Exhibit 10.2
*** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
AGREEMENT
FOR
SATELLITE MODEM, WILDBLUE SATELLITE TERMINAL AND SATELLITE MODEM
TERMINATION SYSTEM
DEVELOPMENT, PRODUCTION AND PURCHASE
BY AND BETWEEN
WILDBLUE COMMUNICATIONS, INC.
AND
VIASAT, INC.
EFFECTIVE AS OF DECEMBER 12, 2001.
ViaSat and WildBlue Confidential Information
TABLE OF CONTENTS.
1. CONSTRUCTION AND INTERPRETATION......................................................1
2. DEFINITIONS..........................................................................2
3. CONTRACT DOCUMENTS; POST EXECUTION MATTERS...........................................8
4. TERM AND EXCLUSIVITY.................................................................8
5. RESPONSIBILITIES.....................................................................9
5.1. Statement of Work.............................................................9
5.2. WildBlue Responsibilities.....................................................9
5.3. Contractor Responsibilities..................................................10
5.4. Milestone and Deliverables...................................................11
5.5. Failure to Achieve Milestones................................................13
6. TESTING AND QUALITY ASSURANCE.......................................................13
6.1. Acceptance Testing...........................................................13
6.2. Quality Assurance............................................................15
7. PHYSICAL APPEARANCE AND BRANDING....................................................15
7.1. Physical Appearance..........................................................15
7.2. SM Marks.....................................................................15
7.3. Use of Contractor Marks......................................................16
7.4. Dispute Resolution...........................................................16
8. ORDERING............................................................................16
8.1. Orders Generally.............................................................16
8.2. Order and Delivery Forecast..................................................17
8.2. Order and Delivery Forecast..................................................17
8.3 Initial WildBlue Satellite Terminals Order...................................17
8.4. Initial SMTS Order...........................................................17
8.5 Orders from Affiliates and Authorized Resellers..............................17
8.6. Shortfalls and Cancellation of WildBlue SM Orders............................17
8.7. SM or WildBlue Satellite Minimum Order Quantity..............................18
9. SHIPPING AND RELATED MATTERS........................................................18
9.1. Serial Numbers...............................................................18
9.2. Packing and Packaging........................................................19
9.3. Delivery and Storage.........................................................19
10. LICENSES, PROPRIETARY RIGHTS .......................................................19
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10.1. Ownership....................................................................19
10.2. Grants of Licenses to Contractor.............................................20
10.3. Grant of Licenses to WildBlue................................................21
10.4. Software Licenses and Rights.................................................22
10.5. Documentation................................................................22
10.6. Open Standard................................................................23
10.7. Contractor's Rights of Sale to Other Service Providers and End Users.........23
11. TRAINING............................................................................23
11.1. Training.....................................................................23
12. RESERVED............................................................................24
13. PROGRAM MANAGEMENT..................................................................24
14. CONTRACTOR'S USE OF SUBCONTRACTORS AND MANUFACTURING FACILITY.......................24
15. FORCE MAJEURE AND DELAYS............................................................26
15.1. Force Majeure................................................................26
15.2. Excusable Delay..............................................................27
15.3. Delay Due to Launch or Satellite Failure......................................27
16. PRICES..............................................................................27
16.1. General......................................................................27
16.2. WildBlue Satellite Terminal Prices by Configuration..........................28
16.3 SMTS Pricing ................................................................28
16.4. Most Favored Customer........................................................28
16.5. Taxes........................................................................28
17. WILDBLUE PAYMENTS TO CONTRACTOR AND INVOICING.......................................29
17.1. Payments.....................................................................29
17.2. Initial Option Payment.......................................................29
17.3. Payments to WildBlue.........................................................29
17.4. Invoicing....................................................................30
17.5. Payment Due..................................................................30
17.6 Right to Change Payment Arrangement..........................................31
17.7 Disputed Changes ............................................................31
18. INFORMATION; CONFIDENTIALITY........................................................32
18.1. Contractor Information.......................................................32
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18.2. WildBlue Information.........................................................32
18.3. Confidentiality..............................................................33
19. WARRANTIES AND TECHNICAL SUPPORT....................................................35
19.1. Pass-Through Warranties......................................................35
19.2. Warranty.....................................................................35
19.3. Monthly Reports..............................................................36
19.4. Epidemic Failures............................................................37
19.5. Ownership or Use.............................................................37
19.6. Disclaimer...................................................................37
19.7. Technical Support............................................................37
20. INDEMNITIES.........................................................................37
20.1. Indemnity by Contractor......................................................37
20.2. Indemnity by WildBlue........................................................38
20.3. Intellectual Property Infringement...........................................39
20.4. Indemnification Procedures...................................................39
20.5. Subrogation..................................................................40
21. LIABILITY...........................................................................40
22. DISPUTE RESOLUTION..................................................................40
22.1. Informal Dispute Resolution..................................................40
22.2. Arbitration..................................................................41
22.3. Injunctive Relief............................................................42
22.4. Venue and Jurisdiction.......................................................42
23. TERMINATION.........................................................................42
23.1. Termination for Cause........................................................42
23.2. Termination for Convenience..................................................44
23.3. Effect of Termination or Expiration; Wind Down...............................45
24. LIMITATION OF LIABILITY.............................................................45
25. GENERAL.............................................................................46
25.1. Binding Nature and Assignment................................................46
25.2. Entire Agreement.............................................................46
25.3. Compliance with Laws and Standards...........................................46
25.4. Notices......................................................................46
25.5. Counterparts.................................................................47
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25.6. Relationship of Parties......................................................47
25.7. Severability.................................................................47
25.8. Consents and Approval........................................................47
25.9. Waiver of Default; Cumulative Remedies.......................................48
25.10. Survival.....................................................................48
25.11. Public Disclosures...........................................................48
25.12. Third Party Beneficiaries....................................................48
25.13. Amendment....................................................................48
25.14. Incorporation by Reference and Order of Precedence...........................48
25.15. Governing Law................................................................49
25.16. Covenant of Good Faith.......................................................49
25.17. Authorization................................................................49
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LIST OF SCHEDULES.
1. Satellite Modem Product Description
2. WildBlue Radio Frequency Interface Specification
3. WildBlue Product Phasing Document, version 1, July 20, 2001
4. IDU/ODU Interface Specification
5. WildBlue Responsibilities
6. Reserved
7. Reserved
8. Minimum Order Commitment and Maximum Capacity Commitment
9. WBST/WBSM Order and Delivery Forecast
10. Labor Rates
11. WildBlue Satellite Terminal Pricing Schedule
12. Contractor's Marks
13. Technical Support, Warranty Support and Maintenance
14. Post Warranty Support and Maintenance
15. Documentation Reproduction Guidelines
16. Warranty Related Fee Schedule
17. Reserved
18. Reserved
19. SMTS Production Price Schedule
20. SMTS Initial Production Order Delivery Schedule and Forecast
21. Product Description of the SMTS
22. SMTS Technical Support, Warranty Support and Maintenance
23. SMTS Post Warranty Support and Maintenance
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AGREEMENT FOR
SATELLITE MODEM, WILDBLUE SATELLITE TERMINAL AND SATELLITE MODEM
TERMINATION SYSTEM DEVELOPMENT, PRODUCTION AND PURCHASE AGREEMENT
BY AND BETWEEN
WILDBLUE COMMUNICATIONS, INC.
AND
VIASAT, INC.
This Agreement for the Satellite Modem, WildBlue Satellite Terminal and
Satellite Modem Termination System Development, Production and Purchase
Agreement, including those Schedules and Attachments attached hereto (the
"AGREEMENT"), effective as of the Effective Date, is entered into by and between
WildBlue Communications, Inc., a Delaware corporation with offices located at
4600 South Syracuse, Suite 500, Denver, CO 80237 ("WILDBLUE"), and ViaSat, Inc.,
a Delaware corporation with offices located at 6155 El Camino Real, Carlsbad,
California 92009 ("CONTRACTOR"). As used in this Agreement, "PARTY" means either
WildBlue or Contractor, as appropriate, and "PARTIES" means WildBlue and
Contractor.
WHEREAS, the Parties entered into a Satellite Modem ("SM") Development,
Production and Purchase Agreement with an Effective Date of March 5, 2001 (the
"SM AGREEMENT");
WHEREAS, the Parties entered into a Satellite Modem Transmission System
("SMTS") Development, Production and Purchase Agreement with an Effective Date
of June 22, 2001 (the "SMTS AGREEMENT");
WHEREAS, the Parties desire to terminate the SM Agreement and SMTS
Agreement ("PRIOR AGREEMENTS") concurrently with entering into this Agreement,
which shall supersede the Prior Agreements;
WHEREAS, WildBlue desires to procure WildBlue Satellite Terminals
("WBST"), SMs and SMTS and Contractor desires to sell such pursuant to the terms
and conditions of this Agreement;
WHEREAS, WildBlue has requirements to support *** (defined below) and
WildBlue requires that Contractor support the WildBlue's requirements to; ***
and,
WHEREAS, WildBlue has entered into an agreement with Telesat Canada to
license all of the U.S. capacity on Anik F2, and the Parties desire to enter
into a Service Agreement, wherein, Contractor is to be provided a portion of the
satellite capacity licensed to WildBlue, if any, on Anik F2, if and when such
satellite is launched.
NOW THEREFORE, the Parties, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
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1. CONSTRUCTION AND INTERPRETATION
1.1. Terms other than those defined in this Agreement shall be given
their plain English meaning, and those terms, acronyms and
phrases known in the satellite telecommunications technology
products and services industries shall be interpreted in
accordance with their generally known meanings.
1.2. Unless the context otherwise requires, words importing the
singular include the plural and vice-versa.
1.3. References to an "Article," "Section" and "Subsection" shall be
references to an article, section, or subsection of this
Agreement, unless otherwise specifically stated.
1.4. References to this Agreement and the words "herein," "hereof,"
"hereto," and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular
Article, Section or Subsection.
1.5. The Article, Section and Subsection headings in this Agreement
are intended to be for reference purposes only and shall in no
way be construed to modify or restrict any of the terms or
provisions of this Agreement.
1.6. The word "including" and words of similar import (such as
"include" and "includes") mean "including, but not limited to."
1.7. A reference to "days" means calendar days, unless otherwise
specifically stated in a reference. A reference to a monthly
"date" is the last day of the month unless another day is
specified.
2. DEFINITIONS
As used in this Agreement, the following defined terms shall have the
meanings set forth below. Other capitalized terms used in this Agreement
are defined in the context in which they are used and shall have the
meanings there indicated.
2.1. "AFFILIATE" means, with respect to a Party, any person or entity
Controlling, Controlled by or under common Control with such
entity (but only as long as such person or entity meets these
requirements).
2.2. "ANIK F2" means the Anik F2 satellite to be owned and operated
by Telesat Canada.
2.3. "AUTHORIZED RESELLER" means a person or entity that is
authorized by WildBlue to buy SMs from Contractor for use with
the WildBlue System.
2.4. "CHASSIS" means one rack mountable enclosure with a minimum of a
functioning and deployable single Downstream and eight
Upstreams.
2.5. "CONTRACTOR BACKGROUND INFORMATION" means all information and
technology, and all Intellectual Property Rights therein,
developed by or for Contractor prior to the Effective Date or
developed by or for Contractor at any time independent of this
Agreement, exclusive of Contractor Foreground Information
developed under the Prior Agreements. Contractor Background
Information expressly excludes all Third Party Information.
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2.6. "CONTRACTOR FOREGROUND INFORMATION" means all information and
technology, and all Intellectual Property Rights therein,
developed by or for Contractor in connection with the
development of WBSTs, SMs or SMTSs under this Agreement or Prior
Agreements, excluding Joint Foreground Information.
2.7. "CONTROL" and its derivatives mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through
the ownership of voting stock, by contract or otherwise.
2.8. "DEFECT" means any failure of an WBST, SM, or SMTS including any
components thereof (but excluding failures of any third party
components provided by WildBlue), to operate in conformance with
the applicable Specification.
2.9. "DELIVERABLES" means the WBST, SM or SMTS ("Products") and
services set forth in this Agreement, including, without
limitation, all incidental related products and services,
provided by Contractor under this Agreement.
2.10. "DOCUMENTATION" means documentation required to be prepared and
delivered by Contractor under this Agreement.
2.11. "DOWNSTREAM" means the hardware element within an SMTS that
enables a communication channel to send data from a SMTS to the
satellite modem.
2.12. "DPM" means that version of the DOCSIS Processor Module as
described in the SMTS Product Description (Schedule 21).
2.13. "DYNAMIC PHYSICAL LAYER DOWNSTREAM" means a Downstream
supporting dynamic selection of modulation and coding parameters
on a frame by frame basis.
2.14. "EFFECTIVE DATE" means December 12, 2001.
2.15. "END USER" means a person or entity (other than WildBlue,
Authorized Resellers or Service Providers) that purchases (other
than for resale or distribution) an SM or SMTS for use outside
the WildBlue System.
2.16. "ESCROW AGREEMENT" means the Escrow Agreement in the form and on
the terms set forth and established between the Parties pursuant
to the purchase of certain goods from WildBlue.
2.17. "FEATURE" means a function, innovation or performance
improvement to the SMs that is made generally available to any
User. New Features may be offered by Contractor to WildBlue
separately or bundled. The term "Feature" does not include Point
Releases or Software Patches, or hardware or software changes
which correct and/or fix Defects in such current release.
2.18. "HARDWARE" means the hardware components of WBSTs, SMs or SMTSs,
excluding any Software.
2.19. "INITIAL WILDBLUE SATELLITE TERMINAL ORDER" is defined in
Section 8.3 below.
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2.20. "INITIAL SMTS ORDER" means those SMTS units and components set
forth in Schedule 19, SMTS Initial Order Delivery Schedule.
2.21. "INITIAL SMTS DELIVERY" is defined in Schedule 19.
2.22. "INTELLECTUAL PROPERTY RIGHTS" means any and all rights in the
following:
(a) patents whether registered or unregistered;
(b) inventions whether or not capable of protection by
patent or registration;
(c) rights in commercial information and technical
information, including know-how, research and
development data, manufacturing methods and data,
specifications and drawings, formulas, trade secrets,
algorithms, prototypes and research materials;
(d) copyrights (including without limitation any
application, registration or renewal related thereto),
registered designs or design rights (whether or not
capable of protection by registration), trademarks
(whether registered or unregistered, including without
limitation service marks, logos, sound logos,
certification marks, and trade names, together with any
applications, registrations and renewals for any of the
foregoing and the goodwill associated with each), domain
names, mask work rights, database rights, and moral
rights;
(e) applications for the grant of rights of the foregoing
descriptions;
(f) rights of a similar or analogous nature to any of the
foregoing whether in existence now or in the future and
wherever located in the world.
2.23. "INTERFACE SPECIFICATION" means the written specifications
defined in Schedules 2 and 4 in effect as of the Effective Date,
excluding Specification Embodiment and IS Background
Information.
2.24. "IS BACKGROUND INFORMATION" means that Contractor Background
Information developed by Contractor prior to the Effective Date
or developed by or for Contractor at any time independent of
this Agreement, exclusive of IS Foreground Information developed
under the Prior Agreements that is incorporated into or
essential to the application of the Interface Specification, and
all Intellectual Property Rights therein, but shall not include
Specification Embodiment.
2.25. "IS FOREGROUND INFORMATION" means that Contractor Foreground
Information developed by Contractor prior to the delivery of the
March 15, 2002 Deliverable specified in Section 5.4(a), *** in
the course of performance of this Agreement or the Prior
Agreements that relates to the Interface Specification, and all
Intellectual Property Rights therein, but shall not include
Specification Embodiment.
2.26. "JOINT FOREGROUND INFORMATION" means all information and
technology, and all Intellectual Property Rights therein,
jointly developed by Contractor and WildBlue in connection with
the development of SMs and SMTSs under this Agreement or the
Prior
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Agreements. The determination of whether Contractor and
WildBlue are joint authors for copyrightable foreground
information or joint inventors for patentable foreground
information shall be based on federal copyright and federal
patent law respectively.
2.27. "LEGAL REQUIREMENTS" means all laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, directions
and requirements of all governmental agencies applicable to or
required in connection with the SMs, WBST or SMTSs.
2.28. "LIEN" means any lien (including subcontractor and other
mechanic liens), imperfection in title, security interest,
claim, charge, restriction or other encumbrance.
2.29. "LOSSES" means all losses, costs, expenses, liabilities and
damages reasonably incurred resulting from or relating to under
any settlement, litigation or final judgment, and all related
reasonable costs and expenses, including reasonable legal fees,
fines, interest and penalties.
2.30. "MAJOR COMPONENT" is defined in Section 14.
2.31. "MAJOR COMPONENT VENDOR" is defined in Section 14.
2.32. "MAJOR RELEASE" means the issue of Software and any superseding
issue thereof which adds new Features or functionality to, or
substantially enhances, the existing Software. A Major Release
may also correct defects in earlier releases.
2.33. "MARK" means any trademark, service mark, trade name, domain
name, logo or other indicia of source or origin of a product or
service.
2.34. "MILESTONE PAYMENT" means an NRE Payment (as defined in Section
17.1) made by WildBlue to Contractor in accordance with Section
17.2 below upon the achievement by Contractor of certain
Milestones and Acceptance by WildBlue of the corresponding
Milestone.
2.35. "MILESTONES" is defined in Section 5.4.
2.36. "NRE PAYMENT" is defined in Section 17.1.
2.37. "ORDER" means a purchase order issued by WildBlue to Contractor
confirming the purchase of WBSTs, SMs or SMTSs and providing
carrier, shipping destination and other similar information.
2.38. "OUT-OF-BOX FAILURE" means the inoperability of any SM or WBST
or failure of any SM or WBST to operate in accordance with the
applicable Specification either (a) if initially tested after
delivery to WildBlue but before initial installation, or (b)
failure to so operate during the two (2) day period immediately
following such initial installation. Out-of-Box failure does not
include failure of any third party components provided by
WildBlue.
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2.39. "POINT RELEASE" means a reissue of the existing Software which
revises or improves the Software with which it is associated; a
Point Release may also correct and/or fix defects in the current
release of Software.
2.40. "PRICE" means the price of an SM, WBST or SMTS to WildBlue as
set forth on Schedule 11 and Schedule 19 respectively, FOB those
Contractor's designated sites in the contiguous United States.
2.41. "SATELLITE TERMINAL" means a version of satellite terminal other
than a WBST, generally based upon customer premise equipment
that consists of a satellite modem, outdoor antenna, Ka-band
transceiver, standard alignment/mounting/grounding hardware,
cable from modem to dish, and power supply(s).
2.42. "SERVICE PROVIDER" means persons or entities other than
WildBlue, Authorized Resellers, or End Users that acquire SMs
from Contractor and resell or distribute such SMs.
2.43. "SM" means the satellite modem, designed, developed and
manufactured by Contractor substantially in accordance with the
applicable Specification and as authorized under the terms and
conditions of this Agreement, and any other substantially
similar satellite modem in design and function manufactured by
or for Contractor.
2.44. "SM-A" means that version of the SM whose functions are
described in the SM Product Description (Schedule 1), and
Schedule 11, the WildBlue Satellite Terminal Pricing Schedule
with the exception of support for dynamic multi-rate downstream
PHY operation.
2.45. "SM-B" means that version of the SM Satellite Modem whose
functions are described in the SM Product Description (Schedule
1).
2.46. "SMP" means that version of the Satellite MAC/PHY daughtercard
as described in the SMTS Product Description (Schedule 21).
2.47. "SMTS" means the satellite modem termination system, designed,
developed and manufactured by or for Contractor substantially in
accordance with the applicable Specification for use in the
WildBlue System and as authorized under the terms and conditions
of this Agreement, and any other satellite modem termination
system substantially compliant with the WildBlue RFI (as defined
in Schedule 2) in design and function manufactured by or for
Contractor. Unless otherwise expressly stated herein, the
obligations of Contractor under this Agreement apply only to
SMTS(s) which are provided to WildBlue by Contractor hereunder.
2.48. "SMTS-A" means that version of the SMTS whose functions are
described in the SMTS Product Description (Schedule 21), with
the exception of support for dynamic multi-rate downstream PHY
operation.
2.49. "SMTS-B" means that version of the SMTS whose functions are
described in the SMTS Product Description (Schedule 21).
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2.50. "SOFTWARE" means the machine readable computer programs
(including firmware, files, databases, interfaces, documentation
and other materials related thereto, any third party Software
sublicensed by Contractor hereunder), as such Software is
revised, upgraded, updated, corrected, modified, and enhanced
from time-to-time and provided to WildBlue pursuant to this
Agreement.
2.51. "SOFTWARE PATCHES" means Software that corrects or removes a
reproducible anomaly or "bug," whether or not such anomaly
applies to software furnished to WildBlue under this Agreement.
Software Patches do not include Point Releases or Major
Releases, and do not represent an upgrade to or enhancement of
existing Software specifications.
2.52. "SPECIFICATION" means, with respect to each Product, those
functional, performance and other requirements specified for
such Product. For the Products, the Specification includes the
following documents as may be amended from time to time in
accordance with the terms of this Agreement:
(a) Satellite Modem Product Description (set forth in
Schedule 1)
(b) WildBlue Radio Frequency Interface Specification (set
forth in Schedule 2)
(c) SM/SMTS Functional Specification (set forth in Schedule
3)
(d) IDU/ODU Interface Specification (set forth in Schedule
4)
(e) Product Description SMTS(set forth in Schedule 21)
2.53. "SPECIFICATION EMBODIMENT" means all Intellectual Property
Rights throughout the world now or hereafter owned by a Party
hereof contained in any embodiment of the SMs, SMTS, and WBST
apart from the Interface Specification.
2.54. "THIRD PARTY INFORMATION" means information and technology, and
all Intellectual Property Rights therein, owned by a third
party.
2.55. "UNITED STATES" or "U.S." means the United States of America.
2.56. "UPSTREAM" means the hardware element with an SMTS that enables
a set of communication channels for receiving data at the SMTS.
Upstream channels are used by satellite modems to send TDMA
bursts of data to the SMTS. A number of upstream channels are
associated with a given downstream channel in order to form a
full-duplex link between the SMTS and a set of satellite modems.
2.57. "USER" means a person or entity (other than WildBlue, any
Authorized Reseller, or a Service Provider) that purchases other
than for resale or distribution a SM, WBST or SMTS for use in
the WildBlue System.
2.58. "USER DOCUMENTATION" means the user documentation furnished to
WildBlue by Contractor for distribution along with the SMs and
WBST.
2.59. "WBSM" means the SM-A or SM-B or other production versions of
the SM produced for WildBlue under this Agreement after
Acceptance for production by WildBlue in accordance with Section
6.2.
2.60. "WBST" means the WildBlue Satellite Terminal as defined in
Section 2.66.
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2.61. "WBST-A" means the WBST incorporating an SM-A.
2.62. "WBST-B" means the WBST incorporating an SM-B.
2.63. "WILDBLUE BACKGROUND INFORMATION" means all information and
technology, and all Intellectual Property Rights therein,
developed by or for WildBlue prior to the Effective Date or
developed by or for WildBlue at any time independent of this
Agreement, exclusive of WildBlue Foreground Information
developed under the Prior Agreements.
2.64. "WILDBLUE FOREGROUND INFORMATION" means all information and
technology, and all Intellectual Property Rights therein,
developed by or for WildBlue in connection with the development
of SMs, WBSTs, SMTSs under this Agreement or Prior Agreements,
but excluding all Joint Foreground Information.
2.65. "WILDBLUE SYSTEM" means the broadband internet access system
operated by WildBlue, as further described in the Specification.
2.66. "WILDBLUE SATELLITE TERMINAL" means that version of the Customer
Premise Equipment that consists of a WBSM, outdoor antenna, 4
watt Ka-band transceiver, standard alignment/mounting/grounding
hardware, cable from modem to dish, and power supply that
supports both the indoor and outdoor equipment produced for
WildBlue under this Agreement. The Specification substantially
describes the performance and capabilities of the WildBlue
Satellite Terminals.
3. CONTRACT DOCUMENTS; POST EXECUTION MATTERS
The contract documents consist of this Agreement and each of the
Schedules, each as may be amended from time to time in accordance with the terms
of this Agreement, which are attached hereto and incorporated into this
Agreement by this reference.
4. TERM AND EXCLUSIVITY
4.1 TERM. The term of this Agreement shall begin upon the Effective
Date and shall expire the earlier of five (5) years thereafter
(the "INITIAL TERM") or the termination of this Agreement in
whole in accordance with Section 23. Prior to the expiration of
the Initial Term or the first two Extended Terms (as defined
below), WildBlue may, at its option, extend the term of this
Agreement for additional one (1) year terms (for a maximum Term
of eight years), by providing at least sixty (60) days written
notification to Contractor of such extension prior to the end of
the then current term (each such extension is referred to as an
"EXTENDED TERM"); provided that the then current WBST/WBSM Order
and Delivery Forecast is at least five thousand (5,000) SMs
and/or WBSTs per month. WildBlue may also extend the Term for
ordering SMTS units, provided that WildBlue (i) agrees to
purchase at least 50 Downstreams during each such one-year
period. The Initial Term and all of Extended Terms (as they may
be earlier terminated), are collectively referred to as the
"TERM."
4.2 EXCLUSIVITY. If WildBlue purchases or intends to purchase
devices performing functions substantially similar to WBSTs,
SMTSs and/or SMs during the five year period commencing on the
Effective Date, WildBlue will first negotiate with the
Contractor to
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provide a significant quantity of the required devices. If,
after good faith negotiations, the Parties are unable to reach
agreement on price, schedule, warranty,
specification/functionality or any other material term with
respect to the purchase of such device, WildBlue may then
solicit offers and purchase any or all such devices from other
suppliers and, is such event, WildBlue shall immediately pay to
Contractor any payments which may be due pursuant to Section
23.2. This requirement remains in effect until WildBlue has
purchased a cumulative 100,000 devices from any party(ies).
Subject to the last clause of the immediately preceding
sentence, this Section 4.2 shall survive any termination of this
Agreement by WildBlue pursuant to Section 23.2 for a period of
five years after the Effective Date, but shall be of no further
effect after the fifth anniversary of the Effective Date.
5. RESPONSIBILITIES
5.1. STATEMENT OF WORK. The Parties each agree to perform their
respective obligations set forth in this Agreement. In
accordance with the terms of this Agreement, Contractor shall
develop and provide WildBlue with the Deliverables. In
accordance with Section 14.4, Contractor shall use commercially
reasonable efforts to assume WildBlue's agreement with Broadcom
Corporation.
5.2. WILDBLUE RESPONSIBILITIES. WildBlue shall deliver to Contractor
those documents and items set forth on and in accordance with
Schedule 5. WildBlue agrees to provide such other WildBlue
Background Information and WildBlue Foreground Information to
Contractor as required by Section 10.1. WildBlue shall use
commercially reasonable efforts to obtain any government
approvals or certifications applicable to the WildBlue System,
apart from approvals or certifications applicable to SMs or
SMTS, that are reasonably necessary for Contractor to fulfill
its obligations set forth in Section 5.3(b) below. In accordance
with Section 14.4, WildBlue shall use commercially reasonable
efforts to renegotiate and/or assign its agreement with Broadcom
Corporation to Contractor. In accordance with Section 14.5,
WildBlue shall support Contractor in exploring the assignment of
the Mentat contract to Contractor.
WildBlue has licensed all of the ***. *** has retained all of
the ***. WildBlue requires that Contractor support ***
consistent with WildBlue's requirements in the U.S., subject to
*** and Contractor agreeing to provide such support and/or
equipment. WildBlue intends to assist and support Contractor in
its efforts to contract with *** for the ***.
The Parties further agree as follows: (i) WildBlue shall
provide, at no additional cost to Contractor, *** Gbytes of
capacity that WildBlue has the right to use, if any (but in no
event more than ***% of the Ka-band capacity on Anik F-2 over
the U.S.) usable during the 24 month period immediately
following the start of WildBlue providing commercial service
("COMMERCIAL ACCEPTANCE") using Anik F2; and (ii) WildBlue
grants to Contractor an option, exercisable up to 12 months
after Commercial Acceptance, to purchase (upon mutually
agreeable terms) up to a total of ***% of the Ka-band capacity
on Anik F2 over the U.S. that WildBlue has the right to use,
usable during the 24 month period immediately following exercise
of the option. Capacity will be based on actual packets sent
over the satellite. Notwithstanding the foregoing, Contractor
shall pay a reasonable premium if the peak usage by Contractor
exceeds a to be determined
ViaSat and WildBlue Confidential
9
threshold and a mutually agreeable limit on geographic
concentration of traffic. WildBlue further agrees to promptly
enter into a mutually acceptable amendment hereto or a separate
agreement, as Contractor may reasonably request, if Contractor
desires to further definitize this obligation of WildBlue.
5.3. CONTRACTOR RESPONSIBILITIES.
(a) Contractor shall design, construct and deliver the
Deliverables set forth in Section 5.4 or the Products
ordered that meet the requirements of the Specification
in all material respects in accordance with this
Agreement. Further, promptly upon the completion of each
development phase, and no later than the relevant
Milestone date, Contractor will deliver to WildBlue the
portion of the Deliverables and any other materials
required to be provided by Contractor under such phase
as described in this Agreement (such other materials
being included in the definition of the term
"DELIVERABLES").
(b) Prior to the delivery of the first 2,000 production
WBSTs and/or WBSMs, Contractor shall obtain the
appropriate and necessary government approvals and
certifications applicable to the WBSM which allow the
WBSM to be sold in the United States and Canada.
Further, for all other countries in North and South
America, provided that WildBlue has obtained the
necessary and applicable government approvals for
landing rights, Contractor shall at commercially
reasonable rates (including reimbursement for reasonable
travel, legal, and other related expenses) and, upon a
written request from WildBlue, use commercially
reasonable efforts to obtain the appropriate and
necessary government approvals and certifications
applicable to the WBSM and to make any necessary
modifications to the WBSM as soon as reasonably
practicable after the WildBlue request that allow the
WBSM to be sold in such other countries. To the extent
practicable, Contractor shall upon request provide
WildBlue a non-binding estimate of the costs associated
with obtaining such approvals or consents within such
countries. Subject to WildBlue's obligations set forth
in this Section 5.3(b), Contractor warrants that WBSMs
will comply fully with the applicable Legal Requirements
in the country for which the WBSMs have been approved as
of the date of delivery of such WBSMs.
(c) Given a firm production delivery date and prior to the
delivery of the first production SMTS, Contractor shall
obtain all appropriate and necessary government
approvals and certifications applicable to the SMTS to
allow the SMTS to be used in the United States and
Canada. Further, for all other countries in North and
South America in which WildBlue has obtained the
necessary and applicable government approvals for
landing rights ("LANDING RIGHTS COUNTRIES"), Contractor
shall at commercially reasonable rates (including
reimbursement for reasonable travel, legal, and other
related expenses) and, upon a written request from
WildBlue, use commercially reasonable efforts (i) to
obtain all appropriate and necessary government
approvals and certifications applicable to the SMTS, and
(ii) to make any necessary modifications to the SMTS as
soon as reasonably practicable after the WildBlue
request to allow SMTSs to be delivered to such other
countries. To the extent practicable, Contractor shall
upon request provide WildBlue a non-
ViaSat and WildBlue Confidential
10
binding estimate of the costs associated with obtaining
such approvals or consents within such countries.
Contractor warrants that the SMTSs will comply fully
with the applicable Legal Requirements in the United
States and Canada as of the date of delivery of the
SMTSs. For Landing Rights Countries for which WildBlue
has requested and paid Contractor to undertake the
activities under subsections (i) and (ii), Contractor
warrants that SMTSs will comply fully with the
applicable Legal Requirements in each such country for
which the SMTSs have been approved as of the date of
delivery of such SMTSs.
(d) At its option, WildBlue may purchase from Contractor,
upon commercially reasonable terms, support services for
a third party satellite modem vendor in connection with
its development of satellite modems prior to delivery to
WildBlue of the first production SMTS. Such support
shall include reasonable technical support by Contractor
and reasonable access to the specifications related to
the interfaces of the WildBlue satellite modem.
Contractor also agrees to provide, at the same unit
prices and terms made available to WildBlue under this
Agreement, the SMTS Hardware and Software set forth in
Schedule 19 to the third party satellite modem vendor
for the sole purpose of that party testing and verifying
modem functionality. All access and support provided by
Contractor pursuant to this paragraph shall be subject
to such third party first executing a confidentiality
and royalty-free licensing agreement with Contractor to
among other things, treat such Hardware and Software as
confidential information, not reverse engineer any
portion of the SMTS Hardware or SMTS Software or attempt
to decode any functionality contained within the SMTS.
5.4. MILESTONE SCHEDULE AND DELIVERABLE.
(a) MILESTONES. Critical milestones in the development and
manufacture of the SM or SMTS (each a "MILESTONE"), the
deadline for achievement for each Milestone (each a
"MILESTONE DATE") are as follows (the "MILESTONE
SCHEDULE"):
----------------------------------------------------------------
Milestone Date Deliverable
----------------------------------------------------------------
December 30, 2001 ***
----------------------------------------------------------------
Jan. 31, 2002 ***
----------------------------------------------------------------
Jan. 31, 2002 ***
----------------------------------------------------------------
March 15, 2002 ***
----------------------------------------------------------------
Contractor will complete each Milestone on or before the
corresponding Milestone Date. Early deliveries are acceptable.
Further, if Beta or production software for the SMTS becomes
available at any time prior to March 15, 2003, this software will
be provided to WildBlue, at no charge "AS IS" without warranty or
support requirements, solely for WildBlue's demonstration
purpose.
(b) FAILURE TO MEET MILESTONES. If Contractor fails to
complete each Milestone on or before the corresponding
Milestone Date, (1) Contractor will develop a
ViaSat and WildBlue Confidential
11
correction plan demonstrating that Contractor can recover from
Contractor's failure to achieve such Milestone and present such
a correction plan to WildBlue within fourteen (14) days after
WildBlue's request for such correction plan; and (2) the Parties
will work in good faith to devise a plan of action to achieve
the next Milestone by the specified Milestone Date or arrive at
a mutually acceptable revised schedule within five (5) business
days after WildBlue's receipt of Contractor's plan; and (3)
Contractor's performance will be measured against the revised
schedule (in no event to exceed ninety (90) days after the
original Milestone Date) in such plan of action; provided that
Contractor shall not be in breach of this Agreement until the
later of five (5) weeks after the Original Milestone Date or the
date for performance set forth in the revised schedule.
(c) WILDBLUE OPTION. WildBlue may, at its option, order any
or all of the following optional items by providing
written notification to Contractor on or before January
5, 2002:
-----------------------------------------------------------------
Optional Item Quantity Unit Price Extended
Price
-----------------------------------------------------------------
*** *** *** ***
-----------------------------------------------------------------
Delivery will be within ninety (90) days from Contractor's
receipt of WildBlue's written election to exercise its option.
5.5. FAILURE TO ACHIEVE MILESTONES. Without prejudice to any remedies
WildBlue may have available pursuant to Section 5.4, if
Contractor fails to achieve an original Milestone or a revised
Milestone by the corresponding Milestone Date, Contractor shall
use its reasonable best efforts to complete the Milestone as
quickly as possible thereafter.
6. TESTING AND QUALITY ASSURANCE.
6.1. ACCEPTANCE TESTING. The following shall apply only to first
article testing on any product development the Parties may agree
to after the Effective Date hereof:
(a) ACCEPTANCE CRITERIA. A mutually acceptable Acceptance
Test Plan will be created by the Parties and used to
verify that each Deliverable subject to Acceptance
Testing in accordance with the Statement of Work meets
the Acceptance Criteria defined in the SOW for such
Deliverable. Each such Acceptance Test Plan shall
include the scope, Acceptance Criteria, parameters to be
tested, and an objective measurement for passing or
failing, as well as other mutually agreed-upon
parameters. If the Parties agree to conduct future
Acceptance Testing in relation to new versions of SMs
(including new versions of SM Hardware and SM Software),
the Acceptance Test Plan, Approval and Acceptance
process will follow the process described in this
Agreement. For
ViaSat and WildBlue Confidential
12
Deliverables in the Milestone Payment Schedule which do not
require testing, Acceptance will occur upon satisfying the
Acceptance Criteria defined in the SOW for that Milestone.
(b) ACCEPTANCE TEST PLAN APPROVAL. Contractor shall submit an
Acceptance Test Plan to WildBlue for each Deliverable that is
subject to Acceptance Testing no later than sixty (60) days
before the relevant Milestone subject to Acceptance Testing.
WildBlue will have two (2) weeks to provide a written response
to Contractor with respect to the proposed Acceptance Test Plan
and have the right to make reasonable modifications to such
draft to make it conform to the Specifications and the
requirements of this Agreement. Each final Acceptance Test Plan
must be approved by both Parties within two (2) weeks after
WildBlue's written response to Contractor. If the Parties cannot
reach agreement regarding an applicable Acceptance Test Plan in
accordance with the two (2) week time frame set forth above, the
expedited dispute resolution process of Section 22.2(b) will be
applied.
(c) ACCEPTANCE TESTING. For each Deliverable that is subject to
Acceptance Testing, Contractor shall perform formal testing on
first article production units in accordance with the approved
Acceptance Test Plan on or prior to the date specified for
initial delivery of such Deliverable. WildBlue representatives
shall be invited to review the test configuration and witness
the formal testing. Upon successful completion of testing,
Contractor will deliver to WildBlue a certification that the
applicable Deliverable has met the applicable Acceptance
Criteria, a copy of the Acceptance Test results and any request
for waivers or deviations. Upon delivery of these items WildBlue
shall have five (5) days to notify Contractor in writing
confirming that Acceptance Testing has been satisfactorily
completed or indicating that the Deliverable has failed to pass
the Acceptance Testing. Any determination of failure shall be
based solely on nonconformity with the Acceptance Test Plan and
shall be accompanied by a notice containing reasonably detailed
information regarding the reasons for the failure and copies of
applicable test documents. Any Deliverable that meets the
applicable Acceptance Criteria or that is not rejected or
provisionally accepted within such five (5) day period shall be
deemed to have been "Accepted." In the event Contractor receives
notification that a Deliverable has failed the relevant
Acceptance Test Plan, Contractor agrees to use its commercially
reasonable best efforts to correct the defects identified in the
notice and upon completion of acceptance testing resubmit the
items listed above to WildBlue. Contractor will not be
authorized to deliver or invoice WildBlue for Sm units of a
given version until that version has been "Accepted." The
failure of an SM version to satisfy the applicable Acceptance
Test Plan shall be subject to the cure period and procedures set
forth in Section 5.4 above. In the event that Contractor is
unable to deliver an SM that satisfies the applicable Acceptance
Test Plan within the cure period, WildBlue shall have the
remedies set forth in Section 5.4.
(d) INDEPENDENT TESTING. WildBlue may perform additional testing on
Deliverables. If Acceptance testing, performed by WildBlue after
the Deliverable has been Accepted identifies a Defect in that
Deliverable, WildBlue shall inform Contractor in writing and
describe the alleged Defect and the test
ViaSat and WildBlue Confidential
13
conditions under which the Defect was identified. Contractor
will have fourteen (14) days to provide a response either
disputing the allegation of failure, requesting a Waiver or
concurring with the alleged Defect. If Contractor concurs with
WildBlue's finding, Contractor will submit a corrective action
plan covering SMs of the affected version which are under
Warranty or Extended Warranty coverage and Contractor will
suspend future deliveries of that version until successful
demonstration of the fixes called out in the corrective action
plan. A request for a Waiver will be handled in accordance with
the provisions of this Agreement. If Contractor disputes
WildBlue's allegation of failure, Contractor will provide
WildBlue with a written response describing the reasons why the
WildBlue test results do not indicate a Defect along with any
supporting test data.
6.2. QUALITY ASSURANCE. Contractor shall maintain compliance with its
ISO 9001 series approach to quality in the performance of its
obligations under this Agreement. As part of its quality
assurance obligations, Contractor shall conduct testing of
production, SMs WBSTs, SMTSs after Acceptance (or provisional
acceptance) of such SM, WBST or SMTS version in accordance with
reasonable industry practices. If testing of WBSTs, SMs or SMTSs
indicates a problem with the quality of the WBSTs, SMs or SMTSs
generally based on evidence of failure of the SMs, WBSTs, SMTSs,
then Contractor will provide an plan to correct the problem
within two (2) weeks after notice of such problems by WildBlue.
7. PHYSICAL APPEARANCE AND BRANDING
7.1. PHYSICAL APPEARANCE. Contractor has submitted a physical design
to WildBlue for review and approval. Contractor shall
incorporate all reasonable suggestions made by WildBlue
regarding physical design and appearance of the WBSMs. If
incorporating WildBlue's suggestions regarding physical design
and appearance (including SM Marks) materially impacts
Contractor's cost or schedule, Contractor shall be entitled to
receive an equitable adjustment in Price and/or schedule in a
manner consistent with Section 12.1 below.
7.2. SM MARKS. Branding of WBSMs shall be determined solely by
WildBlue. WildBlue has the right (but not the obligation) to put
a Contractor logo (provided by Contractor, which may be a name
other than "ViaSat"), another logo (excluding that of a
competing manufacturer of satellite terminals) and/or a WildBlue
logo on the WBSM at a location and size of WildBlue's choosing.
If WildBlue opts not to include a Contractor logo, WildBlue will
include a unique brand name which distinguishes Contractor's
WBSMs from other manufacturer's WBSMs and will not use such
brand name on WBSMs from any other manufacturer. WildBlue agrees
that it will treat Contractor no less favorably regarding the
placement of brand name and logos on the WBSMs than other
manufacturers of WBSMs for WildBlue. Contractor shall affix to
each production WBSM, the Marks selected by WildBlue for
inclusion on WBSMs, in the form and location determined by
WildBlue.
7.3. USE OF CONTRACTOR MARKS. Contractor grants WildBlue a
non-exclusive, non-transferable (except as permitted under
Section 25.1 (Assignment)), royalty-free license
ViaSat and WildBlue Confidential
14
(without the right to grant sublicenses) to use and reproduce
the Contractor Marks set forth on Schedule 12, as may be amended
upon mutual agreement of the Parties from time to time, in
accordance with Contractor's reasonable guidelines solely for
use on WBSMs, or for advertising, promotional or other purposes
having to do with the WildBlue business. WildBlue agrees to
state in appropriate places on all materials using Contractor
Marks that the Contractor Marks are trademarks of Contractor and
to include the symbol (TM) or (R) as appropriate. Contractor
agrees that WildBlue may utilize Contractor Marks to advertise
Contractor's participation as a SM vendor. Contractor must
obtain permission in writing from WildBlue to use the WildBlue
logo or the WildBlue trade name. Subject to Section 25.11,
Contractor may use the WildBlue logo or WildBlue trade name in
connection with listing and describing WildBlue as a customer of
Contractor in its advertising, promotion, marketing and sales
materials. Notwithstanding the foregoing, neither Party shall
make any statement that acts as an implied or direct endorsement
of any product (except for the WBSM) or service of the
referencing Party by the other Party without such other Party's
prior written consent.
7.4. DISPUTE RESOLUTION. If the Parties cannot reach agreement
regarding matters arising under Section 7.1, the Parties will
engage in the Dispute Resolution procedure set forth in Section
22.
8. ORDERING
8.1. ORDERS GENERALLY. During the Term, WildBlue may issue Orders for
WildBlue Satellite Terminals, WBSMs and SMTSs beyond those set
forth in the Initial WildBlue Satellite Terminals Order and
Initial SMTS Order ("ADDITIONAL ORDERS"). Orders and Additional
Orders shall be issued in accordance with this Section 8.1 and
Section 8.2. Any term or condition set forth in an Order or
other document submitted by either Party that is inconsistent
with or in addition to this Agreement will be of no force or
effect, unless mutually and expressly agreed by the Parties in
writing. Subject to the terms of this Agreement, Contractor
shall accept all Orders issued by WildBlue in accordance with
the terms of this Agreement and deliver such Orders in
accordance with the terms of the Order and the terms and
conditions of this Agreement. Title and risk of loss or damage
shall transfer, upon Contractor's delivery to the carrier of
WildBlue's choice at Contractor's designated shipping point
within the contiguous U.S. Except as expressly set forth herein,
delivery schedule changes must be mutually agreed to in writing.
If Contractor obtains shipping insurance on behalf of or for the
benefit of WildBlue, WildBlue shall be responsible for filing,
processing and pursuing all claims under such insurance policy.
Subject to the terms hereof, each Order shall include delivery
instructions, packaging type, purchase order number, quantity,
applicable Price (set forth in Schedules 11 and 19) and
statement that the Order is being placed under this Agreement.
For all SMTS Orders (including those set forth in the Production
Schedule), WildBlue shall deliver to Contractor the delivery
instructions, including location, for the SMTS Chassis and any
associated components at least 90 days prior to the scheduled
delivery date.
8.2. ORDER AND DELIVERY FORECAST. WildBlue shall provide Contractor
with a delivery forecast and order commitment for the WildBlue
Satellite Terminals and/or SMs as required by Schedule 9 (the
"SM/WBST ORDER AND DELIVERY FORECAST"). A monthly
ViaSat and WildBlue Confidential
15
delivery forecast becomes an Order through the process defined
in Schedule 9. Contractor acknowledges that the WildBlue Order
Forecast will be binding only as set forth in Schedule 9.
WildBlue may vary the forecast as provided in Schedule 9.
WildBlue shall also provide Contractor with a delivery forecast
and order commitment as required by Schedule 20 (the "SMTS ORDER
AND DELIVERY FORECAST"). A monthly delivery forecast becomes an
Order through the process defined in Schedule 20.
8.3. INITIAL WILDBLUE SATELLITE TERMINALS ORDER. WildBlue hereby
purchases from Contractor fifty-eight thousand WBSTs as some
combination of WBST-A and WBST-B (the "INITIAL WBST ORDER"). The
delivery schedule for the Initial WBST Order shall be
established with the first WBST/WBSM Order and Delivery Forecast
provided by WildBlue in accordance with Schedule 9. The delivery
schedule and quantities for the Initial WBST Order shall be
consistent with Schedule 8 (Minimum Order Commitment and Maximum
Capacity Commitment). The delivery schedule may be modified in
subsequent months consistent with Schedule 8 and Schedule 9.
8.4. INITIAL SMTS ORDER. WildBlue hereby purchases from Contractor
the SMTSs and SMTS components set forth in the Initial SMTS
Order Delivery Schedule, Schedule 20, (the "INITIAL SMTS
ORDER"). The delivery of the Initial SMTS Order shall be in
accordance with Schedule 20. WildBlue shall pay one-third of the
purchase price of the Deliverables 120 days prior to the
scheduled delivery date (as may be revised by the Parties) and
Contractor may invoice WildBlue for the remaining two-thirds of
the purchase price in accordance with Section 17.3.
Notwithstanding any provision to the contrary, WildBlue may
cancel the Initial Order by exercising its rights under Section
23.2(b) or Section 23.2(c) hereof.
8.5. ORDERS FROM AFFILIATES AND AUTHORIZED RESELLERS. Affiliates and
Authorized Resellers shall be entitled to purchase WBSMs from
Contractor under Price, Order, Delivery and Warranty terms
consistent with this Agreement and such orders shall count
toward satisfaction of all minimum purchase commitments of
WildBlue hereunder, including the Initial Order. One Hundred
Twenty (120) days prior to the first firmed scheduled delivery
of a WBST under its Initial Order, Contractor and WildBlue shall
use commercially reasonable efforts to mutually agree on a form
of purchase agreement, under which Authorized Resellers may
order and purchase WBSMs. Such purchase agreement will include a
license of Contractor Marks to Authorized Resellers consistent
with the terms of this Agreement. Contractor shall notify
WildBlue of orders for WBSMs placed by Affiliates and Authorized
Resellers on a quarterly basis. Contractor agrees that, without
the prior written consent of WildBlue, no Order by an Affiliate
or Authorized Reseller shall be delivered unless and until all
Orders for the relevant time period by WildBlue have been
delivered.
8.6. SHORTFALLS AND CANCELLATION OF WILDBLUE SM ORDERS.
(a) Without WildBlue's prior written approval, Contractor
shall not deliver incomplete Orders. WildBlue may refuse
to accept a partial delivery or an overage. If
Contractor fails to deliver all of the WBSTs, SMs or
SMTSs in a WildBlue Order as required by the Order (a
"SHORTFALL"), and the delivery delay is not requested by
WildBlue or excused under Section 15 (an "UNEXCUSED
SHORTFALL"), then on the date the Order was due
Contractor shall give WildBlue a
ViaSat and WildBlue Confidential
16
written schedule setting forth the schedule on which
Contractor will deliver the shortfall (the "MAKE-UP
ORDER"). Within five (5) days after WildBlue receives
such schedule from Contractor, WildBlue may elect, by
giving written notice to Contractor, to delay delivery
of all or any portion of the Unexcused Shortfall beyond
the dates in Contractor's schedule (for a period not to
exceed 120 days), or delete all or any portion of the
Unexcused Shortfall from the Order commitment. If
WildBlue accepts a partial delivery, WildBlue will have
no obligation to pay for any portion of the delivery
until the earlier of (i) delivery of the Shortfall by
Contractor, and (ii) notice from WildBlue that it has
elected to delay (for a period not to exceed 120 days)
or delete all or any undelivered portion of the affected
Order (in which case WildBlue shall be required to pay
for only that portion of the Order actually received).
Notwithstanding any of the foregoing, WildBlue's
acceptance of partial deliveries will not constitute a
waiver of WildBlue's rights or a release of Contractor's
obligations under this Agreement.
(b) If Contractor becomes aware of any circumstance
involving Contractor or a sub-contractor of Contractor
that would threaten the timely or full delivery of an
Order, Contractor shall immediately notify WildBlue of
such delay and the cause of such delay. If requested by
WildBlue, Contractor shall promptly provide a written
plan for correction of such delay.
8.7. SM OR WILDBLUE SATELLITE TERMINALS MINIMUM ORDER QUANTITY. After
completion of the Initial WBST Order and Initial SMTS Order, if
WildBlue places an Order for fewer than five thousand (5,000)
total units consisting of either SM-B and/or WildBlue Satellite
Terminals during any month, Contractor shall have the right to
refuse to accept such Order. If Contractor elects to accept an
Order for fewer than 5,000 SM-Bs or WildBlue Satellite
Terminals, Contractor shall deliver such SM-Bs or WildBlue
Satellite Terminals in accordance with the terms of this
Agreement. If WildBlue fails to order 5,000 SM-B or WildBlue
Satellite Terminals for two (2) consecutive months or three (3)
out of any period of six (6) consecutive months and thereafter
places an Order of greater than 5,000 SM-B or WildBlue Satellite
Terminals, Contractor, if it accepts such Order, will be
entitled to a one time payment to cover reasonable costs
associated with reinitiating volume production of SM-B or
WildBlue Satellite Terminals to enable Contractor to fulfill the
Order.
9. SHIPPING AND RELATED MATTERS
9.1. SERIAL NUMBERS. Contractor shall mark each WBSM, WBST and
WildBlue SMTS produced or delivered to WildBlue hereunder with a
unique serial number. Contractor shall keep accurate records as
to the WBSMs, WBSTs or WildBlue SMTSs, by serial number, that
were delivered to WildBlue and Authorized Resellers. Upon
WildBlue's request, Contractor shall provide a report in
electronic format which identifies the serial numbers received
by any purchaser.
9.2. PACKING AND PACKAGING. To the extent possible, WBSM-B orders
will be packaged in blocks of twenty-four (24) individual WBSMs
or multiples thereof. All other deliveries to WildBlue pursuant
to this Agreement shall be packaged in a manner consistent with
ViaSat and WildBlue Confidential
17
industry standards and packed for safe delivery to their
destinations without damage. Wholesale, single color packaging
is included in the purchase price. Subject to Contractor having
a firm WBSM delivery schedule, Contractor shall submit a retail
outside packaging design and cable options package (to include
Ethernet and USB cables) ("RETAIL PACKAGE") to WildBlue for
WildBlue's approval not more than 30 days after WildBlue's
written request in conjunction with a firm delivery schedule for
the Initial WBST Order. The obligation to submit a Retail
Package is a one-time event. The price for the Retail Package
will be negotiated between the Parties. The Retail Package shall
be an option for WildBlue. If the Retail Package option is
requested WildBlue may purchase WBSMs with both the standard
packaging and Retail Packaging. Packaging type will be specified
on Orders.
9.3. DELIVERY AND STORAGE. Unless otherwise specified in an Order
accepted by Contractor, all shipments hereunder shall be FOB
Contractor's designated site within the contiguous U.S. WildBlue
may upon five (5) days prior written notice elect to defer a
scheduled shipment for up to ninety (90) days and Contractor
will store SMs, SMTSs and/or WBSTs in its designated warehouses
for up to ninety (90) days at no cost to WildBlue and Contractor
shall retain title and risk of loss during storage. Thereafter,
Contractor shall continue storage and WildBlue shall pay
Contractor *** per SM unit per month or *** per WBST per month
for such continued storage. For the SMTS, WildBlue shall pay
Contractor *** per Chassis per month for such continued storage.
Such election to store units does not relieve WildBlue of the
requirement to pay the purchase Price for such units, which may
be invoiced on the originally scheduled delivery date.
10. LICENSES, PROPRIETARY RIGHTS
10.1. OWNERSHIP.
(a) BACKGROUND INFORMATION. As between the Parties, each
Party hereto shall have and retain exclusive ownership
of its Background Information, subject to the rights
granted to the other Party under this Section 10.
(b) FOREGROUND INFORMATION.
(i) As between the Parties, and except as provided
in Section 10.1(b)(iv), Contractor shall have
and retain exclusive ownership of Contractor
Foreground Information, subject to the rights
granted to WildBlue under this Section 10.
(ii) As between the Parties, WildBlue shall have and
retain exclusive ownership of WildBlue
Foreground Information, subject to the rights
granted to Contractor under this Section 10.
(iii) JOINT FOREGROUND INFORMATION. Contractor and
WildBlue shall have and retain joint ownership
of all Joint Foreground Information without any
appropriate right or obligation of accounting to
the other Party for profits from exploitation of
the rights. With respect to jointly owned patent
rights and rights in inventions, the Parties
will provide reasonable cooperation and
assistance to one another in the preparation,
filing and
ViaSat and WildBlue Confidential
18
prosecution of any such patents. The Parties
will divide any costs and expenses incurred by
the Parties preparing, filing, and prosecuting a
particular patent application or patent. If a
Party does not wish to pay the costs and
expenses associated with preparing or filing a
particular patent application, it may notify the
other Party in writing. In such case, the
notified Party may either abandon the patent
application in question or may proceed with the
application, in which event the other Party will
not have any ownership of any resulting patent.
(iv) INTERFACE SPECIFICATION IS FOREGROUND
INFORMATION. As between the Parties, WildBlue
shall have and retain exclusive ownership of all
IS Foreground Information. Except for
Contractor's rights in the Contractor Background
Information, Contractor hereby irrevocably
assigns to WildBlue all right, title and
interest worldwide in and to the IS Foreground
Information and all applicable Intellectual
Property Rights related to the IS Foreground
Information that Contractor has or may acquire.
Contractor will execute, verify and deliver such
documents and perform such other acts (including
appearances as a witness) as WildBlue may
reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining
and enforcing such it rights in the IS
Foreground Information and the assignment
thereof. Contractor hereby irrevocably
designates and appoints WildBlue and its duly
authorized officers and agents as its agent and
attorney in fact, which appointment is coupled
with an interest, to act for and in its behalf
to execute, verify and file any such documents
and to do all other lawfully permitted acts to
further the purposes of this paragraph with the
same legal force and effect as if executed by
Contractor.
(c) RESERVATION OF RIGHTS. There are no implied licenses
under this Agreement, and any rights not expressly
granted by a Party to the other Party hereunder shall be
reserved by such Party.
10.2. GRANTS OF LICENSES TO CONTRACTOR.
(a) DEVELOPMENT LICENSE TO USE WILDBLUE INFORMATION.
WildBlue hereby grants Contractor a perpetual,
worldwide, royalty-free, non-exclusive, non-transferable
(except in accordance with Section 25.1 hereof) license
to use, reproduce, modify, and create derivative works
of WildBlue Background Information, WildBlue Foreground
Information, IS Foreground Information and Third Party
Information provided by WildBlue and required by
Contractor for the sole purpose of designing and
developing SMs, WBSMs, SMTSs, WildBlue Satellite
Terminals, other satellite modems, other satellite modem
termination systems or other Satellite Terminals, and
components thereof, including the right to sublicense to
its subcontractors and/or suppliers (the "DEVELOPMENT
LICENSE").
(b) WILDBLUE PRODUCTION AND DISTRIBUTION LICENSE FOR
WILDBLUE. WildBlue hereby grants to Contractor a
worldwide, royalty-free, non-exclusive, non-transferable
(except in accordance with Section 25.1 hereof) license
to (1) use WildBlue Background Information, WildBlue
Foreground Information, IS
ViaSat and WildBlue Confidential
19
Foreground Information and Third Party Information
provided to Contractor by WildBlue (collectively, "WB
IP"), solely to produce, manufacture, have manufactured,
sell, distribute and support SMs, SMTSs WBSMs, other
satellite modems, other satellite modem termination
systems, other Satellite Terminals, and/or WildBlue
Satellite Terminals, including components thereof,
including the right to sublicense to its subcontractors
and/or suppliers, on behalf of WildBlue (the "WILDBLUE
PRODUCTION LICENSE").
(c) WILDBLUE PRODUCTION AND DISTRIBUTION LICENSE FOR THIRD
PARTIES. WildBlue hereby grants to Contractor a
worldwide, royalty-free, perpetual, non-exclusive,
non-transferable (except in accordance with Section 25.1
hereof) license to use the WB IP, apart from the
performance enhancing proxy ("PEP"), solely to develop,
produce, manufacture, have manufactured, sell,
distribute and support SMs, SMTSs, other satellite
modems, other satellite modem termination systems, other
Satellite Terminals, and/or WildBlue Satellite
Terminals, including components thereof, including the
right to sublicense to its subcontractors and/or
suppliers on behalf of third parties (the "PRODUCTION
LICENSE").
10.3. GRANT OF LICENSES TO WILDBLUE.
(a) DISTRIBUTION LICENSE. Subject to Sections 10.4 and 10.7,
Contractor hereby grants to WildBlue a worldwide,
perpetual, royalty-free, non-exclusive, right and
license (with the right to sublicense) to use, have
used, operate, display, demonstrate, market, distribute,
lease and/or sell, without out rights to manufacture or
have made, and authorize others to perform the
foregoing, the Contractor Background Information and
Contractor Foreground Information as incorporated with
and into SMs.
(b) IS BACKGROUND INFORMATION LICENSE. Contractor grants to
WildBlue a worldwide, nonexclusive, royalty-free,
perpetual and irrevocable right and license to the IS
Background Information, with a right to sublicense to
other WBSM and SMTS manufacturers, to:
(i) make, have made, use, reproduce, market,
distribute, offer to sell and sell, and import
WBSMs; and
(ii) copy, reproduce, publish, display (publicly or
otherwise), and make derivative works of the IS
Background Information.
Contractor acknowledges that the IS Background
Information will be publicly disseminated and Contractor
waives any right of trade secret in and to the IS
Background Information. Contractor further acknowledges
that, in the event the license granted in this Section
10.3(b) is terminated, User licenses in effect at the
time of such termination shall be unaffected by the
termination and shall remain in full force.
(c) DEVELOPMENT SOURCE CODE LICENSE. Contractor hereby
grants to WildBlue a non-exclusive, royalty free,
worldwide, non-transferable (except as provided in the
Assignment provision) license to access, utilize, modify
and adapt (without
ViaSat and WildBlue Confidential
20
the right to distribute) source code versions of
Contractor Background Information and the Contractor
Foreground Information solely for internal evaluation,
development and testing purposes in connection with
SM-As and SMTS-As for the longer of three years from the
Effective Date or two years after the delivery of the
Initial Order.
10.4. SOFTWARE LICENSES AND RIGHTS. Commencing upon delivery of the
WBSMs or WBSTs to Users, Contractor shall grant to Users a
perpetual, nontransferable, nonexclusive, fully-paid,
royalty-free, irrevocable, and a world-wide right and license
(or sublicense for third party software) to use, copy, access,
display, operate and process the Software in connection with the
intended use of the WBSMs. Such User license shall contain, at
Contractor's option, the following terms:
(a) Users shall agree not to decompile or reverse assemble
all or any portion of the Software in an effort to
obtain the Source Code for the Software, nor shall it
authorize others to do so, nor rent, lease, grant a
security interest in, or otherwise transfer rights to
the Software.
(b) Users will not create derivative works of the Software
or modify the code to the Software, nor shall it
authorize others to do so; provided, however, the
foregoing shall not in any manner whatsoever limit
WildBlue's, its Authorized Resellers and User's rights
to use the Software in accordance with Contractor's
instructions or otherwise limit WildBlue's rights to use
any tools provided with the Software.
WildBlue hereby agrees to use the Software in conformance with
the requirements set forth in paragraphs (a) and (b) above.
10.5. DOCUMENTATION. Contractor shall deliver to WildBlue at no
additional charge, the following Documentation in support of
production deliveries:
a. WILDBLUE SATELLITE TERMINAL INSTRUCTION MANUALS
One user instruction manual printed in both English and
Spanish shall be included with each WildBlue Satellite
Terminal (WBST). These User instruction manuals will
detail the operation of the WBST as follows: preliminary
manuals to be provided with all non-production units
(English only), final manual to be delivered ninety (90)
days prior to delivery of Month 1 Initial Order for
review and approval by WildBlue, which shall not be
unreasonably withheld.
b. SMTS INSTRUCTION MANUALS
One user instruction manual printed in English shall be
included with each SMTS. These User instruction manuals
will detail the operation of the SMTS as follows:
preliminary manuals to be provided with all
non-production units, final manual to be delivered
ninety (90) days prior to delivery of Month 1 Initial
Order for review and approval by WildBlue, which shall
not be unreasonably withheld.
c. TRAINING MATERIALS
ViaSat and WildBlue Confidential
21
The Contractor shall provide the training materials set
forth in Section 11.
Subject to Contractor's copyrights and the restrictions
set forth in Schedule 15, Contractor hereby grants
WildBlue a perpetual, world wide, non-exclusive,
sublicensable (to Authorized Resellers) license to use,
reproduce, publish, modify, and create derivative works
of Documentation. WildBlue may elect upon one hundred
eighty (180) days prior written notice to not include
Contractor's manual within the WBSM and have the unit
Price reduced by ten cents ($0.10).
10.6. OPEN STANDARD. Either Party may elect to publish the WildBlue
Radio Frequency Interface Specification, with updates,
derivatives and/or modifications, as an open standard ("Open
Standard") and to promote it as a DOCSIS-based open satellite
terminal standard. Neither Party shall be entitled to any
royalties in connection with the WildBlue Radio Frequency
Interface Specification (Schedule 2).
10.7. CONTRACTOR'S RIGHTS OF SALE TO OTHER THIRD PARTIES. Subject to
Contractor's compliance with the terms and conditions of this
Agreement, Contractor is entitled to and authorized, without
restriction, to sell SMs, SMTSs, other satellite modems, other
satellite modem termination systems, WildBlue Satellite
Terminals or other Satellite Terminals and components thereof,
to other parties.
11. TRAINING
11.1. TRAINING. During the Term, Contractor will provide WildBlue
training in accordance with the following:
(a) Within thirty (30) days after the delivery of the first
production WBSMs or first production SMTSs, Contractor
shall provide WildBlue employees (or their designees),
at no additional cost or expense (other than attendees
own travel and related expenses to Contractor's training
facility, which shall be paid for by WildBlue), one
comprehensive training courses (with content sufficient
to train employees in the use and installation of the
WBSM and the SMTS) for attendance by up to twenty-five
(25) WildBlue designated individuals. Such training
courses shall include written course materials for each
attendee.
(b) Contractor shall develop and furnish all training
materials for the initial training referred to in
paragraph (a) in a form that is sufficient to enable
WildBlue's designated representatives to provide Tier 1
support for WBSMs and SMTSs.
(c) Contractor shall provide up to twice a year remedial
training and training on any changes, updates and
enhancements to the WBSMs and SMTSs, or training
otherwise requested by WildBlue to enable WildBlue and
its Authorized Resellers to be capable of performing all
necessary services, including installation, operation,
maintenance, provisioning, monitoring and control of the
WBSMs. Such additional training shall be at Contractor's
expense if changes to the WBSMs or SMTSs were made due
to a Defect in the WBSMs or SMTSs. Other training will
be provided at the rates set forth in Schedule 10.
Contractor will provide WildBlue with all updates, if
appropriate, to the training materials
ViaSat and WildBlue Confidential
22
provided in order to enable WildBlue to maintain the
skill level of its personnel in light of Contractor's
changes to the WBSM and SMTS.
(d) Subject to Schedule 15, Contractor grants to WildBlue
license to use, modify and distribute all training
materials provided by Contractor to WildBlue under this
Section 11.
12. RESERVED.
13. PROGRAM MANAGEMENT
Each Party shall designate one employee with decision-making authority
to serve as the principal technical contact for such Party during the
Term (each a "PROJECT MANAGER"). The Project Managers shall work
together to ensure that the development and manufacturing efforts
hereunder proceed in a timely manner. Either Party may change its
Project Manager at any time and from time to time by giving the other
Party written notice. Each Party shall bear its own costs and expenses
incurred in connection with participation in such meetings.
14. CONTRACTOR'S USE OF SUBCONTRACTORS AND MANUFACTURING FACILITY
14.1. Excluding components provided by WildBlue or its suppliers,
Contractor shall be solely responsible in all respects for
obtaining the components necessary to manufacture the WBSMs and
SMTSs, including without limitation, managing relationships with
component vendors and sub-contractors and maintaining adequate
controls on component quality and supply. Contractor will not
enter into exclusive arrangements with component vendors that
would preclude the manufacture of WBSMs by other SM
manufacturers.
14.2. In the event that Contractor becomes aware of circumstances
suggesting that a component vendor or sub-contractor is likely
to breach its obligations to provide components and/or services
to Contractor for any reason and if such breach will materially
impact Contractor's ability to meet its obligations hereunder,
Contractor shall so notify WildBlue. Upon such breach Contractor
will develop an action plan to recover from such breach and
promptly present said plan to WildBlue for recommended changes,
if any, to such plan.
14.3. Contractor shall notify WildBlue in writing of all Major
Component Vendors that Contractor selects to assist Contractor
with the development, modification and supply of WBSMs
hereunder. "MAJOR COMPONENT VENDOR" means a vendor, supplier or
subcontractor selected by Contractor to develop, modify or
supply existing application specific integrated circuits for MAC
processing, downstream demodulation and decoding and upstream
modulation and coding required to meet the Specification (such
components referred to as "MAJOR COMPONENTS"). If Contractor
selects a Major Component Vendor pursuant to section 14.3,
Contractor shall use commercially reasonable efforts to
negotiate terms and conditions that are consistent with the
following provisions:
ViaSat and WildBlue Confidential
23
(a) Contractor will ensure that Major Components Vendors
will agree to sell and/or license to other WBSM
manufacturers on fair and reasonable terms no less
favorable than terms Contractor receives.
(b) WildBlue may purchase Major Components under
substantially the same terms, cost and timeframe as
Contractor.
(c) To the extent required to develop the SMs, any cable
modem and SM reference designs, evaluation boards,
software releases and MAC source code releases shall be
made available to WildBlue, at the same time, and on the
same terms and conditions (including, without
limitation, cost) as such materials are made available
to Contractor.
14.4. The Parties acknowledge and agree that WildBlue has entered into
a development agreement (the "BROADCOM CONTRACT") with Broadcom
Corporation ("BROADCOM") the terms of which are sufficient to
satisfy the terms of this section. WildBlue and Contractor will
negotiate (between themselves and with Broadcom) in good faith
to amend or terminate the Broadcom Contract by January 31, 2002
(the "BROADCOM NEGOTIATION PERIOD"). The goal of this effort is
the assignment of the Broadcom Contract to Contractor with
mutually acceptable changes in scope and termination liability.
However, this also could result in sharing of the costs between
Contractor and WildBlue or termination of the Broadcom Contract.
Upon any assignment that allows for such rights, WildBlue will
have the right to receive and transfer to others all DOCSIS SM
and SMTS related information provided to Contractor from
Broadcom (including SM and SMTS reference designs) and access to
the chips and chipsets on the same price and terms offered to
Contractor under the Broadcom Contract or any successor
agreement thereto between Contractor and Broadcom for the same
or substantially similar chips and chipsets.
If the Broadcom Contract is not assigned to Contractor during
the Broadcom Negotiation Period, prior to terminating or
modifying the Broadcom Contract, WildBlue shall provide
reasonable prior written notice to Contractor of its intention
to do so. If, prior to such termination or modification the
Contractor agrees in writing to pay all amounts when due under
the Broadcom Contract (and in fact timely makes all such
payments), (i) WildBlue shall not terminate or modify the
Broadcom Contract without the prior written approval of the
Contractor, (ii) WildBlue will operate in good faith to
represent Contractor's interests in managing the Broadcom
Contract, and (iii) Contractor may, by providing 30 days prior
written notice to WildBlue, take the lead in the technical
management of the Broadcom Contract, subject to the terms of
such contract.
14.5. WildBlue shall support Contractor in exploring the assignment of
the Mentat contract to Contractor.
15. FORCE MAJEURE AND DELAYS
15.1. FORCE MAJEURE.
(a) Except for payment obligations hereunder, no Party shall
be liable for any failure or delay in the performance of
its obligations under this Agreement if and to the
ViaSat and WildBlue Confidential
24
extent it is caused by fire, flood, lightning,
earthquake, elements of nature or acts of God,
Governmental acts (including government approvals of the
SM, WBST or SMTS and import/export issues provided that
Contractor has complied with its obligations to obtain
such approvals or import/export clearances), riots,
civil disorders, rebellions or revolutions in any
country, or any other cause beyond the reasonable
control of such Party; provided, however, that the
non-performing Party is without fault in causing such
default or delay, and such default or delay could not
have been prevented by reasonable precautions and cannot
reasonably be circumvented by the non-performing Party
through the use of alternate sources, workaround plans
or other means (any of the foregoing, a "FORCE MAJEURE
EVENT").
(b) In the event of a Force Majeure Event, the
non-performing Party shall be excused from further
performance or observance of the obligation(s) so
affected for as long as such circumstances prevail and
such Party continues to use its commercially reasonable
efforts to recommence performance or observance whenever
and to whatever extent possible without delay. Any Party
so delayed in its performance shall immediately notify
the Party to whom performance is due by telephone (to be
confirmed in writing within five (5) business days of
the inception of such delay) and describe at a
reasonable level of detail the circumstances causing
such delay.
(c) If any Force Majeure Event substantially prevents,
hinders, or delays Contractor's performance for more
than one hundred twenty (120) consecutive days, then at
WildBlue's option, WildBlue may terminate or modify any
affected portion of any Order, or terminate this
Agreement in whole or in part, and the charges payable
hereunder to the date of termination shall be
appropriately adjusted to reflect such termination.
(d) Notwithstanding the foregoing provisions of this Section
15.1, if the U.S. Federal Communications Commission or
other U.S. or foreign regulatory or governing body
rescinds or otherwise invalidates WildBlue's
communications license or fails to issue such license in
due course, which substantially impairs the economic
viability of WildBlue (any of the foregoing, a
"REGULATORY FORCE MAJEURE EVENT"), the Parties agree to
renegotiate this Agreement on commercially reasonable
and mutually acceptable terms in light of the effects
arising from the Regulatory Force Majeure Event, to the
extent such Regulatory Force Majeure is not caused by
the gross negligence or willful misconduct of WildBlue.
15.2. EXCUSABLE DELAY. "EXCUSABLE DELAY" shall mean (i) a Force
Majeure Event that prevents Contractor from timely performing
its obligations hereunder, (ii) WildBlue's failure to timely
meet its material obligations hereunder (following the
applicable cure period, if any, and provided that WildBlue
receives written notice describing in reasonable detail its
failure within fifteen (15) days after the applicable due date,
or in the case of WildBlue Major Component Vendor deliverables
as set forth in Schedule 5, 30 days after the applicable due
date) which adversely affects Contractor's ability to timely
perform its obligations hereunder (but only to the extent of
such adverse effect). In the event of an Excusable Delay,
Contractor may stop work until Contractor can
ViaSat and WildBlue Confidential
25
resume performance following cessation of the Force Majeure
Event in accordance with Section 15.1 hereof or WildBlue resumes
or cures performance, as the case may be. In addition,
Contractor shall be entitled to an appropriate adjustment in the
Milestone Dates, or other applicable production schedule
obligations hereunder for any Excusable Delay (only to the
extent not already covered pursuant to Section 15.3) and, in the
event of an Excusable Delay caused by WildBlue's failure to
perform its obligations hereunder, an appropriate payment
adjustment as mutually agreed by the Parties. Payment
adjustments shall account only for the net non-recurring,
production and other related cost impact incurred by Contractor
as a result of the change plus a reasonable profit thereon.
Contractor will provide reasonably detailed back-up data to
support its claim for such adjustment.
15.3. DELAY DUE TO LAUNCH OR SATELLITE FAILURE. For Orders in place at
the time of a launch failure or satellite failure, WildBlue
shall pay, pursuant to the normal invoice schedule. If directed
by WildBlue in writing, Contractor shall store such units for up
to eighteen (18) months at the rates established in Section 9.3.
If, at WildBlue's option, WildBlue suspends the Order process
set forth in Section 8.2 because of launch failure or satellite
failure, WildBlue shall pay reasonable and mutually agreed upon
expenses associated with Contractor's wind down and restart of
the production program.
16. PRICES
16.1. GENERAL. Contractor shall offer WBSM-B,, WildBlue Satellite
Terminals and SMTSs for sale to WildBlue, Affiliates, and
Authorized Resellers at the unit Prices set forth in this
Agreement. Provided that the monthly delivery order requirements
are consistent with Schedule 8 and subject to the provisions of
Section 8.6, the WildBlue Satellite Terminal unit Prices will
not exceed the volume prices defined in Schedule 11 (WildBlue
Satellite Terminal Pricing Schedule), subject to equitable
increase for changes to the requirements.
16.2. WILDBLUE SATELLITE TERMINAL PRICES BY CONFIGURATION. The Price
of each WBSM-B, WBST-A and WBST-B delivered hereunder shall be
as set forth in Schedule 11 and Section 16.4. WildBlue may,
elect to change the configuration by adding Features or removing
Features in accordance with the terms of this Agreement.
16.3. SMTS PRICING. The pricing for each SMTS shall be as set forth in
Schedule 19.
16.4. MOST FAVORED CUSTOMER.
MOST FAVORED CUSTOMER. If during the Term, Contractor sells ***.
Assuming substantially similar specifications, terms and
conditions, in no event will the WBST-B or SMTS-B pricing be
greater than the WBST-A or SMTS-A pricing. If WildBlue is
entitled to a price revision, such adjustment shall be
retroactive to the first date on which the lower charges were
first provided to ***. The purchase price to a *** shall be
calculated to be net of any volume discounts, rebates and other
similar adjustments.
16.5. TAXES. Unless otherwise agreed to by the Parties in an Order,
the Parties' respective responsibilities for taxes arising under
or in connection with this Agreement shall be as follows:
ViaSat and WildBlue Confidential
26
(a) Each Party shall be responsible for any personal
property taxes on property it owns or leases, for
franchise and privilege taxes on its business, and for
taxes based on its net income or gross receipts.
(b) Contractor shall be responsible for any sales, use,
excise, value-added, services, consumption, and other
taxes, customs and duties assessed or otherwise payable
by Contractor on any goods or services that are used or
consumed by Contractor in designing, manufacturing, and
providing the SMs where the tax is imposed on
Contractor's acquisition or use of such goods or
services and the amount of tax is measured by
Contractor's costs in acquiring such goods or services.
(c) WildBlue shall be responsible for any sales, use,
excise, value-added, services, consumption, or other
tax, customs and duties assessed on any particular SM or
SMTS or Service purchased by WildBlue and delivered by
Contractor to WildBlue or designee hereunder. Such taxes
are in addition to the prices set forth herein and shall
be identified separately on invoices.
(d) The Parties agree to cooperate with each other to enable
each to more accurately determine its own tax liability
and to minimize such liability to the extent legally
permissible. Contractor's invoices shall separately
state the amounts of any taxes Contractor is collecting
from WildBlue. Each Party shall provide and make
available to the other any resale certificates,
information regarding out-of-state or out-of-country
sales or use of equipment, materials or services, and
other exemption certificates or information reasonably
requested by either Party.
(e) Contractor shall promptly notify WildBlue of, and
coordinate with WildBlue the response to and settlement
of, any claim for taxes asserted by applicable taxing
authorities for which WildBlue is responsible hereunder,
it being understood that with respect to any claim
arising out of a form or return signed by a Party to
this Agreement, such Party shall have the right to elect
to control the response to and settlement of the claim,
but the other Party shall have all rights to participate
in the responses and settlements that are appropriate to
its potential responsibilities or liabilities. If
WildBlue requests Contractor to challenge the imposition
of any tax, Contractor agrees to do so and WildBlue
shall reimburse Contractor for all reasonable legal fees
and expenses it incurs. WildBlue shall be entitled to
any tax refunds or rebates granted to the extent such
refunds or rebates are for taxes that were paid by
WildBlue.
17. WILDBLUE PAYMENTS TO CONTRACTOR AND INVOICING
17.1. PAYMENTS TO CONTRACTOR. WildBlue shall pay Contractor
nonrecurring engineering payments in the aggregate of Four
Million Dollars for non-recurring development (the "NRE
PAYMENTS") as follows:
---------------------------------------------------------------
NRE PAYMENT EVENT NRE PAYMENT AMOUNT
---------------------------------------------------------------
*** ***
---------------------------------------------------------------
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27
17.2 WildBlue shall wire transfer to Contractor within three business
days fifty percent (50%) of the amount due upon exercising its
option under Section 5.4(c) ("INITIAL OPTION PAYMENT"). The
balance of the amount owed by WildBlue shall be wire transferred
to Contractor within ten (10) days from delivery.
17.3 PAYMENTS TO WILDBLUE. Not more than ten calendar days after the
Effective Date, WildBlue shall provide Contractor an estimated
payment schedule for amounts due to Broadcom under the Broadcom
Contract. Contractor shall pay to WildBlue an amount equal to
50% of such required payment made by WildBlue to Broadcom under
the Broadcom contract; provided however, that the aggregate
amount of such required payments by Contractor shall not exceed
$500,000. If Contractor assumes the Broadcom Contract,
Contractor shall reimburse WildBlue for all required payments
made by WildBlue to Broadcom after the date hereof through the
date of assignment. At least ten (10) calendar days prior to
making a required payment, WildBlue shall provide Contractor
with written notification advising Contractor of the date such
payment will be made, the amount of the payment and a
certification that immediately upon receipt of funds from
Contractor, WildBlue will pay Broadcom all amounts then due. In
the alternative, Contractor may pay its portion of any payment
due under the Broadcom Contract directly to Broadcom and provide
WildBlue reasonable evidence of such payment. All payments
required by this Section 17.3 to WildBlue shall be made by
Contractor by wire transfer of immediately available funds to
WildBlue before WildBlue's payment is due to Broadcom.
17.4 INVOICING.
(a) No invoice shall be required with respect to the ***
payment due upon execution and delivery of this
Agreement.
(b) Upon execution and delivery of this Agreement by the
Parties, Contractor shall deposit *** into escrow
pursuant to the Escrow Agreement on behalf of WildBlue.
(c) For the optional items, no invoice for the Initial
Option Payment is required. For the balance of the
option payment, Contractor shall invoice WildBlue upon
delivery and this amount is due and payable in
accordance with Section 17.1.
(d) 120 days prior to the scheduled commencement of delivery
of SMTS's from the Initial Order, Contractor may invoice
WildBlue for one-third of the purchase price.
(e) Upon shipment of SMs, WBSTs or SMTSs pursuant to an
Order (including the Initial Order), Contractor will
invoice WildBlue for amounts due pursuant to this
Agreement for such SMs, WBSTs or SMTSs. Such invoice
shall include invoice date, Order number, SM, WBSTs or
SMTS part numbers and descriptions, quantities, unit
Prices and total amount due.
ViaSat and WildBlue Confidential
28
(f) For deliverables or services provided by Contractor,
Contractor will invoice WildBlue upon delivery or at
such time as otherwise mutually agreed. For Services,
Contractor will invoice WildBlue upon reasonably
satisfactory completion of the performance of such
Services or at such times as mutually agreed at the
hourly rates set forth in Schedule 10. All such invoices
shall include invoice date, Order number, description,
quantities, unit Prices and total amount due.
17.5 PAYMENT DUE.
(a) Invoices submitted to WildBlue in accordance with this
Section 17 shall be due and payable by WildBlue within
thirty (30) days of the date of such invoice, unless
earlier payment is provided for.
(b) Subject to Sections 8.4 and 17.3, WildBlue shall pay
one-third of the purchase price of the units from the
Initial SMTS Order 120 days prior to the scheduled
commencement of delivery with the balance due and owed
upon delivery.
(c) Subject to the provisions of Section 17.2, invoices for
any undisputed amounts owed by Contractor to WildBlue
shall be due and payable by Contractor within thirty
(30) days of the date of such invoice.
(d) Any undisputed payment that is not made after the due
date hereunder will be subject to an interest charge at
the lesser of (i) one percent (1%) per month, or (ii)
the highest rate permitted by applicable law, plus
reasonable attorneys' fees and other reasonable
collection expense.
(e) Payments to Contractor shall be made in U.S. Dollars via
check or wire transfer to the following Contractor
account:
Union Bank of California
530 B Street
San Diego, California 92101-4407 USA
9 digit Routing Transit Number: ***
Depositor Account Title: ViaSat General Account
Depositor Account Number: ***
(f) Either Party may set-off against amounts owed to the
Other Party hereunder any amounts owed that are not
disputed in good faith.
17.6 RIGHT TO CHANGE PAYMENT ARRANGEMENT.
Should WildBlue twice shall fail to make any payment properly invoiced
within 30 days of its due date (taking into account WildBlue's right to
dispute invoices in accordance with Section 17.6), all future payments
for WildBlue Satellite Terminals, SMs, or SMTSs and components thereof
("PRODUCTS") shall be made in accordance with this Section. WildBlue
shall pay fifty percent (50%) of the purchase price of any Order upon
placing the Order, and Contractor shall invoice WildBlue for the
remaining fifty percent (50%) of the purchase price in accordance with
this Section. Contractor may, at any time, decline to deliver if
WildBlue is in a delinquent
ViaSat and WildBlue Confidential
29
payment status. WildBlue hereby grants to Contractor and Contractor
retains a security interest in each Product and other Deliverable
shipped and the proceeds therefrom (including accounts receivable) and
the right of possession to the Products and other Deliverables shall
remain with Contractor, until payment in full is made (provided that
title and ownership to any software Products shall in any event and at
all times be retained by Contractor since Software Products are provided
under license only). WildBlue agrees to execute all financing statements
or other statements or other documents and to do all other acts which
Contractor may reasonably deem necessary to perfect and maintain such
security interest, title and right in Contractor, and hereby authorizes
Contractor to file this Agreement with appropriate authorities in order
to protect Contractor's interests herein.
17.7 DISPUTED CHARGES.
Either Party may withhold payment of particular charges that such Party
disputes in good faith. Each Party shall notify the other Party if it
disputes any charges hereunder within ten (10) days after receipt of the
invoice for such disputed charges, and will set forth its reasons for
such dispute in reasonable detail. All disputes under this Section shall
be resolved in accordance with Section 22 below.
18. INFORMATION; CONFIDENTIALITY
18.1. CONTRACTOR INFORMATION.
(a) Contractor Background Information and Contractor
Foreground Information shall constitute Confidential
Information of Contractor. WildBlue shall not possess or
assert any Lien against or to Contractor Background
Information or Contractor Foreground Information. No
Contractor Background Information or Contractor
Foreground Information, or any part thereof, shall be
sold, assigned, leased, or otherwise disposed of to
third parties by WildBlue or commercially exploited by
or on behalf of WildBlue, its employees, vendors,
contractors or agents, except as expressly provided
herein.
(b) Except as expressly provided herein, Contractor
Confidential Information shall not be disclosed to any
party without the prior written consent of Contractor,
nor utilized by WildBlue for any purpose other than that
of performing its obligations or exercising it rights
hereunder.
18.2. WILDBLUE INFORMATION.
(a) WildBlue Background Information and WildBlue Foreground
Information shall constitute Confidential Information of
WildBlue. Contractor shall not possess or assert any
Lien against or to any WildBlue Background Information
or WildBlue Foreground Information. No WildBlue
Background Information or WildBlue Foreground
Information, or any part thereof, shall be sold,
assigned, leased, or otherwise disposed of to third
parties by Contractor or commercially exploited by or on
behalf of Contractor, its employees, vendors,
contractors or agents, except as expressly provided
herein.
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30
(b) Upon WildBlue's request, but subject to any continuing
need of Contractor to fulfill its obligations hereunder,
the termination or expiration of this Agreement (in
whole or in part) for any reason (including termination
for cause) or, with respect to any particular data, on
such earlier date that the same shall be no longer
required by Contractor in order to render the Services
hereunder, such WildBlue Confidential Information
(including copies thereof) shall be promptly returned to
WildBlue by Contractor in a form reasonably requested by
WildBlue or, if WildBlue so elects, shall be destroyed.
Contractor shall certify to WildBlue in writing that
Contractor has fully complied with the letter and the
spirit of this Subsection.
(c) Except as expressly provided herein, WildBlue
Confidential Information shall not be disclosed to any
party without the prior written consent of WildBlue, nor
utilized by Contractor for any purpose other than that
of performing its obligations or exercising its rights
hereunder.
18.3. CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. Contractor and WildBlue each
acknowledge that they may be furnished with, receive, or
otherwise have access to information of or concerning
the other Party which such Party considers to be
confidential, proprietary, a trade secret or otherwise
restricted. As used in this Agreement and subject to
Subsection (c)(i) of this Section, "CONFIDENTIAL
INFORMATION" means all information, in any form,
furnished or made available directly or indirectly by
one Party to the other, including such information
developed by either Party hereunder and used in or with
the SMs, which is marked confidential, restricted,
proprietary, or with a similar designation, including
all WildBlue Background Information, WildBlue Foreground
Information, Contractor Background Information and
Contractor Foreground Information. Confidential
Information also shall include, whether or not
designated "Confidential Information": (i) all
specifications, designs, documents, correspondence,
software, documentation, Source Code, data and other
materials and work products produced by either
Contractor or its subcontractors in the course of
performance of this Agreement; (ii) all information
concerning the operations, affairs and businesses of a
Party, the financial affairs of a Party, and the
relations of a Party with its customers, employees and
Authorized Resellers (including customer lists, customer
information, account information and consumer markets);
(iii) software provided to a Party by or through the
other Party; (iv) other information, systems designs and
architecture, and data stored on magnetic media or
otherwise or communicated orally by either Party, which
a reasonable person would assume to be confidential, and
obtained, received, transmitted, processed, stored,
archived, or maintained by the other Party under this
Agreement; and (v) WildBlue equipment forecasts and
orders.
(b) OBLIGATIONS.
(i) Each Party's Confidential Information shall
remain the property of that Party or its
licensors except as expressly provided otherwise
by the other provisions of this Agreement.
WildBlue and Contractor shall each use at
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31
least the same degree of care, but in any
event no less than a reasonable degree of care,
to prevent disclosing to third parties the
Confidential Information of the other as it
employs to avoid unauthorized disclosure,
publication or dissemination of its own
information of a similar nature; provided that
the Parties may disclose such Confidential
Information to entities performing services
required hereunder including subcontractors,
suppliers or agents where (i) use of such entity
is permitted to be used under this Agreement,
(ii) such disclosure is necessary or otherwise
naturally occurs in that entity's scope of
responsibility, and (iii) the entity agrees in
writing to assume the obligations described in
this Section 18.3.
(ii) As requested by a Party during the Term and upon
expiration or any termination of this Agreement
(in whole or in part) and completion of the
other Party's obligations under this Agreement
subject to any continuing need to fulfill its
obligations hereunder, the requested Party shall
return or destroy, as the requesting Party may
direct in writing, all material in any medium
that contains, refers to, or relates to the
requesting Party's Confidential Information, and
retain no copies. The requesting Party shall
certify to the other Party in writing that it
has compiled with the spirit and the letter of
this Subsection.
(iii) Each Party shall take reasonable steps to ensure
that its employees comply with this Section
18.3.
(c) EXCLUSIONS.
(i) "Confidential Information" shall exclude any
particular information which Contractor or
WildBlue can demonstrate (1) was, at the time of
disclosure to it, in the public domain; (2)
after disclosure to it, is published or
otherwise becomes part of the public domain
through no fault of the receiving Party; (3) was
in the possession of the receiving Party at the
time of disclosure to it; (4) was received after
disclosure to it from a third party who had a
lawful right to disclose such information to it
without any obligation to restrict its further
use or disclosure; or (5) was independently
developed by the receiving Party without
reference to Confidential Information of the
furnishing Party. In addition, a Party shall not
be considered to have breached its obligations
by disclosing Confidential Information of the
other Party as required to satisfy any legal
requirement or regulations of a competent
government body provided that, immediately upon
receiving any such request and to the extent
that it may legally do so, such Party advises
the other Party promptly and prior to making
such disclosure in order that the other Party
may interpose an objection to such disclosure,
take action to assure confidential handling of
the Confidential Information, or take such other
action as it deems appropriate to protect the
Confidential Information.
(ii) Either Party may disclose the terms and
conditions of this Agreement to third parties
that (1) have expressed a bona fide interest in
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32
consummating a significant financing, merger or
acquisition transaction between such third
parties and the disclosing Party, (2) have a
reasonable ability (financial and otherwise) to
consummate such transaction, and (3) have
executed a nondisclosure agreement that includes
within its scope the terms and conditions of
this Agreement. Each Party shall endeavor to
delay the disclosure of the terms and conditions
of this Agreement until the status of
discussions concerning such transaction warrants
such disclosure. In addition, either Party may
disclose the terms and conditions of this
Agreement to its subcontractors, suppliers and
agents under confidentiality obligations having
a need to know.
(d) LOSS OF CONFIDENTIAL INFORMATION. In the event of any
disclosure or loss of, or inability to account for, any
Confidential Information of the furnishing Party, the
receiving Party shall promptly, at its own expense: (i)
notify the furnishing Party in writing; (ii) take such
actions as may be necessary or reasonably requested by
the furnishing Party to minimize the violation; and
(iii) cooperate in all reasonable respects with the
furnishing Party to minimize the violation and any
damage resulting therefrom.
(e) NO IMPLIED RIGHTS. Nothing contained in this Section
shall be construed as obligating a Party to disclose its
Confidential Information to the other Party, or as
granting to or conferring on a Party, whether express or
implied, any rights or license to the Confidential
Information of the other Party.
19. WARRANTIES AND TECHNICAL SUPPORT
19.1. PASS THROUGH WARRANTIES.
(a) Contractor will from time to time provide certain SM,
WBST and/or SMTS components, Software and other items
for which Contractor is entitled to warranties from the
manufacturers, lessors or licensors of such items.
Contractor shall pass through to WildBlue the benefits
of such warranties to the extent that Contractor is able
to do so pursuant to any agreements between Contractor
and such manufacturers, lessors or licensors. Contractor
will use commercially reasonable best efforts to obtain
warranties from such manufacturers, lessors and/or
licensors to provide to WildBlue hereunder.
(b) WildBlue shall make no promises or representations to
its customers on the behalf of Contractor and its
employees and suppliers.
19.2. WARRANTY.
(a) PERFORMANCE WARRANTIES. All WBSMs and WBST (including
WBSM and WBST Software) are hereby warranted by
Contractor in accordance with Schedule 13. SMTSs are
hereby warranted by Contractor in accordance with
Schedule 22.
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33
(b) NONCONFORMING WBSM, WBST AND SMTS. Contractor's
obligations and WildBlue's remedies for WBSMs and SMTS
which fail to meet the warranties set forth in the
preceding paragraph are as set out in Schedule 13 and
Schedule 22.
(c) WARRANTY NOT APPLICABLE. This warranty shall not apply
to any WBSM, WBST or SMTS or parts thereof, that (a) has
had the Serial Number, Model Number, or other
identification markings altered, removed or rendered
illegible, (b) has been damaged by or subject to
improper installation or operation, misuse, neglect or
use with improper equipment; or (c) has been repaired or
altered by other than Contractor personnel or has been
subject to the opening of any sealed cabinet boxes
without Contractor's prior written consent.
Additionally, this warranty shall not apply to any parts
of the WBSM, WBST or SMTS that have been provided by
WildBlue or WildBlue supplier.
(d) COMPONENTS. Contractor represents, warrants and
covenants that all SM, WBST and SMTS components
(excluding components provided by WildBlue or its
suppliers) provided under this Agreement shall be new,
not refurbished, reconditioned or re-manufactured.
Notwithstanding the foregoing, Contractor may use
refurbished, reconditioned or re-manufactured parts for
warranty repair or replacement actions.
(e) SOFTWARE. During the Warranty Period (as defined in
Schedule 13 and Schedule 22), or any Extended Warranty
Period (as defined in Schedule 14 and Schedule 23)
purchased by WildBlue, for each SM, WBST and SMTS under
warranty Contractor shall provide to WildBlue, at no
cost, all Software Patches, Point Releases, Major
Releases and other Software error corrections, bug
fixes, patches and mandatory updates (collectively,
"SOFTWARE CORRECTIONS") for distribution to WildBlue,
Authorized Resellers and Users in accordance with
Schedule 13 and Schedule 22. After the Warranty Period,
Contractor shall provide Software Corrections and Major
Releases in accordance with Schedule 14 and Schedule 23
at the prices determined by Contractor from time to
time. In addition, Contractor shall make available to
WildBlue during the Term of this Agreement all updates,
upgrades, enhancements and releases (collectively,
"SOFTWARE UPDATES") related to SMs, WBSTs and/or SMTSs
that Contractor makes available to other SM, WBSTs or
SMTS customers, for prices that are no less favorable
than the prices under which the Software Updates are
made available to such other SM, WBST or SMTS customers.
Software Corrections and Software Updates shall be
considered to form part of the Software for purposes of
this Agreement. Software Corrections and Software
Updates shall be tested prior to release.
(f) POST-WARRANTY SUPPORT. Contractor shall offer to
WildBlue and its Authorized Resellers, Affiliates and
Users post-warranty maintenance and support in
accordance with the terms of Schedule 14 and Schedule
16.
19.3. MONTHLY REPORTS. Contractor shall submit to WildBlue monthly
reports, which summarize the number and types of problem and
reasons for return (if known) warranty returns or WBSM field
failures. These monthly reports shall be submitted within thirty
ViaSat and WildBlue Confidential
34
(30) business days of the end of each month commencing after the
Month 1 Production shipment.
19.4. EPIDEMIC FAILURES. If Epidemic Failures (as defined in Schedule
13) occur the Parties shall have the rights and obligations set
forth in Schedule 13.
19.5. OWNERSHIP OR USE.
(a) Contractor represents, warrants and covenants that, upon
delivery to WildBlue, all right, title and interest in
SM, WBST and SMTS Hardware will pass to WildBlue free of
all Liens, imperfections in title, claims, charges,
restrictions, or other encumbrances.
(b) Contractor represents and warrants that it has the right
to license to WildBlue the SM, WBST and SMTS Software,
the Contractor Background Information and Contractor
Foreground Information as provided in this Agreement
(collectively, "CONTRACTOR IP").
19.6. DISCLAIMER. THE EXPRESS WARRANTIES IN THIS SECTION 19 AND
SCHEDULE 13 AND 14 ARE WILDBLUE'S SOLE REMEDY FOR WildBlue
Satellite Terminals, SMs AND SMTSs FOUND TO BE DEFECTIVE AFTER
ACCEPTANCE AND ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER
EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE USE OF THE
WildBlue Satellite Terminals, SMs AND SMTSs. EXCEPT FOR THE
EXPRESS WARRANTIES IN THIS SECTION 19 AND SCHEDULE 13 AND 14,
THE WildBlue Satellite Terminals, SMs AND SMTSs ARE PROVIDED "AS
IS" AND CONTRACTOR MAKES NO OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED OF ANY KIND WITH RESPECT TO THE SMs, WHETHER
WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR BASED ON
ANY SAMPLE OR MODEL.
19.7. TECHNICAL SUPPORT. Contractor shall provide technical support to
WildBlue to the extent set forth in Schedule 13 and this
Agreement.
20. INDEMNITIES
20.1. INDEMNITY BY CONTRACTOR. Contractor shall indemnify, defend and
hold harmless WildBlue and its affiliates and their respective
officers, directors, employees, agents, successors, and assigns
from any and all Losses from claims arising from, in connection
with, or based on allegations of any of the following:
(a) third party claims arising out of Contractor's
performance hereunder, including breach of this
Agreement;
(b) third party claims arising out of Contractor's failure
to observe or perform any duties or obligations to third
parties, including its subcontractors;
ViaSat and WildBlue Confidential
35
(c) third party claims arising out of the manufacture,
distribution, or intended use of WildBlue Satellite
Terminals, SMs or SMTSs, due to Contractor's negligence
or willful misconduct;
(d) third party claims (including claims by any employee,
agent, customer, business invitee or business visitor or
other person) for death or personal injury caused by the
SMs or the tortious conduct of Contractor or its
Affiliates;
(e) claims for damage to real or tangible property caused by
the WildBlue Satellite Terminals, SMs or SMTSs or the
tortious conduct of Contractor or its Affiliates;
(f) Contractor's breach of its obligations with respect to
WildBlue Confidential Information;
(g) governmental claims arising out of Contractor's failure
to comply with applicable law that it is required to
comply with under this Agreement or to obtain those
permits it is required to obtain under the Contract;
(h) any third party claim, demand, charge, action, cause of
action, or other proceeding asserted against WildBlue
but resulting from an act or omission of Contractor in
its capacity as an employer of a person.
20.2. INDEMNITY BY WILDBLUE. WildBlue shall indemnify, defend and hold
harmless Contractor and its Affiliates and their respective
officers, directors, employees, agents, successors, and assigns,
from any and all Losses from claims arising from, in connection
with, or based on allegations of any of the following:
(a) third party claims arising out of WildBlue's failure to
observe or perform any duties or obligations to third
parties;
(b) third party claims arising out of WildBlue's breach of
its obligations with respect to Contractor Confidential
Information;
(c) third party claims (including claims by any employee,
agent, customer, business invitee or business visitor or
other person) for death or personal injury caused by the
tortious conduct of WildBlue or its Affiliates;
(d) governmental claims arising out of WildBlue's failure to
comply with applicable law that it is required to comply
with under this Agreement or to obtain those government
approvals it is required to obtain under this Agreement;
(e) claims for damage, loss or destruction of any real or
tangible personal property caused by tortious conduct of
WildBlue or its Affiliates;
(f) any third party claim, demand, charge, action, cause of
action, or other proceeding asserted against Contractor
but resulting from an act or omission of the WildBlue in
its capacity as an employer of a person; and
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36
20.3. INTELLECTUAL PROPERTY INFRINGEMENT. Contractor shall indemnify,
defend and hold harmless WildBlue from and against any claim,
suit or proceeding ("SUIT") brought against WildBlue based on a
claim that the WildBlue Satellite Terminals, SMs or SMTSs
furnished hereunder when used in accordance with Contractor
specifications infringes any Intellectual Property Right
(including misappropriation of trade secrets) of any third
party. If the use or distribution of an SM or SMTS is in such
suit held to constitute infringement and the use thereof is
enjoined or in the event of institution of a Suit or
notification of the reasonable possibility thereof, Contractor
shall at its own expense, at its option, either (a) procure for
WildBlue the right to continue exercising the rights of WildBlue
under this Agreement, (b) replace or modify the WildBlue
Satellite Terminals, SMs, or SMTSs, or such Mark, so that it
becomes non-infringing and remains functionally equivalent, or,
in the event that neither (a) nor (b) can be achieved, using
reasonable commercial best efforts, (c) refund to WildBlue any
payments made by WildBlue to Contractor and terminate this
Agreement by written notice to WildBlue, subject to Article 23
(Termination). The foregoing states the entire liability of
Contractor and the exclusive remedy of WildBlue with respect to
any alleged patent, copyright or other infringement by WildBlue
Satellite Terminals, SMs or SMTSs provided hereunder.
The foregoing shall not apply and Contractor shall have no
liability for infringement based on: (a) any change or
modification made by WildBlue or others without Contractor's
consent after delivery of the WildBlue Satellite Terminals, SMs
or SMTSs; (b) any use of any WildBlue Satellite Terminals, SM or
SMTS in combination with other hardware or software products or
in any manner for which the WildBlue Satellite Terminals, SMs or
SMTSs were not designed, to the extent such infringement was
based on such use; (c) compliance by Contractor with WildBlue's
designs, specifications or instructions; (d) use of any release
or version of any WildBlue Satellite Terminals, SM or SMTS
Software other than the most current release made available by
Contractor, if infringement could have been avoided by use of
such release, (e) any use of WildBlue Background Information,
WildBlue Foreground Information or Third Party Information
provided by WildBlue hereunder, or (f) use of WildBlue's
trademarks or third party trademarks designated by WildBlue
under the terms hereof. WildBlue shall indemnify Contractor for
any Suit brought against Contractor to the extent attributable
to infringement or misappropriation excluded from Contractor's
indemnity obligations under the foregoing clauses (a)-(f).
20.4. INDEMNIFICATION PROCEDURES. With respect to third party claims,
the following procedures shall apply:
(a) NOTICE. Promptly after receipt by any entity entitled to
indemnification under Sections 20.1 through 20.3 of
notice of the commencement or threatened commencement of
any civil, criminal, administrative, or investigative
action or proceeding involving a claim in respect of
which the indemnitee will seek indemnification pursuant
to any such Section, the indemnitee shall notify the
indemnitor of such claim in writing. No failure to so
notify an indemnitor shall relieve it of its obligations
under this Agreement except to the extent that it can
demonstrate actual damages attributable to such failure.
Within fifteen (15) days following receipt of written
notice from the indemnitee relating to any claim, but no
later than ten (10) days before the date on which any
response to a complaint or summons is due, the
indemnitor shall notify the indemnitee in writing if the
ViaSat and WildBlue Confidential
37
indemnitor elects to assume control of the defense and
settlement of that claim (a "NOTICE OF ELECTION").
(b) PROCEDURE FOLLOWING NOTICE OF ELECTION. If the
indemnitor delivers a Notice of Election relating to any
claim within the required notice period, the indemnitor
shall be entitled to have sole control over the defense
and settlement of such claim; provided that (i) the
indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim, and
(ii) the indemnitor shall obtain the prior written
approval of the indemnitee before entering into any
settlement of such claim or ceasing to defend against
such claim. After the indemnitor has delivered a Notice
of Election relating to any claim in accordance with the
preceding paragraph, the indemnitor shall not be liable
to the indemnitee for any legal expenses incurred by the
indemnitee in connection with the defense of that claim.
In addition, the indemnitor shall not be required to
indemnify the indemnitee for any amount paid or payable
by the indemnitee in the settlement of any claim for
which the indemnitor has delivered a timely Notice of
Election if such amount was agreed to without the
written consent of the indemnitor.
(c) PROCEDURE WHERE NO NOTICE OF ELECTION IS DELIVERED. If
the indemnitor does not deliver a Notice of Election
relating to any claim within the required notice period,
the indemnitee shall have the right to defend and/or
settle the claim in such manner as it may deem
appropriate, at the cost and expense of the indemnitor.
The indemnitor shall promptly reimburse the indemnitee
for all such Losses.
20.5. SUBROGATION. If an indemnitor shall be obligated to indemnify an
indemnitee pursuant to Sections 20.1 through 20.3, the
indemnitor shall, upon payment of such indemnity in full, be
subrogated to all rights of the indemnitee with respect to the
claims to which such indemnification relates.
21. LIABILITY
Each Party shall have a duty to use commercially reasonable efforts to
mitigate damages for which the other Party is responsible.
22. DISPUTE RESOLUTION
Any dispute between the Parties arising out of or relating to this
Agreement, including with respect to the interpretation of any provision
of this Agreement and with respect to the performance by Contractor or
WildBlue, shall be resolved as provided in this Article 22. Each Party
agrees that during any dispute resolution process or procedure it will
use reasonable commercial efforts to continue to perform under the
agreement until such dispute is resolved in accordance with this Article
22.
22.1. INFORMAL DISPUTE RESOLUTION. Subject to Section 22.3, prior to
the initiation of formal dispute resolution procedures, the
Parties shall first attempt to resolve their dispute informally
pursuant to this Section 22.1. Upon the written request of a
Party, each Party
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shall appoint a designated representative who does not devote
substantially all of his or her time to performance under this
Agreement, whose task it will be to meet for the purpose of
endeavoring to resolve such dispute.
(a) The designated representatives shall meet as often as
the Parties reasonably deem necessary in order to gather
and furnish to the other all information with respect to
the matter in issue which the Parties believe to be
appropriate and germane in connection with its
resolution. The representatives shall discuss the
problem and attempt to resolve the dispute without the
necessity of any formal proceeding.
(b) During the course of discussion, all reasonable requests
made by one Party to another for non-privileged
information, reasonably related to this Agreement, shall
be honored in order that each of the Parties may be
fully advised of the other's position.
(c) The specific format for the discussions shall be left to
the discretion of the designated representatives.
(d) If the designated representatives fail to resolve the
dispute, the Parties agree to escalate the dispute
resolution process to a higher executive level, and then
to the CEO level. Each level of informal dispute
resolution will be allowed no more than fifteen (15)
days, unless otherwise mutually agreed by the Parties.
22.2. ARBITRATION.
(a) Subject to Subsection 22.2(b), and 22.4, if the Parties
fail to resolve a dispute pursuant to Section 22.1
above, either Party may then refer such dispute to be
settled by submission to the CPR Institute for Dispute
Resolution ("CPR") for binding arbitration in Denver,
Colorado if Contractor is demanding such arbitration and
San Diego, California if WildBlue is demanding such
arbitration under the then current CPR "Non-Administered
Arbitration Rules" or any successor CPR rules, and the
procedures specified under this Section 22.2. Each Party
consents to the enforcement of any such arbitration
award or judgement in its home jurisdiction. Any
arbitration shall be conducted and enforced in
accordance with the following principles:
(i) STANDARD ARBITRATION. Selection of Arbitrators.
Arbitration shall be conducted by three (3)
arbitrators with each Party to this Agreement
selecting one arbitrator each and the two
selected arbitrators then selecting the third
arbitrator. Each arbitrator shall be independent
of the Parties and shall have at least ten (10)
years of experience in commercial transactions,
including transactions involving communications
technology companies.
(ii) LIMITED DISCOVERY. Prior to the commencement of
the arbitration, each Party shall be entitled to
take limited discovery, including the rights to
request a reasonable number of documents, to
serve no more than twenty (20) interrogatories
and to take no more than three (3) depositions.
Each
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Party may seek the right to serve additional
interrogatories and to take additional
depositions upon a showing of good faith to the
arbitrators, who can grant or deny any such
request, in whole or part, in their sole
discretion. This limited discovery shall be
conducted in accordance with the Federal Rules
of Civil Procedure, which shall be interpreted
and enforced by the arbitrators. Any disputes
regarding whether a Party has requested a
"reasonable" number of documents shall be
determined by the arbitrators in their sole
discretion.
(iii) HEARING AND DECISION. The arbitrators shall, as
soon as practicable and upon fifteen (15) days
written notice to each Party, conduct an
arbitration hearing and proceeding on the merits
of the dispute giving effect to this Agreement
as interpreted under New York law and thereafter
shall issue a preliminary written decision
citing the basis for the decision, including
findings of fact and conclusions of law. The
Parties shall have two (2) business days to file
a written response to such preliminary decision,
and thereafter the arbitrators shall as soon as
practicable issue a final and binding decision.
The decision of the arbitrators shall be based
on a majority vote. As part of such decision,
the arbitrators shall also be required to
determine if any equitable adjustment to the
applicable schedules for performance herein is
appropriate and the extent of such adjustment.
22.3. INJUNCTIVE RELIEF. Notwithstanding Subsections 22.1 or 22.2,
either Party may obtain preliminary or temporary injunctive
relief, including specific performance, or relief in and of
arbitration at any time from a court of competent jurisdiction
where immediate irreparable harm to that Party is threatened by
the other Party's acts or omissions; provided, however, that
requests for permanent injunctive relief shall be arbitrated
pursuant to Section 22.2(a).
22.4. VENUE AND JURISDICTION. Each Party consents to the exclusive
jurisdiction and venue in a competent court in the County of
Denver, State of Colorado and the County of San Diego, State of
California, in the event of any dispute between the Parties
arising out of or relating to this Agreement that is permitted
under this Article 22 to be resolved by litigation or in the
enforcement of any award granted pursuant to this Article 22,
and each Party agrees that it shall file any suit against the
other Party only in such courts.
23. TERMINATION
23.1. TERMINATION FOR CAUSE.
(a) If Contractor:
(i) commits a material breach of this Agreement and,
in the case of a breach capable of being cured,
fails to cure such breach within thirty (30)
days (except as expressly set forth herein)
after written notice from WildBlue to Contractor
detailing the particulars of such breach and
requiring that it be remedied; or
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(ii) ceases to carry on its business; a receiver or
similar officer is appointed for Contractor and
is not discharged within sixty (60) days; admits
in writing its inability to pay debts as they
mature, is adjudicated bankrupt, or makes an
assignment for the benefit or its creditors or
another arrangement of similar import; or
proceedings under bankruptcy or insolvency laws
are commenced by or against Contractor and are
not dismissed within ninety (90) days;
then WildBlue may, by giving written notice to Contractor,
terminate this Agreement, in whole or in part, as of a date
specified in the notice of termination ("TERMINATION DATE"). If
WildBlue chooses to terminate this Agreement in part, the
charges payable under this Agreement will be appropriately
adjusted to reflect those services that are terminated. Any of
the foregoing reasons for which WildBlue may terminate this
Agreement shall be referred to as "CAUSE." Except as expressly
limited by this Agreement, if WildBlue terminates this Agreement
for Cause, WildBlue shall have all remedies available to it in
law and at equity.
(b) If WildBlue:
(i) commits a material breach of this Agreement and,
in the case of a breach capable of being cured,
fails to cure such breach within thirty (30)
days (except as expressly set forth herein)
after written notice from Contractor to WildBlue
detailing the particulars of such breach and
requiring that it be remedied; or
(ii) fails to pay Contractor undisputed charges when
due under the Agreement and fails to cure such
breach within thirty (30) days of written notice
from Contractor of such breach; or
(iii) ceases to carry on its business; a receiver or
similar officer is appointed for WildBlue and is
not discharged within thirty (30) days; admits
in writing its inability to pay debts as they
mature, is adjudicated bankrupt, or makes an
assignment for the benefit or its creditors or
another arrangement of similar import; or
proceedings under bankruptcy or insolvency laws
are commenced by or against WildBlue and are not
dismissed within sixty (60) days;
Contractor may, by giving written notice to WildBlue,
terminate this Agreement as of a Termination Date and
any such reason for termination shall be referred to as
"Cause". Except as expressly limited by this Agreement,
if Contractor terminates this Agreement for Cause,
Contractor shall have all remedies available to it in
law and at equity.
23.2. TERMINATION FOR CONVENIENCE.
(a) After acceptance and payment for all the Milestones
listed in Section 5.4, WildBlue may terminate this
Agreement, in whole or in part, for convenience by
giving Contractor written notice of termination or by
failing to provide written confirmation as set forth is
Section 23.2(b). Such notice shall designate a
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Termination Date, which date shall be not less than
sixty (60) days after the date of such notice and the
amounts set forth in Sections 23.2(b), 23.2(c) and
23.2(d), if any, shall be immediately due and paid.
(b) Article 8 sets forth the Initial WildBlue Satellite
Terminal Order and Initial SMTS Order. If WildBlue
terminates these Initial Orders pursuant to Section
23.2(a) or fails to confirm any part of these Initial
Orders in writing, by May 1, 2003, WildBlue shall pay
Contractor ***. If both of the Initial Orders were
either terminated pursuant to Section 23.2(a) or by
failing to confirm both Initial Orders, this Agreement
shall be terminated. Except as set forth in Section
23.2(c) and Section 23.2(d), payment of this amount
shall be the sole liability of WildBlue for payment of
said terminated Order in connection with a termination
pursuant to this Section 23.2.
(c) In addition to the payment in 23.2(b) above, if WildBlue
elects to terminate, in whole of part, this Agreement or
any Order(s) for WBSMs or WBSTs for convenience less
than 180 days prior to the firm delivery date for those
Orders (as established by Schedule 9 and Schedule 20) ,
WildBlue shall pay Contractor an amount calculated in
accordance with the following schedule:
(i) 150-180 days from the Delivery Date: ***of price
of terminated units scheduled for delivery
during this period;
(ii) 120-150 days from the Delivery Date: *** of
price of terminated units scheduled for delivery
during this period;
(iii) 90-120 days from the Delivery Date: *** of price
of terminated units scheduled for delivery
during this period; and
(iv) less than 90 days from the Delivery Date: *** of
price of terminated units scheduled for delivery
during this period.
(d) In addition to the payment in 23.2(b) above, if WildBlue
elects to terminate, in whole of part, this Agreement or
any Order for SMTSs for convenience less than 180 days
prior to the first scheduled production delivery,
WildBlue shall pay Contractor according to the following
schedule:
(i) 120-180 days from the Delivery Date: *** of
price of terminated units scheduled for delivery
during this period;
(ii) 90-120 days from the Delivery Date: *** of price
of terminated units scheduled for delivery
during this period;
(iii) 60-90 days from the Delivery Date: *** of price
of terminated units scheduled for delivery
during this period; and
(iv) less than 60 days from the Delivery Date: *** of
price of terminated units scheduled for delivery
during this period.
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42
23.3. EFFECT OF TERMINATION OR EXPIRATION; WIND DOWN.
After expiration or termination of the Agreement and, if
Contractor has delivered and received payment for at least
50,000 WBSTs or SMs, Contractor agrees to provide Post Warranty
Support and Maintenance (in accordance with Schedule 14) for
four (4) years after the date of the delivery and full payment
of 50,000 WildBlue Satellite Terminals or SMs and technical
support services as identified in Schedule 14 Section 1, for
twelve (12) months after the effective date of expiration or
termination of the Agreement. WildBlue will pay Contractor for
Post Warranty Support and Maintenance and technical support
services in accordance with the applicable Schedules; provided
that if the Agreement is terminated by WildBlue for cause, then
Contractor will provide such technical support as reasonably
requested to support WildBlue's transition to another supplier
at no cost for up to four (4) months after the effective date of
termination.
24. LIMITATION OF LIABILITY.
EXCEPT FOR (A) CONTRACTOR'S POTENTIAL LIABILITY FOR LIQUIDATED DAMAGES,
(B) DAMAGES RESULTING FROM EITHER PARTY'S BREACH OF SECTION 18
(CONFIDENTIALITY), AND (C) A PARTY'S INDEMNIFICATION OBLIGATIONS
HEREUNDER, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL,
INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT
LIMITED TO LOST PROFITS, REVENUE, GOOD WILL OR LOSS OF USE OR DATA)
ARISING OUT OF OR RELATED TO: (I) THE SMS, WILDBLUE SATELLITE TERMINAL
AND SMTS; (II) THE USE OF AN SM, WILDBLUE SATELLITE TERMINAL OR SMTS;
(III) THE RESULTS OF ANY USE OF AN SM, WILDBLUE SATELLITE TERMINAL OR
SMTS; (IV) THE INTEGRATION OF SMS WITH EQUIPMENT NOT PROVIDED BY
CONTRACTOR; (V) OTHERWISE RELATING TO THE FUNCTIONING OF AN SM, WILDBLUE
SATELLITE TERMINAL OR SMTS; OR (VI) A PARTY'S PERFORMANCE (OR FAILURE TO
PERFORM) ITS OBLIGATIONS UNDER THIS AGREEMENT, EVEN IF SUCH PARTY HAD
BEEN ADVISED, KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH
DAMAGES OR COSTS.
EXCEPT WITH RESPECT TO (A) WILDBLUE'S PAYMENT OBLIGATIONS PURSUANT TO
SECTION 17.1 AND SECTION 23.2, AND (B) FOR BREACHES OF SECTION 18, THE
MAXIMUM AGGREGATE LIABILITY OF CONTRACTOR OR WILDBLUE, THEIR RESPECTIVE
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, SUBCONTRACTORS AND AGENTS,
UNDER THIS AGREEMENT FOR ALL LOSSES, DAMAGES, EXPENSES OR INJURIES,
WHETHER UNDER CONTRACT, TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE
AND STRICT LIABILITY), BY STATUTE, OTHER LEGAL THEORY OR OTHERWISE,
ARISING OUT OF THE PERFORMANCE, NON-PERFORMANCE OR IMPROPER PERFORMANCE
BY CONTRACTOR OR WILDBLUE, AS THE CASE MAY BE, OF ITS OBLIGATIONS
HEREUNDER, SHALL BE LIMITED TO, IN ANY AND ALL EVENTS, THE GREATER OF
(X) ***, AND (Y) THE AGGREGATE AMOUNT PAID BY WILDBLUE TO CONTRACTOR
HEREUNDER IN THE 12 MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING
RISE TO THE CLAIM.
25. GENERAL
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43
25.1. BINDING NATURE AND ASSIGNMENT. This Agreement shall be binding
on the Parties hereto and their respective successors and
permitted assigns. Neither Party may, or shall have the power
to, assign this Agreement or delegate such Party's obligations
hereunder without the prior written consent of the other, except
no consent shall be required in connection with the merger,
consolidation, sale, or other transfer of all or substantially
all the business and/or assets of such Party.
25.2. ENTIRE AGREEMENT. This Agreement, including any Schedules
referred to herein and attached hereto, constitutes the entire
agreement between the Parties with respect to the subject matter
hereof and supersedes all prior agreements, whether written or
oral, with respect to the subject matter contained in this
Agreement. In particular, this Agreement supersedes both the
Prior Agreements, which Prior Agreements are terminated and are
of no further force or effect as to events occurring after the
termination of said Prior Agreements. Each Party acknowledges
that, as of the Effective Date, Contractor has fully performed
its development, document and delivery obligations under the
Prior Agreements, and WildBlue has fully performed its payment
obligations therefor, and each Party covenants not to assert any
claim that the other Party breached any said obligation under a
Prior Agreement.
25.3. COMPLIANCE WITH LAWS AND STANDARDS.
(a) Each Party agrees that its execution, delivery, and
performance of this Agreement shall not constitute (i) a
violation of any judgment, order, or decree; (ii) a
material default under any material contract by which it
or any of its material assets are bound; or (iii) an
event that would, with notice or lapse of time, or both,
constitute such a default as described in (ii).
(b) Subject to Contractor's obligations under Sections
5.3(b) hereof, each Party shall be responsible for, and
shall coordinate and oversee compliance with the laws
and regulations in respect of items exported or imported
hereunder by it. The Parties acknowledge that certain
Intellectual Property Rights, including those related to
the SM and SMTS Software and technical data to be
provided hereunder and certain transactions hereunder,
may be subject to export controls under the laws and
regulations of the United States and other countries.
Neither Party shall export or re-export any such items
or any direct product thereof or undertake any
transaction in violation of any such laws or
regulations.
25.4. NOTICES. All notices, requests, demands, and determinations
under this Agreement (other than routine operational
communications), shall be in writing and shall be deemed duly
given (i) when received if delivered by hand, (ii) one (1) day
after being given for next day delivery to an express, overnight
courier with a reliable system for tracking delivery, or (iii)
five (5) days after the day of mailing, when mailed by United
States mail, registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:
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44
If to WildBlue: If to Contractor:
WildBlue Communications, Inc. ViaSat, Inc.
4600 South Syracuse St., Suite 500 6155 El Camino Real
Denver, CO 80237 Carlsbad, CA 92009
Phone: 720-554-7400 Phone: 760-476-2200
Fax: 720-554-7500 Fax: 760-929-3926
Contact Persons: Contact Persons:
*** ***
A Party may from time to time change its address or designee for
notification purposes by giving the other prior written notice of the
new address or designee and the date upon which it will become
effective.
25.5. COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one
single agreement between the Parties hereto.
25.6. RELATIONSHIP OF PARTIES. Contractor, in furnishing SMs
hereunder, is acting as an independent contractor, and
Contractor has the sole right and obligation to supervise,
manage, direct, procure, perform or cause to be performed, all
work to be performed by Contractor under this Agreement. Neither
Party is an agent of the other Party nor has a Party any
authority to represent the other Party as to any matters, except
as expressly authorized in this Agreement.
25.7. SEVERABILITY. If any provision of this Agreement conflicts with
the law under which this Agreement is to be construed or if any
such provision is held invalid by an arbitrator or a court with
jurisdiction over the Parties, such provision shall be deemed to
be restated to reflect as nearly as possible the original
intentions of the Parties in accordance with applicable law. The
remainder of this Agreement shall remain in full force and
effect.
25.8. CONSENTS AND APPROVAL. Except where expressly provided as being
in the discretion of a Party, where agreement, approval,
acceptance, consent, or similar action by either Party is
required under this Agreement, such action shall not be
unreasonably delayed or withheld. An approval or consent given
by a Party under this Agreement shall not relieve the other
Party from responsibility for complying with the requirements of
this Agreement, nor shall it be construed as a waiver of any
rights under this Agreement, except as and to the extent
otherwise expressly provided in such approval or consent.
25.9. WAIVER OF DEFAULT; CUMULATIVE REMEDIES.
(a) No waiver or discharge hereof shall be valid unless in
writing and signed by an authorized representative of
the Party against which such amendment, waiver, or
discharge is sought to be enforced. A delay or omission
by either Party hereto to exercise any right or power
under this Agreement shall not be construed to be a
waiver thereof. A waiver by either of the Parties hereto
of any of the covenants to be performed by the other or
any breach thereof shall not be construed to be a waiver
of any succeeding breach thereof or of any other
covenant herein contained.
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45
(b) Except as otherwise expressly provided herein and
subject to Section 19.2 above, all remedies provided for
in this Agreement shall be cumulative and in addition to
and not in lieu of any other remedies available to
either Party at law, in equity or otherwise.
25.10. SURVIVAL. All provisions with respect to payment obligations
hereunder, Sections 1, 2, 3, 4.2, 10, 17, 18, 9, 20, 21, 22, 23
and 24, and any other provision of this Agreement which
contemplates performance or observance subsequent to any
termination or expiration of this Agreement (in whole or in
part) shall survive any termination or expiration of this
Agreement (in whole or in part, as applicable) and continue in
full force and effect, but shall not extend the applicable
statute of limitations.
25.11. PUBLIC DISCLOSURES. Except as may be required by applicable law
or in response to an order of a court of competent jurisdiction
or government agency, neither Party nor its subcontractors will
issue a press release or other public announcement concerning
the subject matter of this Agreement without the prior approval
of the other Party, which approval shall not be unreasonably
withheld or delayed. Such approval must be provided (or the
notice that such approval is withheld must be provided) as soon
as practicable but in not event later than five (5) days after
the request of the other Party. Except as authorized by Sections
7.3 or 18, all media releases, public announcements, and public
disclosures relating to this Agreement or the subject matter of
this Agreement, including promotional or marketing material, but
not including announcements intended solely for internal
distribution or disclosures to the extent required to meet legal
or regulatory requirements beyond the reasonable control of the
disclosing Party, shall be coordinated with and approved in
writing by both Parties prior to release.
25.12. THIRD PARTY BENEFICIARIES. Except as specifically provided in
this Agreement, this Agreement is entered into solely between,
and may be enforced only by, WildBlue and Contractor. This
Agreement shall not be deemed to create any rights in third
parties, including suppliers and customers of a Party, or to
create any obligations of a Party to any such third parties.
25.13. AMENDMENT. This Agreement shall not be modified, amended or in
any way altered except by an instrument in writing signed by
both Parties.
25.14. INCORPORATION BY REFERENCE AND ORDER OF PRECEDENCE.
(a) The Schedules and Attachments attached hereto are hereby
incorporated by reference into this Agreement. Any
amendments to Schedules and Attachments, and any other
Schedules and Attachments that are agreed upon in
writing by the Parties subsequent to the Effective Date,
shall likewise be incorporated by reference into this
Agreement.
(b) Any conflict among or between the documents making up
this Agreement will be resolved in accordance with the
following order of precedence (in descending order of
precedence):
(i) Change Orders;
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(ii) This Agreement;
(iii) The Schedules (Any conflict among or between the
following Schedules will be resolved in
accordance with the following order of
precedence (in descending order of precedence):
Schedule 1 (Satellite Modem Product
Description), Schedule 3 (SM/SMTS Functional
Specification), Schedule 4 (IDU/ODU Interface
Specification), Schedule 2 (WildBlue Radio
Frequency Interface Specification),); and
(iv) Orders.
25.15. GOVERNING LAW. This Agreement and performance under it shall be
governed by and construed in accordance with the laws of state
of New York without regard to its choice of law principles. The
International Sale of Goods Convention shall not apply to this
Agreement.
25.16. COVENANT OF GOOD FAITH. Each Party agrees that, in its
respective dealings with the other Party under or in connection
with this Agreement, it shall act in good faith.
25.17. AUTHORIZATION. Each Party represents and warrants to the other
that:
(a) it has the requisite corporate power and authority to
enter into this Agreement and to carry out the
transactions contemplated by this Agreement;
(b) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized
by the requisite corporate action on the part of such
Party; and
(c) is not subject to any contractual or other obligation
that would prevent it from entering into or performing
this Agreement.
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47
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the undersigned officers, thereunto, duly authorized, as the Effective Date.
WILDBLUE COMMUNICATIONS, INC. VIASAT, INC.
By: ________________________ By: ________________________
David M. Brown Stephen W. Cable
Vice President and General Counsel Vice President, Broadband Systems.
Date: December 12, 2001 Date: December 12, 2001.
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SCHEDULE 1
SATELLITE MODEM PRODUCT DESCRIPTION
VERSION 9, DATED 2/23/2001
***
[19 pages omitted]
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SCHEDULE 2
WILDBLUE RADIO FREQUENCY INTERFACE SPECIFICATION
DATED JANUARY 24, 2001
***
[82 pages omitted]
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SCHEDULE 3
WILDBLUE PRODUCT PHASING DOCUMENT
VERSION 1, JULY 20, 2001.
***
[13 pages omitted]
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SCHEDULE 4
IDU/ODU INTERFACE SPECIFICATION.
DRAFT 1, FEBRUARY 22, 2001
***
[10 pages omitted]
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SCHEDULE 5
WILDBLUE RESPONSIBILITIES
- --------------------------------------------------------------------------------
DELIVERIES FROM MAJOR COMPONENT
VENDOR (MCV) Each deliverable meeting the
requirements set forth in the
applicable agreement (including
statement of work and technical
attachments) between Major
Component Vendor and WildBlue.
***
............................................. ***
PEP INTERFACE
*** ***
.............................................
EQUIPMENT & SERVICES ACCOUNT DELIVERY DATE
*** ***
- --------------------------------------------------------------------------------
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SCHEDULE 6
RESERVED
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SCHEDULE 7
RESERVED
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SCHEDULE 8
MINIMUM ORDER COMMITMENT AND MAXIMUM CAPACITY COMMITMENT
- --------------------------------------------------------------------------------------------
SCHEDULED MONTH FOR MAXIMUM NUMBER OF
DELIVERY MINIMUM NUMBER OF UNITS(1) UNITS(2)
-------------------------------- ------------------
WBST-A WBST-B or SM-B (WBST-A/WBST-B)
Version
- --------------------------------------------------------------------------------------------
Production Month 1 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 2 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 3 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 4 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 5 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 6 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 7 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 8 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 9 *** *** ***
- --------------------------------------------------------------------------------------------
Production Month 10 and In accordance with In accordance with ***
on SM Order and SM Order and
Delivery Forecast Delivery Forecast
(Schedule 9) (Schedule 9)
- --------------------------------------------------------------------------------------------
After the SM-B version has gone through Acceptance Testing, the SM-A column
will no longer be applicable
For the purposes of this Agreement, Production Month 1 is defined to be the
month selected for delivery within the time period set forth in Schedule 9. ***.
- --------
(1) After the SM-B version has gone through Acceptance Testing, the SM-A column
will no longer be applicable (1)
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SCHEDULE 9
WBST/WBSM ORDER AND DELIVERY FORECAST
Beginning 9 months prior to the first scheduled WBST and/or WBSM delivery and
continuing through the Term, WildBlue will provide an Order and Delivery
Forecast to the Contractor. For the Initial WBST Order of Section 8.3 of this
Agreement, the first delivery date shall be no earlier than *** and no later
than ***. The Order and Delivery Forecast will include a firm commitment for the
amount of the SMs required for delivery with specified configuration for the one
month period commencing on the first day of the third month following the date
of the Order and Delivery Forecast and a forecast for the subsequent five
months. Coincident with providing the Order and Delivery Forecast, WildBlue will
issue an Order for the units identified as the firm commitment.
For example, an Order Delivery Forecast on January 1st will include a firm
commitment and an accompanying Order for deliveries commencing on April 1st,
with April deliveries required to be delivered prior to the month end. A month
as set forth herein is a calendar month. After the initial Order and Delivery
Forecast, subsequent submittals shall be consistent with Schedule 8 and the
constraints on month to month forecast changes set forth below for a forecast
submitted 3 months prior to the first day of month 1.
Month Specified Qty Requirement(1)
----- ------------- -----------
1 A +/- 15% of Previous Month 2
2 B +/- 25% of Previous Month 3
3 C +/- 50% of Previous Month 4
4 D Consistent with Schedule 8
5 E Consistent with Schedule 8
6 F Consistent with Schedule 8
If at the time of an Order and Delivery Forecast, the SM-B version has not gone
through Acceptance Testing and been Accepted, WildBlue shall provide a forecast
for both SM-A and SM-B versions. Upon receipt of the Order and Delivery
Forecast, Contractor shall accept Month 1 as a firm Order subject to the terms
and conditions of the Agreement. If Contractor has information that parts
shortages, supplier quality issues or other factors would preclude Contractor's
ability to meet the forecast deliveries in any or all of months 2 through 6,
Contractor has 12 days to submit a revised forecast proposal to WildBlue. The
revised forecast proposal shall include Contractor's plan of action to minimize
the impact on the forecast and Contractor's proposed revision. Upon WildBlue's
approval of the plan, which shall not be unreasonably withheld, the revised
forecast becomes the formal Order and Delivery Forecast for that period.
- ----------
(11) WildBlue may request a delayed delivery schedule subject to the terms
agreed to in this Agreement. If WildBlue desires to purchase a greater number
during any month than is permitted in the forecast schedule, Contractor will
provide WildBlue with a written response indicating the additional units above
the previous forecast which can be committed to in the forecast.
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If WildBlue fails to deliver any forecast as required in this Agreement,
Contractor shall be entitled to proceed based on the last previous forecast
delivered.
FOR CLARIFICATION ONLY OF THE FORECAST PROCESS, THE FOLLOWING EXAMPLE IS
PROVIDED:
Previous Forecast -- each month, non-cumulative
Order and Delivery Forecast Provided July 1st
- -----------------------------------------------------------------------------------------
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
(Oct.) (Nov.) (Dec.) (Jan.) (Feb.) (Mar.)
10,000 (Firm 11,000 12,000 40,000 17,000 18,000
Order) (Forecast (Forecast (Forecast
only) only) only)
- -----------------------------------------------------------------------------------------
Updated Forecast
Order and Delivery Forecast Provided August 1
- -----------------------------------------------------------------------------------------
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
(Nov.) (Dec.) (Jan.) (Feb.) (Mar.) (April)
12,650 15,000 50,000 48,000 20,000 20,000
(within +/- (within +/- (within +/- (Forecast (Forecast (Forecast
15% of 25% of 50% of Only) Only) Only)
previous previous previous
forecast for forecast forecast for
Nov.) for Dec.) Jan. but
cannot exceed
(now Firm) 50,000 per
Schedule 8)
- -----------------------------------------------------------------------------------------
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SCHEDULE 10
LABOR RATES
The rates and guidelines for expenses and travel set forth on this Schedule
apply only to those Services identified in the Agreement
CONTRACTOR RATES
- --------------------------------------------------------------------------------
GRADE CATEGORY HOURLY RATE
- --------------------------------------------------------------------------------
E 1 Executive ***
- --------------------------------------------------------------------------------
E 2 Sr./Lead Eng. ***
- --------------------------------------------------------------------------------
E 3 Eng. ***
- --------------------------------------------------------------------------------
E 4 Jr. Eng. ***
- --------------------------------------------------------------------------------
T 1 Field Service Eng. ***
- --------------------------------------------------------------------------------
T Tech ***
- --------------------------------------------------------------------------------
S Support ***
- --------------------------------------------------------------------------------
1) The rates set forth above are in effect through the Calendar Year 2001.
Thereafter, Contractor will increase the labor rates at the end of each
Calendar Year, beginning 12/31/01 to reflect Contractor's then current
rates; provided that Contractor shall ensure that the rates charged to
WildBlue are no less favorable than the rates charged for similar services
and terms to any other customer or affiliated party of Contractor and that
such rates shall not increase by more than *** percent (***%) at the end of
a calendar year.
2) Contractor shall also be reimbursed for its reasonable, documented expenses
related to travel, per diem and other related expenses. Such reimbursement
shall be at Contractor's cost in accordance with its accounting system plus
an administrative fee of ten percent (10%). WildBlue will not be obligated
to reimburse Contractor for any expenses related to travel, per diem and
other related expenses in excess of two thousand dollars ($2,000), unless
WildBlue has provided its written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, prior to such expenses being
incurred.
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SCHEDULE 11
WILDBLUE SATELLITE TERMINAL PRICING SCHEDULE
- --------------------------------------------------------------------------------
SCHEDULED DELIVERY UNIT PRICE
DATE IN 2002
- --------------------------------------------------------------------------------
WBST-A(1) SM-B WBST-B
- --------------------------------------------------------------------------------
August through Term $*** TBD IAW TBD IAW
Section 16.4 Section 16.4
- --------------------------------------------------------------------------------
Plus reasonable start up costs, including costs for any requested functionality
that is not available in the existing product. WildBlue and Contractor will
negotiate in good faith to establish appropriate ramp up times and start up
costs for production of these units.
o The WBST-A price is based upon the design Contractor presented
at CDR with the following additional requirements:
.......................................................................
***
o WildBlue highly encourages the following features, but they are
not requirements:
***
The above price commitment is predicated on the availability of ***.
- ----------
(1) WBST-A pricing is for a minimum order of *** units
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SCHEDULE 12
CONTRACTOR MARKS
1. ViaSat(R)
2. ViaSat Satellite Networks(TM) (Not for use on SM).
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SCHEDULE 13
WBSM/WBST TECHNICAL SUPPORT, WARRANTY SUPPORT AND MAINTENANCE
TECHNICAL SUPPORT FOR WBSMs AND WBSTs
For the purposes of this schedule, references to SMs apply equally to WBSMs and
WBSTs. During the Term, Contractor will make available to WildBlue at
Contractors then current commercial rates (except as noted below) technical
support and services, which shall include, but not be limited to, the provision
of the following services:
1. Beginning with the delivery and payment of the first *** production
SMs, at no additional charge, telephone support to the WildBlue
technical team, 24 hours per day, seven days per week for production
SM related problems during system integration testing, and the first
six months of SMs operating in the field and communicating through a
WildBlue satellite.
2. Contractor must provide at no additional charge, via a web-based
application, a list of the number of times WildBlue's personnel
contacted Contractor's technical support, with the date and time of
contact, the problem, and disposition of the call. Such application
must be updated such that status of the call must be provided via
the web within 24 hours. As the problem is solved/escalated status
must be provided on the web based application within a reasonable
period of time.
3. Assistance in the diagnosis and resolution of hardware and software
problems.
4. Assistance in expediting priority replacement parts or systems
required on an emergency basis.
5. Assistance in the support of the initial implementation of SMs and
during installation of significant SM updates and/or changes.
6. Support in the preparation and analysis of failure and discrepancy
reports, as required.
7. Cooperation in providing reasonable guidelines and documentation to
ensure the necessary tracking and resolution of engineering,
installation and service complaints.
WARRANTY
1. Contractor warrants to WildBlue that upon delivery of the SM to
WildBlue all right, title and interest in SM Hardware will pass to
WildBlue free of all liens, imperfections in title, claims, charges,
restrictions, or other encumbrances. Contractor warrants to WildBlue
that the SM Hardware (except for operating systems SM Software
furnished) shall be new, free from defects in material and
workmanship, and that the SM Hardware and SM Software shall perform
in material conformance with the Specifications, for a period of one
(1) year from installation date but in no event more than 30 months
from delivery. (the "WARRANTY PERIOD"). All warranties shall survive
inspection, acceptance and payment. WildBlue shall reasonably
cooperate with Contractor in implementing the most cost efficient,
cost effective warranty procedures.
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2. During the Warranty Period, SMs that are subject to Defects shall be
returned to Contractor for repair or replacement at no charge or
cost to WildBlue, Authorized Reseller or User. Unless otherwise
agreed by Contractor and WildBlue, for SMs that are returned to
Contractor for repair, Contractor shall, at its option and cost,
either complete repairs and return the repaired SM, or ship
replacement SM, within ten (10) days of receipt of defective SM at
Contractor's designated repair location. All SMs returned for
warranty repair hereunder shall be returned in accordance with
certain standard procedures, to be mutually agreed upon by the
parties, which may be amended from time to time. Alternatively, the
option of having a replacement SM shipped to either WildBlue, an
Authorized Reseller or a User within two (2) business days of
receipt by Contractor of the returned SM for a *** processing fee
payable by the sending Party shall be provided. The sending Party
shall bear the risk of loss or damage of a returned SM while such is
in WildBlue's, Authorized Resellers' or Users' custody until such SM
is delivered to Contractor's designated repair facility. The sending
party shall bear the cost of transportation charges for shipment to
Contractor (FOB destination; freight prepaid) of SMs under warranty
to be repaired or replaced. For return shipments from Contractor to
WildBlue, Authorized Reseller or User, Contractor shall bear the
risk of loss or damage during transit and shall prepay and bear the
cost of transportation charges for shipment of SM that has been
repaired or replaced. If, during any one (1) year period, more than
*** percent (***%) of the SM's returned solely by WildBlue to
Contractor for repair or replacement under this warranty are
diagnosed as not defective by Contractor, WildBlue will pay for
processing of Post Warranty Repair charges in accordance with
Schedule 16.
3. For units under warranty, Contractor will make available to the
WildBlue technical team, telephone helpdesk support from 8 am to 8
p.m. (EST), at no additional charge, with a maximum one hour
telephone response time. Callers to the helpdesk must have an option
to leave a message if the call is not answered within two (2)
minutes. If engineering technical support is needed beyond the basic
helpdesk services, Contractor will make such support available
within 24 hours at the rates defined in Schedule 10.
4. In addition to the standard warranty provisions stated herein,
instances of Epidemic Failure and Out of Box Failure shall be
governed by the following provisions:
5. "Epidemic Failure" means within any consecutive twelve (12) month
period a failure of *** percent (***%) or more of the total number
of SMs delivered to WildBlue in any three (3) month period during
the Warranty Period or Extended Warranty Period, as applicable, to
conform to the Specifications. In the event of an Epidemic Failure
involving a twelve month period during which at least 10,000 WBSMs
and/or WBSTs were delivered, the Contractor shall do as follows:
6. Within ten (10) business days after receiving a written notification
of an Epidemic Failure by WildBlue, Contractor shall initiate
implementation of an action plan, in a form reasonably satisfactory
to WildBlue, to mitigate the future impact of the cause of this high
failure rate on the WildBlue service;
7. As required by the action plan, Contractor may undertake to repair
or replace affected WBSMs. In that case, Contractor shall bear the
cost of repair or replacement of the WBSMs which includes the
shipping, transportation and other costs of gathering and
redistributing
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the affected WBSMs in the manner defined by the action plan.
Contractor's liability for costs of shipping, transportation and
other costs of gathering such WBSMs for repair or replacement shall
be limited to actual costs; and
8. Contractor shall take all commercially reasonable efforts to ensure
that all WBSMs shipped after the repair or replacement of the
defective WBSMs are free of similar faults.
9. In the event of an Out-of-Box Failure (as defined in the Agreement)
affecting *** percent (***%) or more of any shipping lot of WBSMs
equal to or greater than *** units, Contractor shall do as follows:
10. Contractor shall send replacement SM(s) to WildBlue (FOB
destination; prepaid) in the number identified by WildBlue within
three days of receiving shipment of the SMs from WildBlue (which
shall be sent to Contractor FOB destination; collect) subject to
such Out-of-Box Failure;
11. Contractor shall also bear all costs of any repair or replacement of
Out-of-Box Failure SM(s) including shipment, transportation and
other costs of gathering and redistributing the affected SMs.
12. Any replacement, repair, modification, installation or other service
performed by Contractor shall be warranted, commencing with the date
upon which repaired SM is returned to the sending party, for the
remainder of the unexpired period of the warranty or ninety (90)
days, whichever is greater.
13. The warranties stated above do not extend to SM or SM Software that
has been subjected to misuse, neglect or abuse not caused by
Contractor or been used in violation of approved written
instructions furnished by Contractor with the SM, if such action is
the cause of the damage or malfunction, nor do they apply to
cosmetic problems or defects resulting from normal wear and tear in
ordinary use and which do not affect product performance or use.
SM REPAIR RETURN
1. Contractor will provide electronically to WildBlue a list of (or
mechanism for generating) Return Service Authorization (RSA) numbers
to be used for returned merchandise through a mutually agreed upon
interface.
2. The following information shall be furnished with SMs returned to
Contractor for repairs:
3. Name of User, complete address and phone number;
4. "Ship to" address for return of repaired SM, if different from (1);
5. A reasonable description of the nature of the defect or failure, if
known;
6. SM warranty status via receipt, or RSA.
7. RSA number; and
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8. SM Serial Number.
9. All SMs shipped to Contractor for repair shall have repair tags
attached by Contractor which shall contain the above stated
information.
10. SMs repaired by Contractor shall have the repair completion date
stenciled or otherwise identified in a permanent manner in a readily
visible location on SM and the repaired SM shall be returned with a
tag or other documentation describing the repairs that have been
made. If Contractor maintains statistical records for repaired SM,
the information shall be made available to WildBlue upon reasonable
request.
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SCHEDULE 14
WBSM/WBST POST WARRANTY SUPPORT AND MAINTENANCE
1. TECHNICAL SUPPORT FOR SM
For the purposes of this schedule, references to SMs apply equally to WBSMs and
WBSTs. The terms for post-warranty technical support are identical to those
outlined in Schedule 13 under the section "Technical Support for WBSMs and
WBSTs".
POST-WARRANTY
1. Repair charges for SM Hardware out of warranty shall be as specified
in Schedule 16 and shall not be changed by Contractor without
written notice to WildBlue thirty (30) days in advance of such
change. WildBlue shall be responsible for payment of all charges for
out of warranty repair, SM replacement and return shipment
hereunder.
2. Defective WBSM Hardware out of warranty may be returned to
Contractor for repair or replacement. Contractor shall complete
repairs and ship repaired SM Hardware or replacement SM within
twenty (20) days of receipt of defective SM Hardware at Contractor's
designated repair location.
3. Sending Party shall bear the risk of loss or damage of SM being
shipped to Contractor for post-warranty servicing and shall prepay
and bear the cost of transportation charges for shipment to
Contractor of SM to be repaired or replaced. Return shipments shall
be sent FOB origin; freight prepaid and charged.
If Contractor determines that a returned SM is not subject to Defects,
Contractor shall return SM to the location designated by WildBlue in its "as
received" condition and WildBlue will be charged a fee as outlined in Schedule
16. Determination of fee payment is the same as defined in Schedule 13, Section
2.2. If Contractor determines that a returned SM is irreparable, Contractor
shall promptly notify WildBlue.
4. SM Software maintenance which includes the download of Point
Releases and Software Patch releases will be made available
electronically to WildBlue. Under this agreement Contractor will
provide Wild Blue with one copy of software that contains Point
Releases and Software Patch releases. WildBlue is responsible for
distribution to its end users.
5. Any replacement, repair, modification, installation or other service
performed by Contractor shall be warranted, commencing with the date
upon which repaired SM is delivered to WildBlue, for a period of
ninety (90) days.
SM REPAIR RETURN
1. The terms for product repair return are identical to those outlined
in Schedule 10 under the section "SM Repair Return."
EMERGENCY REPLACEMENT SERVICE
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1. WildBlue has the option to request expedited service for repair and
replacement. Charges for this emergency service are shown in
Schedule 16. In addition to the ability to expedite individual
units, Contractor may sign a maintenance agreement that covers all
SMs shipped to Contractor according to the terms of the agreement.
If WildBlue has paid all applicable fees, or if WildBlue elects to
expedite a specific repair case and agrees to pay the fees listed in
Schedule 16, then:
2. Contractor agrees to ship replacement SM or SM Software by the most
expedient means available, within forty-eight (48) hours after
receipt of the defective unit at Contractor authorized repair
facility.
3. Contractor shall return such repaired unit to WildBlue or its
designated location after repair (FOB origin; freight collect) and
charge WildBlue the Out of Warranty fees listed in Schedule 16.
4. If the defective SM or SM Software is not returned to Contractor
within fifteen (15) days from the date of shipment of the new
replacement SM or SM Software, Contractor may invoice WildBlue for
such new replacement SM or SM Software at Contractor's then current
list price, less WildBlue's applicable discount.
In order to schedule shipment of replacement SM, WildBlue may telephone
Contractor during normal working hours. Fees for such emergency service are
outlined in Schedule 16.
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SCHEDULE 15
Document Reproduction License and Guidelines
1. APPLICABILITY AND DEFINITIONS
This license applies to any documentation or written materials that are prepared
by Contractor and delivered to WildBlue under the terms of the Agreement
(collectively, "DOCUMENTS").
"ATP DOCUMENTS" means Documents required to be prepared by Contractor and
delivered to WildBlue in connection with the Acceptance Testing conducted by
Contractor under the Agreement.
"ESCROW DOCUMENTS" means all Documents delivered to the escrow agent under the
Escrow Agreement.
A "MODIFIED VERSION" of the document means any work containing the document or a
portion of it, either copied verbatim, or with modifications and/or translated
into another language.
A "SOFT" copy of the document means a machine-readable copy, represented in a
format whose specification is available to the general public, whose contents
can be viewed and edited directly and straightforwardly with generic text
editors or (for images composed of pixels) generic paint programs or (for
drawings) some widely available drawing editor, and that is suitable for input
to text formatters or for automatic translation to a variety of formats suitable
for input to text formatters. A copy made in an otherwise Soft copy format that
has been designed to thwart or discourage subsequent modification by readers or
is in paper form is not Soft. A copy that is not "Soft" is called "HARD".
"TRAINING DOCUMENTS" means all training Documents delivered to WildBlue in
accordance with Section 11 of the Agreement.
"TECHNICAL DOCUMENTS" means all technical Documents, excluding Escrow Documents,
User Documents, and Training Documents, that are delivered to WildBlue by
Contractor under the terms of the Agreement."
"USER DOCUMENTS" means all SM user instruction manuals and other user
information necessary for the operation and use of the SM delivered to WildBlue
by Contractor under the terms of the Agreement.
2. COPYING
ATP DOCUMENTS. WildBlue may copy and distribute the ATP Documents in Hard copy
format, in connection with its analysis of the SM test results, provided that
this License, the copyright notices, and the license notice saying this License
applies to the Technical Documents are reproduced in all copies. Distribution of
ATP Documents to third parties shall be limited to those parties assisting
WildBlue in conducting acceptance testing or analysis thereof and provided that
such third parties assume the obligations described in Section 18.3 of the
Agreement.
ESCROW DOCUMENTS. WildBlue may copy and distribute the Escrow Documents in Soft
or Hard format, in accordance with Section 10.7 of the Agreement, provided that
this License, the copyright notices, and the license notice saying this License
applies to the Escrow Documents are reproduced in all copies.
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Distribution of Escrow Documents shall be limited to entities performing
services related to the Escrow Documents, including subcontractors, suppliers or
agents where (i) use of such entity is permitted to be used under this
Agreement, (ii) such disclosure is necessary or otherwise naturally occurs in
that entity's scope of responsibility, and (iii) the entity agrees in writing to
assume the obligations described in Section 18.3 of the Agreement.
USER DOCUMENTS. WildBlue may copy and distribute the User Documents in
connection with the sales, service or marketing of SMs, provided that this
License, the copyright notices, and a license notice saying this License applies
to the User Documents are reproduced in all copies. User Documents that are
meant to be distributed along with SMs may be included in the packaging and
shipment of such product (one copy only). One copy may also be included in a
"read me" or "help file" or other similar digital form; provided that such items
include Contractor's copyright notice and a link to Contractor's web site.
Distribution of User Documents to third parties shall only be distributed in
Hard copy format and shall be limited to users of the SM and all other third
parties that WildBlue deems to reasonably require use of User Documents in that
entity's scope of responsibility and provided that such third parties assume the
obligations described in Section 18.3 of the Agreement.
TRAINING DOCUMENTS. WildBlue may copy and distribute the Training Documents in
Soft or Hard format, in connection with service and operation of the SMs in the
WildBlue satellite system, provided that this License, the copyright notices,
and the license notice saying this License applies to the Training Documents are
reproduced in all copies. Distribution of Training Documents to third parties
shall be limited to those parties WildBlue reasonably requires use of Training
Documents in that parties scope of responsibility and provided that such third
parties assume the obligations described in Section 18.3 of the Agreement.
TECHNICAL DOCUMENTS. WildBlue may copy and distribute the Technical Documents in
Soft or Hard format, in connection with its service and operation of the
WildBlue satellite system, provided that this License, the copyright notices,
and the license notice saying this License applies to the Technical Documents
are reproduced in all copies. Distribution of Technical Documents shall be
limited to entities performing services related to the Technical Documents,
including subcontractors, suppliers or agents where (i) use of such entity is
permitted to be used under this Agreement, (ii) such disclosure is necessary or
otherwise naturally occurs in that entity's scope of responsibility, and (iii)
the entity agrees in writing to assume the obligations described in Section 18.3
of the Agreement.
Notwithstanding the foregoing, WildBlue shall not transfer (nor permit any third
party to transfer) any Documents (except Escrow Documents permitted in
accordance with Section 10.7 of the Agreement and this Schedule) to other
satellite modem manufacturers. All Documents transferred to third parties that
requires a confidentiality agreement hereunder shall include a third party right
of enforcement term for Contractor.
3. MODIFICATIONS
WildBlue may copy and distribute a Modified Version of the Escrow Documents,
User Documents, Technical Documents and the Training Documents under the
conditions of Section 2 above. In addition, WildBlue must do these things in the
Modified Version:
1. List on the title page or first page, Contractor as original author,
and, at WildBlue's option, one or more persons or entities responsible
for authorship of the modifications in the Modified Version
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2. Preserve all the copyright notices of the Documents.
3. Include restrictions on use and distribution consistent with this
License.
4. Do not retitle the Documents.
5. Provide one copy of all Modified Versions to Contractor.
4. COMBINING DOCUMENTS
WildBlue may extract a portion of a Document, and distribute it individually
under this License, provided WildBlue follow this License in all other respects
regarding verbatim copying of that document.
5. TRANSLATION
Translation is considered a type of Modification, so WildBlue may distribute
translations of the Documents under the terms of Section 3. WildBlue may include
a translation of this License provided that WildBlue also include the original
English version of this License. In case of a disagreement between the
translation and the original English version of this License, the original
English version will prevail.
6. GENERAL RESTRICTIONS.
Notwithstanding anything to the contrary herein, no Document prepared by
Contractor and delivered to WildBlue (except Escrow Documents properly released
to WildBlue under the Agreement) shall be distributed to other satellite
terminal manufacturers.
Nothing herein shall in any way restrict WildBlue's use, distribution,
reproduction or modification of the Interface Specifications.
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SCHEDULE 16
WARRANTY FEE SCHEDULE
WildBlue may purchase Extended Warranty coverage for SMs purchased under this
Agreement at the time the Order is placed or at any time during the original
Warranty Period. The Extended Warranty coverage will include the standard
warranty services defined in Schedule 13, Section 2 (excluding Section 2.3). The
prices for Extended Warranty for SM-A and SM-B versions are listed in the table
below.
TABLE 1 EXTENDED WARRANTY PRICING
- -------------------------------------------------------------------------------------------------
1 year 2 years 3 years
beyond basic warranty beyond basic warranty beyond basic warranty
- -------------------------------------------------------------------------------------------------
SM-A or SM-B *** *** ***
- -------------------------------------------------------------------------------------------------
The period of the Extended Warranty listed in Table 1 is defined to cover the
period from the expiration of the original warranty defined in Schedule 13
through the number of additional years identified in the table.
A pricing schedule for post warranty repair services and extended warranty for
WBSTs will be added to this schedule prior to the delivery of the first
production terminals. This pricing schedule will be no less favorable than that
offered by Contractors to other customers for similar services and terms
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SCHEDULE 17
RESERVED
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SCHEDULE 18
RESERVED
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SCHEDULE 19
SMTS PRODUCTION PRICE SCHEDULE
Unless explicitly noted elsewhere in this Agreement, initial equipment orders
and all subsequent orders of SMTS systems and components shall adhere to the
pricing contained within this Schedule.
- ---------------------------------------------------------------------------------------
Part Identifier Item Description Price
- ---------------------------------------------------------------------------------------
*** *** ***
- ---------------------------------------------------------------------------------------
Notes:
1. All prices assume that the *** do not exceed $*** and that the *** do
not exceed $***.
2. Prices also assume that the cost to ViaSat of the essential *** do not
exceed $***.
3. If components supplied or specified by *** exceed these prices then
***. The price increase will incorporate the ***.
4. When the Dynamic Physical Layer SMTS-BU versions are available, the
prices for the SMTS-BUs and SDBs will be the same as listed above
subject to notes 1. through 3. above.
5. The SMST price is based upon the design Contractor presented at CDR.
Accordingly, the SMTS unit will be substantially compliant with the
Specification, but may vary in some performance requirements, which do
not materially impact the functionality of the SMTS.
6. WildBlue and Contractor will negotiate in good faith to establish
appropriate ramp up times and start up costs for production of these
units. The start up costs may include effort to complete the
functionality.
SCHEDULE 20
SMTS INITIAL PRODUCTION ORDER DELIVERY SCHEDULE
The equipment comprising the SMTS Initial Production Order is listed in
the table below along with a nominal delivery schedule. WildBlue will provide
Contractor a firm schedule for the Initial Production Order no later than 180
days prior to the first production SMTS delivery. WildBlue reserves the right to
delay the scheduled Month for Delivery if notice is given to ViaSat prior to 120
days before the order is due to be delivered. Notwithstanding the right to
modify the scheduled Month for Delivery, # of chassis and spares, initial
deliveries shall begin no earlier than *** and all deliveries for this Initial
Order providing a minimum capability of Downstreams will be completed prior to
***.
FIRM INITIAL PRODUCTION ORDER AND NOMINAL DELIVERY SCHEDULE
SCHEDULED MONTH FOR DELIVERY PART IDENTIFIER QUANTITY
- --------------------------------------------------------------------------------
*** *** ***
- --------------------------------------------------------------------------------
No later than 90 days prior to the first production SMTS delivery, WildBlue will
provide the first rolling forecast covering deliveries for the period from 120
days to at least 180 days from the forecast date. The deliveries listed for 120
days will constitute firm orders.
Firm orders will have a delivery FOB ViaSat's designated facility no earlier
than four (4) months from the date of order. For example, an Order placed in
February shall have a required delivery date to WildBlue no sooner than June.
Each such order shall constitute a minimum commitment upon WildBlue when the
order is placed.
SCHEDULE 21- PRODUCT DESCRIPTION OF THE SMTS
***
[24 pages omitted]
SCHEDULE 22
SMTS TECHNICAL SUPPORT, WARRANTY SUPPORT AND MAINTENANCE
1. TECHNICAL SUPPORT FOR SMTS
During the Term, ViaSat will make available to WildBlue at ViaSat's then current
commercial rates (except as noted below) technical support and services which
are then generally available, which shall include, but not be limited to, the
provision of the following services:
1.1 At no additional charge after delivery of the first production SMTS,
telephone support to the WildBlue technical team and access to ViaSat System
Engineering, Integration and Test personnel, 24 hours per day, seven days per
week for production SMTS related problems during system integration testing
prior to fielding, and onsite field support as needed for SMTS related problems
that cause a service outage or material degradation of functionality. This on
site support shall be for the first 4 months of field deployment with the first
satellite. On-site field support will consist of technical personnel arriving on
site at either WildBlue's lab or a designated gateway location within North
America within 24 hours notice from WildBlue subject to airline schedules and
availability. WildBlue will reimburse ViaSat for reasonable and documented
travel and per diem expenses.
1.2 A minimum of 2 days of onsite support during the installation and
configuration of the first SMTS unit in each gateway location which will be
reimbursed by WildBlue at rates established in Schedule 10. This support may be
canceled upon written notification from WildBlue no later than 4 weeks prior to
the scheduled installation at a gateway site.
1.3 ViaSat must provide at no additional charge, via a web-based
application, a list of the number of times WildBlue's personnel contacted
ViaSat's technical support, with the date and time of contact, the problem, and
disposition of the call. Such application must be updated such that status of
the call must be provided via the web within 24 hours. As the problem is
solved/escalated status must be provided on the web based application within a
reasonable period of time, but in no event later than 24 hours.
1.4 Assistance in the diagnosis and resolution of hardware and software
problems.
1.5 Assistance in expediting priority replacement parts or systems
required on an emergency basis.
1.6 Assistance in the support of the initial implementation of SMTSs and
during installation of significant SMTS updates and/or changes.
1.7 Support in the preparation and analysis of failure and discrepancy
reports, as required.
1.8 Cooperation in providing reasonable guidelines and documentation to
ensure the necessary tracking and resolution of engineering, installation and
service complaints.
2. WARRANTY
2.1 ViaSat warrants to WildBlue that upon delivery of the SMTS to
WildBlue all right, title and interest in SMTS Hardware will pass to WildBlue
free of all liens, imperfections in title, claims, charges, restrictions, or
other encumbrances. ViaSat warrants to WildBlue that the SMTS Hardware shall be
new, free from defects in material and workmanship, and that the SMTS Hardware
and SMTS Software shall perform in material conformance with the Specifications,
for a period of one (1) year from installation date (the "WARRANTY PERIOD") but
in no event more than *** months from delivery. All warranties shall survive
inspection, acceptance and payment. WildBlue shall reasonably cooperate with
ViaSat in implementing the most cost efficient, cost effective warranty
procedures.
2.2 During the Warranty Period, SMTSs that are subject to Defects shall
be examined onsite by ViaSat at WildBlue's request, and when possible repairs
may be effected onsite without the removal of the unit in accordance with
commercial rates. When this is not feasible, defective components of the SMTS
shall be returned to ViaSat for repair or replacement at no charge or cost to
WildBlue. Unless otherwise agreed by ViaSat and WildBlue, for SMTSs and
components that are returned to ViaSat for repair, ViaSat shall, at its option
and cost, either complete repairs and return the repaired SMTS or component, or
ship replacement SMTS components, within 10 days of receipt of defective SMTS
components at ViaSat's designated repair location. All SMTS components returned
for warranty repair hereunder shall be returned in accordance with certain
standard procedures, to be mutually agreed upon by the Parties, which may be
amended from time to time. The sending Party shall bear the risk of loss or
damage of a returned SMTS component until such SMTS component is delivered to
ViaSat's designated repair facility. The sending party shall bear the cost of
transportation charges for shipment to ViaSat (FOB ViaSat's designated facility;
freight prepaid) of SMTS components under warranty to be repaired or replaced.
For return shipments from ViaSat to WildBlue, ViaSat shall bear the risk of loss
or damage during transit and shall prepay and bear the cost of transportation
charges for shipment of SMTS components that have been repaired or replaced. If
the SMTS components returned by WildBlue to ViaSat for repair or replacement
under this warranty are diagnosed as not defective by ViaSat, WildBlue will pay
for processing of Post Warranty Repair charges in accordance with Schedule 13.
2.3 For SMTSs under warranty, ViaSat will make available to the WildBlue
technical team, telephone and/or pager support 24 hours a day, 7 days a week
(EST), in accordance with annual prices set forth in Schedule 15, with a maximum
30 minute response time. WildBlue, as appropriate, will designate no more than 5
representatives authorized to utilize this technical support.
2.4 Any replacement, repair, modification, installation or other service
performed by ViaSat shall be warranted, commencing with the date upon which
repaired SMTS components are returned to the sending party, for the remainder of
the unexpired period of the warranty or ninety (90) days, whichever is greater.
2
VIASAT AND WILDBLUE CONFIDENTIAL INFORMATION
2.5 The warranties stated above do not extend to SMTS Hardware or SMTS
Software that has been subjected to misuse, neglect or abuse not caused by
ViaSat or been used in violation of approved written instructions furnished by
ViaSat with the SMTS, if such action is the cause of the damage or malfunction,
nor do they apply to cosmetic problems or defects resulting from normal wear and
tear in ordinary use and which do not affect product performance or use. This
warranty shall not apply to any SMTS or parts thereof, that has been repaired or
altered by other than ViaSat personnel (unless repaired or altered under the
strict guidance or supervision of ViaSat personnel or its designee or in
accordance with Tier 1 maintenance procedures defined in the SMTS training
material) or has been subject to the opening of any sealed cabinet boxes without
ViaSat's prior written consent. Additionally, this warranty shall not apply to
any parts of the SMTS or software modifications that have not been provided by
ViaSat.
3. SMTS REPAIR RETURN
3.1 ViaSat will provide electronically to WildBlue, and its designated
sub-contractors as appropriate, a list of (or mechanism for generating) Return
Service Authorization (RSA) numbers to be used for returned merchandise through
a mutually agreed upon interface.
3.2 The following information shall be furnished with SMTSs returned to
ViaSat for repairs:
3.2.1 "Ship to" address for return of repaired SMTS, if different
from (1);
3.2.2 A reasonable description of the nature of the defect or
failure, if known;
3.2.3 SMTS warranty status via receipt, or RSA.
3.2.4 RSA number; and
3.2.5 SMTS Serial Number.
3.3 All SMTS components shipped to ViaSat for repair shall have repair
tags attached by ViaSat which shall contain the above stated information.
3.4 SMTS components repaired by ViaSat shall have the repair completion
date stenciled or otherwise identified in a permanent manner in a readily
visible location on SMTS and the repaired SMTS component shall be returned with
a tag or other documentation describing the repairs that have been made. If
ViaSat maintains statistical records for repaired SMTS components, the
information shall be made available to WildBlue upon reasonable request.
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VIASAT AND WILDBLUE CONFIDENTIAL INFORMATION
SCHEDULE 23
SMTS POST-WARRANTY SUPPORT AND MAINTENANCE
2. TECHNICAL SUPPORT FOR SMTS
The terms for post-warranty technical support are identical to those outlined in
Schedule 12 under the section "Technical Support for SMTS.
4. POST-WARRANTY
4.1 Repair charges for SMTS Hardware out of warranty shall be as
specified in Schedule 16 and shall not be changed by ViaSat without written
notice to WildBlue thirty (30) days in advance of such change. WildBlue shall be
responsible for payment of all charges for out of warranty repair, SMTS
replacement and return shipment hereunder.
4.2 Defective SMTS Hardware out of warranty may be returned to ViaSat
for repair or replacement. ViaSat shall complete repairs and ship repaired SMTS
Hardware or replacement SMTS within 10 days of receipt of defective SMTS
Hardware at ViaSat's designated repair location.
4.3 Sending Party shall bear the risk of loss or damage of SMTS
components being shipped to ViaSat for post-warranty servicing and shall prepay
and bear the cost of transportation charges for shipment to ViaSat of SMTS
components to be repaired or replaced. Return shipments shall be sent FOB
origin; freight prepaid and charged.
If ViaSat determines that a returned SMTS component is not subject to Defects,
ViaSat shall return SMTS component to the location designated by WildBlue in its
"as received" condition and WildBlue will be charged a fee as outlined in
Schedule 15. If ViaSat determines that a returned SMTS component is irreparable,
ViaSat shall promptly notify WildBlue.
4.4 SMTS Software maintenance, which includes the download of Point
Releases and Software Patch releases, will be made available electronically to
the WildBlue. Under this agreement ViaSat will provide WildBlue with one copy of
software that contains Point Releases and Software Patch releases. WildBlue is
responsible for distribution and installation to each SMTS.
4.5 Any replacement, repair, modification, installation or other service
performed by ViaSat shall be warranted, commencing with the date upon which
repaired SMTS component is delivered to WildBlue, for a period of ninety (90)
days.
5. SMTS REPAIR RETURN
The terms for product repair return are identical to those outlined in
Schedule 12 under the section "SMTS Repair Return."
1
VIASAT AND WILDBLUE CONFIDENTIAL INFORMATION
6. EMERGENCY REPLACEMENT SERVICE
6.1 WildBlue has the option to request expedited service for repair and
replacement. Charges for this emergency service are shown in Schedule 16. In
addition to the ability to expedite individual units, ViaSat may sign a
maintenance agreement that covers all SMTSs shipped to ViaSat according to the
terms of the agreement. If WildBlue has paid all applicable fees, or if WildBlue
elects to expedite a specific repair case and agrees to pay the fees listed in
Schedule 15, then:
6.1.1 ViaSat agrees to ship replacement SMTS or SMTS Software by
the most expedient means available, within 12 hours after receipt of
notification of the defective unit from ViaSat authorized repair facility.
6.1.2 ViaSat shall return such repaired unit to WildBlue or its
designated location after repair (FOB ViaSat's designated contiguous U.S.
facility; freight collect) and charge WildBlue the Out of Warranty fees listed
in Schedule 15.
6.1.3 If the defective SMTS or SMTS Software is not returned to
ViaSat within fifteen (15) days from the date of shipment of the new replacement
SMTS or SMTS Software, ViaSat may invoice WildBlue for such new replacement SMTS
or SMTS Software at ViaSat's then current list price, less WildBlue's applicable
discount.
In order to schedule shipment of replacement SMTS, WildBlue may telephone ViaSat
during normal working hours, or page a designated ViaSat representative during
non-working hours. Fees for such emergency service are outlined in Schedule 15.
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VIASAT AND WILDBLUE CONFIDENTIAL INFORMATION