Satellite Purchase Contract For In-Orbit Delivery [Amendment] - XM Satellite Radio Inc. and Boeing Satellite Systems International Inc.
AMENDMENT
TO THE
SATELLITE PURCHASE CONTRACT FOR IN-ORBIT DELIVERY
BETWEEN
XM SATELLITE RADIO INC.
AND
BOEING SATELLITE SYSTEMS
INTERNATIONAL, INC.
CONTRACT NUMBER L0634
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AMENDMENT
TO THE
SATELLITE PURCHASE CONTRACT FOR IN-ORBIT DELIVERY
This Amendment (the "December Amendment") to the Satellite Purchase Contract for
In-Orbit Delivery effective March 23, 1998 as amended, restated, superseded
and/or supplemented from time to time and in effect through and including the
date hereof (the "Contract") is made this ___ day of December 2001 by and
between XM SATELLITE RADIO INC., a Delaware corporation with its principal
offices located at 1500 Eckington Place, N.E. Washington DC 20002 (hereinafter
"Customer" or "XM") and BOEING SATELLITE SYSTEMS INTERNATIONAL, INC., a Delaware
corporation with its principal offices located at 2260 E. Imperial Highway, El
Segundo, California 90245 (hereinafter "Contractor" or "BSSI"). Capitalized
terms used but not otherwise defined in this December Amendment shall have the
respective meanings as set forth in the Contract.
WHEREAS, the Parties entered into and executed the Contract, which Contract
provides for the procurement by Customer from Contractor of three (3) Boeing 702
Satellites, two (2) of which have been delivered in-orbit and one (1) of which
is being constructed as a ground spare, together with related items, services
and activities; and
WHEREAS, Boeing Capital Services Corporation ("BCSC"), an affiliate of
Contractor, has agreed to provide debt financing to Customer and its affiliates
pursuant to certain financing documents and agreements of even date herewith,
namely, (i) Customer Credit Agreement between BCSC and XM Satellite Radio
Holdings Inc. ("Holdings"); (ii) Assignment and Novation Agreement (the
"Assignment Agreement") between XM and XM Holdings Inc. ("Holdings"); and (iii)
Security Agreement between BCSC and Holdings; and
WHEREAS, in connection with the aforementioned financing arrangements, Customer
and Contractor have agreed to amend the Contract as is more fully set forth
herein with the understanding that all such aforementioned financing documents
and agreements shall be executed concurrently; and
WHEREAS, in order to facilitate the aforementioned financing arrangements,
Customer has agreed to assign all of its rights, title and interest under the
Contract relating to the Ground Spare Satellite Bus (as defined below) to
Holdings, the parent company of XM Satellite Radio Inc., and Contractor
has agreed to consent to such assignment; and
WHEREAS, pursuant to the Assignment Agreement, references to "Customer" in the
Contract shall refer to Holdings, to the extent relating to the rights, duties
and obligations relating to the Ground Spare Satellite Bus (including all
deferred and incentive payments relating to the Ground Spare Satellite), and
otherwise to XM Satellite Radio Inc.
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NOW, THEREFORE, in consideration of the mutual benefits to be derived, the
Parties hereto agree that the Contract is amended as follows:
1. AMENDMENT OF ARTICLE 1.1 (CERTAIN DEFINITIONS). Article 1.1 is hereby
amended by inserting the following new definitions in alphabetical order
and re-lettering the rest of the definitions accordingly.
"BCSC" means Boeing Capital Services Corporation, a Delaware
corporation.
"CUSTOMER CREDIT AGREEMENT" means that certain Customer Credit
Agreement dated as of December __, 2001 by and between XM Satellite
Radio Holdings Inc., a Delaware corporation and BCSC.
"DECEMBER AMENDMENT" means the Amendment made December __, 2001 to the
Satellite Purchase Contract for In-Orbit Delivery by and between XM
Satellite Radio Inc. and Contractor.
"DEFERRED CALL-UP" means, following the written notice by Customer to
Contractor no later than [***] to defer completion and store the
unfinished (not yet Available for Shipment) Ground Spare Satellite
for a period extending beyond the Scheduled Ground Spare Available for
Shipment Date, the written notice by Customer to Contractor to proceed
with the Work required to make the Ground Spare Satellite Available for
Shipment."
"DEFERRED PAYMENT DATE" means December ___, 2006."
"GROUND SPARE SATELLITE BUS" means the Ground Spare Satellite, except
for the Ground Spare Satellite Payload.
"GROUND SPARE SATELLITE PAYLOAD" means the following components of the
Ground Spare Satellite:
(i) all hardware above the four-point interface above the bus
module; and
(ii) all antenna structures, deployment mechanisms and
reflectors.
"SCHEDULED GROUND SPARE AVAILABLE FOR SHIPMENT DATE" means, solely with
respect to the Ground Spare Satellite, [***]."
2. CONSENT TO CERTAIN SECURITY INTERESTS AND AMENDMENT OF ARTICLE 5.7
(SECURITY INTEREST). Add a new paragraph (f) to Article 5.7 as follows:
"(f) Notwithstanding Article 5.7(a), Contractor and Customer hereby
consent to the granting by Contractor and Customer of a security
interest in any right, title or interest Contractor or Customer (as the
case may be) may have in the Ground Spare Satellite Bus in favor of
BCSC; and Contractor and Customer agree that BCSC's rights in the
Ground Spare Satellite Bus shall have priority over any and all rights
that Contractor and Customer may have in such Ground Spare Satellite
Bus. Contractor and Customer confirm that Article 5.7(d) shall not
apply to the Ground Spare Satellite Bus and that the
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release and termination of the security interest as set forth in
Article 5.7(c)(3) shall have no effect on the priority of BCSC's
security interest consented to by Contractor and Customer in
accordance with this Article 5.7(f)."
3. AMENDMENT OF ARTICLE 5.8(b). Article 5.8(b) is hereby amended and restated
in its entirety as set forth below (the interest rate set forth in Article
5.8(c) shall be applicable to Article 5.8, as amended):
"Contractor shall provide [***] with interest payable on this amount
to commence quarterly in arrears from the date that the Ground Spare
Satellite is Available for Shipment and ending on the Deferred
Payment Date, with the principal of such amount to be paid on such
Deferred Payment Date, all in accordance with Exhibit G-2; provided
that if prior to completion Customer has decided to store the
unfinished (not yet Available for Shipment) Ground Spare Satellite
for a period extending beyond the Scheduled Ground Spare Available
for Shipment Date, such interest shall commence on the Scheduled
Ground Spare Available for Shipment Date; PROVIDED FURTHER that such
interest shall be tolled on a day-for-day basis to the extent the
Ground Spare Satellite is not in fact Available for Shipment [***]
after Deferred Call-up such that no interest shall be payable during
such tolled period. Subject to such rights as shall have been
established by Customer and consented to by Contractor in favor of
BCSC, Contractor shall retain title to, and store (in accordance
with Article 14.4 (Storage)), the Ground Spare Satellite prior to
(i) Launch or (ii) other disposition by Customer and repayment of
principal by Customer or its Affiliates of amounts owing to
Contractor or to BCSC under the Customer Credit Agreement.
4. AMENDMENT OF ARTICLE 9.1. Article 9.1 is hereby amended by adding the
following proviso at the end thereof:
"; provided that notwithstanding any other provision in the Contract,
transfer of title of the Ground Spare Satellite Bus shall only occur
after all amounts owing to BCSC are repaid under the Customer Credit
Agreement."
5. AMENDMENT OF TABLE 7.1; CLARIFICATION OF DELIVERY DATE OF GROUND SPARE.
Customer and Contractor confirm that the Ground Spare Satellite shall be
Available for Shipment on [***]. Accordingly, the box in the second
column of row number 7 of Table 7.1 of the Contract is hereby deleted in
its entirety and the following is substituted therefor along with a
footnote asterisk****:
"Available for Shipment on [***]; unless the Ground Spare Satellite
is placed into Storage at the request of Customer, in which case
the Ground Spare Satellite shall be Available for Shipment [***]
after Deferred Call-up. ****.
**** Customer shall notify Contractor in writing by no later than
[***] to defer completion of, and store the unfinished (not yet
Available for Shipment) Ground
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Spare Satellite for a period beyond the Scheduled Ground Spare
Available for Shipment Date. For the avoidance of doubt, where the
completed Ground Spare Satellite is stored after it becomes Available
for Shipment, the provisions of Section 4.6 of Exhibit D (Test Plan
Requirements) shall control the retesting and qualification of the
Ground Spare Satellite for launch."
6. WAIVER OF CERTAIN LIQUIDATED DAMAGES; COVENANT NOT TO TERMINATE FOR BREACH.
The Contract shall be amended by adding a new Article 36 (Waiver of Certain
Liquidated Damages; Covenant not to Terminate for Breach) as follows:
"36.1 WAIVER OF CERTAIN LIQUIDATED DAMAGES.
Notwithstanding Article 10 (Liquidated Damages for Late Delivery)
and Article 28 (Launch Services), Customer hereby irrevocably waives
its rights to liquidated damages under the Contract with respect to
any failure by Contractor [***]; provided, however, that the
foregoing waiver shall not apply to, and liquidated damages may be
imposed under [***] with respect to, Contractor's obligation to
cause the Ground Spare Satellite to be Available for Shipment by the
date set forth in Table 7.1 of the Contract, as modified by the
December Amendment.
36.2 WAIVER OF AND COVENANT NOT TO TERMINATE FOR BREACH.
Customer hereby irrevocably waives any right it may have under the
Contract and covenants that it shall not terminate the Contract for any
breach arising out of [***]."
7. AMENDMENT OF ARTICLE 12.6. Article 12.6 is hereby amended by the addition
of the following Article 12.6 (c) thereto:
"(c) Notwithstanding Article 12.6(b), [***] of the Total Amount at
Risk for the first two Satellites [***] (such portion, the "BSSI
Portion") shall be payable on the Deferred Payment Date, said amount
to be reduced by any amounts Contractor failed to earn prior to the
Deferred Payment Date in accordance with Article 12. Customer shall
pay to Contractor interest on earned amounts as set forth in Exhibit
G-1 (calculated at a rate of [***] compounded annually) which shall
be payable quarterly in arrears, all commencing with the Initial
Handover Date of 15 May 2001 for the first Satellite ("XM-Rock")
and, all commencing with the Initial Handover Date of 28 June 2001
for the second Satellite ("XM-Roll") as set forth in Exhibit G-1.
After the Deferred Payment Date, unearned Incentive Amounts shall be
repaid by Contractor to Customer as follows:
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(i) Contractor shall earn such Incentive Amounts in accordance with
Article 12.3 (Calculation and Earning of Incentive Amounts); and
(ii) any Incentive Amounts not earned (or not earnable in the event of
a Partial Loss or a Constructive Total Loss of a Satellite) by
Contractor pursuant to Article 12.3 (Calculation and Earning of
Incentive Amounts) shall be repaid by Contractor to Customer as
set forth below and as listed in Exhibit G-1. Repayment by
Contractor of any unearned or not earnable Incentive Amounts
under this paragraph (c) shall be due and payable thirty (30)
Calendar Days after the date of receipt by Contractor of a
telefaxed invoice (which shall be followed by the airmailed
original) from Customer. Customer's invoice shall be accompanied
by sufficient information to support Customer's claim. Contractor
shall be deemed to have accepted the invoice ten (10) Business
Days after receipt of Customer's invoice unless, within such time
period, Contractor notifies Customer of a dispute. Any disputes
as to the performance of a Launched Satellite shall be resolved
in accordance with the provisions of Article 12.4 (Disputed
Performance). Contractor shall pay any undisputed portion of an
invoice.
The amount of [***] ([***] less the [***] of incentives), or [***]
for each of the first two Satellites [***], shall be earned by and
paid to Contractor in accordance with Article 12.3, Article 12.6 and
as set forth in Exhibit G-1."
8. AMENDMENT OF ARTICLE 14.4(c). Article 14.4(c) is hereby amended by the
addition of the following sentences at the end thereof:
"Such costs shall accrue quarterly beginning on either (i) the later of
the date on which the Ground Spare Satellite is actually Available for
Shipment or the delivery date of the Ground Spare Satellite set forth
in Table 7.1 hereof or (ii) the Scheduled Ground Spare Available for
Shipment Date (solely in the event Customer elects to store the
unfinished (not Available for Shipment) Ground Spare Satellite for a
period extending beyond the Scheduled Ground Spare Available for
Shipment Date), and shall be payable on the Deferred Payment Date.
Contractor shall provide a statement to Customer for the storage costs
incurred for each quarter and Customer shall pay quarterly installments
of interest only with respect to the accrued but unpaid storage costs.
Such quarterly installments of interest, payable in arrears, shall be
calculated at a rate equal to [***] compounded annually, computed
beginning on the date that the applicable storage costs accrue, and
continuing until payment of the accrued storage costs on the
Deferred Payment Date."
9. AMENDMENT OF ARTICLE 14.4(e). Article 14.4(e) is hereby amended by the
addition of the following sentences at the end thereof.
"Notwithstanding the above, [***] after either (i) the later of the
date on which the Ground Spare Satellite is actually Available for
Shipment or the delivery date of the Ground Spare Satellite set
forth in Table 7.1 hereof or (ii) the Scheduled Ground
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Spare Available for Shipment Date (solely in the event Customer
elects to store the unfinished (not Available for Shipment) Ground
Spare Satellite for a period extending beyond the Scheduled Ground
Spare Available for Shipment Date), Customer shall pay to Contractor
[***] of the Incentive Amount for the Ground Spare Satellite of [***]
(subject to repayment pursuant to this Article 14.4(e)) and
Contractor shall be entitled to receive interest beginning upon such
date on the balance of the Incentive Amount of [***] (calculated at a
rate of [***]) which shall be payable quarterly in arrears in
accordance with Exhibit G-2. Customer shall pay to Contractor [***]
on the Deferred Payment Date.
If the Ground Spare Satellite is launched prior to the Deferred Payment
Date, one of the following actions shall be taken, and in either case,
the principal amount of $[***] (said amount to be reduced by any
amounts Contractor failed to earn prior to the Deferred Payment Date in
accordance with Article 12) shall be paid on the Deferred Payment Date
and, for the avoidance of doubt, all amounts owed to BCSC shall have
been paid in full under the Customer Credit Agreement.
(1) If Deferred Call-up of the Ground Spare Satellite
occurs within [***] from the Scheduled Ground
Spare Available for Shipment Date (or such later
date on which the Ground Spare Satellite actually
becomes Available for Shipment where the delay in
availability is due to Contractor), Customer shall
begin to pay to Contractor interest on earned
amounts as set forth in Exhibit G-2 (calculated at
a rate of [***] which shall be payable quarterly
in arrears), all commencing with the Initial
Handover date of the Ground Spare Satellite;
provided, if the Ground Spare Satellite is used as
a replacement satellite, Customer shall have no
obligation to pay any of the [***] or any of the
[***] in In-Orbit Performance Incentives or
interest thereon (and any of such amounts already
paid shall be refunded to Customer within [***] of
Customer's invoice); provided that such interest
shall be tolled on a day-for-day basis to the
extent the Ground Spare Satellite is not in fact
Available for Shipment [***] after Deferred
Call-up; or
(2) If Deferred Call-up of the Ground Spare Satellite
occurs after [***] from the Scheduled Ground Spare
Available for Shipment Date (or such later date on
which the Ground Spare Satellite actually becomes
Available for Shipment where the delay in
availability is due to Contractor), interest shall
commence [***] after the Scheduled Ground Spare
Available for Shipment Date on the amount of [***],
payable quarterly in arrears (calculated at a
rate of [***] compounded annually) until the
Deferred Payment Date; provided, if the Ground
Spare Satellite is used as a replacement
satellite, Customer shall have no obligation to
pay any of the [***] or any of
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the [***] in In-Orbit Performance Incentives or
interest thereon (and any of such amounts already
paid shall be refunded to Customer within [***] of
Customer's invoice); provided that such interest
shall be tolled on a day-for-day basis to the
extent the Ground Spare Satellite is not in fact
Available for Shipment [***] after Deferred
Call-up.
After the Incentive Amount of [***] has been paid on the Deferred
Payment Date, unearned Incentive Amounts for the Ground Spare Satellite
shall be repaid by Contractor to Customer in accordance with the procedure
set forth as stated above in this Article 14.4(e).
If the Ground Spare Satellite has not been launched prior to the
Deferred Payment Date, the [***] of the Incentive Amount shall be paid
to Contractor on the Deferred Payment Date, and Contractor shall be
entitled to retain the full Incentive Amounts for the Ground Spare
Satellite and neither Party shall have any further obligation to each
other except with respect to delivery of the Ground Spare Satellite to
storage in accordance with Paragraph (g) below and title shall pass to
Customer in accordance with Paragraph (h) below."
10. AMENDMENT OF ARTICLE 14.4(g). Article 14.4(g) is hereby revised by adding
the following sentences at the end thereof:
"Notwithstanding the foregoing, in the event the Ground Spare Satellite
has been in such storage for [***] following the later of the Scheduled
Ground Spare Available for Shipment Date or the date the Ground Spare
Satellite actually becomes Available for Shipment, as the case may be,
or Customer decides prior to the end of such [***] period not to Launch
such Satellite, the following shall apply:
(i) Contractor shall be entitled to receive, within [***]
after the earlier of receipt of de-storage notification
from Customer or the end of the [***] period, all payments
due and owing and not otherwise paid to Contractor
pursuant to Paragraph (e) above, with the exception of
the [***] pursuant to Article 5.8 (Payment and Deferred
Financing for the Ground Spare Satellite), the [***] of
the Incentive Amount pursuant to Article 14.4(e) above,
and the storage costs deferred pursuant to Article
14.4(c).
(ii) Contractor shall promptly Deliver such Satellite, at
Customer's expense, to a storage location specified by
Customer in the State of Florida or the State of Delaware,
or in such other location as may be mutually agreed upon by
the Parties. Customer's expenses shall include any
applicable state sales tax for such storage.
(iii) Title to the Ground Spare Satellite shall pass to Customer
on the later of such time that Customer has (x) paid to
Contractor the Deferred Financing
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Payment of [***], the Incentive Amounts of [***] and the
storage costs deferred pursuant to Article 14.4(c), as
applicable, and (y) paid all amounts owing to BCSC in
accordance with the Customer Credit Agreement."
11. AMENDMENT OF ARTICLE 14.4(h). Article 14.4 (h) is hereby revised by adding
the following sentence as follows:
"If the Ground Spare Satellite is placed in storage in accordance with
Article 14.4(g) and Final Acceptance has not taken place pursuant to
Article 8.6, (i) Final Acceptance shall occur with respect to the
Ground Spare Satellite upon arrival of the Ground Spare Satellite at
the storage location specified by Customer, in which case,
notwithstanding Article 4.3 (Taxes and Duties), any and all taxes and
duties in connection with such delivery shall be borne and paid by
Customer, and (ii) notwithstanding Article 9.1, transfer of title with
respect to the Ground Spare Satellite placed into storage shall occur
as set forth in Article 14.4(g)(iii). Risk of Loss with respect to the
Ground Spare Satellite shall transfer to Customer upon arrival of the
Ground Spare Satellite at the storage location specified by Customer."
12. AMENDMENT OF ARTICLE 25 (INSURANCE). (a) Article 25 is hereby amended by
inserting the following sentence at the end of Article 25.1(a):
"Customer shall procure at its own expense and maintain in full force
and effect, at all times from and after the time when risk of loss or
damage to the Ground Spare Satellite is transferred to the Customer and
prior to the launch of the Ground Spare Satellite in accordance with
the terms of this Contract, Ground Insurance with respect to the Ground
Spare Satellite in a minimum amount equal to the sum of (i) the Minimum
Threshold Amount (as such term is defined in the Customer Credit
Agreement, and solely to the extent required under the Customer Credit
Agreement) and (ii) all deferred financing, milestone payment amounts
and Incentive Amounts relating to the Ground Spare Satellite, to the
extent Customer owes such deferred financing, milestone payment amounts
and Incentive Amounts to Contractor hereunder."
(b) Article 25 is hereby further amended by inserting the following as new
Article 25.4 immediately following Article 25.3:
"25.4 Contractor shall name BCSC as loss payee to the extent of its
interest under the Ground Insurance maintained with respect to the
Ground Spare Satellite Bus, as its interest may appear. The Ground
Insurance maintained with respect to the Ground Spare Satellite Bus
shall provide, either as a clause in, or an endorsement to, the
relevant policies, that (i) there shall be no recourse against BCSC,
the Ground Spare Satellite Bus, this Contract (as it relates to the
Ground Spare Satellite Bus) or the proceeds of the Ground Insurance for
payment of premiums or other amounts with respect to the Ground
Insurance and (ii) the insurers are required to provide BCSC with at
least thirty (30) Calendar Days (or ten (10) Calendar Days in the case
of nonpayment of premiums) prior
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written notice of cancellation or non-renewal of any policy. Such
policy shall, either as a clause in, or an endorsement to, such
policy, waive any right of subrogation against BCSC and Customer (and
their respective officers, employees, agents and insurers). Contractor
shall provide suitable evidence to BCSC of the Ground Insurance
maintained with respect to the Ground Spare Satellite Bus.
13. AMENDMENT OF ARTICLE 11.3 (MAXIMUM EXCUSABLE DELAY; TERMINATION). Article
11.3 is hereby amended by amending Article 11.3(b) by inserting the phrase
"and Ground Spare Satellite and related launch services" at the end of the
parenthetical phrase in the third line thereof, and inserting the following
as new Article 11.3(c) immediately following Article 11.3(b):
"(c) In the event of an insurance claim being made with respect to the
Ground Spare Satellite (prior to the risk of loss transferring to
Customer) against Ground Insurance, all proceeds shall be distributed,
and certain other payments shall be made, in accordance with this
Article 11.3(c) as follows: (i) first, insurance proceeds shall be paid
to BCSC in satisfaction of the aggregate amount (including principal,
interest, fees and any other amounts outstanding) owing by Customer to
BCSC under the Customer Credit Agreement and (ii) then, after BCSC
shall have accordingly released Customer from any claims from amounts
owed under the Customer Credit Agreement, Customer shall pay Contractor
the same amount that was distributed to BCSC (up to the amount owed by
Customer to BCSC and in accordance with a payment plan to be agreed)
only in the event Customer does not terminate this Contract with
respect to the Ground Spare Satellite and related launch services (if
purchased) under Article 11.3(b) as a result of the event underlying
such insurance claim and Contractor proceeds to complete the Ground
Spare Satellite; and (iii) in the event that the Contract is terminated
under Article 11.3(b) with respect to the Ground Spare Satellite, (x)
the amount paid to BCSC from the insurance proceeds (under clause (i)
above) shall be deducted from the refund paid to Customer under Article
32.4(b) and (y) Contractor shall be reimbursed out of the insurance
proceeds (to the extent such are available) for all deferred financing,
milestone payment amounts and Incentive Amounts relating to the Ground
Spare Satellite, to the extent Customer owes such deferred financing,
milestone payment amounts and Incentive Amounts to Contractor
hereunder, and any accrued, but unpaid interest, prior to the
calculation and payment of any refund to Customer under Article
32.4(b)."
14. AMENDMENT OF ARTICLE 28 (LAUNCH SERVICES). Article 28 is hereby amended by
inserting the following as new Article 28(f) immediately following Article
28(e):
"(f) Customer hereby agrees to launch the Ground Spare Satellite using
Sea Launch at such time as may be agreed by Customer and Contractor, as
set forth below:
(1) The price for said Sea Launch launch services for any launch
period beginning [***] shall be [***] and the price for
transportation to the launch site, Sea Launch Launch Campaign,
Mission Support
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Services and LEOP for the Ground Spare Satellite shall be [***]
(notwithstanding Article 30.4, [***]); provided, however, that
the price for the Sea Launch shall [***] shown in Table 28.1
below for the [***] which occurs after [***]. The launch
period shall be as set forth in the applicable Launch
Agreement, and the aforementioned [***] shall not be imposed
on the Customer to the extent that the Ground Spare Satellite
is not Delivered on the applicable Delivery Date due to
Contractor's fault.
<Table>
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Table 28.1
Optional Launch Vehicle - Launch Periods and Prices
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[***] Price:
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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[***] [***]
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</Table>
(2) In the event Customer and Contractor have not scheduled a launch
of the Ground Spare Satellite to occur on or before [***],
Customer shall have no obligation to launch the Ground Spare
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Satellite on the Sea Launch and this Article 28(f) shall have no
further force and effect.
(3) Payment terms for the Sea Launch launch services for the Ground
Spare Satellite shall be as set forth in Table 28.2:
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Table 28.2
Sea Launch Payment Terms
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Payment Date Percentage of Sea Amount*
Launch Price
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[***] [***] [***]
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[***] [***] [***]
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[***] [***] [***]
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[***] [***] [***]
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[***] [***] [***]
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[***] [***] [***]
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</Table>
* Assuming a Launch Period commencing [***].
The Parties shall make commercially reasonable efforts to
facilitate, and shall work together to arrange, commercially reasonable
financing during the construction of the Sea Launch Launch Vehicle from
a source other than Contractor [***]. Payment terms for the [***] for
transportation to the launch site, Sea Launch Launch Campaign, Mission
Support Services and LEOP for the Ground Spare Satellite shall be
negotiated at time of commitment.
(4) In order to establish and secure a launch period, Customer shall
provide a written notification to Contractor at least [***]
prior to its desired launch date in order for Contractor
[***]. Contractor shall work with Customer to obtain [***]
however Contractor makes no guarantees that such rights can be
obtained.
(5) If [***], the Launch Insurance rate for the launch of the Ground
Spare Satellite
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on a Sea Launch Vehicle for launch concurrent with the time of
the proposed launch of the Ground Spare Satellite [***], the
insurance rate for launch of [***] (as confirmed in writing by
Customer's and Contractor's respective insurance brokers), then
Customer shall have the right, [***] as set forth in this
Article 28(f). For avoidance of doubt, in the event Customer
has directed Contractor in writing to proceed with [***]
(notwithstanding the Launch Insurance rates applicable at the
time of such written direction), [***], Customer shall not have
the right to [***] under this Article 28(f)(5).
(6) Notwithstanding the foregoing, Customer shall have [***]
Ground Spare Satellite on Sea Launch in the event of any of the
following conditions:
(i) Sea Launch has a [***] at any given time. In the event
that a launch date has been set by Customer and Contractor
prior to the [***], Customer shall then have thirty (30)
Calendar Days from the date Contractor notifies Customer
in writing that [***] to inform Contractor that it will
either [***]. In the event Customer does not notify
Contractor within this time period, Customer shall [***].
In the event no such launch date has been set by Customer
and Contractor, Customer shall [***] the Ground Spare
Satellite using the Sea Launch as contemplated by this
Article 28(f); or
(ii) Sea Launch has become bankrupt or insolvent or has a
receiving order made against it, or seeks the protection of
any law relating to bankrupt or insolvent debtors, or if an
order is made or resolution passed for the winding up of Sea
Launch.
If a [***] occurs pursuant to the above, Customer shall have
the right to [***] or negotiate with Contractor to [***] on its
behalf. In either event, any payments by Customer to Contractor
for [***] shall either be refunded to Customer within [***] or,
at Customer's option, [***].
12
<Page>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(8) If (i) the Ground Spare Satellite is scheduled to be the
[***] at the written direction of Customer for the Ground
Spare Satellite, then Customer shall have [***] the Ground
Spare Satellite using the Sea Launch as set forth in this
Article 28(f).
(9) Customer shall have the right to cause Contractor to terminate
the applicable Launch Agreement for convenience and Customer
shall then pay to Contractor the following termination
liability amounts set forth in Table 28.3. In the event that
Customer has paid Contractor more than the applicable
Termination for Convenience Liability Amounts, such difference
shall be refunded to Customer.
<Table>
<S> <C>
-----------------------------------------------------------------------
Table 28.3
Sea Launch Termination for Convenience Liability Amounts
-----------------------------------------------------------------------
[***] [***]
-----------------------------------------------------------------------
[***] [***]
-----------------------------------------------------------------------
[***] [***]
-----------------------------------------------------------------------
[***] [***]
-----------------------------------------------------------------------
[***] [***]
-----------------------------------------------------------------------
</Table>
(10) In the event of a [***] the Ground Spare Satellite,
Contractor agrees to use reasonable efforts to [***] the
Ground Spare Satellite under the terms of the Launch
Agreement between Contractor and Sea Launch such that
launch of the Ground Spare Satellite is not the [***].
Furthermore, Contractor agrees to work jointly with
Customer and Sea Launch to negotiate a commercially
reasonable accommodation so that Customer shall not be
required to [***]. Customer understands that such a [***]
may result in a price increase to Customer.
(11) Contractor agrees that Customer shall have the same rights of
access to Sea Launch LLP as Customer has to Major
Subcontractors under Article 6.9 of the Contract and
Contractor shall insure that Article 6 applies to Sea Launch
L.L.P."
15. AMENDMENT OF ARTICLE 28 (LAUNCH SERVICES). Article 28 is hereby amended by
the addition of the following Article 28(g) following Article 28(f):
13
<Page>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
"(g) Customer shall not propose to have the Ground Spare Satellite
shipped to the Sea Launch launch processing facility pursuant to
Article 8.2(h) hereof prior to five (5) days following the repayment in
full of the loan made by BCSC under the Customer Credit Agreement.
16. AMENDMENT OF ARTICLE 32.3(a) Article 32.3(a) is hereby amended by adding
new paragraphs (6) and (7) thereto:
"(6) If BCSC declares an Event of Default and accelerates Customer's
payment obligations following such Event of Default under the Customer
Credit Agreement;
(7) If a default (permitting termination in whole or in part by
Contractor) occurs under a satellite purchase contract (relating to any
portion of the Ground Spare Satellite) between Contractor and an
Affiliate of Customer, which Affiliate shall be, or shall be controlled
by, XM Satellite Radio Holdings Inc."
(b) Article 32.4(b) is hereby amended by inserting the following parenthetical
phrase immediately following the phrase "under this Contract" and before the
phrase "and payment of any" in the third line thereof:
"(or, in the case of partial termination, with respect to the
terminated portion of this Contract)".
17. AMENDMENT OF ARTICLE 10.1(c). Article 10.1(c) is hereby amended by revising
the first part of the first sentence to read as follows:
"(c) In the event Contractor fails to Deliver the Ground Spare
Satellite on or before the Delivery Date specified in Article 7.1, and
provided that such late delivery of the Ground Spare Satellite causes a
delay in the launch of the Ground Spare Satellite, as such date may be
adjusted in accordance with this Contract, Contractor agrees to pay
Customer with respect to such Ground Spare Satellite, as liquidated
damages and not as a penalty, the following amounts for the period
beginning on the first (1st) day following the Delivery Date specified
in Article 7.1 and continuing for a period thereafter not to exceed
[***] (the "Ground Spare Damages Period"):"
18. AMENDMENT OF EXHIBITS G-1 AND G-2. Exhibits G-1 and G-2 of the Contract
shall be amended and restated and superseded in their entirety by the new
exhibits attached hereto as Appendix A and Appendix B, respectively.
14
<Page>
19. ENTIRE AGREEMENT; COUNTERPARTS. There is no modification to the Contract
except as expressly set forth in this December Amendment and all terms,
provisions and conditions of the Contract shall be in full force and
effect, provided that any provisions in the Contract that are inconsistent
with this December Amendment shall be construed to be consistent with this
December Amendment. This December Amendment may be executed in one or more
counterparts, which together shall constitute a fully executed agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this December Amendment to
the Satellite Purchase Contract No. L0634, effective as of the date first
written above (the "December Amendment Effective Date").
BOEING SATELLITE SYSTEMS XM SATELLITE RADIO INC.
INTERNATIONAL, INC.
BY: __________________________ BY: __________________________
15
<Page>
<Table>
<Caption>
EXHIBIT G-1
------------------------------------------------------------------------------------------------------------------------------------
PAYMENT PLAN FOR BSSI PORTION OF ROLL (PFM (ALSO KNOWN AS XM1)) IN-ORBIT INCENTIVES
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
**** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this
exhibit has been filed separately with the Securities and Exchange Commission.
</Table>
[***Pages 1-4 of Exhibit G-1]
<Page>
EXHIBIT G-2
**** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this
exhibit has been filed separately with the Securities and Exchange Commission.
[*** Pages 1-2 of Exhibit G-2]