Pursuant to 17 CFR 240.24b-2, confidential information has been
omitted in places marked "[***]" and has been filed separately with
the Securities and Exchange Commission pursuant to a Confidential
Treatment Application filed with the Commission.
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AGREEMENT FOR THE LAUNCHING
INTO GEOSTATIONARY
TRANSFER ORBIT
OF THE TERRESTAR-1 SATELLITE
AND
OF TWO OPTIONAL SATELLITES
BY
AN ARIANE LAUNCH VEHICLE
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LAUNCH SERVICES AGREEMENT
-------------------------
This Launch Services Agreement is entered into
BY AND BETWEEN
TerreStar Networks, Inc., hereinafter referred to as "CUSTOMER", a company duly organized and validly existing under the laws of the State of Delaware, with principal offices located at One Discovery Square, 12010 Sunset Hills Road, Suite 600, Reston, VA 20190, USA
On the one hand
AND
ARIANESPACE, a company organized under the laws of France with principal offices located at Boulevard de l'Europe, 91006 Evry-Courcouronnes, France, hereinafter referred to as "ARIANESPACE",
On the other hand
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WHEREAS CUSTOMER has approached ARIANESPACE with a view to launching the
TerreStar Satellites using an ARIANE Launch Vehicle, and
WHEREAS ARIANESPACE has proposed to CUSTOMER either a dedicated Launch,
i.e., a launch by an ARIANE Launch Vehicle the only payload of
which is CUSTOMER's Satellite, or a shared Launch, i.e., a
Launch by an ARIANE Launch Vehicle the payload of which is made
up at the same time of CUSTOMER's Satellite and the satellite(s)
of Third Party Customer(s) of ARIANESPACE, and
WHEREAS CUSTOMER has selected a dedicated Launch being acknowledged that
ARIANESPACE shall have the possibility to integrate to the
Launch Vehicle (an) Auxiliary Payload(s) subject to CUSTOMER
prior approval.
WHEREAS CUSTOMER and ARIANESPACE, aware of the constraints involved in
any Launch operation and of the complex nature of the
technologies involved, have reached an agreement in accordance
with the terms and conditions set forth herein,
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
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CONTENTS
PART I
TERMS AND CONDITIONS
Pages
----- ARTICLE 1 - DEFINITIONS.............................................................7
ARTICLE 2 - SUBJECT OF THE AGREEMENT.............................................. 12
ARTICLE 3 - CONTRACTUAL DOCUMENTS................................................. 13
ARTICLE 4 - ARIANESPACE'S SERVICES................................................ 14
ARTICLE 5 - CUSTOMER'S TECHNICAL COMMITMENTS...................................... 18
ARTICLE 6 - LAUNCH SCHEDULE....................................................... 19
ARTICLE 7 - COORDINATION BETWEEN ARIANESPACE AND CUSTOMER......................... 21
ARTICLE 8 - REMUNERATION.......................................................... 22
ARTICLE 9 - PRICE ESCALATION FORMULA.............................................. 24
ARTICLE 10 - PAYMENT FOR SERVICES.................................................. 25
ARTICLE 11 - LAUNCH POSTPONEMENTS.................................................. 29
ARTICLE 12 - RIGHT OF OWNERSHIP AND CUSTODY........................................ 32
ARTICLE 13 - REPLACEMENT LAUNCH.................................................... 33
ARTICLE 14 - ALLOCATION OF POTENTIAL LIABILITIES AND RISKS......................... 35
ARTICLE 15 - INSURANCE............................................................. 39
ARTICLE 16 - OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION
CONFIDENTIALITY/PUBLIC STATEMENTS..................................... 41
ARTICLE 17 - PERMITS AND AUTHORIZATIONS - GROUND STATIONS.......................... 43
ARTICLE 18 - TERMINATION BY CUSTOMER............................................... 45
ARTICLE 19 - TERMINATION BY ARIANESPACE............................................ 48
ARTICLE 20 - MISCELLANEOUS......................................................... 49
ARTICLE 21 - APPLICABLE LAW........................................................ 52
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ARTICLE 22 - ARBITRATION........................................................... 53
ARTICLE 23 - EFFECTIVE DATE........................................................ 54
PART II
A N N E X E S
ANNEX 1 Part 1 LAUNCH SPECIFICATIONS
Part 2 ARIANESPACE TECHNICAL COMMITMENTS
Part 3 CUSTOMER'S TECHNICAL COMMITMENTS
Part 4 DOCUMENTATION AND REVIEWS
Part 5 GENERAL RANGE SUPPORT (GRS) AND OPTIONAL SERVICES
ANNEX 2 ESA - ARIANESPACE CONVENTION (EXTRACT)
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P A R T I
T E R M S A N D C O N D I T I O N S
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ARTICLE 1 - DEFINITIONS
In this Agreement capitalized terms shall have the meanings set forth in this Article:
"Agreement" means this Agreement as defined in Article 3 hereof.
"Associated Services" means those supplementary launch services specified in Sub-paragraphs 4.1.2. and 4.1.3. hereof.
"Associates" means any individual or legal entity, whether organized under public or private law, who or which shall act, directly or indirectly, on behalf of or at the direction of either Party to this Agreement or on behalf of the Third Party Customer(s) of ARIANESPACE, to fulfill the obligation undertaken by such Party pursuant to this Agreement or by the Third Party Customer(s) of ARIANESPACE including without limitation, any employee, officer, agent, consultant of either Party, and of the Third Party Customer(s) of ARIANESPACE, and their respective contractors, subcontractors and suppliers at any tier.
For the purpose of the definitions of Associate and Third Party and Article 14:
a) any individual or legal entity governed by private or public law that
has directed ARIANESPACE to proceed with the Launch or has any interest
in the Launch, including without limitation, a legal interest in the
Launch Vehicle shall be deemed to be an Associate of ARIANESPACE
b) any individual or legal entity governed by private or public law that
has directed CUSTOMER to proceed with the Launch, or has any interest in
the Satellite to be launched, including without limitation, insurers,
any person or entity to whom CUSTOMER has sold or leased, directly or
indirectly, or otherwise agreed to provide any portion of the Satellite
or the Satellite services (and their respective contractors,
subcontractors and suppliers at any tier) shall be deemed to be an
Associate of CUSTOMER;
c) any individual or legal entity governed by private or public law, that
has directed the Third Party Customer(s) of ARIANESPACE to proceed with
the launch, or has any interest in the satellite(s) of the Third Party
Customer(s) to be launched, including without limitation, insurers, any
person or entity to whom the Third Party Customer(s) has sold or leased,
directly or indirectly, or otherwise agreed to provide any portion of
the satellite(s) or satellite(s) service shall be deemed to be an
Associate of Third Party Customer(s) of ARIANESPACE.
"Auxiliary Payload(s)" means (a) micro (mass<120 kg) or mini (mass>Loss Quantum
>>.
If CUSTOMER does not procure any insurance policy on the Commercial
Insurance Market, the constructive total loss percentage prevailing on
the Commercial Insurance Market at L minus (-) THREE months based on
ARIANESPACE and CUSTOMER insurance Brokers written statement shall
apply.
"Launch Opportunity" means the availability to CUSTOMER of a Satellite position within a Launch Period or Launch Slot for a Launch on a Launch Vehicle that is compatible with that of CUSTOMER's Satellite in accordance with Part 1 of Annex 1 to this Agreement. Such availability is linked to the time required to complete the mission analysis studies and to select the Launch Vehicle/Satellite configuration.
"Launch Period or Period" means [***].
"Launch Rank" means, at a given date, the chronological position of the Satellite in the order (existing on such date) of the satellites to be launched by ARIANESPACE fixed by reference to the Launch Period or Launch Slot allocated to CUSTOMER's Satellite (as the same may from time to time be postponed) pursuant to the Agreement and by reference to the Launch Period or Launch Slot allocated to the satellites of other clients of ARIANESPACE (as the same may from time to time be postponed) pursuant to the agreements between ARIANESPACE and other clients as shall be consistent with the definitions of Launch Rank as stated herein.
"Launch Services" means the services to be provided by ARIANESPACE as specified in (i) Part 2 and Sub-paragraph 1.1 of Part 4 of Annex 1 to this Agreement and (ii) Paragraph 4.3 hereof.
"Launch Slot or Slot" means [***].
"Launch Term" means, the period defined in Sub-paragraph 6.1 of Article 6 as applicable to the Firm Launch.
"Launch Time" means the instant, within the Launch Window, that the ignition of the first stage engine(s) is scheduled to take place, as defined in hours, minutes and seconds (GMT Universal Time). The initial Launch Time shall commence immediately upon the opening of the Launch Window.
"Launch Vehicle" means (i) for the Firm Launch, an ARIANE 5-Gs launch vehicle chosen by ARIANESPACE to perform the Firm Launch or another launch vehicle from the ARIANE 5 Launch Vehicle family retained by ARIANESPACE in accordance with the terms of Sub-paragraph 11.2.1.5 of Article 11, and (ii) for the Launch of the two Firm Optional Launches, an ARIANE 5-ECA launch vehicle chosen by ARIANESPACE.
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"Launch Vehicle Mission or Launch Mission" means the mission assigned to the ARIANE Launch Vehicle as defined in Part 1 of Annex 1 to this Agreement.
"Launch Window" means a time period as defined in Sub-paragraph 2.3 of Part 1 of Annex 1 to this Agreement.
"Loss Quantum" means the degradation factor of the Satellite resulting from the application of determination mode as mutually agreed in good faith by the Parties on or prior to L minus (-) THREE (3) months based on a CUSTOMER's written proposal;
provided, that, if CUSTOMER has taken out, either in insurance or in reinsurance, on the Commercial Insurance Market for at least EIGHTY PER CENT (80%) of the amount insured, one or more policy(ies) of launch phase insurance, the determination mode of the loss quantum provided for in the insurance policy with the higher cover, as delivered by CUSTOMER to ARIANESPACE on or prior to L (-) minus THREE (3) months, shall apply. If a different determination mode is further agreed with the Commercial Insurance Market, for that policy with higher cover, this new determination mode shall consequently apply; it being understood that CUSTOMER shall promptly inform ARIANESPACE, and in any event before the Launch has occurred of any change.
"Partial Failure" means the occurrence due to a Deviation of a reduction of more than a percentage defined as PFF but not more than LFF of the operational capability of the Satellite for CUSTOMER's intended communication purposes, using reasonable business judgment.
Where PFF is TWENTY PERCENT (20%), unless CUSTOMER procures on the Commercial Insurance Market a policy of launch insurance with consequent application of the determination mode of the degradation factor as provided for in the definition of the term "Loss Quantum", in which case PFF shall mean the percentage specified in that insurance policy to define a partial loss. Said reduction of the operational capability shall be determined by using the Loss Quantum.
"Party or Parties" means CUSTOMER or ARIANESPACE or both according to the context in which the term is used.
"Postlaunch Services" means (i) the reports and range services as specified in Parts 2, 4 and 5 of Annex 1 to this Agreement that are to be provided to CUSTOMER by ARIANESPACE after the Launch and (ii) the services provided for in Paragraph 4.3 hereof.
"Reflight" means a Replacement Launch under Paragraph 4.3 of Article 4 of this Agreement.
"Replacement Launch" means a Launch subject to Article 13 hereof, subsequent to a previous Launch that, for any reason whatsoever, has not accomplished the Launch Vehicle Mission or the Satellite Mission.
"Satellite" (referred to as Spacecraft in Annex 1 to this Agreement) means the spacecraft supplied by CUSTOMER for the Firm Launch (currently known as "TerreStar-1"), and for the Firm Optional Launches, as may be substituted by other Satellites in accordance with the terms of this Agreement), that is compatible with the Launch Vehicle and the Launch Vehicle Mission, and that meets the specifications set forth in Part 1 of Annex 1 to this Agreement.
"Satellite Mission" means the mission assigned to the Satellite by CUSTOMER after separation from the Launch Vehicle.
"Services" means any and all services to be provided by ARIANESPACE under this Agreement.
"Third Party" means any individual or legal entity other than the Parties, Third Party Customer(s) of ARIANESPACE and the Associates of each of the foregoing.
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"Third Party Customer(s) of ARIANESPACE" means other customer(s) of ARIANESPACE that use(s) ARIANESPACE's launch services for the launch of the Auxiliary Payload(s) on the same Launch as CUSTOMER.
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ARTICLE 2 - SUBJECT OF THE AGREEMENT
The subject of this Agreement is the Launch of the TerreStar-1 Satellite (Firm Launch), plus two additional Satellites if the related Launch Option(s) is/are activated by CUSTOMER, supplied by CUSTOMER at the Launch Base for the purpose of accomplishing the Launch Mission(s) in accordance with the terms and conditions of this Agreement.
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ARTICLE 3 - CONTRACTUAL DOCUMENTS
3.1 This Agreement consists of the following documents, which are
contractually binding between the Parties :
1) Terms and Conditions
2) Launch Specifications (Part 1 of Annex 1)
3) ARIANESPACE Technical Commitments (Part 2 of Annex 1)
4) CUSTOMER's Technical Commitments (Part 3 of Annex 1)
5) Documentation and reviews (Part 4 of Annex 1)
6) General Range Support (GRS) and Optional Services (Part 5 of
Annex 1)
7) ESA-ARIANESPACE Convention (Extract) (Annex 2)
3.2 All of the Agreement documents shall be read so as to be consistent to
the extent practicable.
In the event of any inconsistency or discrepancy between the terms and
conditions and the Annexes, the Terms and Conditions shall prevail over
the Annexes. There is no order of precedence among the documents 2
through 6 above inclusive, and Annex 2.
3.3 Annex 1 of this Agreement, as applied to the Firm Optional Launch(es)
and any Replacement Launch for the Firm Launch shall be revised by the
parties, acting in good faith, no later than one month after the
applicable "Decision Date" (as set forth in Paragraph 4.8 hereof) for
the applicable Firm Optional Launch (or, in the case of a Replacement
Launch for the Firm Launch, no later than one month following the date
ARIANESPACE has received CUSTOMER's request for Replacement Launch) so
as to allow CUSTOMER the full benefit of the increased mass permitted
thereunder as applied to the Satellite selected by CUSTOMER for the
applicable Launch for a Launch, taking into account the increased mass,
of equivalent or better resulting performance than as specified herein,
for a Satellite with a mass of up to 8200 kg (without adapter), or the
full capability of the ARIANE 5 Launch Vehicle if greater.
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ARTICLE 4 - ARIANESPACE' SERVICES
4.1 ARIANESPACE shall, for the Firm Launch and for the Firm Optional
Launches if the related Launch Option(s) has/have been activated by
CUSTOMER, perform the Services under this Agreement including :
4.1.1 Launch Services.
In the event that the ARIANE 5 launch immediately preceding a
CUSTOMER's Launch under this Agreement (based on the ARIANESPACE
manifest at the time of such failure) results in a launch
failure due to an element of the said ARIANE 5 Launch Vehicle
which could affect the Launch Vehicle version retained for the
performance of CUSTOMER Launch, then CUSTOMER shall have the
right to (i) re-schedule the Launch if such launch is the return
to flight launch, or, (ii) to require ARIANESPACE to perform
such Launch using a different configuration of ARIANE 5 Launch
Vehicle if available; provided however that a launch failure due
to an element that will not be used for the Launch shall not be
taken into account for the purpose of this Paragraph. In the
event that CUSTOMER elects to re-schedule the Launch pursuant to
this Paragraph 4.1.1, then the new Launch Schedule for such
Launch shall be determined in accordance with Paragraph
11.2.1.1. The aggregate duration of postponements resulting from
such Launch delay of SIX (6) months or less shall be deemed
postponements by mutual agreement of the Parties and shall not
be subject to the terms of any of Section 11.2.1.5, 11.3.4, or
Paragraph 18.3, being further agreed that any resulting
postponements exceeding that SIX (6) month period shall be
treated as delays requested by ARIANESPACE in accordance with
Sub-paragraph 11.3.1.
4.1.2 Associated Services ordered by CUSTOMER as set forth in this
Agreement, and as defined in Paragraph 1 ("General Range
Support") and Paragraph 2 ("Options Ordered by the CUSTOMER") of
Part 5 of Annex 1 to this Agreement, in accordance with the
conditions as specified therein.
4.1.3 Subject to any additional orders of CUSTOMER, one or more of the
services as set forth in (i) Paragraph 3 ("Additional Options
Available to the CUSTOMER") of Part 5 of Annex 1 to this
Agreement, (ii) the latest issue of the User's Manual (M.U.A.)
in effect on the date of the corresponding order of CUSTOMER, in
accordance with the then applicable conditions and any other
services ordered by CUSTOMER and accepted by ARIANESPACE.
4.2 Launch Services, except for Postlaunch Services, shall be deemed to be
completed by ARIANESPACE when the Launch has taken place. In the event
that, for any reason whatsoever, a Launch Abort occurs, ARIANESPACE
shall postpone the Launch in accordance with the conditions set forth in
Article 11 of this Agreement.
4.3 CUSTOMER shall have the right to exercise the Reflight Option by written
request received by ARIANESPACE (i) within ONE HUNDRED AND TWENTY (120)
days following the Effective Date of this Agreement for the Firm Launch,
and (ii) on the day of activation of the Launch Option for each
respective Firm Optional Launch.
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If the CUSTOMER has selected the Reflight option and should the Launch
Mission results in a:
4.3.1 Launch Failure, ARIANESPACE shall perform a Reflight on an
ARIANE 5 family Launch vehicle, in accordance with the
provisions of this Agreement, provided that no further payment
by CUSTOMER to ARIANESPACE shall be due for the provision of (i)
Launch Services for the Launch of a replacement Satellite on
condition that the maximum mass of such Satellite is equal to
the mass of the initial Satellite, and (ii) such Associated
Services as are retained by CUSTOMER as of the date of execution
of this Agreement, except as provided for in Paragraph 8.2 of
Article 8 of this Agreement, in case of postponement.
4.3.2 Partial Failure, ARIANESPACE shall pay to CUSTOMER an amount as
obtained by multiplying the Guarantee Amount by the Loss Quantum
if the Launch Mission has resulted in a Partial Failure. The
resulting amount will be subject to a deductible equal to PFF of
the Guarantee Amount provided for the launching, in accordance
with the following formula :
(Guarantee Amount x Loss Quantum) minus deductible.
Notwithstanding the foregoing, if the insurance policy taken out
by CUSTOMER (i) provides for a deductible higher or lower than
PFF, such deductible as provided for in the said insurance
policy shall apply, or (ii) does not provide for a deductible,
no deductible shall apply.
4.4 Any amount due by ARIANESPACE to CUSTOMER under Paragraph 4.3 above
shall be paid within the SIXTY (60) day period following the date when
the Parties have agreed on the occurrence of the Partial Failure and the
corresponding Loss Quantum, provided CUSTOMER has paid all amounts due
and payable by it under this Agreement.
4.5 The implementation of Paragraph 4.3 above shall not imply any transfer
of title to the Satellite to ARIANESPACE. In case of Launch Failure or
Partial Failure, the rights of ARIANESPACE shall be the same of those of
any entity(ies) who could cover risks related to the launch of the
Satellite. Specially and not limitatively, in circumstances where
salvage can be performed, ARIANESPACE will be entitled to a share in any
salvage value remaining in any portion of the Satellite for which a
Reflight, a credit or a payment has been due by ARIANESPACE to CUSTOMER
and will negotiate the disposition of the Satellite if transfer of title
has been requested.
4.6 In the event that, after application of Paragraphs 4.3. above due to a
Launch Failure, the Satellite is placed into commercial operation and/or
is sold, leased or otherwise transferred, ARIANESPACE shall be entitled
to a share of any resulting revenues and/or payments, as shall be
negotiated and agreed upon promptly, taking into account the conditions
peculiar to such commercial operation, but in no case shall any shared
amount exceed the Guarantee Amount.
4.7 There shall not be any cover for Launch Failure or Partial Failure and
consequently the provisions of Paragraph 4.3. of Article 4 hereof shall
not apply, in any of the following cases :
4.7.1 If CUSTOMER does not notify in writing ARIANESPACE of any event
that would entitle CUSTOMER to any right under Paragraph 4.3 of
Article 4 of this Agreement before the first to occur of any of
the THREE (3) following events;
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(i) the day the Satellite is put into commercial operation,
(ii) the SIXTIETH (60th) day following the date of station
acquisition of the Satellite,
(iii) the NINETIETH (90th) day at zero hour following the date
of the Launch.
Notwithstanding the foregoing, an extension of the periods
hereabove might be obtained upon request from CUSTOMER if both
of the following conditions occur:
(a) the launching does not conform to the specifications of
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