Exhibit 10.13
IRIDIUM SERVICE PROVIDER AGREEMENT
EXHIBIT E:
ADDITIONAL TERMS AND CONDITIONS
Exhibit E
Additional Terms and Conditions
The following terms and conditions are made part of the Iridium Service
Provider Agreement between INA and SkySite Communications Corporation to which
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it is appended. When this Exhibit is signed by both parties, the terms hereof
shall supersede and control over any provisions of the Iridium Service Provider
Agreement that are inconsistent herewith.
A. Ethical Responsibilities of the Parties: INA and SkySite shall each
refrain from doing anything that would tend to discredit, dishonor,
reflect adversely upon, or in any manner injure the reputation of
the other or adversely affect the other, except that a party's
enforcement of its rights and performance of its duties and
obligation contained in this Agreement shall not be deemed a
violation of the provisions of this paragraph. Each party shall be
governed in all its dealings under this Agreement by the highest
standards of honesty, integrity and fair dealing. Each party shall
comply with all applicable federal, state and local laws ordinances
and regulations in performing its duties and obligations contained
in this Agreement.
B. Notwithstanding the provisions of Section 7, the initial term hereof
will continue for a period of three (3) years after execution of
this Agreement.
C. This Agreement may be cancelled by SkySite Communications
Corporation, without further obligation except for those obligations
which are outlined in Article 16.B1, either (a) without cause, by
providing written notice to INA, on or before February 1, 1998; or
(b) if the Commencement Date does not occur before November 23,
1998.
IRIDIUM U.S., L.P. SERVICE PROVIDER
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By: By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Signature: Signature:
Director, Gateway Business Operations President and CFO
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Title: Title:
ADDENDUM TWO
SATELLITE MINUTES COMMITMENT PLAN ADDENDUM
This Satellite Minutes Commitment Plan (the "Plan") is dated as of
10 August, 1998 and is by and between Iridium U.S., L.P., d/b/a Iridium North
America ("INA") and Project 77, Inc. ("Service Provider").
RECITALS
Whereas INA and Service Provider have entered into a service provider
agreement, dated November, 1997 (the "Service Provider Agreement") to provide
Iridium satellite services and the parties now desire to modify the pricing
structure set forth therein;
Whereas, Service Provider desires to obtain favorable pricing rates
based upon outbound minutes of domestic and international Iridium homed
satellite use purchased and paid for by Service Provider ("Satellite Minutes")
specifically excluding any promotional or other free minutes of use and INA
desires to obtain a firm commitment from Service Provider for its Satellite
Outbound Minutes over a fifteenth month period; and
Whereas, INA and Service Provider desire to enter in to its Plan upon
the terms and conditions set forth herein.
AGREEMENT
Not, therefore, in consideration of the mutual agreements and
understandings herein contained, the parties hereto agree as follows:
1. COMMITMENT PLAN. INA is offering a volume pricing plan based upon
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Service Provider's level of commitment. The purpose of this Plan is to
grant favorable pricing to Service Provider for cultivating additional
Satellite Minutes through increased sales and Iridium subscribers. In
addition, this Plan is designed to hold Service Provider accountable to
its commitment and discouraging Service Provider from making unrealistic
or impractical commitments, thereby gaining a market pricing advantage
relative to other service providers.
2. COMMITMENT. During the term of this Plan, Service Provider hereby agrees
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to commit to the (Initial One of the following):
_____ Entry Level Program and a minimum gross revenue of $500,000.00.
_____ Second Level Program and a minimum of 1,000,000 Satellite Minutes.
_PAK_ Third Level Program and a minimum of 3,000,000 Satellite Minutes.
Service Provider shall be entitled to the pricing and rebate structure and
obligated to the assessment set forth below associated with the program selected
above.
Entry Level Program.
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Pricing. Service Provider shall be charged the standard rates for
Satellite Minutes (the "Standard Rate") which are contained in Exhibit B to the
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Service Provider Agreement.
Commitment. Service Provider shall guaranty INA minimum gross revenue
from Satellite Minutes equal to $500,000.00 during the term of this Plan.
Assessment. If Service Provider fails to purchase at least $500,000.00
of Satellite Minutes, Service Provider shall pay to INA the difference between
the gross revenue received from Service Provider for Satellite Minutes and
$500,000.00 thirty days after the end of the term of this Plan.
Termination. If Service Provider fails to purchase at least
$500,000.00 of Satellite Minutes, INA shall have the option of terminating the
Service Provider Agreement, in its sole and absolute discretion.
Secondary Level Program.
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Pricing. Service Provider shall be charged the Standard Rate for
Satellite Minutes less a five percent (5%) discount. Once Service Provider
reaches the first place breakpoint by purchasing 2,000,000 Satellite Minutes
during the term of this Plan, INA shall increase the applicable discount off of
the Standard Rate to seven percent (7%) for Satellite Minutes purchased
thereafter. Once Service Provider reaches the second price breakpoint by
purchasing 3,000,000 Satellite Minutes during the term of this Plan, INA shall
increase the applicable discount off of the Standard Rate to ten percent (10%)
for Satellite Minutes purchased thereafter.
Commitment. Service Provider agrees to purchase a minimum of 1,000,000
Satellite Minutes during the term of this Plan.
Rebates. If Service Provider reaches the first price breakpoint by
purchasing 2,000,000 Satellite Minutes during the term of this Plan, INA shall
credit Service Provider with a rebate. The rebate shall be calculated by taking
two percent (2%) of Service Provider's Blended Rate (defined below) and
multiplying the product thereof by one million (1,000,000). If Service Provider
purchases 3,000,000 Satellite Minutes during the term of this Plan, INA shall
credit Service Provider with a second rebate. The second rebate shall be
calculated by taking three percent (3%) of Service Provider's Blended Rate and
multiplying the product thereof by one million (1,000,000).
Assessment. If Service Provider's Satellite Minutes are less than
1,000,000 at the end of term of this Plan, Service Provider shall pay INA an
assessment for each unused Satellite Minute within thirty days from the end of
this Plan. The assessment shall be equal to the difference between 1,000,000 and
Service Provider's Satellite Minutes multiplied by $1.00. For example, assume
a Service Provider's Satellite Minutes are 800,000 at the end of this Plan. In
this case the difference between the Service Provider's Satellite Minutes and
its commitment to is 200,000. Therefore, the Service Provider's assessment will
be equal to $200,000.00 ([1,000,000 - 800,000] * $1.00).
Third Level Program
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Pricing. Service Provider shall be charged the Standard Rates for
Satellite Minutes less a ten percent (10%) discount. Once Service Provider
reaches the first price breakpoint by purchasing 4,000,000 Satellite Minutes
during the term of this Plan, INA shall increase the applicable discount off of
the Standard Rate to twelve percent (12%) for Satellite Minutes purchased
thereafter. Once Service Provider reaches the second price breakpoint by
purchasing 5,000,000 Satellite Minutes during the term of this Plan, INA shall
increase the applicable discount off of the Standard Rate to fifteen (15%) for
Satellite Minutes purchased thereafter.
Commitment. Service Provider agrees to purchase a minimum of 3,000,000
Satellite Minutes during the term of this Plan.
Rebate. If Service Provider reaches the first price breakpoint by
purchasing 4,000,000 Satellite Minutes during the term of this Plan, INA shall
credit to Service Provider a rebate. The rebate shall be calculated by taking
two percent (2%) of Service Provider's Blended Rate (defined below) and
multiplying the product thereof by one million (1,000,000). If Service Provider
reaches the second price breakpoint by purchasing 5,000,000 Satellite Minutes
during the term of this Plan, INA shall credit to Service Provider a second
rebate. The second rebate shall be calculated by taking three percent (3%) of
Service Provider's Blended Rate and multiplying the product thereof by one
million (1,000,000).
Assessment. If Service Provider's Satellite Minutes are less than
3,000,000 at the end of the term of this Plan, Service Provider shall pay INA an
assessment for each unused Satellite Minute thirty days from the end of this
Plan. The assessment shall be equal to the difference between 3,000,000 and
Service Provider's Satellite Minutes multiplied by $1.00.
3. EVALUATION. INA shall evaluate Service Provider's performance six
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months from the Commencement Date and thereafter on a quarterly basis.
If, in INA's sole and absolute discretion, INA determines that Service
Provider will not be able to meet its commitment obligations contained
herein, INA reserves the right to reduce or eliminate the pricing
discount granted to Service Provider to recover the assessment described
above. INA's decision not to modify the discount applied shall not
effect Service Provider's commitment or the assessment due for failure
to meet its commitment.
4. REBATE CALCULATION. Service Provider's Blended Rate shall be equal to
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the weighted average of the Standard Rate for Satellite Minutes during
the applicable period. The "applicable period" shall mean the period
between the billing cycle immediately following Service Provider's
Satellite Minutes exceeding the prior price breakpoint and the billing
cycle immediately following Service Provider's Satellite Minutes
exceeding the current price breakpoint. Service Provider shall, within
thirty (30) days of a written request therefor, reimburse INA for full
amount of any rebate credited hereunder which should not have been
credited to Service Provider as the result of any re-calculation, for
any reason, of the total amount of Service Provider's Satellite Minutes:
INA shall apply a rebate or reimbursement of a rebate to Service
Provider's invoice for the billing cycle following of the close of the
billing cycle in which the commitment is exceeded or the recalculation
is made.
5. TERM. This Plan shall be effective for fifteen (15) months from the
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Commencement Date or December 31, 1999 whichever is later. If the
Service Provider Agreement is
terminated prior to such date, this Plan shall terminate and Service
Provider shall pay to INA the assessment calculated above using Service
Provider's actual performance through the billing cycle
immediately following the termination date and a minimum forecast
analysis prepared by INA, in its sole and absolute discretion, for such
time period. The assessment shall be paid thirty (30) days after the end
of the billing cycle following the termination date.
6. REVISIONS. Upon thirty days written notice to Service Provider, INA
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reserves the right to revise the terms of this Plan in its sole and
absolute discretion depending on market conditions during the term of
this Plan. If there is a cumulative pricing increase of five percent
(5%) or more during any six month period, Service Provider shall have
the option to revise its commitment election; provided, however, Service
Provider shall not be entitled to revise its election if it could not
reasonably expect to meet its commitment had the pricing increase not
occurred.
7. AMENDMENT. Unless otherwise modified herein, the terms and conditions
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set forth in the Service Provider Agreement shall remain in full force
and effect. All capitalized terms not defined herein shall have the
meaning assigned in the Service Provider Agreement.
Dated effective as of the date first written above.
Iridium U.S., L.P. Project 77, Inc.
By: /s/ ▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Title: President Title: President
AMENDMENT TO ADDENDUM TWO
SATELLITE MINUTES COMMITMENT PLAN ADDENDUM
The following terms and conditions are made a part of Addendum Two to
the Iridium Service Provider Agreement between INA and Service Provider, to
which is appended. When this Amendment is signed by both parties, the terms
hereof shall supersede and control over any provisions of Addendum Two that are
inconsistent herewith.
A. Section 3, EVALUATION, Section 3 is deleted in its entirety and replaced
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with the following:
"3. EVALUATION. INA shall evaluate Service Provider's performance six months
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from the Commencement Date and thereafter on a quarterly basis. The initial six
month's performance review will be undertaken for all service providers as a
group, and if a substantial majority of service providers have been unable to
meet their program commitment levels, INA, at its sole and absolute discretion,
may make reasonable and non-discriminatory adjustments to the rates and
commitment levels applicable to service providers, including Service Provider. A
decision by INA not to modify the Program Level applied shall leave in effect
Service Provider's commitment and the assessment due to failure to meet its
commitment.
If during the initial six month's performance review, in INA's sole and absolute
discretion INA determines that a general adjustment of rates and commitment
levels is unnecessary but that Service Provider has not reached 300,000
Satellite Minutes, INA shall adjust Service Provider's commitment to a lower
level Program hereunder. INA shall have sole and absolute discretion as to which
lower level Program hereunder Service Provider's commitment will be adjusted. In
the case of such Program adjustment, Service Provider shall reimburse, as set
forth in Section 4 below, INA five percent (5%) of all Service Provider's actual
charges incurred under this Agreement as of the date of such Program adjustment
("Recapture of Discount")."
B. Section 4, REBATE CALCULATION. Section 4 is amended to add the following:
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"The process provided herein shall apply to Rental Service Provider's payment of
the Recapture of Discount calculated pursuant to section 3."
Unless otherwise modified herein, all other terms and conditions contained in
Addendum Two to the Iridium Service Provider Agreement shall have full force
and effect.
Dated August 18, 1998
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Iridium U.S., L.P. Project 77, Inc.
By: /s/ ▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Title: President Title: President
