Engineering Services Agreement Dated 3/6/96

Exhibit 10.5
------------ EARTHWATCH INCORPORATED


Contract
for
Engineering Services
between
Earthwatch Incorporated
and
Ball Aerospace &
Technologies Corporation


Contract #9602-0117


EarthWatch Incorporated: "An Imaging and Information Company" -------------------------------------------------------------------------------
1900 Pike Road, Longmont, Colorado USA 80501-6700
Tel: 303.682.3800 Fax: 303.682.3848


Contract #9602-0117


Table of Contents


Article 1 Services


Article 2 Price


Article 3 Payment


Article 4 Period of Performance


Article 5 Warranty


Article 6 Independent Contractor


Article 7 Indemnification


Article 8 Proprietary Information


Article 9 Access


Article 10 Delegation of Responsibility


Article 11 Force Majeure


Article 12 Termination


Article 13 Applicable Laws


Article 14 Arbitration


Article 15 Liability


Article 16 Assignment


Article 17 Entire Agreement


Article 18 No Third Party Beneficiaries


Article 19 Severability


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Contract #9602-0117


This Contract is entered into this 1st day of March, 1996, by and between Earthwatch, Incorporated, a corporation organized and existing under the laws of the State of Delaware, having an office at 1900 Pike Road, Longmont, Colorado, 80501, (hereinafter referred to as "Earthwatch"), and Ball Aerospace and Technologies Corporation, a corporation organized and existing under the laws of the State of Delaware, having an office at 10 Longs Peak Drive, Broomfield, Colorado, 80021 (hereinafter referred to as "BATC").


WITNESSETH
----------


WHEREAS, Earthwatch has a need for engineering and technical management support for integration and test of privately owned satellite remote sensing systems,


WHEREAS, BATC is willing to provide the engineering and technical management support to assist Earthwatch's technical staff,


WHEREAS, BATC has agreed with Earthwatch to provide technical assistance to Earthwatch for certain consideration,


NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained, the parties hereby agree as follows:


Article 1 Services ------------------


BATC will provide and Earthwatch will pay for the engineering and technical management support required to assist Earthwatch in the integration and test of satellite remote sensing systems throughout the period of performance and in accordance with the terms and conditions of this contract. Such services shall be performed by individuals as employees of BATC, an independent contractor. BATC shall not provide Services under this Agreement, which are performed by its employees, in jurisdictions where such employees have not been admitted to practice such professional services or otherwise do not have a requisite professional license or certification. BATC shall determine both the staffing required and the particular personnel assigned to perform the Services. The work contemplated to be performed by BATC shall be at or about the Earthwatch facilities located in California and Colorado.


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Contract #9602-0117


Article 2 Price ---------------


The price of the Services is exclusive of all sales, use, value added, excise, privilege, personal property or other taxes or duties occasioned by the use of the Services.


2.1 Labor ----------


All Labor charges shall be at BATC's actual labor costs plus burdens and profit at eight (8) percent. The following hourly rates represent the average selling price per labor hour for each of the available labor categories:


Engineering Production & Test ------------------------------- ------------------------- Position Avg Hrly Rate Position Avg Hrly Rate -------- ------------- -------- ------------- Sr Mqr $118.00 Sr Mgr $113.00 Mgr $ 98.00 Mgr $ 95.00 Pr Eng'r $103.00 Pr Eng'r $100.00 Sr Eng'r $ 83.00 Sr Eng'r $ 88.00 Eng'r/TS2 $ 68.00 Eng'r/TS2 $ 68.00 Eng'r/TS1 $ 53.00 Eng'r/TS1 $ 57.00 Sr Adm/Sup $ 75.00 Sr Adm/Sup $ 73.00 Adm/Sup2 $ 54.00 Adm/Sup2 $ 63.00 Adm/Supl $ 41.00 Adm/Supl $ 44.00 Sr Tech $ 47.00 Sr Tech $ 52.00 Tech $ 35.00 Tech $ 36.00 Sr Insp $ 45.00 Sr Insp $ 44.00 Insp $ 30.00 Insp $ 31.00 Sr Dr/Gr $ 46.00 Sr Plnr $ 48.00 Sr Plnr $ 46.00 Sr Mach $ 55.00 Plnr $ 36.00 Mach $ 34.00 Sr Cler $ 37.00 Sr Cler $ 33.00 Cler $ 31.00 Cler $ 29.00 Pr Ass'y $ 32.00


Sample Calculations (Engineering Category) ------------------------------------------------- Sr Mgr 5 hrs x $118/hr = $590.00 Sr Eng'r 2 hrs x $83/hr = $166.00 Tech 2.5 hrs x $35/hr = $87.50 -------------------------------------------------
Total = $843.50


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Contract #9602-0117


2.2 Materials --------------


All Material charges shall be at BATC's actual cost plus burdens at 143 percent. Profit shall not be included in Material charges.


Sample Calculations:
3 electronic transistors @ $7.50 = $22.50
X 1.43 burden
------
$32.18


2.3 Other Direct Costs (ODC) -----------------------------


ODC charges such as expenditures for telephone, mailing, computer time and miscellaneous expenses shall be charged at BATC's actual cost plus burdens at 126 percent. Profit shall not be included in ODC charges.


2.3.1 Travel


Travel costs including airfare, automobile rental, lodging, meals, and miscellaneous expense will be charged at BATC's actual costs as defined in BATC Directive and Procedure No. D & P 10.03, dated May 1, 1992 as amended, plus burdens at 126 percent. Profit will not be included in travel charges.


Article 3 Payment ------------------


Payment will be made by Earthwatch within net 30 days after the date of BATC's monthly invoice to:


Ball Corporation
10 Longs Peak Drive
Broomfield, CO 80021


Article 4 Period of Performance -------------------------------


The term of this Contract is from 1 March 1996 through 31 December 1996. Any work requested that will require performance beyond this date will require a written amendment to this contract.


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Contract #9602-0117


Article 5 Warranty -------------------


BATC AGREES TO PERFORM ITS SERVICES WITH THAT STANDARD OF CARE AND GOOD FAITH AS IT USES IN PERFORMING SERVICES FOR ITS OWN ACCOUNT. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES, DUTIES OR OBLIGATIONS, WHETHER EXPRESSED, IMPLIED OR STATUTORY, ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARISING OUT OF THIS CONTRACT OR THE SERVICES.


Article 6 Independent Contractor ---------------------------------


BATC shall not and shall not be deemed to, as a result of the performance of the work, supervise, direct or have control over the performance by Earthwatch or its lower tier subcontractors (if any) and vendors (if any) nor shall BATC have authority over or responsibility for means, methods, techniques, sequences or procedures of work selected by Earthwatch or its subcontractors and vendors or for any failure to comply with any contract requirements, laws, regulations, rules, ordinances or codes applicable to Earthwatch's work. BATC does not guarantee the performance of work by Earthwatch, its subcontractors and vendors; Earthwatch shall be solely responsible for the performance of its work in accordance with Earthwatch's contract with its customers and for the performance of Earthwatch's subcontractors and vendors in their respective contracts with Earthwatch.


Article 7 Indemnification --------------------------


Earthwatch recognizes that it is solely responsible for its own performance, the performance of its subcontractors and any other consultants with respect to the Earthwatch business activities or any other use which may be made of the work furnished hereunder. Earthwatch hereby waives any claim it may have against BATC, its officers, directors, contractors, subcontractors, employees and agents, and agrees to indemnify and save BATC, its officers, directors, contractors, subcontractors, employees, and agents harmless from any and all claims, losses, lawsuits, damages, costs or expenses including reasonable attorneys' fees including without limitation claims by Earthwatch employees, arising from or relating to:


(a) the performance or nonperformance by BATC of the work or the furnishing by
BATC of facilities, equipment or administrative and technical information
or assistance hereunder, irrespective of whether such claim, loss, lawsuit,
damage,


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Contract #9602-0117


cost or expense arises out of or is alleged to have arisen out of or caused
by breach of warranty or otherwise, except in the case of BATC's gross
negligence or willful misconduct;


(b) the use by Earthwatch of any technical information, administrative
assistance, consultations or advice furnished by BATC or its employees that
infringes or is alleged to infringe any patents, copyrights or other
intellectual property rights owned by third parties;


(c) damage to property of BATC and its customers, and injuries, including fatal
injury, to all persons arising out of or related to this Contract.


The provisions of this section shall survive rescission, termination, expiration or cancellation of this Contract.


Article 8 Proprietary Information ----------------------------------


Earthwatch and BATC understand that data or information disclosed by either party or any of its operating divisions to any employee during the performance of this agreement may be deemed to be Proprietary and Confidential to the disclosing party. Therefore, the parties undertake to treat and maintain such data in strict secrecy and confidence.


Data and information generated by BATC under the terms of this contract shall be considered Earthwatch Proprietary and marked accordingly. Earthwatch shall have exclusive right to use this data for other markets. Exclusive of the data and information generated under the terms of this agreement, Earthwatch and BATC understand that certain other data disclosed by either party may be deemed Proprietary and Confidential by that party.


This Article shall not restrict the use by either party of information which, as established by written documentation, is substantially in its entirety (i) publicly available from sources other than as a result of disclosure directly or indirectly by either party, (ii) obtained on a nonconfidential basis from a source other than the disclosing party which is entitled to disclose the information and/or (iii) independently developed by the receiving party without use of the other party's Proprietary data provided.


Both parties shall exercise all proper diligence and use every proper precaution to prevent any other party from having access to Proprietary data provided, however, that either party shall be entitled to disclose the Proprietary data to responsible consultants, advisors, vendors and suppliers of equipment, software and services who are necessary to carry out its business and the purposes of this Agreement and who have entered into nondisclosure


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Contract #9602-0117


agreements with the receiving party in a form no less restrictive that the terms of this Article.


Both parties shall abide by all confidentiality obligations relating to third party information that may be included in the Proprietary data disclosed to the receiving party, provided that the receiving party is notified in writing or otherwise becomes aware of such confidentiality obligations prior to the time that the party fails to abide by such obligations, and shall indemnify and hold the other harmless form and against all claims, damages, losses, costs and expenses (including reasonable attorneys' fees) arising out of or alleged to have arisen out of either party's failure to do so, provided that the other party is notified in writing by the disclosing party or otherwise becomes aware of such confidentiality obligations prior to the time of the failure to abide by such obligations.


The provisions of this section shall survive rescission, termination, expiration or cancellation of this Contract.


Notwithstanding any provision of this agreement, Earthwatch s ...