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EXHIBIT 10.63
[SPACEHAB, INC. LETTERHEAD]
Letter Agreement
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DRAFT
LETTER AGREEMENT
To: RSC-Energia
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Russia
141070, RSC-Energia
Attn: A. Derechine
Contracts Administrator
RSC-Energia
Dear Mr. Y. P. Semenov:
1. Pursuant to this letter agreement ("Letter Agreement") SPACEHAB, Inc.
("SPACEHAB"), agrees to contract with RSC-Energia (hereinafter referred
to as "Energia" or "Seller"), to develop flight qualified Unpressurized
Cargo Pallets ("UCP") and associated test and support equipment in
accordance with the Statement of Work ("SOW") attached hereto as
Exhibit A and incorporated herein by this reference.
2. This Letter Agreement is for all activities required to complete a
Preliminary Design Review ("PDR") for the UCP (which will be a discreet
element of the Initial Integrated Cargo Carrier System ("IICC") being
developed by SPACEHAB), as well as for long lead material orders or
schedule protection activities that must be accomplished prior to PDR
in order to complete the full UCP build program on a schedule to
support delivery of the IICC flight hardware inclusive of the UCP to
SPACEHAB in June of 1999. It is expected that a full-scale development
and production contract ("Production Contract") for the build and
delivery of flight qualified UCP hardware will be negotiated and
executed no later than 31 December 1997. It is agreed that the
following items will be excluded from the Production Contract:
1) Transportation of the UCP hardware items
2) Travel costs
It is also agreed that the following items are included in the
Production Contract:
1) Translation costs
2) Customs costs
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Letter Agreement
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The parties agree to promptly begin good faith negotiation of the terms
of the Production Contract. Energia agrees that the fixed price for the
Production Contract, based on the current definition of the UCP (and
assuming no special provisions for equity or revenue sharing) shall not
exceed $2.4 Million (U.S. Dollars).
3. RSC-Energia shall provide the UCP and the design of the cargo
integration on the UCP per SPACEHAB requirements. SPACEHAB has
contracted with Daimler-Benz Aerospace ("DASA") of Bremen, Germany, for
production of the Keel Yoke Assembly and Engagement Mechanism Assembly,
and for integration of the IICC into the Space Shuttle. RSC-Energia is
expected to work directly and informally with DASA engineers as
required for integration of the UCP into the IICC system. However, all
interface specifications, technical direction and contract deliverables
under this Letter Agreement shall be dictated solely by SPACEHAB.
4. The fixed price to be paid to Energia for the products and services
under this Letter Agreement is $150,000 (U.S. Dollars). This amount is
to be paid in three payments. First payment (20% of fixed price) to be
paid upon execution of this Letter Agreement. Second payment (30% of
fixed price) to be paid upon acceptance by SPACEHAB of the comparative
analysis report (deliverable item # 4 of Section 4.1 of the attached
SOW) due sixty (60) days after execution of this Letter Agreement. The
final 50% payment shall be made at successful completion of the PDR
(defined as closing out of all PDR review items and actions) fifteen
(15) days after the PDR milestone. All payments shall be made by wire
transfer to the account listed in Exhibit B attached hereto and shall
be completed within 30 days of written ratification of completion of
the associated payment milestone by the SPACEHAB ICC Program Manager.
5. Reimbursement for Travel Expenses: The fixed price in Section 4 above
is for provision of the products and services associated with the
attached SOW, with the sole exception of travel costs in support of
program reviews, technical interchange meetings and other activities
approved in advance by SPACEHAB. SPACEHAB shall reimburse RSC-Energia
for actual pre-approved transportation and hotel expenses, and on a per
diem basis for meals and other expenses. The per diem allowance shall
be at the rate of $58 per day.
6. Period of performance: From date of execution of this Letter Agreement
through 31 December 1997.
7. Technical Direction: Seller shall accept technical direction from one
of the following SPACEHAB individuals only:
Prime Contact - ▇▇▇▇ ▇▇▇▇▇▇, ICC Program Manager
Alternate Contact - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director, Product Development
8. Provisions for Execution: Seller and SPACEHAB shall execute two (2)
copies of this Letter Agreement in English and two (2) copies in
Russian, one original in each language for each party.
9. Intellectual Property Rights: All worldwide Intellectual Property
rights (including but not limited to patents, copyrights, trademarks,
service marks and trade secrets) created under
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Letter Agreement
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this Letter Agreement and the Production Contract shall be the sole
property of SPACEHAB. Energia agrees to reasonably assist SPACEHAB in
securing such rights through patent, copyright and tradename
applications in various worldwide jurisdictions. All Intellectual
Property utilized in the performance of this Letter Agreement or the
subsequent Production Contract shall remain the exclusive property of
the party(s) who had the rights in the IP prior to this Letter
Agreement.
10. Confidentiality: Per the Nondisclosure Agreement between the parties
dated December 23, 1996, which terms and conditions are incorporated
herein by this reference.
11. Document Translation: All textual documents provided by the Seller
shall be in English. Graphical documents (drawings) may be provided in
Russian. Any textual document, fax, or letter, five (5) pages or less
in size, may be exchanged in native language.
12. Local transportation, meeting facilities, and interpreter services
shall be provided by the host party. SPACEHAB will provide ground
transportation (to and from DASA) for Energia personnel while jointly
at DASA's facilities for business meetings.
13. All provisions herein and performance hereunder shall be governed by
the laws of the Commonwealth of Virginia.
14. Any and all disputes hereunder shall be resolved by arbitration in the
Washington, D.C. metropolitan area pursuant to the arbitration rules of
the International Chamber of Commerce. The parties hereby agree that
any arbitration findings hereunder may be enforced in any U.S. Federal
Court in Washington D.C. or Virginia and the parties hereby consent to
the jurisdiction of such courts for such purpose.
SPACEHAB, INC. RSC-ENERGIA
By: By:
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Typed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Typed Name:
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Title Contracts Administrator Title:
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Date: Date:
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