ORBCOMM (ORBC), SpaceX Enter Launch Agreement for 18 2G Commercial Satellites

December 27, 2012 9:24 AM EST
On December 21, 2012, ORBCOMM Inc. (Nasdaq: ORBC) and Space Exploration Technologies Corp. (SpaceX) entered into a Launch Services Agreement pursuant to which SpaceX will provide launch services for the carriage into low-Earth-orbit of up to 18 ORBCOMM second-generation commercial communications satellites currently being constructed by Sierra Nevada Corporation.

Under the Falcon 9 Agreement, SpaceX will also provide to ORBCOMM satellite-to-launch vehicle integration and launch support services, as well as certain related optional services.

The total price under the Falcon 9 Agreement (excluding any optional services) is $42.6 million, subject to certain adjustments, which reflects pricing agreed under the 2009 agreement for launch services. The amounts due under the Falcon 9 Agreement are payable by ORBCOMM in installments from the date of execution of the Falcon 9 Agreement through the performance of each Launch Service.

The Falcon 9 Agreement anticipates that the Launch Services for 18 Satellites will be performed between the second quarter of 2013 and the second quarter of 2014, subject to certain rights of ORBCOMM and SpaceX to reschedule the Launch Services as needed. Either ORBCOMM or SpaceX may postpone and reschedule either Launch Service based on satellite and launch vehicle readiness, among other factors, subject to the payment of certain fees by the party requesting or causing the delay following 6 months of delay with respect to either of the two Launch Services.

Both ORBCOMM and SpaceX have customary termination rights under the Falcon 9 Agreement, including for material breaches and aggregate delays beyond 365 days by the other party. ORBCOMM also has the right to terminate either of the Launch Services subject to the payment of a termination fee in an amount that would be based on the date ORBCOMM exercises its termination right.

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