
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2.3 In the event the Parties are unable to resolve any ambiguity, conflict or
inconsistency that affects the Work, Hughes will follow Customer's
direction as to the interpretation of the Contract and the cost, schedule
and performance impact thereof will be determined under Paragraph 22.3
(regarding changes requested by Customer), pending the resolution of the
ambiguity, conflict or inconsistency pursuant to Article 30 (Applicable
Law and Dispute Resolution) should either Party choose to proceed under
Article 30. Notwithstanding the foregoing, nothing in this Paragraph 2.3
alters or affects Hughes' rights under this Contract, if Customer does not
timely make any Progress Payment prior to and including the Balloon
Payment. In the event of any ambiguity, conflict or inconsistency relating
to Hughes' rights to any Progress Payment up to and including the Balloon
Payment or rights and remedies in the event of nonpayment of any Progress
Payment up to and including the Balloon Payment, Customer shall follow
Hughes direction as to the interpretation of the Contract pending the
resolution of the ambiguity, conflict or inconsistency pursuant to Article
30 should either party choose to proceed under Article 30 (Applicable Law
and Dispute Resolution).
2.4 Hughes shall deliver to Customer no later than February 15, 1997 revisions
to the pages of Exhibit B (Satellite Technical Specification) attached
hereto as Exhibit I (Technical Performance). In developing these
revisions, Hughes will use its best reasonable efforts (consistent with
the fundamental design and hardware of HS 601 HP product line) to achieve
performance levels meeting or exceeding Customer's minimum performance
requirements, as set forth in handwriting in Exhibit I. The revised
Exhibit B shall be effective upon Customer's review and written approval.
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ARTICLE 3. DELIVERY SCHEDULE
3.1 Thefollowing goods and services to be provided under the Contract shall be
Delivered to the locations specified below, on or before the dates
specified below, in Table 3.1:
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Table 3.1
Delivery Schedule
Date of Delivery
Item or Performance Place of Delivery
---- -------------- -----------------
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1. Orion 3 Satellite December 31, 1998* In-orbit at Specified Orbital
Location
2. Launch and Mission As required* As required
Operations (LEOP)
3. Launch Services (Delta III) As required* Designated Launch Site
4. Ground Segment** As required* As specified by Customer
5. Training As required* As required
6. Contract Deliverable Data Per Exhibit A (CDRL) As specified by Customer
and Documentation
</TABLE>
NOTE1: Satellite Control Equipment Delivered Duty Unpaid (DDU) (as defined
in Incoterms 1990) United States or Australia to the site to be
specified by Customer. Hughes shall be obligated to insure the
transportation of the Satellite Control Equipment. .
*Delivery Date such that Customer can begin service (defined as the time of
completion by Hughes of in-orbit testing of the Satellite and Delivery of the
Preliminary In-Orbit Acceptance Report in accordance with Exhibit D (Test Plan))
by December 31, 1998.
** Includes two (2) satellite software simulators specified in Exhibit E (Ground
Segment).
3.2 Delivery of items listed in Paragraph 3.1 shall be deemed to have occurred
upon arrival of the item in conformance with the requirements of the
Contract at the place of delivery or upon completion of the service as the
case may be.
3.3 Packing and shipping will be in accordance with Hughes' standard
commercial practice.
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<PAGE>
ARTICLE 4. CONTRACT PRICE, INVOICING, PAYMENT AND ADJUSTMENTS
4.1 All charges for the Work are set forth in this Article 4, Article 5
(Satellite Performance Incentive Payments), Article 6 (Launch Vehicle
Delays) and, if any option is ordered, Article 33 (Options) as such
articles may be amended pursuant to Article 22 (Changes) and Paragraph
35.5 (Amendments). Customer shall not be required to pay Hughes any
amounts for the Work in addition to those payable to Hughes under this
Article 4, Article 5, Article 6, Article 22, Article 33 and Paragraph
35.5.
<TABLE>
<CAPTION>
<S> <C>
4.2 The Contract Price is Two Hundred Eight Million U.S. dollars (U.S.
$208,000,000). The Contract Price shall include those items, services and
incentives set forth below in Table 4.2. The Contract Price does not
include payment of [ ] annual operating costs (or those of a similarly*
situated third-party TT&C operator). The Contract Price does not include
Launch Insurance. Customer shall pay to Hughes the Contract Price
(excluding the Initial Incentive Amount and the Paid-Over-Time Incentive)
in accordance with the terms set forth in the payment schedule of
Exhibit F (Payment Plan) and shall pay the Initial Incentive Amount and
the Paid-Over-Time Incentive in accordance with Article 5. Line item
prices are set forth below in Table 4.2.
Table 4.2
Contract Price
Items and Services U.S.$ (millions)
------------------ ----------------
1 Orion 3 Satellite............................................... [ ]
2 Launch and Mission Operations (LEOP)............................ [ ]
3 Launch Services (Delta III)..................................... [ ]
4 Ground Segment.................................................. [ ]*
5 Training........................................................ [ ]
6 Contract Deliverable Data and Documentation..................... [ ]
7 Initial Incentive Amount........................................ [ ]
8 Paid-Over-Time Incentive........................................ [ ]
*Included in 1 and 4 above
Contract Price Total........................................... 208
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
4.4 The [ ] paid by Customer to Hughes*
pursuant to the ATP shall be credited as the first Progress Payment of the
Contract Price.
</TABLE>
4.5 Hughes shall, with respect to each Progress Payment (except the ATP
Payment and the Initial Payment), provide Customer with an invoice at
least ten (10) days but no more than forty-five (45) days in advance of
the date when such payment is scheduled to be made by Customer to Hughes.
Failure by Hughes to provide an invoice for any given Progress Payment
will not excuse Customer's payment obligation or change the due date with
respect to such payment.
4.6 Hughes' rights to terminate the Contract for Customer's failure to make
timely payment of any Progress Payment are set forth in Paragraph 17.3.A.
4.7 Promptly after Hughes' receipt of the Balloon Payment and for each
Progress Payment due thereafter, Hughes shall certify prior to Customer
having to make such payment (except the Balloon Payment) that Hughes is on
schedule to Deliver the Satellite in accordance with the Delivery
Schedule. Such certification shall be in the form attached hereto as Annex
A.
4.8 Subject to Subparagraphs (A) and (B) below, Customer shall pay Hughes each
Progress Payment on or before the date specified in Exhibit F (Payment
Plan); provided, however, where the specified date causes a payment to
become due on a non-Business Day, such payment shall be due on the next
Business Day.
A. If Hughes makes the certification required by Paragraph 4.7 as to
any Progress Payment due after the Balloon Payment but Customer
disputes it, Customer shall pay such Progress Payment into an escrow
account in accordance with Paragraph 4.9 and the disposition of such
escrowed amount shall be governed by Paragraph 4.9. During the
period any Progress Payment is held in escrow, Hughes shall be
obligated to continue performance, but Hughes shall not be obligated
to proceed to Intentional Ignition until the dispute is resolved and
any amounts ultimately determined to be due Hughes are released to
Hughes from escrow.
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<PAGE>
B. If Hughes cannot make the certification required by Paragraph 4.7 as
to any Progress Payment due after the Balloon Payment, Customer
shall be entitled to withhold from such payment the amount of One
Million U.S. Dollars (U.S. $1,000,000) for each month (up to a
maximum of six (6) months or Six Million U.S. Dollars (U.S.
$6,000,000)) of delay (as certified by Hughes) with respect to the
delivery of the Satellite, such payments to be repaid to Hughes to
the extent Hughes subsequently certifies a reduced (or no) delay in
delivery of the Satellite. Under this subparagraph (B), Hughes shall
not be obligated to proceed to Intentional Ignition unless all
required Progress Payments (less any applicable liquidated damages)
are current.
4.9 No dispute with respect to the payment of any amount under the Contract
shall relieve the disputing Party of its obligation to pay all other
amounts due and owing under the Contract. All disputed amounts, unless
otherwise specified in the Contract, shall be paid into an
interest-bearing escrow account (to be specified in writing by Hughes) on
or before the applicable due date. After the dispute is settled, the Party
entitled to the amount in escrow shall receive such amount together with
all interest thereon and the other Party shall pay all costs and fees
associated with such escrow. In no event shall any Progress Payment prior
to or including the Balloon Payment be paid into escrow. Customer's duty
to make all Progress Payments up to and including the Balloon Payment
directly and timely to Hughes is not altered in any way by Paragraph 4.8
or this Paragraph 4.9. Under this Paragraph 4.9, Hughes shall not be
obligated to proceed to Intentional Ignition unless all required Progress
Payments have been released to Hughes from escrow.
4.10 If Intentional Ignition occurs, but the Satellite is not a Successfully
Launched Satellite, any remaining payments shall be payable to Hughes
within thirty (30) days after, and to the extent of, Customer's receipt of
applicable proceeds from Launch Insurance (as such proceeds are paid to
Customer, whether in one payment or in multiple payments); provided,
however, the Initial Incentive Amount and the Paid-Over-Time Incentives
shall be payable to Hughes in accordance with Paragraph 5.4.
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<PAGE>
4.11 Amounts payable to either Party shall be remitted by wire transfer to the
following bank accounts, as applicable:
In the case of Customer:
<TABLE>
<CAPTION>
<S> <C>
NationsBank
Rockville, Maryland
[ ] *
[ ]
In the case of Hughes:
Bank of America
Concord, California
[ ] *
</TABLE>
Any payment shall be deemed to have been made when credit for the amount
is established in the above bank accounts, as applicable. Each Party shall
notify the other in writing within ten (10) Days of a change to its
respective bank accounts.
4.12 The Parties acknowledge and agree that, with respect to any Progress
Payment due prior to, and including, the Balloon Payment, Hughes would
suffer extreme prejudice as the result of any delayed receipt of such
payments and the rapid decrease, over time, of the value of the Work.
Accordingly, the Parties agree that time is of the essence in the receipt
by Hughes of Progress Payments up to and including the Balloon Payment,
and, subject to Article 17.3, Hughes may, upon a default in such payment
by Customer, immediately and without prior notice to Customer exercise all
its rights and remedies under the Contract.
4.13 Subject to Paragraph 17.3, up to and including the date on which Hughes
receives the Balloon Payment, the following shall apply:
A. Hughes' right to timely payments under the Contract is independent
of any obligations Hughes may have to Customer; and
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<PAGE>
B. Unless or until the Contract is terminated, Customer shall make all
payments required by the Contract to Hughes on a timely basis
regardless of whether Hughes shall then be in breach of its
obligations under the Contract; and
C. If Hughes breaches the Contract, Customer shall retain all rights to
terminate the Contract due to Hughes' breach and/or sue to obtain
recovery of appropriate damages for the breach, but Customer shall
not be entitled to delay or withhold timely payments to Hughes on
account of Hughes' breach if Customer did not also terminate the
Contract.
4.14 With respect to Progress Payments up to and including the Balloon Payment,
Hughes may suspend performance if Customer does not make any such Progress
Payment on or before the due date for such Progress Payment.
4.15 No payment made by Customer prior to the Balloon Payment shall be for the
Delta III launch vehicle. Upon receipt of the Balloon Payment, Hughes
shall dedicate a Delta III launch vehicle from its launch vehicle
inventory to Customer for the purpose of launching the Satellite. Unless
and until the Balloon Payment shall be received by Hughes, Hughes shall
have no duty to identify a Delta III launch vehicle to Customer under the
Contract. Notwithstanding the foregoing, in recognition of the fact that
the probability of the Satellite being launched on schedule will be
maximized if Customer receives certain information on the Delta III launch
vehicle prior to making the Balloon Payment, Hughes shall use best
reasonable efforts to provide Customer access as described in Paragraphs
12.1-12.5 and 12.9 to information regarding a launch vehicle of the same
type as the Launch Vehicle.
4.16 Subject to the last sentence of Paragraph 4.15, Customer shall have no
interest in the Work, or any items thereof, unless and until it has made
the Balloon Payment and all previous Progress Payments. Accordingly, if
Customer shall not make any such payment on a timely basis (provided
Hughes has given Customer at least ten (10) days prior notice in writing
of the payment due date) for any reason, including Customer's insolvency
or
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<PAGE>
status as a debtor in bankruptcy, then Hughes shall have the right to stop
Work immediately and to sell the Work, or items thereof, to another Person
without notice to Customer. If Hughes decides not to sell the Work, Hughes
shall be entitled to retain possession of the Work, and all items thereof,
until all payments current or past due under the Contract have been
received in immediately available funds. .
4.17 The Parties agree that, to the extent permitted by law, Customer shall
have no right, title or interest in the Work prior to Hughes' receipt of
the Balloon Payment. Notwithstanding the foregoing, until Hughes' receipt
of the Balloon Payment, Customer hereby grants Hughes a first priority
security interest in any right, title or interest Customer may have or be
deemed to have in the Work to secure Customer's obligations to Hughes
under the Contract. Hughes shall have the right to include in such
financing statements public notice reasonably acceptable to Customer of
Customer's agreements in Paragraph 15.12 of the Contract. Hughes agrees to
terminate such security interest and terminate such financing statement
concurrently with payment of the Balloon Payment.
4.18 All payments made by Customer to Hughes prior to and including the Balloon
Payment, shall be deemed fully earned by Hughes upon receipt. Any payments
due after the Balloon Payment paid into escrow in accordance with
Paragraph 4.8.A and Paragraph 4.9 shall be deemed fully earned by Hughes
(i) at the time the dispute is resolved and (ii) to the extent any such
escrowed amounts are ultimately determined to be due Hughes, regardless of
whether such amounts have been released to Hughes from escrow.
4.19 Hughes shall not be required to proceed to Intentional Ignition unless
Customer is current with all Progress Payments due under the Contract.
-23-
<PAGE>
ARTICLE 5. SATELLITE PERFORMANCE INCENTIVE PAYMENTS
5.1 In the event the Satellite is a Successfully Launched Satellite, then,
upon Final Acceptance, the Initial Incentive Amount shall be paid to, and
earned or refunded by, Hughes in the manner and to the extent provided
hereunder:
<TABLE>
A. The Initial Incentive Amount shall be allocated to the C-Band and
Ku-Band 1
Repeaters as follows:
<S> <C>
C-Band Repeater [ ] [ ] *
Ku-Band 1 Repeater [ ] [ ] *
B. For the C-Band and Ku-Band 1 Repeaters, respectively, the portion of
the Initial Incentive Amount to be paid shall be determined in
accordance with the following formula:
Repeater Initial Incentive Amount x APTL
-------------
Maximum APTL
where the maximum Aggregate Predicted Transponder Life (APTL) for
the C-Band Repeater is 150 years [ ]*
[ ] and for the Ku-Band 1 Repeater is 375 years [ ]*
[ ] Two examples illustrating how to determine*
that part of the Initial Incentive Amount due after Final Acceptance
follow:
(1) If the C-Band Repeater and Ku-Band 1 Repeater at Final
Acceptance are determined to have APTLs of [ ]*
[ ], respectively, then Customer shall be obligated to pay
Hughes [ ]*
[ ] and [ ]*
[ ], respectively.
(2) If the C-Band Repeater and Ku-Band 1 Repeater are determined at
Final Acceptance to have APTLs of [ ] years,*
respectively, then
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Customer shall be obligated to pay Hughes [ ]*
[ ]*
and [ ]*
[ ] *
</TABLE>
C. Hughes shall earn and be entitled to retain a percentage of the
Initial Incentive Amount for each Day of the Operational Lifetime
according to the number of Successfully Operating Transponders that
the Satellite has during such day, as described below. In the event
that it is determined for any Day of the Operational Lifetime of the
Satellite that a Transponder is not a Successfully Operating
Transponder, Customer shall promptly notify Hughes of said
discovery. Upon concurrence by Hughes ( or in the event of a
dispute, resolution of the dispute in Customer's favor) that the
Transponder is not a Successfully Operating Transponder, Hughes
shall refund to Orion for each Day of the remainder of the
Operational Lifetime the appropriate portion of the Initial
Incentive Amount paid to Hughes, such portion calculated consistent
with examples (1) and (2) set forth below.
(1) Example (1): If at Final Acceptance the APTLs for the C-Band and
Ku-Band 1 Repeaters are maximum, then for each Transponder that
is not a Successfully Operating Transponder during the
Operational Lifetime, Hughes shall pay to Customer a refund as
set forth below:
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<PAGE>
<TABLE>
<CAPTION>
Table 5.1.C(1)
Satellite Performance Refund
C-band Repeater Ku-band 1 Repeater
Performance Payment Performance Payment
No. of Successfully Refund Daily Amount No. of Successfully Refund Daily Amount
Transponders Operating Per Transponder Operating Transponders per Transponder
- ---------------------- --------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
[ ] [ ] [ ] [ ]
[ ] [ ] *
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
</TABLE>
<TABLE>
<S> <C>
(2) Example (2): The C-Band and Ku-Band 1 Repeater performance
refund tables shown above in Table 5.1.C(1) are based upon the
APTL for both repeaters being at maximum at Final Acceptance.
Where the APTL for either or both repeaters is below maximum,
the respective refund tables will be proportionately modified
based upon the percentage of the Initial Incentive Amount paid
by Customer to Hughes at Final Acceptance. For example, if at
Final Acceptance the C-Band Repeater has only [ ]*
Successfully Operating Transponders and the Ku-Band 1 Repeater
has only [ ] Successfully Operating Transponders, each*
with a PTL of [ ], then the APTL for the C-Band*
Repeater equals [ ] years and the APTL for*
the Ku-band repeater equals three hundred (300) years, and [ ]*
[ ]
</TABLE>
-26-
<PAGE>
<TABLE>
<S> <C>
[ ] and [ ]*
[ ] shall*
have been paid at Final Acceptance for the C-Band and Ku-Band 1
Repeaters, respectively. In addition, for each Day during the
Operational Lifetime there are fewer than [ ] and/or*
[ ] Successfully Operating Transponders in the C-Band*
and Ku-Band 1 Repeaters, respectively, then for each Transponder
less than [ ] and/or [ ] Successfully Operating*
Transponders in the C-Band and Ku-Band 1 Repeaters,
respectively, the daily refund amount will be recalculated
against U.S. [ ] and U.S. [ ], respectively,*
down to a full repayment of the U.S. [ ] for [ ]*
or fewer Transponders and U.S [ ] for [ ] or*
fewer Transponders, respectively, in accordance with the
following table:
</TABLE>
<TABLE>
<CAPTION>
Table 5.1C(2)
Satellite Performance Refund
C-Band Repeater Ku-Band 1 Repeater
Performance Payment Performance Payment
No. of Successfully Refund Daily Amount No. of Successfully Refund Daily Amount
Operating Transponders Per Transponder Operating Transponders per Transponder
- ---------------------- --------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
[] [ ] [ ] [ ]
[] [ ] [ ] [ ]
[] [ ] [ ] [ ]
[ ] [ ] [ ] [ ] *
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
</TABLE>
5.2 In the event the Satellite is a Successfully Launched Satellite, then, for
each Day of the Operational Lifetime that a Transponder in the Ku-Band 2
Repeater is a Successfully
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<PAGE>
Operating Transponder, Hughes shall earn and be entitled to payment of a
portion of the Paid-Over-Time Incentive in accordance with Table 5.2
below:
<TABLE>
Table 5.2
Paid-Over-Time Incentive Payments for Ku-Band 2 Repeater
Daily Payment Amount
Number of Successfully Per Successfully
Operating Transponders Operating Transponder
---------------------- ---------------------
<S> <C>
[ ] [ ] *
[ ] [ ]
5.3 Hughes shall be entitled to payment of Extended Incentives as follows:
A. In the event the Satellite continues to provide service for Customer
after expiration of the Operational Lifetime for which service
Customer receives customary commercial revenues substantially
equivalent to those that Customer would customarily receive if the
Satellite were a normally operating satellite, Customer agrees to
pay to Hughes certain amounts as specified below in subparagraphs
(B) and (C).
B. With respect to the C-Band [ ] or Ku-Band 1 [ ]*
[ ] Repeaters, the amount to be paid for each Day a*
Transponder operates after expiration of the Operational Lifetime is
[ ]*
[ ] (for C) and [ ]*
[ ] (for Ku 1), up to a*
maximum of that portion of the Initial Incentive Amount refunded to
Customer for the respective repeaters during the Operational
Lifetime (but excluding any portion of the Initial Incentive Amount
not paid to Hughes at Final Acceptance).
C. With respect to the Ku-Band 2 [ ] Repeater, the amount*
to be paid for each Day a Transponder operates after expiration of
the Operational Lifetime is [ ]*
[ ], up to a *
</TABLE>
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<PAGE>
maximum of that portion of the Paid-Over-Time Incentive not paid by
Customer to Hughes during the Operational Lifetime.
D. In the event the Satellite continues to provide service for Customer
after expiration of the Operational Lifetime for which Customer
receives revenues less than those described above in subparagraph
(A), the daily amount to be paid for each Transponder operating
after expiration of the Operational Lifetime shall be a percentage
of the respective amounts set forth above in subparagraphs (B) and
(C), such percentage equal to the percentage of customary commercial
revenues actually received by Customer.
E. Such extended incentive payments shall continue for as long as
Customer receives customary commercial revenues on the Satellite or
until the allowable maximum amount (excluding any portion of the
Initial Incentive Amount not paid to Hughes at Final Acceptance) has
been reached, whichever occurs first.
<TABLE>
<S> <C>
5.4 In the event the Satellite is launched but is not a Successfully Launched
Satellite, Hughes shall be entitled to (i) payment of the Initial
Incentive Amount within [ ] Days after, and to the extent of,*
Customer's receipt of applicable proceeds (as such proceeds are paid to
Customer, whether as a single payment or over several payments) from
Launch Insurance and Customer shall not be entitled to receive any refund
of the Initial Incentive Amount for such Satellite and (ii) payment of the
Paid-Over-Time Incentive after and, to the extent of, Customer's receipt
of applicable proceeds from Launch Insurance, such amount to be paid in
equal monthly installments over the next succeeding [ ] years or*
earlier at Customer's election.
</TABLE>
5.5 In the event that a Transponder is not a Successfully Operating
Transponder but is capable of partial operation and the Transponder
continues to be operated by Customer for telecommunications purposes, the
Parties shall negotiate an equitable adjustment of the Initial Incentive
Amount refund (specified in Paragraph 5.1) and Paid-Over-Time Incentive
payments (specified in Paragraph 5.2), taking partial operation into
consideration.
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<PAGE>
5.6 Any assertion by Customer that a Transponder is not a Successfully
Operating Transponder shall be accompanied by technical data, reports, and
analyses, and Hughes shall be given an opportunity to verify all relevant
data. Should Hughes disagree with such determination and present evidence
to the contrary, then Customer shall consider such evidence and consult
with Hughes. In the event that the disagreement cannot be resolved, then
it may be disposed of in accordance with Article_30 (Applicable Law and
Dispute Resolution).
5.7 The amounts to be refunded by Hughes under Paragraph 5.1 and the amounts
to be paid by Customer under Paragraph 5.2 and 5.3 shall be (i) calculated
on a daily basis and (ii) invoiced in arrears and paid on a monthly basis.
Any payment required to be made by one Party to the other Party under this
Article 5 shall be made within thirty (30) Days after the first Party's
receipt of an invoice certifying the event giving rise to such Party's
liability.
5.8 If a Satellite has not been, or is not being, operated as a Properly
Operated Satellite and such improper operation results in one or more
Transponders not meeting the requirements of a Successfully Operating
Transponder, or the Operational Lifetime being reduced, Customer (i)_shall
not be entitled to receive refunds of the Initial Incentive Amount in
accordance with Paragraph_5.1, and (ii)_shall be required to pay the
Paid-Over-Time Incentive in accordance with Paragraph_5.2, with respect to
the Transponders so affected (and such affected Transponders shall be
deemed to be Successfully Operating Transponders).
5.9 SUBSEQUENT TO LAUNCH OR TO A FAILED LAUNCH, HUGHES' LIABILITY AND THE
RIGHTS AND REMEDIES OF CUSTOMER UNDER THIS ARTICLE 5 AND ARTICLE 17
(TERMINATION) AND ARTICLE 30 (APPLICABLE LAW AND DISPUTE RESOLUTION) ARE
IN LIEU OF ALL OTHER RIGHTS AND REMEDIES FOR A SATELLITE THAT IS NOT A
SUCCESSFULLY OPERATING SATELLITE OR A TRANSPONDER THAT IS NOT A
SUCCESSFULLY OPERATING TRANSPONDER WHETHER SUCH
-30-
<PAGE>
LIABILITY, RIGHTS AND REMEDIES ARISE UNDER CONTRACT, TORT OR STATUTORY
WARRANTIES.
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<PAGE>
ARTICLE 6. LAUNCH VEHICLE DELAYS
6.1 In the event of postponement or delay of a Launch prior to shipment of the
Satellite, which postponement or delay exceeds thirty (30) Days from the
originally scheduled Launch Date (to be scheduled by the Parties during
the Contract to occur no later than November 30, 1998 absent Excusable
Delay) and which delay is not caused by Hughes or its Subcontractors
(except the Launch Provider) or Affiliates, the price included in the
Contract Price for Launch and Mission Operations services provided by
Hughes (Table 4.2) shall be increased to reflect the cumulative increase,
if any, in the Consumer Price Index for All Urban Consumers, All Cities
Average, All Items, 1982-1984 ("CPI-U") published monthly by the Bureau of
Labor Statistics or a successor agency of the U.S. Government. Such
cumulative increase in the CPI-U shall be determined by computing the
percentage change in the CPI-U between November 1998 and the month actual
delivery of the Launch and Mission Operations services commences, but in
no case shall such cumulative increase be less than an annualized rate of
three percent (3%). If the Bureau of Labor Statistics redefines the base
year, the Parties will adjust their calculations by using an appropriate
conversion formula.
In addition, Customer shall be responsible for any and all incremental
expenses actually and reasonably incurred by Hughes (and invoiced to
Customer in reasonable detail) and a profit of twelve and one half percent
(12.5%) on such incremental expenses resulting from such postponement or
delay. Such incremental expenses may include, as appropriate for the
period of delay, launch crew standby time, extra launch crew travel
expenses, transportation expenses for equipment, expenses associated with
maintaining launch support capabilities, stretch-out program expenses, and
storage expenses.
6.2 The Contract Price stated in Paragraph_4.2 is based on a launch on the
Delta III Launch Vehicle.
6.3 If failure to launch a Satellite on the originally scheduled Launch Date
is due to anything other than the fault of Hughes or its Subcontractors or
Affiliates, then
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<PAGE>
A. Customer shall make the necessary arrangements for, and bear the
costs of, storage of the Satellite until such Satellite can be
launched. Hughes shall cooperate in assisting Customer to make the
necessary storage arrangements in a U.S. storage facility which
conforms to Hughes' standards for ensuring the integrity of the
Satellite.
B. Except as provided in the second sentence of Paragraph 6.3.A above,
Customer shall reimburse Hughes for its extra expenses actually and
reasonably incurred (and invoiced to Customer in reasonable detail)
as a result thereof plus a profit of twelve and one half percent
(12.5%) on such expenses, and the Contract Price shall be revised
accordingly; and an amendment to the Contract reflecting such
adjustments shall be entered into in accordance with Paragraph 35.5.
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<PAGE>
ARTICLE 7. PERMITS AND LICENSES; GOVERNMENT APPROVALS
7.1 Hughes shall, at its own expense, obtain all United States Government
approvals, permits and licenses as may be required for the performance of
the Work under the Contract. Hughes shall perform the Work in accordance
with all applicable laws, government rules, regulations and ordinances of
the United States Government and the conditions of all such applicable
United States Government permits and licenses.
7.2 Hughes shall review with Customer any application Hughes makes to any
government department, agency, or entity for any permit, license,
agreement or approvals, as may be required for performance of the Work,
prior to the submission of such application. Hughes shall provide Customer
a minimum of three (3) Business Days to review such application prior to
submission to such governmental entity and Hughes shall in good faith
consider any comments and proposed revisions made by Customer for
incorporation into such application.
7.3 Notwithstanding this or any other Article in the Contract, the Parties
understand and agree that certain restrictions are placed on access to
Hughes' plant and the use of Technical Data and Information and hardware
delivered under the Contract with relation to the approvals, permits and
licenses Hughes must obtain from the United States Government.
As a result, and if applicable, the Parties agree that such access and the
actual delivery of any Technical Data and Information will be at all times
subject to United States Government approval. Hughes shall prepare said
agreement and in consultation with Customer shall request United States
Government approval.
7.4 The documentation and hardware ("products") furnished under the Contract
will be authorized by the United States Government for export for
Customer's ground station in Australia. The products may not be resold,
diverted, transferred, trans-shipped or otherwise disposed of in any other
country or in any other manner, either in their original form or after
being incorporated through an intermediate process into other end items
without the prior written approval of the United States Government, which
approvals are
-34-
<PAGE>
the sole responsibility of Customer. Additionally, transferring
registration or control to any other person or business entity of the
products furnished under the Contract is considered an export and as such
also requires prior written approval from the United States Government,
which approvals are the sole responsibility of Customer. Customer
represents and warrants that the ultimate end use of the products is for
telecommunications services.
7.5 Customer is responsible for obtaining, as may be required for performing
the Work, all non-United States Government approvals, licenses and permits
(exclusive of those required by Hughes' suppliers or Subcontractors),
including those which may be required for Hughes to perform the Work in
compliance with the laws of any country in which a ground station is
established. Hughes agrees to cooperate with Customer in Customer's
efforts to obtain all required non-United States Government approvals.
7.6 Hughes shall not be responsible for any failure to obtain any licenses,
approvals or consents of any governmental authority, which failure results
from Customer's inability to demonstrate Customer's financial viability or
meet other financial requirements.
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<PAGE>
ARTICLE 8. PRE-SHIP REVIEW, LAUNCH READINESS REVIEW, IN-ORBIT
TESTING AND FINAL ACCEPTANCE
8.1 Preliminary inspections of all Work (including the deliverable items
listed in Paragraph 3.1) may be made by Customer or its designated
representative at Hughes' or a Subcontractor's plant. All such inspections
shall be made in the presence of a representative of Hughes. Customer
shall inform Hughes in writing of those particulars in which the Work
performed under the Contract does not meet the requirements of the
Contract, and Hughes shall use its best reasonable efforts to remedy such
defects.
8.2 Final Acceptance of the Satellite shall arise upon successful completion
of in-orbit testing in accordance with the requirements of the Contract,
following arrival of the Satellite at the Specified Orbital Location or a
Storage Orbit location designated by Customer, delivery to Customer of the
certificate of completion (accompanied by the Preliminary In-Orbit
Acceptance Report) and configuration of the Satellite for hand-over to
Customer.
8.3 Prior to the shipment of the Satellite, Hughes shall conduct a Pre-Ship
Review in accordance with the Test Plan at Hughes's plant. The Pre-Ship
Review shall consist of reviewing Satellite ground test results in
accordance with the Test Plan. Hughes shall provide ORION at least fifteen
(15) days advance notice of the Pre-Ship Review. ORION shall have the
right to witness such review and the right to either concur or not concur
that the Spacecraft meets the requirements of the Contract and is ready
for shipment.
A. The Pre-Ship Review shall verify that:
(1) The Satellite ground testing has been completed in accordance
with the requirements of the Contract;
(2) Except as provided in (3) below, all material discrepancies or
non-conformances affecting the capability of the Satellite to
perform its on-orbit mission throughout its Operational Lifetime
have been corrected;
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(3) It is the intent of the Parties that all work that can be
accomplished at Hughes' plant will be completed prior to
shipment to the Launch Site. Notwithstanding that intent, Hughes
may, with regard to certain limited non-conformances, conclude
that such non-conformances can be effectively remedied after
shipment, in which case Hughes may, after consultation with
Customer, ship the Satellite to the Designated Launch Site.
(4) The Satellite, ground support equipment for handling the
Satellite in preparation for launch, and supporting
documentation as specified in Exhibit A (Statement of Work) and
Exhibit B (Satellite Technical Specification) are ready for
shipment based on an inspection of the Satellite and such ground
support equipment and an examination of the data package.
B. Successful completion of the Pre-Ship Review shall arise upon the
occurrence of any of the following:
(1) The Pre-Ship Review complies in all respects with the provisions
of Paragraph 8.3.A, and Customer notifies Hughes of its
acceptance of the Pre-Ship Review within five (5) Business Days
following completion. Failure of Customer to provide Hughes with
a notice of either acceptance or rejection within five (5)
Business Days shall be deemed to constitute successful
completion of said review; or
(2) The Pre-Ship Review complies in all respects with Paragraph
8.3.A save for minor non-conformances that have not been
corrected but which Hughes demonstrates to Customer at the
review have no adverse effect upon the capability of the
Satellite to perform its on-orbit mission throughout its
Operational Lifetime, and Customer notifies Hughes of its
acceptance of the Pre-Ship Review within five (5) Business Days
following completion. Failure of Customer to provide Hughes with
a notice of either
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acceptance or rejection within five (5) Business Days shall be
deemed to constitute successful completion of said review; or
(3) If the Pre-Ship Review reveals non-conformances which require
correction, within five (5) Business Days after such review,
Customer shall request correction of non-conforming conditions
affecting the Satellite in writing. Hughes shall, at its
expense, promptly correct the non-conforming conditions referred
to therein and, promptly following such correction, shall notify
Customer that the corrections have taken place and shall invite
Customer to send representatives to attend an inspection at
which they will be entitled to verify that such corrections have
been satisfactorily made. The provisions of this Paragraph 8.3
shall thereafter apply similarly to that inspection as if that
inspection was the original Pre-Ship Review.
C. Upon successful completion of the Pre-Ship Review, the Satellite
shall be deemed to be Available for Shipment.
8.4 Prior to integration of the Satellite with the Launch Vehicle at the
Designated Launch Site, a Launch Readiness Review (LRR) shall be jointly
conducted by Hughes and Customer. Hughes shall give Customer five (5)
Business Days written notice of the LRR. The purpose of the LRR is to
confirm that the Satellite is ready for Launch. Prior to Hughes proceeding
to integrate the Satellite with the Launch Vehicle, any defects or
non-conformances in the Satellite or other equipment as may remain from
the Pre-Ship Review, or resulting from shipment or otherwise discovered
during Satellite launch preparations, shall have been corrected or
dispositioned. Upon successful completion of the LRR, the Satellite shall
be released by Customer for Launch Vehicle integration. Successful
completion of the LRR shall arise upon the occurrence of any of the
following:
A. The LRR demonstrates compliance in all respects with the provisions
of Paragraph 8.3, and Customer notifies Hughes of its acceptance of
the LRR at the LRR. Failure of Customer to provide Hughes with a
notice of either acceptance or
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rejection at the LRR shall be deemed to constitute successful
completion of said review; or
B. The LRR demonstrates compliance with Paragraph 8.3 save for minor
non-conformances that have not been corrected which Hughes
demonstrates at the review to Customer have no adverse effect upon
the capability of the Satellite to perform its on-orbit mission
throughout its Operational Lifetime, and Customer notifies Hughes of
its acceptance of the LRR at the LRR. Failure of Customer to provide
Hughes with a notice of either acceptance or rejection at the LRR
shall be deemed to constitute successful completion of said review;
or
C. If the LRR reveals non-conformances or defects which require
correction, at the LRR Customer shall request correction of
non-conforming conditions affecting the Satellite in writing.
Failure of Customer to provide Hughes with a notice of either
acceptance or rejection at the LRR shall be deemed to constitute
successful completion of such review. Hughes shall, at its expense,
correct such non-conforming conditions and defects and, following
such correction, shall notify Customer that the corrections have
taken place and invite Customer to send representatives to attend an
inspection to verify that such corrections have been satisfactorily
made. Customer shall notify Hughes of its acceptance of the LRR at
the LRR. Failure of Customer to provide Hughes with a notice of
either acceptance or rejection at the LRR shall be deemed to
constitute successful completion of such review. In the event of any
disagreement between Customer and Hughes relating to the LRR, the
Senior Executive Level representatives of the Parties shall use best
reasonable efforts to promptly resolve such dispute.
8.5 After Launch and either during drift orbit or upon arrival of the
Satellite at the Specified Orbital Location (or a Storage Orbit specified
by Customer, as the case may be) Hughes shall commence in-orbit testing,
in consultation with Customer, in accordance with the requirements of the
Contract. Hughes shall, at its expense, seek to remedy, in consultation
with Customer and in accordance with standard satellite industry
procedures,
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any anomalous conditions that may become apparent as a result of such
testing, and shall retest as necessary subsequent to taking remedial
action (if any). Notwithstanding an anomalous condition or failure of the
Satellite or any Transponder to meet the specifications and other
requirements set forth in Exhibits A and B (which failure the Parties
intend to address through the provisions of the Contract dealing with
Launch Insurance and Performance Incentives payments), successful
completion of in-orbit testing shall be deemed to have occurred on _the
date in-orbit testing is completed in accordance with the requirements of
the Contract, the Satellite is configured for hand-over to Customer, and
the certificate of completion (accompanied by the Preliminary In-Orbit
Acceptance Report) is Delivered to Customer.
8.6 Prior to shipment of the Satellite Control Equipment to the sites selected
by Customer, Hughes shall conduct a Pre-Ship Review at the Hughes plant.
The Pre-Ship Review shall be conducted in accordance with the Test Plan.
Hughes shall provide Customer at least fifteen (15) Business Days advance
notice of the Pre-Ship Review. Customer shall have the right to witness
such review and the right to either concur or not concur that the
Satellite Control Equipment meets the requirements of the Contract and is
ready for shipment.
A. Customer shall direct Hughes to ship the Satellite Control Equipment
to the selected site(s) upon successful completion of the Pre-Ship
Review. The Pre-Ship Review shall be deemed complete and preliminary
acceptance occurs when the Parties agree that:
(1) factory acceptance testing in accordance with Exhibit E (The
Ground Segment) is complete;
(2) all open actions have been closed or a closure plan agreed by
Customer; and
(3) all non-conformances have been corrected or waived in writing by
an Authorized Representative of Customer in accordance with
Paragraph
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35.2, except minor non-conformances which Hughes demonstrates to
Customer have no adverse effect upon the operation of the
Satellite Control Equipment in accordance with Exhibit E (Ground
Segment).
B. Customer shall not withhold its preliminary acceptance of the
Satellite Control Equipment for minor non-conformances which Hughes
demonstrates to Customer have no adverse effect upon the operation
of the Satellite Control Equipment in accordance with Exhibit E
(Ground Segment).
8.7 Final Acceptance of the Satellite Control Equipment shall occur upon
successful completion of installation and checkout of the Satellite
Control Equipment at its installation site, an acceptance test of the
complete Satellite Control Equipment system in accordance with Exhibit E
(Ground Segment), and closure of all action items from the Pre-Ship
Review; provided, however, if there is a delay in installation and
checkout due to unavailability of hardware or facilities not the
responsibility of Hughes, and in particular if the beneficial access
obligations set forth in Article 29 (Customer's Responsibilities) are not
met by Customer, then there shall be a day for day adjustment to the
Delivery Date for the Satellite Control Equipment and Customer shall be
responsible for any expenses actually and reasonably incurred by Hughes
(and invoiced to Customer in reasonable detail) directly related to the
delay.
8.8 Final Acceptance of Contract Deliverable Data and Documentation shall
occur only when the Contract Deliverable Data and Documentation have been
delivered at the place referenced in Table 3.1 of Article 3 in a condition
fully conforming to the provisions of the Contract. Contract Deliverable
Data and Documentation shall be deemed to be in a condition fully
conforming to the provisions of the Contract unless rejected by Customer
in writing within fifteen (15) Business Days after receipt of said
Contract Deliverable Data and Documentation by Customer. If such Contract
Deliverable Data and Documentation are unacceptable, Customer shall,
within the said fifteen (15) Business Days, notify Hughes in writing in
which respects the Contract Deliverable Data and Documentation fail to
conform to applicable requirements of the Contract. Any Contract
Deliverable Data
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and Documentation that fail to conform to applicable requirements of the
Contract with respect to which Customer has so notified Hughes in writing
as being non-conforming, shall be deemed under the Contract not to have
been Delivered unless and until the defects that resulted in such
rejection have been remedied or demonstrated not to exist pursuant to
verification procedures in accordance with the Contract.
8.9 "Delivery" shall be deemed to have occurred for each deliverable item
under the Contract upon its Final Acceptance by Customer pursuant to this
Article 8.
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ARTICLE 9. TITLE AND RISK OF LOSS
9.1 Risk of loss or damage to the Satellite to be delivered under the Contract
shall pass from Hughes to Customer at the time of Intentional Ignition of
that Satellite. In the event of Intentional Ignition that fails to lead to
Launch, risk of loss shall revert to Hughes at the point in time when the
Launch Vehicle's liquid engine has been safely shut down and Hughes will
retain risk of loss until the next Intentional Ignition. Title to the
Satellite, free and clear of all liens and encumbrances, shall pass from
Hughes to Customer at Final Acceptance of the Satellite in accordance with
Article 8.
9.2 Title and risk of loss or damage to the Satellite Control Equipment shall
pass from Hughes to Customer at Final Acceptance of the Satellite Control
Equipment in accordance with Article 8.
9.3 The Parties agree that, upon Hughes' request, the Customer shall sign and
will permit Hughes to file, for precautionary purposes, appropriate
Uniform Commercial Code financing statements or any similar document
having the same effect in foreign countries reflecting Hughes' right,
title, and interest to the SCE prior to transfer of title in such
deliverable items to the Customer, provided that Hughes shall be
responsible for preparing such financing statements and terminating such
financing statements upon transfer of title in such items to Customer.
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ARTICLE 10. EXCUSABLE DELAYS
With respect to Hughes' performance of its obligations under the Contract, an
"Excusable Delay" shall be any delay in the performance of the Work caused by an
event which is beyond the control of Hughes, its Affiliates and its
Subcontractors, and not involving fault or negligence of Hughes, its Affiliates
or its Subcontractors, such as, but not limited to, any acts of Government,
including but not limited to the Governments of the United States and the
country of any foreign ground station in their contractual or sovereign
capacities (including the refusal, suspension, withdrawal, or non-renewal of
export or import licenses essential to the performance of the Contract); war
(whether declared or undeclared), outbreak of national hostilities, or civil
insurrection; fire; earthquake; flood; strike or work slowdown not reasonably
within the control of Hughes or Hughes Communications, Inc.; epidemic;
quarantine restriction; freight embargo; acts of God; Customer's failure to
perform its obligations as set forth in Article 29, and where such delay could
not have been avoided by Hughes or its Subcontractors through the exercise of
reasonable foresight or reasonable precautions and cannot be circumvented by
Hughes through the use of reasonable efforts (for example, alternate sources or
work-around plans); provided written notice is given to Customer promptly (under
the circumstances) after Hughes shall have first learned of the possibility of
such an event and provided further that failure on Hughes' part to provide such
notice shall not prevent such an event from qualifying as an Excusable Delay
should Customer have actual notice of the event (e.g., an earthquake that
receives nation-wide publicity). In addition, any postponement by the Launch
Provider of Launch of the Satellite shall constitute Excusable Delay (whether or
not such postponement is d whether or not such postponement involves any fault
or negligence on the part of the Launch Provider) subject to the notice
provisions set forth in the prior sentence. Notwithstanding any other provision
of the Contract, in the event of such an Excusable Delay there shall be an
equitable adjustment to the time for performance of the affected Work, and the
schedule of payments set forth in Exhibit F (Payment Plan) and other terms
stated in the Contract as they are applicable; provided, however, that the
Parties agree that while it is impossible to foresee all of the contingencies
and circumstances associated with the types of Excusable Delay set forth above,
ordinarily the occurrence of an Excusable Delay shall not entitle Hughes to an
increase in the Contract Price (unless such Excusable Delay is caused by
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postponement by the Launch Provider of the launch of the Satellite or by
Customer's failure to perform its obligations as set forth in Article 29, in
which cases there may be an equitable adjustment in the Contract Price for
incremental costs incurred by Hughes as a result of such Excusable Delay); and
provided further that the occurrence of an Excusable Delay caused by Customer's
failure to perform its obligations as set forth in Article 29 (Customer's
Responsibilities) shall not entitle Customer to an adjustment in the schedule of
payments set forth in Exhibit F (Payment Plan).
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ARTICLE 11. LIQUIDATED DAMAGES FOR LATE DELIVERY
<TABLE>
<S> <C>
11.1 In the event the Satellite is not Delivered on or before the Scheduled
Delivery Date for the Satellite and such late delivery prevents Customer
from providing service for which it has one or more executed contracts
pursuant to which it would earn commercial revenue, then, commencing on
the first Day following the Scheduled Delivery Date, and continuing for a
period thereafter not to exceed [ ] Days (the*
"Damages Period"), the Contract Price shall be reduced by [ ]*
[ ]*
[ ] for each Day during the Damages Period that the*
Satellite has not been Delivered; provided, however, that the Contract
Price reduction specified above will not be applicable with respect to any
period during which an Excusable Delay exists or during which the failure
to Deliver the Satellite is attributable to the Customer's failure to
perform any of its responsibilities under Article 29 (Customer's
Responsibilities), or other provisions of the Contract (and the Damages
Period will be extended, as appropriate, to reflect any such period).
</TABLE>
As used above, the term "Scheduled Delivery Date for the Satellite" shall
mean the delivery date specified for the Satellite in Article 3 (Delivery
Schedule), as such date shall be extended, as appropriate, to reflect all
periods during which an Excusable Delay exists or any similar extension of
time pursuant to Article 29 (Customer's Responsibilities), or as otherwise
agreed by the Parties pursuant to an amendment to the Contract in
accordance with Paragraph 35.5 (Amendments).
11.2 Except as provided in Paragraph 17.2, the Contract Price reduction
specified in Paragraph 11.1 shall be the sole remedy available to Customer
in the event of a late Delivery of the Satellite to be Delivered
hereunder, and shall be in lieu of all damages of any kind or any right to
terminate the Contract for default. The Contract Price reduction specified
in Paragraph 11.1 shall constitute liquidated damages for any such late
Delivery (and shall not constitute a penalty), the Parties acknowledging
that such liquidated damages are believed to represent a genuine estimate
of the losses that would be suffered by reason of
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any such delay (which losses would be difficult or impossible to calculate
with certainty). In the event the Damages Period has expired and the
Contract Price has been reduced by the maximum amount specified in
Paragraph 11.4, then, at any time thereafter but prior to actual delivery
of the Satellite, Customer may exercise its right to terminate the
Contract for Hughes' default pursuant to Paragraph_17.2, in which case
Customer's rights and remedies shall be governed by the provisions of that
Article. Customer shall have no other rights or remedies for late Delivery
of an item to be Delivered under the Contract. The liquidated damages
specified in Paragraph_11.1 shall not be applicable to a Satellite which
is delivered for purposes of storage, unless the requirement for such
storage was caused primarily by Hughes' unexcused delay.
11.3 In the event of a late Delivery requiring a reduction in Contract Price
pursuant to the foregoing, the Parties shall, if appropriate, equitably
adjust the payment plan set forth in Exhibit F (Payment Plan).
11.4 The maximum price reduction for late Delivery under the Contract pursuant
to termination under Paragraph 17.2 shall never exceed Six Million U.S.
Dollars (U.S. $6,000,000).
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ARTICLE 12. ACCESS TO WORK-IN-PROGRESS AND DATA
12.1 Subject to Article 7 (Permits and Licenses: Government Approvals),
Paragraphs 12.3 and 12.4 below, and Article 21 (Proprietary Information),
Hughes shall provide Customer Personnel reasonable access to all Work
(including work-in-progress and observation of tests in accordance with
the requirements of Exhibit_D (Acceptance Test Plan)), at Hughes'
facilities, at reasonable times during the period of the Contract,
provided that such access does not unreasonably interfere with such Work
and access to Work is coordinated with the Hughes Program Manager or other
person designated by Hughes for such purpose. Subject to the restrictions
set forth above, Customer Personnel shall also be afforded access to the
Subcontractors' facilities, to the extent that Hughes is permitted to
provide such access, and subject to Hughes accompanying Customer Personnel
on any such visit.
12.2 Work-in-progress, technical and schedule data and documentation directly
related to the Contract shall be subject to reasonable evaluation and
inspection by Customer Personnel, subject to the restrictions set forth in
Paragraphs_12.1,12.3 and 12.4.
12.3 Customer Personnel visiting at the Hughes facility or a Subcontractor's
facility (a) will abide by Hughes' security regulations and/or those of
its Subcontractors and applicable United States Government regulations;
(b) will not disclose to a third party any information received in
connection with the access provided hereunder and will use such
information only in the performance of the Contract, whether or not such
information is marked or otherwise identified as proprietary; and (c) will
not remove any documents, materials or other items from any facility of
Hughes or its Subcontractors (other than Contract Deliverable Data and
Documentation and other documents delivered to Customer Personnel for
Customer's use and with no requirement to return to Hughes) without the
express written consent of the Hughes Program Manager.
12.4 Customer shall submit the individual name(s) of any proposed Consultant
who will have access to the plants and/or proprietary data of Hughes
and/or its Subcontractors to Hughes, which shall have the right to approve
all such Consultants (whether paid or
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unpaid). Such approval shall not be withheld by Hughes unless (i) the
hiring of such Consultant would give rise to a reasonable concern by
Hughes regarding the protection of its proprietary or competitive
information or compliance with its security requirements or United States
law, and/or (ii) Hughes has knowledge of prior incidents in which such
Consultant has demonstrated behavior or activity incompatible with Hughes'
ability to achieve the objectives of the Contract. In the event Hughes
disapproves a Consultant proposed by Customer, Hughes shall provide
Customer with an explanation, which need not be written, of its reasons
for disapproval.
12.5 As a condition to access to the facilities of Hughes, its Affiliates and
its Subcontractors under this Article, Customer agrees to indemnify Hughes
as set forth in Paragraph 39.1 of the Contract.
12.6 Hughes shall provide office space and facilities (co-located with the
program office) for the accommodation of up to three (3) Customer
Personnel who are U.S. citizens, and if necessary, separate facilities for
two (2) Customer Personnel who are citizens of the Republic of Korea plus
facilities for two (2) rotational U.S. Customer Personnel co-located with
the Koreans at Hughes' facilities. Hughes shall make reasonable work space
available for such Customer Personnel at environmental test facilities (if
located off site) and shall use best reasonable efforts to ensure that
facilities are provided for up to two (2) such Customer Personnel at other
selected Subcontractors' plants on a temporary basis to attend meetings or
witness tests. At a minimum, Hughes shall provide desks, chairs, office
supplies, local telephone service (long distance telephone usage to be
charged to Customer), car parking facilities and access to meeting rooms,
copying machines and facsimile equipment, and, as available, access to and
use of video conferencing facilities at Hughes' facilities.
12.7 Customer Personnel will have reasonable access to (i) drawings, circuit
diagrams/schematics, specifications, standards or process descriptions
available to Hughes and relevant to the Satellite, and (ii) data and
documentation provided to Hughes by its Subcontractors and relevant to the
Satellite (to the extent permitted by the Subcontractors
<PAGE>
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after Hughes has used best efforts to obtain such permission), and (iii)
Contract Deliverable Data and Documentation. Where such documentation is
necessary for evaluation of designs, performance considerations,
assessment of test plans and test results or for any other purpose
connected with the design, qualification, testing, Final Acceptance or
operation of the Satellite and its components, Hughes will make available
to Customer Personnel copies of such documentation (excluding unit and
unit sub-assembly design and process data), at no charge to Customer, on
the reasonable request of Customer Personnel. To facilitate their work in
this respect, Hughes will allow Customer Personnel reasonable access to
all Customer-specific indices related to such drawings, circuit
diagrams/schematics, and documents.
12.8 With regard to electronically generated information, Hughes will copy
Customer and/or provide Customer electronic access to such information as
is necessary to keep Customer advised, on a current basis, of program
issues, decisions and problems. Hughes shall, if feasible, provide
Customer Personnel access to Hughes's electronic mail systems through the
Internet, such access to be at Customer's cost. To the extent Hughes
establishes data links for general use between the facilities of Hughes
and its customers, Hughes shall establish data links between its and
Customer's facilities such that Customer has remote electronic access to
those project related documents identified in the CDRL. Hughes will also
provide Customer Personnel with "real time" access to all measured data
for the Satellite taken at Hughes' and/or Subcontractor's facilities on a
non-interference, no-cost basis.
12.9 Customer Personnel shall be entitled to attend all meetings and reviews
(including meetings and reviews held by electronic means) of Hughes and of
Hughes with any Subcontractors where such meetings and reviews are solely
related to Customer's project schedule and management, engineering,
design, manufacturing, integration, testing and launch (but not meetings
relating solely to Hughes' product line) and shall have the right to
participate in and make recommendations, but not to control, give
directions or assign actions, in all meetings and reviews at the system,
subsystem and unit level, as well as in internal program reviews. The
Parties agree to work cooperatively in resolving issues that
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arise at the various meetings and, where Customer has an objection to a
recommended resolution/ implementation, the Parties agree to discuss it at
the Senior Executive Level prior to implementation, provided that the
final decision concerning implementation shall remain with Hughes, who
shall provide Customer with a written explanation for its decision. With
respect to Hughes, "Senior Executive Level" shall mean the President or
Chairman of the Board of Hughes, and with respect to Customer, "Senior
Executive Level" shall mean the Chief Executive Officer of Customer or
Senior Vice President, Engineering and Satellite Operations of Orion
Satellite Corporation.
In the event a meeting or review is convened at Hughes' or a
Subcontractor's plant relating to Customer's program, Hughes shall provide
reasonable advance notice to Customer and shall make feasible and
appropriate arrangements to facilitate the entry of Customer Personnel to
the meeting place.
12.10 Hughes shall require that any Subcontract entered into after the Effective
Date of Contract (other than bulk-buy Subcontracts) contains a provision
substantially similar to this Article 12 to ensure the effectiveness of
Customer's rights under the Contract. With respect to Subcontracts entered
into before the Effective Date of Contract, Customer's rights under this
Article 12 shall be as permitted in such Subcontracts. With respect to
bulk-buy Subcontracts for critical sub-assemblies entered into after the
Effective Date, Hughes shall inform the Subcontractor of the provisions of
this Article 12 relating to access to Subcontractor's work-in-progress and
data and shall use reasonable efforts to request on Customer's behalf a
similar level of access.
12.11 Hughes' obligations under this Article shall be subject to applicable
United States Government regulations and Hughes' standard security rules
and regulations.
12.12 Consultants who are foreign nationals may be afforded a more restricted
degree of access to Hughes' facilities, such level of access to be
determined by Hughes in its reasonable discretion.
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12.13 With respect to foreign nationals access to design and process data,
Hughes will provide to a location designated by Customer two data sets:
one properly marked for U.S. citizen access; and a second (more
restrictive) data set properly marked for foreign nationals. Customer
accepts responsibility for proper distribution of each data set in a
manner that complies with all relevant United States Government laws and
regulations.
12.14 Hughes represents that the access to facilities and information provided
under the Contract is substantially equivalent to that generally granted
to its commercial customers (excluding Hughes Communications, Inc. or any
successor entity).
12.15 It is the intention of the Parties that the measures set forth in this
Article 12 shall afford Customer sufficient visibility into the Orion 3
Satellite Program such that Customer shall, throughout the duration of the
Program, be aware and informed with respect to material developments
affecting Hughes' ability to deliver the Satellite and other items to be
delivered according to the requirements of the Contract and on schedule to
meet the delivery dates set forth in Table 3.1 above. In order to further
facilitate this objective, Hughes shall advise Customer promptly by
telephone and confirm in writing any event, circumstance or development
that in Hughes' reasonable judgment Customer should not have become aware
of via the other measures set forth in this Article 12 and that, after
considering the applicability of reasonable remedial measures, materially
threatens (i) the quality of the Satellite or any component part thereof,
as well as any services, Contract Deliverable Data and Documentation, SCE,
Ground Control Software, or (ii) any delivery dates set forth in Table 3.1
of Article 3.
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ARTICLE 13. INTER-PARTY WAIVER OF LIABILITY
13.1 All operations at the Designated Launch Site pursuant to the Contract will
be subject to a no-fault, no-subrogation inter-party waiver of liability
under which Customer, Hughes and each other Person conducting operations
at the Designated Launch Site, including the Launch Provider ("Other
Users"), agrees to be responsible for any loss or liability which it
sustains as a result of damage to its own property and employees,
including death, while involved in operations, whether or not such damage
arises through negligence of any Person. It is the intent of the Parties
that this inter-party waiver of liability be construed broadly to achieve
its intended objectives of clarifying and minimizing the risk of liability
to third parties arising from Launch Operations. Prior to commencement of
Launch Operations, Customer will provide Hughes with evidence reasonably
satisfactory to Hughes that all other such Persons have agreed to such
inter-party waiver of liability.
13.2 If either Party contracts or subcontracts with a third party to provide
services which necessitate the contractor's or subcontractor's presence on
the Designated Launch Site, then such Party will also ensure that such
third party agree to a no-fault, no-subrogation inter-party waiver of
liability and indemnity for damages it sustains, identical to the Parties'
respective undertakings under this Article.
13.3 In the event that either Customer or Hughes fails to obtain the aforesaid
inter-party waiver of liability and indemnity from their respective
contractors or subcontractors, then such Party shall indemnify and hold
the other Party, the Launch Provider, the Other Users of launch services
and their respective contractors and subcontractors harmless from claims
brought by such Party's subcontractors with respect to matters that
otherwise would have been covered by the inter-party waiver of liability.
13.4 The Parties will take such further actions as may be required to implement
the provisions of this Article 13, including the execution of such
agreements and waivers as are customarily used with respect to operations
at the Designated Launch Site and are consistent with the provisions of
this Article 13.
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ARTICLE 14. HUGHES' REPRESENTATIONS, WARRANTIES AND COVENANTS
14.1 Subject to the provisions of Article 34 (Limitation of Liability) and
Paragraph 14.10, Hughes warrants that the Satellite delivered under the
Contract shall be free from material defects in materials and/or
workmanship as specified by Exhibit B (Satellite Technical Specification).
This warranty shall apply to the Satellite (other than the Satellite's
batteries) beginning on the date upon which the Satellite is Available for
Shipment and shall run for a period of 24 months (2 years) thereafter, or
until Intentional Ignition, whichever is earlier.
With respect to batteries, this warranty shall begin upon cell activation
and shall run for a period of 24 months (2 years) after such activation,
or until Intentional Ignition, whichever is earlier. In the event the
Satellite is placed in storage due to the fault of Hughes, the foregoing
warranty periods shall be extended by the length of such storage period.
14.2 Subject to the provisions of Article 34 (Limitation of Liability), and
Paragraph 14.10, Hughes warrants that the SCE delivered under the Contract
shall be free from material defects in materials and/or workmanship as
specified by Exhibit E (Ground Segment). With respect to the SCE, this
warranty shall begin upon the date of Final Acceptance thereof and shall
run for a period of 12 months (1 year) thereafter.
14.3 Subject to the provisions of Article 34 (Limitation of Liability) and
Paragraph 14.10, Hughes warrants that the simulator (as described in
Exhibit E) delivered under the Contract shall be free from material
defects in materials and/or workmanship as specified by Exhibit E (Ground
Segment). With respect to the simulator, this warranty shall begin upon
the date of Final Acceptance thereof and shall run for a period of 12
months (1 year) thereafter.
14.4 In the event the Satellite is not Delivered on or before the Scheduled
Delivery Date due to the fault of Hughes, the warranty periods set forth
in Paragraphs 14.2 and 14.3 shall be extended one Day for each Day
Delivery is delayed beyond the Scheduled Delivery Date, up to a maximum
extension of twelve (12) months.
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14.5 Customer shall have the right at any time during the period of the
warranties set forth in Paragraphs 14.1, 14.2, and 14.3 (as the warranty
periods set forth in Paragraphs 14.2 and 14.3 may be extended pursuant to
Paragraph 14.4) to require that any Work not conforming in any material
respect to the Exhibits to the Contract be promptly corrected or replaced
(at Hughes' option and expense) with conforming Work. If Hughes fails to
correct or replace such defective Work within a reasonable period after
notification from Customer, Customer may then require Hughes to repay such
portion of the Contract Price as is equitable under the circumstances in
lieu of repairing or replacing such defective Work.
14.6 Hughes covenants that it shall assign properly qualified and experienced
personnel to the Orion 3 Satellite Program contemplated by the Contract.
14.7 Hughes represents and warrants that it is either the owner of, or
authorized to use and incorporate, any software or invention utilized or
incorporated in the Work.
14.8 Hughes represents, warrants and covenants that:
A. it has the requisite corporate power and authority to enter into the
Contract and to carry out the transactions contemplated by the
Contract; and
B. the execution, delivery and performance of the Contract and the
consummation of the transactions contemplated by the Contract have
been duly authorized by the requisite corporate action of Hughes;
and
C. it has (and will have throughout the period of performance of the
Contract) adequate financial resources to fulfill its obligations
hereunder, including any repayment obligations upon termination; and
D. it will, until Final Acceptance, provide Customer with Hughes
Electronics Space Segment quarterly financial statements (profit and
loss/balance sheet) evidencing Hughes' financial ability to perform;
and
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E. the Contract is a valid and binding obligation of Hughes,
enforceable in accordance with its terms.
14.9 Hughes represents and warrants to Customer that, to the best of its
knowledge, it has not violated any applicable laws or regulations or any
Customer policies of which Hughes has been given notice regarding the
offering of unlawful inducements in connection with the Contract.
14.10 THESE WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING FITNESS FOR PARTICULAR PURPOSE OR MERCHANTABILITY AND THE REMEDY
PROVIDED IN PARAGRAPH 14.5 IS THE SOLE REMEDY FOR FAILURE BY HUGHES TO
FURNISH THE SATELLITE, SCE AND SIMULATOR FREE FROM MATERIAL DEFECTS IN
MATERIAL OR WORKMANSHIP AS SET FORTH IN PARAGRAPHS 14.1, 14.2 AND 14.4
ABOVE, RESPECTIVELY. ALL OTHER WARRANTIES OR CONDITIONS IMPLIED BY ANY
OTHER STATUTORY ENACTMENT OR RULE OF LAW WHATSOEVER ARE EXPRESSLY EXCLUDED
AND DISCLAIMED.
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ARTICLE 15. ORION'S REPRESENTATIONS, WARRANTIES, COVENANTS AND ACKNOWLEDGMENTS
Unless specifically specified otherwise, references to Customer and ONS
refer only to those entities as distinct and separate corporate entities
and not to any of their subsidiaries or Affiliates. Customer and/or ONS,
as the context dictates, represent and warrant to Hughes as follows:
15.1 Organization, Good Standing and Qualification. As of the Effective Date of
Contract, each of Customer and ONS is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Each of Customer and ONS has all requisite power and authority
to own and operate its material properties and assets and to carry on its
respective business as now conducted in all material respects. Customer
and ONS are each duly qualified to transact business and are in good
standing in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect (as hereinafter defined). For purposes of
this Article 15, the term "Material Adverse Effect" shall mean any
material adverse change in (a) the legality, validity or enforceability of
the Contract, or (b) the ability of Customer or ONS to perform the
Contract or (c) the financial condition or operations of Customer or ONS.
15.2 Authorization. Customer and ONS each has all corporate and other requisite
authority to execute, deliver, carry out and perform its obligations under
the terms of the Contract and all the transactions contemplated hereunder.
The Contract and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all requisite corporate action on
behalf of Customer and ONS.
15.3 Capitalization and Subsidiaries. As of the Effective Date of Contract,
Customer and ONS do not presently own or control, directly or indirectly,
any interest in any other corporation, partnership, association or other
business entity or have any subsidiaries, except those listed in Schedule
15.3. Schedule 15.3 also includes a listing of the percentage ownership of
Customer or ONS, as the case may be, in the foregoing entities.
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15.4 Litigation. As of the Effective Date of Contract, except as provided on
Schedule 15.4, there are no actions, suits, or proceedings or
investigations Pending, or, to the knowledge of Customer and/or ONS,
threatened against either Customer or ONS which ONS is required to
disclose in its filings under the Securities Exchange Act of 1934, as
amended. In addition, neither Customer nor ONS currently intends to
initiate such an action. For purposes of the Contract, "Pending," when
used in the context of legal action, lawsuit, proceeding or investigation,
shall mean an action, suit, proceeding or investigation as to which
Customer or ONS shall have knowledge or received written notice.
15.5 Certain Actions. Except as set forth on Schedule 15.5 hereto, neither
ORION nor ONS has, from September 30, 1996 to the Effective Date of
Contract, incurred any indebtedness of Five Hundred Thousand U.S. Dollars
(U.S. $500,000) or more, or sold, exchanged or otherwise disposed of any
of its material assets or rights.
15.6 Title to Properties and Assets. Customer owns its material properties and
assets, other than leased properties, free and clear of all liens, charges
and encumbrances, except for (a) such encumbrances and liens which arise
in the ordinary course of business and do not materially impair Customer's
ownership or use of such property or assets, (b) liens created by the
Contract and (c) liens listed on Schedule 15.6.
15.7 Financial Statements. Customer has delivered to Hughes the audited
consolidated statements of operations, changes in shareholders' equity and
cash flows for each of the three (3) years in the period ended December
31, 1995, including the notes thereto, of ONS and the unaudited
consolidated balance sheets at September 30, 1996 and related unaudited
consolidated statements of operations and cash flows for the nine (9)
months then ended of ONS (together, the "Financial Statements"). The
Financial Statements have been prepared in accordance with GAAP and
present fairly in all material respects the consolidated financial
condition, cash flow, results of operations and changes in stockholders
equity of ONS and its subsidiaries for such periods. Except as disclosed
in Schedule 15.7, from September 30, 1996 to the Effective Date of
Contract, there has not been (a) any material adverse change to the
financial condition of ONS or any of its
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subsidiaries, or (b) any damage, destruction or loss, whether or not
covered by insurance, which has had a Material Adverse Effect. Except as
disclosed in the Financial Statements or in Schedule 15.7, neither
Customer nor ONS is a guarantor or indemnitor of any material indebtedness
of any other person, firm or corporation. ONS, on a consolidated basis,
maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP.
15.8 Undisclosed Liabilities. As of the Effective Date of Contract, except as
set forth on Schedule 15.7 or on any other Schedule hereto, neither
Customer nor ONS is subject to any liabilities of any nature, whether
absolute, contingent or otherwise (whether or not required to be accrued
or disclosed under the accounting disclosure standards applicable to such
entity) which have had or can reasonably be expected to have a Material
Adverse Effect, except to the extent set forth or provided in the
Financial Statements. Except as set forth in Schedule 15.7 or any other
Schedule hereto, all debts, liabilities and obligations incurred by such
entities, after the date of the Financial Statements, were incurred in the
ordinary course of business and are in amounts less than Five Hundred
Thousand U.S. Dollars (U.S. $500,000).
15.9 Disclosure. As of the Effective Date of Contract, neither the Contract
(including the representations and warranties of this Article 15 and the
related Schedules) nor any of the written statements or certificates made
or delivered in connection herewith to the extent such are listed in
Schedule 15.9 (including the filings made by ONS under the Securities
Exchange Act of 1934, as amended, which have been provided to Hughes and
are listed in Schedule 15.9), contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were
made, not misleading.
15.10 Compliance with Other Instruments. To the knowledge of Customer and ONS,
as of the Effective Date of Contract, neither Customer nor ONS is in
violation or default of its respective Certificate of Incorporation or its
respective By-Laws, or in material default of any instrument, judgment,
order, writ, decree or oral or written contract or other
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agreement to which it is a party or by which it is bound or of any
provision of federal, state or local statute, rule or regulation
applicable to such entities as of the date hereof where such violation or
default will have a Material Adverse Effect. The execution, delivery and
performance of the Contract and the consummation of the transactions
contemplated hereby will not (i) result in any such violation or be in
conflict with the Certificate of Incorporation or the By-Laws of such
entity, or (ii) be in conflict with any instrument, judgment, order, writ,
decree, or (iii) be in conflict with any contract or other agreement or be
an event which results in the creation of any lien, charge or encumbrance
upon any material asset of any of such entities other than as provided in
the Contract, where such conflict or creation would have a Material
Adverse Effect.
15.11 Customer's Financial Strength. Hughes and Customer acknowledge and agree
that Hughes, in entering into the Contract, is relying on the separate
existence and financial strength of Customer alone and not of any
Affiliate of Customer.
15.12 Other Commitments. The following representations and covenants of Customer
only apply prior to Hughes' receipt of the Balloon Payment (and shall not
apply to any financing entered into by Customer, ONS, or Customer's
Affiliates to obtain the funding for such payment which results in the
Balloon Payment being made substantially concurrently with such financing
being obtained for the Balloon Payment):
1) Customer represents and warrants that its assets do not secure the
liabilities of ONS ("Parent"), Orion Atlantic, L.P. or any other
person, and prior to Hughes' receipt of the Balloon Payment, will
not grant such a security interest.
2) Customer represents and warrants that, as of the Effective Date of
Contract, it is not a party to any financing agreements which
contain a provision that a default by any third party in such third
party's obligations will be a default under any of Customer's
financing agreements where enforcement of such provision is likely
to have a material adverse effect on the ability of Customer to make
the Balloon
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Payment or have a material adverse effect on Hughes' right, title
and interest in the Work or the security interest held by Hughes
therein.
3) Customer agrees that it shall not agree to a provision in any of its
financing agreements that a default by any third party in such third
party's obligations will be a default under any of Customer's
financing agreements unless the lender provides Hughes with an
express acknowledgment of those Hughes' rights under the Contract
listed in Schedule 15.12 and agrees not to contest those rights.
Further, Customer will not agree to such provision if it is likely
to have a material adverse effect on the ability of Customer to make
the Balloon Payment or have a material adverse effect on Hughes'
right, title and interest in the Work or the security interest held
by Hughes therein.
15.13 ONS represents and warrants that, as of the Effective Date of Contract, to
ONS' knowledge, no competing satellite vendor has any claim against Hughes
based on any relationship, contract or understanding between Customer or
ONS and any competing satellite vendor arising out of Hughes' entry into
the Contract. Customer and ONS shall indemnify and hold Hughes harmless
for any breach of the immediately foregoing representation and warranty.
15.14 Customer and ONS represent and warrant that the payments to be made to
Hughes under the Contract shall be made by Customer and shall not be from
funds that are held by Customer in either an express or constructive
trust. Customer and ONS shall indemnify and hold Hughes harmless for any
breach of these representations and warranties.
15.15 ONS shall indemnify and hold Hughes harmless against any damages that
arise from the ORION 3 Satellite business contemplated by the ATP and the
Contract competing with the business of International Private Satellite
Partners, L.P. d/b/a ORION Atlantic, L.P.
15.16 Customer acknowledges that the Republic of Marshall Islands licenses or
consents with respect to the Specified Orbital Location for the ORION 3
Satellite are held by an entity other than Customer.
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15.17 Customer and ONS represent and warrant that, as of the Effective Date of
Contract, Customer is not a party to a joint venture or any similar
agreement with Loral Space and Communications Corporation or any of its
subsidiaries (collectively "Loral").
15.18 Customer and ONS represent and warrant that Customer has been and shall be
operated as an independent and separate corporate entity from ONS. As of
the Effective Date of Contract, Customer and ONS shall have separate bank
accounts, separate accounting records (although Customer has been and may
continue as part of the ONS consolidated financial reporting group), and
separate stationery, and Customer shall be responsible for its allocable
portion of overhead expenses, such as rent, compensation for officers and
legal counsel, etc.
15.19 THE WARRANTIES SET FORTH IN THIS ARTICLE 15 ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED. ALL OTHER WARRANTIES OR CONDITIONS IMPLIED
BY ANY OTHER STATUTORY ENACTMENT OR RULE OF LAW WHATSOEVER ARE EXPRESSLY
EXCLUDED AND DISCLAIMED.
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ARTICLE 16. TAXES AND DUTIES
16.1 This Paragraph 16.1 applies only to goods and services delivered by Hughes
to any foreign country pursuant to the requirements of the Contract. The
Contract Price excludes, and Hughes and Hughes' Affiliates and
Subcontractors shall not be required to pay, any present or future
non-U.S. taxes, duties, fees, levies, bonds, duties, charges,
contributions, or any other such fiscal burden based on the delivery by
Hughes of goods or services to Customer in any foreign country pursuant to
the requirements of the Contract imposed by any jurisdiction other than
the United States or the State of California, including the following:
A. Taxes, customs, duties, or other charges levied on goods imported
into or services delivered in any foreign country under the
Contract; and
B. Taxes, customs, duties, or other charges levied on materials, test
equipment, tools, and documentation temporarily imported into any
foreign country which are required for the performance of the
Contract; and
C. Income taxes or business taxes levied by any foreign country on
goods or services delivered directly by Hughes to Customer in a
foreign country; and
D. Value added taxes or any similar taxes imposed by any foreign
country on goods or services delivered directly by Hughes to
Customer in a foreign country.
16.2 Hughes shall consult with Customer or its designated Consultant(s) on any
taxes or duties which may be payable under Paragraph 16.1 above. In the
event any of the items in 16.1 above are levied upon Hughes, or Hughes'
Affiliates or Subcontractors, Hughes shall immediately notify Customer.
Customer, within five (5) Business Days of receipt of such notification
from Hughes, shall either have the charges waived or pay the charges
directly. For those items in Paragraph 16.1 that Hughes is required by law
to pay, Customer shall reimburse Hughes in an amount which leaves Hughes
in the same economic position as if such payment of charges and
reimbursement thereof had not been required, within thirty
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(30) days of Customer's receipt of Hughes' invoice. Hughes' reimbursement
request will be accompanied by evidence of the amount and purpose of such
payments, and shall include a calculation of the amount of reimbursement
required under the preceding sentence.
16.3 Hughes shall be responsible for and shall pay all United States (federal
and state) taxes, fees, levies, duties and other lawful charges which are
levied upon Hughes or its Affiliates in connection with Hughes'
performance of the Work under the Contract, except those levied as a
result of transfer of title in the United States for an unlaunched
Satellite as described in Article 32.5.
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ARTICLE 17. TERMINATION AND OTHER RIGHTS
17.1 Termination for Customer's Convenience
A. Customer may, upon written notice to Hughes, at any time terminate
the Work in accordance with the terms set forth below, and Hughes
shall immediately cease Work in the manner and to the extent
specified. Notwithstanding the foregoing, in no event shall there be
a termination under this Paragraph 17.1 after Intentional Ignition.
B.S Upon receipt of a notice of termination, as provided in
Paragraph_17.1.A above, Hughes shall take the following actions:
(1) stop Work under the Contract on the date and to the extent
specified in the notice of termination;
(2) place no further orders or subcontracts for materials, services,
or facilities;
(3) terminate orders and subcontracts to the extent that they relate
to the performance of the Work;
(4) settle all outstanding liabilities and all claims arising out of
such termination of orders and subcontracts for materials,
services, or facilities; and
(5) take such action as may be reasonably necessary, or as Customer
may direct, for the protection and preservation of the property
related to the Contract which is in the possession of Hughes or
any Subcontractor and in which Customer has or may acquire an
interest.
C. In the event of termination under this Paragraph 17.1 and provided
the termination is not due to Hughes' default under Paragraph 17.2,
Hughes shall be entitled to payment of an amount equal to the
Termination Liability Amount as specified in Exhibit F (Payment
Plan) less the sum of all amounts (including the ATP Payment)
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received by Hughes under the Contract; provided that in the event
such amount is a negative number, Hughes shall refund such amount to
Customer.
D. Hughes shall submit an invoice to Customer within sixty (60) Days
after the termination date, which invoice shall specify the amount
due to Hughes from Customer pursuant to this Paragraph 17.1, and
Hughes shall be entitled to payment by Customer of such amount
within thirty (30) Days thereafter. Payment of such amount by any
Financing Entity on behalf of Customer shall relieve Customer from
its obligation to make such payment.
E. The amount payable by Customer to Hughes pursuant to
Paragraph 17.1.C shall constitute a total discharge of Customer's
liabilities to Hughes for termination pursuant to this
Paragraph 17.1.
F. In the event of termination pursuant to this Paragraph 17.1 after
Hughes' receipt of the Balloon Payment, upon payment of all amounts
due hereunder, then
(1) title to all items of Work which would have been incorporated
into a deliverable item under the Contract, and which are in
progress before the giving of notice under Paragraph 17.1.A
above, shall, subject to applicable United States Government
export regulations, vest in Customer, and Hughes shall deliver
all such items to Customer FOB Hughes plant, El Segundo,
California (at which point Customer shall accept such items);
and.
(2) Hughes agrees to refund to Customer the difference between (x)
the lesser of (i) the price of the Launch Services set forth in
Paragraph 4.2 ("Launch Services Price") and (ii) the resale
price of such Launch Services to a third party and (y) Hughes'
additional actual costs incurred to resell such Launch Services
(including unrecoverable costs charged by the Launch Provider
such as: inventory carrying fees; reasonable reprogramming
costs; and profit), plus a profit on such additional actual
costs of twelve and one-half
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<TABLE>
<S> <C>
percent (12.5%); provided that in the event Customer has not
paid in full the Launch Services Price (taking into account any
termination liability payment made by Customer) the "resale
price" in (x) above shall be adjusted, for purposes of these
calculations, by multiplying such "resale price" by the amount
Customer has paid for the Launch Services (taking into account
any termination liability paid by Customer) divided by the
Launch Services Price (for example, if Customer has paid only
[ ] of the Launch Services Price [ ] and*
Hughes resells the Launch Services for [ ] then the*
"resale price" for purposes of (x) shall be adjusted to be
[ ] times [ ] divided by*
[ ])). Hughes agrees to use best reasonable efforts to*
resell the Launch Services during the eighteen (18) month period
following said termination and amounts realized from such resale
will be refunded to Customer thirty (30) days after Hughes'
receipt of such resale payments from the third party. Hughes
shall use best reasonable efforts to sell the Launch Services at
fair market value (at the time of such resale).
</TABLE>
G. If in Hughes' sole judgment it is feasible for Hughes to utilize any
items of terminated Work, it shall submit to Customer an offer to
acquire such items. If such offer is accepted, Hughes' termination
invoice shall be credited with the agreed acquisition price. Hughes
shall have no obligation to use any of the Work in any other project
or for any other customer and any decision to do so shall be made at
Hughes' sole discretion.
H. This Paragraph 17.1 shall apply only to a complete termination of
the Work. Customer requests for termination of only a portion of the
Work shall be presented to Hughes and negotiated pursuant to Article
22 (Changes).
17.2 Termination for Hughes' Default
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A. Customer may issue a written notice of default (the "Default
Notice") to Hughes if:
(1) The Satellite has not been Delivered and the Damages Period set
forth in Article 11 (as extended in accordance with the
provisions thereof) has expired and the maximum Contract Price
reduction has occurred; or
(2) Hughes commences a voluntary proceeding concerning itself under
any applicable bankruptcy, insolvency, reorganization,
adjustment of debt, relief of debtors or similar law
("Insolvency Law"); or any involuntary proceeding commences
against Hughes under an Insolvency Law and the petition has not
been dismissed within ninety (90) Days after commencement of the
proceeding; or a receiver or custodian is appointed for or takes
charge of all or a substantial portion of the property of Hughes
and such custodian or receiver has not been dismissed or
discharged within sixty (60) Days; or Hughes has taken action
toward the winding-up, dissolution or liquidation of Hughes or
its business; or Hughes has been adjudicated insolvent or
bankrupt or an order for relief or other order approving a case
or proceeding under an Insolvency Law has been entered; or
Hughes has made a general assignment for the benefit of
creditors or becomes unable to pay its debts generally as they
become due; or
(3) Hughes has assigned or transferred the Contract in violation of
the provisions of Article 26 (Assignment or Change in Ownership
or Control) and Hughes fails to cure such unauthorized
assignment or transfer within thirty (30) days after receiving
written notice.
B. Customer's service of a Default Notice on Hughes shall operate to
terminate the Contract forthwith with respect to the Work. In the
event Customer terminates the Contract as provided in
Paragraph 17.2.A, Customer shall be entitled to a refund of all
payments (including the ATP Payment) previously made to Hughes
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<TABLE>
<S> <C>
under the Contract, any liquidated damages for delay levied pursuant
to Article 11, and, as damages, direct reasonable re-procurement
costs in excess of the Contract Price, such re-procurement damages
to be actually incurred and invoiced to Hughes in reasonable detail
not to exceed [ ] *
</TABLE>
C. Upon refund of payments in accordance with Paragraph_17.2.B above,
Hughes shall be entitled to retain title to any and all Work,
work-in-progress, parts or other material, together with any
associated warranties, and any subcontracted items which Hughes has
specifically produced or acquired or entered into in accordance with
the Contract.
D. If, after termination of the Contract under the provisions of this
Paragraph 17.2, it is determined by arbitration or admitted in
writing by Customer that Hughes was not in default under the
provisions of this Paragraph 17.2, or that the default was excusable
under Article 10 (Excusable Delays), such termination shall be
considered a termination for convenience of Customer and the
provisions of Paragraph 17.1 shall apply.
E. THE RIGHTS AND REMEDIES PROVIDED TO CUSTOMER IN THIS PARAGRAPH 17.2,
AND IN ARTICLE 4 (CONTRACT PRICE, PAYMENT AND ADJUSTMENT), ARTICLE 5
(SATELLITE PERFORMANCE PAYMENTS), ARTICLE 11 (LIQUIDATED DAMAGES FOR
LATE DELIVERY), ARTICLE 14 (HUGHES' REPRESENTATIONS, WARRANTIES AND
COVENANTS), PARAGRAPH 17.4 (TERMINATION FOR EXCUSABLE DELAY) AND
ARTICLE 19 (PATENT INDEMNIFICATION) SHALL BE EXCLUSIVE AND IN LIEU
OF ANY OTHER RIGHTS AND REMEDIES PROVIDED BY LAW OR IN EQUITY IN THE
EVENT HUGHES FAILS TO MEET ITS OBLIGATIONS TO PERFORM THE WORK.
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F. Notwithstanding the other provisions of this Article, a termination
for Hughes' default shall not relieve the Parties of their
obligations with respect to a launched Satellite and, except for
termination pursuant to Paragraph 17.2.A(1), there will be no
termination for default with respect to a launched Satellite.
17.3 Termination for Customer's Default
A. Hughes may terminate the Contract in whole without prior notice to
Customer at any time after the occurrence of any of the following:
(1) If Customer is in default of any Progress Payment up to and
including the Balloon Payment; provided, however, where Hughes
failed to provide the invoice specified in Paragraph 4.7 for
such payment, Hughes shall not be entitled to terminate the
Contract for Customer's default in making such payment unless
and until Hughes provides Customer such an invoice for such
payment and fails to receive such payment within ten (10) Days
after Customer's receipt (as specified in Article 24) of such
invoice; or
(2) If Hughes gives written notice to Customer of default in the
payment of any Progress Payment due after the Balloon Payment
when such Progress Payment shall have become due and payable and
Customer fails to cure such event within thirty (30) Days after
receiving such written notice; or
(3) Customer commences a voluntary proceeding concerning itself
under any applicable bankruptcy, insolvency, reorganization,
adjustment of debt, relief of debtors or similar law
("Insolvency Law"); or any involuntary proceeding commences
against Customer under an Insolvency Law and the petition has
not been dismissed within ninety (90) Days after commencement of
the proceeding; or a receiver or custodian is appointed for or
takes charge of all or a substantial portion of the property of
Customer and such custodian or receiver has not been dismissed
or discharged within sixty (60) Days; or Customer has taken
action toward
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the winding-up, dissolution or liquidation of Customer or its
business; or Customer has been adjudicated insolvent or bankrupt
or an order for relief or other order approving a case or
proceeding under an Insolvency Law has been entered; or Customer
has made a general assignment for the benefit of creditors or
becomes unable to pay its debts generally as they become due; or
(4) Customer has assigned or transferred the Contract in violation
of the provisions of Article 26 (Assignment or Change in
Ownership or Control) and Customer fails to cure such
unauthorized assignment or transfer within thirty (30) days
after receiving written notice.
B. Upon the occurrence of an event of default under Paragraph
17.3.A(1), Hughes' sole and exclusive remedies against Customer, ONS
and any Orion Affiliate (in addition to those remedies set forth in
Paragraph 17.3.A(1)) shall be the following: (i) Hughes may, at its
sole option, terminate its obligation to dedicate a Delta III launch
rocket to the Contract without terminating the remainder of the
Contract; (ii) Hughes may immediately stop Work; (iii) Hughes shall
be entitled, as liquidated damages, to retain possession and title
of the Work, and all items thereof, and all payments received prior
to such termination until all payments due under the Contract have
been received in immediately available funds; and (iv) sell the
Work, or items thereof, to another Person without notice to
Customer. Nothing in this subparagraph 17.3.B shall limit any rights
(and associated remedies to enforce those rights) Hughes has in the
Work by virtue of law or its security position as permitted in
Paragraphs 4.17 and 9.3 or any rights either Party has under the
existing Non-Disclosure Agreement between the Parties.
C. Upon the occurrence of an event of default under Paragraph 17.3.A(3)
above, Customer shall, upon the written request of Hughes,
immediately terminate the Contract under Paragraph 17.1 above
(Termination for Customer's Convenience).
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D. Upon the occurrence of an event of default under Paragraph 17.3.A
above (other than under Paragraph 17.3.A(1)), Hughes' remedies (in
addition to those set forth in Paragraph 17.3.A) shall be the
following:
(1) Customer shall pay to Hughes the amounts specified in
Paragraph 17.1.C within fifteen (15) Days after notice of
request to pay such amounts; and
(2) Hughes shall have the right to immediately stop Work under the
Contract; and
(3) If Customer does not pay to Hughes the amounts specified in
Paragraph 17.1.C within fifteen (15) Days after receiving
written notice of request to pay such amounts Hughes shall be
entitled to (without any further notice to Customer):
(i) immediately sell all the work in progress and retain the
proceeds of such sale; and
(ii) the provisions of Paragraph 17.1.F(2) shall apply with
respect to the resale of the Launch Services and refund to
Customer of the proceeds realized therefrom.
(4) If Customer pays the amounts specified in Paragraph 17.1.C
within fifteen (15) days after receiving written notice of
request to pay such amounts, then
(i) title to all items of Work which would have been
incorporated into a deliverable item under the Contract,
shall, subject to applicable United States Government
export regulations, vest in Customer, and Hughes shall
deliver all such items to Customer FOB Hughes plant, El
Segundo, California (who shall accept such items); and
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(ii) the provisions of Paragraph 17.1.F(2), shall apply with
respect to resale of the Launch Services and refund to
Customer of the proceeds realized therefrom.
E. Except as specified in this Paragraph 17.3, or Paragraphs 4.6, 4.8,
4.9, 4.14, 4.16, 4.19 or 32.4, Hughes shall not have the right to
terminate or suspend the Contract.
17.4 Should Customer become a debtor in any bankruptcy proceeding, Customer
shall move to assume or reject the Contract within forty-five (45) days
after the entry of an order for relief.
<TABLE>
<S> <C>
17.5 Customer may, upon written notice to Hughes, terminate immediately all of
the Contract if the aggregate of Excusable Delays (except those Excusable
Delays caused by Customer's failure to perform its obligations under
Article 29) exceeds twelve (12) months. If Customer so terminates the
Contract, Hughes shall refund to Customer all amounts (including amounts
paid under the ATP) paid to Hughes pursuant to the Contract less a profit
of twelve and one half percent (12.5%) on such amounts, provided, however,
such profit shall not exceed [ ]*
[ ] *
</TABLE>
17.6 Hughes shall use reasonable efforts to place Subcontracts on terms that
will enable Hughes to terminate in a manner consistent with this Article
17.
17.7 Because time is of the essence in the Contract, any disputes between the
Parties under Article 17 will be decided by an expedited arbitration
procedure.
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ARTICLE 18. DATA AND SOFTWARE
18.1 Use of Contract Deliverable Data and Documentation
Subject to the provisions of Article 21 (Proprietary Information),
Customer and its Consultants shall have a nonexclusive, non-transferable,
worldwide, royalty-free, fully paid-up right to use and maintain, for the
actual physical operational lifetime of the Satellite, the Contract
Deliverable Data and Documentation for the Orion 3 Satellite Program
solely for purposes of maintaining and operating the Satellite and
delivered Satellite Control Equipment and Ground Control Software.
18.2 Use of Copyrights
Notwithstanding any other provision hereof, the ownership and title to
copyrights in Contract Deliverable Data and Documentation shall remain in
Hughes or its licensor(s). Hughes grants to Customer a fully paid-up,
royalty-free, nonexclusive right under Hughes' copyrights for the actual
physical operational lifetime of the Satellite to make copies of the
Contract Deliverable Data and Documentation solely for use in connection
with the maintenance and operation of the Satellite and delivered
Satellite Control Equipment and Ground Control Software. On all
documentation that is copyrighted, Customer shall apply the appropriate
copyright notice to all copies made thereof. All rights to documentation
not owned by Hughes are limited by the extent of Hughes' rights and
interests therein.
18.3 Software Rights in Ground Control Software
Hughes grants to Customer a non-exclusive, non-transferable license and
worldwide, royalty-free, fully paid-up right for the actual physical
operational lifetime of the Satellite (i) to use and maintain the Ground
Control Software, only for the purpose of controlling the Satellite,
provided however that Customer may, upon notification to Hughes, transfer
the Ground Control Software to another location for the purpose of
controlling the Satellite and (ii) to reproduce the Ground Control
Software, for the purposes of
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safekeeping (archives) or backup, provided all copyright notices and
proprietary markings are reproduced.
Except for those rights in the Ground Control Software specifically
granted in the Contract, no rights in the Ground Control Software are
granted to Customer. The Ground Control Software in source code form and
the documentation are a trade secret of Hughes. Customer agrees to
preserve such Ground Control Software in confidence and shall not disclose
such Ground Control Software to any third parties. This provision does not
limit the right of Customer to use Ground Control Software, or information
therein, which Customer may already have or obtains without restriction.
Third parties do not include those contractors and Consultants who have
Customer's permission and who have agreed to use the Ground Control
Software only in accordance with these restrictions. Customer agrees to
take all reasonable steps to safeguard from theft, loss and negligent
disclosure to others all Ground Control Software delivered hereunder.
Customer shall take appropriate action by instruction or agreement with
its employees and Consultants who are permitted access to the Ground
Control Software advising such employees and Consultants of Customer's
obligations hereunder. The foregoing obligations shall survive termination
or expiration of the Contract.
18.4 Vendor Software shall be provided to Customer in accordance with the
particular Vendor's usual software license agreement, which agreement(s)
will be provided to Customer upon installation of said software. Customer
agrees to use Vendor Software only in accordance with the provisions of
such software license agreements.
18.5 Inthe event of any termination of the Work under the Contract, subject to
any rights granted elsewhere in the Contract to the contrary, any data
rights specified in this Article in and to such Work shall revert to
Hughes and Customer shall have no further rights with respect to such
Work.
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ARTICLE 19. PATENT INDEMNIFICATION
19.1 In lieu of any other warranty by Customer or Hughes against infringement
of intellectual property rights, express or implied, it is agreed that
Hughes will indemnify and defend (including by way of settlement), at its
expense, any suit against Customer based on a claim that Customer's use of
the Satellite, Satellite Control Equipment, Ground Control Software,
Contract Deliverable Data or Documentation furnished under the Contract
infringes an intellectual property right in the country of delivery or the
United States, unless such infringement occurred solely as a result of
Customer's provision of designs, specifications or instructions to Hughes,
and provided Hughes is promptly notified in writing of such claim and
given authority, information and assistance by Customer, at Hughes'
expense, for the defense or settlement thereof. Hughes agrees to pay
damages and costs awarded against Customer in any suit defended by Hughes
pursuant to the Contract.
Nothing in the Contract shall be construed as requiring Hughes to defend a
suit or pay damages or costs if either (i) the infringement claim or
judgment is based upon the use of any goods and services furnished in
combination with other goods and services not provided by Hughes or
approved for use by Hughes, if the infringement would not have occurred
but for such combined use; (ii) the infringement claim is based on the
goods and services being used in other than their specified operating
environment; or (iii) the infringement claim is based on Customer's
modification of the Satellite, Satellite Control Equipment, Ground Control
Software, Contract Deliverable Data or Documentation.
If the use of the Satellite(s), Satellite Control Equipment, Ground
Control Software, Contract Deliverable Data or Documentation is enjoined
in such suit, Hughes shall, at its option, either procure for Customer the
right to use the Satellite(s), Satellite Control Equipment, Ground Control
Software, Contract Deliverable Data or Documentation, as the case may be,
or substitute an equivalent product reasonably acceptable to Customer or
modify the same to render them noninfringing. If Hughes determines that
none of these
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alternatives are reasonably available or feasible, Hughes shall meet with
Customer to address the matter and reach an equitable solution reasonably
acceptable to Customer.
If the infringement results solely from Customer's provision of designs,
specifications or instructions to Hughes, Customer will indemnify and
defend (including by way of settlement), at its expense, any such suit
against Hughes, provided Customer is promptly notified in writing of the
claim of infringement and given authority, information and assistance by
Hughes, at Customer's expense, for the defense or settlement thereof.
19.2 Each Party's total liability for the cost of any such defense and any
subsequent award of damages and costs under this Article 19 shall not
exceed Ten Million Dollars (U.S. $10,000,000). The existence of one or
more claims or lawsuits shall not extend this amount under patent covering
combination of items furnished hereunder with other devices or elements.
19.3 In no event shall Hughes be liable for any lost revenues, lost profits, or
other indirect, incidental, special or consequential damages suffered by
Customer (as contrasted with damages suffered by any third party claiming
infringement of its intellectual property rights under this Article 19 for
which Customer may become liable) as a result of a claim or suit under
this Article 19.
19.4 The foregoing constitutes the Parties' entire obligation with respect to
claims for infringement.
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ARTICLE 20. RIGHTS IN INVENTIONS
20.1
A. As used in the Contract, "Program Invention" shall mean any
invention, discovery or improvement conceived of and first reduced
to practice in the performance of the Work under the Contract.
Information relating to Program Inventions shall be treated as
proprietary information in accordance with the provisions of the
Contract. Rights to inventions conceived solely by Hughes or its
employees shall vest completely with Hughes.
B. Hughes shall be the owner of all Program Inventions invented solely
by Hughes. Hughes grants Customer a fully paid-up, royalty-free,
nonexclusive license for the actual physical operational lifetime of
the Satellite in Program Inventions to use Program Inventions solely
for the purposes of maintenance and operation of the Satellite and
any other item delivered that contains Program Inventions.
C. The following shall apply to joint Program Inventions: that is,
inventions conceived jointly by one or more employees of both
Parties hereto:
(1) each Party shall have an equal, undivided one-half interest in
and to such joint Program Inventions, as well as in and to
patent applications and patents thereon in all countries.
(2) Hughes shall have the first right of election to file patent
applications in any country, and Customer shall have a second
right of election. Each Party in turn shall make its election at
the earliest practicable time, and shall notify the other Party
of its decision.
(3) The expenses for preparing, filing and securing each joint
Program Invention patent application, and for issuance of the
respective patent shall be borne by the Party which prepares and
files the application. The other Party shall furnish the filing
Party with all documents or other assistance
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that may be necessary for the filing and prosecution of each
application. Where such joint Program Invention application for
patent is filed by either Party in a country which requires the
payment of taxes, annuities, maintenance fees or other charges
on a pending application or on an issued patent, the Party which
files the application shall, prior to filing, request the other
Party to indicate whether it will agree to pay one-half of such
taxes, annuities, maintenance fees or other charges. If within
sixty (60) Days of receiving such request, the non-filing Party
fails to assume in writing the obligation to pay its
proportionate share of such taxes, annuities, maintenance fees
or other charges, or if either Party subsequently fails to
continue such payments within sixty (60) Days of demand, it
shall forthwith relinquish to the other Party, providing that
said other Party continues such payments, its interest in such
application and patent and the Invention disclosed therein,
subject, however, to retention of a irrevocable, fully paid-up,
non-exclusive, non-assignable license in favor of the
relinquishing Party, its parent, and any subsidiary thereof to
make, use, lease and sell apparatus and/or methods under said
application and patent.
D. Each owner of a jointly-owned patent application or patent resulting
therefrom shall, provided that it shall have fulfilled its
obligation, if any, to pay its share of taxes, annuities,
maintenance fees and other charges on such pending application or
patent, have the right to grant non-exclusive licenses thereunder
and to retain any consideration that it may receive therefor without
obligation to account therefor to the other Party. In connection
therewith, each of the Parties hereby consents to the granting of
such non-exclusive licenses by the other Party and also agrees not
to assert any claim with respect to the licensed application or
patent against any licensee of the other Party thereunder during the
term of any such license.
20.2 No sale or lease hereunder shall convey any license by implication,
estoppel or otherwise, under any proprietary or patent rights of Hughes,
to practice any process with such
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product or part, or, for the combination of such product or part with any
other product or part.
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ARTICLE 21. PROPRIETARY INFORMATION
21.1 Under the Contract, Hughes (and its Affiliates) and Customer may disclose
to each other such of their respective information, some of which may be
Proprietary Information as defined below, as the disclosing Party in its
sole discretion believes will be essential to the objectives of the
Contract and which it has a right to disclose. Any information required by
the Contract to be set forth in Contract Deliverable Data or Documentation
shall be deemed essential to the objectives of the Contract.
21.2 "Proprietary Information" means information which a Party deems
proprietary to it. Each Party shall hold in confidence and withhold from
third parties any and all Proprietary Information received under the
Contract and shall use such Proprietary Information only as set forth in
the Contract and for no other purpose unless the disclosing Party shall
otherwise agree in writing. Each Party shall take reasonable and
appropriate measures to safeguard any Proprietary Information received
under the Contract from theft, loss or disclosure to others, and to limit
access to Proprietary Information to those officers, directors and
employees within the receiving Party's organization who reasonably require
access in order to accomplish the aforesaid purposes. Proprietary
Information shall be in written or other permanent form and be prominently
identified as proprietary using an appropriate legend, marking stamp or
other clear and conspicuous written identification which unambiguously
indicates the information being provided is the originating Party's
Proprietary Information. Any such information in other than written or
other permanent form when disclosed shall be considered Proprietary
Information hereunder, but only to the extent identified as the
originating Party's Proprietary Information at the time of original
disclosure and thereafter summarized in written form which clearly and
conspicuously identifies the Proprietary Information. Such summary shall
be transmitted by the originating Party to the receiving Party within
thirty (30) Days of the nonwritten disclosure.
21.3 The receiving Party shall not be liable for use or disclosure of any such
Proprietary Information if it can establish that the same:
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A. Is or becomes a part of the public knowledge or literature without
breach of the Contract by the receiving Party; or
B. Is known to the receiving Party without restriction as to further
disclosure when received; or
C. Is independently developed by the receiving Party as demonstrated by
written records; or
D. Becomes known to the receiving Party from a third party who had a
lawful right to disclose it and without breach of the Contract.
Specific Proprietary Information shall not be deemed to be available to
the public or in the possession of the receiving Party merely because it
is embraced by more general information so available or in the receiving
Party's possession.
21.4 Should the receiving Party be faced with judicial or administrative
governmental action to disclose Proprietary Information received
hereunder, said receiving Party shall forthwith notify the originating
Party in sufficient time to permit the disclosing Party to intervene in
response to such action.
21.5 The receiving Party agrees promptly to notify the disclosing Party of the
loss or unauthorized use or disclosure of any Proprietary Information, and
upon request of the originating Party, the receiving Party shall surrender
any part or all of the Proprietary Information to the originating Party.
21.6 The individuals identified in Article 24 (Notices) are designated as the
point for receiving Proprietary Information exchanged between the Parties
pursuant to the Contract.
21.7 Hughes shall have its Subcontractors agree in writing to be bound to
protect Customer's Proprietary Information on the same conditions as set
forth herein.
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21.8 Customer shall have its Consultants agree in writing to be bound to
protect Hughes Proprietary Information on the same conditions as set forth
herein.
21.9 Upon termination of the Contract for any reason, the Parties shall cease
use of all Proprietary Information furnished by the other Party and shall,
at the direction of the furnishing Party, return to or destroy all such
Proprietary Information, together with all copies made thereof. Upon
request, the receiving Party shall send the other Party a destruction
certificate.
21.10 Customer and Parent acknowledge that Hughes would be irreparably harmed if
any competitor of Hughes as determined by Hughes in its reasonable
discretion were to acquire access to any of the intellectual property,
Proprietary Information or other technology, data or inventions covered
under the Contract (collectively, the "Intellectual Property"), regardless
of whether such competitor has an ownership interest in Customer or ONS.
Accordingly, Customer and ONS agree that no competitor of Hughes shall be
given access to any of the Intellectual Property and that should such a
competitor obtain control of Customer or otherwise be an assignee or
transferee of Customer with regard to the Contract, Hughes may take any
and all reasonable steps to safeguard and protect its Intellectual
Property. Notwithstanding any provisions of the Contract requiring
arbitration, the foregoing agreement may be enforced by Hughes by the
entry of injunctive relief, in addition to all other remedies available to
Hughes under the Contract, applicable law or otherwise. The provisions of
this Paragraph 21.10 shall apply mutually to the Intellectual Property of
Customer and ONS
21.11 Notwithstanding any provision of this Contract, the Parties agree that the
existing Non-Disclosure Agreement between the Parties shall remain in full
force and effect according to its terms.
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ARTICLE 22. CHANGES
22.1 Any changes requested by Hughes during the performance of the Contract,
within the general scope of the Contract, which will add or delete Work,
affect the design of the Satellite, change the method of shipment or
packing, or the place or time of delivery, or will affect any other
requirement of the Contract, shall be submitted in writing to Customer
sixty (60) Days prior to the proposed date of the change. If such Hughes
requested change causes an increase or decrease in the total price or
other terms of the Contract, Hughes shall submit a proposal to Customer.
22.2 Customer shall notify Hughes in writing, within thirty (30) Days after
receipt of the requested change proposal, whether or not Customer agrees
with and accepts such change and the price/schedule impact thereof. If
Customer agrees with and accepts Hughes' requested change, Hughes shall
proceed with the performance of the Contract as changed and an amendment
to the Contract reflecting the change proposal shall be issued in
accordance with Paragraph 35.5. If Customer does not agree with Hughes'
requested change, the Parties shall attempt to reach agreement on such
change. In the event the Parties are unable to reach agreement on such
change or price adjustment, if any, or both, Hughes shall proceed with the
performance of the Contract, as unchanged.
22.3 Customer may submit to Hughes any changes requested by Customer during the
performance of the Contract, within the general scope of the Contract,
which will add or delete Work, affect the design of the Satellite, change
the method of shipment or packing, or the place or time of delivery, or
will affect any other requirement of the Contract. Hughes shall respond to
such request in writing to Customer within thirty (30) Days after such
request. Hughes shall submit to Customer, at the time the response to the
requested change is submitted, the details of the impact of such change.
Customer shall notify Hughes in writing, within thirty (30) Days after
receipt of Hughes' response, whether or not Customer agrees with and
accepts Hughes' response. If Customer agrees with and accepts Hughes'
response, Hughes shall proceed with the performance of the Contract as
changed and an amendment to the Contract reflecting such change shall be
incorporated
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into the Contract in accordance with Paragraph 35.5. If the Parties cannot
agree on a reasonable price or revised Delivery Schedule or performance
specification(s) and Customer still desires the requested changes,
Customer shall request Hughes to proceed with the changes and Customer
will pay the offered price and accept the revised Delivery Schedule or
performance specifications pending any decision to the contrary under
Article 30 (Applicable Law and Dispute Resolution). Hughes will proceed
with the Work and Customer may dispute the reasonableness of the price or
revised Delivery Schedule or performance specification(s) under Article 30
(Applicable Law and Dispute Resolution).
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ARTICLE 23. PUBLICITY
23.1 From and after the Effective Date of Contract and until the date of
Intentional Ignition, other than disclosures required by law, rule,
regulation or requirements of NASDAQ, the NYSE or any other national
securities exchange, any publicity, news releases, articles, brochures,
advertisements, prepared speeches and other information releases regarding
the specific financial details of the Contract or proprietary information
regarding the Work performed or to be performed hereunder shall be
mutually agreed upon in writing by Hughes and Customer within a reasonable
time prior to the release of such information (such agreement not to be
unreasonably withheld or delayed by either Party). This Paragraph 23.2
shall not apply to internal publications or releases not intended for the
public at large.
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ARTICLE 24. NOTICES
Any notices or requests or receipts required or desired to be given or made
hereunder shall be in writing and shall be effective if delivered by hand to an
officer of the recipient Party or sent by registered air mail or by facsimile
transmission or by express courier with a reliable system for tracking and
received by the recipient Party, at the address indicated below:
A. In respect of Customer, to:
Orion Asia Pacific Corporation
2440 Research Boulevard
Rockville, Maryland 20850
Telephone: (301) 258-8101
Facsimile: (301) 258-3300
Attention: Richard H. Shay, Esq., Vice President of Corporate
and Legal Affairs
Dr. Denis Curtin, Senior Vice President, Engineering
and Satellite Operations of Orion Satellite Corporation
B. In respect of Hughes, to:
Hughes Space and Communications International, Inc.
Bldg. S41, M/S A374
Post Office Box 92919, Airport Station
Los Angeles, California 90009
Telephone: (310) 364-9477
Facsimile: (310) 364-9644
Attention: Manager, Contracts
Any notice or request shall be deemed to have been served if delivered by
hand, when delivered, if sent by registered airmail, upon receipt, if
sent by facsimile transmission, upon receipt if confirmed by telephone or
otherwise by the specific addressee (or any officer of the receiving
Party) with a copy sent by another means authorized by this Article 24,
and if by express courier, upon receipt. Either Party may change its
address for notices by notice to the other Party in accordance with this
Article.
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ARTICLE 25. INTEGRATION
The Contract, together with the Annex and Exhibits, contains the entire
agreement between the Parties relating to the subject matter hereof. All prior
understandings, representations and warranties (including those contained in
sales, promotional and/or marketing materials) by and between the Parties,
written or oral, which may be related to the subject matter hereof in any way,
are superseded by the Contract.
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ARTICLE 26. ASSIGNMENT OR CHANGE IN OWNERSHIP OR CONTROL
26.1 Neither Party shall assign or transfer the Contract or any of its rights,
duties or obligations hereunder to any person or entity, in whole or in
part, without the prior written consent of the other Party (which approval
shall not be unreasonably withheld or unduly delayed). However, either
Party may assign or transfer any of its rights, duties or obligations
under the Contract, either in whole or in part, to its parent company or a
subsidiary in which the assigning Party has a controlling interest,
provided always that the assigning Party shall remain secondarily liable
with respect to performance of all duties and obligations set forth in the
Contract, including compliance with all applicable laws and regulations.
26.2 Notwithstanding Paragraph 26.1, either Party may assign the Contract or
any rights, duties or obligations hereunder to any person or entity
acquiring all or substantially all the assets of that Party (through
merger or stock or asset acquisition) provided that:
A. Its successor or assignee possesses the financial and other
resources to fulfill that Party's obligations under the Contract;
and
B. Any such assignment or transfer shall not jeopardize the other
Party's data rights or violate laws related to export or technology
transfer.
The assigning Party shall reimburse the other Party for all reasonable
expenses incurred by the other Party (and invoiced in reasonable detail)
in obtaining advice from its external financial and legal advisors
relating to the assigning Party's proposed assignment or transfer.
26.3 Any assignment or transfer of the Contract by either Party or any direct
or indirect change in control of Customer or Hughes shall be subject to
Paragraph 21.10 relating to proprietary information.
26.4 The Contract shall be binding upon the Parties hereto and their successors
and permitted assigns.
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ARTICLE 27. SEVERABILITY
In the event any one or more of the provisions of the Contract shall, for any
reason, be held to be invalid or unenforceable, the remaining provisions of the
Contract shall be unimpaired, and the invalid or unenforceable provision shall
be replaced by a mutually acceptable provision, which, being valid and
enforceable, comes closest to the intention of the Parties underlying the
invalid or unenforceable provision.
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ARTICLE 28. CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES
28.1 Notwithstanding Paragraph 28.4 and without limiting the obligations of
Hughes under other provisions of the Contract, if the data available from
an HS 601 HP or HS 601 satellite model shows that there is a material
deficiency in the design or manufacture of such satellite model that, in
the opinion of Hughes, could adversely affect one or both of such
satellite models, Hughes shall notify Customer of any such material
deficiency coming to Hughes' attention and shall, promptly upon written
request of Customer, take appropriate corrective measures to the Work, at
Hughes' own expense, with respect to the Satellite so as to eliminate from
the Satellite all the material deficiencies discovered in the Satellite's
model.
28.2 If there is a mutually agreed-to change in the natural environment to
which the Satellite will be subjected in orbit, Hughes shall take
corrective measures as Hughes deems appropriate in consultation with
Customer.
28.3 If Hughes, in accordance with this Article_28, replaces any equipment or
any part which was determined to be deficient, such deficient equipment or
part shall remain or become the property of Hughes.
28.4 Nothing in this Article 28 requires Hughes to disclose in-orbit data from
satellites owned by others.
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ARTICLE 29. CUSTOMER'S RESPONSIBILITIES
29.1 The responsibilities of Customer, which will be discharged at no cost to
Hughes or Hughes' Affiliates or Subcontractors, are as set forth in
Exhibit A (Statement of Work) and below.
A. Customer will provide Beneficial Access to Hughes and its Affiliates
and Subcontractors at each Satellite Control Facility, on a timely
basis, as necessary to permit Hughes to (i) deliver the SCE as soon
as it is Available for Shipment and (ii) perform its obligations
under the Contract with respect to the SCE.
B. In addition to, and without limiting the generality of, the
foregoing, Customer will be responsible for the following:
(1) Providing all civil works utilities and environmental controls
associated with any Satellite Control Facility; and
<TABLE>
<S> <C>
(2) In the event Customer exercises the [ ] option*
described in Paragraph 33.1.C, ensuring that the Ground Control
Facility located in Rockville, Maryland has [ ]*
Software; and
(3) Furnishing two (2) [ ]*
[ ] units; and *
(4) Furnishing all governmental approvals and licenses necessary to
send [ ]*
[ ]; and *
</TABLE>
(5) Obtaining Launch Insurance prior to Intentional Ignition.
Customer shall provide Hughes a certificate of such insurance
coverage at Hughes' request.
C. Customer shall provide written notification to Hughes as early as
practicable as to the identity/nationality of its employees and
Consultant(s) and subsequent changes,
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if any. It is recognized that certain United States Government
approvals may be required before such employees and Consultant(s)
have access to Work pursuant to the provisions of Article 12 (Access
to Work-in-Progress and Data), and that the processing time for
obtaining such approvals could take a few months.
D. Customer is responsible for obtaining the necessary Specified
Orbital Location, frequency spectrum and other approvals and
licenses to operate the ORION 3 Satellite Program. Customer agrees
to indemnify Hughes for, and hold Hughes harmless against, any loss,
damage, liability or expense (including attorney's fees and other
expenses of investigating or defending claims) resulting from any
claims made by any party as a result of the Customer's failure to
perform its responsibilities under this Paragraph 29.1.D.
29.2 If the Customer-furnished items and/or responsibilities are not available
at the time scheduled or not suitable for the intended purpose, in lieu of
actual damages, Customer shall pay to Hughes all expenses directly
resulting from such delay, such expenses actually and reasonably incurred
(and invoiced to Customer in reasonable detail) plus a profit of twelve
and one half percent (12.5%) on such costs and any affected Scheduled
Delivery Date for the Work shall be extended to permit Hughes adequate
time to perform its obligations under the Contract.
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ARTICLE 30. APPLICABLE LAW AND DISPUTE RESOLUTION
30.1 The Contract and any performance or non-performance related thereto shall
be interpreted and construed, governed and enforced under the laws of the
State of New York, U.S.A., without giving effect to its conflict of laws
principles. The UN Convention on the International Sale of Goods shall not
be applicable.
30.2 If, during the course of performance or non-performance hereunder, a
dispute arises between Customer and Hughes as to the rights or obligations
of either Party under the Contract (or resulting from an alleged breach of
the Contract), either Party may give written notice of its objections and
the reasons therefor and may recommend corrective action. Hughes' Program
Manager shall consult with Customer's Program Manager in an effort to
reach a mutual agreement to overcome such objections. In the event mutual
agreement cannot be reached, the respective positions of the Parties shall
be forwarded to the representatives of each Party at the Senior Executive
Level, for discussion, and such persons shall attempt to reach mutual
agreement.
30.3 If the Parties are unable to resolve the dispute through such mediation
and conciliation, or if neither Party desires to pursue mediation and
conciliation, such dispute may be referred on the application of either
Party for final determination to an arbitration tribunal convened in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, which arbitration shall be conducted by three
arbitrators in the English language. Each Party shall appoint one (1)
arbitrator and the third shall be appointed by the two (2) arbitrators so
previously appointed.
30.4 The place of arbitration shall be in New York, New York, U.S.A., and all
matters in dispute shall be determined in accordance with the applicable
law specified in Paragraph 30.1.
30.5 The following time limits shall be observed in respect of any arbitration
held pursuant to this Article:
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(1) each Party shall appoint its arbitrator within ten (10) days of
receipt of a demand for arbitration;
(2) the two (2) appointed arbitrators shall appoint a third
arbitrator within a further twenty (20) days from the time
stipulated in Article 15.2(f)(1) (unless the two (2) arbitrators
agree to an extension not to exceed an additional (20) days);
and
(3) any decision by the arbitrators referred to shall be made within
six (6) months from the date on which a Party demands
arbitration or within such extended period as the arbitrators
may unanimously allow.
30.6 Except as specifically set forth in this Article 30, the election of
either Party to proceed with arbitration under this Article 30 shall not
change the rights or obligations of each Party as otherwise stated under
this Contract.
30.7 The arbitral tribunal shall award prejudgment interest on any amount that
the tribunal determines is owing from one Party to the other, such
interest to be calculated at an annual rate equal to the Chase Manhattan
Prime Rate then in effect for each day from forty-five (45) days following
the date of loss or from the date of the filing for arbitration, whichever
is the earlier, unless the date full payment is made.
30.8 The award rendered by the arbitration tribunal shall be binding on both
Parties and shall be enforceable by any court of competent jurisdiction.
The cost of arbitration, including the fees and expenses of the
arbitrators, will be shared equally by the Parties, unless the award
otherwise provides. Each Party shall bear the cost of preparing and
presenting its own case, until the award otherwise provides.
30.9 Notwithstanding anything else contained herein, the Parties agree that (i)
it is to their mutual advantage to resolve any such dispute in a timely
manner, (ii) the arbitral hearing shall be commenced promptly and
conducted expeditiously and (iii) with respect to any dispute regarding
the Satellite or Launch Services, payment or nonpayment by Customer
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or Hughes' remedies upon a default or termination, time is of the essence
in the resolution of such dispute.
30.10 Any arbitration proceeding held pursuant to this Article 30 shall be
governed exclusively by the United States Arbitration Act, 9 U.S.C.
Section 1, et seq.
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ARTICLE 31. PERFORMANCE COMMENCEMENT DATE
<TABLE>
<S> <C>
Pursuant to the ATP and the payment by Customer to Hughes on December 16, 1996
of the sum of [ ] (receipt of which is*
hereby acknowledged by Hughes), Hughes commenced performance of the Work as
defined in the ATP on December 16, 1996.
</TABLE>
Hughes shall commence performance of the Work under this Contract, and the
Performance Commencement Date (PCD) in respect of the Work under this Contract
shall be deemed to be December 16, 1996, provided both of the following events
have occurred:
A. The Contract is duly signed by both Parties; and
B. Hughes is in receipt of the Sum of Eight Million U.S. Dollars
(U.S. $8,000,000) no later than close of business January 16,
1997.
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ARTICLE 32. STORAGE
32.1 Upon six (6) months prior written notification by Customer that it desires
to place a Satellite and related equipment into storage after such
Satellite is Available for Shipment, Hughes shall:
A. Within forty-five (45) Days thereafter submit a price proposal to
Customer outlining a plan for storage in the Continental United
States, including transportation, periodic Satellite testing and
maintenance of batteries; and
B. Specify to Customer the storage arrangements that would be
acceptable to Hughes, including Hughes' storage terms.
Upon agreement between Customer and Hughes as to Hughes' proposal, the
Satellite and related equipment shall be delivered by Hughes to the agreed
storage site, and the Contract shall be amended pursuant to Paragraph 22.3
and Paragraph 35.5.
32.2 In the event Customer gives Hughes less than six (6) months prior written
notice of its desire to place the Satellite in storage, Customer shall be
obligated to reimburse Hughes for any nonrefundable deposits or reasonable
expenses actually incurred by Hughes (and invoiced to Customer in
reasonable detail) (i) in order to arrange for transportation of the
Satellite to the Designated Launch Site or (ii) to prepare the Satellite
for Launch at the Designated Launch Site.
32.3 Six (6) months prior to the Scheduled Launch Date for a stored Satellite,
Customer shall, by notice in writing, order Hughes to remove the Satellite
from storage and deliver the Satellite in orbit subject to the
availability of a Launch Vehicle. The cost of shipping of the Satellite
and related equipment from the storage facility to the Designated Launch
Site shall be borne by Customer to the extent such cost plus the cost of
shipping the Satellite and related equipment from Hughes' plant to the
Designated
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Launch Site exceed the cost of shipping the Satellite and related
equipment from Hughes' plant to the Designated Launch Site, in addition to
any charges which become the obligation of Customer per the provisions of
Article 6 (Launch Vehicle Delays).
32.4 If a Satellite is Available for Shipment but (i) the Designated Launch
Site is not available or ready to receive shipment of the Satellite for
whatever reasons (e.g., Beneficial Access to the Designated Launch Site
has not been provided) and (ii) Customer has not provided for the
Satellite to be delivered into storage in accordance with the provisions
of this Article, Hughes, at its option, may deliver the Satellite and
related equipment into storage either at Hughes' own facilities or at the
facilities of a third party. The costs of storage, transportation,
periodic Satellite testing and maintenance of batteries as well as all
other reasonable costs associated with such storage shall be borne by
Customer.
32.5 If a Satellite is ordered to be launched later than six (6) months
following its Available for Shipment date for reasons not the fault of
Hughes or any Affiliate or Subcontractor of Hughes, it is agreed that such
Satellite shall, upon Hughes' request, be returned at Customer's expense,
to Hughes' facility for inspection and refurbishment. The cost of such
inspection, including any shipping, handling or storage costs, plus a
twelve and one-half percent (12.5%) profit thereon, shall be borne by
Customer. Any refurbishment undertaken by Hughes to meet the requirements
of Article 14 (Warranty), as applicable, shall be at Hughes' expense,
provided that, in the event Customer contracts with a third party to store
the Satellite, Customer has caused the Satellite to be maintained in a
storage environment suitable for prevention of deterioration, and further
provided that said Satellite has not been damaged while in storage or in
transit. In the event Customer contracts with a third party to store the
Satellite, if such Satellite has not been properly maintained or has been
damaged in storage or in transit, the cost of repair of such disrepair or
damage and all transportation and related costs, plus a twelve and one
half percent (12.5%) profit, shall be borne and paid for by Customer.
Hughes may elect to perform inspection and refurbishment at the Designated
Launch Site. If a warranty period as stated in Article 14 (Warranty) has
expired, then replacement or refurbishment of the Satellite shall be paid
for by Customer.
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32.6 If a Satellite has not been launched within five (5) years after its
Available for Shipment date and Hughes is otherwise not in default, then
(1) Subject to (4) below, Hughes shall be entitled to receive all
payments which are due and owing, and Hughes shall be entitled
to retain without obligation all payments previously made.
(2) Subject to (4) below, neither Party shall have any further
obligations to the other Party under the Contract, provided that
Customer has met its obligations under the Contract, and
Customer shall have title to the Satellite.
(3) Customer shall be responsible for and shall pay all sales tax
associated with the transfer of title to the Satellite.
Disposition of the Satellite shall be at the option of Customer
with the costs of such disposition to be borne by Customer
subject to Article 7 (Permits and Licenses: Government
Approvals). Hughes shall have no liability in the event an
export license is not issued for the benefit of Customer.
(4) With respect to Launch Services, Customer shall notify Hughes in
writing whether it desires to retain the Launch Services or
whether it desires for Hughes to resell the Launch Services in
accordance with Paragraph 17.1.F, such notice to be provided to
Hughes within eighteen (18) months after the initial Launch
Date. If Customer desires to launch the Satellite within such
eighteen (18) month period, then Hughes shall use best
reasonable efforts to arrange with the Launch Provider to
provide Launch Services within such eighteen (18) month period
and Customer shall be obligated to pay launch delay expenses as
specified in, and in accordance with, Article 6.
32.7 Notwithstanding anything to the contrary contained herein, in the event
Customer, due to the fault of Hughes, any of its Subcontractors (except
the Launch Provider) or any of its Affiliates, elects to have the
Satellite placed in storage, then the costs of such storage,
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shipment of the Satellite and related equipment from the storage facility
to the Designated Launch Site, periodic Satellite testing, maintenance of
the batteries, inspection and refurbishment of the Satellite shall be
borne by Hughes.
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ARTICLE 33. OPTIONS
33.1 Hughes hereby grants to Customer the options set forth below to be
exercised at Customer's sole discretion in accordance with the terms
specified for each option.
A. Transponder Specifications
<TABLE>
<S> <C>
Customer may make minor modifications to the Transponder beam
connectivities, frequencies and beam coverages up to and including
[ ]. Customer may define final antenna contours up to*
and including [ ]. *
B. Korean Backup TT&C Capability
Hughes will provide, at Customer's request, a backup TT&C facility
at a location specified by Customer in the Republic of Korea. Hughes
will provide to Customer a proposal for such facility by January 31,
1997. The proposal will provide a description of a facility
essentially similar to the TT&C facility at the [ ] in*
[ ]. The proposal will include [ ]*
[ ] equipment along with all required software. A*
communications network will also be supplied to connect the Korean
station to the primary Satellite Control Facility. Such items shall
be delivered Customer Insurance Freight (CIF), Seoul International
Airport, Republic of Korea (Incoterms 1990). The proposal will also
include other equipment as requested by Customer to be delivered at
a location to be specified by Customer. The proposal will also
include pricing by functional capability, and the total price shall
not exceed [ ]*
[ ] Customer must exercise this option no later than [ ]*
[ ] to ensure the Korean TT&C facilities operational at the*
time of Final Acceptance of the Satellite.
</TABLE>
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<TABLE>
<S> <C>
C. TT&C [ ] Software *
By January 31, 1997, Hughes will provide to Customer a proposal to
replace the baseline, legacy TT&C software system to be provided
under the Contract with a [ ]-based TT&C software*
system for the HS 601 HP series of satellites (the "[ ] HS 601 HP*
TT&C Software") now under development at Hughes. The proposal will
be based upon the assumption that Customer will install at
Customer's Rockville site a [ ] based TT&C software*
system for Customer's existing Matra Marconi Space (MMS) satellite
(the "[ ] TT&C Software") under separate contract with [ ]*
[ ]. The proposal will include pricing and technical*
specifications for the following three options: (i) upgrading
Customer's [ ] TT&C Software with those modules of [ ] HS 601 HP*
TT&C Software necessary for operation of the Satellite and
installing such upgraded software at Customer's Rockville and Mount
Jackson sites, (ii) upgrading Customer's [ ] TT&C Software with*
those modules of [ ] HS 601 HP TT&C Software necessary for*
operation of the Satellite and installing such upgraded software at
the [ ] site in [ ] (or other site specified by Customer)*
and, if approved by Customer, a site in the Republic of Korea, and
(iii) providing and installing the [ ] HS 601 HP TT&C Software at*
the [ ] site in [ ] (or other site specified by Customer)*
and, if approved by Customer, a site in the Republic of Korea. The
pricing in the proposal shall account for the savings realized by
Hughes in not providing the legacy TT&C software system included in
the Contract Price.
</TABLE>
D. Launch Insurance.
Upon Customer's request and in Customer's behalf, Hughes shall place
Launch Insurance for the Satellite. The Parties acknowledge that the
Delta III is a new launch vehicle. Hughes estimates that the
insurance rate for the initial Delta III launch will be in the range
of eighteen percent to twenty-one percent (18% to 21%). The Parties
understand that Hughes cannot guarantee its ability to obtain
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such insurance at such rates (or any insurance, whether or not at
commercially reasonable rates), and Hughes shall be under no
liability to Customer or any third party whatsoever for its failure
to do so. In the event Hughes obtains Launch Insurance for Customer,
Hughes shall provide such Launch Insurance to Customer on a
pass-through basis, provided, however, that (i) Hughes will not be
obligated to pay the underwriters of the Launch Insurance until
after it has received the premium payment from Customer and (ii)
Hughes shall be entitled to a payment for its general and
administrative costs in procuring the Launch Insurance, such costs
not to exceed two percent (2%) of the cost of the Launch Insurance.
E. Option Satellite
(1) Hughes agrees to provide Customer with an additional
satellite ("Option Satellite") of design identical to
the Satellite, which Option Satellite shall be
delivered in orbit within nineteen (19) months after
order for One Hundred Eighty-Three Million U.S.
Dollars (U.S. $ 183,000,000). This option is subject
to the following conditions: (i) in no case will the
Option Satellite be launched earlier than April 1999;
(ii) design changes in the Option Satellite may be
ordered by Customer prior to order of the Option
Satellite, said changes may modify the price and
change the delivery schedule; and (iii) the provision
of launch services for the Option Satellite shall be
subject to the provisions of sub-paragraph (6) below.
<TABLE>
<S> <C>
(2) In addition, Customer may delay ordering the Option
Satellite until fifteen (15) months prior to in-orbit
delivery; provided (i) Customer places the order for
such satellite any time during the period from
November 15, 1998 to March 15, 1999 and (ii) for a
commitment for a position on Hughes' satellite
production line and for certain long-lead inventory
items (to be discussed by the Parties and set forth
in Exhibit H no later than December 31, 1997
("Long-Lead Inventory Items")), Customer orders such
Items on or before July 15, 1998 and pays Hughes [ ]*
[ ] *
</TABLE>
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<TABLE>
<S> <C>
[ ] in accordance with the payment schedule*
set forth in Table 33.1.F.(2).
Table 33.1.F(2)
Payload Long-Lead Inventory Item Payment Schedule for a 15-Month Delivery
In-Orbit Where the Satellite Order is Placed During the Period November 15,
1998 to March 15, 1999
July 15, 1998 [ ]
August 21, 1998 [ ]
September 30, 1998 [ ]
October 31, 1998 [ ] *
November 30, 1998 [ ]
----------
TOTAL [ ]
(3) In addition, for an additional sum of [ ]*
[ ], paid in accordance*
with Table 33.1.F(3), Hughes agrees to extend the
Option Satellite order date specified in (2) above
from March 15, 1999 to December 31, 1999.
Table 33.1.F(3)
Bus Long-Lead Inventory Payment Schedule to Extend the 15-Month Delivery
Option Satellite Order Date From March 15, 1999 to December 31, 1999
August 31, 1998 [ ]
September 30, 1998 [ ] *
October 31, 1998 [ ]
November 30, 1998 [ ]
----------
TOTAL [ ]
</TABLE>
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<TABLE>
<S> <C>
(4) In addition, Hughes agrees to permit Customer to
delay ordering the Option Satellite until twelve (12)
months prior to in-orbit delivery; provided (i)
Customer places the order for such satellite during
the period November 15, 1998 and March 15, 1999 and
(ii) for Payload and Bus Long-Lead Inventory Items,
Customer orders such items on or before April 15,
1998 and pays Hughes [ ]*
[ ] in accordance with the payment*
schedule set forth in Table 33.1.F.(4).
Table 33.1.F(4)
Payload and Bus Long-Lead Inventory Item Payment Schedule for a 12-Month
Delivery In-Orbit Where the Satellite Order is Placed During the Period
November 15, 1998 to March 15, 1999
April 15, 1998 [ ]
May 31, 1998 [ ]
June 30, 1998 [ ]
July 31, 1998 [ ] *
August 31,1998 [ ]
September 30, 1998 [ ]
October 31, 1998 [ ]
November 30, 1998 [ ]
TOTAL [ ]
</TABLE>
(5) All payments for Payload and/or Bus Long-Lead
Inventory Items (specified in (2), (3) and (4) above)
shall be applied against the total price of One
Hundred Eighty-Three Million U.S. Dollars (U.S.
$183,000,000) for the Option Satellite.
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(6) In the event Customer orders an Option Satellite as a
replacement Satellite for a failed launch, McDonnell
Douglas has agreed to use best efforts to launch a
replacement satellite within twelve (12) months after
such failure, subject to its obligation to give
priority to U.S. government launches. In the event
Customer orders an Option Satellite that is not a
replacement satellite, Hughes shall use best
reasonable efforts to obtain a Delta III launch
vehicle meeting the above delivery schedule for the
Option Satellite. Where a Delta III is not available
and the Option Satellite is not a replacement for the
Satellite, the price shall be adjusted for the
difference in cost between the Delta III and the
selected launch vehicle, which vehicle shall be
acceptable to Customer.
(7) Hughes shall furnish the Option Satellite in
accordance with the provisions of the documents that
constitute the Contract. Except as otherwise required
by the terms of this Paragraph 33.1.F, the contract
terms for the Option Satellite will be identical to
the Contract, provided, however, the delivery
schedule shall be adjusted, if necessary, for the
later timeframe of the Option Satellite and the risk
elements (e.g., liquidated damages for late delivery
and performance incentives) shall be adjusted to the
change in price from the Satellite so as to represent
the same percentage risk.
(8) Where Customer makes any payments for Payload and/or
Long-Lead Inventory Items but Customer fails to order
the Option Satellite during the applicable time
specified in this Paragraph 33.1.F, the option for
the Option Satellite shall no longer be effective and
Hughes shall deliver to Customer, within thirty (30)
days after the expiration date of the option, the
Payload Long-Lead Inventory Items purchased with such
payments.
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F. Ku-Band 2 Repeater Linearized Transponders
<TABLE>
<S> <C>
Hughes will, at Customer's direction, modify the Ku Band 2 Repeater
payload to add a [ ] to each of three (3) Transponders. Such*
[ ] shall meet performance specifications to be specified by*
Hughes no later than thirty (30) days after Customer exercises this
option, such specifications to be compatible with the general
communications requirements set forth in Sections 3.3, 9.7, 8, and 9 of
Exhibit B (Satellite Technical Specifications) without degrading the
performance specified in Appendix A of Exhibit B (Satellite Technical
Specifications).1 This change will provide two (2) operating linearized
channels and one (1) spare linearized channel. The price for this
option, including hardware, engineering, testing, etc. is Two Million
Two Hundred Thousand U.S. Dollars (U.S. $2,200,000). For this price,
Customer may, in its discretion, choose either of the following two
options:
(1) The addition of Hughes [ ]*
[ ] to the Ku-Band 2 Repeater Transponders.*
This addition will increase the dry mass of the
Satellite by [ ], and cause a corresponding reduction*
in the Operational Lifetime of the Satellite of five
(5) months. This addition will have no impact on the
Scheduled Delivery Date of the Satellite ; or
(2) The replacement of the existing [ ]*
[ ] in each Transponder of the Ku-Band 2*
Repeater with a single linearized amplifier unit.
This change will have no impact on the dry mass or
Operational Lifetime of the Satellite, but will delay
the delivery of the Satellite two (2) months.
Customer must exercise this option no later than January 31, 1997.
G. Designation of Primary Command & Control Site
The Contract baseline calls for Hughes to provide one complete set of
hardware and software for one TT&C site Telemetry Tracking and Control
("TT&C") ([ ] in *
</TABLE>
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<TABLE>
<S> <C>
[ ] and one (1) set of SCE at Customer's site in Rockville,*
Maryland. Currently, the [ ] site is designated as the primary TT&C*
site and primary Satellite Control Facility and the Rockville site is
designated as the backup Satellite Control Facility. Provided Customer
notifies Hughes by June 15, 1997, Customer may change the primary TT&C
and primary Satellite Control Facility site designations from the [ ]*
site to a site specified by Customer. The Parties agree that the
performance of the command link will need to be reanalyzed if it is
relocated from [ ]. The Parties further agree that a possible*
result of such analyses may be changes to Exhibits B (Technical
Specifications) and E (Ground Segment).
</TABLE>
33.2 Except as otherwise provided in Paragraph 33.1.E, the terms and
conditions of the Contract shall apply to the options.
33.3 Should Customer exercise any or all of the options described above, the
Parties shall amend the Contract in accordance with Paragraph 35.5 as
soon as is reasonably possible after option exercise to incorporate the
schedule adjustments, price adjustments (which shall be considered
Progress Payments, time-phased accordingly, and incorporated into an
amended Exhibit F as appropriate), and changes to the technical
exhibits and other Contract terms and conditions which are made
necessary by such exercise.
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ARTICLE 34. LIMITATION OF LIABILITY
34.1 Hughes makes no warranty or agreement, express or implied, to or for
the benefit of any person or entity other than Customer concerning the
performance of the Satellite or any other matters relating to the Work
hereunder. Customer shall indemnify and hold harmless Hughes and its
Affiliates and Subcontractors from and against any loss, damage,
liability or expense (including attorneys' fees and other expenses of
investigating or defending claims) resulting from (i) any
representation made by Customer to any third party relating to the
Work; (ii) any claim of Persons dealing with or through Customer
(including customers or insurers) or any agency or other governmental
authority of Customer's Country; or (iii) any other claims relating to
the Satellite and arising after Launch of the Satellite. Customer shall
obtain from its insurers waivers of any subrogation rights against
Hughes or its Affiliates or Subcontractors, and shall provide evidence
of such waivers to Hughes prior to Launch of the Satellite.
34.2 THE PARTIES TO THE CONTRACT EXPRESSLY RECOGNIZE THAT COMMERCIAL SPACE
VENTURES INVOLVE SUBSTANTIAL RISKS AND RECOGNIZE THE COMMERCIAL NEED TO
DEFINE, APPORTION AND LIMIT CONTRACTUALLY ALL OF THE RISKS ASSOCIATED
WITH THIS COMMERCIAL SPACE VENTURE. THE PAYMENTS AND OTHER REMEDIES
EXPRESSLY SET FORTH IN THE CONTRACT FULLY REFLECT THE PARTIES'
NEGOTIATIONS, INTENTIONS AND BARGAINED-FOR ALLOCATION OF THE RISKS
ASSOCIATED WITH COMMERCIAL SPACE VENTURES.
THE WARRANTY OBLIGATIONS OF HUGHES AND THE REMEDIES AGAINST HUGHES
THEREFOR WHICH ARE EXPRESSLY SET FORTH IN ARTICLE 14 OF THE CONTRACT
ARE EXCLUSIVE AND ARE IN SUBSTITUTION OF ANY OTHER WARRANTIES, EXPRESS
OR IMPLIED (INCLUDING ANY STATUTORY WARRANTIES SUCH AS IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE)
WHICH ARE EXPRESSLY DISCLAIMED. CUSTOMER'S SOLE AND EXCLUSIVE REMEDIES,
AND
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HUGHES' SOLE OBLIGATIONS FOR (i) ANY BREACH OF THE CONTRACT, INCLUDING
DELAY OR DEFAULT; (ii) ANY DEFECT, NON-CONFORMANCE OR DEFICIENCY IN ANY
WORK UNDER THE CONTRACT OR IN ANY INFORMATION, INSTRUCTIONS, SERVICES
OR OTHER THINGS PROVIDED PURSUANT TO THE CONTRACT; OR (iii) ANY OTHER
CLAIMS WHATSOEVER ARISING OUT OF OR RELATING TO THE CONTRACT AND/OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER DENOMINATED AS CONTRACT,
TORT, EQUITABLE, STATUTORY OR ANY OTHER TYPE OF CLAIM) ARE LIMITED TO
THOSE SET FORTH IN ARTICLES 5 (SATELLITE PERFORMANCE INCENTIVE
PAYMENTS), 11 (LIQUIDATED DAMAGES FOR DELAY), 14 (HUGHES'
REPRESENTATIONS, WARRANTIES AND COVENANTS), 17 (TERMINATION), 19
(PATENT INDEMNIFICATION) AND 39 (INDEMNIFICATION) HEREOF; AND ALL OTHER
REMEDIES OR RECOURSE AGAINST HUGHES OF ANY KIND ARE EXPRESSLY
DISCLAIMED AND FOREVER WAIVED BY CUSTOMER.
HUGHES SHALL NOT, UNDER ANY CIRCUMSTANCES, UNDER ANY WARRANTY (EXPRESS,
IMPLIED, OR STATUTORY) OR UNDER ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE, TORT, STRICT LIABILITY, CONTRACT, OR OTHER LEGAL OR
EQUITABLE THEORY) HAVE ANY LIABILITY TO CUSTOMER OR CUSTOMER'S
CUSTOMERS OR TO ANYONE ELSE FOR ANY SPECIAL, CONSEQUENTIAL AND/OR
INCIDENTAL DAMAGES, WHETHER OR NOT FORESEEABLE, INCLUDING BUT NOT
LIMITED TO LOST REVENUES OR PROFITS, COST OF CAPITAL, OR ANY OTHER FORM
OF ECONOMIC LOSS RESULTING FROM ANY BREACH OF THE CONTRACT OR WITH
RESPECT TO ANY DEFECT, NON-CONFORMANCE OR DEFICIENCY IN ANY
INFORMATION, INSTRUCTIONS, SERVICES OR OTHER THINGS PROVIDED PURSUANT
TO THE CONTRACT.
34.3 The Limitations of Liability set forth herein shall also apply to all
Affiliates and Subcontractors of Hughes to the same extent as set forth
herein with respect to Hughes.
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34.4 Nothing in this Article 34 shall apply to or limit (i)_claims against
which Hughes is required to indemnify ORION under the other Articles of
the Contract and or (ii)_the remedies of Customer against Hughes
specified elsewhere in the Contract.
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ARTICLE 35. MISCELLANEOUS
35.1 Disclaimer of Agency
None of the provisions of the Contract shall be construed to mean that
either Party is appointed or is in any way authorized to act as an
agent of the other Party. The Contract does not constitute, create,
give effect to, or otherwise recognize a joint venture, partnership or
formal business organization of any kind, and the rights and
obligations of the Parties shall be limited to those expressly set
forth in the Contract.
35.2 Waiver of Breach of Contract
A waiver of any breach of a provision of the Contract shall not be
binding upon either Party unless the waiver is in writing and signed by
the Authorized Representative of each Party and such waiver shall not
affect the rights of the Party not in breach with respect to any other
or future breach.
35.3 Term of Contract
The Contract shall be in full force and effect as long as either Party
is or may be required to perform any obligation pursuant to the
Contract. In addition, Articles 13 (Inter-Party Waiver of Liability),
16 (Taxes and Duties), 18 (Data and Software), 19 (Patent
Indemnification), 20 (Rights in Inventions), 21 (Proprietary
Information) and 30 (Applicable Law and Dispute Resolution) shall
survive the expiration or termination of the Contract for whatever
cause.
35.4 Language
With respect to all correspondence relating to the Contract and to all
material, including labels and markings of equipment, submitted by
Hughes hereunder, the English language and U.S. units of measure shall
be used. Controlling language for the Contract shall therefore be the
English language.
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35.5 Amendments
The Contract may not be modified except by written amendment signed by
the Authorized Representatives of each Party, which amendment shall
expressly state that it is an "Amendment to the Orion 3 Contract."
35.6 Parent Guarantee
From and after the making of the Balloon Payment and the release by
Hughes of its security interest, ONS shall unconditionally guaranty
Customer's performance of its obligations under the Contract.
35.7 Remedies
Except as otherwise expressly provided in the Contract, the Parties
shall have all remedies available to them under (i) the Contract, (ii)
applicable law or (iii) otherwise.
35.8 Cumulative Remedies
Except as otherwise expressly provided in the Contract, all remedies
provided for in the Contract shall be cumulative.
35.9 Financing
The Parties recognize that the Contract may be financed through
external sources. Hughes agrees to work cooperatively to negotiate and
execute such documents as may be reasonably required to implement such
financings to the extent they do not adversely affect Hughes' rights.
35.10 Compliance with Laws
A. Subject to Article 7 (Permits and Licenses: Government
Approvals), each Party shall, at its own expense, comply with
the requirements of any laws of any place in
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which any part of the Work is to be performed and with the
lawful requirements of public, municipal and other authorities
in any way affecting or applicable to any Work.
B. Subject to Article 7 (Permits and Licenses: Government
Approvals), neither Party shall be responsible in any way for
the consequences, direct or indirect, of any violation by the
other Party or its Subcontractors or Consultants, or their
officers, employees, agents or servants of any law of a
country in which the Work is performed, or of any country
whatsoever.
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ARTICLE 36. SUBCONTRACTORS
36.1 During preliminary design review, Hughes shall provide Customer with a
list of the names of the major Subcontractors holding a Subcontract
with a value of U.S. $2,500,000 (with respect to the Work to be
provided hereunder) or more and shall identify the Work to be performed
under each such Subcontract.
36.2 Hughes shall use its best reasonable efforts to ensure that all
Subcontracts are awarded to the Subcontractor offering the best
combination of reliability, quality, price and delivery time.
36.3 Hughes shall make available to Customer any of Hughes' Subcontractor
information relating to the Satellite construction schedule.
36.4 Nothing in this Article 36 or in any Subcontract shall be deemed to
relieve Hughes from any obligation under the Contract.
36.5 New Subcontracts solely related to the Satellite shall be required by
the terms of their Subcontracts to submit copies of written status
reports to Hughes. Hughes shall use these reports in preparing Hughes'
reports to Customer.
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ARTICLE 37. INSURANCE
37.1 Hughes represents that it has in place and will at all times maintain,
from PCD to the moment of Intentional Ignition, insurance ("Ground
Insurance") against all risks of loss or damage to the Satellite, and
to any and all components purchased for and intended to be integrated
into the Satellite, in an amount not less than the greater of (i) the
replacement value of, or (ii) the amounts paid by Customer with respect
to, the Satellite and components. Hughes shall also maintain public
liability insurance, insurance of employees and comprehensive
automobile liability insurance, all in amounts adequate for its
potential liabilities under the Contract. In addition, Hughes shall
require each of its Subcontractors to provide and maintain insurance in
amounts adequate for their respective potential liabilities.
37.2 Hughes shall provide a certificate of insurance of such insurance
coverage to Customer at Customer's request.
37.3 Hughes shall require its insurers to waive all rights of subrogation
against Customer. Hughes and Customer will discuss the feasibility of
Customer being named as additional insured and loss payee under all
relevant policies.
-117-
<PAGE>
ARTICLE 38. KEY PERSONNEL
38.1 Hughes will assign key personnel from within Hughes' organization to
carry out the Work. Such personnel will be familiar with programs
similar to Customer's program, and Hughes will use best reasonable
efforts to retain such personnel for the duration of the Orion 3
Program.
38.2 Key personnel ("Key Personnel") shall be the personnel filling the
following positions:
A. Hughes Program Manager
B. Payload Manager
C. Test Manager
38.3 With respect to Key Personnel, before assigning an individual to any of
such positions, whether as an initial assignment or a subsequent
assignment, Hughes shall notify Customer of the proposed assignment,
shall introduce the individual to appropriate Customer representatives
(and, upon request, provide such representatives with the opportunity
to interview the individual) and shall provide Customer with a resume
and other information about the individual reasonably requested by
Customer. If Customer in good faith objects to the proposed assignment,
the Parties shall attempt to resolve Customer's concerns on a mutually
agreeable basis. Should the individuals filling the positions of Key
Personnel leave such positions for whatever reason, Hughes shall follow
the procedure set forth in this Paragraph 38.3 to select replacement
personnel.
-118-
<PAGE>
ARTICLE 39. INDEMNIFICATION
39.1 Customer agrees to indemnify Hughes and its Subcontractors for, and
hold Hughes and its Subcontractors harmless against, any loss, damage,
liability or expense (including attorney's fees and other expenses of
investigating or defending claims) resulting from damage to property or
from personal injury, including death, attributable to Customer
Personnel while at Hughes' or its Subcontractors' facilities.
39.2 Customer agrees to indemnify Hughes as set forth in Paragraphs 13.3,
15.13, 15.14, 15.15, 19.1, 29.1.D and 34.1.
39.3 Hughes agrees to indemnify Customer and Customer Personnel for, and
hold Customer and Customer Personnel harmless against, any loss,
damage, liability or expense (including attorney's fees and other
expenses of investigating or defending claims) resulting from damage to
property or from personal injury, including death, attributable to
Hughes or its Subcontractors while at Hughes' or its Subcontractors'
facilities
39.4 Hughes agrees to indemnify Customer as set forth in Paragraphs 13.3 and
19.1.
-119-
<PAGE>
IN WITNESS WHEREOF, the Contract has been issued in three (3) counterparts and
signed in the city of ___ROCKVILLE____ on behalf of Customer, ONS and Hughes by
their respective Authorized Representatives.
HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ D.L. CROMER
--------------------------------
D.L. CROMER
CHAIRMAN OF THE BOARD
ORION ASIA PACIFIC CORPORATION
By: /s/ HANS GINER
--------------------------------
HANS GINER
PRESIDENT
ORION NETWORK SYSTEMS, INC.
(with respect to Article 15 and Paragraph 21.10 only)
By: /s/ DENIS J. CURTIN
--------------------------------
DENIS J. CURTIN
VICE PRESIDENT
-120-
<PAGE>
Annex A-11
ANNEX A FORM OF CERTIFICATION
[Date]
Orion Asia Pacific Corporation
2440 Research Boulevard, Suite 400
Rockville, Maryland 20850
United State of America
Attention: Dr. Denis Curtin
Re: Orion 3 Satellite Purchase Contract, dated as of [__________] (as
amended, supplemented or modified from time to time) between Orion Asia
Pacific Corporation, Orion Network Systems, Inc., and Hughes Space and
Communications International, Inc. (the "Orion 3 Contract")
Ladies and Gentlemen:
This certificate is delivered to you in connection
with the Orion 3 Contract. Each capitalized term used herein
and not otherwise defined shall have the meaning assigned
thereto in the Orion 3 Contract. We hereby certify, after due
inquiry, that as of the date hereof:
Hughes' performance of the Work is such that Hughes will be
able to Deliver the Satellite in accordance with the Delivery
Schedule.*
For the reasons set forth in Schedule 1 hereto, Hughes'
performance of the Work is such that it will not be able to
Deliver the Satellite in accordance with the Delivery
Schedule. Hughes reasonably expects to be able to Deliver the
Satellite at its Specified Orbital Location on or before
___________.*
Certified: Hughes Space and Communications International, Inc.
By: __________________________
Title:________________________
Date__________________________
* Include when relevant.
<PAGE>
HUGHES
SPACE & COMMUNICATIONS
- --------------------------------------------------------------------------------
ORION 3
- --------------------------------------------------------------------------------
Statement of Work (SOW)
Exhibit A
10 January 1996
Contract Number: ORION3/001/97
-------------
/S/
- ---------------------------------
HSC Approval
/S/
- ---------------------------------
ORION Approval
ORION AND HUGHES PROPRIETARY
This document contains information that is proprietary to the
ORION and Hughes Space and Communications International, Inc.
All information contained herein is deemed to be Proprietary
Information (as such term is defined in Clause 36 of the
Contract) of both Parties, and disclosure thereof is governed
by Clause 20 of the Contract.
<PAGE>
Page iv
ORION AND Hughes Proprietary
Subject to the restrictions on the title page of this document
1. PURPOSE AND SCOPE.....................................................1
2. SPACECRAFT EQUIPMENT REQUIREMENTS.....................................1
2.1 Flight Spacecraft.....................................................1
2.2 Test and Handling Equipment...........................................1
2.3 Satellite Ground Control System.......................................2
3. PROGRAM MANAGEMENT....................................................5
3.1 Scope & Responsibilities..............................................5
3.1.1 Resource Management..........................................5
3.2 Program Control.......................................................5
3.3 Configuration Control.................................................5
3.4 Design Reviews........................................................5
3.5 Unit Acceptance Reviews (CDRL 3.9)....................................6
3.6 System Test Reviews (CDRL 4.3)........................................6
3.7 Pre-Ship Review (CDRL 4.8)............................................7
3.8 In-Orbit Test Review and Handover (CDRL 3.8)..........................7
3.9 Variance Notification.................................................7
4. ANALYSIS 8
4.1 Design Analyses and Study Reports.....................................8
4.1.1 Analyses at Spacecraft System Level..........................8
4.1.1.1 EMCAnalysis..............................................8
4.1.1.2 Dynamic Analysis.........................................8
4.1.1.3 Antenna Pointing Error Analysis..........................9
4.1.1.4 Propellant Budget Analysis...............................9
4.1.1.5 Mass Properties Analysis................................10
4.1.1.6 Power Budget Analysis...................................10
4.1.1.7 Mission Analysis........................................10
4.1.1.8 Environmental Effects Analyses..........................10
4.1.1.9 Worst Case Performance Analysis.........................11
4.1.2 Subsystem Level Analyses....................................12
4.1.2.1 Communications Subsystem Analyses.......................12
4.1.2.2 Telemetry, Tracking, and Command (TT&C)
Subsystem Analyses.......................................14
4.1.2.3 Attitude Control Subsystem (ACS) Analysis...............15
4.1.2.4 Propulsion Subsystem Analyses...........................16
4.1.2.5 Power Subsystem Analyses................................16
4.1.2.6 Thermal Subsystem Analyses..............................17
4.1.2.7 Structure Analyses......................................17
5. SATELLITE PRODUCT ASSURANCE PLAN.....................................18
6. TESTPLAN.............................................................18
7. LAUNCH SERVICES (CDRL 4.5)...........................................18
Page ii
<PAGE>
7.1 Launch Vehicle Compatibility.........................................19
7.2 Launch Support.......................................................19
7.2.1 Launch Schedule Activities (CDRL 4.5).......................19
7.2.2 Spacecraft Preparation at the Launch Site...................19
7.2.3 Integration and Checkout with the Launch Vehicle............20
7.2.4 Spacecraft Propellant and Pressurant........................20
7.2.5 Safety......................................................20
8. MISSION OPERATIONS (CDRL 5.2)........................................20
9. IN-ORBIT TEST (IOT) (CDRL 5.4).............................................21
10. SHIPPING AND STORAGE......................................................21
10.1 Shipping, Transportation, and Storage....................................21
10.2 Spacecraft Shipment......................................................21
10.3 Spacecraft Storage.......................................................21
11. TRAINING SERVICES AND MATERIALS (CDRL 1.5)................................22
12. INFORMATION...............................................................24
12.1 Access to Information....................................................24
12.2 Release of Information...................................................24
12.3 Notification Requirements................................................24
13. REPORT AND DOCUMENTATION REQUIREMENTS.....................................25
13.1 System Test Requirement Document (STRD) (CDRL 5.7)...................25
13.1.1 Compliance Matrix (CDRL 1.2)..................................25
13.1.2 Program Schedules (CDRL 1.1)..................................25
13.1.3 Design Review Data (CDRL 4.2).................................25
13.1.4 Design Review Reports (CDRL 3.2, 3.3).........................25
13.1.5 Test Data and Reports (CDRL 3.4, 3.5).........................26
13. 1.6 Drawings and Engineering Control Documents
(CDRL 4.4, 4.10)............................................26
13. 1.7 Specifications and Test Procedures (CDRL 2.2, 5.3)...........26
13.1.8 Design Information Reports....................................26
13.1.8.1 Spacecraft System Summary (CDRL 4.1)...............27
13.1.8.2 Spacecraft Recommended Operating Procedures
(CDRL 5.1, 5.6).............................................27
13.1.8.3 Mission Plan (CDRL 1.3)............................27
13.1.8.4 Spacecraft Parameters Handbook (CDRL 4.7)..........27
13.1.8.5 In-Orbit Test (IOT) Plan (CDRL 1.4)................28
13.1.8.6 IOT Report (CDRL 3.8)..............................28
13.1.9 Status and Reporting..........................................29
13.1.9.1 Technical Reviews..................................29
13.1.9.2 Quarterly/Senior Management Reviews (CDRL 3.)......29
13.1.9.3 Action Items.......................................29
13.1.9.4 Quarterly, PDR, CDR, Pre-Ship Review Meetings......29
13.1.10 Documentation................................................30
Page iii
<PAGE>
13.1.11 Master Index (CDRL4.9).......................................30
14. CONTRACT DATA REQUIREMENTS LIST (CDRL)...............................33
TABLE 2-1 MAJOR COMPONENT LIST.........................................3
TABLE 11.1 TRAINING PROGRAM SUMMARY....................................22
TABLE 3-1 ORION REVIEW PACKAGE CONTENT................................31
TABLE 3-1 CONTINUED...................................................32
TABLE 14.1 CONTRACT DATA REQUIREMENTS LIST (CDRL)......................34
TABLE 14.1 CONTRACT DATA REQUIREMENTS LIST (CDRL) - CONTINUED..........35
TABLE 14.1 CONTRACT DATA REQUIREMENTS LIST (CDRL) - CONTINUED..........37
Page iv
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 37 OF THIS EXHIBIT A]
<PAGE>
HUGHES
SPACE & COMMUNICATIONS
- --------------------------------------------------------------------------------
ORION 3
- --------------------------------------------------------------------------------
SPACECRAFT SPECIFICATION
Exhibit B
11 January 1997
Contract Number: ORION 3/001/97
/S/
- --------------------------------
HSC Approval
/S/
- --------------------------------
ORION Approval
<PAGE>
TABLE OF CONTENTS
1.0 SCOPE .............................................................1
2.0 APPLICABLE DOCUMENTS..................................................1
2.1 APPLICABLE DOCUMENTS LIST.............................................1
3.0 REQUIREMENTS..........................................................2
3.1 GENERAL...............................................................2
3.1.1 GENERAL DESCRIPTION...................................................2
3.1.2 RELIABILITY...........................................................2
3.1.2.1 Single Point Failure..........................................2
3.1.2.2 Redundancy....................................................2
3.1.2.3 Failure Isolation.............................................3
3.1.3 UNDERVOLTAGE AND TRANSIENT CONDITIONS.................................3
3.1.3.1 Critical Unit Undervoltage....................................3
3.1.3.2 Undervoltage Capability.......................................3
3.1.4 ECLIPSE AND SUNLIGHT OPERATIONS.......................................3
3.1.5 GROUND CONTROL CAPABILITY.............................................4
3.1.5.1 Satellite Command System......................................4
3.1.5.2 Ground Command Capability.....................................4
3.1.5.3 Control Parameter Selection...................................4
3.1.5.4 Autonomy......................................................4
3.1.6 SPACECRAFT CHARGING...................................................5
3.1.7 ELECTROMAGNETIC COMPATIBILITY.........................................5
3.1.8 ENVIRONMENTAL REQUIREMENTS............................................5
3.1.9 CONNECTOR REDUNDANCY..................................................5
3.2 MISSION REQUIREMENTS..................................................5
3.2.1 LAUNCH VEHICLES.......................................................6
3.2.1.1 Launch Vehicle Mechanical & Electrical Interfaces.............6
3.2.1.2 Launch Configuration..........................................6
3.2.1.3 Separation System.............................................6
3.2.1.4 Separation Signal Interface...................................6
3.2.1.5 Mass Properties...............................................7
3.2.1.6 Launch Vehicle Envelope.......................................7
3.2.1.7 Safety........................................................7
3.2.2 SATELLITE LIFE........................................................7
3.2.2.1 Service Life..................................................7
3.2.2.2 Mission Life..................................................7
3.2.3 STORAGE MODES.........................................................8
3.2.3.1 Ground Storage................................................8
3.2.3.2 On-Orbit Storage..............................................8
3.2.4 ORBITAL LOCATION......................................................8
3.2.5 STATIONKEEPING........................................................8
3.2.5.1 Stationkeeping Accuracy.......................................8
3.2.5.2 Stationkeeping Frequency......................................8
3.2.5.3 Stationkeeping Pointing During Bipropellant
Maneuvers.....................................................9
3.2.6 NORMAL MODE POINTING..................................................9
3.2.6.1 Normal Mode...................................................9
3.2.6.2 NORMAL MODE POINTING REQUIREMENTS......................................9
ii
<PAGE>
3.2.7 ORBIT MEASUREMENT ACCURACY............................................9
3.2.7.1 Transfer Orbit................................................9
3.2.7.2 Synchronous Orbit.............................................9
3.2.7.3 Attitude Sensing Requirements.................................9
3.3 Communications Subsystem.............................................10
3.3.1 GENERAL..............................................................10
3.3.1.1 DEFINITIONS..................................................10
3.3.1.2 CONDITIONS FOR SPECIFICATION.................................12
3.3.3.1.3 PRIMARY TRANSMISSION MODES.................................12
3.3.3.2 COVERAGE..............................................................13
3.3.2.2 C-BAND COVERAGE.......................................................23
3.3.3 POLARIZATION.........................................................26
3.3.3.1 Receive Isolation............................................26
3.3.3.2 Transmit Isolation...........................................27
3.3.4 CAPACITY.............................................................28
3.3.5 FREQUENCY PLAN.......................................................29
3.3.6 COMMUNICATIONS SUBSYSTEM AND ANTENNA BEAM INTERCONNECTIVITY..........30
3.3.6.1 Communications Subsystem Configuration.......................30
3.3.6.2 Interconnectivity............................................31
3.3.7 INPUT CHARACTERISTICS................................................33
3.3.7.1 Receive Sensitivity (G/T)....................................33
3.3.7.3 Saturation Flux Density (SFD)................................36
3.3.7.4 Drive Conditions.............................................37
3.3.7.4.1 Overdrive Conditions.......................................37
3.3.7.4.2 Pulsed Transient Response..................................37
3.3.7.5 Receive Rejection............................................38
3.3.7.6 Linearity of the Common Input Section........................39
3.3.7.7 Interference from Command Carrier............................39
3.3.8 OUTPUT CHARACTERISTICS...............................................39
3.3.8.1 Effective Isotropic Radiated Power (EIRP)....................39
3.3.8.2 Spurious Outputs.............................................42
3.3.8.3 Spurious Modulation..........................................43
3.3.8.4 Pulsed Level.................................................44
3.3.8.5 Passive Intermodulation......................................44
3.3.9 TRANSFER CHARACTERISTICS.............................................44
3.3.9.1 Gain Versus Frequency (TBR)..................................44
3.3.9.2 Gain Slope...................................................45
3.3.9.3 Group Delay Versus Frequency (TBR)...........................45
3.3.9.4 Group Delay Slope............................................46
3.3.9.5 Group Delay Stability........................................46
3.3.9.6 Group Delay Ripple...........................................47
3.3.9.7 Phase Linearity and AM/PM Conversion Coefficient.............47
3.3.9.8 AM/PM Transfer Coefficient...................................47
3.3.9.9 Amplitude Linearity..........................................47
3.3.9.10 Frequency Stability.........................................48
3.3.9.11 Out-Of-Band Response........................................49
3.3.10 CESSATION OF EMISSIONS...............................................50
3.3.11 TRAFFIC ROUTING......................................................50
3.3.12 REDUNDANCY...........................................................51
3.3.13 HIGH POWER AMPLIFIERS................................................51
3.3.13.1 Linearized TWTAs............................................51
3.3.14 TT&C INTERFACE.......................................................51
3.3.14.1 Command Requirements........................................51
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<PAGE>
3.3.14.2 Telemetry Requirements......................................52
3.4 TELEMETRY, TRACKING, COMMAND, AND RANGING SUBSYSTEM (TT&CR)...............52
3.4.1 GENERAL
3.4.1.1 CONCURRENT OPERATION WITH PAYLOAD............................52
3.4.1.2 Satellite Control............................................52
3.4.2 COMMAND SUBSYSTEM.......................................................53
3.4.2.1 General......................................................53
3.4.2.2 Probability of Successful Command............................53
3.4.2.3 False Commands...............................................53
3.4.2.4 Noise Generated Commands.....................................53
3.4.2.5 Improper Command Tolerance...................................53
3.4.2.6 Ranging Uplink...............................................53
3.4.2.7 Command Backup...............................................53
3.4.2.8 Redundancy...................................................53
3.4.2.9 Switches.....................................................54
3.4.2.10 Hazardous Commands..........................................54
3.4.2.11 Command RF Parameters.......................................54
3.4.2.12 Command Encryption..........................................55
3.4.2.13 Command Receiver AGC........................................55
3.4.2.14 Command Deviation...........................................56
3.4.2.15 Subcarrier Modulation.......................................56
3.4.2.16 Command Data Rate...........................................56
3.4.2.17 Command Receiver and Decoder Selection......................56
3.4.2.18 Error Checking..............................................56
3.4.2.19 Command Formats.............................................56
3.4.2.20 Execute Modes...............................................57
3.4.2.21 Stored Commands.............................................57
3.4.2.22 Validation Tone.............................................57
3.4.3 TELEMETRY SUBSYSTEM..................................................57
3.4.3.1 General Requirements.........................................57
3.4.3.2 Ranging Capability...........................................58
3.4.3.3 Spacecraft ID................................................58
3.4.3.4 Telemetry Accuracy...........................................58
3.4.3.5 Redundancy...................................................58
3.4.3.6 Telemetry RF Parameters......................................59
3.4.3.7 Modulation and Encoding Modes................................60
3.4.4 RANGING SUBSYSTEM....................................................60
3.4.4.1 Transmitter Selection........................................60
3.4.4.2 Ranging Accuracy.............................................60
3.4.4.3 Range Tone Frequencies.......................................61
3.4.4.4 Modulation Indices...........................................61
3.4.4.5 Ranging Dynamic Range........................................61
3.5 POWER SUBSYSTEM......................................................61
3.5.1 GENERAL..............................................................61
3.5.1.1 Subsystem Configuration......................................61
3.5.1.2 Single Point Failure.........................................61
3.5.2 SOLAR ARRAY..........................................................62
3.5.2.1 DISSIPATION OF EXCESS POWER..................................62
3.5.2.2 CELL PROTECTION FROM SHADOWING...............................62
3.5.2.3 SOLAR WING ROTATION DIRECTION................................62
3.5.2.4 SOLAR WING MARGIN............................................62
3.5.2.5 ARRAY DEGRADATION PREDICTIONS.........................................62
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<PAGE>
3.5.3 BATTERY ............................................................62
3.5.3.1 DEPTH OF DISCHARGE...........................................63
3.5.3.2 RECHARGE.....................................................63
3.5.3.3 AUTONOMOUS CHARGE CONTROL....................................63
3.5.3.4 TELEMETRY....................................................63
3.5.4 POWER CONDITIONING, CONTROL & DISTRIBUTION..............................63
3.5.4.1 Battery Disconnect...........................................63
3.5.5 Transfer Orbit Power...........................................63
3.6 WIRE HARNESS.........................................................63
3.7 ATTITUDE CONTROL SUBSYSTEM...........................................64
3.7.1 REACQUISITION........................................................64
3.7.2 SENSOR INTERFERENCE..................................................64
3.7.3 CONTROL BIAS CAPABILITY..............................................64
3.7.3.1 EARTH BIAS CONTROL RANGE.....................................64
3.7.3.2 BIAS REQUIREMENTS FOR EARTH MODE.............................65
3.7.4 IN-ORBIT ANTENNA PATTERN MEASUREMENT CAPABILITY......................65
3.7.5 SPACECRAFT CAPABILITIES..............................................65
3.7.5.1 Attitude Re-orientation Capability...........................65
3.7.5.2 Spin Control Capability......................................65
3.7.5.3 Automatic Acquisition Capabilities...........................65
3.7.6 STATIONKEEPING.......................................................65
3.7.6.1 Automatic East/west Stationkeeping Sequence..................66
3.7.6.2 Automatic North/South Stationkeeping Sequence................66
3.7.7 THRUSTER USAGE.......................................................66
3.7.7.1 Bipropellant Thruster Usage Interval.........................66
3.7.7.2 Xenon Ion Thruster Usage.....................................66
3.7.8 MOMENTUM CONTROL.....................................................66
3.7.8.1 Pitch Momentum Dumping Simultaneous with Biprop
Stationkeeping...............................................66
3.7.8.2 Autonomous Pitch Momentum Dumping
(Bipropellant Thrusters).....................................66
3.7.8.3 Setting Pitch Momentum Thresholds............................67
3.7.8.4 Roll/Yaw Momentum Dumping Simultaneous with
Bipropellant Stationkeeping .................................67
3.7.8.5 Autonomous Roll/Yaw Momentum Dumping
(Xenon Thruster Mode)........................................67
3.7.8.6 Autonomous Roll/Yaw Momentum Dumping (Bipropellant
Thruster Mode)............................................67
3.7.8.7 Setting Roll/Yaw Momentum Thresholds.........................67
3.7.9 SWITCHING TRANSIENTS.................................................67
3.7.10 ENVIRONMENTAL DISTURBANCE TORQUES....................................67
3.7.11 MOMENTUM WHEEL GROUND CONTROL........................................67
3.7.12 REPROGRAM CAPABILITY.................................................68
3.7.13 FAULT PROTECTION.....................................................68
3.7.13.1 Fault Detection Algorithm Status Flag.......................68
3.7.13.2 Fault Correction Sensitivity to Bad Data....................68
3.7.14 REFERENCE SYSTEMS....................................................68
3.7.15 AUTONOMOUS OPERATION OF LATCH VALVES.................................68
3.8 PROPULSION SUBSYSTEM.................................................68
3.8.1 GENERAL..............................................................68
3.8.1.1 LIQUID APOGEE MOTOR (LAM) BACKUP.............................68
3.8.1.2 OUT OF VIEW LAM FIRING.......................................69
3.8.2 THERMAL CONSTRAINTS..................................................69
3.8.3 PROPELLANT STORAGE AND FEED..........................................69
3.8.3.1 PROPELLANT SUPPLY............................................69
3.8.4 LEAKAGE..............................................................69
v
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3.8.5 PERFORMANCE..........................................................69
3.8.5.1 Compatibility................................................70
3.8.5.2 Operating Range..............................................70
3.8.5.3 Constraints..................................................70
3.8.6 INSTRUMENTATION REQUIREMENTS.........................................70
3.8.6.1 Temperature Sensors..........................................70
3.8.6.2 Pressure Transducers.........................................70
3.8.7 FUEL LIFE ESTIMATION.................................................70
3.8.8 FUELED SPACECRAFT....................................................70
3.9 THERMAL CONTROL SUBSYSTEM............................................71
3.9.1 UNIT TEMPERATURE MARGIN..............................................71
3.9.2 TEST TEMPERATURE RANGE...............................................71
3.9.2.1 Protoflight and Qualification Performance ...................71
3.9.2.2 Acceptance/Flight............................................71
3.9.3 TELEMETRY............................................................71
3.9.4 REPEATER CONFIGURATION...............................................72
3.10 STRUCTURAL SUBSYSTEM.................................................72
3.10.1 DESIGN PARAMETERS......................................................72
3.10.2 DIMENSIONAL STABILITY..................................................72
4.0 QUALITY ASSURANCE PROVISIONS.........................................72
4.1 GENERAL..............................................................72
4.1.1 NOT APPLICABLE.......................................................72
4.1.2 INSPECTION...........................................................72
4.1.3 ANALYSIS.............................................................73
4.1.4 DEMONSTRATION........................................................73
4.1.5 TEST ............................................................73
4.1.5.1 Unit Tests (U)...............................................73
4.1.5.2 Assembly Tests (A)...........................................73
4.1.5.3 Subsystem Tests (SS).........................................73
4.1.5.4 Integrated Spacecraft Tests (SC).............................73
4.1.5.5 Development Tests (D)........................................73
4.1.5.6 Qualification Tests (Q)......................................74
4.1.5.7 Protoflight Test (P).........................................74
4.1.5.8 Flight Acceptance Test (F)...................................74
5.0 PREPARATION FOR DELIVERY.............................................74
5.1 SHIPMENT.............................................................74
5.1.1 CONFIGURATION........................................................74
5.1.2 ENVIRONMENTS.........................................................74
5.1.3 METHODS..............................................................75
5.1.4 CONTAINER............................................................75
5.2 GROUND STORAGE.......................................................75
Appendix A DTH Payload
Appendix B Environmental Specification
vi
<PAGE>
List of Figures
FIGURE 3.3.2.1-1 DEFINITION OF NEA COVERAGE AT 139 DEG. EAST..................15
FIGURE 3.3.2.1-2 DEFINITION OF SEA COVERAGE AT 139 DEG. EAST..................18
FIGURE 3.3.2.1-3 DEFINITION OF HAWAII COVERAGE AT 139 DEG. EAST...............19
FIGURE 3.3.2.1-4 DEFINITION OF INDIA COVERAGE AT 139 DEG. EAST................21
FIGURE 3.3.2.1-5 DEFINITION OF OCEANA COVERAGE AT 139 DEG. EAST...............22
FIGURE 3.3.2.2-1 BAND COVERAGE................................................25
List of Tables
TABLE 3.3.3.2.1-1 DEFINITION OF NEA COVERAGE..................................14
TABLE 3.3.2.1-2 DEFINITION OF SEA COVERAGE....................................16
TABLE 3.3.2.1-2 DEFINITION OF SEA COVERAGE (CONTINUED)........................17
TABLE 3.3.2.1-3 DEFINITION OF HAWAII COVERAGE (NEA AND SEA)...................19
TABLE 3.3.2.1-4 DEFINITION OF INDIA COVERAGE..................................20
TABLE 3.3.2.1-5 DEFINITION OCEANA.............................................22
TABLE 3.3.2.2-1 DEFINITION OF C-BAND COVERAGE.................................23
TABLE 3.3.2.2-1 DEFINITION OF C-BAND COVERAGE (CONTINUED).....................24
TABLE 3.3.3.1-1 CO-POLAR RECEIVE ISOLATION....................................26
TABLE 3.3.3.1-2 CROSS-POLAR RECEIVE ISOLATION.................................27
TABLE 3.3.3.2-1 CO-POLAR TRANSMIT ISOLATION...................................27
TABLE 3.3.3.2-2 CROSS-POLAR TRANSMIT ISOLATION................................27
TABLE 3.3.4-1 ORION AP DC POWER CONSTRAINED OPERATIONAL CONFIGURATION.........28
TABLE 3.3.5-1 CHANNEL FREQUENCIES.............................................29
TABLE 3.3.6.1-1(B). C-BAND CONNECTIVITY MATRIX................................33
TABLE 3.3.7.1-1A MINIMUM G/T PERFORMANCE OF NEA BEAM..........................34
TABLE 3.3.7.1-1B MINIMUM G/T PERFORMANCE OF SEA BEAM..........................34
TABLE 3.3.7.1-1C MINIMUM G/T PERFORMANCE OF INDIA BEAM........................34
TABLE 3.3.7.1-1D MINIMUM G/T PERFORMANCE OF OCEANA BEAM.......................34
TABLE 3.3.7.1-1E MINIMUM G/T PERFORMANCE OF C-BAND HEMI BEAM..................34
TABLE 3.3.7.1-2 KEY CITY G/T VALUES (TBR).....................................35
TABLE 3.3.7.5-1 (A) KU-BAND RECEIVE REJECTION.................................38
TABLE 3.3.8.5-1 (B) C-BAND RECEIVE REJECTION..................................38
TABLE 3.3.7.7-1 COMMAND CARRIER LEVEL AT RECEIVE ANTENNA.....................39
TABLE 3.3.8.1-1A MINIMUM EIRP PERFORMANCE OF NEA BEAM.........................40
TABLE 3.3.8.1-1B MINIMUM EIRP PERFORMANCE OF SEA BEAM.........................40
TABLE 3.3.8.1-1C MINIMUM EIRP PERFORMANCE OF INDIA BEAM.......................40
TABLE 3.3.8.1-1D MINIMUM EIRP PERFORMANCE OF OCEANA BEAM......................40
TABLE 3.3.8.1-1E MINIMUM EIRP PERFORMANCE OF C-BAND HEMI BEAM.................40
TABLE 3.3.8.1-2 KEY CITY EIRP VALUES (TBR)....................................41
TABLE 3.3.8.2-1 SPURIOUS OUTPUT LEVELS........................................43
vii
<PAGE>
TABLE 3.3.8.3-1 SINGLE COMPONENT SPURIOUS FREQUENCY MODULATION................44
TABLE 3.3.9.1-1 GAIN FLATNESS (DB)............................................45
TABLE 3.3.9.2-1 GAIN SLOPE (DB/MHZ)...........................................45
TABLE 3.3.9.3-1 GROUP DELAY (INS).............................................46
TABLE 3.3.9.4-1 54 MHZ TRANSPONDERS GROUP DELAY SLOPE.........................46
TABLE 3.3.9.5-1 GROUP DELAY STABILITY (NS)....................................47
TABLE 3.3.9.9-2 NOISE POWER RATIO.............................................48
TABLE 3.3.9.11-1(A) OUT-OF-BAND RESPONSE TBR..................................49
TABLE 3.3.9.11-1(B) OUT-OF-BAND RESPONSE......................................49
TABLE 3.3.9.11-1(C) OUT-OF-BAND RESPONSE......................................50
viii
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 75 OF THIS EXHIBIT B]
<PAGE>
HUGHES
SPACE & COMMUNICATIONS
- --------------------------------------------------------------------------------
ORION 3
- --------------------------------------------------------------------------------
SPACECRAFT SPECIFICATION
Exhibit B
Appendix A
DTH Payload
11 January 1997
Contract Number: ORION 3/001/97
/s/
- ----------------------------------
HSC Approval
/s/
- ----------------------------------
ORION Approval
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 2 TO 19 OF THIS EXHIBIT B,
APPENDIX A]
<PAGE>
HUGHES
SPACE & COMMUNICATIONS
- --------------------------------------------------------------------------------
ORION 3
- --------------------------------------------------------------------------------
SPACECRAFT SPECIFICATION
Exhibit B
Appendix B
Environmental Specification
11 January 1997
Contract Number: ORION 3/001/97
/s/
- ---------------------------------
HSC Approval
/s/
- ---------------------------------
ORION Approval
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 7 OF THIS EXHIBIT B,
APPENDIX B]
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------------------- ----------------------- ------------ -----------------------------------------
TITLE NUMBER REV
HS601HP Prelim HUGHES
ORION
Product Assurance Plan
----------------------- ------------
TOTAL SPACE & COMMUNICATIONS
CAGE CODE PAGES A HUGHES ELECTRONICS COMPANY
9E831
67
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: HUGHES PROPRIETARY
This document contains proprietary information and except with
written permission of Hughes Space and Communications Company
such information shall not be published or disclosed to others
or used for any purpose and the document shall not be copied
in whole or in part.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
APPROVALS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DATE DATE
/s/ P. Lauenstein
A. Traum - Product Assurance 11/27/96 Campaign Manager
Project Manager, Advanced Programs
- ------------------------------------------- --------------- --------------------------------- ----------------------------
- ------------------------------------------- --------------- --------------------------------- ----------------------------
- ------------------------------------------- --------------- --------------------------------- ----------------------------
- ------------------------------------------- --------------- --------------------------------- ----------------------------
</TABLE>
<PAGE>
Prelim
November 1996
1. BASIC PROVISIONS ...................................................1-1
1.1 Program Content............................................1-2
1.2 Program Functions..........................................1-2
1.3 Applicable Documents and Guidelines........................1-2
2. ORGANIZATION AND MANAGEMENT.........................................2-1
2.1 Basic Provisions...........................................2-2
2.2 Organization of Integrated Product Teams (IPTs)............2-2
2.3 Reviews ..............................................2-2
2.4 Audits ..............................................2-2
2.5 Documentation..............................................2-3
2.6 Subcontractor/Supplier PA Program Control..................2-3
2.6.1 Basic Provisions..............................2-3
2.6.2 High Reliability Parts Suppliers..............2-3
2.6.3 Materials and Fabricated Item Suppliers.......2-3
2.6.4 Subcontractors................................2-3
2.7 Progress Reporting.........................................2-4
2.8 Customer Interface.........................................2-4
2.8.1 Involvement in and Access to Program
Activities....................................2-4
2.8.2 Involvement in a Review Board Proceedings.....2-4
3. QUALITY ASSURANCE...................................................3-1
3.1 Basic Provisions...........................................3-2
3.2 Function Administration....................................3-2
3.2.1 Responsibilities..............................3-2
3.2.2 Tasks.........................................3-2
3.2.3 Audits........................................3-3
3.3 Procurement Controls.......................................3-3
3.3.1 Responsibility................................3-3
3.3.2 Subcontractor/Supplier Evaluation.............3-3
3.3.3 Procurement Document Requirements.............3-3
3.3.4 Source Surveillance...........................3-3
3.3.5 Receiving Inspection..........................3-4
3.4 Manufacturing Controls.....................................3-4
3.4.1 Fabrication and Assembly Operations...........3-4
3.4.2 Stores Control................................3-4
3.4.3 Process Control...............................3-4
3.4.4 Process and Personnel Certification...........3-4
3.4.5 Workmanship Standards.........................3-5
3.4.6 Cleanliness and Contamination Control.........3-5
3.4.7 Configuration Control.........................3-5
3.4.8 Electrostatic Discharge Control...............3-5
3.5 Testing and Inspection.....................................3-5
3.5.1 In-process Inspections........................3-5
3.5.2 Final Test and Inspection.....................3-5
3.5.3 Subsystem/System Assembly Inspection and
Records.......................................3-6
3.5.4 Test Participation............................3-6
i
<PAGE>
Prelim
November 1996
3.6 Nonconforming Article and Material Control.................3-7
3.6.1 Material Review Action and Control............3-7
3.6.1.1 Preliminary Review............................3-7
3.6.1.2 Engineering Disposition.......................3-7
3.6.1.3 Engineering Review............................3-7
3.6.2 Nonconformance Definitions and
Classifications...............................3-7
3.6.3 Corrective Action.............................3-7
3.6.4 Subcontractor Material Review.................3-8
3.6.5 Database......................................3-8
3.7 Measurement Processes and Calibration......................3-8
3.7.1 Basic System..................................3-8
3.7.2 Calibration Controls..........................3-8
3.7.3 Remedial and Preventive Action................3-9
3.7.4 Subcontractor Controls........................3-9
3.8 History Records and Traceability...........................3-9
3.8.1 History Records...............................3-9
3.8.2 Traceability..................................3-9
3.9 Stamp Controls............................................3-10
3.10 Sampling Plans, Statistical Planning, and Analysis........3-10
3.11 Handling and Shipping.....................................3-10
3.11.1 Handling.....................................3-10
3.11.2 Shipping.....................................3-10
3.11.3 Transportation...............................3-10
3.12 Software Quality Assurance................................3-11
3.13 Launch Site Activities....................................3-11
4. RELIABILITY ENGINEERING.............................................4-1
4.1 Basic Provisions...........................................4-2
4.2 Function Administration....................................4-2
4.2.1 Responsibilities..............................4-3
4.2.2 Tasks.........................................4-2
4.3 Reliability Assessments....................................4-2
4.3.1 Space Segment Design Reliability..............4-2
4.3.1.1 Requirements..................................4-3
4.3.1.2 Apportionment.................................4-3
4.3.2 Analyses......................................4-3
4.3.2.1 Failure Rates.................................4-3
4.3.2.2 Analysis Results..............................4-4
4.3.3 Part Application Derating.....................4-4
4.3.4 Failure Modes, Effects, and Criticality
Analysis......................................4-4
4.3.5 Single Point Failures.........................4-5
4.3.6 Wearout Analysis..............................4-5
4.3.7 Worst-case Analysis...........................4-5
4.3.8 Critical Items List...........................4-5
4.4 Failure Reporting and Corrective Action....................4-6
4.4.1 Basic Provisions..............................4-6
ii
<PAGE>
Prelim
November 1996
4.4.2 Failure Definition and Documentation..........4-6
4.4.3 Failure Analysis..............................4-7
4.4.4 Failure Review Board..........................4-7
4.4.5 Subcontractor Failure Reporting...............4-7
4.4.6 Mission On-orbit Performance Metrics and
Corrective Action.............................4-7
5. PARTS, MATERIALS, AND PROCESSES CONTROL.............................5-1
5.1 Basic Provisions...........................................5-2
5.2 Function Administration....................................5-2
5.3 Program Requirements.......................................5-2
5.3.1 Authorized Lists..............................5-2
5.3.2 Parts, Materials, and Processes...............5-2
5.3.3 Parts, Materials, and Processes
Specifications................................5-3
5.3.4 Parts and Materials Qualification.............5-3
5.4 Parts Process Controls, Screening and Acceptance...........5-4
5.4.1 Basic Provisions..............................5-4
5.4.2 Environmental Screening and Conditioning......5-4
5.4.3 Burn-in.......................................5-4
5.4.4 Destructive Physical Analysis.................5-4
5.4.5 Radiation.....................................5-4
5.4.6 Subcontractor PMP Program Control.............5-4
6. CONFIGURATION CONTROL...............................................6-1
6.1 Basic Provisions...........................................6-2
6.2 Function Administration....................................6-2
6.2.1 Responsibilities..............................6-2
6.2.2 Tasks.........................................6-2
6.3 Activities ..............................................6-3
6.3.1 Configuration Identification..................6-3
6.3.1.1 Baseline Identification.......................6-3
6.3.1.2 Configuration Items Definition................6-3
6.3.1.3 Specifications and Drawings Identification....6-3
6.3.1.4. Specification Tree............................6-4
6.3.1.5 Master Index..................................6-4
6.3.1.6 Computer Software Configuration
Identification................................6-4
6.3.1.7 Firmware Configuration Management.............6-4
6.3.2 Configuration Control.........................6-4
6.3.2.1 Change Classification.........................6-4
6.3.2.2 Requests for Deviations/Waivers (RDWs)........6-4
6.3.2.3 Engineering Control Processing................6-5
6.3.2.4 Change Control Board..........................6-5
6.3.3 Configuration Status Accounting...............6-5
6.3.4 Subcontractor Configuration Management........6-5
6.3.5 Engineering Documentation Control.............6-6
6.3.5.1 Engineering Releases and Records..............6-6
7. SYSTEM SAFETY.......................................................7-1
7.1 Basic Provisions...........................................7-2
iii
<PAGE>
Prelim
November 1996
7.2 Function Administration....................................7-2
7.2.1 Responsibilities..............................7-2
7.2.2 Tasks.........................................7-2
7.2.3 Organizational Roles..........................7-3
7.2.3.1 Engineering...................................7-3
7.2.3.2 System Operations.............................7-3
7.2.3.3 Safety, Health, and Environmental Affairs
(SHEA)........................................7-3
7.2.4 Launch Site Safety Requirements...............7-3
7.3 HSC System Safety Policy...................................7-4
7.4 Scope of System Safety Program.............................7-4
7.5 Integration and Coordination of Delegated Activities.......7-5
7.6 Hazard Control Order of Precedence.........................7-5
7.7 Hazard Analysis............................................7-5
7.7.1 Preliminary Hazard Analysis (PHA).............7-6
7.7.2 Subsystem and System Hazard Analysis (S&SHA)..7-6
7.7.3 Verification and Certification of
Requirements Compliance.......................7-6
7.8 Test and Operational Safety................................7-6
7.9 Launch Campaign Safety Operations..........................7-7
7.10 Safety Reviews and Safety Data/Deliverables................7-7
7.11 Training ..............................................7-8
7.12 Audit Program..............................................7-8
ANNEX 7A. LAUNCH VEHICLE/LAUNCH SITE SPECIFIC SAFETY INFORMATION...........7A-1
7A.1 USA Eastern Range Launch Vehicle (Delta II,
Delta III, and Atlas ................................Vehicles)
Specific Annex for HS376, HS601, and HS601HP..............7A-1
iv
<PAGE>
LIST OF FIGURES
1-1 ISO 9001 Certificate of Qualification..........................1-3
2-1 Program Product Assurance Management Reporting.................2-5
2-2 Program Product Assurance Manager's Staff......................2-5
2-3 HSC Quality Management System..................................2-6
3-1 Quality Assurance Interfaces..................................3-12
4-1 Failure Management System......................................4-9
6-1 Program Configuration Management Operations Reporting..........6-7
6-2 Customer/HSC/Subcontractor Interfaces..........................6-7
6-3 Program CMO Functional Responsibilities........................6-8
7A.1-1 Phased ER Safety Generic Approval Process.....................7A-2
LIST OF TABLES
1-1 Applicable Documents...........................................1-4
1-2 Applicable HSC Manuals and Procedures..........................1-4
2-1 Review Boards..................................................2-7
2-2 Customer Involvement in Review Board Proceedings...............2-8
3-1 Flight Hardware Material Review Authority.....................3-13
4-1 HS601HP Baseline Critical Items List..........................4-10
5-1 High Reliability Parts Screening...............................5-5
v
<PAGE>
1. BASIC PROVISIONS
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR 1-2 TO 7A-3 OF THIS EXHIBIT C]
1-1
<PAGE>
HUGHES
- --------------------------------------------------------------------------------
ORION
- --------------------------------------------------------------------------------
HS601HP
INTEGRATED TEST PLAN
August 1996
/s/
-------------------------
Approved by HSC
/s/
-------------------------
Approved by ORION
HUGHES PROPRIETARY
This document contains proprietary information, and except
with written permission of Hughes Space and Communications
Company, such information shall not be published, or disclosed
to others, or used for any purpose and the document shall not
be duplicated in whole or in part.
Copyright 1996
Hughes Space and Communications Company
Unpublished Work
HUGHES PROPRIETARY
<PAGE>
TABLE OF CONTENTS
Page
ACRONYMS AND ABBREVIATIONS..........................................NOT NUMBERED
FOREWORD I
A. Integrated Test Plan (ITP) and HS601HP Integration and
Test Documentation...................................................ii
B. HS601HP Product Line Test Philosophy..............................iv
C. Program-Specific Information for the __________ Spacecraft........vi
1. INTRODUCTION..............................................................1-1
1.1 Plan Scope......................................................1-2
1.2 Test Program Flow...............................................1-2
1.3 Plan Content....................................................1-2
1.4 Customer Participation..........................................1-2
2. TEST PROVISIONS...........................................................2-1
2.1 HS601HP Product Line Test Philosophy............................2-2
2.2 Test Requirements...............................................2-2
2.2.1 Development Testing..................................2-3
2.2.2 Qualification Testing................................2-3
2.2.3 Acceptance Testing...................................2-4
2.2.4 Life Testing.........................................2-4
2.3 Test Phase Descriptions.........................................2-5
2.3.1 Unit Level...........................................2-5
2.3.2 Subsystem Level......................................2-7
2.3.3 System Level.........................................2-9
2.3.4 In Orbit Testing (IOT)..............................2-14
3. UNIT/EQUIPMENT LEVEL TESTING..............................................3-1
3.1 Unit/Equipment Heritage / Qualification/Heritage................3-1
3.1.1 HS601HP Product Line Heritage / Qualification
Matrix...............................................3-3
3.2 Unit Thermal Cycle and Thermal Vacuum Cycle Requirements........3-6
3.3 Life Testing....................................................3-9
4. SUBSYSTEM AND SYSTEM LEVEL ACCEPTANCE TESTING.............................4-1
4. Test Matrices....................................................4-2
4.1 Mechanical.............................................4-2
4.2 Electrical Power Subsystem.............................4-4
4.3 Attitude Control Subsystem.............................4-6
4.4 Liquid Propulsion Subsystem (LPS)......................4-8
4.5 Xenon Ion Propulsion Subsystem (XIPS).................4-10
4.6 T&C Subsystem Digital Equipment.......................4-12
4.7 T&C Subsystem RF Hardware.............................4-13
4.8 Communications Subsystem..............................4-14
5. IN ORBIT TESTING (IOT)....................................................5-1
5.1 Overview........................................................5-2
5.2 Tests...........................................................5-2
5.2.1 Electrical Power Subsystem...........................5-2
5.2.2 Attitude Control Subsystem...........................5-3
5.2.3 Communications Subsystem.............................5-4
5.2.4 Telemetry and Command Subsystem......................5-5
HUGHES PROPRIETARY
<PAGE>
LIST OF FIGURES
Page
A-1 HS601HP Integration and Test Documentation...............................iii
1-1 Top Level Acceptance Spacecraft Test Flow................................1-3
1-2 HS601HP Acceptance Spacecraft Integration and Test Flow Details..........1-4
LIST OF TABLES
Page
3.1.1 HS601HP Product Line Heritage / Qualification Matrix...................3-3
3.2 Unit Thermal Cycle and Thermal Vacuum Cycle Requirements.................3-6
4. Subsystem and System Test Matrices........................................4-2
4.1 Mechanical.............................................4-2
4.2 Electrical Power Subsystem.............................4-4
4.3 Attitude Control Subsystem.............................4-6
4.4 Liquid Propulsion Subsystem (LPS)......................4-8
4.5 Xenon Ion Propulsion Subsystem (XIPS).................4-10
4.6 T&C Subsystem Digital Equipment.......................4-12
4.7 T&C Subsystem RF Hardware.............................4-13
4.8 Communications Subsystem..............................4-14
5.2 In Orbit Test (IOT) Matrices.............................................5-2
5.2.1 Electrical Power Subsystem...........................5-2
5.2.2 Attitude Control Subsystem...........................5-3
5.2.3 Communications Subsystem.............................5-4
5.2.4 Telemetry and Command Subsystem......................5-5
HUGHES PROPRIETARY
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 5-5 OF THIS EXHIBIT D]
HUGHES PROPRIETARY
<PAGE>
ORION 3
GROUND SEGMENT
Exhibit E
9 January 1997
Appendix A Statement of Work
Appendix B Performance Specifications
Appendix C Test Plan
Appendix D Product Assurance Plan
<PAGE>
Orion Ground Statement of Work Appendix B
Optional/Unique Requirements
- --------------------------------------------------------------------------------
STATEMENT OF WORK
ORION 3 Ground System
Exhibit E
Appendix A
Date: 8 January 1997
<PAGE>
Orion Ground Statement of Work Appendix B
Optional/Unique Requirements
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
1. INTRODUCTION................................................................4
2. APPLICABLE DOCUMENTS........................................................4
3. DELIVERABLE EQUIPMENT, SOFTWARE and SERVICES................................5
3.1 Satellite Control Equipment and Software..........................5
3.2 Training and Satellite In-Orbit Operations Support................5
3.3 Test Equipment and Tools..........................................5
3.4 Spares............................................................5
4. DELIVERABLE DATA and DOCUMENTATION..........................................7
4.1 Facilities Requirements...........................................7
4.2 Test Data and Report..............................................7
4.3 O&M Manuals.......................................................8
4.4 Interface Control Document........................................8
4.5 Interconnect Drawings.............................................8
4.6 Design Review Package.............................................9
4.6.1 Technical Interchange Meeting #1.......................9
4.6.2 Technical Interchange Meeting #2.......................9
5. LONG TIME SUPPORT...........................................................9
5.1 Warranty.........................................................10
5.2 Equipment (Hardware and Software) Product Support................10
5.3 Operational Life.................................................10
6. Orion MANAGEMENT...........................................................10
6.1 Technical Coordination and Witness...............................11
6.2 Status Reviews...................................................11
6.3 Product Assurance Management.....................................11
6.4 Test Program.....................................................11
6.5 Program Milestones...............................................12
6.6 Final Acceptance Criteria........................................12
7. PACKING, SHIPPING, and SITE INSTALLATION...................................13
7.1 Packing and Shipping.............................................13
7.2 Requirements and Regulations for Site Installation and Tests.....14
8. INSTALLATION, POWER REQUIREMENTS AND BENEFICIAL ACCESS.....................14
8.1 Civil Works Power Distribution...................................14
8.2 Mechanical Systems...............................................14
8.3 Grounding........................................................14
8.4 Antenna Foundations and RF Shelter...............................14
8.5 Purchaser-Furnished Equipment....................................14
8.6 Miscellaneous....................................................14
<PAGE>
Orion Ground Statement of Work Appendix B
Optional/Unique Requirements
- --------------------------------------------------------------------------------
LIST OF TABLES
--------------
Table 3-1 Major Component List.................................................5
Table 4-1 Contract Data Requirement List (CDRL)................................8
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 4 TO 15 OF THIS EXHIBIT E ,
<PAGE>
Document
REV: 1.0
PERFORMANCE SPECIFICATIONS
Orion 3 Ground System
Exhibit E
Appendix B
<PAGE>
Change Record
- ----------- -------------- ---------------- ---------------- -------------------
Date Change Affected Affected Remark
Page Section
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i
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2.3.1.1.5 Command Sources.......................................12
2.3.1.1.5.1 Command Sequences................................12
2.3.1.1.5.2 Operator Input...................................12
2.3.1.1.6 Commanding Interface..................................12
2.3.1.1.7 Unauthorized Commanding...............................12
2.3.1.1.8 Critical Commands.....................................12
2.3.1.1.9 Restricted Commands...................................12
2.3.1.1.10 Invalid Command Sequences............................12
2.3.1.1.11 Command History......................................13
2.3.1.2 Telemetry Function..........................................13
2.3.1.2.1 Telemetry Format......................................13
2.3.1.2.2 Telemetry Modes.......................................13
2.3.1.2.3 Simultaneous Telemetry and Ranging....................13
2.3.1.2.4 Multiple Telemetry Streams............................14
2.3.1.2.5 Telemetry Processing..................................14
2.3.1.2.5.1 Decommutation....................................14
2.3.1.2.5.2 Time-Tagging.....................................14
2.3.1.2.5.3 Engineering Unit Conversion......................14
2.3.1.2.5.4 Limit Checking...................................14
2.3.1.2.6 Telemetry Display.....................................14
2.3.1.2.7 Telemetry Alarm Generation............................14
2.3.1.2.8 Telemetry Alarm Display...............................15
2.3.1.2.9 Telemetry Archiving...................................15
2.3.1.2.10 Alarm History........................................15
2.3.1.3 Ranging Function............................................15
2.3.1.3.1 Range Measurement Processing..........................15
2.3.1.3.2 Ranging Modes.........................................15
2.3.1.3.3 Ranging Accuracy......................................15
2.3.1.3.4 Tracking Data Archiving...............................15
2.3.1.3.5 Payload Thermal Management............................16
2.3.1.4 Flight Dynamics Software....................................16
2.4 Flight Dynamics Software............................................16
2.5 Space Health and Performance Evaluation (SHAPE).....................16
2.6 Ground Status and Control Software..................................16
2.6.1 Simultaneous Control and Status.................................16
2.6.1.1 TCR Software Interface......................................16
2.6.1.2 Operator Control and Status.................................16
2.6.1.2.1 Manual Control........................................16
2.6.1.2.2 Displays..............................................16
2.6.1.2.3 Ground Equipment Control..............................17
2.6.1.2.4 Ground Equipment Status...............................17
2.7 Dynamic Satellite Simulator.........................................17
3. Baseband Subsystem Definition..............................................18
3.1 Baseband Subsystem Interface Definition.............................18
ii
<PAGE>
3.1.1 External Interfaces...........................................18
3.1.1.1 IF Telemetry/Ranging Input..............................18
3.1.1.2 IF Command/Ranging Output...............................18
3.1.1.3 Computer to Command Generator...........................20
3.1.2 Characteristics...............................................21
3.1.2.1 Performance.............................................21
3.1.2.1.1 Command Tone Generation and Uplink Modulation.......21
3.1.2.1.1.1 Command Generator...............................21
3.1.2.1.1.2 Encryption......................................21
3.1.2.1.1.3 Frequency Modulator.............................21
3.1.2.1.1.4 FM Modulator Output.............................22
3.1.2.1.2 Telemetry Reception and Formatting..................22
3.1.2.1.2.1 Telemetry Receiver..............................22
3.1.2.1.2.2 PSK Demodulator.................................22
3.1.2.1.2.3 Bit Synchronizer................................22
3.1.2.1.2.4 Frame Synchronizer..............................23
3.1.2.1.2.5 Bit Error Rate (BER)............................23
3.1.2.1.3 Satellite Range Measurement.........................23
3.1.2.1.3.1 T&C Ranging Uplink..............................23
3.1.2.1.3.2 T&C Ranging Downlink............................24
3.1.2.1.3.3 T&C Range Measurement...........................24
3.1.2.1.3.4 T&C Range Calibration...........................24
3.1.2.1.3.5 T&C Ranging Timebase............................24
3.1.2.2 Time Code Generation Function...........................25
3.1.2.2.1 Timing System.......................................25
3.1.2.2.2 Timing System.......................................25
4. Radio Frequency (RF) Subsystem.............................................26
4.1 PRIMARY-STATION...................................................26
4.1.1 RF Subsystem Interface Definition.............................26
4.1.1.1 External Interfaces.....................................26
4.1.1.1.1 Baseband Telemetry/Ranging Output...................26
4.1.1.1.2 Baseband Command/Ranging Input......................26
4.1.1.1.3 RF Uplink...........................................26
4.1.1.1.4 Antenna Interfaces..................................28
4.1.1.1.5 RF Downlink.........................................29
4.1.1.1.6 Control Computer Subsystem..........................29
4.1.2 RF Performance................................................29
4.1.2.1 RF Transmit.............................................29
4.1.2.1.1 RF Transmit Input Characteristics...................29
4.1.2.1.2 RF Transmit Output Characteristics..................29
4.1.2.1.3 RF Transmit Transfer Characteristics................29
4.1.2.2 RF Received.............................................31
4.1.2.2.1 RF Received Input Characteristics...................31
4.1.2.2.2 RF Received Output Characteristics..................31
iii
<PAGE>
4.1.2.2.3 RF Received Transfer Characteristics................31
5. Antenna Subsystem31
5.1 OPTUS ground station...... ..........................................31
5.1.1 Structure31
5.1.2 Tracking System...............................................32
5.1.2.1 Control Modes...........................................32
5.1.2.2 Servo Control Requirements..............................32
5.1.2.3 Tracking Receiver.......................................32
5.1.3 RF Performance................................................33
5.1.3.1 Transmit Requirements...................................33
5.1.3.2 Received Requirements...................................33
5.1.3.3 Feed....................................................33
5.1.3.1 LNA.....................................................33
5.1.4 Inter Facility Link (IFL).....................................33
6. Site Communication Network Subsystem.......................................34
Appendix A....................................................................75
iv
<PAGE>
List of Figures
Table Page
- ----- ----
FIGURE 1-1 ORION GROUND SYSTEM BLOCK DIAGRAM...................................3
FIGURE 2-1 PRIMARY-STATION CONTROL COMPUTER SUBSYSTEM..........................8
FIGURE 2-2 BACKUP-STATION CONTROL COMPUTER SUBSYSTEM...........................9
FIGURE 2-1 BELROSE GROUND STATION BASEBAND BLOCK DIAGRAM......................19
FIGURE 3-1 BELROSE GROUND STATION RF SUBSYSTEM BLOCK DIAGRAM..................26
List of Tables
Figures Page
- ------- ----
TABLE 1-1 PRIMARY-STATION/BACKUP-STATION ANTENNA FUNCTIONAL REQUIREMENTS
4
TABLE 2-2 WORKSTATION ALLOCATION...............................................6
TABLE 2-3 PRINTER ALLOCATION...................................................9
v
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 34 AND 1 TO 46 OF THE
TWO PARTS TO THIS EXHIBIT E, APPENDIX B]
<PAGE>
TEST PLAN
FOR THE ORION 3 GROUND SYSTEM
EXHIBIT E
APPENDIX C
<PAGE>
Ground System Test Plan DOC#
REV-
- --------------------------------------------------------------------------------
Table of Contents
-----------------
1. Overview....................................................................1
1.1 Scope.................................................................1
1.2 Purpose...............................................................1
1.3 Testing Philosophy....................................................1
1.3.1 Test Director...................................................1
2. Applicable documents........................................................1
3. Test Process................................................................2
3.1 Test Readiness Reviews................................................2
3.2 Test Procedures.......................................................2
3.3 Post Test Data Review.................................................3
3.4 Test Reports..........................................................3
3.5 Test anomalies........................................................3
3.6 Quality Assurance.....................................................3
4. Requirements Flowdown.......................................................4
4.1 Verification Methods..................................................4
4.2 Integration & Test Flow...............................................4
4.2.1 Burn-in Tests...................................................4
4.2.2 Subsystem.......................................................5
4.2.3 Subsystem Test Notebooks/Test Procedures........................6
4.2.4 Subsystem Sell-Off..............................................6
4.2.5 Subsystem Integration and Checkout..............................6
4.2.6 System Test Notebook............................................6
4.2.7 FAT Test Readiness Review.......................................6
4.2.8 FAT.............................................................7
4.2.9 Preshipment Review (PSR)........................................7
4.2.10 Pack and Ship..................................................7
4.2.11 Site Installation..............................................7
4.2.12 SAT Test Readiness Review......................................7
4.2.13 SAT............................................................7
4.2.14 Final Acceptance Review........................................8
5. TEST IDENTIFICATION.........................................................8
5.1 Unit Tests............................................................8
5.1.1 Spares Testing..................................................8
5.2 Subsystem Tests.......................................................8
5.2.1 AC Power Test...................................................8
5.2.2 Baseband Subsystem Test.........................................8
5.2.2.1 Telemetry Test...........................................9
5.2.2.2 Command Test.............................................9
5.2.2.3 Ranging Tests............................................9
5.2.2.3.1 T&C IF Ranging Calibration Test....................9
5.2.2.3.2 Transponder IF Ranging Calibration Test............9
i
<PAGE>
5.2.2.4 Patch Panels Test........................................9
5.2.3 RF Subsystem Test...............................................9
5.2.4 Antenna Subsystem Test..........................................9
5.2.5 Control Computer Subsystem (CCS) Test..........................10
5.2.5.1 Ground Status and Control (GSC).........................10
5.2.5.1.1 GSC User Interface................................10
5.2.5.1.2 Status and Control Interface Unit Interface
(SCIU)............................................10
5.2.5.2 Orbital Analysis Software Test..........................10
5.2.5.2.1 User Interface....................................10
5.2.5.2.2 Database Utilities................................10
5.2.5.2.3 Raw Data Processing...............................11
5.2.5.2.4 Orbit Estimation..................................11
5.2.5.2.5 Ephemeris Prediction..............................11
5.2.5.2.6 Eclipse Prediction................................11
5.2.5.2.7 Inclination Control Maneuver Planning.............11
5.2.5.2.8 Drift and Eccentricity Control Maneuver
Planning..........................................11
5.2.5.2.9 Orbit Simulation..................................11
5.2.5.2.10 Additional Functions.............................11
5.2.5.3 SHAPE...................................................11
5.2.5.3.1 Convert data queue to month file (CVTQ)...........11
5.2.5.3.2 SHAPE System Administrator (SYSAD)................11
5.2.5.3.3 SHAPE User (also known as Graphical User
Interface (GUI))..................................11
5.2.5.3.4 Live Data.........................................12
5.2.5.4 TCR/GSC Interface Test..................................12
5.2.6 Site Communications Network (SCN)..............................12
5.2.7 DSS Test.......................................................12
5.3 Factory Acceptance Test..............................................12
5.3.1 FAT System Configuration.......................................13
5.3.2 Computer Readiness.............................................13
5.3.3 Telemetry Processing...........................................13
5.3.3.1 PCM Data Test...........................................13
5.3.3.2 Data Archiving..........................................14
5.3.4 Transmission of Satellite Commands.............................14
5.3.4.1 Hazardous Satellite Commanding..........................14
5.3.5 Ranging 14
5.3.5.1 T&C IF Range Calibration Test...........................14
5.3.5.2 T&C Ranging Test........................................14
5.3.5.3 Transponder IF Range Test...............................14
5.3.5.4 Transponder Ranging Test................................14
5.3.6 Orbital Analysis Software Test.................................15
5.3.7 SHAPE 15
5.3.8 RF.............................................................15
5.3.9 Control Computer Subsystem and Software........................15
5.3.9.1 CCS to Timing Interface Test............................15
5.3.9.2 Status and Control......................................15
ii
<PAGE>
5.3.10 Site Communication Network....................................16
5.4 Site Acceptance Test.................................................16
5.4.1 SAT System Configuration.......................................16
5.4.2 Computer Checkout..............................................16
5.4.3 Telemetry Processing...........................................16
5.4.4 Antenna Monitoring.............................................17
5.4.5 CCS/GSC Software...............................................17
5.4.5.1 Procedures (PROCs)......................................17
5.4.6 Timing.........................................................17
5.4.7 RF Tests 17
5.4.8 Site Communications Network....................................17
5.5 Final Acceptance Review..............................................18
6. Index of ACRONYMS..........................................................19
iii
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E, APPENDIX C]
<PAGE>
HISD-001-01 Rev B
5 June 96
HITS
Product Assurance Plan
EXHIBIT E
APPENDIX D
<PAGE>
HISD-001-01 Rev B
5 June 96
Table of Contents
Foreword.....................................................................v
1.0 BASIC PROVISIONS......................................................1
1.1 Program Content..................................................1
1.2 Program Functions................................................1
1.3 Applicable Documents.............................................1
1.3.1 Government Documents.....................................1
1.3.2 HISD Documents...........................................2
2.0 ORGANIZATION AND MANAGEMENT...........................................2
2.1 Introduction 2
2.2 Management Responsibility........................................2
2.2.1 Reliability Engineering..................................2
2.2.2 Parts, Materials, and Processes Assurance................3
2.2.3 Quality Assurance........................................3
2.2.4 Subcontractor Product Assurance..........................3
2.2.5 Standard Commercial Test Equipment.......................3
2.3 Reviews 3
2.4 Audits 3
2.5 Documentation....................................................4
2.6 Major Subcontractor Controls.....................................4
3.0 RELIABILITY PROGRAM...................................................4
3.1 Basic Provisions.................................................4
3.2 Organization and Management......................................4
3.3 Reliability Engineering Assessments..............................4
3.3.1 Reliability of the Customers Equipment...................4
3.3.2 Analyses.................................................5
3.4 Problem Reporting and Corrective Action..........................5
3.4.1 Basic Provisions.........................................5
3.4.2 Problem Definition and Documentation.....................5
3.4.3 Problem Analysis.........................................5
4.0 QUALITY ASSURANCE PROGRAM.............................................5
4.1 Basic Provisions.................................................5
4.2 Organization and Management......................................6
4.2.1 Responsibility...........................................6
4.2.2 Program Requirements.....................................6
<PAGE>
HISD-001-01 Rev B
5 June 96
4.2.3 Audits/Review............................................7
4.3 Procurement Controls.............................................9
4.3.1 Responsibility...........................................9
4.3.2 Subcontractor/Supplier Evaluation........................9
4.3.3 Procurement Document Review..............................9
4.3.4 Source Surveillance/Inspection...........................9
4.3.5 Receiving Inspection and Test............................9
4.4 Manufacturing Controls..........................................10
4.4.1 Fabrication and Assembly Operations.....................10
4.4.2 Stores Control..........................................10
4.4.3 Process Controls........................................10
4.4.4 Process and Personnel Certification.....................10
4.4.5 Workmanship Standards...................................10
4.4.6 Hardware Configuration Control..........................11
4.5 Testing and Inspection..........................................11
4.5.1 In-process Inspection...................................11
4.5.2 Final Test and Inspection...............................12
4.5.3 Test Participation......................................12
4.5.4 Site Installation and Acceptance........................13
4.6 Nonconforming Article and Material Control......................13
4.6.1 Material Review Action and Control......................13
4.6.2 Nonconformance Definitions and Classifications..........14
4.6.3 Corrective Action.......................................14
4.6.4 Subcontractor Material Review...........................15
4.7 Measurement Processes and Calibration...........................15
4.7.1 Basic System............................................15
4.7.2 Calibration Controls....................................15
4.7.3 Subcontractor Controls..................................16
4.8 Records and Traceability........................................16
4.8.1 Records.................................................16
4.8.2 Traceability............................................17
4.9 Inspection and Status Control...................................17
4.10 Packaging, Handling, and Transportation.........................17
5.0 SOFTWARE QUALITY ASSURANCE...........................................17
5.1 Introduction ...................................................17
<PAGE>
HISD-001-01 Rev B
5 June 96
5.2 Organization and Resources......................................18
5.2.1 Organization............................................18
5.2.2 Personnel...............................................18
5.2.3 Other Resources.........................................18
5.2.4 Schedule................................................18
5.3 SQA Program Procedures, Tools, and Records......................18
5.3.1 Procedures..............................................18
5.3.1.1 Software Quality Planning......................19
5.3.1.2 Program Documentation..........................19
5.3.1.3 Software Quality System Evaluation.............19
5.3.1.4 Software Quality Process Evaluation............20
5.3.1.5 Software Product Evaluations...................20
5.3.1.6 Corrective Action..............................21
5.3.1.7 Management Reporting...........................21
5.3.1.8 Certification and Acceptance...................22
5.3.1.9 Software Testing...............................22
5.3.1.10 Reviews and Audits.............................23
5.3.1.11 Non-Deliverable Software.......................23
5.3.1.12 Customer Interface.............................23
5.3.1.13 Tools..........................................23
5.4 Software Quality Records........................................23
5.5 Subcontractor/Supplier..........................................23
5.6 Notes...........................................................24
5.6.1 Definitions 24
5.6.2 Acronyms 24
6.0 PARTS, MATERIALS, AND PROCESSES PROGRAM..............................25
6.1 Basic Provisions 25
6.2 Parts Selection and Specification...............................25
6.3 Parts and Materials Handling and Storage........................25
6.4 Subcontractor Control 25
7.0 CONFIGURATION AND DATA MANAGEMENT....................................25
7.1 Basic Provisions 25
7.2 Management and Organization.....................................26
7.3 Configuration Management........................................26
7.3.1 Configuration Identification............................26
<PAGE>
HISD-001-01 Rev B
5 June 96
7.3.2 Configuration Control...................................26
7.3.2.1 Engineering Change Classification..............26
7.3.2.2 Requests for Deviations/Waiver.................27
7.3.3 Configuration Control Board (CCB).......................27
7.3.4 Configuration Status Accounting and Verification........27
7.4 Data Management 28
7.4.1 Contract Data Requirements..............................28
7.4.2 Data Control 28
7.4.3 Library 28
7.5 Subcontractor Configuration and Data Management.................28
7.5.1 Configuration Management................................28
7.5.2 Data Management.........................................28
Figure 1. Problem Report Form 8
Table 1. Hardware Material Review Authority...................................14
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 28 OF THIS EXHIBIT E
APPENDIX D]
<PAGE>
ORION 3 SATELLITE PURCHASE CONTRACT
EXHIBIT F
PAYMENT PLAN
AND
TERMINATION LIABILITY AMOUNT
PAYMENT PLAN
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 1 TO 2 OF THIS EXHIBIT F.]
<PAGE>
ORION 3 SATELLITE PURCHASE CONTRACT
EXHIBIT G
SCHEDULES TO ARTICLE 15
Schedule 15.3
<TABLE>
<CAPTION>
Entity % Ownership by ONS
Orion Satellite Corporation 100%OrionNet, Inc.
100%Orion Finance Corporation 100%Orion Asia Pacific Corporation 100%Asia Pacific
Space and Communications, Ltd. 83% or 100%International Technology Gateway (U.K.) Limited 60%International Private Satellite
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
</TABLE>
Schedule 15.4
In October 1995, Skydata Corporation ("Skydata"), a former
contractor, filed suit against Orion Atlantic, Orion Satellite Corporation and
Orion, in the United States District Court for the Middle District of Florida,
claiming that certain Orion Atlantic Operations using frame relay switches
infringe a Skydata patent. Skydata's suit sought damages in excess of $10
million and asked that any damages assessed be trebled. On December 11, 1995,
the Orion parties filed a motion to dismiss the lawsuit on the grounds of lack
of jurisdiction and violation of a mandatory arbitration agreement. In addition,
on December 19, 1995, the Orion parties filed a Demand for Arbitration against
Skydata with the American Arbitration Association in Atlanta, Georgia,
requesting damages in excess of $100,000 for breach of contract and
declarations, among other things, that Orion and Orion Atlantic own a
royalty-free license to the patent, that the patent is invalid and unenforceable
and that Orion and Orion Atlantic have not infringed on the patent. On March 5,
1996, the court granted the Company's motion to dismiss the lawsuit on the basis
that Skydata's claims are subject to arbitration. Skydata appealed the dismissal
to the United States Court of Appeals to the Federal Circuit. Skydata also filed
a counterclaim in the arbitration proceedings asserting a claim for $2 million
damages as a result of the conduct of Orion and its affiliates. On May 15, 1996,
the arbitrator granted the Orion parties' request for an initial hearing on
claims relating to the Orion parties' rights to the patent, including the
co-ownership claim and other contractual claims. This initial hearing was
scheduled to take place in November 1996.
On November 9, 1996, Orion and Skydata executed a letter with
respect to the settlement in full of the pending litigation and arbitration. As
part of the settlement, the parties are to release all claims by either side
relating in any way to the patent and/or the pending litigation and arbitration.
In addition, Skydata is to grant Orion (and its affiliates) an unrestricted,
word-wide paid-up license to make, have made, use or sell products or methods
under the patent and all other corresponding consideration and reissue patents.
Orion is to pay Skydata $437,000 over a period of two years as part of the
settlement. The parties are in the process of documenting the terms of the
settlement in a formal settlement agreement.
Schedule 15.5
$10,000,000 letter of credit issued by Chase Manhattan Bank, N.A. on behalf of
Customer in favor of DACOM Corp.
<PAGE>
Schedule 15.6
Lien on approximately $10M of funds deposited with Chase Manhattan Bank, N.A.,
as security for the letter of credit referenced on Schedule 15.5.
Schedule 15.7
Contract Documents Relating to Procurement of Orion 2 and Orion 3 Satellites
Contracts for the Provision of Telecommunications Service in the ordinary course
of business
DACOM Contract
Schedule 15.9
1995 Form 10-K
Form 10-Qs for the periods ending:
June 30, 1995 March 31, 1996 June 30, 1996 September 30, 1996
1995 Proxy Statement
1995 Annual Report
Schedule 15.12*
---------------
Hughes' rights in contract to be acknowledged by Lender and to which Lender will
agree not to contest one contained in the following Paragraphs of the Contract.*
4.5 14.10 30.3
4.6 15.1 30.4
4.8A 15.2 30.5
4.9 15.ll 30.9
4.12 15.12 34.1
4.13 15.14 34.2
4.14 15.18 34.3
4.15 17.2 35.1
4.16 17.3 35.2
4.17 17.6 35.6
4.18 21.10 35.7
4.19 26.1 35.8
5.9 26.2 35.10
9.3 26.3 39.1
11.2 26.4 39.2
11.4 30.1
- ----------
*Note: Paragraph citations are to 1/12/97 Draft. As provisions are moved
in accordance with my January 14, 1997 letter the citations will
have to be renumbered.
<PAGE>
ORION 3 SATELLITE PURCHASE CONTRACT
EXHIBIT H
PAYLOAD LONG-LEAD INVENTORY ITEMS
<PAGE>
ORION 3 SATELLITE PURCHASE CONTRACT
EXHIBIT I
TECHNICAL PERFORMANCE
<PAGE>
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PAGES 2 TO 16 OF THIS
EXHIBIT I]
