Gateway Terminal Development, Production And Purchase Agreement

EXHIBIT 10.1


*** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


GATEWAY TERMINAL DEVELOPMENT, PRODUCTION AND PURCHASE AGREEMENT


BY AND BETWEEN


ASTROLINK INTERNATIONAL LLC


AND


VIASAT, INC.


This Gateway Terminal 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 Astrolink International LLC, a Delaware corporation with offices located at 6701 Democracy Boulevard, Suite 1000, Bethesda, MD 20817 ("AIL"), 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 AIL or Contractor, as appropriate, and "Parties" means AIL and Contractor. The Parties agree that the following terms and conditions shall apply to the products and services to be provided by Contractor under this Agreement in consideration of certain payments to be made by AIL.


The Parties, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows:


1. BACKGROUND AND OBJECTIVES


1.1 BACKGROUND.


This Agreement is being made and entered into with reference to the following:


(a) AIL has determined to implement a Ka-band, switched-processor
payload, digital, multichannel, satellite switched networking
system that utilizes ground terminals and Gateways (as defined
below) satisfying the Acceptance Criteria (as defined below), and
other terms and conditions of this Agreement to provide satellite
telecommunications network services in various markets.


(b) Contractor is an established and well-known global electrical
engineering, manufacturing and systems integration company
(together with its Subcontractors), has particular expertise in
telecommunications and Gateway Terminal technology and desires to
develop, produce and provide AIL with Service Provider Gateway
Terminals


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ASTROLINK AND VIASAT
CONFIDENTIAL AND PROPRIETARY INFORMATION


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for the AIL System (as defined below) and related services as
specified in this Agreement.


1.2 OBJECTIVES.


AIL and Contractor have agreed upon certain goals and objectives for
this Agreement, including the following:


(a) Designing, developing, and manufacturing the Gateway Terminals in
accordance with the terms hereof;


(b) Bringing the Gateway Terminals, which incorporate and meet the
requirements of the SOW and the Acceptance Criteria, quickly and
reliably to market;


(c) Ensuring that Contractor and Contractor's Subcontractors have in
place all the research, development, manufacturing, technological
and management skills necessary to design, develop, fabricate,
assemble, install, integrate, support and maintain the Gateways;


(d) Creating a contractual relationship that is flexible and highly
responsive to the needs of the Parties and provides a competitive
solution in light of changes in the business environment, and
advances in technology and methods of using technology;


(e) Aligning the capabilities and performance of the Gateway
Terminals with the AIL System specifications, AIL's business
requirements and Contractor's (including its Subcontractors')
capabilities; and


(f) Establishing Contractor as a designer and supplier of Service
Provider Gateway Terminals for use with the AIL System.


1.3 CONSTRUCTION AND INTERPRETATION.


(a) The provisions of Sections 1.1 and 1.2 are intended to be a
general introduction to this Agreement and are not intended to
expand the scope of the Parties' obligations under this Agreement
or to alter the plain meaning of the terms and conditions of this
Agreement and shall be used only as guidance to the Parties.


(b) 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.


(c) Unless the context otherwise requires, words importing the
singular include the plural and vice-versa.


(d) References to an "Article," "Section" and "Subsection" shall be
references to an article, section, or subsection of this
Agreement, unless otherwise specifically stated.


(e) 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.


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(f) 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.


(g) The word "including" and words of similar import (such as
"include" and "includes") mean "including, but not limited to."


(h) A reference to "days" means calendar days, unless otherwise
specifically stated in a reference.


2. DEFINITIONS


2.1 CERTAIN 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.


(a) "Acceptance" or "Accepted" means, with respect to any Milestone
or Gateway Terminal that such Milestone or Gateway Terminal has
satisfied the applicable requirements set forth in Section 6.2.


(b) "Acceptance Criteria" means the criteria used to confirm that the
Gateway Terminals, the interfaces of the Gateway Terminals with
the Baseband Equipment and the Element Manager, Documentation and
Services meet the requirements of the Acceptance Test Plan or the
SOW as appropriate.


(c) "Acceptance Testing" means the acceptance tests to be conducted
in accordance with Section 6.2 and the procedures and timeframes
set forth in the mutually agreed upon Acceptance Test Plan.


(d) "Affiliate" means, with respect to any entity, any other entity
Controlling, Controlled by or under common Control with such
entity. "Affiliate" does not include any Competitor.


(e) "AIL Background Information" means all Confidential Information
and Joint Confidential Information of AIL or its licensors, in
any form, furnished or made available directly or indirectly to
Contractor by AIL or otherwise obtained by Contractor from AIL,
including, without limitation, the SOW and AIL's market analysis,
certification procedures, business model and AIL-proprietary
algorithms and all Intellectual Property Rights related to any of
the foregoing, developed prior to the Effective Date.


(f) "AIL Foreground Information" means all Confidential Information
of AIL or its licensors, and any Joint Confidential Information,
in any form, furnished or made available directly or indirectly
to Contractor by AIL or otherwise obtained by Contractor from AIL
and Confidential Information jointly owned by AIL and Contractor
and all Intellectual Property Rights related to any of the
foregoing, developed or acquired by AIL on or after the Effective
Date.


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(g) "AIL System" means the Ka-band satellites to be constructed,
launched and successfully deployed in orbit together with the
ground segment required to deliver broadband services, and as
further described in the Statement of Work.


(h) "ATM Switch" means the asynchronous transfer mode switch which is
supplied to Contractor by AIL as CFE for integration with the
Gateway Terminal.


(i) "Baseband Equipment" or "BBE" means that portion of a Gateway
that is used to perform terrestrial interworking, switching and
other terrestrial networking functions. The Baseband Equipment
includes the ATM Switch.


(j) "CFE" means that equipment, data and documentation set forth in
the SOW for delivery to Contractor in accordance with the SOW
schedule that AIL provides for Contractor's use hereunder, and
unless otherwise agreed by the Parties, in which AIL retains
ownership.


(k) "Comparable Gateway Terminals" means any Gateway Terminals
developed and/or manufactured by Contractor for use with the AIL
System that are substantially similar to or a derivative of the
Gateway Terminals, and the associated equipment, software and
documentation therefor.


(l) "Competitor" means a provider of a substantially comparable
geosynchronous Ka-band, switched processor satellite system that
provides services substantially comparable to those offered over
the AIL System.


(m) "Contract Year" means any calendar year during the Term hereof.


(n) "Contractor Background Information" means all Confidential
Information and Joint Confidential Information of Contractor or
its licensors (excluding AIL's Confidential Information), in any
form, furnished or made available directly or indirectly to AIL
by Contractor or incorporated in or otherwise necessary to use or
maintain the Gateways and Comparable Gateways, including the
related Intellectual Property Rights.


(o) "Contractor-Certified Installer" means a third party installer of
Gateway Terminals of AIL's choice that has been trained and
certified by Contractor using procedures which Contractor follows
for such certifications under similar commercial conditions, in
accordance with reasonable standards set forth by Contractor.


(p) "Contractor Foreground Information" means the Confidential
Information (and the Intellectual Property Rights appurtenant
thereto) developed by Contractor hereunder and any Joint
Confidential Information developed hereunder or acquired by
Contractor after the Effective Date, which shall not include any
AIL Confidential Information or any Contractor Background
Information.


(q) "Contractor Personnel" means employees of Contractor, including
(i) any temporary-duty personnel and Key Contractor Personnel,
and (ii) Contractor's Subcontractors performing under this
Agreement.


(r) "Control" and its derivatives means with regard to any entity (i)
the legal or beneficial ownership, directly or indirectly, of
fifty percent (50%) or more of the capital stock of 5


such entity ordinarily having voting rights or (ii) the
management control over such entity.


(s) "Dead on Arrival" means where any Gateway Terminal or component
thereof is inoperative or fails to operate in accordance with the
SOW at the time it is initially installed or fails to so operate
during the *** period immediately following such initial
installation, excluding any Gateway Terminal or component failure
to the extent caused by damage during shipping or installation
(if such installation is not performed by Contractor or a
Contractor-Certified Installer).


(t) "Defect" or "Defective" means any failure of a Gateway Terminal,
including any components thereof, to operate in conformance with
the SOW and applicable Standards.


(u) ***


(v) "Documentation" shall include specifications, manuals,
programmatic and test plans and procedures, reports, minutes and
other media and documents pertaining to the performance,
installation, training, use, operation and maintenance of each
Gateway Terminal, all of the above as set forth or referenced in
the SOW.


(w) "Effective Date" means the date that this Agreement is executed
by the Parties.


(x) "Element Manager" or "EM" means that portion of a Gateway that
provides consolidated control and status capabilities of the
Gateway.


(y) "Equipment" means the ground-based hardware, cabling, spare or
replacement parts for Gateways and other non-Software components
associated with the Gateway Terminals that may be purchased by
AIL from Contractor under this Agreement.


(z) "Firmware" means the computer programs that are stored in machine
executable form within non-volatile memory and operate embedded
processes within the equipment.


(aa) "Gateway" means a major satellite earth station that operates
with an AIL satellite on a designated gateway beam that is used
(i) to interface the AIL network with a local terrestrial network
(including a larger number of users), (ii) to provide high
throughput of data, (iii) to support the management of its
associated customers and (iv) to support AIL's regional network
control center in the management of AIL System resources. A
Gateway means *** Gateway consisting of Baseband Equipment
(including the ATM Switch), an Element Manager and Gateway
Terminal.


(bb) "Gateway Support Facility" means the diagnostic and repair
facility for Gateways established by Contractor pursuant to
Section 14.2 for the Gateway Terminals and located at
Contractor's facility (Atlanta facility for baseline pricing-
other options under study).


(cc) "Gateway Terminal" means that portion of a Gateway that
translates RF (radio frequency) to and from the ATM Switch and
performs the TCP PEP functions and as further defined in the SOW,
that is designed, developed and/or manufactured in accordance
with the SOW and applicable Standards for use with the AIL System
and the associated Equipment, Software and Documentation, as
updated, revised or improved from time-to-time and provided by
Contractor to AIL or its Service Providers. 6


(dd) "Initial Warranty Period" means the first to occur of (i) ***
following installation of a Gateway Terminal at a Gateway site by
a Contractor-certified Installer or (ii) *** from the date of
delivery of a Gateway Terminal to AIL or a Service Provider.


(ee) "Intellectual Property" means patents, copyrights, Confidential
Information, Marks, know-how, trade secrets, moral rights,
contract or licensing rights, confidential and proprietary
information protected under contract or otherwise under law and
other similar intellectual or industrial property.


(ff) "Intellectual Property Rights" means any and all rights in and
with respect to patents, copyrights, Confidential Information,
rights in Marks, know-how, trade secrets, moral rights, contract
or licensing rights, confidential and proprietary information
protected under contract or otherwise under law, and other
similar rights or interests in intellectual or industrial
property and all registrations and applications for registration
therefor.


(gg) "Joint Confidential Information" means (A) information that has
been developed pursuant to Section 10.4(c)(iii); and (B)
information that has been independently developed, licensed or
otherwise acquired by each Party without breach of this
Agreement, and excluding Confidential Information of a Party that
is provided to the other Party or its agents or Subcontractors
hereunder, that would qualify as Confidential Information of each
Party, but for the exclusions to Confidential Information set
forth in Subsections 15.3(c)(i)(3), (4) or (5) below.


(hh) "Lien" means any lien (including subcontractor and other mechanic
liens), imperfection in title, security interest, claim, charge,
restriction or other encumbrance.


(ii) ***


(jj) ***


(kk) "Losses" means all costs, expenses, liabilities and damages
reasonably incurred and payable under any settlement, litigation
or final judgment, and all related reasonable costs and expenses,
including legal fees and disbursements and costs of
investigation, expert fees, fines, interest and penalties.


(ll) "Mark" means any trademark, service mark, trade name, domain
name, logo or other indicia of source or origin of a product or
service.


(mm) "Milestone Payment" means a payment made by AIL to Contractor in
accordance with Section 14.2(e) below upon Acceptance by AIL of
the corresponding Milestone.


(nn) "Milestone and Payment Schedule" has the meaning given in Section
5.4 and is attached hereto as Schedule 1.


(oo) ***


(pp) "Order" means a purchase order issued to Contractor for the
purchase of Gateway Terminals.


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(qq) "Preproduction Gateway Terminals" means the *** Gateway Terminals
delivered in accordance with the Milestone and Payment Schedule
that provides a single thread RF-to-ATM and TCP PEP, as described
in the SOW.


(rr) "Prime Rate" means the rate identified as the prime rate offered
by The Chase Manhattan Bank (or its successor), as published in
the Wall Street Journal from time to time.


(ss) "Production Gateway Terminals" means a Gateway Terminal produced
by Contractor following AIL's Acceptance of the Prototype Gateway
Terminals and the Preproduction Gateway Terminals for use by AIL
or a Service Provider with the AIL System.


(tt) "Prototype Gateway Terminal" means a non-Redundant, ***Gateway
Terminal described in the SOW delivered in accordance with the
Milestone and Payment Schedule that provides a single thread
RF-to-ATM.


(uu) "Purchase Price" means the price of a Gateway Terminal to AIL and
its Service Providers, FOB Contractor's designated site, as set
forth in Section 13.2 for the Purchase Commitment and Schedule 2
attached hereto (as may be amended by mutual agreement of the
Parties to include pricing for various Gateway options and
Services) for additional Gateway Terminals Ordered hereunder.


(vv) ***


(ww) "Redundancy" shall have the meaning set forth in the SOW.


(xx) "Service Provider" means entities that pursuant to written
agreement with AIL own and/or operate the Gateways or Comparable
Gateways with the AIL System and other related software and
equipment, and that may purchase Gateway Terminals from
Contractor.


(yy) "Services" means (i) the services provided by Contractor pursuant
to this Agreement, and (ii) services described in any Order, and
(iii) any services not specifically described in (i) or (ii) that
are required or appropriate for the proper performance and
provision of those services described in (i) or (ii).


(zz) "Software" means the machine readable computer code used to
instruct a processor to perform a task or series of tasks in
object code form, including Firmware, files, databases,
interfaces, documentation and other materials related thereto)
necessary to make the Gateway Terminals achieve applicable
requirements of the SOW, which computer code shall be supplied
and licensed by Contractor to AIL for use pursuant to this
Agreement (including any third party Software sublicensed by
Contractor hereunder), as such Software is revised, updated,
corrected and enhanced from time-to-time and provided to AIL
pursuant to this Agreement.


(aaa) "Source Code" means the human readable code written in a high
level language, including source code listings as then commented,
system and program flowcharts, and such other components,
programs and documents to fully utilize, modify and maintain the
Software consistent with standards set forth herein, including
all necessary support routines, all of which, where applicable,
shall be on media able to be read and processed.


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(bbb) "Specifications" means those functional, performance and other
requirements and documents set forth or referenced (as
applicable) in the Statement of Work, as may be amended from time
to time.


(ccc) "Standards" shall have the meaning set forth in the SOW.


(ddd) "Statement of Work" or "SOW" means the document attached hereto
as Schedule 4, which shall include by this reference all
documents, specifications and tables, including without
limitation the Specifications, contained therein and referenced
thereby, as may be amended from time to time by mutual agreement
of the Parties.


(eee) "Subcontractor" means those contractors, consultants, suppliers
and providers used by Contractor under this Agreement.


(fff) "TCP PEP" means equipment providing the performance enhancing
protocol that is used to enhance the performance of using
transmission control protocol over a satellite link.


(ggg) "Technical Materials" means the technical, engineering and design
information and specifications relating to the Gateway Terminals,
whether written or non-written, including Source Code, Software,
Software specifications, functional specifications, interface
specifications, hardware and circuit diagrams, mask works,
schematic diagrams, vellums, third party supplier information
(including name, address, and part numbers), and associated
documentation, in reasonable detail sufficient to permit AIL or
its designees to manufacture, support, maintain and procure
Gateway Terminals as permitted hereunder.


(hhh) "Termination Date" means the date that this Agreement is
terminated by a Party in accordance herewith.


(iii) "United States" or "U.S." means the United States of America.


(jjj) "Virus" means: (i) program code, programming instruction or set
of instructions intentionally constructed with the ability to
damage, interfere with or otherwise adversely affect computer
programs, data files or operations; or (ii) other code typically
designated to be a virus (including worms, Trojan horses and
similar items).


(kkk) "Warranty" means any of the representations, covenants and
warranties set forth in this Agreement.


(lll) "Warranty Period" means the Initial Warranty Period and all
Extended Warranty Periods for any Gateway Terminals.


(mmm) "Year 2000 Compliant" means the ability of Gateway Terminals,
when used in accordance with its associated documentation, to be
capable of correctly and unambiguously processing, recognizing,
providing, recording and receiving date data within and between
the twentieth and twenty-first centuries, including proper
identification of the century and leap years, without resulting
in or causing logical or mathematical inconsistencies, processing
errors, loss of functionality or performance or other failures. 9


2.2 OTHER TERMS.


Other terms used in this Agreement are defined in the context in which
they are used and have the meanings there indicated. A cross-reference
for such terms is set forth below:


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