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.
MEMORANDUM OF AGREEMENT
FOR
PROCUREMENT OF ORION 2 SPACECRAFT
The following agreement ("Agreement") is effective as of December 10,
1996 ("Effective Date") by and between International Private Satellite Partners,
L.P., d/b/a Orion Atlantic, L.P., a Delaware limited partnership with its
principal offices located at 2440 Research Boulevard, Rockville, Maryland 20850,
U.S.A. ("ORION") and Matra Marconi Space UK Limited, a company organised and
existing under the laws of England and Wales with its registered office at The
Grove, Warren Lane, Stanmore, Middlesex, HA7 4LY, England ("MMS"), hereinafter
singularly known as "the Party" or collectively as "the Parties."
WHEREAS, the Parties entered into an agreement (known as the "ORION 2
Purchase Contract") dated July 31, 1996 under which ORION agreed to purchase and
MMS agreed to sell, subject to certain conditions, a follow-on spacecraft to the
ORION 1 Spacecraft to provide coverage over the Atlantic and to be known as the
"Orion 2 Spacecraft";
WHEREAS, the Parties desire to amend the Orion 2 Purchase Contract;
WHEREAS, the Parties have reached agreement, as set forth below, on the
basic terms acceptable to both Parties for the amendment to the ORION 2 Purchase
Contract; and
WHEREAS, the Parties intend to enter into (a) an option agreement
substantially in the form attached hereto as Exhibit 1 pursuant to which the
Contractor will grant to ORION an option to purchase the ORION 2 Spacecraft upon
the terms and conditions set forth in such agreement (the "Option Agreement")
and (b) the Restated Amendment No. 10 to the Second Amended and Restated
Purchase Contract, dated as of 26th September 1991, between ORION and MMS Space
Systems Limited attached hereto as Exhibit 2 ("Amendment No. 10");
NOW, THEREFORE, in consideration of the mutual promises and
undertakings contained herein, the Parties, intending to be legally bound,
hereby agree as follows:
1. All terms used herein and not defined shall have the meanings
attributed to them in the ORION 2 Purchase Contract.
Memorandum of Agreement -1-
2. Fixed Price.
-----------
The Contract Price is comprised of the following elements:
______________
ORION 2 Spacecraft [ ]
Launch Vehicle [ ]
Launch Services [ ]
Total Contract Price [______________]
Launch Insurance is not included in the Contract Price. The Contract
Price shall remain fixed until and through April 30, 1997.
3. Milestone Payments and Termination Liability Amounts.
----------------------------------------------------
Part 1(B) of the ORION 2 Purchase Contract shall be amended to reflect
the new schedule developed pursuant to Section 8 hereof and, as revised, shall
maintain the timing of payments in said Part 1(B).
4. Vendor Financing. The ORION 2 Purchase Contract shall be
amended to delete all references to vendor financing.
5. Delivery Schedule. Subject to the availability of a Launch
Slot, Delivery shall occur on or before 28.25 months from the date upon which
MMS receives Installment No. 2 under the Option Agreement, provided ORION does
not fail to make any payment under the Option Agreement when due.
6. Launch Provider and Launch Reservation. MMS shall use all reasonable
commercial efforts to reserve with Lockheed Martin a Launch Slot occurring no
later than July 1999 at a reservation cost not to exceed One Million U.S.
Dollars ($U.S. 1,000,000), said reservation cost ($800,000 plus $200,000 already
paid) to be paid by ORION no later than December 31, 1996. MMS shall arrange
termination provisions with the selected launch provider such that MMS can
enforce the termination and repayment provisions of the ORION 2 Purchase
Contract, as amended.
7. Access. Appropriate provisions will be negotiated between the
Parties and included in the Definitive Purchase Agreement.
8. Scheduling. The ORION 2 Spacecraft documents, as detailed in
the ORION 2 Purchase Contract, as amended, shall be revised to reflect
scheduling revisions of Reviews and Tests resulting from the new payment profile
in the Option Agreement.
Memorandum of Agreement -2-
9. Repeater Subcontractor. MMS has advised ORION that NEC presently is
unwilling to proceed on the risk sharing basis set forth in this Agreement and
the Option Agreement. MMS will continue to negotiate with NEC and, if unable to
reach agreement by December 31, 1996, will proceed to perform the program
without NEC as repeater subcontractor, unless ORION elects to provide additional
consideration to NEC beyond that set forth in the Option Agreement.
10. Negotiation of Definitive Agreements. The Parties agree to
negotiate diligently and in good faith to amend the ORION 2 Purchase Contract in
accordance with the terms set forth herein and in the Option Agreement (the
"Definitive Purchase Agreement"). The Parties intend that such negotiations
commence promptly upon the Effective Date of this Agreement.
11. Term and Termination. The term of this Agreement shall begin on
the Effective Date and shall continue until the earlier of (i) the execution of
the Definitive Purchase Agreement, or (ii) April 30, 1997.
12. Confidentiality. Each Party acknowledges that it may, in the course
of performing its responsibilities under this Agreement, be exposed to or
acquire information that is proprietary or confidential to the other Party. Each
Party agrees to hold such information in strict confidence and not to disclose
such confidential information for any purpose whatsoever other than the
performance of its obligations as contemplated by this Agreement (or as required
by law or regulation) and to advise each of its employees who may be exposed to
such proprietary and confidential information of his or her obligation to keep
such information confidential. This obligation of confidentiality will survive
the termination or expiration of this Agreement.
13. Rights Cumulative. All rights, powers and privileges conferred
hereunder upon the Parties, unless otherwise provided, shall be cumulative and
shall not be restricted to those given by law. Failure to exercise any power
given any party hereunder or to insist upon strict compliance by any other party
shall not constitute a waiver of any party's right to demand exact compliance
with the terms hereof.
14. General. This Agreement (and any Exhibits hereto) sets forth the
entire understanding between the Parties with respect to its subject matter and
supersedes all prior and contemporaneous agreements and understandings with
respect thereto. This Agreement shall not constitute, give effect to, or
otherwise imply, a joint venture, pooling arrangement, partnership, agency or
formal business organisation of any kind. Neither Party shall assign, delegate
or in any manner transfer this Agreement without the prior written consent of
the other Party, which consent shall not be unreasonably withheld, except that
ORION may assign this Agreement to any party to whom ORION may assign the ORION
2 Purchase Contract. No waiver, delay or discharge by a Party will be valid
unless in writing and signed by an authorised representative of the Party
against which its enforcement is sought. Provisions of this Agreement that by
their express terms or context impose continuing obligations on the Parties will
survive the expiration or termination of this Agreement for any reason. This
Agreement will be governed by and construed in accordance with the substantive
laws of the
Memorandum of Agreement -3-
State of Maryland, exclusive of its choice of law rules. This Agreement may be
amended only by a written instrument signed by an authorised representative of
each Party. This Agreement is limited to the subject matter hereof and shall not
bind, limit or otherwise affect either Party with regard to other spacecraft
configurations or different orbital locations.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorised representatives, with an Effective Date as set
forth in the introductory paragraph of this Agreement.
INTERNATIONAL PRIVATE MATRA MARCONI SPACE UK LIMITED
SATELLITE PARTNERS, L.P.
By: Orion Satellite Corporation, its
General Partner
/s/W. Neil Bauer /s/Armand Carlier
- ----------------------------------- ------------------------------
(Signature) (Signature)
W. NEIL BAUER ARMAND CARLIER
- ----------------------------------- ------------------------------
(Name Printed) (Name Printed)
PRESIDENT & CEO CHAIRMAN AND CEO
- ----------------------------------- ------------------------------
(Title) (Title)
Memorandum of Agreement -4-