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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
EXHIBIT 10.6
MASTER AGREEMENT
BY AND AMONG
STARBAND COMMUNICATIONS INC.
AND
GILAT SATELLITE NETWORKS LTD.
AND
SPACENET INC.
DATED AS OF SEPTEMBER 29, 2000
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C0NTENTS
1. Scope of Agreement......................................................................................1
2. Gilat/Spacenet Products & Services - Order Priority.....................................................2
3. Software License and Support/Intellectual Property......................................................3
4. Telecommunications Services.............................................................................4
5. Exclusivity/Non-Compete.................................................................................5
6. Research and Development................................................................................5
7. Transition Services.....................................................................................5
8. Transitional Cooperation................................................................................6
9. Term....................................................................................................7
10. Charges and Payment.....................................................................................7
11. Representations and Warranties..........................................................................9
12. Confidential Information...............................................................................12
13. Dispute Resolution.....................................................................................13
14. Notices................................................................................................14
15. Termination Rights.....................................................................................15
16. Limitation of Liability and Indemnification............................................................17
17. Governing Law; Jurisdiction............................................................................19
18. Assignment.............................................................................................19
19. Waiver of Compliance...................................................................................19
20. Most Favored Nation....................................................................................19
21. Export Restrictions....................................................................................20
22. Force Majeure..........................................................................................20
23. Verification...........................................................................................20
24. Entire Agreement; Amendments...........................................................................20
25. Survival...............................................................................................21
26. Severability...........................................................................................21
27. Counterparts...........................................................................................21
28. Headings...............................................................................................21
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ATTACHMENTS
ATTACHMENT A...............................................................................G/S Products & Services
ATTACHMENT B..........................................................................StarBand Products & Services
ATTACHMENT C....................................................................Description of Transition Services
ATTACHMENT D......................................................................ERP System and One-Time Payments
ATTACHMENT E...................................................................................Transition Managers
ATTACHMENT F.............................................Additional Terms and Conditions for Internet Connectivity
ATTACHMENT G.....................................................................................Non-Compete Terms
ATTACHMENT H....................................................................Product Performance Specifications
ATTACHMENT I.................................................................Telecommunications Services Agreement
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MASTER AGREEMENT
This Master Agreement together with the Attachments hereto (the
"Agreement") entered into as of September 29, 2000, ("Effective Date") by and
among StarBand Communications Inc., with its headquarters at 0000 Xxx Xxxxxx
Xxxx, XxXxxx, Xxxxxxxx 00000 XXX ("StarBand"), Gilat Satellite Networks Ltd.,
with its headquarters at Yegia Kapayim St. Daniv Park, Kiryat Xxxx, Petah Tikva
49130 Israel ("Gilat"), and Spacenet Inc., with its headquarters at 0000 Xxx
Xxxxxx Xxxx, XxXxxx, Xxxxxxxx 00000 XXX ("Spacenet").
WHEREAS, StarBand is partly owned by Spacenet, a wholly owned
subsidiary of Gilat and was established for the purpose of providing satellite
Internet access to North American consumers, small business and home office
customers and ISPs serving such customers;
WHEREAS, Gilat and Spacenet wish to provide certain telecommunications
related equipment and services to StarBand and StarBand wishes to provide
certain telecommunications equipment and services to Spacenet;
WHEREAS, Gilat and Spacenet have and currently are providing certain
functionality and a number of transition related services to StarBand to assist
StarBand's operations;
WHEREAS, StarBand, Spacenet and Gilat wish to define certain commercial
dealings with one another and reduce such definition to writing.
NOW, THEREFORE, in consideration of the above premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
StarBand, Gilat and Spacenet agree as follows:
1. Scope of Agreement.
(a) Products and Services to be provided by Gilat and/or Spacenet.
Gilat and/or Spacenet, as specified, either directly or
through one of their subsidiaries, will provide certain
telecommunications equipment ("Equipment") and licensed
software ("Software"), and will provide access to satellite
capacity ("Space Segment," together referred to as the "G/S
Products & Services") at StarBand designated remote subscriber
and retail locations (each subscriber or retail location
herein defined as a "Site") and will install and maintain
certain telecommunications equipment at retailer Sites, on
terms and as specified in Attachment A hereto. In the event
that Spacenet provides Internet connectivity to StarBand
pursuant to the provisions of Attachment A, the additional
terms and conditions for Internet connectivity service
identified on Attachment F shall apply to the provisions of
such Internet connectivity. The product performance
specifications for the G/S Products & Services are attached
hereto as Attachment H. The parties will also, from time to
time, upon mutual agreement, add technical specifications to
Attachment A regarding the G/S Products & Services.
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(b) Products and Services to be provided by StarBand. StarBand
shall provide Spacenet with StarBand products and services
(the "StarBand Products & Services") as set forth in
Attachment B. The StarBand Products & Services and terms and
conditions of their provision to Spacenet will be further
described by mutual written agreement of the parties at the
time of the provision of such StarBand Products & Services,
subject to basic commercial terms set forth in Attachment B.
The StarBand Products & Services are preliminarily described
in Attachment B hereto.
(c) Consulting and Administrative Services provided by Gilat
and/or Spacenet to StarBand. To facilitate StarBand's
transition to its own systems and processes, Gilat and/or
Spacenet, as specified, will provide to StarBand to the extent
indicated herein, certain consulting and administrative
services and functions, and such other services as agreed by
the parties that may be reasonably required to operate the
StarBand business (collectively the "Transition Services.")
The terms and conditions, including prices, for those
Transition Services are described in Attachment C to this
Agreement. Any additional services required by StarBand and
agreed upon by Gilat and/or Spacenet will be provided on
commercially reasonable terms to be determined at a later date
by mutual agreement of the parties.
(d) ERP System and One-Time Payments. Spacenet will (by
sublicense, use rights or the like) provide certain rights to
StarBand (or reasonably assist StarBand in acquiring such
rights as specified in Attachment D) in an ERP Service Group
(business application software). Additionally, StarBand shall
make certain one-time payments in consideration of Gilat's and
Spacenet's commercial efforts and expenses in establishing
StarBand as a company. The terms and conditions and prices
associated with the ERP rights and the one-time payments are
detailed in Attachment D.
2. Gilat/Spacenet Products & Services - Order Priority.
Gilat agrees to give priority to allocating sufficient manufacturing
capacity to producing and timely delivering the G/S Products & Services
to be provided hereunder to StarBand in accordance with accepted
delivery dates. To achieve this result, Gilat and StarBand agree to the
following procedures:
(a) By the first day of each month, StarBand shall submit to Gilat
order forecasts for the next twelve (12) months. The forecast
for the first three (3) months shall be a firm order. The
forecast for the next three (3) months shall be a binding
forecast subject to an adjustment of a maximum of plus or
minus [*] of the total amount set forth in the forecast. The
forecast for the next three (3) months shall be a binding
forecast subject to an adjustment of a maximum of plus or
minus [*] of the total amount set forth in the forecast. For
the last three (3) months, the order is only a forecast.
[*] Certain information on this page has been omitted and filed separately with
the COmmission. Confidentail treatment has been requested with repect to the
omitted portions
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(b) Gilat shall accept all firm purchase orders within the
StarBand forecast that StarBand places with Gilat at least
ninety (90) days prior to the required delivery date, subject
to the [*] capacity terms below. If, at the start of a
calendar quarter, accepted StarBand firm purchase orders
represent less than [*] of Gilat's capacity to produce for
that quarter products of the kind that StarBand ordered for
that quarter, Gilat agrees to accept during the first fifteen
(15) days of that quarter additional firm purchase orders from
StarBand for up to [*] of such capacity.
(c) If manufacturing or delivery problems arise that affect
Gilat's forecasted capacity and require Gilat to allocate
quarterly output among customers with accepted firm orders,
Gilat agrees to supply StarBand with the greater of (i) [*] of
Gilat's actual quarterly output of products of the kind
ordered by StarBand for the duration of such problems, or (ii)
a percentage of Gilat's actual quarterly output for the
duration of such problems calculated by dividing (A) the
quantity of StarBand's accepted firm orders for the calendar
quarter at the time that the problems arise by (B) the total
quantity of firm orders from all parties for that quarter,
provided that in no event shall StarBand be entitled to any
more than [*] of Gilat's actual quarterly output of products
of the kind ordered by StarBand for the duration of such
problems.
3. Software License and Support/Intellectual Property.
(a) "Software" means any computer program, including any
modifications, updates, or additions, which may be included in
or with Gilat-provided Equipment as object code, or in
executable form in any medium, and related materials such as
diagrams, manuals and other documentation which are for use
with the Equipment provided to StarBand under this Agreement.
(b) Gilat hereby grants to StarBand (including a right to
sublicense to its customers) and StarBand accepts a
non-exclusive license to use or have used the Software
residing in Gilat-provided Equipment, but only for the purpose
of causing such Equipment to operate for the provision of
transmission services and not otherwise. StarBand shall not
permit any third party to gain access to the Software or
transfer the Software to any third party, copy or permit to
have copied the Software, reverse engineer, disassemble,
de-compile, or transmit the Software in any form or by any
means. Software is and shall remain the exclusive property of
Gilat or Gilat's vendors. No license other than that
specifically stated herein is granted to StarBand, and
StarBand shall have no right under patent, trademark,
copyright, trade secret or other intellectual property of
Gilat or Gilat's vendors other than that granted herein.
(c) The service fees detailed in Attachment A cover to the extent
paid, the Software license and maintenance for the applicable
Software for the Agreement Term. During the Agreement Term,
Gilat will provide remedial software support services so that
Gilat's software operates on the Gilat-provided Equipment. For
as long as StarBand remains current in its payment of all
charges hereunder and continues the relevant optional services
(e.g., Internet Group Services), there is no additional
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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charge for Software releases or updates covered by such
charges that Gilat may incorporate into its shared hub
services to StarBand.
(d) All intellectual property rights subsisting in or related to
the Equipment and Software and/or Transition Services,
including but not limited to patents and other know-how and
copyright, both registered and unregistered, owned and/or
otherwise used by Gilat and all goodwill related thereto
(collectively the "IP Rights") are and shall remain at all
times the exclusive property of Gilat or, as the case may be,
its vendors and/or licensors. StarBand shall not have or
acquire any right, title or interest in or otherwise become
entitled to any IP Rights by taking delivery of, making
payment for, distributing and/or selling or otherwise using or
transferring the Equipment, Software or Transition Services,
other than such rights granted in this Agreement.
4. Telecommunications Services.
(a) The parties will negotiate in good faith the compensation and
reimbursement to Gilat for its contribution to the StarBand 1
and StarBand 2 satellites.
(b) Without limiting 4(a) above, StarBand and Spacenet have
entered into a telecommunications service agreement dated as
of February 15, 2000, (the "Telecommunication Services
Agreement") pursuant to which Spacenet provides StarBand with
telecommunication facilities and services necessary to provide
satellite communication services. That agreement which is
attached hereto as Attachment I, and the terms and conditions
of such agreement are incorporated herein by reference. In the
event that the Telecommunications Services Agreement is not
renewed in accordance with its terms because MSN does not
exercise the option to renew the agreement, Spacenet and
StarBand hereby agree that the Telecommunications Services
Agreement shall be extended automatically for the term of this
Agreement unless otherwise agreed, except that (i) with
respect to space segment, StarBand shall continue to be
responsible for space segment contracted for StarBand under
the Telecommunications Services Agreement (including but not
limited to GE4), and (ii) with respect to FCC licensing, the
Telecommunications Services Agreement shall continue until the
FCC licenses pursuant to which Spacenet provides service to
StarBand are assigned to or otherwise acquired by StarBand for
the provision by StarBand of such services, after obtaining
FCC consent. To the extent that the terms and conditions of
the Telecommunications Services Agreement and this Agreement
are inconsistent, the terms and conditions of the
Telecommunications Services Agreement shall prevail with
respect to the operation of any FCC licensed facilities used
by Spacenet to provide telecommunications services to
StarBand.
(c) Preservation of Spacenet's Control. StarBand hereby recognizes
and acknowledges that Spacenet holds licenses issued by the
Federal Communications Commission covering certain equipment
and facilities located at Spacenet's facilities in McLean,
Virginia, and Marietta, Georgia, which are used by Spacenet
for the provision of telecommunications services to StarBand.
Under the terms of
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Spacenet's FCC licenses, Spacenet is required to retain
control over the operation of that equipment and facilities
unless prior consent is obtained from the FCC to transfer
control over the equipment and facilities to others, including
StarBand. StarBand and Spacenet hereby covenant and agree that
Spacenet will retain control over the equipment and facilities
licensed by the FCC to Spacenet during the term of this
Agreement and nothing in this Agreement shall be construed to
give StarBand any control over that equipment or facilities,
unless and until prior FCC consent is obtained to transfer
control of the licensed equipment and facilities to StarBand.
5. Exclusivity/Non-Compete.
(a) Spacenet and Gilat agree that StarBand has exclusive rights,
as defined by the terms of the non-compete provisions set
forth in Attachment G hereto.
(b) Spacenet and Gilat undertake to use their best commercially
reasonable efforts to maintain price competitiveness of the
Equipment it sells to StarBand in the StarBand marketplace.
StarBand undertakes to purchase the G/S Products & Services
and any equipment and services performing similar
functionality in the future, solely from Gilat and Spacenet
(or third parties identified by either of them), provided that
Gilat complies with the Most Favored Nation provisions in
paragraph 20 hereof and the non-compete provisions detailed in
Attachment G hereof.
6. Research and Development.
(a) Gilat agrees to be responsible for all research and
development costs related to the ongoing development of the
Skystar Advantage and the SkyBlaster products. Agreements
relating to future products or modification to the existing
Skystar Advantage and SkyBlaster products which support
StarBand's projects may be entered into in the future between
Gilat and StarBand, at arms length and at rates to be mutually
agreed upon. For the first two years of this Agreement,
StarBand shall pay to Gilat [*] per calendar quarter,
provided that priority for research conducted using these
monies shall be toward modifying the product and service in
light of consumer experience and field feedback on the Skystar
Advantage and the SkyBlaster products. Gilat and StarBand will
consult during the first calendar quarter of each year to
discuss the planned research projects and associated budgets
for the next two years.
(b) Beginning on January 1, 2001, StarBand agrees to share with
Gilat the cost of the product development focused exclusively
on reducing the cost to manufacture the USB boxes which are
being provided by Gilat to StarBand hereunder. Gilat and
StarBand agree to discuss further the specific details of this
research, the total cost of the research, the relative share
of that cost that each party will bear, and the manner in
which the benefits from that research will be shared between
them.
7. Transition Services.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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(a) Attachment C describes the Transition Services to be provided
under this Agreement, including, without limitation, name of
service, pricing, and scope of service.
(b) Except as otherwise provided in this Agreement or unless
otherwise terminated pursuant to the terms detailed in
Attachment C, Gilat and/or Spacenet, as applicable, shall
provide or cause to be provided each of the Transition
Services beginning on the Effective Date or the date indicated
in Attachment C and continuing through to the expiration of
the Transition Services Term, as such term is defined in
Section 9(b) below, unless otherwise terminated pursuant to
the terms detailed in Attachment C.
(c) StarBand may request Gilat and/or Spacenet, as applicable, to
provide additional or modified Transition Services that are
not described in Attachment C. Gilat and/or Spacenet, as
applicable, will use commercially reasonable efforts to
accommodate any reasonable requests by StarBand to provide
additional or modified Transition Services. In order to
initiate a request for additional or modified Transition
Services, StarBand shall submit a request in writing to Gilat
and/or Spacenet specifying the nature of the additional or
modified Transition Services and requesting a cost estimate
and time frame for completion. Gilat and/or Spacenet shall
respond within ten (10) days to such written request. Only if
StarBand accepts Gilat's and/or Spacenet's offer to provide
the additional or modified Transition Services, will such
additional or modified Transition Services be provided
hereunder and according to the terms agreed to by the parties
in writing.
(d) From the Effective Date forward, the parties will use
commercially reasonable efforts to work together and begin the
process of migrating the Transition Services from Gilat and/or
Spacenet to StarBand such that the completion of the migration
of the Transition Services shall occur as soon as reasonably
practicable.
8. Transitional Cooperation.
(a) StarBand, Gilat and Spacenet will cooperate to assure an
orderly and efficient Transition. Each party shall make
available, as reasonably requested by the other party,
sufficient resources and timely decisions, approvals and
acceptances, in order that each party may perform its
obligations under this Agreement in a timely and efficient
manner.
(b) So long as any Transition Services are being provided under
this Agreement and thereafter, Gilat and/or Spacenet will
provide StarBand with copies of all then existing files,
records and operational data relating to such Transition
Services as may be reasonably requested by StarBand (including
third party expenses separately charged to StarBand), and such
other information as may be reasonably requested by StarBand,
including reasonable access to such employees of Gilat and/or
Spacenet having knowledge of such Transition Services.
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(c) If the provision of a Transition Service in whole or in part
requires the consent of a third party to the assignment of any
license or other agreement, Gilat and/or Spacenet shall use
best commercial efforts to obtain such consent. If Gilat
and/or Spacenet are unable to obtain any such consent after
using best commercial efforts, then the parties will agree
upon a commercially reasonable alternative that next best
approximates such Transition Service.
(d) If requested by StarBand in connection with the Transition,
Gilat and/or Spacenet shall use best commercial efforts to
assist StarBand in its efforts to enter into a license or
other agreement with any third party with whom Gilat and/or
Spacenet and any of their affiliates have a commercial
relationship.
(e) Each party shall appoint a person for the purpose of
coordinating the Transition and the provision of the
Transition Services. The initial representatives of the
parties are the persons set forth on Attachment E.
9. Term.
(a) This Agreement shall become effective upon and the term shall
commence at the Effective Date and shall terminate four (4)
years thereafter (the "Term"), and shall automatically renew
for additional two (2) year terms for as long as the terms of
paragraph 20 regarding Most Favored Nation and paragraph 5 and
Attachment G regarding exclusivity are complied with, or such
extended term as mutually agreed to by the parties in writing.
The pricing provisions related to the provision of G/S
Products & Services hereunder shall be renegotiated in good
faith between the parties every two years, and such
renegotiated pricing provisions shall be attached hereto and
become a part hereof. If the parties fail to agree to new
prices, then the current prices will remain in effect until
the parties reach agreement on new pricing.
(b) With respect only to the Transition Services described in
Attachment C to be provided by Gilat and/or Spacenet, the term
for the provision of the Transition Services shall be two (2)
years from the Effective Date (the "Transition Services
Term"), or such later date as mutually agreed to by the
parties in writing.
10. Charges and Payment.
(a) Gilat shall ship Equipment to StarBand in material compliance
with confirmed delivery dates in order to achieve a consistent
supply of product over each calendar quarter. All payments
made under this Agreement shall be in U.S. Dollars. The prices
for the G/S Products & Services provided hereunder are set
forth in Attachment A. Except as otherwise provided herein,
all payments for Equipment and services and all other items
delivered or otherwise provided under the terms of this
Agreement in any calendar quarter are due and payable no later
than one (1) business day prior to the end of the quarter in
which the Equipment, services, or other items were delivered,
provided that StarBand receives necessary documentation (e.g.,
invoice, packing list, freight documents) at least five (5)
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business days before the date on which payment is due.
StarBand shall not be responsible for payment of
non-conforming product (that is, product that does not meet
the then applicable product performance specifications set
forth in Attachment H). For non-conforming product on which
StarBand has already made payment, StarBand shall offset the
price of that product against current accounts payable.
(b) The terms of sale for all shipments from Gilat shall be FOB
Israel, U.S. duty paid and from Spacenet, Ex factory. For
shipments from Gilat, StarBand will be responsible only for
the cost of freight for the item as though it were shipped
from Israel to the United States, plus associated insurance
and U.S. customs brokerage expenses. Gilat (or its agent)
shall act as U.S. importer of record for all imports and shall
be responsible for all charges in addition to the freight,
insurance, and brokerage amounts to be paid by StarBand.
Should any products subject to this Agreement become subject
to U.S. import duties, Gilat and StarBand agree to share such
duties equally, provided that StarBand will in no event be
responsible for any antidumping or countervailing duties (or
deposits thereof) that might be imposed on such products.
(c) Payments to Gilat or Spacenet, as the case may be, for
Transition Services provided under Attachment C hereto for
Transition Services provided during the calendar quarter
beginning July 1, 2000, and payments for the ERP system and
one-time charges described in Attachment D hereto shall be
made in three equal monthly installments due on the last
business day of October, November and December 2000.
(d) All charges for products or services and other items provided
under this Agreement are exclusive of federal, state, and
local and non-US sales, use, excise, utility, value-added and
gross receipts taxes, universal service fees any other U.S.
tax withholding or similar deductions and assessments, and
other similar tax-like charges and tax-related surcharges
relating to charges or costs imposed by governmental or
quasi-governmental entities or other unaffiliated third
parties, all of which shall be borne and paid by StarBand.
StarBand, Spacenet, and Gilat, as appropriate, each agree to
provide the others with a duly authorized tax exemption
certificate, if applicable. Taxes based on each parties' net
income shall be the sole responsibility of such party. Gilat
and Spacenet shall each be responsible for any home-country
income, franchise, privilege or occupational taxes imposed on
them.
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11. Representations and Warranties.
(a) Each party shall comply, at its own expense, with the
provisions of all applicable municipal requirements and those
state, federal, and national laws that may be applicable to
the performance of this Agreement.
(b) The parties represent and warrant that they have and will have
all rights, titles, licenses, permissions and approvals
necessary to perform their obligations under this Agreement
and to grant the other parties the rights granted hereunder.
Notwithstanding the foregoing, Spacenet's obligations with
respect to the ERP rights detailed in Attachment D hereto
shall be exempt from this representation and warranty, and
Spacenet shall use best efforts to fulfill such obligations as
detailed in Attachment D.
(c) Gilat represents and warrants that title in the Equipment and
the medium on which the Software is stored supplied to
StarBand hereunder, when conveyed to StarBand shall be good
and its transfer rightful, and the Equipment and Software
shall be delivered free from any security interest or other
lien or encumbrance save for certain components of the
Equipment or Software which are licensed to Gilat, the license
granted to StarBand shall fully comply with and not be in
breach of the license agreement relating to such component.
(d) Gilat represents and warrants that to the best of its
knowledge the Equipment and Software and its use by StarBand
does not and will not infringe, violate or in any manner
contravene or breach any patent, trademark, copyright, license
or other property or proprietary right or constitute the
unauthorized use or misappropriation of a trade secret of any
third party.
(e) Gilat represents and warrants that all Software is year 2000
compatible and compliant (i.e., will correctly calculate,
compare, sort, extract, sequence, store and otherwise process,
in accordance with the Software's use and applicable
specifications, date related information and associated date
calculations for dates before, during and after the year 2000,
and will display date information in ways that are unambiguous
as to the determination of the century).
(f) Product Warranty
(i) During the Warranty Period, the Equipment and
Software shall be in compliance in all material
respects with the then applicable (i.e., time of
order) technical performance specifications set forth
in Attachment H, and shall be free from defects in
workmanship and materials. "Warranty Period" means:
(A) for the hub and server Equipment and all
Equipment and Software delivered therewith and
installed in accordance with the provisions hereof,
from the time of delivery to StarBand and for a
period of twelve (12) months from the later of the
purchase or the date of commissioning of such hub and
server Equipment; (B) for such Equipment that is part
of hub operations services, for the period during
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which StarBand purchases such optional hub operations
services from Gilat or Spacenet; and (C) for all
other Equipment and Software, from the time of
installation and for a period of twelve (12) months
thereafter. Notwithstanding the foregoing, Gilat
and/or Spacenet do not warrant that the Software will
be error free or uninterrupted in its use or
operation.
Thereafter, StarBand may purchase at its option an
extended full warranty at an annual cost equal to
[*] of the purchase price for all Equipment subject
to such extended warranty. Under this product
warranty, Gilat will be responsible for the cost of
any replacement parts and associated labor, overhead
and related expenses. After the above product
warranty periods have elapsed, Gilat will sell
replacement parts to StarBand for a period of seven
(7) years from StarBand's last purchase of particular
products at prices equal to the then current USB box
price, multiplied by [*] for the ODU, [*] for the USB
Indoor Unit, [*] for the LNBs, and [*] for the
antenna/mount system. Gilat reserves the right to
provide notice that a particular part will be
discontinued and to establish a time limit for all
future orders of such part.
(ii) A) Under this product warranty, Gilat shall, at
its sole option and expense, repair or
replace any Equipment and/or Software found
to be defective during the Warranty Period
and returned to Gilat's premises at
StarBand's expense. Return of the repaired
or replaced Equipment or Software to
StarBand's or its affiliates' original
destination shall be at the expense of
Gilat, unless Gilat determines that the
Equipment and/or Software is not defective
within the terms of the warranty, in which
event StarBand shall pay Gilat all costs of
handling, transportation and labor at
Gilat's then prevailing rates.
B) Under this product warranty, for Software,
if an error in the Software precludes the
Equipment from being in material compliance
with the then applicable specifications,
Gilat and/or Spacenet, as the case may be,
will use its commercial best efforts to
supply a workaround, program temporary fix
or update. The price for extended
maintenance on Software shall be the monthly
per site charge as set forth in Attachment
A.
(iii) Limitation on Warranties. This product warranty and
StarBand's remedies hereunder are solely for the
benefit of StarBand and shall not be extended to any
other person. StarBand shall be solely responsible
for the selection, use, efficiency and suitability of
the G/S Products & Services. This warranty shall not
apply to any Equipment or Software to the extent that
such Equipment or Software: (A) has had the serial
number, model number or any other identification
markings removed or rendered illegible; (B) has been
damaged by improper operation, maintenance,
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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misuse, accident, neglect, failure to continually
provide a suitable operating environment (including
necessary ventilation, electricity, protection from
power surges, cooling and/or humidity), or from any
other cause beyond Gilat's reasonable control,
including force majeure, and without Gilat's fault or
omission or negligence or the fault or negligence or
omission of Gilat's employees, agents or other
representative; (C) has been used in a manner not in
accordance with the instructions supplied by Gilat;
(D) has been subject to the opening of any sealed
components without Gilat's prior written approval;
(E) has had changes made by StarBand or StarBand's
agents to the physical, mechanical, electrical,
software or interconnection components of the
Equipment supplied by Gilat without written
authorization of Gilat to do so; or (F) has been
repaired or otherwise altered by anyone not under the
control of, or not having the written authorization
of Gilat to do such repair or alteration. With
respect to software, Gilat's and/or Spacenet's
obligation to provide remedial services shall only
apply if StarBand promptly implements each work
around, program temporary fix, update or other Gilat
and/or Spacenet provided software problem solution on
each affected item of Equipment.
(g) Gilat and Spacenet represent and warrant that they shall
perform all services performed hereunder including all
Transition Services in a timely, thorough and professional
manner.
(h) The parties represent and warrant that all financial records
regarding the transactions contemplated hereunder shall be
maintained in accordance with generally accepted accounting
principles consistently applied.
(i) The parties represent and warrant that they shall at all times
during the term of this Agreement and any renewals or
extensions hereof maintain all necessary insurance policies
usual and proper in the industry for the contemplated
transactions hereunder.
(j) THE WARRANTIES PROVIDED IN THIS SECTION AS TO EQUIPMENT AND
SOFTWARE CONSTITUTE THE SOLE AND EXCLUSIVE LIABILITY OF GILAT
AND SPACENET FOR DEFECTIVE OR NONCONFORMING EQUIPMENT AND
SOFTWARE AND CONSTITUTE STARBAND'S EXCLUSIVE REMEDY FOR
DEFECTIVE OR NONCONFORMING EQUIPMENT AND SOFTWARE, EXCEPT FOR
THE INDEMNIFICATION PROVISIONS HEREOF AS TO THIRD PARTY
CLAIMS. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY
MAKES ANY OTHER WARRANTY, EXPRESS OR IMPLIED, OR STATUTORY
INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND AS TO
THE DEFECTIVE OR NONCONFORMING EQUIPMENT AND SOFTWARE, THESE
WARRANTIES ARE IN LIEU OF ANY OBLIGATIONS OR LIABILITIES ON
THE PART OF GILAT AND SPACENET FOR
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DAMAGES, EXCEPT FOR CLAIMS UNDER THE INDEMNIFICATION
PROVISIONS HEREOF AS TO THIRD PARTY CLAIMS.
12. Confidential Information.
As used in this Agreement, the term "Confidential Information" means
any information of a party disclosed by one party to another (the
"Receiving Party") pursuant to this Agreement which is in written or
other tangible form (including on magnetic media) or by oral, visual or
other means, which is because of legends or other markings, the
circumstances of disclosure or the nature of the information itself
deemed to be proprietary and confidential, including without limitation
this Agreement itself. Each party recognizes the importance of the
Confidential Information. Accordingly, each party agrees as follows:
(a) The Receiving Party agrees (i) to protect such Confidential
Information from disclosure to others, using the same degree
of care used to protect its own confidential or proprietary
information of like importance, but in any case using no less
than a reasonable degree of care, (ii) not to disclose except
as specifically permitted hereunder any of the Confidential
Information or any information derived therefrom to any third
person except to its affiliates, agents, contractors and
financing parties under a confidentiality obligation to the
Receiving Party, and (iii) not to make any use whatsoever at
any time of such Confidential Information except as expressly
authorized in this Agreement or as reasonably necessary for
the purposes of running their respective businesses. Subject
to restrictions on disseminating Confidential Information to
third parties contained in this Agreement, any affiliate,
employee, agent, contractor or financing party given access to
any such Confidential Information must have a legitimate "need
to know" and will be similarly bound to the Receiving Party in
writing (including without limitation pursuant to a
pre-existing agreement). The Receiving Party shall be
responsible to the disclosing party with respect to any breach
of the provisions of this section caused by any such third
parties provided access to Confidential Information by the
Receiving Party. Without granting any right or license, the
parties agree that the foregoing will not apply with respect
to information the Receiving Party can document (i) is in or
(through no improper action or inaction by the Receiving Party
or any affiliate, agent or employee of the Receiving Party)
enters the public domain, or (ii) was in its possession or
known by it prior to receipt from the disclosing party, or
(iii) was rightfully disclosed to it by another person without
restriction, or (iv) was developed independently by it without
use of the Confidential Information. The Parties recognize
that service providers (employees, consultants and the like)
may serve multiple parties hereto simultaneously and hereby
agree that disclosure to or from such service providers shall
not affect the obligations of confidentiality to the party
whose information is disclosed.
(b) Immediately upon termination of this Agreement, the Receiving
Party will return or, at the disclosing party's direction,
destroy or erase and certify the destruction
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or erasure of all Confidential Information and all documents
containing any such Confidential Information and all copies
and extracts of the portions of such Confidential Information
(regardless of the media on which the Confidential Information
is stored).
(c) Either party may disclose the other's Confidential Information
as required by law, regulation or applicable stock exchange
rules; provided however, that such party will provide the
other party as much notice as reasonably possible under the
circumstances of such disclosure and the opportunity to
contest such disclosure.
(d) Each Receiving Party acknowledges and agrees that due to the
unique nature of the Confidential Information, there may be no
adequate remedy at law for breach of the obligations
hereunder. Therefore upon any such breach or any threat of
such breach, the disclosing party may be entitled to
appropriate equitable relief in addition to whatever remedies
it might have at law and under this Agreement.
(e) Notwithstanding anything herein to the contrary, the
provisions of this Section 12 shall survive for a period of
five (5) years following the expiration or termination of this
Agreement.
13. Dispute Resolution.
(a) Each party shall designate an individual as its project
manager with the right and responsibility to represent such
party with regard to the day to day management of such party's
performance of the terms of this Agreement ("Project
Manager").
(b) Notwithstanding any other provisions of this Agreement to the
contrary, the following procedure shall be adhered to in all
disputes arising under or relating to this Agreement, other
than disputes arising under section 15(a) that the parties
cannot resolve informally (the "Dispute").
(i) Any party may initiate this dispute resolution
process by giving another party's Project Manager
written notice of the Dispute. The Project Managers
of the parties shall thereafter have a reasonable
period of time to resolve the Dispute, but in no
event longer than ten (10) days after delivery of the
written notice described in this section 13(b)(i).
All attempts at resolution shall be conducted in good
faith and in no event shall the Project Managers
waive attempts at such resolution.
(ii) In the event the Project Managers are unable to
resolve a Dispute submitted to dispute resolution in
accordance with subsection (i) above, either party
may elect in writing, within five (5) days after
expiration of the ten (10) day period described in
(i) above, to refer the Dispute to appropriate senior
executive officers (Vice President or above) of the
parties having responsibility over such matters
("Executive Officers"). The Executive Officers shall
thereafter have a reasonable period of time to
resolve the Dispute, but in no event longer than ten
(10) days following
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the written referral to them of the Dispute. All
attempts at resolution shall be conducted in good
faith and in no event shall the Executive Officers
waive attempts at such resolution.
(iii) If the Project Managers are unable to resolve the
Dispute as described above, but neither party refers
the Dispute to the Executive Officers within the
indicated deadline, the relevant Dispute shall be
deemed withdrawn, but not waived. In order to
reestablish the claim, the claiming party will be
required to reinitiate the Dispute under section
13(b)(i).
(iv) If, at any time following the procedures of section
13(a)(i), and if relevant, Section 13(a)(ii), the
Project Manager or the Executive Officer for one
Party notifies one or more other parties in writing
that a Dispute considered under this section
constitutes a material breach of the terms and
conditions of this Agreement, pursuant to section
15(b)(ii) hereof, the ninety (90) day cure period
provided in section 15(b)(ii), or any applicable cure
or notice period with respect to such breach, will be
considered to commence as of the date of such notice.
(v) Any notices delivered in accordance with the
procedures set out above shall not be deemed
effective until delivered to and received by the
receiving party in accordance with the notice
provisions of Section 14 hereof.
14. Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have
been duly given upon receipt if delivered by hand or telecopier (with
confirming receipt):
If to StarBand:
The Office of General Counsel
StarBand Communications Inc.
0000 Xxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
or to such other person or address as StarBand shall designate
in writing.
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If to Spacenet:
The Office of General Counsel
0000 Xxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Kleinhendler & Xxxxxx
00 Xxxxxxxx Xxxxxx
Xxx Xxxx 00000
Xxxxxx
Tel: 000-0-000-0000
Fax: 000-0-000-0000
Attention: Xxxx Xxxxxxxxxxxx, Esq.
or to such other person or address as Spacenet shall designate
in writing.
If to Gilat:
The Office of General Counsel
Gilat Satellite Networks Ltd.
Yegia Kapayim Xx. Xxxxx Xxxx
Xxxxxx Xxxx, Xxxxx Xxxxx
00000 Israel
Tel: 000-0-000-0000
Fax: 000-0-000-0000
with a copy to:
Kleinhendler & Xxxxxx
00 Xxxxxxxx Xxxxxx
Xxx Xxxx 00000
Xxxxxx
Tel: 000-0-000-0000
Fax: 000-0-000-0000
Attention: Xxxx Xxxxxxxxxxxx, Esq.
or to such other person or address as Gilat shall designate in
writing.
15. Termination Rights.
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(a) If any party becomes or is declared insolvent or bankrupt, is
the subject of any proceedings related to its liquidation,
insolvency or for the appointment of a receiver or similar
officer for it, makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an
agreement for the composition, extension, or readjustment of
all or substantially all of its obligations, any other party
may, by giving thirty (30) days written notice thereof to the
affected party, terminate this Agreement without liability or
obligation, in whole or in part, as of a date specified in
such notice of termination.
(b) Any party may terminate this Agreement upon thirty (30) days
prior written notice to any other in the event of one of the
following:
(i) A party's failure to pay any amounts due hereunder
that are not duly contested in good faith within
thirty (30) days after receipt of the terminating
party's written notice of default concerning the
same; or
(ii) A party's failure to cure a material breach within
ninety (90) days after receipt of the terminating
party's written notice of default concerning the
same. Notwithstanding the foregoing, if a material
breach is not able to be cured within such ninety
(90) days, the parties may agree to extend such
timeframe.
(c) With respect to breaches or defaults giving rise to a right to
terminate this Agreement, other than pursuant to section
15(a), the dispute resolution procedures of section 13(b)
shall be applicable. Any such right of termination shall be
suspended until (b) dispute resolution process in section
13(b) is completed or until the alleged breaching party has
had an opportunity to seek judicial intervention prior to the
end of any applicable cure period in a notice given under
section 13(b)(iv).
(d) The remedies provided under this section 15 are not exclusive
of any other rights or remedies under law or equity to which
either party may be entitled to with respect to any breach or
failure by the other party.
(e) Transition Period. If this Agreement (including any extension
terms) expires by its own terms under section 9(a), or if any
party terminates this Agreement prior to the end of the
applicable term hereof, except for termination pursuant to
Section 15(b)(i) hereto, the parties will reasonably cooperate
with one another to facilitate an effective transition to
commercially reasonable alternatives as follows:
(i) Gilat and Spacenet will fill outstanding purchase
orders for a period of no less than eighteen (18)
months from the date of termination at the expiration
of the term or for termination for reasons other than
failure to pay timely;
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(ii) Gilat and Spacenet will support StarBand operations
and subscribers with regular Software updates and
telecommunications facilities and services pursuant
to the Telecommunications Services Agreement (to the
extent such agreement remains in effect at the time
of termination) for three (3) years following
termination subject to payment of any applicable fees
therefor as set forth in this Agreement or in the
Telecommunications Services Agreement;
(iii) Gilat's product warranty and warranty parts
obligations set forth in section 11 shall survive any
such expiration or termination.
16. Limitation of Liability and Indemnification.
(a) Except as further limited by section 11(f) hereto, the sole
and exclusive remedy at law (other than with respect to claims
involving misrepresentation or fraud) for any claim (whether
such claim is based in tort, contract or otherwise) arising
out of a breach of any representation, warranty, covenant or
agreement in or pursuant to this Agreement shall be a claim
for actual damages, which claims are independent of and in
addition to any equitable rights or remedies. No party shall
be liable in any case to any other party for indirect,
consequential, punitive, special or other similar damages
arising out of or relating to this Agreement. No party shall
be liable for direct damages in excess of (i) as to a claim
related to Equipment and Software, the total amount of the
purchase order under which the Equipment or Software that is
the subject matter of the claim was purchased by StarBand, or;
(ii) as to any other claim brought hereunder, [*]; except that
for claims covered by the indemnification obligations provided
in this Agreement regarding third party claims (such third
party claims to include claims asserted by the respective
parties' employees, as third parties), such liability limits
shall not apply.
(b) Gilat and/or Spacenet shall, at their sole expense, defend,
indemnify, and hold StarBand harmless from and against all
costs, expenses and liabilities in connection with any claim,
suit or action for infringement of any intellectual property
rights, including patent, copyright, or trade secret rights
which arise from any of the products or services provided by
Gilat and/or Spacenet under this Agreement, including but not
limited to the currently pending Xxxxxx claim.
(c) Should the G/S Products & Services or any component thereof
that may be provided by Gilat and/or Spacenet under this
Agreement become, or in Gilat's or Spacenet's, as applicable,
opinion be likely to become, the subject of a claim of
infringement of any intellectual property rights, Gilat and/or
Spacenet, as applicable, may exercise any of the following
options at their sole expense: (i) procure for StarBand the
right to continue using the G/S Products & Services, (ii)
replace the same with comparable alternatives; (iii) modify
the same so as to be non-infringing; and/or (iv) compensate
StarBand for the full purchase price of the impacted G/S
Products & Services.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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(d) StarBand agrees that Gilat's and/or Spacenet's liability for
intellectual property infringement shall not apply to any
claim, suit or action for infringement which may be brought
against StarBand to the extent due to: (i) StarBand's
modification of the G/S Products & Services or any parts
thereof or StarBand's modification of the Software or any
software associated therewith; or (ii) use of the G/S Products
& Services or Transition Services with any device, software or
services added by StarBand. StarBand further agrees that it
will indemnify Gilat and/or Spacenet on the same terms as
Gilat and/or Spacenet is obligated to indemnify StarBand
pursuant to this section, should any claim of infringement be
made against Gilat and/or Spacenet to the extent caused by
StarBand's modifications or use as aforesaid. StarBand,
however, shall not be liable for any such modifications that
are made at the instruction of Gilat or Spacenet.
(e) StarBand hereby indemnifies Gilat and/or Spacenet, as the case
may be, and shall indemnify and save Gilat and/or Spacenet
harmless from and against injuries, loss and/or damage to
Gilat's and/or Spacenet's employees and/or their tangible
personal property and/or to the person or tangible personal
property of third parties to the extent caused by the willful
or negligent acts or omissions of StarBand.
(f) Gilat and/or Spacenet, as the case may be, hereby indemnifies
and shall indemnify and save StarBand harmless from and
against injuries, loss, or and/or damage to StarBand's
employees and/or its tangible personal property and/or to the
person or tangible personal property of third parties to the
extent caused by the willful or negligent acts or omissions of
Gilat and/or Spacenet.
(g) It is understood and agreed by StarBand that under this
Agreement, Gilat and/or Spacenet is providing the G/S Products
& Services for purposes determined by StarBand. StarBand
recognizes that Gilat and/or Spacenet, as the case may be,
does not control the manner in which StarBand uses the G/S
Products & Services, the access by others to the data or other
content transmitted over the StarBand network or the content
of the communications that StarBand transmits and receives
over its network. Without limiting the terms of Attachment F
hereto regarding Internet connectivity service, StarBand
therefore agrees to indemnify and hold Gilat and/or Spacenet,
as the case may be, and Gilat's and/or Spacenet's officers,
directors, and employees harmless from and against any and all
claims for direct damages, expenses, and losses (including
reasonable attorney's fees) to the extent arising out of or in
connection with (a) the use to which StarBand elects to put
the G/S Products & Services; or (b) the content of the
communications that StarBand or its customers place over the
G/S Products & Services.
(h) A party which is seeking indemnification hereunder shall
notify the indemnifying party in reasonable detail of the
event(s) giving rise to such claim for indemnification within
fifteen (15) business days after the indemnified party has
actual knowledge of such event(s). The indemnifying party
shall not have any liability to the indemnified party to the
extent that it is materially prejudiced as a
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result of any delay in notification by the indemnified party
nor shall the indemnifying party be responsible for any
additional loss incurred by the indemnified party due to such
delay by the indemnified party. The indemnifying party shall
have the right to undertake the defense of any claim upon
delivery of notice to the indemnified party with respect to
such claim. Such defense shall be made with counsel reasonably
acceptable to the indemnified party. If the indemnifying party
fails to undertake the defense of the indemnified party within
such time period, the indemnified party may retain its own
counsel for such defense (which shall be reasonably acceptable
to the indemnifying party), and the indemnified party's
reasonable attorney's fees and expenses related to such claim
shall be paid by the indemnifying party. No party shall,
without the consent of the other party or parties, agree to
any non-monetary settlement of the indemnified claim.
(i) Nothing in this section 16 shall limit or in any way derogate
from the terms and provisions of Attachment F hereto as
applied to Internet connectivity service.
17. Governing Law; Jurisdiction.
This Agreement, including all matters relating to the validity,
construction, performance and enforcement hereof, shall be governed by
the laws of the Commonwealth of Virginia, without giving reference to
its principles of conflicts of laws. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of any federal court
in the Commonwealth of Virginia, or, to the extent federal jurisdiction
is not available, any state court in the Commonwealth of Virginia, in
respect of any action arising out of or based upon this Agreement and
irrevocably waives any objections which it may now or hereafter have to
the laying of venue of any such action in any such court.
18. Assignment.
This Agreement will be binding on and inure to the benefit of the
parties and their permitted successors and assigns. None of the parties
to this Agreement may assign, transfer or convey any right, obligation
or duty, in whole or in part, or of any other interest under this
Agreement, without the prior written consent of the other relevant
parties. Notwithstanding the foregoing, no consent shall be required in
the case of an assignment by a party to an affiliate or subsidiary of
such party.
19. Waiver of Compliance.
Other than sections 13(b)(i) or 13(b)(ii), any term or condition of
this Agreement may be waived at any time by the party that is entitled
to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the
party waiving such term or condition. No waiver by any party of any
term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
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20. Most Favored Nation.
The parties hereto represent that this Agreement contains, and shall
hereafter contain, rates and terms no less favorable than the best
terms offered on the Equipment, Software and StarBand Products offered
hereunder to other similarly situated customers. If there is no
similarly situated customer as described above, the parties shall
provide such products on commercially reasonable terms in the context
of the transactions contemplated hereunder. For these purposes, the
Most Favored Nation concept refers to prices no higher than those
charged by Gilat or StarBand (as the case may be) for comparable
products and services sold in comparable quantities on comparable terms
and conditions to other customers in bona fide offers or sales.
21. Export Restrictions.
StarBand agrees that it shall not export, re-export, resell, ship or
divert the Equipment or Software directly or indirectly to any country
for which a U.S. or other export license is required without first
receiving confirmation that the U.S. Department of Commerce and other
relevant authorities have approved or licensed, if required, such
export, re-export, resale, shipment or diversion.
22. Force Majeure.
Unless specified otherwise, any delay in or failure of performance by
any party under this Agreement shall not be considered a breach of this
Agreement if and to the extent caused by events beyond the reasonable
control of the party affected, including but not limited to acts of
God, embargoes, governmental restrictions, strikes, riots, wars or
other military action, civil disorders, rebellion, vandalism, or
sabotage. The party whose performance is affected by such events shall
promptly notify the other parties giving details of the force majeure
circumstances, and the obligations of the party giving such notice
shall be suspended during but not longer than the continuance of the
force majeure, and the time for performance of the affected obligation
hereunder shall be extended by the time of the delay caused by the
force majeure event.
23. Verification.
Each party shall have the right to request on fifteen (15) days notice
that a third party certified public accountant acceptable to Gilat,
Spacenet and StarBand, but paid for by the party making the request,
conduct an audit of the relevant records of another party to verify
compliance with this Agreement or any portion thereof. The subject
matters of such an audit may include, but are not necessarily limited
to, capacity, price, cost, and related issues, but only to the extent
this Agreement provides (expressly or by reasonable implication) that
such matters are subject to verification by another party hereto.
24. Entire Agreement; Amendments.
This Agreement and any specified provisions of documents incorporated
by reference contains the entire agreement between the parties with
respect to the transactions
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contemplated hereunder, and supersede all prior arrangements or
understandings with respect thereto, written or oral. Once this
Agreement has been executed, any amendments hereto must be made in
writing and signed by all parties.
25. Survival.
The relevant rights and obligations of the parties shall survive the
termination of this Agreement.
26. Severability.
In the event that any portion of this Agreement is held to be
unenforceable, the unenforceable portion shall be construed in
accordance with applicable law as nearly as possible to reflect the
original intentions of the parties and the remainder of the provisions
shall remain in full force and effect.
27. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
28. Headings.
The headings contained in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto each acting with proper authority have
executed this Agreement.
STARBAND COMMUNICATIONS INC.
By: /s/ ZUR XXXXXXX
------------------------------------------------------------------
Print Name: Zur Xxxxxxx
----------------------------------------------------------
Title: CEO & Co-Chairman
--------------------------------------------------------------
Date: Sept. 29, 00
--------------------------------------------------------------
GILAT SATELLITE NETWORKS LTD.
By: /s/ XXXX GAT
------------------------------------------------------------------
Print Name: Xxxx Gat
----------------------------------------------------------
Title: Chairman & CEO
--------------------------------------------------------------
Date: Sept. 29, 2000
--------------------------------------------------------------
SPACENET INC.
By: /s/ XXXXXXX XXXXXX
------------------------------------------------------------------
Print Name: Xxxxxxx Xxxxxx
----------------------------------------------------------
Title: President
--------------------------------------------------------------
Date: 29 September, 2000
--------------------------------------------------------------
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ATTACHMENT A
This Attachment A contains specific information regarding the G/S Products &
Services to be provided to StarBand by Gilat and Spacenet.
Pursuant to the terms of this Agreement, StarBand shall purchase from Gilat (i)
the Skystar Advantage satellite communications Equipment and Software described
below for use by (a) retailers identified and mutually agreed to by Gilat and
StarBand in writing to support in-store demonstrations of StarBand's broadband
Internet product at retail locations and (b) consumers and (ii) the SkyBlaster
satellite communications Equipment, Software and Space Segment for use by
consumers. Spacenet will provide the indicated services for such Equipment and
Software.
As regards pricing in this Attachment A, a "site" refers, as appropriate, to a
single operating unit, e.g., antenna, IDU, ODU, etc.
G/S PRODUCTS & SERVICES
SKYSTAR ADVANTAGE PRODUCT (FOR RETAILERS)
PERFORMANCE SPECIFICATIONS ARE SET FORTH IN ATTACHMENT H.
1. SSA Remote Equipment: $[*]/site
Includes:
- 1.2 Meter Antenna
- Standard Mount*
- 500 mW Outdoor Unit with LNB
- Indoor Unit, w/ Access to One (1) Ethernet LAN Port and two
(2) RS-232 Serial Ports
- Software license
*"Standard" mounts means basic penetrating roof/wall mount; additional
mount characteristics require additional payment.
2. Standard Site Installation: $[*]/site
Includes the delivery and installation of the equipment described above
and includes one (1) wall penetration for the IFL cable run. The
installation process consists of VSAT assembly, installing and pointing
the VSAT antenna, installing the IFL cable, installing and connecting
the indoor and outdoor electronics and connecting the indoor
electronics to the retailer's PC. Other required efforts such as the
installation of cable conduits, trenching or non-standard antenna
mounts are outside the scope of a standard installation and subject to
quotation.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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ATT. A-1
27
3. SSA Hub Equipment: $[*]/VSAT hub chain
Includes: ______________________
4. Hub Servers: $[*]/VSAT hub chain
Includes:
- QOS
- Switch
5. GSTAR IV Space Segment (2.5 trx): $[*]/transponder/month
6. Optional Recurring Services:
Includes:
- Software maintenance
- Hub operations: $[*]/month/VSAT hub chain
- Next Business Day maintenance: $[*]/month/site
- Second level help desk: $[*]/month/site
- Internet connectivity: $[*]/month/Site
StarBand shall have no obligation to purchase any of these recurring services.
StarBand may cancel one or more of these recurring services, at its discretion,
upon ninety (90) days' notice and at the expiration of such notice period, the
obligation of Gilat and/or Spacenet, as the case may be, to provide such
services shall cease. Spacenet will provide adequate levels of service during
the term of such ninety (90) day notice period.
Any funds paid by a retailer to StarBand for the retailer's use of the SSA
service shall be StarBand's revenue.
SKYSTAR ADVANTAGE PRODUCT (FOR CONSUMERS)
PERFORMANCE SPECIFICATIONS ARE SET FORTH IN ATTACHMENT H.
1. SSA Remote Equipment: $[*]/site
Includes:
- .75 Meter Antenna
- Standard Mount*
- 1 Watt Outdoor Unit with LNB
- Indoor Unit, w/ Access to One (1) USB port**
- Software license
*"Standard" mounts means basic penetrating roof/wall mount; additional
mount characteristics require additional payment.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
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ATT. A-2
28
**Upgrade feature: Gilat agrees to upgrade, at StarBand's option, the
IDU used by each StarBand customer with installed SSA Equipment. Upon
StarBand's request for an upgrade, Gilat will provide by an agreed upon
date a USB box to replace the SSA indoor unit and self installation
instructions, for payment by StarBand of $[*] per unit, unless the
customer ships the original SSA indoor unit (in good condition, normal
wear and tear excepted) to StarBand at Spacenet's expense (not to
exceed $[*] per unit) within twelve (12) months of the customer's
receipt of the USB box. If Spacenet resells the returned units for a
price that exceeds $[*] per unit, Spacenet and StarBand will negotiate
in good faith whether and to what extent the excess amount will be
shared between the two companies. Upon completion of the upgrade
program, Gilat agrees to use reasonable commercial efforts to assist
StarBand in selling the hub equipment used for the SSA system, but
shall be under no duty to sell such equipment.
2. SSA Hub Equipment: $[*]/VSAT hub chain
Includes:______________
3. Hub Servers: $[*]/VSAT hub chain
Includes:
- QOS
- Switch
4. Performance Plan (number of subscribers per hub chain equipment):
----------------------------------------------------------------------------------------
Date: As of 12/31/00 After 9/1/01 After 3/1/02
----------------------------------------------------------------------------------------
Sub per hub: [*] [*] [*]
----------------------------------------------------------------------------------------
If the actual performance is lower than above, hub and server prices
for future purchases, will be adjusted in a manner to be agreed by the
parties.
5. Optional Recurring Services:
Includes:
- Hub operations: $[*]/month/VSAT hub chain
- Second level help desk: $[*]/month/site
- Internet connectivity: $[*]/month/site
- Software maintenance
StarBand shall have no obligation to purchase any of these recurring
services. StarBand may cancel one or more of these recurring services,
at its discretion, upon ninety (90) days' notice and at the expiration
of such notice period, the obligation of Gilat and/or
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. A-3
29
Spacenet, as the case may be, to provide such services shall cease.
Spacenet will provide adequate levels of service during such ninety
(90) day notice period.
SKYBLASTER PRODUCT (FOR CONSUMERS)
PERFORMANCE SPECIFICATIONS ARE SET FORTH IN ATTACHMENT H.
1. SkyBlaster Equipment:
For Equipment delivered in 2000: $[*] per site;
For Equipment delivered in 2001 and beyond:
Quantity Price per site
-------- --------------
1 - 50,000 $[*]
50,001 - 100,000 $[*]
100,001 - 150,000 $[*]
150,001 - 200,000 $[*]
200,001 - 250,000 $[*]
250,001 - 300,000 $[*]
300,001 and up $[*]
Includes:
- 0.75 Meter antenna
- Standard Antenna Mount*
- 1 Watt Outdoor Unit with LNB
- SkyBlaster USB Box IDU
*"Standard" mounts means basic penetrating roof/wall mount; additional
mount characteristics require additional payment.
For SkyBlaster PCI cards based units delivered in 2001, add $[*] to the
above USB box prices for each unit.
At the earlier of 300,000 USB boxes sold in 2001, or December 30, 2001,
Gilat and StarBand agree to negotiate in good faith lower USB prices
for future deliveries.
Prices for new version: If Gilat's hardware costs for a new version of
the SkyBlaster product for consumers is the same or lower than the
prices set forth herein, the price to StarBand for the new version will
be the same as stated herein. If Gilat's hardware costs for a new
version (with additional features which are not included in the other
previous product model) of the SkyBlaster product for consumers is
higher than the prices stated herein, then the parties shall
negotiate the price for such new version in good faith.
2. SkyBlaster Hub Equipment: $[*]/microcluster if the number of
subscribers per transponder is less than [*] or $[*] per transponder
otherwise. $[*] per transponder from 2001 onward.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. A-4
30
Includes: ____________________
3. Hub server:
For server delivered in 2000: $[*]
For server delivered in 2001: $[*]
For server delivered in 2002: $[*]
Includes:
- QoS
- IPSec
- Flash
- DHCP
- Switch
*Prices are based on use by 10,000 subscribers and on the following MSN
traffic assumptions: (i) at Peak Hours, [*] of all subscribers are
on-line; (ii) at Peak Hours, on-line subscribers use the outbound
channel [*] of the time on average; and (iii) at Peak Hours, on-line
subscribers use the inbound channels [*] of the time on average.
4. Performance Plan (number of subscribers per hub)
----------------------------------------------------------------------------------------
Date: As of 12/31/00 After 9/1/01 After 3/1/02
----------------------------------------------------------------------------------------
Sub per hub: [*] [*] [*]
----------------------------------------------------------------------------------------
If the actual performance is lower than above, hub and server prices
for future purchases will be adjusted in a manner to be agreed by the
parties.
5. Product Software License and Maintenance: $[*]/month/site
Includes:
- SkyBlaster Windows Driver
- DHCP
- IPSec
- IB QoS (does not support networking)
- Flash
- IPA
- All software updates for extended warranty. The terms for
upgrades are to be mutually agreed upon by the parties at the
time of the relevant release, it being understood that
StarBand shall not be required to pay for upgrades necessary
to meet the necessary specifications required by this
Agreement. For these purposes, "updates" shall refer to
changes made available by Gilat to Software to correct errors
or improve the efficiency and effectiveness of the then
current Software, and "upgrades" shall refer to changes made
by Gilat or third parties to Software which add one or more
new functions to the then current Software.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. A-5
31
6. Multicast Services System (MSS): $[*] /MSS hub site plus
$[*]/month/subscriber plus a revenue sharing of [*] on MSS value added
revenues above $[*]/month/subscriber and [*] on revenues above
$[*]/month/subscriber. The MSS shall include software licenses and
servers.
NETWORK IMPLEMENTATION
ORDERING PROCEDURES
A. Content of Site Orders. StarBand will notify Spacenet's designated
program manager (via purchase orders or other mutually agreed-upon
means of communication) by facsimile (or other mutually agreed upon
means of communication) of specific Sites that it wishes Spacenet to
install at least 45 days prior to the requested installation
commencement date. In such notices, StarBand must include:
- Street address, city, state and zip code where the Equipment
will be delivered and installed;
- Requested installation date;
- Name or title and phone number of the person at each Site
authorized to work with Spacenet on all installation
activities;
- Any special instructions for the installation, including
deviations from the standard Equipment configuration specified
herein; and
- StarBand unit number for the Site.
*In all instances where StarBand requests a Site installation date that
is less than thirty (30) days from the date Spacenet receives
StarBand's order and Spacenet is able to meet such request, StarBand
shall pay an expedite fee for such Site installation.
B. Purchase Orders. G/S Products & Services may be ordered via StarBand's
own purchase orders within the lead times provided by Gilat or
Spacenet, as the case may be. However, StarBand understands and agrees
that any such purchase orders are to be used only for purposes of
facilitating the ordering of G/S Products & Services under this
Agreement, and for providing a purchase order number for StarBand's
accounting purposes. StarBand agrees that, notwithstanding any
statements to the contrary on StarBand's purchase order or other
documents, the provision of G/S Products & Services as contemplated in
this Agreement shall be governed solely by the terms and conditions of
this Agreement, and that any terms and conditions of StarBand's
purchase order or other documents shall be null and void.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. A-6
32
SITE INSTALLATIONS (FOR RETAILERS ONLY)
A. Standard Installation. A standard installation includes the delivery
and installation of the Equipment set forth above, and includes one (1)
wall penetration for the IFL cable run. The installation process
consists of VSAT assembly, installing and pointing the VSAT antenna,
installing the IFL cable, and installing and connecting the indoor and
outdoor electronics. Other required efforts, such as the installation
of cable conduits, trenching, or non-standard antenna mounts, are
outside the scope of a standard installation and subject to quotation.
B. Spacenet Responsibilities. As part of the Standard Installation,
Spacenet or its agents will:
- Obtain all licenses, permits, approvals, authorizations and
clearances required by the FCC for the operation of the
Equipment.
- Render reasonable assistance by telephone to support
StarBand's efforts to secure landlord approvals at each Site.
C. StarBand Responsibilities. At each Site, StarBand or its agents will:
- Designate one individual that is authorized to make decisions
relating to the installation of the Equipment at each Site and
to interface with Spacenet during installation.
- Obtain any landlord approvals required for each Site.
- Obtain any required building permits, zoning permits, and/or
zoning variances.
- Pay Spacenet, on a time and materials basis, if Spacenet
attends zoning hearings or other public meetings in order to
obtain a building or zoning permit or zoning variance.
- If requested by Spacenet, provide building construction
drawings for each Site type to Spacenet's installation manager
at least thirty days prior to scheduled commencement of
installation.
- Provide a suitable secure area for installation of the antenna
and all outdoor and indoor electronics associated with the
Equipment.
- Provide electrical supply, data interface cables, and
environmental conditioning requirements as may be required in
order to meet Spacenet-provided specifications and local
building department codes. Electrical supply requirements
include a 120 volt single phase electrical power receptacle
within 5 feet of the Indoor Unit location, preferably with a
separate 15-Amp circuit breaker; and if antenna de-icing is
provided, an additional 120 volt single phase electrical power
receptacle within 5 feet of the antenna with a separate 15-Amp
circuit breaker. The Indoor Unit portion of the VSAT system
shall be located in an area suitable for a personal computer,
in a clear space, 18"D x 20"W x 10"H, adequately ventilated to
provide air circulation about the unit (preferably
air-conditioned) and to be free of excessive dust or dirt.
- Subject to StarBand's security policies and procedures,
provide Spacenet or its agents with access and egress to the
Site and indoor communications equipment location at all
reasonable times for installation and maintenance of the
Equipment.
CONFIDENTIAL
ATT. A-7
33
- Pay for any special conveyances (e.g. crane), services, or
facilities for transporting Equipment (e.g., the VSAT antenna)
and any materials that cannot be manually conveyed to the
point of installation.
- Arrange and pay for union labor if the local jurisdiction
requires labor union members to perform or supervise the VSAT
installation.
D. Scheduling Installations.
- For all installations under this Agreement, Spacenet and
StarBand shall agree to a mutually acceptable and
geographically efficient Site installation schedule. Spacenet
shall plan the specific installation schedule and routing of
the installations.
- There will be no Site survey charge applicable if the Spacenet
installer is able to perform an installation on his first
visit using one of the standard antenna mounts. Upon arrival
of the Spacenet installers at a Site, if it is determined that
one of the standard antenna mounts cannot be used, or if the
Site is determined to be non-Standard for other reasons, a
Site survey will be performed at that time instead of the
installation activity for the price specified above, and the
installation will be rescheduled to include the non-standard
Equipment and installation activities, subject to StarBand's
approval of Spacenet's quotation for any non-standard items or
services.
- An Aborted Site Installation charge will be paid if StarBand
fails to grant Spacenet access to a site on the scheduled
installation date, or if the site is not ready for a VSAT
installation on the scheduled install date (e.g., site under
construction, no A/C power, etc.)
OPERATION AND MAINTENANCE (FOR RETAILERS ONLY ) - OPTIONAL
SITE MAINTENANCE
A. Maintenance Definitions. Subject to the terms and conditions hereof,
Spacenet shall provide maintenance support for all Equipment provided
as part of this Agreement. Such maintenance shall consist of:
- Equipment maintenance which includes travel to and from the
Site and technical trouble-shooting to isolate any problems;
- On-Site repair and replacement, as required, of malfunctioning
Equipment;
- Diagnostic support of malfunctioning Equipment;
- Software maintenance; and
- Coverage during Spacenet's normal Business Hours, provided,
however, that if the 7x16 ("Extended") maintenance option is
selected, the maintenance hours shall be seven days a week
from 8AM - Midnight, local time. "Business Hours" means Monday
through Friday (excluding Seller holidays), 9:00 a.m. to 5:00
p.m. (local time of the serving field service center).
CONFIDENTIAL
ATT. A-8
34
"Business Day" excludes Saturdays, Sundays and Federal, state and local
holidays. US Federal holidays observed by Seller maintenance and
service personnel are:
New Year's Day * Labor Day
President's Day Thanksgiving Day
Memorial Day The day after Thanksgiving Day
Independence Day * Christmas Day *
*If the holiday falls on a Saturday or Sunday, it will be observed on
the nearest Friday or Monday, as observed by Federal employees.
B. Maintenance Response Time. Spacenet will respond to maintenance calls
or other indications of malfunction by dispatching a service technician
to the Site to repair or replace the defective component unless the
trouble can be otherwise corrected through remote repair. During
Business Hours, for Sites located within 50 miles of a Spacenet field
service center, Spacenet will use commercially reasonable efforts to
ensure that the field service technician will arrive at the Site within
an average of four (4) hours of dispatch. For periods other than
Spacenet's normal Business Hours and for Sites located more than 50
miles from a Spacenet field service center, Spacenet shall respond to
maintenance calls on a commercially reasonable effort basis.
Maintenance response times will be measured as the elapsed time (in
Business Hours) from StarBand's request for a maintenance dispatch from
the Spacenet Seller Network Management Center to arrival of the field
service representative at the failed unit, provided that the failed
unit is immediately accessible to the field service representative at
the Site. The average response time will be based on results
experienced during the prior 12-month period of operation.
C. StarBand's Maintenance Responsibilities. StarBand shall perform "1st
Level" maintenance support, which means that StarBand shall establish a
clearinghouse through which Site service problems are initially
reported (hereinafter, StarBand's "Central Trouble Reporting Point").
As part of this 1st Level support, StarBand will perform first-line
troubleshooting to assess whether a problem reported at a Site is due
to Gilat and/or Spacenet-provided Equipment that needs repair, or to
some other cause. Calls and requests to Spacenet from StarBand for
maintenance support (i.e., for 2nd level support) shall be made only
from StarBand's Central Trouble Reporting Point. In order for Spacenet
to respond to maintenance calls from StarBand's Central Trouble
Reporting Point, StarBand shall assure that an authorized
representative shall be available at the Site to receive the Spacenet
maintenance technician(s), including security escort, if required. In
the event StarBand cannot verify that a representative and/or security
escort will be present, Spacenet shall not dispatch or have dispatched
a maintenance technician until such time as StarBand can verify that a
representative shall be available at the Site to receive the
maintenance technician(s) and contacts Gilat/Spacenet with such
information. Upon dispatch of a maintenance technician, if an
authorized representative is not available at the Site to receive the
maintenance technician(s), including security escort, if required, the
Aborted Site Maintenance Charge shall apply.
CONFIDENTIAL
ATT. A-9
35
D. Maintenance Exclusion. Gilat's/Spacenet's maintenance obligations under
this Agreement do not include provision of consumable supplies, repair
or replacement of Equipment failures or malfunctions caused by improper
installation, operations, or maintenance by other than Spacenet
authorized representatives, relocation or modification by StarBand or
others not under Spacenet's control, failure or interruption of
StarBand-provided terrestrial communications or electrical power,
accident, fire, lightning, snow, snow removal, or other hazards beyond
normal range of use, vandalism, trouble calls where no problem is found
and the reported problem does not repeat within five calendar days, or
failures or malfunctions resulting from exposure of the Equipment to
conditions beyond its operating conditions. Any such failures and
malfunctions will be repaired as authorized by StarBand on a
commercially reasonable effort basis and billed to StarBand on a time
and materials basis. StarBand shall grant or have granted access as
required for maintenance of the Equipment during maintenance hours,
including appropriate security escort when required.
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CONFIDENTIAL
ATT. A-10
36
ATTACHMENT B
STARBAND PRODUCTS & SERVICES
SSA Model 180
SSB Model 360
SB with PCI Cards
Option 1: RETAIL DISTRIBUTOR PLAN
Includes: Equipment, standard installation, field maintenance,
service/warranty (optional), help desk, shared hub
support, space segment, consumer billing, and Internet
backbone connectivity.
StarBand Dealer Commission: Distributor commission structure consistent with the MFN
provision in Paragraph 20 of the Agreement.
Terms: Consistent with the MFN provision in Paragraph 20 of the
Agreement. StarBand will serve as the exclusive EchoStar
dealer for any Echostar sales within StarBand's field of
exclusivity.
Option 2: WHOLESALE ACCESS PLAN
Includes: Shared hub support with dedicated baseband equipment,
dedicated space segment (to be purchased in bulk), and
3rd level technical diagnostic support.
Excludes: Equipment, installation, field maintenance,
service/warranty, help desk and consumer billing.
Terms: Based on the MSN traffic assumptions and consistent with
the MFN provisions in Paragraph 20 of the Agreement and
subject to Spacenet commitment to number of subs.
CONFIDENTIAL
ATT. B-1
37
a.) The parties shall agree to the size and the price for the space segment
at or before the time of order.
b.) StarBand will provide Spacenet with additional StarBand services (i.e.
Installation, Individual billing and Field maintenance warranty) and
equipment on an "a-xx-xxxxx" basis in accordance with mutually agreed
terms.
c.) StarBand will approve Spacenet being a non-exclusive reseller of the
StarBand service to certain residential or SOHO (small office/home
office) customers over which StarBand has exclusive marketing rights
(e.g., real estate agents, etc.), provided that Spacenet operates
within the guidelines that StarBand establishes for the distribution
and sale of the StarBand Products & Services. Without limiting the
foregoing, StarBand hereby appoints Spacenet as a non-exclusive
reseller to real estate agents.
d.) Traffic: Under Option 1, Spacenet's customer traffic, on an aggregate
basis, will be not more than consumer Internet traffic (based on the
MSN assumptions) during the peak hours. In the event traffic is higher
during the peak hours, Spacenet and StarBand will mutually agree on an
appropriate adjustment to terms.
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CONFIDENTIAL
ATT. B-2
38
ATTACHMENT C
DESCRIPTION OF TRANSITION SERVICES
1. In consideration for the Transition Services detailed below, performed
by Spacenet for StarBand, StarBand shall pay to Spacenet the following
fees (not including payments covering costs and expenses for employees
loaned to StarBand by Spacenet or any other payments that StarBand
requests Spacenet process through its accounts payable, both of which
StarBand will reimburse to Spacenet):
A. Information Technology (IT) StarBand will pay to Spacenet as
of July 1, 2000, [*] per calendar quarter for IT services
provided by Spacenet to StarBand.
B. Marketing. StarBand will pay to Spacenet as of July 1, 2000,
[*] per calendar quarter for marketing services provided
by Spacenet to StarBand, excluding third party charges
approved in advance by StarBand.
C. General & Administrative (G&A). StarBand will pay to Spacenet
as of July 1, 2000, [*] per calendar quarter for G&A
services, including but not limited to, legal, finance, and
human resources services, excluding third party charges
approved in advance by StarBand.
D. Real Estate. Star Band shall reimburse Spacenet for the pro
rata share of all rent paid on the premises of the facilities
occupied by StarBand in McLean, Virginia and Marietta,
Georgia.
StarBand may, in its discretion and upon ninety (90) days' written
notice (except for Real Estate which shall be subject to the same
termination notice provisions and other terms and conditions for early
termination set forth in Spacenet's leases for the respective
properties), cancel one or more of the above Transition Services
effective at the close of the first calendar quarter following the
notice, at which time StarBand's obligation to pay Spacenet the above
quarterly fees will cease.
2. In consideration for the Transition Services detailed below, performed
by Gilat for StarBand, StarBand shall pay to Gilat the following fees:
A. Internet Group. StarBand will pay to Gilat as of July 1, 2000,
[*] per calendar quarter for Internet services, and the
advancement and development of transparent Flash technology,
security gateway and systems, MSS development and integration
(managing Deuromedia product management, etc., and including
the "Carousel" user experience (including privacy, security
and other features required to provide an adequate user
experience), IPA (Internet Page accelerator) integration and
testing, switching technique integration, OB (outbound)
quality of service
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. C-1
39
development and integration (second phase on software from
Deterministic Network Inc. and Gilat's hardware), and
assistance with the Internet standard DHCP (dynamic host
configuration protocol) solution to the research and
development. StarBand shall be entitled to updates made
available by the Internet group during the time that StarBand
continues to purchase the Internet group services from Gilat.
StarBand may, upon ninety (90) days' written notice terminate
these Internet services, effective at the close of the first
quarter following the notice, at which time StarBand's payment
obligation will cease, as will Spacenet's/Gilat's obligations
to include subsequent updates of such items in future
deliverables. Pricing for such subsequent updates will be
negotiated as separate items to the extent such items are
ordered.
B. Financial, legal and other services. StarBand will pay to
Gilat as of July 1, 2000, [*] per calendar quarter for
financial, legal and other services, excluding third party
charges approved in advance by StarBand, provided by Gilat to
StarBand. Upon thirty ninety (90) days' written notice,
StarBand may, in its discretion, terminate the financial,
legal and other services effective at the close of the first
quarter following the notice, at which time StarBand's
obligation to pay Spacenet the above quarterly fees will
cease.
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. C-2
40
ATTACHMENT D
ERP SYSTEM AND ONE-TIME PAYMENTS
1. ERP: As soon as commercially possible after the Effective Date hereof,
Spacenet will provide (by sublicense, user rights or the like) certain
rights to StarBand (or reasonably assist StarBand in acquiring such
rights) for the ERP infrastructure together with the Service Group
(including all the developments to the ERP system to date) and [*]
seats, subject to StarBand's execution of the applicable third party
sublicenses or similar agreement governing use, as well as an indemnity
to Spacenet and/or Gilat in the event that Spacenet and/or Gilat is
required to indemnify the third party provider against acts or
omissions of StarBand. Such sublicense or use rights will be pursuant
to the terms of the software license agreement entered into between SAP
America, Inc., ("SAP") and Spacenet Inc., effective as of September 10,
1999, or other applicable license. StarBand will pay Spacenet or Gilat,
as the case may be, [*] for such sublicense or use rights, which shall
be accounted for as follows: [*] for the ERP sublicense or use rights
for the [*] seats, [*] for the infrastructure, and [*] for a share of
the development costs that Spacenet and Gilat have incurred throughout
their respective companies in the process of identifying, describing,
and designing the requirements and process for the ERP system.
Spacenet shall use best commercial efforts to secure consent from SAP
in order to sublicense or otherwise provide use rights as described
above to StarBand. In the event that Spacenet is unable to secure such
consent from SAP, Spacenet will promptly credit to StarBand the actual
cost StarBand incurs to license [*] ERP seats from SAP, less any amount
not yet paid by StarBand to Spacenet hereunder for such [*] seats.
Spacenet shall retain the rights to use the ERP system for all of its
purposes. As of July 1, 2000, the on-going operating, development and
other costs for ERP shall be divided between Spacenet and StarBand on a
[*] basis, respectively, the underlying assumption for this ratio is
that Spacenet is using [*] of the ERP system. StarBand and Spacenet,
however, will each bear the cost of hardware purchases necessary to
operate the ERP system for their respective purposes. All rights to ERP
developed by either Gilat, Spacenet or StarBand subsequent to the
transfer hereunder will be made available to the other parties and
their affiliates, as well as present and future entities operating in
other countries that sell products and/or services for use in VSAT
applications under the StarBand or other name, subject to the terms of
any applicable third party contract.
2. Set-up Costs. StarBand will pay to Gilat [*] as a one-time set-up cost
for preparation of the business plan, product plan, training and
personnel used to raise initial corporate capital of [*] in equity and
debt, this item is subject to the approval of the StarBand board of
directors. At the end of the second calendar quarter 2001, the
co-chairmen of StarBand shall jointly review the business plan
(including projections) in light
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. D-1
41
of actual revenues at that time. If in the sole discretion of the
co-chairmen, the co-chairmen mutually conclude, in light of all
relevant circumstances, that the projections in the business plan are
materially inconsistent with actual revenues, Gilat shall refund to
StarBand [*].
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. D-2
42
ATTACHMENT E
TRANSITION MANAGERS
StarBand
-----------------------------------------------------
Gilat
-----------------------------------------------------
Spacenet
-----------------------------------------------------
CONFIDENTIAL
ATT. X-0
00
XXXXXXXXXX F
ADDITIONAL TERMS AND CONDITIONS FOR INTERNET CONNECTIVITY
1. Tariffs.
Any state or federal tariffs applicable to the Internet Connectivity
Service are incorporated into the terms herein by reference. Spacenet
may elect or be required to file with the appropriate regulatory agency
tariffs respecting the delivery of certain Internet Connectivity
Service. In the event that such tariffs are filed respecting Internet
Connectivity Service ordered by StarBand, then the terms set forth in
the applicable tariff are incorporated herein by reference and shall
govern Spacenet's delivery of, and StarBand's consumption or use of,
such Internet Connectivity Service. In the event of a conflict between
this Agreement and any such tariff, the terms of the tariff shall
control.
2. Regulatory or Legal Changes.
In the event of any change in applicable law, regulation, decision,
rule or order that materially increases the costs or other terms of
delivery of the Internet Connectivity Service, Spacenet and StarBand
agree to negotiate regarding the rates to be charged to StarBand to
reflect such increase in cost and, in the event that the parties are
unable to reach agreement respecting new rates within thirty (30) days
after Spacenet's delivery of written notice requesting renegotiation,
then Spacenet may pass such increased costs through to StarBand and, in
the event Spacenet passes such costs through to StarBand, StarBand may
terminate the Internet Connectivity Service no later than fifteen (15)
business days after Spacenet increases the rates by providing sixty
(60) days' prior written notice.
3. Spacenet Facilities.
Spacenet will use reasonable commercial efforts to provide and maintain
the Facilities in good working order. "Facilities" shall be defined as
any and all equipment supplied by Spacenet used to deliver Internet
Connectivity Service, including but not limited to all terminal and
other equipment, wires, lines, circuits, ports, routers, switches,
channel service units, data service units, cabinets, racks, private
rooms and the like. StarBand shall not and shall not permit others to
rearrange, disconnect, remove, attempt to repair, or otherwise tamper
with any of the Facilities. If the same occurs, in addition to being a
breach by StarBand of StarBand's obligations hereunder, StarBand shall
(i) pay Spacenet the cost to repair any damage to the Facilities or
harm to any individual caused thereby; and (ii) be responsible for the
payment of service charges in the event that maintenance or inspection
of the Facilities is required as a result of StarBand's breach of this
paragraph. StarBand covenants to procure and maintain an insurance
policy reasonably acceptable to Spacenet to cover the foregoing. In no
event shall Spacenet be liable to StarBand or any other person for
interruption of Internet Connectivity Service or for any
CONFIDENTIAL
ATT. F-1
44
other loss, cost or damage caused or related to improper use or
maintenance of the Facilities, unless the same is caused by the
negligence of Spacenet.
4. Service Subject to Availability.
The furnishing of Internet Connectivity Service is subject to the
availability thereof, on a continuing basis, and is limited to the
capacity of Spacenet to provide the Internet Connectivity Service as
well as the capacity which Spacenet may obtain from carriers to furnish
Internet Connectivity Service from time to time as required at the sole
discretion of Spacenet.
5. StarBand Responsibilities.
StarBand shall have the additional responsibilities set forth below. In
addition to other remedies available at law, in the event StarBand
breaches any of the following responsibilities, Spacenet shall have the
immediate right to terminate or suspend the Internet Connectivity
Service to StarBand and StarBand shall be liable for all charges
incurred as of the date of termination, and if applicable, any
termination charges associated with such Internet Connectivity Service.
(i) Spacenet will not provide support directly to nor interface
with any end user. StarBand is responsible for (a) selecting
the end users that StarBand permits to access the Internet
Connectivity Service; (b) implementing with its end users
appropriate terms, conditions, and measures to ensure that all
end users comply with the terms and conditions of this
Agreement; (c) establishing its end users' rights to access
the Internet Connectivity Service; (d) training its end users;
and (e) billing and collecting any amounts StarBand elects to
charge its end users in connection with the Internet
Connectivity Service.
(ii) StarBand is responsible for its content (including any content
hosted by StarBand). StarBand agrees that it will not use the
Internet Connectivity Service to interfere with or disrupt
other network users, network services or network equipment.
Disruptions include, but are not limited to distribution or
propagation of computer worms and viruses, and using the
network to make unauthorized entry to any other machine
accessible via the network. StarBand will (a) not send any
unsolicited email that could be expected, in Spacenet's
reasonable discretion, to provoke complaints; (b) provide
recipients of unsolicited emails a clear and easily
exercisable means to be excluded from additional emails from
StarBand; (c) honor any request by any party to be excluded
from unsolicited emails (which means, among other things, that
StarBand will not provide such party's email address to any
third party for the purpose of sending unsolicited email); (d)
refrain from any use of the Internet Connectivity Service
which could interfere with a third party's ability to access
or use the Internet or the Internet Connectivity Service; and
(e) ensure that any email StarBand sends clearly and
accurately identifies the sender, the sender's return address
and the email address of the originator.
CONFIDENTIAL
ATT. F-2
45
(iii) To the extent deemed necessary by StarBand, StarBand shall
implement security procedures and controls necessary to limit
access to the Internet Connectivity Service to StarBand's
authorized end users and shall maintain facilities and
procedures external to the Internet Connectivity Service for
reconstruction of lost or altered files, data or programs.
(iv) StarBand understands that the Internet Connectivity Service
provided under this Agreement (including Internet use) may
require registrations and related administrative reports that
are public in nature.
(v) All IP addresses shall remain, at all times, property of
Spacenet and shall be nontransferable and StarBand shall have
no right to use such IP addresses upon termination or
expiration of this Agreement. IP addresses are allocated by
Spacenet to StarBand per the Internet Registry (ARIN)
guidelines following XXX 0000. Any change requested by
StarBand to the Spacenet allocated addresses must be agreed to
by the parties.
(vi) StarBand authorizes Spacenet to (a) monitor and record calls
and transmissions using the Internet Connectivity Service and
calls or transmissions to Spacenet concerning the Internet
Connectivity Service in order to detect fraud, check quality
and operate, maintain and repair the Internet Connectivity
Service; and (b) disclose such information to the extent
Spacenet deems it is legally required.
6. StarBand Warranty.
StarBand warrants that its use of the Internet Connectivity Service,
the content and all matters related thereto will at all times comply
with all applicable laws, regulations and written and electronic
instructions for use. Spacenet reserves the right to terminate or
suspend Internet Connectivity Service and/or remove StarBand or end
users' content from the Internet Connectivity Service if Spacenet (i)
determines, in its sole discretion, that Spacenet's public image,
reputation or goodwill will be adversely affected or that such use or
content does not conform with the requirements set forth in this
Agreement, or that Spacenet could be subject to liability; or (ii)
receives notice from anyone that StarBand's or end users' use or
content may violate any laws or regulations. Spacenet's actions or
inaction under this Section shall not constitute review or approval of
StarBand's or end users' use or content.
7. Limitation of Liability.
(i) Spacenet shall not be responsible for the operation or
maintenance of any StarBand-provided communication equipment.
Spacenet shall not be responsible for the transmission or
reception of signals by StarBand-provided equipment or for the
quality of, or defects in, such transmission and/or equipment.
(ii) Spacenet shall not be liable for any damages arising out of or
relating to: interoperability, interaction or interconnection
problems with applications, equipment,
CONFIDENTIAL
ATT. F-3
46
services or networks provided by StarBand or third parties;
service interruptions or lost or altered messages or
transmissions, except as otherwise provided herein or in a
tariff; or, unauthorized access to or theft, alteration, loss
or destruction of StarBand's, users' or third parties'
applications, content, data, programs, information, network or
systems.
(iii) Spacenet shall not be responsible for: (a) service impairments
caused by acts within the control of StarBand, its agents,
subcontractors, suppliers, licensees or users; (b)
interoperability of specific StarBand applications; (c)
inability of StarBand or any user to access or interact with
any other service providers, networks, users or informational
or computing resources through the Internet; (d) interactions
with third parties through the Internet; (e) services or
equipment provided by third parties; or, (f) performance
impairments caused elsewhere on the Internet. Spacenet shall
not be liable for unauthorized access by third parties to
StarBand's or its users' or third parties transmission
facilities or premises equipment or for unauthorized access to
or alteration, theft, loss or destruction of StarBand's or its
user's or third party's network, systems, applications, data
files, programs, procedures or information through accident,
fraudulent means or devices, or any other method.
(iv) Spacenet does not warrant that the Internet Connectivity
Service will be uninterrupted or error-free, or that the
Internet Connectivity Service will meet StarBand's
requirements or that the Internet Connectivity Service will
prevent unauthorized access by third parties. Spacenet does
not authorize anyone to make a warranty of any kind on its
behalf and StarBand should not rely on anyone making such
statements.
(v) StarBand shall indemnify, defend and hold Spacenet harmless
from and against any and all injuries, loss or damage
(including attorney's fees and court costs and including
claims for infringement of third party proprietary rights) (a)
made by any end user of StarBand in connection with the
delivery or consumption of Internet Connectivity Service, (b)
arising out of any commission or negligent omission by
StarBand in connection with the Internet Connectivity Service,
or (c) arising from StarBand's negligence or willful
misconduct.
(vi) Spacenet does not monitor and shall have no liability or
responsibility whatsoever for the content of any transmissions
or communications transmitted or otherwise disseminated via
the Internet Connectivity Service, and StarBand shall
indemnify and hold Spacenet harmless from any and all claims
(including claims by governmental entities seeking to impose
penal sanctions) related, directly or indirectly, to such
content. Spacenet provides only access to the Internet;
Spacenet does not operate or control the information,
services, opinions or other content of the Internet. StarBand
agrees that it shall make no claim whatsoever against Spacenet
relating to the content of the Internet or respecting any
information, product, service or software ordered through or
provided by virtue of the Internet.
CONFIDENTIAL
ATT. F-4
47
8. Acceptable Use Policy.
StarBand's use of the Internet Access Service shall at all times comply
with Spacenet's then-current Acceptable Use Policy and Privacy Policy,
as amended by Spacenet from time to time in its sole discretion.
Spacenet will notify StarBand of complaints received by Spacenet
regarding each incident of alleged violation of Spacenet's Acceptable
Use Policy by StarBand or third parties that have gained access to the
Internet Access Service through StarBand. StarBand agrees that it will
promptly investigate all such complaints and take all necessary actions
to remedy any actual violations of Spacenet's Acceptable Use Policy.
Spacenet may, in its sole discretion, identify to the complainant that
StarBand, or a third party that gained access to the Internet Access
Service through StarBand, is investigating the complaint and may
provide the complainant with the necessary information to contact
StarBand directly to resolve the complaint. StarBand shall promptly
identify a representative for the purpose of receiving such
communications. Spacenet reserves the right to install and use, or to
have StarBand install and use, any appropriate devices to prevent
violations of its Acceptable Use Policy, including devices designed to
filter or terminate access to the Internet Access Service.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
CONFIDENTIAL
ATT. F-5
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ATTACHMENT G
NON-COMPETE TERMS
During the term of this Agreement (including all renewals thereof), Gilat and
Spacenet, hereby agree that they shall not, and shall not permit any of their
Subsidiaries to, (a) directly or indirectly, offer in North America (i.e., the
United States, Canada and Mexico), any products or services competitive with the
G/S Products & Services that are the subject of this Agreement, including,
without limitation, selling, offering for sale or distributing free of charge,
customer premises equipment ("CPE") or any other products, services, equipment
or other items related to the provision by StarBand of such goods and services
(provided that Spacenet shall not be prohibited from conducting in North America
its Existing VSAT Business with existing customers of Spacenet and Large
Businesses), (b) without StarBand's prior written consent amend their respective
organizational documents, or (c) enter into or permit to exist any transaction
with StarBand unless such transaction is negotiated and consummated on an arm's
length basis and upon terms and conditions no less favorable than those which
StarBand could reasonably expect to be offered by a third party in a
substantially similar transaction. For purposes of this paragraph, (a) "Existing
VSAT Business" means the sale, marketing, service support of VSAT equipment and
VSAT-based network services and the installation of such equipment; and (b) a
"Large Business" means any corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust, trustee, unincorporated
organization, authority or other body that (i) has at least 100 VSAT sites and
(ii) is centrally billed, but that is not (A) an Internet Service Provider or
(B) a provider of access to the service (two-way broadband connectivity via
satellite) at a residence or "small office, home office" through an arrangement
whereby it would be reasonably likely that the provider of such access would be
paid for such access, if it was not obtaining another commercial benefit
therefrom.
In addition to the foregoing, Spacenet and Gilat represent and warrant that an
Equipment Purchase Agreement, dated as of December 23, 1991 (as from time to
time amended, modified or supplemented, the "Gilat/Spacenet Equipment
Agreement"), by and between Gilat and Spacenet (as successor in interest to GTE
Spacenet Corporation) constitutes the legal, valid and binding obligation of
Gilat and Spacenet, enforceable against each of them in accordance with its
terms. During the term of this Agreement (including all renewals thereof), Gilat
and Spacenet shall (a) preserve and maintain their corporate existence and all
of their material franchises, licenses, rights and privileges, and (b) each
remain a corporation duly organized and in good standing under the respective
laws of their incorporation jurisdiction. In addition, Gilat and Spacenet shall
ensure that during the term of this Agreement (including all renewals thereof),
the Gilat/Spacenet Equipment Agreement (a) shall continue to be a valid and
binding obligation of each of Gilat and Spacenet, enforceable against each of
them in accordance with its terms, and (b) shall not, without the prior written
consent of StarBand, be amended, modified or supplemented. In addition, Gilat
and Spacenet shall take no action whatsoever that, after giving effect thereto,
would impair Spacenet's exclusive rights to sell VSAT products under the
Gilat/Spacenet Equipment Agreement.
CONFIDENTIAL
G-1
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In addition to the foregoing, Gilat and Spacenet further represent and warrant
that they will sell G/S Products & Services to other parties only pursuant to
written terms and conditions that are expressly limited in such a manner that
will not impair StarBand's rights hereunder. Gilat and Spacenet further agree to
use reasonable efforts to stop and/or discourage activities of other parties
that might attempt to sell G/S Products & Services in the business segments
described above that are exclusively StarBand's, and to cooperate with StarBand
in this regard.
The preceding paragraphs shall apply to all two-way satellite products now in
existence or that are developed during the term of this agreement (including all
renewals thereof) by Gilat, Spacenet, or affiliates of either company, which
shall be made available to StarBand on mutually agreeable terms and conditions.
During the term of this Agreement (including all renewals thereof), StarBand
agrees that it shall not, in North America, offer to Large Businesses products
and services substantially similar to the products and services that compete
with the Existing VSAT Business, it being understood that nothing contained
herein shall prevent StarBand from providing any services whatsoever to any
Person that is not a Large Business.
The parties acknowledge that (a) Gilat intends to establish a separate entity
that is tentatively to be called StarBand Latin America (for the purpose of
selling VSAT equipment and services in Latin America, including Mexico); and (b)
StarBand will acquire [*] of the equity, and an option to purchase another [*]
of such equity in the new entity in exchange for granting StarBand Latin America
the exclusive rights to sell VSAT products and services in Mexico. StarBand
hereby agrees that upon such occurrence, the term "North America" as used in
this Attachment shall be limited to the United States and Canada, and Mexico
shall be deleted from the StarBand territory.
Gilat, Spacenet and StarBand each acknowledge that the covenants set forth above
pertaining to them contain reasonable limitations as to time, geographical area
and scope of activity to be restrained, and do not impose a greater restraint
than is necessary to protect and preserve for the benefit of the Parties the
goodwill of StarBand and Spacenet and to protect the legitimate business
interests of the Parties. If, however, the covenants set forth above are
determined by any court of competent jurisdiction to be unenforceable by reason
of their duration or the scope of the geographical area covered or in any other
respect, they will be interpreted to extend only over the longest period of time
for which they may be enforceable and/or over the largest geographical area as
to which they may be enforceable and/or to the maximum extent in all other
aspects as to which they may be enforceable, all as determined by such court in
such action.
These Non-Compete Terms shall terminate upon the termination of the Agreement by
either party thereto in accordance with the terms thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
G-2
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ATTACHMENT H
PRODUCT PERFORMANCE SPECIFICATIONS
1. SKYSTAR ADVANTAGE PRODUCT (FOR CONSUMERS)
Performance Plan (number of subscribers per hub ):
----------------------------------------------------------------------------------------
Date: As of 12/31/00 After 9/1/01 After 3/1/02
----------------------------------------------------------------------------------------
Sub per hub: [*] [*] [*]
----------------------------------------------------------------------------------------
2. SKYBLASTER PRODUCT (FOR CONSUMERS)
Performance Plan (number of subscribers per hub)
----------------------------------------------------------------------------------------
Date: As of 12/31/00 After 9/1/01 After 3/1/02
----------------------------------------------------------------------------------------
Sub per hub: [*] [*] [*]
----------------------------------------------------------------------------------------
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with repect to the
omitted portions
CONFIDENTIAL
ATT. H-1
51
ATTACHMENT I
Telecommunications Services Agreement
CONFIDENTIAL
ATT. I-1
52
Telecommunications Services Agreement
This Telecommunications Services Agreement ("Agreement") is entered into as of
the 15th day of February, 2000, by and between Spacenet Inc. ("Spacenet"), a
Delaware corporation and wholly-owned subsidiary of Gilat Satellite Networks,
Ltd., and Newco ("Newco"), a Delaware corporation, pursuant to which Spacenet
agrees to provide Newco with telecommunications facilities and services
necessary to provide satellite communications services in connection with
Newco's proposed satellite direct-to-home telecommunications services.
WHEREAS, Spacenet and Newco are related entities and Spacenet wishes to
assist Newco in the development of its business; and
WHEREAS, Spacenet has and operates certain satellite transmission and
reception facilities and services that Newco can use to provide the services it
contemplates until such time as Newco may obtain the necessary authorizations
to own and/or operate those, or other, facilities;
NOW THEREFORE, in consideration of the mutual promises and undertakings set
forth herein, the parties hereto hereby agree as follows:
1. Services
1.1 Spacenet Services and Direct-to-Home Services. Spacenet shall
provide to Newco, twenty-four (24) hours per day, three hundred sixty-five (365)
days per year, uplink and associated satellite transport services from
Spacenet's satellite earth station hubs and the uplink and reception services of
submeter and other VSAT terminals licensed to Spacenet, including access to
transmission and switching facilities necessary to transmit and terminate
Newco's telecommunications traffic to all termination points accessible to
Spacenet (the "Spacenet Services"). The Spacenet Services shall be defined, not
later than the Milestone One Achievement Date (as such term is defined in that
certain Broadband Access Services Supply Agreement, dated as of February 15,
2000 (as from time to time amended, modified or supplemented, the "Supply
Agreement"), in a statement of work (such statement of work to be in form and
substance satisfactory to MSN (as defined below), the "SOW")) to be attached
hereto as Exhibit A. Newco will use the Spacenet Services to provide such
telecommunications services to customers in the contiguous United States, (and
as appropriate in Canada and Mexico) as Newco may offer from time-to-time
("Direct-to-Home Services"). It is understood that the Direct-to-Home Services
will be primarily to provide Internet access and related services and direct
broadcast satellite services to Newco customers. As part of the Spacenet
Services, Spacenet shall also provide all personnel and utilities (e.g.,
electricity, water, heat, air conditioning, etc.) at the Spacenet facilities
that are necessary for Newco to provide the Direct-to-Home Services.
1.1.1 Spacenet personnel will continuously monitor the
Spacenet Services and the Direct-to-Home Services and will communicate with
Newco's Operational Contracts (as defined in Paragraph 9 below) as promptly as
possible regarding any technical problems with
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53
Newco's equipment, Newco's signal(s) or such services. Spacenet will assign
properly qualified and experienced personnel to perform the Spacenet Services
described in this Agreement. Spacenet shall assume the responsibility for
day-to-day management and performance of the Spacenet Services and shall
ensure, without limitation, that the appropriate resources are available and
utilized to perform the Spacenet Services in accordance with this Agreement.
For good cause, Newco may reasonably request that Spacenet remove any of
Spacenet's personnel from performance of the Spacenet Services under this
Agreement, and Spacenet agrees to promptly comply with such requests. Spacenet
also understands and agrees that it shall be solely responsible for the
performance of any subcontractors that may be required in order for Spacenet
to perform the Spacenet Services.
1.1.2 Spacenet will provide to Newco, use of such reasonable
space as may be necessary to permit Newco to locate its equipment at Spacenet's
facilities. In consideration for this, Newco will reimburse Spacenet for the
actual direct cost to Spacenet of the space used by Newco and reimbursement
will be made in accordance with Paragraph 6 below.
1.2 Service Initiation. Spacenet shall make the Spacenet Services
available to Newco on the date on which this Agreement has been fully executed.
1.3 Additional Services. If Newco wishes to have Spacenet perform
additional services under this Agreement, then those additional services shall
be subject to availability and shall be added to this Agreement upon the
written agreement of the parties. If any such services cause an increase in
the cost of performing the Spacenet Services, or otherwise affects any other
provisions of this Agreement, then the addition of such services shall be
subject to good faith negotiation and acceptance by both parties prior to the
performance of such services.
2. Newco-Supplied Equipment
2.1 Newco Equipment. In the event Newco determines to supply any
equipment (the "Newco Equipment") in connection with this Agreement:
2.1.1 Newco Equipment shall remain the property of Newco, and
maintenance, repair, or replacement of Newco Equipment shall be the sole
responsibility of Newco unless otherwise agreed. Upon expiration or termination
of this Agreement, Newco agrees to promptly remove Newco Equipment from
Spacenet's facilities.
2.1.2 Except for emergencies, Newco shall have access to the
Newco Equipment for normal maintenance purposes form 08:00 to 17:00 local
time, weekends and holidays excluded, and Newco shall give Spacenet a minimum
of twenty-four (24) hours advance notice of its need to gain such access.
Newco shall have access to the Newco Equipment for emergency servicing purposes
at any time upon telephonic or facsimile notice to Spacenet, and in such case
Newco shall give Spacenet as much advanced notice as is feasible before
seeking access to the Newco equipment.
3. Responsibilities.
3.1 Newco.
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3.1.1 Newco shall be solely responsible for delivery of its
signal(s) to the mutually agreed demarcation point at Spacenet hubs. Spacenet
shall be responsible for the actual connection of Newco's network to the
facilities at the demarcation point.
3.1.2 Newco shall not use, or knowingly permit anyone to use,
the demarcation point, Spacenet's system or hubs for any use or purpose not
permitted by law.
3.1.3 Newco shall be responsible for establishing the rates it
charges its customers and for billing and collecting from its customers any
charges for the Direct-to-Home Services that Newco provides through Spacenet's
facilities. Newco is responsible for payment of the total invoiced amount from
Spacenet regardless of whether Newco is paid for those services by its
customers.
3.2 Spacenet.
3.2.1 Spacenet shall uplink Newco's signal(s) to the
transponder(s) on the telecommunication satellites that are accessed by the
facilities.
3.2.2 Spacenet shall provide all necessary facilities and
equipment (including any necessary spare parts) that are necessary to uplink
Newco's signal(s) in accordance with this Agreement after the demarcation point.
3.2.3 All equipment provided by Spacenet shall remain the
property of Spacenet; all equipment provided by Newco shall remain the
property of Newco.
4. Compliance with Technical Specifications.
4.1 Newco shall comply with (i) Spacenet's technical specifications
from time to time set forth in the SOW so as to enable Spacenet to provide the
Spacenet Services, and (ii) all policies and procedures of the Spacenet hubs,
as notified to Newco in writing in advance.
4.2 Spacenet shall comply with all operational guidelines,
specifications and requirements provided by Newco, to the extent consistent
with Spacenet facilities and existing commitments to other customers. Upon
Spacenet's request, Newco shall furnish any technical information or
specifications relating to the Direct-to-Home Services as may be reasonably
required by Spacenet.
5. Charges.
5.1 Service Charge. The Spacenet Services will be provided to Newco
free-of-charge except as specified below:
(a) To the extent Spacenet incurs actual direct costs relating
to its performance of the Spacenet Services as set forth
in the SOW, Newco shall reimburse Spacenet for such actual
direct costs incurred by Spacenet in accordance with a
budget to be agreed by Newco and Spacenet. If the amount
with respect to which Spacenet is seeking reimbursement
exceeds such budget, then such reimbursement shall be
subject to Newco approval
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55
and will be based upon Spacenet's submission to Newco of
reasonable documentation substantiating the cost overruns.
(b) Likewise, based on reasonable substantiating documentation,
Newco shall reimburse Spacenet for the actual direct costs it
incurs to employ specifically dedicated Spacenet personnel at
the Spacenet facilities necessary for Newco to provide the
Direct-to-Home Service, as specified in the SOW. There will
be no charge to Newco for the utilities referenced in
Paragraph 1.1.
(c) It is anticipated that Newco will need to place certain of
its dedicated personnel at Spacenet facilities in connection
with this Agreement. If circumstances arise in connection
with this Agreement where Newco requires the use of specified
Spacenet personnel to perform certain services, Spacenet may
charge Newco for the actual direct costs it incurs in making
such personnel available to Newco.
For purposes of this Agreement, "actual direct costs" are those costs
that are necessarily incurred by Spacenet to perform the Spacenet
Services (without the addition of any xxxx-up or other increase).
5.2 Payment. Charges for the items specified above, and for any
additional services or Spacenet-supplied equipment agreed upon by the parties,
shall be invoiced at the time such services are rendered or the equipment is
provided and Newco shall make payment by wire transfer to the Spacenet's
designated bank account within thirty (30) days of the date of the invoice.
5.3 Late Payment. If any payment is not received by Spacenet within
thirty (30) days after the date of invoice, then, unless such payment is the
subject of a good faith dispute between the parties, such overdue amount shall
be subject to late payment charges at the lower of 10% per annum, or the
highest legally permissible rate of interest, until the date payment is actually
received.
5.4 Taxes. Newco acknowledges and understands that all charges are
computed exclusive of any applicable federal, state or local use, excise,
gross receipts, sales and privilege taxes, duties, fees or similar liabilities
(other than general income or property taxes), including without limitation,
any tax or charge levied to support the Universal Service Fund contemplated by
the Telecommunications Act of 1996, whether charged to or against Spacenet, its
suppliers or affiliates or Newco for the Service provided to Newco ("Taxes").
Such Taxes shall be paid by Newco in addition to all other charges provided for
herein.
5.5 Audit Rights. Spacenet agrees to keep all usual and proper books
of account and records and all usual and proper entries and other documentation
relating to the Spacenet Services and the Direct-to-Home Services. Newco shall
have the right to cause an audit and inspection to be made of such books and
records, entries and documentation of Spacenet as they relate to Spacenet's
obligations under this Agreement. Such audit shall be conducted by an
independent, third party auditor selected by Newco and all information
disclosed and/or provided to such auditor in connection with such audit will be
subject to an appropriate prior written confidentiality agreement. Any such
audit shall be conducted, to the extent possible, in a manner that does not
interfere with the ordinary business operations of Spacenet. Any such audit
shall be
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56
paid for by Newco unless material discrepancies are disclosed in the auditor's
report. "Material" shall mean a five percent (5%) or greater discrepancy
between information previously reported to Newco by Spacenet and that
information contained in the auditor's report. If material discrepancies are
disclosed, Spacenet agrees to pay for the costs associated with the audit, in
addition to the amount of the discrepancy paid by Newco to Spacenet plus
interest at the highest LIBOR rate from time to time set forth in the Wall
Street Journal in the United States plus six (6) percentage points (or, if less,
at a rate equal to the highest rate permitted under applicable law).
6. Representations and Warranties.
6.1 Spacenet and Newco each represent and warrant to the other that:
6.1.1 It has the right, power and authority to enter into and
perform its respective obligations under this Agreement; and
6.1.2 It has taken all requisite corporate action to approve
execution, delivery and performance of this Agreement, and this Agreement
constitutes a legal, valid and binding obligation upon itself in accordance with
its terms.
6.2 Spacenet represents and warrants that its uplink facilities are
fully licensed and in compliance with all Federal Communications Commission
("FCC") rules and regulations concerning satellite signal reception and
transmission and that it has, or will have prior to the commencement of service,
the authority necessary to permit it and Newco to operate with the submeter VSAT
facilities within the contiguous United States. In addition, Spacenet
represents and warrants that all material necessary or appropriate licenses,
clearances, permits, authorizations or permissions to which it is subject in
connection with the transactions contemplated hereby (except with respect to
local permits and zoning approvals), or which it must obtain by virtue of its
ownership of or operation of its telecommunications facilities, have been or
shall be obtained in a timely manner, and shall be maintained for the duration
of this Agreement.
6.3 Spacenet represents and warrants that the Spacenet Services to be
performed hereunder shall be of professional quality and shall be performed
strictly in accordance with the requirements of this Agreement and the SOW, as
well as in accordance with generally accepted satellite services industry
standards for the performance of services similar to, or the same as, the
Spacenet Services.
7. Term. This Agreement shall become effective upon signature by both
parties and shall continue in effect for a period of twelve (12) months, unless
terminated by mutual agreement of the parties (the "Original Term"). Thereafter,
it shall, at MSN's option, be renewable for up to four (4) years.
8. Termination. Either party may terminate this Agreement due to a material
breach of this Agreement by the other party. The non-breaching party shall
provide written notice to the breaching party of the alleged breach, and the
breaching party shall have sixty (60) days to cure the breach. If the breach
has not been cured within this sixty-day period, then the non-breaching party
may terminate upon thirty (30) days' written notice. Newco shall pay Spacenet
in
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accordance with this Agreement for all Spacenet Services performed up to and
including the effective date of termination.
9. Operational Contacts and Notices. If Newco has any technical problems
with Newco's Equipment, Newco's signal(s), the Spacenet Services or the
Direct-to-Home Services, Newco may call Spacenet's Network Management Center on
a twenty-four (24) hour, seven (7) days a week basis. Spacenet will communicate
with Newco as promptly as possible regarding any technical problems with Newco's
Equipment, Newco's signal(s), the Spacenet Services and/or the Direct-to-Home
Services. For purposes of these communications between Spacenet and Newco, each
of Spacenet and Newco agree to designate contact personnel and notify each other
in writing of such designations ("Operational Contacts"). Each party shall
update its list of Operational Contacts as needed. Spacenet shall not be
responsible for any interruptions or other technical problems with Newco's
Equipment, Newco's signals(s) or the Direct-to-Home Services in the event that
Spacenet has attempted to communicate with Newco's Operational Contacts
according to the information provided by Newco to Spacenet and Spacenet is
unable to establish communications with them.
10. Confidentiality of Information.
10.1 From time to time, the parties may make available to each other
information of a confidential nature about or relating to the disclosing party
and/or its subsidiaries and affiliates, including, but not limited to,
technical data, test and analysis data, marketing, application, financial,
bookkeeping, business, and customer information in a written form or orally.
The recipient shall not disclose such information to others (including potential
customers), or use such information without the prior written consent of the
disclosing party and only as necessary to carry out the terms of this Agreement.
The recipient shall treat such information with the same care as he would
exercise in the handling of its own confidential or proprietary information, but
in no event less than reasonable care and in no event shall such information be
disclosed to any person including employees, consultants and/or contractors
and/or potential and actual customers, unless such person or entity is bound by
or specifically undertakes a like obligation of confidentiality. This Section
10 shall not apply to disclosures of confidential information by either Newco or
Spacenet to MSN or any MSN Affiliate. Upon termination or cancellation of this
Agreement for any reason, all such data, proprietary information and
confidential information of the disclosing party shall be immediately returned
by the recipient and the limitations and undertakings specified in this
paragraph shall remain in effect.
10.2 Confidential information, as referred to in this Article 10, shall
not include information (i) that is or becomes public knowledge through no fault
of the recipient; or (ii) that is known to the recipient at the time of
disclosure by the disclosing party as evidenced by the recipient's written
records; (iii) that is disclosed to the recipient on an non-confidential basis
by a third party having no obligation of secrecy to the disclosing party; (iv)
that must be disclosed in order to comply with any applicable laws and
regulations, or as a part of required regulatory filings, or which must be
disclosed by an order of a court of competent jurisdiction, provided that the
party making such disclosure shall seek confidential treatment of such
information to the maximum extent possible; and (v) that must be disclosed to a
party's insurance broker or agent in order to obtain insurance, provided that
such broker or agent agrees in writing to the confidential treatment of such
information prior to disclosure.
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11. Indemnity/Limitation of Liability.
11.1 Spacenet shall defend, indemnify and save Newco harmless from and
against injuries, loss or damage to Newco's employees or its tangible personal
property or to the person or tangible personal property of third parties to the
extent caused by the willful or negligent acts or omissions of Spacenet.
11.2 Newco shall defend, indemnify and save Spacenet harmless from and
against injuries, loss, or damage to Spacenet's employees or its tangible
personal property or to the person or tangible personal property of third
parties to the extent caused by the willful or negligent acts of omissions of
Newco.
11.3 With respect to the indemnifications provided under Paragraphs
11.1 and 11.2 above, the indemnifying party shall control the defense of and
shall defend or settle, at its own expense, all suits or proceedings arising out
of the indemnified acts or omissions, provided that the indemnified party gives
prompt notice of any such claim of which it learns. In all events, the
indemnified party shall have the right to participate in the defense of any such
suit or proceeding through counsel of its own choosing at its own expense.
11.4 The liability of either party for claims for direct damages
arising out of or in connection with this Agreement or any particular Service
hereunder shall in the aggregate, be limited to the total payments paid or
payable per year to Spacenet hereunder.
11.5 UNDER NO CIRCUMSTANCES SHALL EITHER NEWCO OR SPACENET BE LIABLE
FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (HOWEVER ARISING),
INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT, LOSS OF USE, LOSS OF REVENUES OR
DAMAGES TO BUSINESS OR REPUTATION ARISING FROM THE PERFORMANCE OR
NON-PERFORMANCE OF ANY ASPECT OF THIS AGREEMENT WHETHER OR NOT NEWCO OR SPACENET
SHALL HAVE BEEN MADE AWARE OF THE POSSIBILITY OF SUCH LOSS. THE FOREGOING
NOTWITHSTANDING, IN THE CASE OF DEATH OR INJURY TO THIRD PARTIES OR DAMAGE TO
TANGIBLE PERSONAL PROPERTY OF THIRD PARTIES UNDER ARTICLES 11.1 AND 11.2 ABOVE,
THIS ARTICLE 11.4 SHALL NOT APPLY.
12. Waiver. No delay or failure of Spacenet or Newco to insist on performance
of any of the terms or conditions herein or to exercise any right or privilege,
or either party's waiver of any breach hereunder, shall be construed to be a
waiver thereof or a waiver of any other terms, conditions or privileges, whether
of the same or similar type.
13. Notices.
13.1 Emergencies. Each party shall provide the other party with a
telephone number to be used for routine and emergency operational notifications,
which telephone number shall be continuously monitored and staffed (twenty-four
(24) hours per day, seven (7) days per week) so as to enable the receipt of such
notices of all times. When appropriate, any such telephonic notifications shall
be followed by written notification as described in Paragraph 13.2 below.
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13.2 General. All notices and requests required or authorized
hereunder, shall, except where specifically provided otherwise, be given either
in writing by personal delivery to the party to whom notice is to be given, or
sent by registered mail, addressed to the party intended at its address set
forth in the caption above or by telex, cable, or facsimile. The date of actual
delivery of a telex, cable or facsimile in the case of personal delivery or the
date upon which it is deposited in the mail in the case of notice by mail, shall
be deemed to be the date of such notice. Notices shall be addressed to the
other party as follows:
Spacenet: [TBD]
Emergency Telephone Number: [TBD]
Newco: [TBD]
Emergency Telephone Number: [TBD]
Either party may change the name and/or address by written notice to the other
party in conformity with this Paragraph 13.2 and the date upon which the change
becomes effective.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its choice
of law provisions.
15. Third-Party Beneficiary. Each of Spacenet and Newco hereby agree that
The Microsoft Network, L.L.C., a Delaware limited liability company ("MSN") is
an express third-party beneficiary of this Agreement. With the exception of
MSN, the provisions of this Agreement are for the benefit only of the parties
hereto, and no third party may seek to enforce, or benefit from these
provisions.
16. No Assignment or Delegation. Neither party shall assign this Agreement
or delegate any of its responsibilities or obligations under this Agreement, in
whole or in part, without the prior written consent of the other party, which
consent may be reasonably conditioned but shall not be unreasonably withheld or
delayed. Any attempted assignment or delegation made without such consent shall
be null and void.
17. Severability. If any term or provision of this Agreement shall, to any
extent, be determined to be invalid or unenforceable by a court or body of
competent jurisdiction, then (a) both parties shall be relieved of all
obligations arising under such provision and this Agreement shall be deemed
amended by modifying such provision to the extent necessary to make it valid and
enforceable while preserving its intent, and (b) the remainder of this Agreement
shall be valid and enforceable.
18. Survival of Terms and Conditions. The terms and conditions of this
Agreement that by their nature extend beyond termination of this Agreement shall
survive the expiration or termination of this Agreement to the full extent
necessary for their enforcement and for the protection of the party in whose
favor they operate.
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19. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement.
20. Agreement. This Agreement is binding upon and shall inure to the benefit
of the parties hereto and upon their respective successors and permitted
assigns.
21. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes any prior
understandings, oral agreements and/or writings between the parties regarding
the subjects within this Agreement. This Agreement may only be amended or
modified in writing signed by Newco and Spacenet.
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IN WITNESS WHEREOF, this Agreement has been executed on behalf of each of the
parties by persons authorized in that behalf at Redmond, Washington.
SPACENET INC.
By: /s/ Xxxx Xxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxx
Title: Authorized Officer
NEWCO
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Authorized Officer
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