Local Civil Rule 54.2 based on the Court's view that plaintiffs
had failed to litigate this case in a manner consistent with
having a meritorious claim. Because I conclude that plaintiffs'
complaint should be dismissed, the issue of a security bond
pursuant to Local Civil Rule 54.2 is moot and I do not reach it.
A. The Facts
The basic facts underlying this dispute were discussed in the
Court's prior decision on plaintiffs' motion for a preliminary
injunction. See Space Imaging Europe, Ltd. v. Space Imaging
L.P., No. 98 Civ. 2291, 1998 WL 190356, at *1 (S.D.N.Y. Apr. 21,
1998) ("Space Imaging I"). Additional facts have come to light
during discovery. Construed in the light most favorable to
plaintiffs, the facts are as follows:
1. The Parties and Summary of Events
Defendants are in the business of developing and marketing high
resolution geographic images from satellites. In the spring of
1997, defendants began searching for parties with whom they could
contract for the right to market and operate their IKONOS
satellite abroad. (See Barton MSJ Aff. ¶ 5). The contracts that
defendants hoped to enter into — a Regional Affiliate Agreement
("RAA") and a Regional Operations Center Purchase Agreement
("ROCPA") — would give a contracting party the exclusive right to
market and transmit IKONOS satellite images within a certain
Plaintiffs are shell corporations that are owned and/or managed
by Emmanual Ducas. At some point during the spring of 1997,
defendants began negotiating with Ducas for the exclusive right
to be a Regional Affiliate for a certain territory that included
parts of Europe, the Middle East, and North Africa (the
Initially, defendants communicated with Ducas through a
consultant named Jon Monett. (Mueller Aff. ¶ 2). In June 1997,
however, Monett introduced Ducas to John Copple, defendants'
chief executive officer, and Conrad Mueller, defendants' vice
president for international communications. (Barton MSJ Aff. ¶
6). Shortly after being introduced to Copple and Mueller, Ducas
requested that defendants enter into a Letter of Intent ("LOI")
as to the parties' negotiations with him. (Id. ¶ 7; Mueller
Dec. ¶ 4).
2. The LOI
The parties signed a three-page LOI that was dated September
22, 1997 on September 25, 1997. The letter was printed on
defendants' letterhead and was addressed to Ducas. Ducas signed
on behalf of "an entity to be named later," and Copple signed on
behalf of defendants.
The LOI contains three introductory paragraphs, each containing
cautionary language as to the purpose of the LOI. These
paragraphs read as follows:
Space Imaging is pleased to document the basis upon
which we intend to negotiate to reach an agreement
with you (or an entity that you control) in regard to
the execution of a Regional Affiliate Agreement
("RAA") and the construction, management and
operation of a Regional Operations Center ("ROC")
located in Greece or any location that you designate
within the geographic area set forth on Exhibit A
hereto (the "Territory"). This ROC will allow you to
. . . market and sell minutes of imaging sensor . .
. time and images transmitted from Space Imaging's
IKONOS satellite . . . to be launched late in 1997,
or that will be transmitted by any satellite launched
by Space Imaging or its successors for up to ten (10)
years after the effective date of the RAA. This
letter is not a binding agreement. It is written to
memorialize our discussions thus far and to serve as
a basis to go forward.
The offer described herein is subject to successful
conclusion of negotiations by December 31, 1997.
Successful conclusion means the signing of a RAA and
ROCPA. Space Imaging will grant you 60 days from the
signing [of both agreements] to make any initial
payment required under the RAA or ROCPA.
The key points of a future series of agreements,
the first of which being the RAA, is to be executed
no later than December 31, 1997, are as follows:
(Copple Dec. Ex. A (emphasis added)).