1
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Exhibit 4.1(h)
CONFIDENTIAL
C0NTENTS
MASTER AGREEMENT
by and between
STARBAND LATIN AMERICA (HOLLAND) B.V.
and
GILAT TO HOME LATIN AMERICA (HOLLAND) N.V.
and
GILAT TO HOME LATIN AMERICA, INC.
and
GILAT SATELLITE NETWORKS LTD.
Dated as of __________, 2001
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENTS
ATTACHMENT A.........................................Gilat Products & Services
ATTACHMENT B................................Description of Transition Services
ATTACHMENT C.................................................Non-Compete Terms
ATTACHMENT D..................................................Escrow Agreement
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
MASTER AGREEMENT
This Master Agreement together with the Attachments hereto (the
"Agreement") entered into as of ______, 2001 ("Effective Date"), by and among
StarBand Latin America (Holland) B.V., with its headquarters at
________________________ ("StarBand"), Gilat to Home Latin America (Holland)
N.V., with its headquarters at _____________________ ("GTHLA Holland"), Gilat to
Home Latin America, Inc., with its headquarters at ______________________
("GTHLA"), and Gilat Satellite Networks Ltd., with its headquarters at Yegia
Kapayim St. Daniv Park, Kiryat ▇▇▇▇, Petah Tikva 49130 Israel ("Gilat").
WHEREAS, StarBand is indirectly controlled by Gilat and was established
for the purpose of (i) implementation, operation and marketing broadband
Internet access services and voice services to consumers and small office and
home office subscribers, (ii) providing a bundled product with direct-to-home
television service using a single satellite dish and (iii) providing such new
technologies and products related to the foregoing as Gilat Israel may in the
future develop or make available to StarBand Communications Inc., which shall be
offered to StarBand and/or StarBand's subsidiaries upon commercially reasonable
terms via a two-way satellite-based network, together with the related assets,
licenses, rights, management, employees experience and know-how (such business,
related assets, licenses, rights, management, employees' experience and
know-how, shall be referred to herein as the "Business") in South America ,
Central America, Mexico and non-U.S. territories or protectorates in the
Caribbean (the "Territory"), directly and/or indirectly through its
subsidiaries;
WHEREAS, Gilat, directly and through its affiliates, including without
limitation GTHLA and GTHLA Holland, wishes to appoint StarBand, directly and/or
indirectly through its subsidiaries, as the exclusive provider of certain
telecommunications related equipment and services to the Business in the
Territory (with certain exceptions as stipulated below) and StarBand wishes to
accept such appointment or to purchase certain telecommunications equipment and
services from Gilat or Gilat's affiliates;
WHEREAS, StarBand and Gilat wish to define certain commercial dealings
with one another and reduce such definition to writing.
NOW, THEREFORE, in consideration of the above premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
StarBand and Gilat, intending to be legally bound, agree as follows:
1. Scope of Agreement.
(a) Exclusivity/Non-Compete. Gilat agrees that StarBand, directly
and/or indirectly through its subsidiaries, has exclusive
rights to sell and offer the Gilat Products & Services (as
defined hereinafter) in connection with the Business in the
Territory and to develop and operate the Business in the
Territory. Notwithstanding the
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
foregoing, the parties agree that StarBand does not have such
rights in Chile, and its rights in Mexico are co-exclusive
with the rights granted to StarBand Communications Inc. The
rights granted herein shall in each case be subject to the
terms of the non-compete provisions set forth in Attachment C
hereto. Subject to the foregoing exceptions, Gilat agrees not
to directly or indirectly appoint another entity to provide,
or itself provide, the Gilat Products & Services, or operate
the Business in the Territory.
Gilat undertakes to use its best commercial efforts to
maintain price and technological competitiveness of the Gilat
Products & Services and the other products and services to be
provided by Gilat hereunder for use by the Business in the
Territory.
So long as the Gilat Products & Services remain competitive
with respect to their pricing and technological
competitiveness and Gilat meets its delivery and support
obligations, StarBand undertakes to purchase the Gilat
Products & Services and any equipment and services performing
similar functionality in the future, solely from Gilat.
(b) Products and Services to be provided by Gilat. Gilat, directly
or through GTHLA, GTHLA Holland or other of its affiliates (in
this Agreement, unless expressly stated otherwise, any
reference to Gilat shall mean Gilat or any of GTHLA, GTHLA
Holland or Gilat's other affiliates, as directed by Gilat),
will provide StarBand with telecommunications equipment
("Equipment") and licensed software ("Software") (together
referred to as the "Gilat Products & Services") for use at
StarBand designated consumer, SOHO, SME and public call
offices locations (each such location herein defined as a
"Site"). Gilat shall also provide to StarBand all new products
and technological developments to the extent related to the
Business as such products and technology are provided to
StarBand Communications Inc. The parties will also, from time
to time, upon mutual agreement, add technical specifications
to Attachment A regarding the Gilat Products & Services. The
parties agree that any support, bug fixes and updates to the
Gilat Products & Services shall be provided to StarBand
without any charge and at the same time as they are provided
to other Gilat customers. The parties further agree that the
price paid by StarBand for upgrades to the Gilat Products &
Services shall be determined in the following manner: (i) if
the upgrades relate to the Gilat Products and Services
provided by Gilat to any other customer, then the Most Favored
Nations provision of this Agreement shall apply, or (ii)
otherwise, the upgrades shall be available at a fair price
based upon good faith negotiations of the parties and
competitive pricing.
(c) IT provided by Gilat to StarBand. To facilitate StarBand's
transition to its own systems and processes, Gilat will
provide to StarBand to the extent indicated herein, certain
Information Technology (IT), and such other services as agreed
by
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the parties that may be reasonably required to operate the
StarBand business (collectively the "Transition Services.").
The terms and conditions, including prices, for those
Transition Services are described in Attachment B to this
Agreement. Any additional services required by StarBand and
agreed upon by Gilat will be provided on commercially
reasonable terms to be determined at a later date by mutual
agreement of the parties.
(d) Research and Development (R&D). Gilat will provide to
StarBand, on an on-going basis, all applicable technology and
software developments, enhancements and improvements made or
obtained by Gilat, under the terms specified in Attachment B
hereto.
(e) Optional Services. At the option of StarBand, Gilat will
provide StarBand with the following optional services, at
prevailing and customary market prices and terms: (i)
Installation, (ii) Operation and Maintenance, (iii) access to
satellite transmission and reception facilities and services
("Space Segment"), and (iv) as detailed in paragraph 5 of
Attachment A, any other service required by StarBand in order
to provide the services contemplated by it, for which a
license, permit or other authorization is required.
(f) Minimum Quantities. StarBand undertakes to purchase from Gilat
not less then [*] Units each calendar year (the "Minimum
Quantities"). For the purpose of this Agreement the term
"Unit" shall mean - the combination of one (1) outdoor unit
and one (1) indoor unit and one (1) antenna.
2. Gilat Products & Services - Order Priority.
Gilat agrees to give priority to allocating sufficient manufacturing
capacity to producing and timely delivering the Gilat Products &
Services to be provided hereunder to StarBand in accordance with
accepted delivery dates.
3. Software License and Support/Intellectual Property.
(a) "Software" means any computer program, including any
modifications, updates, or additions, which may be included in
or with Gilat-provided Equipment as object code, or in
executable form in any medium, and related materials such as
diagrams, manuals and other documentation which are for use
with the Equipment provided to StarBand under this Agreement.
(b) Subject to the provisions of Attachment C, Gilat hereby grants
to StarBand (including a right to sublicense to its customers,
distributors and resellers) and StarBand accepts a
non-exclusive license to use or have used the Software
residing in Gilat-provided Equipment, but only for the purpose
of causing such Equipment to operate for the provision of
two-way transmission services and not otherwise. StarBand
shall not itself and will use its best commercial efforts to
not
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
permit any third party to gain access to the Software or
transfer the Software to any third party, copy or permit to
have copied the Software, reverse engineer, disassemble,
de-compile, or transmit the Software in any form or by any
means. Software is and shall remain the exclusive property of
Gilat or Gilat's vendors. No license other than that
specifically stated herein is granted to StarBand, and
StarBand shall have no right under patent, trademark,
copyright, trade secret or other intellectual property of
Gilat or Gilat's vendors other than that granted herein.
(c) The service fees detailed in Attachment A cover to the extent
paid, the Software license and maintenance for the applicable
Software for the term of the Agreement. During the term of the
Agreement, Gilat will provide remedial software support
services, including bug fixes and changes to Software made
available by Gilat generally to correct errors or improve the
efficiency and effectiveness of the then current Software,
without adding new functions to the then current Software so
that Gilat's software operates properly on the Gilat-provided
Equipment in accordance with the specifications therefor.
(d) Except as set forth in Section 15 all intellectual property
rights subsisting in or related to the Equipment and Software
and/or Transition Services, including but not limited to
patents and other know-how and copyright, both registered and
unregistered, owned and/or otherwise used by Gilat and all
goodwill related thereto (collectively the "IP Rights") are
and shall remain at all times the exclusive property of Gilat
or, as the case may be, its affiliates and/or vendors and/or
licensors. StarBand shall not have or acquire any right, title
or interest in or otherwise become entitled to any IP Rights
by taking delivery of, making payment for, distributing and/or
selling or otherwise using or transferring the Equipment,
Software or Transition Services, other than such rights
granted in this Agreement.
4. Most Favored Nations.
Gilat shall provide at all times, and from time to time, all Gilat
Products & Services or other products and services contemplated hereby
to operate the Business on rates and terms no less favorable than the
best terms offered on the Gilat Products & Services offered hereunder
to other customers wherever situated. For these purposes, the Most
Favored Nation concept refers to prices no higher than those charged by
Gilat (as the case may be) for comparable products and services sold in
comparable quantities on comparable terms and conditions including, but
not limited to, subsidy, support or other related payment, made to
other customers in bona fide offers or sales. Gilat's obligations
hereunder shall apply to all commercial terms including without
limitation warranties, costs of software upgrades, new products, terms
and timing of shipping and delivery. If there is no similarly situated
customer as described above, the parties shall
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
provide such products on commercially reasonable terms in the context
of the transactions contemplated hereunder negotiated in good faith on
an arm's-length basis.
Notwithstanding the previous paragraph, beginning [*], in no event
shall the prices charged hereunder by Gilat for any Gilat Products &
Services or other products and services contemplated to be provided by
Gilat to StarBand hereunder, irrespective of any quantity or subsidy,
support or other terms, exceed [*] of the price charged by Gilat to any
other customer in the consumer market, where ever located.
The parties agree that in case any other provisions of this Agreement
conflicts with the terms of this section, the terms of this section
shall control.
5. Transition Services.
(a) Attachment B describes the Transition Services to be provided
under this Agreement, including, without limitation, name of
service, pricing, and scope of service.
(b) Except as otherwise provided in this Agreement or unless
otherwise terminated pursuant to the terms detailed in
Attachment B, Gilat shall provide or cause to be provided each
of the Transition Services beginning on the Effective Date or
the date indicated in Attachment B and continuing through to
the expiration of the Transition Services Term, as such term
is defined in Section 7(b) below, unless otherwise terminated
pursuant to the terms detailed in Attachment B.
(c) StarBand may request Gilat to provide additional or modified
Transition Services that are not described in Attachment B.
Gilat will use commercially reasonable efforts to accommodate
any reasonable requests by StarBand to provide additional or
modified Transition Services. In order to initiate a request
for additional or modified Transition Services, StarBand shall
submit a request in writing to Gilat specifying the nature of
the additional or modified Transition Services and requesting
a cost estimate and time frame for completion. Gilat shall
respond within ten (10) days to such written request. Only if
StarBand accepts Gilat's offer to provide the additional or
modified Transition Services, will such additional or modified
Transition Services be provided hereunder and according to the
terms agreed to by the parties in writing.
6. Transitional Cooperation.
(a) StarBand and Gilat will cooperate to assure an orderly and
efficient Transition. Each party shall make available, as
reasonably requested by the other party, sufficient resources
and timely decisions, approvals and acceptances, in order that
each party may perform its obligations under this Agreement in
a timely and efficient manner.
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(b) If the provision of a Transition Service in whole or in part
requires the consent of a third party to the assignment of any
license or other agreement, Gilat shall use best commercial
efforts to obtain such consent. If Gilat is unable to obtain
any such consent after using best commercial efforts, then the
parties will agree upon a commercially reasonable alternative
that next best approximates such Transition Service on a basis
consistent with Attachment B.
(c) If requested by StarBand in connection with the Transition,
Gilat shall use best commercial efforts to assist StarBand in
its efforts to enter into a license or other agreement with
any third party with whom Gilat and any of their affiliates
have a commercial relationship.
(d) Each party shall appoint a person for the purpose of
coordinating the Transition and the provision of the
Transition Services.
7. Term.
(a) This Agreement shall become effective upon and the term shall
commence at the Effective Date and shall terminate five (5)
years thereafter (the "Term"), and shall automatically renew
for additional five (5) year terms. Without limiting Gilat's
obligations under the Most Favored Nations provisions of
Section 4, the pricing provisions related to the provision of
Gilat Products & Services hereunder shall be renegotiated in
good faith between the parties every two years, and such
renegotiated pricing provisions shall be attached hereto and
become a part hereof. If the parties fail to agree to new
prices, then the current prices will, subject to the most
favored nation provision hereof, remain in effect until the
parties reach agreement on new pricing.
(b) The Transition Services described in Attachment B shall be
provided by Gilat, as long as requested by StarBand at terms
provided for in this Agreement or as negotiated from time to
time by the management of StarBand and Gilat.
8. Charges and Payment.
(a) Gilat shall ship Equipment to StarBand in material compliance
with confirmed delivery dates in order to achieve a consistent
supply of product over each calendar quarter. All payments
made under this Agreement shall be in U.S. Dollars. The prices
for the Gilat Products & Services provided hereunder are set
forth in Attachment A. Except as otherwise provided herein,
subject to Section 8(c) below, all payments for Equipment and
services and all other items delivered or otherwise provided
under the terms of this Agreement in any calendar quarter are
due and payable no later than one (1) business day prior to
the end of the quarter in which the Equipment, services, or
other items were delivered, provided that StarBand receives
necessary documentation (e.g., invoice, packing list, freight
documents) at least thirty (30) days before the date on which
payment is
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
due. StarBand shall not be responsible for payment of
non-conforming product (that is, product that does not meet
the then applicable product performance specifications). For
non-conforming product on which StarBand has already made
payment, StarBand shall offset the price of that product
against current accounts payable.
(b) The terms of sale for all shipments from Gilat shall be
EX-WORKS Israel.
(c) StarBand shall pay for the Transition Services provided under
Attachment B hereto within 30 days after receiving a
reasonably detailed invoice from Gilat for such services from
Gilat.
(d) All charges for products or services and other items provided
under this Agreement are exclusive of federal, state, and
local sales, use, excise, utility, value-added and gross
receipts taxes, universal service fees any other applicable
tax withholding or similar deductions and assessments, and
other similar tax-like charges and tax-related surcharges
relating to charges or costs imposed by governmental or
quasi-governmental entities or other unaffiliated third
parties, all of which shall be borne and paid by StarBand.
StarBand and Gilat, as appropriate, each agree to provide the
others with a duly authorized tax exemption certificate, if
applicable. Taxes based on each party's net income shall be
the sole responsibility of such party. Gilat shall be
responsible for any home-country income, franchise, privilege
or occupational taxes imposed.
(e) All Equipment delivered by Gilat pursuant to the terms hereof
shall be new (and not refurbished) Equipment.
9. Representations and Warranties.
(a) Each party shall comply, at its own expense, with the
provisions of all applicable municipal requirements and those
state, federal, and national laws that may be applicable to
the performance of this Agreement.
(b) The parties represent and warrant that they have and will have
all rights, titles, licenses, permissions and approvals
necessary to perform their obligations under this Agreement
and to grant the other parties the rights granted hereunder.
(c) Gilat represents and warrants that title in the Equipment and
the medium on which the Software is stored that are supplied
to StarBand hereunder, when conveyed to StarBand, shall be
good and its transfer rightful, and the Equipment and Software
shall be delivered free from any security interest or other
lien or encumbrance, save for certain components of the
Equipment or Software which are licensed to Gilat, in which
event the license granted to StarBand shall fully comply with
and not be in breach of the license agreement relating to such
component.
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(d) Gilat represents and warrants that the Equipment and Software
and its use by StarBand does not and will not infringe,
violate or in any manner contravene or breach any patent,
trademark, copyright, license or other property or proprietary
right or constitute the unauthorized use or misappropriation
of a trade secret of any third party.
(e) Gilat represents and warrants that all Software is year 2000
compatible and compliant (i.e., will correctly calculate,
compare, sort, extract, sequence, store and otherwise process,
in accordance with the Software's use and applicable
specifications, date related information and associated date
calculations for dates before, during and after the year 2000,
and will display date information in ways that are unambiguous
as to the determination of the century).
(f) Product Warranty
(i) During the Warranty Period, the Equipment and
Software shall be in compliance in all material
respects with the then applicable (i.e., time of
order) technical performance specifications, and
shall be free from defects in workmanship and
materials. "Warranty Period" means: (A) for the hub
and server Equipment and all Equipment and Software
delivered therewith and installed in accordance with
the provisions hereof, from the time of delivery to
StarBand and for a period of twelve (12) months from
the later of the purchase or the date of
commissioning of such hub and server Equipment; (B)
for such Equipment that is part of hub operations
services, for the period during which StarBand
purchases such optional hub operations services from
Gilat; and (C) for all other Equipment and Software,
from the time of installation and for a period of
twelve (12) months thereafter. Notwithstanding the
foregoing and without limiting any other obligations
of Gilat hereunder, Gilat does not warrant that the
Software will be error free or uninterrupted in its
use or operation.
Thereafter, StarBand may purchase at its option an
extended full warranty at an annual cost equal to [*]
of the purchase price for all Equipment subject to
such extended warranty. Under this product warranty,
Gilat will be responsible for the cost of any
replacement parts and associated labor, overhead and
related expenses. After the above product warranty
periods have elapsed, Gilat will sell replacement
parts to StarBand for a period of seven (7) years
from StarBand's last purchase of particular products
at prices equal to the then current USB box price,
multiplied by [*] for the ODU, [*] for the USB Indoor
Unit, [*] for the LNBs, and [*] for the antenna/mount
system. Gilat reserves the right to provide notice
that a particular part will be discontinued and to
establish a time limit for all future orders of such
part.
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treatment has been requested with respect to the omitted portions.
(ii) A) Under this product warranty, Gilat shall, at
its sole option and expense, repair or
replace any Equipment and/or Software found
to be defective during the Warranty Period
and returned to Gilat's premises at
StarBand's expense. Return of the repaired
or replaced Equipment or Software to
StarBand's or its affiliates' original
destination shall be at the expense of
Gilat, unless Gilat determines that the
Equipment and/or Software is not defective
within the terms of the warranty, in which
event StarBand shall pay Gilat all costs of
handling, transportation and labor at
Gilat's then prevailing rates.
B) Under this product warranty, for Software,
if an error in the Software precludes the
Equipment from being in material compliance
with the then applicable specifications,
Gilat will use its commercial best efforts
to supply a workaround, program temporary
fix or update. The price for extended
maintenance on Software shall be the monthly
per site charge as set forth in Attachment
A.
(iii) Limitation on Warranties. This product warranty and
StarBand's remedies hereunder are solely for the
benefit of StarBand and shall not be extended to any
other person. StarBand shall be solely responsible
for the selection, use, efficiency and suitability of
the Gilat Products & Services. This warranty shall
not apply to any Equipment or Software to the extent
that such Equipment or Software: (A) has had the
serial number, model number or any other
identification markings removed or rendered
illegible; (B) has been damaged by improper
operation, maintenance, misuse, accident, neglect,
failure to continually provide a suitable operating
environment (including necessary ventilation,
electricity, protection from power surges, cooling
and/or humidity), or from any other cause beyond
Gilat's reasonable control, including force majeure,
and without Gilat's fault or omission or negligence
or the fault or negligence or omission of Gilat's
employees, agents or other representative; (C) has
been used in a manner not in accordance with the
instructions supplied by Gilat at the time or prior
to the delivery of the Equipment; (D) has been
subject to the opening of any sealed components
without Gilat's prior written approval; (E) has had
changes made by StarBand or StarBand's agents to the
physical, mechanical, electrical, software or
interconnection components of the Equipment supplied
by Gilat without written authorization of Gilat to do
so; or (F) has been repaired or otherwise altered by
anyone not under the control of, or not having the
written authorization of Gilat to do such repair or
alteration. With respect to software, Gilat's
obligation to provide remedial services shall only
apply if StarBand promptly implements each work
around, program temporary fix,
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update or other Gilat provided software problem
solution on each affected item of Equipment.
(g) Gilat represents and warrants that it shall perform all
services performed hereunder including all Transition Services
in a timely, thorough and professional manner.
(h) The parties represent and warrant that all financial records
regarding the transactions contemplated hereunder shall be
maintained in accordance with generally accepted accounting
principles consistently applied.
(i) The parties represent and warrant that they shall at all times
during the term of this Agreement and any renewals or
extensions hereof maintain all necessary insurance policies
usual and proper in the industry for the contemplated
transactions hereunder.
(j) THE WARRANTIES PROVIDED IN THIS SECTION AS TO EQUIPMENT AND
SOFTWARE CONSTITUTE THE SOLE AND EXCLUSIVE LIABILITY OF GILAT
FOR DEFECTIVE OR NONCONFORMING EQUIPMENT AND SOFTWARE AND
CONSTITUTE STARBAND'S EXCLUSIVE REMEDY FOR DEFECTIVE OR
NONCONFORMING EQUIPMENT AND SOFTWARE, EXCEPT FOR THE
INDEMNIFICATION PROVISIONS HEREOF AS TO THIRD PARTY CLAIMS.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY
OTHER WARRANTY, EXPRESS OR IMPLIED, OR STATUTORY INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, AND AS TO THE DEFECTIVE
OR NONCONFORMING EQUIPMENT AND SOFTWARE, THESE WARRANTIES ARE
IN LIEU OF ANY OBLIGATIONS OR LIABILITIES ON THE PART OF GILAT
FOR DAMAGES, EXCEPT FOR CLAIMS UNDER THE INDEMNIFICATION
PROVISIONS HEREOF AS TO THIRD PARTY CLAIMS.
10. Confidential Information.
As used in this Agreement, the term "Confidential Information" means
any information of a party disclosed by one party to another (the
"Receiving Party") pursuant to this Agreement which is in written or
other tangible form (including on magnetic media) or by oral, visual or
other means, which is because of legends or other markings, the
circumstances of disclosure or the nature of the information itself
deemed to be proprietary and confidential, including without limitation
this Agreement itself. Each party recognizes the importance of the
Confidential Information. Accordingly, each party agrees as follows:
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(a) The Receiving Party agrees (i) to protect such Confidential
Information from disclosure to others, using the same degree
of care used to protect its own confidential or proprietary
information of like importance, but in any case using no less
than a reasonable degree of care, (ii) not to disclose except
as specifically permitted hereunder any of the Confidential
Information or any information derived therefrom to any third
person except to its affiliates, agents, contractors and
financing parties under a confidentiality obligation to the
Receiving Party, and (iii) not to make any use whatsoever at
any time of such Confidential Information except as expressly
authorized in this Agreement or as reasonably necessary for
the purposes of running their respective businesses. Subject
to restrictions on disseminating Confidential Information to
third parties contained in this Agreement, any affiliate,
employee, agent, contractor or financing party given access to
any such Confidential Information must have a legitimate "need
to know" and will be similarly bound to the Receiving Party in
writing (including without limitation pursuant to a
pre-existing agreement). The Receiving Party shall be
responsible to the disclosing party with respect to any breach
of the provisions of this section caused by any such third
parties provided access to Confidential Information by the
Receiving Party. Without granting any right or license, the
parties agree that the foregoing will not apply with respect
to information the Receiving Party can document (i) is in or
(through no improper action or inaction by the Receiving Party
or any affiliate, agent or employee of the Receiving Party)
enters the public domain, or (ii) was in its possession or
known by it prior to receipt from the disclosing party, or
(iii) was rightfully disclosed to it by another person without
restriction, or (iv) was developed independently by it without
use of the Confidential Information. The Parties recognize
that service providers (employees, consultants and the like)
may serve multiple parties hereto simultaneously and hereby
agree that disclosure to or from such service providers shall
not affect the obligations of confidentiality to the party
whose information is disclosed.
(b) Immediately upon termination of this Agreement, the Receiving
Party will return or, at the disclosing party's direction,
destroy or erase and certify the destruction or erasure of all
Confidential Information and all documents containing any such
Confidential Information and all copies and extracts of the
portions of such Confidential Information (regardless of the
media on which the Confidential Information is stored).
(c) Either party may disclose the other's Confidential Information
as required by law, regulation or applicable stock exchange
rules; provided however, that such party will provide the
other party as much notice as reasonably possible under the
circumstances of such disclosure and the opportunity to
contest such disclosure.
(d) Each Receiving Party acknowledges and agrees that due to the
unique nature of the Confidential Information, there may be no
adequate remedy at law for breach
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
of the obligations hereunder. Therefore upon any such breach
or any threat of such breach, the disclosing party may be
entitled to appropriate equitable relief in addition to
whatever remedies it might have at law and under this
Agreement.
(e) Notwithstanding anything herein to the contrary, the
provisions of this Section 10 shall survive for a period of
five (5) years following the expiration or termination of this
Agreement.
11. Dispute Resolution.
(a) Each party shall designate an individual as its project
manager with the right and responsibility to represent such
party with regard to the day to day management of such party's
performance of the terms of this Agreement ("Project
Manager").
(b) Notwithstanding any other provisions of this Agreement to the
contrary, the following procedure shall be adhered to in all
disputes arising under or relating to this Agreement (other
than disputes arising under section 13(a)), that the parties
cannot resolve informally (the "Dispute").
(i) Any party may initiate this dispute resolution
process by giving another party's Project Manager
written notice of the Dispute. The Project Managers
of the parties shall thereafter have a reasonable
period of time to resolve the Dispute, but in no
event longer than ten (10) days after delivery of the
written notice described in this section 11(b)(i).
All attempts at resolution shall be conducted in good
faith and in no event shall the Project Managers
waive attempts at such resolution.
(ii) In the event the Project Managers are unable to
resolve a Dispute submitted to dispute resolution in
accordance with subsection (i) above, either party
may elect in writing, within five (5) days after
expiration of the ten (10) day period described in
(i) above, to refer the Dispute to appropriate senior
executive officers (Vice President or above) of the
parties having responsibility over such matters
("Executive Officers"). The Executive Officers shall
thereafter have a reasonable period of time to
resolve the Dispute, but in no event longer than ten
(10) days following the written referral to them of
the Dispute. All attempts at resolution shall be
conducted in good faith and in no event shall the
Executive Officers waive attempts at such resolution.
(iii) If the Project Managers are unable to resolve the
Dispute as described above, but neither party refers
the Dispute to the Executive Officers within the
indicated deadline, the relevant Dispute shall be
deemed withdrawn, but not waived. In order to
reestablish the claim, the claiming party will be
required to reinitiate the Dispute under section
11(b)(i).
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(iv) If, at any time following the procedures of section
11(a)(i), and if relevant, Section 11(a)(ii), the
Project Manager or the Executive Officer for one
Party notifies one or more other parties in writing
that a Dispute considered under this section
constitutes a material breach of the terms and
conditions of this Agreement, pursuant to section
13(b)(ii) hereof, the ninety (90) day cure period
provided in section 13(b)(ii), or any applicable cure
or notice period with respect to such breach, will be
considered to commence as of the date of such notice.
(v) Any notices delivered in accordance with the
procedures set out above shall not be deemed
effective until delivered to and received by the
receiving party in accordance with the notice
provisions of Section 12 hereof.
12. Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have
been duly given upon receipt if delivered by hand or telecopier (with
confirming receipt):
If to StarBand:
----------
----------
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other person or address as StarBand shall designate
in writing.
If to Gilat:
The Office of General Counsel
Gilat Satellite Networks Ltd.
Yegia Kapayim ▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Israel
Tel: ▇▇▇-▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
with a copy to:
Gross, Kleinhendler, Hodak, Halevy, ▇▇▇▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Israel
Tel: ▇▇▇-▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
or to such other person or address as Gilat shall designate in writing.
13. Termination Rights.
(a) If any party becomes or is declared insolvent or bankrupt, is
the subject of any proceedings related to its liquidation,
insolvency or for the appointment of a receiver or similar
officer for it, makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an
agreement for the composition, extension, or readjustment of
all or substantially all of its obligations, any other party
may, by giving thirty (30) days written notice thereof to the
affected party, terminate this Agreement without liability or
obligation, in whole or in part, as of a date specified in
such notice of termination.
(b) Any party may terminate this Agreement upon thirty (30) days
prior written notice to any other in the event of one of the
following:
(i) A party's failure to pay any amounts due hereunder
that are not duly contested in good faith within
thirty (30) days after receipt of the terminating
party's written notice of default concerning the
same; or
(ii) A party's failure to cure a material breach, within
ninety (90) days after receipt of the terminating
party's written notice of default concerning the
same. Notwithstanding the foregoing, if a material
breach is not able to be cured within such ninety
(90) days, the parties may agree to extend such
timeframe; provided, however, that Gilat may not
terminate this Agreement pursuant to this Section
13(b) so long as Gilat is directly or indirectly the
holder of 51% or more of the shares of rStar
Corporation or has the right or ability to elect or
appoint a majority of the Board of Directors of rStar
Corporation.
(c) With respect to breaches or defaults giving rise to a right to
terminate this Agreement, other than pursuant to section
13(a), the dispute resolution procedures of section 11(b)
shall be applicable. Any such right of termination shall be
suspended until the dispute resolution process in section
11(b) is completed or
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
until the alleged breaching party has had an opportunity to
seek judicial intervention prior to the end of any applicable
cure period in a notice given under section 11(b)(iv).
(d) The remedies provided under this section 13 are not exclusive
of any other rights or remedies under law or equity to which
either party may be entitled to with respect to any breach or
failure by the other party.
(e) Transition Period. If this Agreement (including any extension
terms) expires by its own terms under section 7(a), or if any
party terminates this Agreement prior to the end of the
applicable term hereof, except for termination pursuant to
Section 13(b)(i) hereto, the parties will reasonably cooperate
with one another to facilitate an effective transition to
commercially reasonable alternatives as follows:
(i) Gilat will fill outstanding purchase orders for a
period of no less than eighteen (18) months from the
date of termination at the expiration of the term or
for termination for reasons other than failure to pay
timely;
(ii) Gilat will support StarBand operations and
subscribers with regular Software updates and
telecommunications facilities and services pursuant
to the Telecommunications Services Agreement (to the
extent such agreement remains in effect at the time
of termination) for three (3) years following
termination subject to payment of any applicable fees
therefor as set forth in this Agreement or in the
Telecommunications Services Agreement;
(iii) Gilat's product warranty and warranty parts
obligations set forth in section 9 shall survive any
such expiration or termination.
14. Limitation of Liability and Indemnification.
(a) Except as further limited by section 9(f) hereto, the sole and
exclusive remedy at law (other than with respect to claims
involving misrepresentation or fraud) for any claim (whether
such claim is based in tort, contract or otherwise) arising
out of a breach of any representation, warranty, covenant or
agreement in or pursuant to this Agreement shall be a claim
for actual damages, which claims are independent of and in
addition to any equitable rights or remedies. No party shall
be liable in any case to any other party for indirect,
consequential, punitive, special or other similar damages
arising out of or relating to this Agreement.
(b) Gilat shall, at its sole expense, defend, indemnify, and hold
StarBand harmless from and against all costs, expenses and
liabilities in connection with any claim, suit or action for
infringement of any intellectual property rights, including
patent, copyright, or trade secret rights which arise from any
of the products or services
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
provided by Gilat under this Agreement, including but not
limited to the currently pending ▇▇▇▇▇▇ claim.
(c) Should the Gilat Products & Services or any component thereof
that may be provided by Gilat under this Agreement become, or
in Gilat's opinion be likely to become, the subject of a claim
of infringement of any intellectual property rights, Gilat may
exercise any of the following options at their sole expense:
(i) procure for StarBand the right to continue using the Gilat
Products & Services; (ii) replace the same with comparable
alternatives; (iii) modify the same so as to be
non-infringing; and/or (iv) compensate StarBand for the full
purchase price of the impacted Gilat Products & Services plus
an additional amount StarBand is required to reimburse to any
of its customers as a result therefor.
(d) StarBand agrees that Gilat's liability for intellectual
property infringement shall not apply to any claim, suit or
action for infringement which may be brought against StarBand
to the extent due to: (i) StarBand's modification of the Gilat
Products & Services or any parts thereof or StarBand's
modification of the Software or any software associated
therewith; or (ii) use of the Gilat Products & Services or
Transition Services with any device, software or services
added by StarBand. StarBand further agrees that it will
indemnify Gilat on the same terms as Gilat is obligated to
indemnify StarBand pursuant to this section, should any claim
of infringement be made against Gilat to the extent caused by
StarBand's modifications or use as aforesaid. StarBand,
however, shall not be liable for any such modifications that
are made at the instruction of Gilat.
(e) StarBand hereby indemnifies Gilat, and shall indemnify and
save Gilat harmless from and against injuries, loss and/or
damage to Gilat's employees and/or their tangible personal
property and/or to the person or tangible personal property of
third parties to the extent caused by the willful or negligent
acts or omissions of StarBand.
(f) Gilat hereby indemnifies and shall indemnify and save StarBand
harmless from and against injuries, loss, or and/or damage to
StarBand's employees and/or its tangible personal property
and/or to the person or tangible personal property of third
parties to the extent caused by the willful or negligent acts
or omissions of Gilat.
(g) It is understood and agreed by StarBand that under this
Agreement, Gilat is providing the Gilat Products & Services
for purposes determined by StarBand. StarBand recognizes that
Gilat does not control the manner in which StarBand uses the
Gilat Products & Services, the access by others to the data or
other content transmitted over the StarBand network or the
content of the communications that StarBand transmits and
receives over its network. StarBand therefore agrees to
indemnify and hold Gilat and Gilat's officers, directors, and
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
employees harmless from and against any and all claims for
direct damages, expenses, and losses (including reasonable
attorney's fees) to the extent arising out of or in connection
with (a) the use to which StarBand elects to put the Gilat
Products & Services; or (b) the content of the communications
that StarBand or its customers place over the Gilat Products &
Services.
(h) A party which is seeking indemnification hereunder shall
notify the indemnifying party in reasonable detail of the
event(s) giving rise to such claim for indemnification within
fifteen (15) business days after the indemnified party has
actual knowledge of such event(s). The indemnifying party
shall not have any liability to the indemnified party to the
extent that it is materially prejudiced as a result of any
delay in notification by the indemnified party nor shall the
indemnifying party be responsible for any additional loss
incurred by the indemnified party due to such delay by the
indemnified party. The indemnifying party shall have the right
to undertake the defense of any claim upon delivery of notice
to the indemnified party with respect to such claim. Such
defense shall be made with counsel reasonably acceptable to
the indemnified party. If the indemnifying party fails to
undertake the defense of the indemnified party within such
time period, the indemnified party may retain its own counsel
for such defense (which shall be reasonably acceptable to the
indemnifying party), and the indemnified party's reasonable
attorney's fees and expenses related to such claim shall be
paid by the indemnifying party. No party shall, without the
consent of the other party or parties, agree to any
non-monetary settlement of the indemnified claim.
15. Within ninety (90) days after the Effective Date, Gilat agrees to
commence providing the Escrow Agent the Escrow Materials as described
in Attachment D and shall thereafter, during the term of this
Agreement, continually provide to the Escrow Agent the Escrow Materials
as are commercially reasonable. StarBand's right to access the Escrow
Materials shall be as provided in the Escrow Agreement (All terms
herein shall be defined in Attachment D).
(a) Effective upon the release of the Escrow Materials to
StarBand, Gilat grants to StarBand a fully paid-up and royalty
free license under Gilat's intellectual property rights
(including but not limited to, patents, inventions,
discoveries, trade secrets, know-how, and copyrights, but not
including trademarks and tradenames) to (a) make or have made
the Equipment as described in Attachment D of the Agreement;
(b) to incorporate into such manufactured Equipment the
licensed Software; and (c) to use, sell, lease, rent,
maintain, or otherwise dispose of the Equipment containing the
Licensed Software to the same extent as permitted under the
Master Agreement. Except as provided in Section 3.4 of the
Escrow Agreement, such license shall be irrevocable. Gilat
agrees that it will not enter into any agreements or
relationship with a third party which agreement or
relationship would preclude the exercise by StarBand of the
rights granted to it
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
under this Section 15(a) and the Escrow Agreement. This
license grant shall give StarBand the right to have a
third-party complete and support the Escrow Materials for
StarBand, provided that such license shall be limited to
StarBands use to manufacture and support the Equipment as
specified in this provision. StarBand shall not be permitted
to license or sublicense others to use the Escrow Materials
(except as is incident to the sale or lease of the initial
Equipment by StarBand) or to manufacture or distribute the
Equipment except directly for and on behalf of StarBand.
Nothing herein shall be construed as a transfer of title to
the Escrow Materials, or any portion thereof, or any rights in
the intellectual property, trade secret, copyright or patent
rights related thereto, except in so far as they may be
licensed pursuant to the foregoing license.
16. Governing Law; Jurisdiction.
This Agreement, including all matters relating to the validity,
construction, performance and enforcement hereof, shall be governed by
the laws of the State of New York, without giving reference to its
principles of conflicts of laws. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of any federal court in the
Southern District of New York, or, to the extent federal jurisdiction
is not available, any state court in New York, in respect of any action
arising out of or based upon this Agreement and irrevocably waives any
objections which it may now or hereafter have to the laying of venue of
any such action in any such court.
17. Assignment.
This Agreement will be binding on and inure to the benefit of the
parties and their permitted successors and assigns. Except as to
distributor and resellers engaged by StarBand to carry out the Business
none of the parties to this Agreement may assign, transfer or convey
any right, obligation or duty, in whole or in part, or of any other
interest under this Agreement, without the prior written consent of the
other relevant parties. Notwithstanding the foregoing, no consent shall
be required in the case of an assignment by a party to an affiliate or
subsidiary of such party. Furthermore no consent shall be required in a
transaction involving a merger of StarBand where StarBand shall not be
the surviving entity or a sale of all or substantially all the assets
of StarBand.
18. Waiver of Compliance.
Other than sections 11(b)(i) or 11(b)(ii), any term or condition of
this Agreement may be waived at any time by the party that is entitled
to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the
party waiving such term or condition. No waiver by any party of any
term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
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21
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
19. Export Restrictions.
StarBand agrees that it shall not export, re-export, resell, ship or
divert the Equipment or Software directly or indirectly to any country
for which a U.S. or other export license is required without first
receiving confirmation that the U.S. Department of Commerce and other
relevant authorities have approved or licensed, if required, such
export, re-export, resale, shipment or diversion.
20. Force Majeure.
Unless specified otherwise, any delay in or failure of performance by
any party under this Agreement shall not be considered a breach of this
Agreement if and to the extent caused by events beyond the reasonable
control of the party affected, including but not limited to acts of
God, embargoes, governmental restrictions, strikes, riots, wars or
other military action, civil disorders, rebellion, vandalism, or
sabotage. The party whose performance is affected by such events shall
promptly notify the other parties giving details of the force majeure
circumstances, and the obligations of the party giving such notice
shall be suspended during but not longer than the continuance of the
force majeure, and the time for performance of the affected obligation
hereunder shall be extended by the time of the delay caused by the
force majeure event.
21. Verification.
Each party shall have the right to request on fifteen (15) days notice
that a third party certified public accountant acceptable to Gilat and
StarBand, but paid for by the party making the request, conduct an
audit of the relevant records of another party to verify compliance
with this Agreement or any portion thereof. The subject matters of such
an audit may include, but are not necessarily limited to, capacity,
price, cost, and related issues, but only to the extent this Agreement
provides (expressly or by reasonable implication) that such matters are
subject to verification by another party hereto.
22. Entire Agreement; Amendments.
This Agreement and any specified provisions of documents incorporated
by reference contains the entire agreement between the parties with
respect to the transactions contemplated hereunder, and supersede all
prior arrangements or understandings with respect thereto, written or
oral. Once this Agreement has been executed, any amendments hereto must
be made in writing and signed by all parties.
23. Survival.
The provisions of section 9(f) Product Warranty, section 10
Confidential Information, and section 11 Dispute Resolution and any
other provision which by its terms survives the termination herein,
shall survive the termination of this Agreement.
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
24. Severability.
In the event that any portion of this Agreement is held to be
unenforceable, the unenforceable portion shall be construed in
accordance with applicable law as nearly as possible to reflect the
original intentions of the parties and the remainder of the provisions
shall remain in full force and effect.
25. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
26. Headings.
The headings contained in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
IN WITNESS WHEREOF, the parties hereto each acting with proper authority have
executed this Agreement.
StarBand LATIN AMERICA HOLLAND (B.V.)
By:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
Date:
-------------------------------------------
GILAT TO HOME LATIN AMERICA (HOLLAND) N.V.
By:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
Date:
-------------------------------------------
GILAT TO HOME LATIN AMERICA, INC.
By:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
Date:
-------------------------------------------
Gilat Satellite Networks Ltd.
By:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
Date:
-------------------------------------------
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT A
This Attachment A contains specific information regarding the Gilat Products &
Services to be provided to StarBand by Gilat.
Pursuant to the terms of this Agreement, StarBand shall purchase from Gilat (i)
the Skyblaster 360 satellite communications Equipment and Software described
below for use by Consumers, SOHO, and SME subscribers, and (ii) the DialAway IP
satellite communications Equipment and Software for use by consumers, SOHO, SME
and public call offices for voice and Internet applications. Gilat will provide
the indicated services for such Equipment and Software.
As regards pricing in this Attachment A, a "site" refers, as appropriate, to a
single operating unit, e.g., antenna, IDU, ODU, etc.
SKYBLASTER PRODUCT 360
1. SkyBlaster Equipment:
For Equipment delivered from Q4 2001 and beyond:
$[*] per site (KU-Band).
$[*] per site (C-Band).
Includes:
- 0.75 Meter antenna (.96M - add $[*]; 1.2M - add $[*]; 1.8M -
add $[*]).
- Standard Antenna Mount*
- 0.5-1.0 Watt Outdoor Unit with LNB (for C-Band 2 ▇▇▇▇▇)
- SkyBlaster USB Box IDU
*"Standard" mounts means basic penetrating roof/wall mount; additional
mount characteristics require additional payment.
At the earlier of (i) [*] Skyblaster 360 units sold in 2002, or (ii)
December 30, 2002, Gilat and StarBand agree to negotiate in good faith
lower prices for future deliveries.
2. SkyBlaster Baseband Hub Equipment: $[*] subscribers in a single
location (under the MSN assumptions*).
3. Internet Farm (for 10,000 users under the MSN assumptions*):
For server farm delivered in 2001: $[*]
For server farm delivered in 2002: $[*]
For server farm delivered in 2003 : $[*]
Includes:
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ATT. A-1
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
- QoS
- Outbound Security
- Flash
- Switch
* Prices in (2) and (3) above are based on the following MSN traffic
assumptions: (i) at Peak Hours, [*] of all subscribers are on-line;
(ii) at Peak Hours, on-line subscribers use the outbound channel [*] of
the time on average; and (iii) at Peak Hours, on-line subscribers use
the inbound channels [*] of the time on average.
4. Product Software License and Maintenance: $[*]/month/site.
Includes:
- SkyBlaster Windows Driver
- IPSec
- IB QoS (does not support networking)
- Flash
- IPA
- All software updates (not including upgrades)
5. Optional Recurring Services:
Includes:
- Hub operations: $[*]/month/site
- Third level help desk: $[*]/month/site
- Internet connectivity: $[*]/month/site for a U.S.-based hub;
$[*]/month/site for a non-U.S. based hub
StarBand shall have no obligation to purchase any of these recurring
services. StarBand may cancel one or more of these recurring services,
at its discretion, upon ninety (90) days' notice and at the expiration
of such notice period, the obligation of Gilat to provide such services
shall cease. Gilat will provide adequate levels of service during such
ninety (90) day notice period.
6. Multicast Services System (MSS): $[*]/MSS hub site plus
$[*]/month/subscriber plus a revenue sharing of [*] on MSS value added
revenues above $[*]/month/subscriber and [*] on revenues above
$[*]/month/subscriber. The MSS shall include software licenses and
servers.
DIALAWAY IP PRODUCT
1. DialAway IP Remote Equipment: $[*]/site for KU-BAND; $[*]/site for
C-BAND.
Includes:
- .75 Meter Antenna (.96M - add $[*]; 1.2M - add $[*]; 1.8M -
add $[*]).
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treatment has been requested with respect to the omitted portions.
- Standard Mount*
- 1 Watt Outdoor Unit with LNB
- Indoor Unit, w/ Access to One (1) USB port
- Software license
*"Standard" mounts means basic penetrating roof/wall mount; additional
mount characteristics require additional payment.
2. Hub Equipment: $[*]/VSAT hub chain.
Includes: 1 hub basic configuration
3. Internet Farm: $[*] per hub chain.
Includes:
- HPA
- Switch
4. Product Remote Software License and Maintenance: $[*]/month/site.
Includes:
- IPA Client
- SSA Firmware
5. Optional Recurring Services:
Includes:
- Hub operations: $[*]/month/site
- Third level help desk: $[*]/month/site
- Internet connectivity: $[*]/month/site for a U.S.-based hub;
$[*]/month/site for a non-U.S. based hub
StarBand shall have no obligation to purchase any of these recurring
services. StarBand may cancel one or more of these recurring services,
at its discretion, upon ninety (90) days' notice and at the expiration
of such notice period, the obligation of Gilat to provide such services
shall cease. Gilat will provide adequate levels of service during such
ninety (90) day notice period.
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separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT B
Description of Transition Services
1. In consideration for the Transition Services detailed below, performed
by Gilat for StarBand, StarBand shall pay to Gilat the following fees
(not including payments covering costs and expenses for employees
loaned to StarBand by Gilat or any other payments that StarBand
requests that Gilat process through its accounts payable, both of which
StarBand will reimburse to Gilat):
A. Information Technology (IT) StarBand shall reimburse the
actual cost incurred by Gilat for IT services provided by
Gilat to StarBand.
B. Research and Development (R&D) For the right to receive on an
ongoing basis the most advanced technology and software and
any associated updates from Gilat at no additional cost,
Starband will pay to Gilat, in addition to the prices agreed
to in attachment A above, an amount of $[*] per VSAT, for up
to 10,000 VSATs sold by StarBand per calendar quarter. The
parties agree that there shall be no royalty payments by
StarBand to Gilat.
C. Real Estate. Star Band shall reimburse the actual costs
incurred by Gilat for the pro rata share of office space rent
paid on the premises of the facilities occupied by StarBand in
SUNRISE, FLORIDA and such locations in the Territory as are
necessary for the operation of the Business.
D. Administrative Services. Gilat shall provide StarBand with
such administrative services (including, without limitation,
financial, legal, accounting, tax preparation, human resources
and the like) as is reasonably required by StarBand for which
StarBand will reimburse Gilat for Gilat's actual cost incurred
by Gilat for providing such services.
Except for (i) the R&D provisions mentioned above, which shall survive
a period of two (2) years from the date of the signing of this
Agreement and (ii) the Real Estate provision which shall be subject to
the same termination notice provisions and other terms and conditions
for early termination set forth in Gilat's leases for the respective
properties, StarBand may, in its discretion and upon ninety (90) days'
written notice, cancel one or more of the above Transition Services
effective at the close of the first calendar quarter following the
notice, at which time StarBand's obligation to pay Gilat the above
quarterly fees will cease.
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT C
Non-Compete Terms
During the term of this Agreement (including all renewals thereof), Gilat
hereby agrees that it shall not, and shall not permit any of its affiliates
(other than StarBand) to, (a) directly or indirectly, offer in South America
(excluding Chile), Central America, Mexico and the Caribbean (the
"Territory"), except to Large Businesses (as defined below), any products or
services competitive with the Gilat Products & Services that are the subject
of this Agreement, including, without limitation, selling, offering for sale
or distributing free of charge, customer premises equipment ("CPE") or any
other products, services, equipment or other items related to the provision
by StarBand of such goods and services in the Territory, or (b) enter into or
permit to exist any transaction with StarBand unless such transaction is
negotiated and consummated on an arm's length basis and upon terms and
conditions no less favorable than those which StarBand could reasonably
expect to be offered by a third party in a substantially similar transaction;
provided, however, that the limitations set forth in clause (a) of this
paragraph shall not: (i) in any way limit the activities of StarBand
Communications Inc. in Mexico; or (ii) limit or prevent Gilat from conducting
business in Chile with COMUNICACION Y TELEFONIA RURAL S.A., SERVICIOS
RURALES DE TELECOMUNICACIONES S.A., CTR HOLDINGS LTD., and RURAL
TELECOMMUNICATIONS CHILE S.A.
For the purpose herein, (a) "Existing VSAT Business" means the sale, marketing,
service support of VSAT equipment and VSAT-based network services and the
installation of such equipment; and (b) a "Large Business" means any
corporation, partnership, limited liability company, joint venture, association,
joint-stock company, trust, trustee, unincorporated organization, authority or
other body that (i) has at least 100 VSAT sites and (ii) is centrally billed,
but that is not (A) an Internet Service Provider or (B) a provider of access to
the service (two-way broadband connectivity via satellite) at a residence or
"small office, home office" through an arrangement whereby it would be
reasonably likely that the provider of such access would be paid for such
access, if it was not obtaining another commercial benefit therefrom.
In addition to the foregoing, Gilat further represents and warrants that it will
sell Gilat Products & Services to other parties only pursuant to written terms
and conditions that are expressly limited in such a manner that will not impair
or conflict with StarBand's rights hereunder. Gilat further agrees to use
reasonable efforts to stop and/or discourage activities of other parties that
might attempt to sell Gilat Products & Services in the business segments
described above that are exclusively StarBand's, and to cooperate with StarBand
in this regard.
The preceding paragraphs shall apply to all two-way satellite products now in
existence or that are developed during the term of this agreement (including all
renewals thereof) by Gilat, or any of its affiliates, which shall be made
available to StarBand on mutually agreeable terms and conditions.
During the term of this Agreement (including all renewals thereof), StarBand
agrees that it shall not, in the Territory, offer to Large Businesses products
and services substantially similar to the products and services that compete
with the Existing VSAT Business, it being understood that
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Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
nothing contained herein shall prevent StarBand from providing any services
whatsoever to any Person that is not a Large Business or to provide services to
a Large Business which at the time of provision of any equipment or services by
StarBand was not a Large Business and became a Large Business.
Gilat and StarBand each acknowledge that the covenants set forth above
pertaining to them contain reasonable limitations as to time, geographical area
and scope of activity to be restrained, and do not impose a greater restraint
than is necessary to protect and preserve for the benefit of the Parties the
goodwill of StarBand and Gilat and to protect the legitimate business interests
of the Parties. If, however, the covenants set forth above are determined by any
court of competent jurisdiction to be unenforceable by reason of their duration
or the scope of the geographical area covered or in any other respect, they will
be interpreted to extend only over the longest period of time for which they may
be enforceable and/or over the largest geographical area as to which they may be
enforceable and/or to the maximum extent in all other aspects as to which they
may be enforceable, all as determined by such court in such action.
These Non-Compete Terms shall terminate upon the termination of the Agreement by
either party thereto in accordance with the terms thereof.
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30
Note: Information in this document marked with "[*]" has been omitted and filed
separately with the U.S. Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT D
ESCROW AGREEMENT
Gilat and StarBand shall enter into an escrow agreement, as contemplated by
Section 15 of this Agreement, in form and substance mutually agreeable to them.
[Remainder of Page Intentionally Left Blank]
CONFIDENTIAL