Letter of Intent (LoI)
Between DBS Industries and the SAIT-RadioHolland Group
Whereas DBS Industries, Inc. ("DBSI") and SAIT Systems SA ("SAIT"), a 100%
subsidiary of SAIT-RadioHolland SA, wish to explore an industrial partnering
arrangement, beneficial to both companies, dealing with the E-SAT/NEWSTAR XXX
satellite system (DBSI and SAIT both referred to as "the Parties").
Whereas both parties want to lay down their intent in this Letter of Intent:
Therefore, the Parties confirm the following:
1. This LoI & term sheet is not intended to be a legally binding agreement
between DBSI and SAIT and all rights and obligations of the Parties
with respect to the subject matters covered herein shall be subject to
and conditional upon the satisfactory completion of the Parties market
and business investigations, the CEO and Boards approvals of the
Parties, the negotiation and execution of definitive agreements between
the Parties and obtaining the necessary licenses and approvals from the
appropriate government authorities.
2. The Parties have the intent to investigate the possibility and the
economic feasibility to cooperate, on a non-exclusive basis, on the
development, production and exploitation of the E-SAT/NEWSTAR XXX
satellite system. The Parties hereto decided to start in good faith
investigations and negotiations in accordance with the principles laid
down in this LoI.
3. These investigations and negotiations will start at the date of
signature of this LoI and the Parties' intent is to reach a final
agreement within 90 days.
The LoI may be terminated before this 90 day period without any
liability to either Party either:
1. By mutual consent of the Parties; or
2. By SAIT if DBSI has not awarded (directly or indirectly) a
contract to SAIT for the Preliminary Design Review by
September 7, 1998; or
3. At the time definitive agreements are signed.
4. During the aforementioned period of 90 days the Parties will jointly
undertake a review and negotiation of three separate tasks:
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4.1 Task 1
4.1.1 DBSI wishes to enter into agreements, with SAIT as main contractor for
the engineering, development and provision of hardware and software for
its satellite ground segment.
4.1.2 SAIT wishes to review its capabilities and provide a rough order of
magnitude (ROM) for such work, within 1 month from signing the LoI, on
the following work subjects:
I. Engineering of the satellite ground segment
1. Communications system radio links.
2. E-SAT User Remote Terminal (ET).
3. Applications of the ET and interface to specific NEWSTAR
products.
4. Manufacturing of ET's.
II. Provision of Services
1. TT & C for NEWSTAR satellites.
2. Satellite data processing and scheduling.
3. Billing/data delivery to users.
The Parties will try to reach an agreement upon those work items which
can be included in Task 2.
4.1.3 Before September 7, 1998, DBSI will award on for SAIT acceptable
conditions a contract to SAIT for the Preliminary Design Review (PDR)
of the satellite ground segment. It is anticipated this PDR will take
two months.
4.2 Task 2
4.2.1 Given the output of Task 1, the parties will evaluate the potential
usage and adaptation of SAIT's previously developed assets,
capabilities and property rights for the E-SAT/NEWSTAR XXX satellite
system and its operation.
4.2.2 The Parties will try to reach agreement on the value of SAIT's
previously developed assets, capabilities and property rights to be
used for the E-SAT/NEWSTAR XXX satellite system and its operation and
on how this contribution will be recognized or paid for (cash payment
or stock ownership, or . . . .).
4.3 A positive conclusion of Task 1 and Task 2 will lead to a formal
proposal by SAIT as main contractor for the engineering, development
and provision of hardware and software for the satellite ground segment
of the E-SAT/NEWSTAR system.
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4.4 Task 3
4.4.1 DBSI wishes to enter into a relationship with SAIT for the marketing
rights for the E-SAT/NEWSTAR XXX satellite services for ITU World Zone
1 and for an ownership investment at the level of NEWSTAR/E-SAT/DBSI.
4.4.2 Subject to and conditional upon the satisfactory completion of the due
diligence of the business case by SAIT, the CEO and Board approvals of
SAIT, the contract signature for the engineering, development and
provision of hardware and software for the satellite ground segment of
the E-SAT/NEWSTAR system, SAIT investment is intended to be of the
order of US$10 million. A major part of the investment (preliminary
value is estimated to be US$8 million) will be the contribution of
SAIT's previously developed assets, capabilities and property rights
(see Task 2).
4.4.3 The Parties will evaluate the creation and ownership investment of a
company that will provide the E-SAT/NEWSTAR XXX satellite services in
ITU World Zone 1. This company will own the licenses and landing rights
for the provision of the E-SAT/NEWSTAR XXX satellite services for ITU
World Zone 1.
4.4.4 The Parties confirm that Task 3 will take place in parallel with Task 1
and 2.
4.4.5 The positive conclusion of Task 1 and 2 is not linked to a conclusion
of Task 3.
5. The Parties agree that the process under this LoI will be covered with
the appropriate confidentiality regarding the business plans and
technical information of each Party, which will be shared during the
execution of the process under this LoI, with provisions to extend the
confidentiality into the future in the event the Parties fail to reach
final agreements. (See Non Disclosure Agreement dated April 7, 1998,
already signed between the Parties.)
The Parties agree to hold this LoI in the strictest confidence and
shall not release any information regarding the subject of the LoI to
any third party without the expressed approval of the other Party.
6. The Parties confirm that by signing this Letter of Intent no Party
accepted any obligation except the obligations laid down in clauses
4.1.3 - 5 - 6 - 7 and 8.
7. This LoI shall be governed by and construed in accordance with the
laws in Belgium.
8. All disputes resulting from and/or arising under this LOI shall
exclusively be submitted to the judgement of the Courts in Brussels,
Belgium.
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Done in Brussels, in two copies, one for each Party on this 25 August 1998.
For SAIT Systems SA For DBS Industries Inc.
/s/ X. Xxxxxx /s/ E. Ceuppens /s/ X. X. Xxxxxxxx
X. Xxxxxx E. Ceuppens X. X. Xxxxxxxx
Director Director President and CEO
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