MEMORANDUM OF UNDERSTANDING
BETWEEN
MATRA MARCONI SPACE AND DBS INDUSTRIES, INC.
By and between
Matra Marconi Space France s.a., a company organized under the laws of France
and having its headquarters at 4, Rue de Presbourg, 75116, Paris, France ("MMS")
and
DBS Industries, Inc., a company organized under the laws of the State of
California, USA and having its headquarters at 100 Shoreline Highway, Suite
190A, Mill Valley, CA 94941, USA ("DBSI")
collectively the "Parties" and individually the "Party":
RECITALS
Whereas DBSI is the major shareholder of E-Sat, Inc., a Colorado corporation.
E-Sat, Inc. is the holder of Non-Voice, Non-geostationary Mobile Satellite
Service license issued by the Federal Communications Commission ("FCC"),
Whereas E-Sat, Inc. has planned to develop and operate a satellite constellation
and the associated ground segment to service the messaging market,
Whereas MMS is a major space company and is willing to build the E-Sat
satellites and possibly the Remote Terminal Unit ("RTU").
AGREEMENTS
This MOU is subject to satisfactory completion of the activities provided herein
and expresses the common interest to work out mutually acceptable agreement as
contemplated herein between the parties, within the objectives and the process
specified herein. This MOU is not, and is not intended to be, a binding
agreement between the Parties, and neither Party shall have any liability to the
other if the Parties fail to reach an acceptable agreement for any reason.
1. Objective:
a. DBSI is considering entering into a spacecraft manufacturing agreement with
MMS, appointing MMS as prime contractor for the design, construction, delivery
at launch site and launch support services of 6 LEO satellites (the "Prime
Contract"). The Prime Contract will also include launch station equipment and
launch services via EUROKOT for 2 launchers with launch insurance, development
of operation software and data processing for ground support.
b. DBSI and MMS are considering entering into a manufacturing agreement for the
manufacture of 2 million RTUs.
c. In case MMS is awarded a contract for the above-mentioned item (a), MMS will
consider making an investment into DBSI.
2. Definitive agreements
After executing this MOU, the Parties shall closely work together and jointly
work out in good faith the relevant definitive agreements, and develop the E-Sat
System through three phases as follows.
Phase 1: (a) Preliminary design of the E-SAT system including detailed design of
the satellites, ground stations, RTUs and ground support software, (b)
negotiation of a contract setting forth the terms of any MMS investment in DBSI
including the disbursement dates of the investment.
Subject to satisfactory due diligence and approval by the MMS board and MMS
shareholders and subject to Prime Contractor contract signature, the MMS
investment in DBSI is intended to be of the order of US$10 million.
Phase 1 is intended to begin on 1 September 1998 and continue for 2 months.
Phase 2: Negotiations of (a) a Prime Contract for the design, construction,
delivery at launch site and launch support services of 6 LEO satellites, ground
station equipment, launch services, development of operation software and data
processing for ground support; (b) a contract for the manufacture of the RTUs.
Phase 2 is intended to begin on 1 October 1998.
The Prime Contract, as described in paragraph 1(a), is intended to have a
not-to-exceed price of US$95 million (assuming EUROKOT launch service price,
including insurance, is US$21.5 million).
The manufacturing contract for 2 million RTUs, as described in paragraph 1(b),
is intended to have a not-to-exceed price of US$70 million.
Phase 3: Entry into force of the manufacturing contracts. E-Sat System full
development concluding with the delivery to the launch site of 6 satellites and
delivery of the ground stations.
Phase 3 is intended to begin when Phase 1 and Phase 2 have been completed.
3. Conditions
The definitive agreements will be subject to the following conditions:
o Negotiation and execution of the agreements with terms and conditions
mutually acceptable to both Parties.
o Obtention all required approvals of governing boards and shareholders of
DBSI, E-Sat, Inc., and MMS, if required.
o Compliance with applicable laws and receipt of all required approval by all
governmental agencies having jurisdiction over the subject of those
agreements.
o Completion of due diligence to MMS's satisfaction.
4. Press Releases and Disclosures
Each Party will not issue any press release or other disclosure of this LOI
without approval by the other Party. The disclosure issue is covered by a
separate Non-Disclosure Agreement signed between the Parties.
5. Term of LOI/Termination
This LOI shall become effective on the last date of signature hereunder and may
be terminated without liability to either Party either:
a. By mutual consent of the Parties; or
b. By any Party if Phase 2 is not completed by 1 January 1999 or such other
date as the Parties may agree; or
c. At the time definitive agreements are signed.
In the event of such termination, all provisions hereof shall terminate. The
separate Non-Disclosure Agreement signed between the Parties will remain in
force.
6. Governing Law
This agreement is governed by the laws of the State of New York excluding its
conflict of laws rules. Any dispute which cannot be settled by the Parties shall
be resolved in accordance with the Rules of Concilliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with such Rules. The venue of such arbitration shall be New York
City, New York, USA.
Date:
By: /s/ Fred W. Thompson
Fred W. Thompson, President and Chief Executive Officer,
DBS Industries, Inc.
Date:
By: /s/ Armand Cartier
Armand Cartier, Chairman & Chief Executive Officer,
Matra Marconi Space France S.A.