[Letterhead of British Aerospace]
23rd December 1996
Xx. X. Xxxxx,
MCN Sat US Inc. and Lagardere Groupe SA
00 xxxxxx Xxxxx Xxxxxxx - XXX,
00000 Velizy-Villacoublay Cedex,
FRANCE
Dear Sir:
We refer to the Contingent Transponder Agreement dated 26th January 1995, among
British Aerospace Plc ("BAe"), MCN Sat US, Inc. ("MCN"), and Xxxxxxxxx Groupe,
being the successor to Matra Hachette SA (the "Indemnity Agreement") pursuant to
which XXx agreed to indemnify MCN for 75/175 of the actual amount paid by MCN to
International Private Satellite Partners, LP ("IPSP") under that certain
Contingent Communications Satellite Capacity Agreement, dated as of 24th October
1990, between MCN and IPSP (the "Contingent Capacity Agreement"). Each of the
payments made by BAe to MCN under the Indemnity Agreement is herein called a
"BAe Portion". As of the date hereof BAe has paid $2,252,143 to MCN pursuant to
the Indemnity Agreement. Capitalized words used herein and not defined shall
have the meanings attributed to them in the Indemnity Agreement.
Under Section 1.5 of the Indemnity Agreement, within five days of each date upon
which MCN receives a Contingent Payment Distribution from IPSP, MCN is required
to pay to BAe 75/175 of such Contingent Payment Distribution until the sum of
all such payments made by MCN to BAe equals the sum of all BAe Portions paid by
BAe to MCN under Sections 1.1 and 1.2 of the Indemnity Agreement.
Pursuant to the Section 351 Exchange Agreement and Plan of Conversion dated June
1996 as amended by the First Amendment thereto among IPSP, Orion Network
Systems, Inc. ("ONS"), Orion Satellite Corporation, British Aerospace
Communications Inc. ("BAeComs"), Com Dev Satellite Communications Limited,
Kingston Communications International Limited, Lockheed Xxxxxx Commercial Launch
Services Inc., Trans-Atlantic Satellite, Inc. and MCN (the "Exchange
Agreement"), an affiliate of ONS ("Orion") is proposing to issue shares of its
Series C 6% Cumulative Redeemable Convertible Preferred Stock (the "Preferred
Stock") to each of the IPSP limited partners (other than ONS) and to release
each of the limited partners from such limited partner's obligations under its
Contingent Capacity Agreement, among others, in exchange for such limited
partner's limited partnership shares in IPSP (the "Exchange Transaction"). A
portion of the number of shares of Preferred Stock to be delivered to each of
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the limited partners in the Exchange Transaction represents repayment by ONS, on
behalf of IPSP, of the amounts paid by the limited partners to IPSP under their
Contingent Capacity Agreements.
In the consideration of the premises set forth herein and for other good and
valuable consideration, the receipt of which is acknowledged, the parties,
intending to be legally bound, agree as follows:
1. (i) In respect of BAe Portions paid on or before 29th January, 1997,
within five days of the date upon which MCN receives from Orion one or
more certificates evidencing the shares of Preferred Stock that Orion
is required to deliver to MCN in the Exchange Transaction (the "Closing
Date"), MCN shall irrevocably assign to BAeComs, free of all
encumbrances, (a) 1,914 shares of Preferred Stock in respect of BAe
Portions prior to 24th December, 1996 plus (b) in respect of all BAe
Portions made between 24th December, 1996 and 29th January, 1997 a
number of shares of Preferred Stock equal to the quotient obtained by
dividing (i) 85% of the aggregate of such BAe Portions by (ii) 1,000 or
such other number as is used to compute the number of shares MCN will
be entitled to receive in the Exchange Transaction.
(ii) In respect of BAe Portions paid in the period from 30th January,
1997 until Closing, to the extent that MCN receives cash refunds for
Contingent Capacity Payments under Section 3.2(c)(x) of the Exchange
Agreement as amended, it will within five days of the receipt pay
75/175 of that amount to BAe Coms in immediately available funds in US
dollars. To the extent that MCN receives shares of Preferred Stock, MCN
shall within five days irrevocably assign to BAeComs, free of all
encumbrances, 75/175 of the number of shares received. If MCN receives
a mixture of cash and Preferred Stock, MCN will pay to BAe 75/175 of
the cash received and irrevocably assign 75/175 of the shares of
Preferred Stock received.
2. The Indemnity Agreement shall terminate only upon the date upon which
MCN's obligations under the Contingent Capacity Agreement terminate.
3. This Letter Agreement shall be governed by the laws of the State of New
York without regard to its conflicts of laws principles.
4. The provisions of this Letter Agreement are not intended to be for the
benefit of any third party upon whom benefits are not specifically
conferred by this Agreement.
5. This Letter Agreement may not be amended, altered or modified except by
a written instrument signed by the parties.
6. This Letter Agreement may be executed in a number of counterparts, each
of which shall be deemed an original and all of which shall constitute
one and the same instrument.
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7. BAe may terminate this Letter Agreement on 1st May, 1997 if the Closing
Date has not occurred by such date and BAeComs has served notice of
termination under Section 13.1(b) of the Exchange Agreement as amended.
8. MCN may terminate this Letter Agreement on 1st May, 1997 if the Closing
Date has not occurred by such date and it has served notice of
termination under Section 13.1(b) of the Exchange Agreement as amended.
9. This Letter Agreement and the Indemnity Agreement contain all of the
understanding and agreements of every kind and nature existing between
BAe and MCN with respect to the subject matter of this Agreement. In
particular this Letter Agreement supersedes the Letter Agreement
between us dated 1st July 1996 which shall cease to have effect as from
signature of this Letter Agreement by all parties to it.
If the terms of this Letter Agreement are satisfactory to you, please so
indicate by signing in the space provided below.
Sincerely Accepted and Agreed:
British Aerospace Plc. For and on behalf of Lagardere Groupe SA
By /s/ W.A. Rice By /s/ illegible
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Name W.A. Rice
Title Director
BAe Communications
For and on behalf of MCN Sat. US, Inc.
By /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, President
