Exhibit 10.5

	
	I ORIGINAL I ~ J
..1-
ESA Contract No. 4000127860/19/UK/ND
with
Arqit Limited (GB)
Project QKD SAT
Phase B/C/D/E
!AR.TES Partner, Sub-element 11- Activity Reference 17.3T1.12[ 





	
	CONTRACT
Between:
THE EUROPEAN SPACE AGENCY,
(hereinafter called "the Agency" or "ESA"),
located at: 24 rue du General Bertrand,
CS30798,
75345 Paris CEDEX 7
France,
ESA Contract No. 4000127860/19/UK/ND
Page 1
represented by Mr Johann-Dietrich Worner, its Director General,
through its centre
The European Centre for Space Applications and Telecommunications (ECSAT)
located at: Fermi Avenue
and:
Harwell Campus
Didcot
Oxfordshire OX11 oFD
United Kingdom
ARQIT LIMITED (GB) (hereinafter called "the Contractor"),
whose Registered Office is at:
ArQit Limited
3 More London Riverside,
London SE1 2RE,
United Kingdom
represented by Mr David Williams, its Chairman,
the following has been agreed:
of the one part,
of the other part, 





	
	Preamble:
Whereas:
ESA Contract No. 4000127860/19/UK/ ND
Page 2
ESA has created a dedicated ARTES Programme element (ARTES Partner), Sub­
element 11) with the key objective to validate key QKD technologies as well as
service delivery through a pre-operational deployment in view of a full global
commercial deployment of multiple satellites in the near future and the installation
of further Ground Optical Communications Terminals to support the projected
market needs.
- "QKD SAT" is one of the projects under the new ARTES Partner Element and
established under Sub-element 11 thereof;
- "QKD SAT'' aims to:
 • De-risk and optimise the innovative QKD Space and Ground technologies, for
cost, perf ormance, quality and security level of the services delivered globally.
 • Gain an early mover advantage by successfully implementing and deploying a
space centric QKD infrastructure and delivering QKD services offered
through optimised service delivery models and mechanisms.
 • Validate the service proposition and secure market acceptance, by deploying
pre-operational QKD services direct to users and quantum networked
customers.
 • Improve commercial adoption and catalyse future opportunities for a
European micro satellite platform through product optimisation,
qualification and deployment in QKD mission.
The Parties have now agreed to execute the work at the specific conditions set forth hereafter: 





	
	Contents
ESA Contract No. 4000127860/ 19/UK/ ND
Page3
ARTICLE 1 - SUBJECT OF THE CONTRACT - APPLICABLE DOCUMENTS ...................... 4
1.1 Subject of the Contract ....................................................................................................... 4
1.2 Applicable Documents ........................................................................................................ 6
ARTICLE 2 - DELlVERY AND REVIEWS ................................................................................. 8
2.1 Place and Dates of Delivery ................................................................................................ 8
ARTICLE 3 - PRICE & PAYMENT .............................................................................................. 9
3.1 Price ...................................................................................................................................... 9
3.2 Payment ............................................................................................................................. 1 O
ARTICLE 4 - ITEMS PRODUCED OR PURCHASED UNDER THE CONTRACT ............... 14
ARTICLE 5 - COMPLEMENTS AND AMENDMENTS TO THE GCC ................................... 15
CLAUSE 2: APPROVAL AND ENTRY INTO FORCE ............................................................. 15
CLAUSE 5: THE PARTIES' REPRESENTATIVES .................................................................. 15
CLAUSE 6: PUBLICITY RELATING TO CONTRACTS .......................................................... 16
CLAUSE 8: GENERAL CONDITIONS OF EXECUTION: ...................................................... 17
CLAUSE 9: KEY PERSONNEL ................................................................................................. 17
CLAUSE 10: SUB-CONTRACTS ............................................................................................... 17
CLAUSE 11: CUSTOMER FURNISHED ITEMS (CFI) ........................................................... 18
CLAUSE 12: ITEMS MADE AVAILABLE BY THE AGENCY ................................................. 18
CLAUSE 13: CHANGES ............................................................................................................. 18
CLAUSE 14: TIME-LIMITS FOR THE PROVISION OF DELlVERABLES AND SERVICES
18
CLAUSE 15: HANDLING, PACKING AND TRANSPORT, TRANSFER OF OWNERSHIP
AND RISK ................................................................................................................................... 18
CLAUSE 17: PENALTIES ........................................................................................................... 20
CLAUSE 18: DAMAGE TO STAFF AND GOODS .................................................................... 20
CLAUSE 20: LIABILITY AFfER ACCEPTANCE .................................................................... 20
CLAUSE 27: PRICING ............................................................................................................... 20
CLAUSES 30, 31, 32, 33: TERMINATION ............................................................................... 21
CLAUSE 34: APPLICABLE LAW .............................................................................................. 22
CLAUSE 35: DISPUTE RESOLUTION .................................................................................... 22
CLAUSE 50: GENERAL ............................................................................................................. 22
CLAUSE 51: INFORMATION TO BE PROVIDED .................................................................. 22
CLAUSE 52: DISCLOSURE ....................................................................................................... 22
CLAUSE 53: OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS .............................. 23
CLAUSE 55: USE OF INTELLECTUAL PROPERTY RIGHTS ............................................... 23
CLAUSE 57: BACKGROUND INTELLECTUAL PROPERTY RIGHTS ................................. 23
CLAUSE 61: RE-SUPPLY .......................................................................................................... 23
ARTICLE 6-QKD SAT STEERING BOARD ............................................................................ 24
ANNEX 1 : PERSONAL DATA PROCESSING .................................................................... 26
APPENDIX 1 : PAYMENT PLAN AND ADVANCE PAYMENT(S) AND OTHER
FINANCIAL CONDITIONS FOR PHASE 1 ........................................................................ 32
APPENDIX 2: STATEMENT OF WORK ............................................................................. 33
APPENDIX 3: MANAGEMENT REQUIREMENTS ....................................................... 34
APPENDIX 4 : MISSION REQUIREMENTS ..................................................................... 35
APPENDIX 5 : SYSTEM ASSURANCE REQUIREMENTS ........................................... 36
APPENDIX 6: CONTRACT CHANGE NOTICE ................................................................ 37
APPENDIX 7: OPTION TO PHASE 1 ................................................................................... 39 





	
	ESA Contract No. 4000127860/19/lJK/ ND
Page4
ARTICLE 1 - SUBJECT OF THE CONTRACT - APPLICABLE DOCUMENTS
1.1 Subject of the Contract
The Contractor, as further described in the Statement of Work in Appendix 2 [so-called here­
after "SOW"], shall carry out all work necessary to perform all the activities related to the
design, development, manufacturing, assembly, integration, verification, obtaining of
licenses, launch of the QKDSat into a LEO orbit, deployment and pilot operations of the
QKDSat system and to deliver the documentation as described herein.
1.1.1 The work shall be performed in 2 Phases, so-called Phase 1 "Preliminary Design"
and Phase 2 "Detailed Design and Implementation" (hereafter "Phase" or "Phases")
as defined in Appendix 2 hereto.
 • Phase 1 shall cover all the activities up to and including successful Segments
Preliminary Design Reviews ["Seg-PDR"] according to the "SOW'' including
payload, user, control and service;
 • Phase 2 shall cover all remaining activities up to end of the service
deployment and validation along the follo·wing steps recalled below and
described in the "SOW":
- System Detailed Definition;
- Manufacturing, Integration and Verification Testing Acceptance;
- Deployment and Commissioning;
- Service -Development and Validation.
Until Parties agree to proceed with Phase 2, in accordance with Section 1.1.2, the
Parties' commitments and financial liabilities are limited to Phase 1 only.
A decision not to continue further with the work at the end of Phase 1 does not lead
to the application of Clause 31 of the GCC.
1.1.2 a) The decision process whether to proceed or not with Phase 2 shall be initiated
immediately after successful System Preliminary Design Review [so-called
here-after "S-PDR"] and at the latest at successful Payload Preliminary Design
Review [so-called here-after "PL_PDR"];
b) Phase 2 shall proceed subject to the fulfilment of the following conditions:
i) successful "S-PDR";
ii) availability of the Agency's funding for completion of financial coverage
of Phase 2 activities;
iii) demonstration of availability of the Contractor's funding for the
completion of Phase 2 activities;
iv) successful achievement of the technical criteria according to Section 4.5
of the "SOW" ;
v) acceptance by the Agency according to the criteria as defined in Annex
A to Appendix 3 of ESA RFQ/3-15929/19/UK/ND, of the Contractor's 





	
	ESA Contract No. 4000127860/ 19/ UK/ND
Pages
Proposal relevant to the conversion of the Ceiling Price into a Firm Fixed
Price for Phase 2.
c) If any of the above conditions would not be fulfilled at the time of the decision
to proceed with Phase 2, the matter shall be brought to the QSB Steering Board
in order to be addressed in good faith by both Parties according to the
procedure as explained in Article 6 of the present contract.
In case criteria 1.1.2 b) ii) is not achieved, Phase 2 can still be authorised to
proceed in case the Contractor has demonstrated availability of funds to fulfil
such criteria 1.1.2 b) ii).
d) The Contractor shall start Phase 2 only upon receipt of written notification
from the Agency's representatives nominated in Article 5, Clause 5, Sub­
Clause 5.1, of the relevant authorisation to proceed with Phase 2. Such
notification shall be given as soon as possible hut in any event within three (3)
weeks of the fulfilment of all above listed conditions.
1.1.3 The Contractor shall commit to launch on-board a reliable Launcher in order to
guarantee that the Agency programme objectives are preserved to the maximum
possible extent.
The launcher system configuration envisaged for the launch of the ESA PPP mission
shall have been flown successfully at least two times consecutively from the
associated launch complex.
In cases where the baseline launch system would not fulfil the above criteria, the
latter may be considered as fulfilled if a reliable launch service back-up is
guaranteed.
Should a launch failure occur after selection of the launch service provider, ESA and
the Contractor shall meet and jointly re-assess the reliability of the selected launch
system.
Prior to initiating the launch service procurement process, the Contractor shall
verify that each of the potential launch services identified at the time of mission
proposal still complies with the ESA launch service selection criteria for ESA PPP
missions.
Procurement of the launch service shall be performed by the Contractor in
accordance with its own modalities and in compliance with the following:
- The procurement is performed among the identified launch services fulfilling
the ESA launch service selection criteria and identification, including
Arianespace;
- The launch service procurement modalities shall provide clarity on launch
services ancillary conditions such as insurance, remedies for delays, additional
services to ensure comparability of launch services offers;
- Reliability of the launch system and background and experience of the launch
service provider shall be key criteria in the selection by the Operator.
At least 2 months, before concluding the launch service contract, the Contractor
shall discuss with ESA the result of its evaluation and provide necessary visibility
on the launch service offers it has received and evaluated. 





	
	1.1.4 Re-Launch
ESA Contract No. 4000127860/19/UK/ND
Page 6
For the purpose of this Article 1.1-4, loss of the QKDSat satellite is defined as a total
loss or a constructive total loss that can be insured on the insurance market.
In case of loss of the QKDSat satellite ArQit undertakes to build and launch a
satellite similar to the QKDSat satellite (the "Replacement satellite") so that the
objectives of the Agency, i.e. to support QKD communications between ground and
satellite as well as provide a managed service for the delivery of Quantum Keys can
be fulfilled.
The minimum level of insurance placed by ArQit shall be equal to the cost for the
recurrent elements plus the launch of the replacement satellite.
The Agency shall have no obligation to provide funding of the Replacement satellite.
1.1.5 For a period of 3 years starting from Commissioning, the Contractor will make the
QKDSat system available to ESA and its non-commercial partners for
experimentations related to the topic of Quantum Key Distribution and Optical
Communications research on a basis of non-disturbance to commercial services
provided by the Contractor with the QKDSat system. Beyond the 3 years period the
terms and conditions to access the unused capacity are subject to agreement
between the Agency and the Contractor.
1.2 Applicable Documents
The work shall be performed in accordance with the following documents, listed in order of
precedence, in case of conflict:
a) The Articles and Annexes of this Contract and its Appendix 1 (Payment Plan and
Advance Payment(s) and other Financial Conditions) & its Deliverable Items List as
described in the Minutes of the negotiation meeting, reference QKDS-ESA-MOM-
0018, not attached hereto but known to both Parties;
b) The General Clauses and Conditions for ESA Contracts (herein referred to as GCC),
reference ESA/REG/002, rev. 2 not attached hereto but known to both Parties and
available on htt_p: // emits.sso.esa.int/ emits/ owa/ emits.main) "reference
documentation" - "administrative documents", as amended by this Contract;
c) Appendix 2 hereto: The Statement of Work, reference QKDS-ESA-SOW-0004, Issue
1, Revision 1, dated 26-06-2019;
d) Appendix 3 hereto: The Management Requirements ref. QKDS-ESA-SP-0005, Issue
1 , Revision o, dated 12-02-2019 and its Annex A: Layout for Contract Closure
Documentation;
e) Appendix 4 hereto: The Mission Requirements ref. QKDSat.MRD.00059.ARQ -
Mission Requirements, version 1.3, dated 27/06/2019;
f) Appendix s hereto: System Assurance Requirements ref. QKDSAT.REQ.00119
ARQ_PartI, Issue 1.1, dated Avril 2019;
g) Appendix 7: Option to Phase 1 So-Called "Programmatic Headstart Phase C") 





	
	ESA Contract No. 4000127860/19/UK/ND
Page7
h) The Minutes of the negotiation meeting, reference QKDS-ESA-MOM-0018, not
attached hereto but known to both Parties;
The documents listed in Article 1.2 lit a) through g) shall form the Contractual Baseline.
Any change to the Contractual baseline shall require the signature of a Contract Change
Notice.
A document generated or to be generated by the Contractor in the course of the contract
execution shall only form part of the Contractual baseline after approval by the Agency. 





	
	ARTICLE 2 - DELIVERY AND REVIEWS
2.1 Place and Dates of Delivery
2.1.1 Documents
ESA Contract No. 4000127860/19/UK/ND
P age8
The Contractor shall, during the performance of this Contract, deliver all documentation and
reports specified in Appendix 2 (SOW) complemented by the Minutes of the Negotiation
Meeting as referred to in Article 1.2, in the required number of paper copies and in an
electronic file. These shall be sent to the Agency's Technical Officer mentioned in Article 5,
Clauses, Sub-Clause 5.1 a) of the Contract.
2.1.1.1 The Contractor shall also deliver a Proposal for conversion of the Ceiling Price to
the Firm Fixed Price for Phase 2 four (4) weeks prior to the decision whether to
proceed or not with Phase 2.
The Contractor shall include in its Proposal the status of the risk financial reserve
for Phase 1 and its recommended handling for Phase 2.
2.1.2 Hardware and Software
Except for the promotional items (e.g. satellite models) as described in the SOW,
the hardware and software specified in Minutes of the Negotiation Meeting as
referred to in Article 1.2 shall not be a deliverable to ESA except in the case defined
in Article 5 Clause 15.
2.1.3 Launch
The Contractor undertakes to have the QKDSAT satellite launched not later than the end of
March 2023.
2.1.4 Mission Validation and Operations
The Contractor undertakes to start the Mission Validation and Operations not later than
three months after the launch date as stated in 2.1.3.
2.1.5 Contract Closure Documentation
The Contract Closure Documentation (Appendix 4, Annex A) shall be delivered in one (1) set
of documentation each, to the Agency's authorised representatives not later than the time of
submitting the invoice(s) for the Final Settlement (see also Article 3.2.2).
/EsA\ 01
~ pf
i)vJ 





	
	ARTICLE 3 - PRICE & PAYMENf
3.1 Price
The price of this Contract amounts to:
30,800,000 EUR
ESA Contract No. 4000127860/ 19/UK/ND
Page9
(Thirty Million eight hundred thousand EURO),
The price is broken down in Euros per Phase and Contractor and Subcontractor as follows:
Company ESA Entity Type Country Phase 1 Option Phase 2 Total
Name Code P/Prime (ISO (FFP) Phase 1 (Ceiling per
(at contract SI/Subco Code) (FFP) Price) company
signature) Indirect
ArQit 1000028414 p GB 948,085 108,727 7,454,755 8,511,567
Limited
QinetiQ 1000001370 SI BE 930,535 275,379 10,890,760 12,096,674
Space
N.V.
Teledyne 1000000105 SI GB 526,319 0 2,174,744 2,701,063
e2V
Cognizant 1000031492 SI GB 325,910 0 0 325,910
QT Labs 1000027242 SI AU 1,136,438 17,599 4,594,507 5,748,544
BT 1000004726 SI GB 90,470 0 313,876 404,346
ESC 1000025564 SI CZ 469,623 0 542,273 1,011,896
Aerospace
Total 4,427,380 401,705 25,970,915 30,800,000
The price of this Contract is based on a total cost of 93,991,617 EUR (ninety three million
nine hundred ninety one thousand six hundred seventeen euros), as follows:
 • The price of Phase 1 is based on a total cost of 8,854,760 EUR (eight million eight
hundred fifty four thousand seven hundred sixty euros);
 • The price of the Option Phase 1 (so-called "Programmatic Headstart Phase C") is
837,370 EUR (eight hundred thirty seven thousand three hundred seventy euros);
 • The price of Phase 2 is based on a total cost of 84,299,487 EUR (eighty four million
two hundred ninety nine thousand four hundred eighty seven euros);
Any change in the total cost shall not change the ESA price.
3. l.1 A risk financial reserve for Phase 1 activities amounting to 364,740 EUR (three
hundred sixty four thousand seven hundred forty euros) based on a total cost of
646,720 EURO is included in Phase 1 total cost and broken down as described in
the Minutes of the negotiation meeting referred to in Article 1.2 above.
The implementation of this reserve for activities shall be released after submission
by the Contractor of a CCN to the Agency and disposed in a co-chaired Change
Review Board [so-called "CRB"]. 





	
	ESA Contract No. 4000127860/19/UK/ND
Page 10
While the price for Phase 1 shall remain unchanged, any unspent amount of the
reserve will be transferred to Phase 2.
Should Phase 2 not be released, the unspent ESA share of the risk financial reserve
will be refunded to the Agency.
3.1.2 Option phase 1 is described in Appendix 7 of the present Contract, and shall be
activated pending availability of the Contractor funding via the CCN procedure.
3.1.3 The type of price is the following:
For Phase 1: A Firm Fixed Price as defined in Section 2.1 of Annex II to the GCC.
For Option Phase 1: A Firm Fixed Price as defined in Section 2.1 of Annex II to the
GCC.
For Phase 2: A Ceiling Price to be converted into a Firm Fixed Price as defined in
Section 3 of Annex II to the GCC. This conversion shall be made before completion
of the preceding Phase 1 and after submission, by the Contractor, of a Proposal to
this effect, including the ESA form PSS-A2, PSS-AS, and Ats. This Ceiling Price shall
be deemed to include the price escalation for the period in which the work is
scheduled to be performed.
3.1.4 The above amount does not include any taxes or duties in the Member States of the
Agency.
3.1.5 The price is deemed to include all applicable fees for licences to be purchased and
delivered in the frame of the Contract, indicating the Agency as the end user. The
price is further deemed to include any and all licence fees payable according to
Clause 57. 7 of the GCC.
3.1.6 The price is Delivered Duty Paid for all deliverables, exclusive of import duties and
VAT in accordance with the INCOTERMS® 2010, to the addressee(s) specified in
Article 5, Clause 5, Sub-Clause 5.1 a) of the Contract. Reference to INCOTERMS®
in this provision is exclusively for the purpose of price definition.
3.2 Payment
3.2.1 General provisions
The Payment Plan and advance payment off-setting conditions applicable to this Contract
are specified in Appendix 1 hereto.
The advance payment constitutes a debt of the Contractor to the Agency until it has been set­
off against subsequent milestone(s) as shown in Appendix 1 hereto.
In the event that the achievement of a milestone is delayed but the milestone is partially met
at the milestone planning date foreseen, the Agency may as an exception, effect a payment
against an approved confirmation of the partially achieved milestone, not exceeding the
value of the work performed at the date of payment.
When releasing the payment for a given milestone, if applicable, the Agency's payment shall
be made after due deduction of the corresponding off-set of the advance payment(s) as per
conditions of Appendix 1 to the contract (Payment plan and advance payment(s) and other
financial conditions). 





	
	ESA Contract No. 4000127860/19/UK/ND
Page 11
In case of partial payment, the Agency shall deduct from the corresponding invoice(s)
relative to the same milestone any outstanding amount of the advance payment(s) still to be
off-set.
Payments shall be made within thirty (30) calendar days of receipt at ESA-ESTEC Finance,
Central Invoice Registration Office of the documents listed and fulfilment of the
requirements as specified in 3.2.2 below1. Only upon fulfilment of these requirements shall
the invoice be regarded as due by the Agency.
Payments shall be made by the Agency in EURO to the account specified by the Contractor.
Such account information shall clearly indicate the IBAN (International Bank Account
Number) and BIC/SWIFT (Bank Identification Code). The Parties agree that payments shall
be considered as effected by the Agency on time if the Agency's orders of payment reach the
Agency's bank within the payment period stipulated in the paragraph above.
Any special charges related to the execution of payments will be borne by the Contractor.
Any questions concerning the latest status of due invoices can be addressed to the ESA
Payment Officer (mail to: esa.payment.officer@esa.int).
If applicable, invoices shall separately show all due taxes or duties.
In the case of invoices submitted by the Contractor which are free of VAT, reference shall be
made to the number indicated on the VAT Exemption Form which the Agency provided to
the Contractor when forwarding two (2) originals of the present Contract for signature. On
invoices submitted via esa-p, the number shall be put in the respective field 'VAT Exemption
Number'.
3.2.2 Requirements for Advance Payment Requests (APR) and invoices being regarded as
due:
Advance Payment:
- Advance Payment Request (APR): to be submitted after signature of this
Contract by both Parties.
- Advance Payment Request (APR): to be submitted after receipt of the Agency's
written Authorisation to Proceed with a Phase.
Progress Payment(s):2
- Milestone Achievement Confirmation (MAC) hereinafter referred to as
"confirmation" with supporting documentation, attached in esa-p. The
supporting documentation shall justify the actual achievement of the
milestone(s) as defined in the Payment Plan specified in Appendix 1 hereto.
and
- lnvoice(s);
Final Settlement:
1 This is reflected in esa-p as "30 days upon receipt by ESA, in esa-p, of both the confirmation and the invoice" see in
esa-p GUIDE Frequently Asked Questions & Answers for Suppliers at http://esa-p­
help.sso.esa.int/F AO for Suppliers.pdf
2 esa-p Job Aid: How to submit a Confirmation / Invoice / Advance in 6 steps (see link hereunder): http://esa-p­
help.sso.esa.int'2f 





	
	and
ESA Contract No. 4000127860/19/UK/ND
Page 12
- Confirmation, with supporting documentation attached in esa-p. The
supporting documentation shall justify the actual achievement of the
milestones as defined on the Payment Plan Specified in Appendix 1 hereto.
- Invoice(s);
and
- Receipt and/ or acceptance, by the Agency, of all deliverable items, of the
services to be rendered. and other obligations to be fulfilled, in accordance with
the terms of this Contract;
- The Contract Closure Documentation using the template provided in Appendix
4,AnnexA.
- In case of non-authorisation by ESA at the end of Phase 1 to proceed with the
Phase 2, the last payment milestone of the Phase 1 shall be deemed to
constitute the Fina l Settlement of the Contract and all conditions associated to
the Final Settlement shall be fulfilled for payment of such milestone.
3.2.3 Implementation of payments conditions
The Contractor shall ensure that all APR, invoices and confirmations, are submitted for
payment exclusively through the Agency's esa-p system.
The Contractor undertakes to adhere strictly to the instructions contained in esa-p
(including those for billing taxes and duties, where applicable) when submitting APR,
invoices and confirmations through the esa-p system.
The Agency shall credit the account of the Contractor to the Contractor's benefit and to the
benefit of the Contractor's Subcontractor(s).
The Contractor shall be responsible for approving or rejecting, within ten (10) calendar days
of receipt, the relevant Subcontractor('s) (s') invoices and related supporting documents ( e.g.
MACs, Cost Reports).
The Contractor shall also be responsible for paying the accounts of its Subcontractor(s) for
this Contract in accordance with the applicable law and normal commercial practices.
The Contractor shall indemnify the Agency against any claims arising from such
Subcontractor(s), caused by the Contractor's failure to pay the Subcontractor(s). The
Contractor shall supply to the Agency, upon request, evidence of payments made to its
Subcontractor(s).
The Agency reserves the right to visit the Contractor's and/ or Subcontractor('s)(s') premises
and ascertain the progress of the work being performed under the Contract, prior to making
the progress payment concerned.
The Contractor shall, upon request at any time by the Agency, submit the payment
conditions / provisions of individual Sub-Contracts to the Agency for approval (if requested
before the Sub-Contract is placed) or verification.
With a view to optimise subcontractors' time to payment and financial coverage, and to
facilitate, when needed, the resolution of such issues, the Agency has established a dedicated
centralised email address.
Should any subcontractor encounter serious difficulties in the process leading to: 





	
	ESA Contract No. 4000l27860/19/ UK/ ND
Page 13
(i) payment of invoices due which is to be paid by its direct customer (not through ESA),
i.e. related to a milestone already achieved,
(ii) contractual coverage of activities already kicked-off,
they may contact the Agency at: indirectpayments@esa.int
This communication channel does not replace the normal communication lines within the
consortium, and the overall responsibility of the Contractor to ensure proper and timely
contractualisation and payments throughout the consortium.
Any subcontractor contacting the Agency through the above email shall document the steps
already taken towards its direct customer in the consortium in order to resolve the issue and
shall document that the Contractor has been informed of the issue.
In doing so, such subcontractor shall provide the Standard Contact Form available at:
http://emits.sso.esa.int/ emits-doc/ ESTEC/lndirect-Payments-Ouery-Form.docx
properly filled in or provide the same information in the email.
The Contractor shall ensure that the above provisions are included in all subcontracts
entered into for the purpose of the contract.
In case of absence of legitimate justification for any late payment to, or lack of contractual
coverage for the Subcontractors, the Agency reserves the right to take actions against the
Contractor which are commensurate to the situation.
3.2-4 Absence of user account for esa-p:
If the Contractor has no access to the Agency's esa-p system at the time of signature of the
present Contract, an immediate request for an esa-p user account shall be made by the
Contractor to the ESA Helpdesk (idhelp@esa.int), specifying a contact name, the company
name, and the ESA Contract number.
3.2.5 In case of esa-p not being operative:
Should the Contractor find the Agency's esa-p system technically inoperative at the moment
of submission of the advance payment requests and invoices, the Contractor may submit
invoices in paper format in two (2) copies to the ESA Financial Operations Department of
the responsible ESA establishment ESA-ESTEC Finance, Central Invoice Registration Office,
together with justifying documentation as required by the Contract.
Should the Contractor find the Agency's esa-p system technically inoperative at the moment
of submission of the confirmation, the Contractor may submit the confirmation in paper
format in three (3) copies to the Agency's Technical Officer mentioned in Article 5, Clause 5,
Sub-Clause 5.1 a) of the Contract. A template confirmation form can be obtained upon
request to the ESA Helpdesk (idhelp@esa.int).
3.2.6 Questions related to the esa-p system:
Any questions concerning the operation of esa-p shall be addressed to the ESA Helpdesk
(idhelp@esa.int). 





	
	ESA Contract No. 4000127860/ 19/UK/ND
Page14
ARTICLE 4 - ITEMS PRODUCED OR PURCHASED UNDER THE CONTRACT
4.1 The following provisions apply to any items other than those items which fall within
the scope of Article 2 of the Contract.
4.2 The title to the property of any items produced under the Contract, including
electronic components, special jigs, tools, test equipment, and which are paid for
under the Contract, shall remain with the Contractor unless otherwise agreed by the
Parties.
4.3 The Contractor shall maintain an inventory of all such items (called "Contract
Inventory") and shall mark those items as falling under this Article of the Contract.
The inventory shall be updated and made available to the Agency during the
execution of the Contract. A final issue of that inventory shall be submitted with the
final contractual deliverables as foreseen in Appendix 4, Annex A, Table 2.1.1.
If that inventory also includes any of those items which fall within the scope of
Article 2 of the Contract, these items are to be clearly set apart.
Of Or (}JJ 





	
	ESA ContrJ.ct No. 4000127860/19/UK/ND
Page 15
ARTICLE 5 - COMPLEMENTS AND AMENDMENTS TO THE GCC
The General Clauses and Conditions for ESA Contracts, ref. ESA/ REG/002. Rev.2 (GCC)
apply to this Contract with the following complements and amendments:
fAJiT I. CONDITIONS APPLICABLE TO E:SA C!ONTRAOTS
CLAUSE 2: APPROVAL AND ENTRY INTO FORCE
For the purpose of this Contract the authorised representative of the Director General is Ms
M. Vaissiere, Director of Telecommunications and Integrated Applications.
CLAUSE5:THEPARTIES' REPRESENTATIVES
Sub-Clause 5.1: The Agency's Representatives
The Agency's representatives are:
a) Mr Eric Villette for technical matters or a person duly authorised by him/her ("Technical
Officer").
All correspondence for technical matters will be addressed as follows:
To: With copy to:
Name Mr Eric Villette Mr Michael Witting
Phone + 31 71 56s 8471 michael.witting(@.esa.int
Fax + 31 71 56s 4826
e-mail eric. villette@.esa.int
Mail ESA/ESTEC,
Address European Space Research and
Technology Centre,
P.O. Box 299, 2200 AG Noordwijk,
The Netherlands
b) Ms Nathalie Dorval for contractual and administrative matters or a person duly
authorised by her ("Contracts Officer").
All correspondence for contractual and administrative matters ( with exception of
invoices as mentioned in Article 3.2) will be addressed as follows:
To: With copy to:
Name Ms Nathalie Dorval Mr Eric Villette
Phone +33 (0)5 61 333 829 eric.villette@esa.int
Fax na &
e-mail nathalie.dorval@.esa.int Mr Michael Witting 





	
	F.sA Contract No. 4000127860/19/UK/ ND
Page 16
Mail ESA/ECSAT, michael.witting@esa.int
Address Fermi Avenue,
Harwell Campus,Didcot,
Oxfordshire OXu oFD,
United Kingdom
Sub-Clause .5.2: The Contractor's Representatives
The Contractor's representatives are:
a) Mr Lee Boland for technical matters or a person duly authorised by him ("Technical
Officer").
All correspondence for technical matters will be addressed as follows:
To: With copy to:
Name Mr Lee Boland Mr David Williams
Phone +44 ( O )7 710 823 874 dw@argit.eu
Fax na
e-mail Ib@arait.eu
Mail ArQit limited
Address 3 More London Riverside,
London SE1 2RE,
UK
b) Mr David Williams for contractual and administrative matters or a person duly
authorised by him ("Contracts Officer").
All correspondence for contractual and administrative matters will be addressed as
follows:
To: With conv to:
Name Mr David Williams Mr Lee Boland
Phone +44 (0)7 787 571610 lb@arqit.eu
Fax na
e-mail dw@.arait.eu
Mail ArQit Limited
Address 3 More London Riverside,
London SE1 2RE,
UK
CIAUSE 6: PUBLICITY REIATING TO CONTRACTS
The following provision is added to Clause 6 of the GCC:
-For press release or any other public announcement related to this contract, including the
utilisation of the ESA logo, shall require the prior approval of both the Contractor and of the 





	
	ESA Contract No. 4000127860/ 19/ UK/ND
Page 17
Communication Department of ESA and the Agency's representatives for technical matters
as indicated in Clause 5 above.
-The contractor shall ensure that ESA logo shall be implemented on the launcher fairing, at
the occasion of the satellite launch.
CLAUSE 8: GENERAL CONDITIONS OF EXECUTION:
The following provision is added to Clause 8 of the GCC:
8.8 In respect of any audit carried out under this Clause 8: (i) the Agency shall comply
with reasonable security and confidentiality procedures of the Contractor and/ or the
Subcontractor(s); (ii) the Contractor and/or Subcontractor(s) shall have no obligation
to release information relating to other customers or information related to costs or
margins; and (iii) the access provided to the Agency shall be restricted to that relevant
part(s) of premises used exclusively by the Contractor and/ or the Subcontractor(s) to
perform the services under the Contract; (iv) if the Agency appoints a representative
or an authorised national agent, the Agency shall ensure that such representative or
agent shall not be a direct competitor of the Contractor and/ or the Subcontractor(s).
CLAUSE9:KEYPERSONNEL
The Contractor's key personnel is listed in the Minutes of the negotiation meeting referred
to in Article 1.2 above.
CLAUSE 1.0: SUB-CONTRACTS
Part of the work is to be subcontracted to the Subcontractors listed in Article 3.1 above.
When at the time of the contract signature, no/ not all subcontractors are introduced,
additional work to be sub-contracted shall be implemented in the contract via CCN.
In relation to Article 3.2.3 above, the following provisions are added to Clause 10 of the GCC:
The Contractor shall ensure that provisions A) and B) hereunder are duly reflected in all
subcontracts entered into for the purpose of this Contract. It is explicitly understood that the
communication channel described below shall not replace the normal communication lines
within the consortium, and the overall responsibility of the Contractor to ensure proper and
timely contractualisation and payments throughout the consortium:
A) With a view to optimise Subcontractors' time to payment and financial coverage, and
to facilitate, when needed, the resolution of such issues, the Agency has established a
dedicated centralised email address.
Should any Subcontractor encounter serious difficulties in the process leading to:
(i) timely payment of due invoices (i.e. related to a milestone already achieved) to
be made by the Subcontractor's direct customer (i.e. not ESA),
(ii) contractual coverage of activities already kicked-off,
the said Subcontractor may directly contact the Agency at: indirectpayments@esa.int 





	
	ESA Contract No. 4000l27860/19/UK/ND
Page 18
B) Any Subcontractor contacting the Agency through the above email shall document the
steps already taken towards its direct customer in the consortium in order to resolve
the issue and shall document that the Contractor has been informed of the issue.
In doing so, such Subcontractor shall attach the Standard Contact Form available at:
http://emits.sso.esa.int/ emits-doc/ESTEC/Indirect-Payments-Quei:y-Form.docx
properly filled in or provide the ~ information in the body of the email.
In case any Subcontractor has SME status, as per the definition of SMEs given by the
European Commission: http://eur-lex.europa.eu/legal­
content/EN /TXT /PDF /?uri=CELEX:32003Ho361&from=EN.
the Contractor shall ensure that the relevant subcontract foresees an automatic grant of a
35% Advance Payment.
The Contractor shall have the responsibility of obtaining the self-certification of the
Subcontractor('s)(s') SME status as per certification model provided in the tender
documentation.
CLAUSE 11: CUSTOMER FURNISHED ITEMS (CFI)
It is not foreseen that the Agency will provide any items in accordance with Clause 11 of the
GCC to the Contractor.
CLAUSE 12: ITEMS MADE AVAILABLE BY 1HE AGENCY
It is not foreseen that the Agency will make any items available to the Contractor in
accordance with Clause 12 of the GCC.
CLAUSE13:CHANGES
The template of a Contract Change Notice (CCN) is attached hereto as Appendix 7.
CLAUSE 14 : TIME-LIMITS FOR THE PROVISION OF DELIVERABLES AND
SERVICES
The Contractor may mark the deliverables documents with the following :
"© [COMPANY NAME] [YEAR OF PUBLICATION]
The copyright in this document is vested in [COMPANY NAME].
This document may only be reproduced in whole or in part, or stored in a retrieval system,
or transmitted in any form, or by any means electronic, mechanical, photocopying or
otherwise, either with the prior permission of [COMP ANY NAME] or in accordance with the
terms of ESA Contract No. 4000127793/ 19/UK/ND."
CLAUSE 15: HANDLING, PACKING AND TRANSPORT, TRANSFER OF
OWNERSHIP AND RISK
The following provision is added as Sub-Clause 15.3.6 of the GCC:
Should in the execution of the Contract a need arise to provide the Agency with information
which is subject to export control laws and regulations, the Contractor shall secure that such
1EsA, 01
\!:!9) ff p,.J 





	
	ESA Contract No. 4000127860/19/UK/ND
Page 19
information is only passed on to the Agency in accordance with the provisions of such export
control laws and regulations.
Sub-Clause 15.4 of the GCC is modified as follows:
As regards transfer of ownership and risk, the follov\ring shall apply:
15.4.1 Ownership of the hardware and software developed, produced or procured under the
Contract shall remain v\ri.th the Contractor. The Agency v\ri.ll not acquire possession
and ownership of the hardware and software or any parts therefore, except in cases
specified in paragraph 15-4.2 here below.
15-4-2 The Agency shall be entitled to acquire ownership of Items, to be decided by the
Parties at the time of Termination in their actual state of completion and the related
documentation from the Contractor in case the Agency cancels the Contract on any of
the grounds specified in Article 5 Clauses 30, 31, 32, 33, before launch. The value of
the items acquired by the Agency shall approximately equal and not exceed the value
of the Agency financing at the time of termination.
To the extent the Contractor has not acquired ownership in such parts yet, the Agency
shall be entitled to acquire the Contractor's right to acquire ownership instead.
The Agency shall be entitled to replace the Contractor as party to any subcontract the
Contractor has placed and the Contractor shall provide for such right within the
subcontracts.
15.4.3 In case of termination, the Contractor shall have the option to retain ownership and
possession of such Items against repayment of all payments made by the Agency.
This option shall expire 90 days from receipt of the Agency's letter of cancellation
unless (a) it is exercised through registered letter which is received by the Agency
within the said time period and (b) repayment of the abovementioned amount is
effected v\ri.thin 30 days from exercising the option.
In such a case, the Contractor shall deliver Items in their actual state of completion
and the related documentation to the Agency v\ri.thin sixty ( 60) days from the expiry
of the option set forth in paragraph above.
Ownership in the above deliverables shall pass to the Agency upon their receipt at the
address specified in Article 5 Sub-Clause 5.1 above for not yet launched items.
15.4-4 Sale, lease, pledging or giving as security in any other way, decommissioning, transfer
of ownership of the Items funded or co-funded by the Agency, in their actual state of
completion and the related documentation shall be subject to the Agency's prior
written approval which the Agency is free to deny and which, if given, may be
conditional upon the approval by the Agency's Industrial Policy Committee.
In case of infringement by the Contractor of any provision of this paragraph 15.4-4
the Agency shall be entitled to a full and immediate repayment by the Contractor of
any payments made by the Agency under the Contract.
For raising funds for the sole benefit of the present Contract without suspending the
performance of the Contract or any part of it, the Contractor is hereby authorised to
giving as security the ownership of the Items in their actual state of completion and
the related documentation 





	
	CLAUSE 17: PENALTIES
ESA Contract No. 4000127860/ 19/ UK/ND
Page 20
Penalties for late delivery do not apply, and similarly they will not apply in the subcontracts
that may be placed by the Contractor.
CLAUSE 18: DAMAGE TO STAFF AND GOODS
The following provision is added to Clause 8 of the GCC:
18.3 Nothing in this Contract shall exclude or limit either Party's liability for: (a) death or
personal injury or loss or damage for which liability cannot be limited or excluded by
law; (b) fraud or fraudulent misrepresentation; (c) the wilful failure or gross
negligence of either Party in performing its contractual obligations; or (d) any other
liability that cannot be limited under applicable law. Subject to the foregoing, the total
liability of either Party to the other under or in connection with this Contract shall not
exceed an amount equal to the Price.
CLAUSE 20: LIABILTIY AFTER ACCEPTANCE
The owner of the tangible assets developed, produced or procured under the Contract shall
be liable under international, national or regional law whatever the legal basis for such
liability. The Agency shall not be liable for the operations of such assets.
CLAUSE27:PRICING
The type of price notwithstanding, sub-clauses 27.3 and 27.4 of the GCC are implemented as
follows:
The Contractor shall provide, on completion of the Contract, the following documents signed
by a senior financial representative:
a presentation by the Contractor and each Subcontractor, on (one or more) PSS-A2
form(s) with relevant Exhibit A, of the cost actually incurred for work and services
under the Contract,
a certification from the Contractor and each sub-contractor as follows:
"I, (insert name) do hereby certify that the costs presented in the enclosed PSS-A.2
form(s) are, to the best of my knowledge and belief, a true statement of the costs
incurred under this contract, an internal audit of the costs having been conducted to
verify that the company's cost accounting system and rules and the Agency's
requirements in Annex I to the GCC with respect to costs incurred under the contract
have been observed.
I further certify that the company's contribution to this co-funded contract has been
provided from (specify source) and has not been and ,N ill not be included in rates and
overheads applied for the Contract or any other contract with the Agency."
The Contractor undertakes to permit the Agency to effect cost control operations as
stipulated in Annex I to the GCC, with regard to the information included in the Contractor's
financial statement. 





	
	ESA Contract No. 4000127860/ 19/ UK/ ND
Page 21
The Agency's right to exercise the above cost control shall cease one year after submission of
the Contractor's certified statement of cost unless it is delayed for reasons the Contractor is
responsible for.
CLAUSES 30, 31, 32, 33: TERMINATION
Clauses 30, 31, 32 and 33 of the GCC are replaced by the following provisions:
1. The Agency may terminate the Contract by giving written notice with immediate effect
in any of the following events:
a) If the Contractor becomes insolvent or if its financial position is such that within
the framework of its national law, legal action leading towards bankruptcy may be
taken against it by its creditors; such decision in the latter case shall not be taken
before having explored any other solution by raising the issue to the QKD SAT
Steering Board (QSB).
b) If the Contractor fails to secure the funds to carry out the subsequent phase of work
resulting in the Agency's decision not to proceed further with the work at the end
of preceding Phase.
c) If the Contractor resorts to fraudulent practices in connection with the Contract,
especially by deceit concerning the nature, quality or quantity of the supplies, and
the methods or processes of manufacture employed.
d) If the Contractor continues to materially breach its obligations under the Contract,
and this breach is not remedied within 60 days after formal notification or within
a longer reasonable period if agreed by the Agency.
e) If the Contractor continues to fail to demonstrate the reliability of the launch
services proposed to fulfil the Agency's programme objectives as set out in the
provisions of Article 1.1-4;
f) A delay of the launch by 12 months or more beyond the date stipulated in Article
2.1.3 shall be deemed to constitute a failure in the above sense;
g) A delay of the starting of the Demonstration Service by 36 months beyond the date
stipulated in Article 2.1-4 shall be deemed to constitute a failure in the above sense;
h) If the Contractor has not observed the provisions set out in Clause 5 2 .1 of the GCC
concerning the disclosure and use of information provided by the Agency;
i) If the Contractor transfers the Contract without the Agency's authorisation or
concludes subcontracts against the Agency's explicit ·written wishes.
j) In case of failure by the QSB to resolve the disagreement with regard to
continuation · with Phase 2 within a cure period of 6 months.
2. In the event of such a termination the Agency shall only pay the contractual value of
items accepted under the Contract prior to the receipt of notification of termination, or
to be accepted under the special conditions of termination. In no case shall the total
amount paid or to be paid by the Agency under the Contract exceed the total price stated
in Article 3 above.
3. The provisions of paragraph 1 above shall not apply if the failure under (f) or (g) is due
to circumstances outside the Contractor's control. 





	
	CLAUSE 34: APPUCABLE LAW
ESA Contract No. 4000127860/ 19/ UK/ ND
Page22
The substantive law referred to in Clause 34 of the GCC is the law of England and Wales.
CLAUSE 35: DISPUTE RESOLUTION
The arbitration proceedings referred to in Clause 35 of the GCC shall take place in London,
England.
Any initiation of arbitration shall be conditional upon the completion of the procedure
stipulated in Article 6.
PART II: CONDITIONS CONCERNING INTELLECTUAL PROPER1Y RIGHTS
FOR ESA STUDY, RESEARCH AND DEVELOPMENT CONTRACTS
For the purpose of this Contract:
Part II, Option B of the GCC shall apply, as modified by the special provisions
below.
The free licenses provided for the benefit of ESA in the present Contract and in
Part II of the GCC, shall be deemed granted through signature of the present
Contract and without the need to implement a separate license.
CLAUSE50:GENERAL
The following provision is added to sub-clause 50.2 of the GCC:
The term "documentation" as defined in Annex IV to the GCC shall be interpreted to also
include data files, CAD files, EXCEL files and similar electronic files, which shall not be
considered as "software" in the sense of Clause 56 of the GCC.
The electronic files containing these items shall be delivered to the Agency in the format
agreed with the ESA Technical Officer.
CLAUSE 51: INFORMATION TO BE PROVIDED
The following provision is added to Clause 51 of the GCC:
Clause 51 shall not be interpreted as to add any deliverables to or change any deliverables in
the Deliverable Items List provided as Appendix 3 to the present Contract.
CLAUSE 52: DISCLOSURE
The following provision is added to Sub-Clause 52.2 of the GCC:
The access rights granted to the Agency's employees under Sub-Clause 52.2 of the GCC are
hereby extended to contractor personnel providing technical, management, legal or
administrative support to ESA as long as they have signed an engagement of confidentiality. 





	
	ESA Contract No. 4000127860/19/ UK/ ND
Page 23
CLAUSE 53: OWNERSHIP OF INTELLECTUAL PROPER1Y RIGHTS
The following provisions are added as Sub-Clauses 53.5 and 53.6 of the GCC:
53.5 In case the Agency cancels the Contract on any of the grounds specified in Article 5
Clauses 30, 31, 32, 33, the Agency shall be entitled to benefit of an irrevocable,
worldwide, royalty free licence of the Intellectual Property Rights generated under the
present Contract. The Agency shall be entitled to replace the Contractor as party to
any subcontract the Contractor has placed and the Agency shall be entitled to sub­
licence for the purpose of performing the present Contract. Acquisition of the licence
by the Agency shall not include Intellectual Property Rights neither funded nor co­
funded by the Agency.
53.6 For the purpose of performing the present contract, the rights permanently licenced
to the Agency shall include:
i. The right to reverse-engineer, edit, amend, adapt or otherwise modify the
subject-matter of the Licenced Items by the Agency or any licensee of the
Agency for any purposes the Agency or the licensee sees fit,
n. The right to incorporate, embed or merge the subject matter of the Licenced
Items into any other product,
m. The right to prepare derivative works of the subject matter of Licenced Items.
53.7 Para. 53.5 above notwithstanding, the Contractor shall in case of termination have
the option to revoke this licence against refund of all payments made by the Agency
by the Contractor. This option shall expire 90 days from receipt of the Agency's
letter of cancellation unless (a) it is exercised through registered letter which is
received by the Agency within the said time period and (b) refund of the
abovementioned amount is effected within 30 days from exercising the option.
CLAUSE 55: USE OF INTELLEcruAL PROPERTY RIGHTS
Clause 55 shall apply with the following understanding that if any Persons or Bodies are
competitors of the Contractor, the Intellectual Property Rights arising from work performed
under the Agency Contract shall be available under Sub-Clause 55.1, paragraph(c).
CLAUSE 57: BACKGROUND INTELLECTUAL PROPER1Y RIGHTS
Sub-Clause 57.1, second paragraph, shall not apply.
CLAUSE 61: RE-SUPPLY
Clause 61 shall not apply. 





	
	ARTICLE 6 - QKD SAT STEERING BOARD
ESA Contract No. 4000127860/19/UK/ND
Page24
6.1 Any dispute arising out of the interpretation or execution of the Contract including
but not limited to disagreement on the decision to proceed with Phase 2, shall at the request
of any Party, be submitted to the QKD SAT Steering Board (QSB), the composition and rules
of which are laid down below.
6.2 The QSB shall consist of:
For ESA:
- Director of Telecommunications and Integrated Applications ( co-chair),
- Head of Earth Observation & Telecommunication Procurement Division
- QKD SAT Programme Manager
- QKD SAT Project Manager
For the Contractor:
- Chief Executive Officer (co-chair), or equivalent,
- Chief Technical Officer,
- Executive Chairman
- QKD SAT Programme Manager
- Legal Counsel
Where appropriate and in particular in the scope defined in Article 6.1 above, the
QSB shall be supported by all Parties' Contracts Officers.
6.3 When examining a case, the QSB shall either reach unanimous agreement on it or
shall draw up a statement of disagreement.
6-4 In case of failure of the QSB to resolve a disagreement not related to the decision to
proceed with Phase 2, within a cure period of 3 months, the matter shall be brought
to the Dispute Appeal Board ("DAB") as foreseen in Article 5 Clause 35
6.5 Deliberations and discussions in the QSB shall have no contractual impact unless
documented in a Contract Change Notice. 





	
	ESA Contract No. 4000127860/19/UK/ND
Page25
Done in 2 originals, one for each Party to this Contract,
FORARQIT LTD
David Williams
Arqit Limited Chairman
FOR THE EUROPEAN SPACE
AGENCY (ESA)
Magali Vaissiere
Director of Telecommunications and
Integrated Applications