<PAGE>
EXHIBIT 10.15
[HUGHES NETWORK SYSTEMS LOGO]
AMENDMENT #2 TO THE
TERMS AND CONDITIONS
FOR
38GHZ ODU
BETWEEN
HUGHES NETWORK SYSTEMS
A HUGHES ELECTRONICS CORPORATION COMPANY
11717 EXPLORATION LANE
GERMANTOWN, MARYLAND 20876
AND
ENDGATE CORPORATION
321 SOQUEL WAY
SUNNYVALE, CALIFORNIA 94086
DATE: JANUARY 14, 2000
CONTRACT NO.: JBG-020798-1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
NOTICE OF PROPRIETARY INFORMATION
All information contained in or disclosed by this
document is confidential and proprietary to Hughes
Network Systems. By accepting this material the
recipient agrees that this material and the information
contained therein will be held in confidence and will
not be reproduced, disclosed, or used in whole or in
part except for purposes of this document.
<PAGE>
AMENDMENT #2 TO THE
TERMS AND CONDITIONS
FOR 38 GHZ ODU BETWEEN
HUGHES NETWORK SYSTEMS AND ENDGATE CORPORATION
(CONTRACT NO. JBG-020798-1)
THIS AMENDMENT #2 ("Amendment #2"), effective as of January 14, 2000,
to the Terms and Conditions for 38 GHZ ODU Between Hughes Network Systems and
Endgate Corporation (Contract No. JBG-020798-1) (the "Terms and Conditions"),
dated March 13, 1998, between Hughes Network Systems, a Hughes Electronics
Corporation company, having its principal place of business at 11717 Exploration
Lane, Germantown, Maryland 20876 (hereinafter "Hughes" or "HNS") and Endgate
Corporation, having its principal place of business at 321 Soquel Way,
Sunnyvale, CA 94086 (hereinafter "Endgate"), as amended by Amendment #1 to the
Terms and Conditions, dated as of October 5, 1998, to provide for 24 GHZ ODUs
(the Terms and Conditions, as amended by Amendment #1, hereinafter are referred
to as the "Agreement"), is entered into by and between Hughes and Endgate.
WITNESSETH:
WHEREAS, on March 13, 1998, Hughes and Endgate entered into the Terms
and Conditions under which Endgate agreed to develop and manufacture a 38-GHZ
Radio Integrated Outdoor Unit for Subscriber and Hub Stations (the "38-GHZ ODU")
for the prices and with the specifications incorporated into that contract and
pursuant to a delivery schedule specified in the contract; and
WHEREAS, on October 5, 1998, Hughes and Endgate entered into Amendment
#1 to the Terms and Conditions, pursuant to which Endgate agreed to develop and
manufacture a 24-GHZ Radio Integrated Outdoor Unit for Subscriber and Hub
Stations (the "24-GHZ ODU") for the prices and with the specifications set forth
in the Amendment #1 and pursuant to a delivery schedule specified therein; and
WHEREAS, Hughes represents that it has relied on the Agreement, as
amended, in entering into separate contracts with two of its customers, which
contracts utilize the units to be developed and produced by Endgate hereunder;
and
WHEREAS, the parties are desirous of entering into this Amendment #2,
so as to assure the most expeditious possible satisfaction of the needs of HNS'
customers.
NOW THEREFORE in consideration of the mutual covenants herein
expressed, and for the reasons set forth above, the Parties hereto agree as
follows:
1. ARTICLE - SCOPE OF WORK hereby is amended to add the following new Paragraph
after the existing Paragraphs of this Article:
Contractor shall complete the Development Phase as defined in the
Agreement and shall deliver the remaining units of Work as detailed in the
Memorandum Of Agreement dated July 1, 1999, annexed hereto as Exhibit A and made
a Part hereof. The units of Work shall comply with the Gamma level
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Specifications previously agreed to between the parties, as attached
hereto as Attachment 3, and set forth as follows:
1024668 Revision A 38 GHz RADIO INTEGRATED OUTDOOR UNITS FOR
SUBSCRIBER AND HUB STATIONS
1025231 Revision A HUB ANTENNA, POINT TO MULTIPOINT
1026128 Revision A DEMS ODU, Technical Specification
The Development Phase shall be deemed to be complete upon acceptance of the Work
specified above in accordance with the Article of this Contract entitled
ACCEPTANCE. To the extent this new Paragraph is inconsistent with the provisions
of the preceding Paragraphs of this Article, this new Paragraph shall control.
2. ARTICLE - PRICE AND PAYMENT hereby is amended to add new Paragraph D as
follows:
D. Notwithstanding any provision of Paragraph A through C of this Article
to the contrary, for the Development Phase, the price charged by Contractor
shall be in accordance with the Memorandum Of Agreement dated July 1, 1999
(Exhibit A hereto). To the extent this new Paragraph D is inconsistent with the
provisions of Paragraphs A through C of this Article, this paragraph D shall
control.
3. ARTICLE - PRODUCTION PHASE AND PURCHASE ORDERS hereby is amended (i) to
delete Paragraphs C and D, and to restate them as follows:
C. Endgate shall manufacture the products specified in Attachment 2 in
accordance with the applicable Specifications and at prices not to exceed those
shown in Attachment 2, which is annexed hereto and made a part hereof. The
prices shown in Attachment 2 include HNS supplied items which HNS shall procure
and/or manufacture in accordance with the applicable Specifications and sell to
Endgate. The terms of any such sales to Endgate by HNS are defined below in the
Article entitled HNS Supplied Items.
D. Subject to Paragraph E below, Hughes shall have the right to procure
all, some or none of the Contractor Supplied Products at Hughes' sole
discretion.
(ii) to add the following new Paragraphs E, F, G, H and I:
E. HNS shall purchase, on a non-exclusive basis, 38GHZ ODU's and 38GHz and
24GHZ MmW Decks from Endgate as required to satisfy HNS requirements
during calendar year 2000. Endgate shall acquire the necessary
materials, personnel, equipment and facilities to be ready to
manufacture said ODU's and MmW Decks, as described in Attachment 2, in
accordance with the agreed upon leadtime. HNS agrees to purchase the
following:
[*]
from Endgate during calendar year 2000 as necessary to satisfy firm
customer orders. Endgate shall confirm receipt of Purchase Orders
received from Hughes within five (5) business days of
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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receipt by signing a copy of any such Hughes Purchase Order and
returning signed copy by fax to Hughes.
F. Endgate shall deliver the items specified in Paragraph E above as
follows:
MmW Decks and ODU's shall be delivered in accordance with the ramp
schedule per Exhibit B attached hereto. Exhibit B is Endgate's
committed schedule for delivery and is subject to availability of HNS
Material. It is understood by the parties that the target date to
complete delivery of the quantity of MmW Decks and ODU's as shown in
Exhibit B shall be November 30, 2000 for the MmW Decks and September
30, 2000 for ODU's. HNS shall have the right to cancel any open balance
due under valid purchase orders, without liability to HNS, in the event
that Endgate falls behind agreed to delivery schedules as defined in
Exhibit B, or as agreed to in any Production Purchase Orders issued,
during any calendar month by [*] or more of the quantity due to have
shipped.
G. Pursuant to a Technology Transfer Agreement substantially in the form set
forth as Annex T to this Amendment #2, for all modules of the ODU except
for the Tx Mix Module, Rx Module, and the Antennas, Endgate shall provide
to Hughes, immediately upon their availability or, as of the effective date
of this Amendment #2, has already provided, all pertinent and required
documentation, including, but not limited to, design review materials,
theory of operations, prototype test data, MTBF predictions, reliability
analysis, junction temperature analyses, parts stress analyses, software,
artwork, test procedures, test software, know-how, firmware,
specifications, parts lists, drawings, assembly and other production
drawings, tooling, production test fixture equipment lists, production test
fixture schematics and/or wiring list, lists of special jigs or fixtures
used for test, etc. (the "Pertinent Materials") such that Hughes, at its
sole option, is able to design, modify, manufacture, and/or have
manufactured, test, and evaluate the "Endgate Modules" (Endgate Modules
shall mean all modules of the Endgate Gamma ODU design for both the 24GHz
ODU and the 38GHz ODU with the exception of the Tx Mix, Rx and Antennas).
Endgate hereby grants to Hughes, a royalty-free, non-exclusive,
irrevocable, worldwide license in and to any Endgate and any third-party
intellectual property rights (but only to the extent that Endgate is
permitted to grant such license to third party rights) in the Pertinent
Materials to use the same to design, modify, manufacture, and/or have
manufactured, test and evaluate the HNS Materials.
H. Notwithstanding Paragraph F above, with respect to the Tx Mix Module, Rx
Module and Antennas, solely upon the occurrence of a "Trigger Event" (as
defined below), Endgate hereby grants HNS an irrevocable, nonexclusive,
non-sublicensable, non-transferable, royalty-free, worldwide license to the
Pertinent Materials for the Tx Mix Module, Rx Module and Antennas which
shall allow HNS to make or have others make, solely in the event of a
Trigger Event the Tx Mix Module, Rx Module and/or Antennas deliverable
under this Contract, whether as stand alone or integrated into Products,
for use by HNS or for sale or lease or resale by HNS. For purposes of this
Section, a "Trigger Event" means
(i) (A) all or a substantial portion of the Endgate's assets are
transferred to an assignee for the benefit of creditors, to a receiver or
to a trustee in bankruptcy, (B) a proceeding is commenced by or against
Endgate for relief under bankruptcy or similar laws and such proceeding is
not dismissed or vacated within sixty (60) days, or (C) Endgate is adjudged
bankrupt.
(ii) Endgate fails to deliver Products to HNS for sixty (60) days after the
agreed-upon delivery date specified in the applicable Purchase Order and
Endgate has failed to deliver such Product within ten
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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<PAGE>
business (10) days of HNS' written notice demanding delivery; provided,
however, that to the extent that the Trigger Event described in this clause
H (ii) pertains only to either one of the ODU or Antenna (but not both)
(the "Trigger Product") then the license granted pursuant to such Trigger
Event shall be limited to the Pertinent Materials specific to the Trigger
Product but shall not include Pertinent Materials that relate only to the
other Product.
I. Endgate hereby represents and warrants that it holds or timely will obtain
all necessary rights and consents to make such Pertinent Materials
available to Hughes for the purposes set forth herein to assure that Hughes
is not exposed to liability to third-parties who may claim intellectual
property rights in and to said Pertinent Materials. Endgate hereby agrees
to defend HNS against any actions suits or proceedings asserted by any such
third party in connection with intellectual property rights asserted by
such third party in and to the Pertinent Materials, and to indemnify HNS
and hold HNS harmless for any losses, costs or damages awarded against HNS
in such actions, suits or proceedings, provided that Endgate is given
prompt written notice of any such action, suit or proceeding and sole
control over the defense or settlement thereof.
and (iii) to redesignate original Paragraph F of this Article of the Agreement
as new Paragraph J.
To the extent that amended Paragraph C and D or new Paragraph E, F, G, H, and I
are inconsistent with the provisions of this Article before amended, the new
Paragraph C, D, E, F, G, H, and I, shall control.
4. A new Article to the Agreement hereby is added as follows:
ARTICLE - HNS SUPPLIED ITEMS
A HNS supplied items ("HNS Material") shall be defined as the
items listed in Attachment 1. HNS shall deliver HNS Materials pursuant
to Purchase Orders that conform to the terms of this Contract.
B. HNS shall sell HNS Material to Endgate at prices set by HNS.
Any prices for HNS Material listed in Attachment 2 are estimates only
and not to be considered firm prices, provided, however, that Endgate's
total unit prices set forth in Attachment 2 are dependent on the prices
for HNS Materials, solely to the extent that the price for HNS
Materials may increase or decrease. Endgate's total unit price shall
only be subject to change should HNS alter the prices of the HNS
Materials and only to the extent of the change (increase or decrease).
Furthermore, should HNS sell HNS Materials to Endgate at prices less
than shown in Attachment 2, Endgate shall be required to reduce total
unit prices charged HNS to the extent HNS reduced the price.
C. Endgate agrees that any HNS Material sold to Endgate by Hughes
shall not be subject to any administrative mark-up, including but not
limited to, handling charges, overhead application, profit, general and
administrative (G&A) burden, taxes, duties, etc. when resold to HNS,
whether or not said HNS Material has been integrated with other
equipment.
D. HNS shall procure and/or manufacture HNS Material in accordance
with Endgate designs and in accordance with Endgate-supplied
specifications, provided however, that HNS may at, its sole option,
elect to modify the designs to improve yields and/or costs provided
that the required functionality is maintained. Any designs modified by
HNS will be identified by HNS part numbers.
E. HNS Material sold by Hughes to Endgate shall be supplied FOB, Sunnyvale
California.
F. HNS shall retain a security interest in any HNS Material sold to
Endgate until payment by Endgate for HNS Material is received by HNS.
4
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G. Endgate shall not be considered in breach of this Contract to the
extent that any non-compliance is caused by or attributable to any HNS
Materials that do not conform to HNS specifications or that are
delivered after the agreed upon delivery date(s). Endgate has no
liability under this Amendment #2 for any defects in materials or
workmanship in any HNS Materials furnished to Endgate hereunder.
Notwithstanding Paragraph F of the Article Production Phase And
Purchase Orders above, HNS hereby agrees to defend Endgate against any
actions suits or proceedings asserted by any third party in connection
with any such defects or any infringement of third party intellectual
property rights to the extent that the defect or infringement arise
from any modification to the design of any of the HNS Materials, and to
indemnify Endgate for any losses, costs or damages awarded against
Endgate in such actions, suits or proceedings, provided that HNS is
given prompt written notice of any such action, suit or proceeding and
sole control over the defense or settlement thereof.
5. A new Article to the Agreement hereby is added as follows:
ARTICLE - WAIVER OF CERTAIN RIGHTS BY ENDGATE
Endgate hereby waives any claim, right, or cause of action, and hereby
agrees not to assert any claim, right or cause of action against Hughes, or any
third party contractor or manufacturer of Hughes, based on any allegation that
the manufacture, modification, use, sale, or importation of any item
manufactured or delivered or scheduled to be manufactured or delivered by HNS or
by HNS subcontractors under this Agreement as amended infringes any Endgate
intellectual property rights. The provisions of this Article shall survive the
termination of this Agreement as amended.
6. A new Article to the Agreement hereby is added as follows:
ARTICLE - WAIVER BY HUGHES AND WAIVER BY ENDGATE
Upon completion by Endgate of the Development Phase, as described in
Section 1 of this Amendment #2, and of its obligations with respect to delivery
of the Pertinent Materials as contemplated by this Amendment #2, HNS will
provide Endgate a notice of completion and a general release of all claims
arising in connection with Endgate's performance of the Development Phase of
this Agreement. Except as provided by the preceding sentence, the parties agree
that nothing in this Amendment #2 is a waiver of or limitation upon any right or
remedy afforded to HNS by the Agreement or at law, and that any such right or
remedy remains in full force and effect. The parties further agree that, by this
Amendment #2, HNS does not waive any default by Endgate that may have occurred
under the Agreement up to and including this effective date of this Amendment
#2.
Furthermore, upon completion by Endgate of the Development Phase, as
described in Section 1 of this Amendment #2, and of its obligations with respect
to delivery of the Pertinent Materials as contemplated by this Amendment #2.
Endgate hereby releases and forever discharges HNS, its affiliates, successors,
representatives, assigns, agents, employees, officers, directors, contractors,
and all other persons and entities whatsoever from all manner of actions and
causes of action, debts, dues, liabilities, controversies, claims, and demands
of every kind and nature, known or unknown, vested or contingent, including
without limitation all claims for personal injury, property damage, or other
damages, injuries or losses, arising out of or relating in any way to the
5
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Contract up to and including the effective date of this Amendment #2.
7. ARTICLE - RIGHTS TO MANUFACTURE hereby is amended as follows:
HNS, at its sole option, may request and Contractor shall provide all pertinent
and required documentation, including soft, rare, artwork, test procedures,
specifications, parts lists, drawings, etc., as escrowed pursuant to the Article
of this Contract entitled ESCROW OF DESIGN RIGHTS AND DOCUMENTATION, necessary
for HNS to manufacture or have manufactured, test, support, use, sell and resell
the Product(s) should any of the circumstances listed in the Article of this
Contract TERMINATION FOR DEFAULT or in Paragraph H of the Article of this
Contract entitled PRODUCTION PHASE AND PURCHASE ORDERS, as amended, occur or in
the event this Contract is terminated under the provisions of the Article of
this Contract TERMINATION FOR DEFAULT.
Further, the right to manufacture shall be granted as a non-exclusive,
worldwide, unrestricted, non-transferable, royalty free right to HNS. Contractor
shall also provide reasonable consultation of its key personnel at no cost to
HNS other than the reasonable and actual travel and living costs should HNS
require any travel.
8. ARTICLE - TERMINATION FOR CONVENIENCE -hereby is amended to delete
Paragraph A, Section 3 and restate as follows:
3. For the Production Phase and any Production Purchase Orders, HNS
liability, which shall not include any non-recurring engineering costs,
shall be limited in accordance with HNS' notice of Termination prior to the
scheduled delivery date as follows:
For Antennas:
NOTICE LIABILITY
[*] [*]
For MmW Decks & ODU's:
NOTICE LIABILITY
[*] [*]
9. Each party, hereby represents and warrants that it has taken all corporate
action and has all necessary corporate authority to enter into this Amendment #2
and to perform as set forth hereunder.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment #2 to the
Agreement as of the effective date first set forth above.
HUGHES NETWORK SYSTEMS
ATTEST: BY: /S/ SURESH ARORA
------------------ ---------------------------------
NAME: SURESH ARORA
--------------------------------
TITLE: VICE PRESIDENT
-------------------------------
ENDGATE CORPORATION
ATTEST: BY: /S/ STEVE LAYTON
------------------- ---------------------------------
NAME: STEVEN LAYTON
--------------------------------
TITLE: DIRECTOR OF SALES
-------------------------------
11/15/00
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ATTACHMENT - 1
DESCRIPTION 38GHZ PART NUMBER 24GHZ PART NUMBER
MMWAVE DECK
Subscriber 1028674-0001
Hub 1028674-0002
Hub - Low 1028674-0003
Hub - High 1028674-0004
Subscriber - Low 1028674-0005
Subscriber - High 1028674-0006
COMPLETE ODU
Subscriber - Low 1028720-0001
Subscriber - High 1028720-0002
Hub - Low 1028720-0003
Hub - High 1028720-0004
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
These documents are referenced in the assembly drawings identified above.
mmWave Deck 1028664 1028662
ODU TBD-1 -
Power Amplifier 1028296-0002 1028296-0001
Synthesizer 1028295-0001 1028292-0002
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ATTACHMENT - 2
MmWave Decks; 24GHz & 38GHz Combined
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
[*] Endgate Endgate [*] O/H
Material Labor on Labor Total Unit Cost
----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------
</TABLE>
[*]
2)Endgate material and/or labor does not include any HNS content
Upside Potential [*] Decks
<TABLE>
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
[*] Endgate Endgate [*]O/H
Material Labor on Labor Total Ext. Cost
----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------
</TABLE>
[*]
2)Endgate material and/or labor does not include any HNS content 38GHz ODU's
38GHz ODU's
<TABLE>
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
[*] [*] MmWave Endgate [*]O/H
Deck Labor on Labor Total Ext. Cost
----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*] [*]
----------------------------------------------------------------------------------------------------------
</TABLE>
[*]
2)Endgate material and/or labor does not include any HNS content
ANTENNAS U/Price
Subscriber Antenna [*]
24GHz and/or 38GHz
U/Price
Hub Antenna [*]
24GHz and/or 38GHz
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
ATTACHMENT - 3 SPECIFICATIONS
SUBSCRIBER ANTENNA 1028836 REV. A
HUB ANTENNA 1025231 REV. B
38GHZ ODU 1029000 REV. A
38GHZ MMW DECK 1028664 REV. A
24GHZ MMW DECK 1028662 REV. B
<PAGE>
EXHIBIT - A
Memorandum of Agreement
This Memorandum of Agreement is intended to establish a new and mutually
agreeable payment schedule for HNS Purchase Order Numbers P241537 and 30060
against Contract Number JBG-020798-1. This Memorandum of Agreement will be in
effect until a new contract agreement superceding Contract Number JBG-020798-1
is finalized. The new contract will be established on or before 13 August 1999.
The current contract status is:
Total Purchase orders released are [*]
Total billed to date [*]
Total paid to date [*]
Unpaid as of 7/1/99 Inv, #400425 6/28/99 [*]
Open contract balance [*]
Number of Units left to ship [*]
It is agreed that the remaining purchase order balance will be divided equally
across the number of units remaining to be delivered. This results in a per unit
cost of [*] which will be invoiced at the time of shipment and paid per the
payment terms below.
Payment terms remain Net 30 days, FOB Sunnyvale CA. Acceptance is Sunnyvale, CA.
Signed and accepted.
ENDGATE CORPORATION HUGHES NETWORK SYSTEMS
/S/ EDWARD A. KEIBLE /S/ SURESH K. ARORA
--------------------------- ---------------------------
Edward A. Keible Suresh K. Arora
President July 1, 1999 Vice President 2/1/99
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
EXHIBIT - B
Delivery schedule at execution of this Amendment #2 is TBD. Final schedule shall
be defined and attached to this Agreement no later than January 14, 2000. The
preliminary understanding between the parties is that at worst case, Endgate
shall meet the Production Delivery schedule presented by Bob Hendrix during the
specification review meeting at HNS held on 12/17/99.
<PAGE>
ANNEX T
TECHNOLOGY TRANSFER AGREEMENT
THIS Technology Transfer Agreement (the "Agreement") shall be effective
on the date of last signature (the "Effective Date") to Amendment #2 to the
Terms and Conditions for 38 GHz ODU ("Amendment #2") made between Hughes Network
Systems, having its principal place of business at 11717 Exploration Lane,
Germantown, Maryland 20876 ("HNS"), and Endgate Corporation, having its
principal place of business at 321 Soquel Way, Sunnyvale, CA 94086 ("Endgate").
WITNESSETH:
WHEREAS, Amendment #2 requires that Endgate provide to HNS certain
materials, information, and documentation (collectively, the "Pertinent
Materials", defined in Amendment #2); and
WHEREAS, Endgate and HNS desires to set forth the terms and conditions
controlling the provision of the Pertinent Materials from Endgate to HNS.
NOW THEREFOR, the Parties hereto, in consideration of the mutual
covenants herein expressed, agree with each other as follows:
1. DEFINITIONS
"Intellectual Property Rights" means patents, registered design rights
and applications for any of the foregoing, copyright, unregistered design
rights, topography rights and all forms of protection of any similar nature
(including all such rights in software) which may subsist in any part of the
world for the full term of such rights including any extension to the term of
such rights.
2. TRANSFER OF PERTINENT MATERIALS
Immediately upon the availability to Endgate thereof, Endgate shall
provide to HNS a copy of the Pertinent Materials. The Pertinent Materials shall
be provided to HNS per the previously agreed to process (electronic file
transfer where possible and by another mutually agreed to process if needed).
HNS in its sole discretion may require. For the avoidance of doubt, the duty and
obligation of Endgate to provide the Pertinent Materials to HNS shall be
continuous and ongoing throughout the term of this Agreement.
3. GRANT OF LICENSE RIGHTS BY ENDGATE
Endgate hereby grants to HNS and HNS hereby accepts from Endgate a
irrevocable, non-exclusive, world-wide, paid-up license, with the right to
sub-license as further defined herein, under Endgate's Intellectual Property
Rights to manufacture, have manufactured, use, sell, lease, or otherwise
transfer, alter, and modify the Pertinent Materials as defined in Paragraph G of
the
-1-
<PAGE>
Article entitled PRODUCTION PURCHASE ORDERES AND FORECAST as amended. In the
event that Endgate has secured a license to any third party Intellectual
Property Rights that are designed into the Pertinent Materials, Endgate shall
offer to the other party any such license rights which it is legally or
contractually permitted to offer at terms no less favorable than its own license
grant.
4. ENDGATE REPRESENTATIONS AND WARRANTIES
A. Endgate represents and warrants that it has the full right and
power to enter into this Agreement and that there are no
outstanding agreements, assignments, or encumbrances to which it
is bound which may restrict, or prohibit entry into, or
performance under, this Agreement. Endgate further represents and
warrants that it has the full power and right to grant the license
set forth in Section 2.
B. Endgate represents and warrants that the Pertinent Materials
provided to HNS hereunder does not and shall not infringe the
Intellectual Property Rights of any third party.
C. Endgate represents and warrants that the Pertinent Materials
provided to HNS hereunder comprise all of the materials,
information, and documentation called for in Section 3.F. of
Amendment #2 that is in the possession or control of or available
to Endgate relating in any way to the design, modification,
manufacture, procurement, testing, performance, and evaluation of
the modules.
5. AUDIT RIGHTS
A. At the request of HNS, Endgate will permit HNS and/or technical
consultants mutually selected by HNS and Endgate, to examine
during ordinary business hours such records, files, storage media,
equipment and facilities of Endgate for the sole purpose of
determining the adequacy of the Pertinent Materials provided by
Endgate to HNS and the compliance by Endgate with the obligations
to provide such Pertinent Materials to HNS on a continuous,
ongoing basis, as set forth in Section 2 of this Agreement.
B. The fees and expenses incurred by HNS in the performance of such
examination of records under Section 5.A above shall be borne by
HNS. However, if it is determined in the course of such
examination that there is or has been noncompliance on the part
Endgate in fulfilling its obligations hereunder, including
specifically its obligation under Section 2 of this Agreement,
then the total fees and expenses of the examination shall be borne
by Endgate.
C. All information disclosed during any audit shall be considered
proprietary information between the parties. Prior to any audit
taking place, HNS, Endgate and the third party auditor shall enter
into a non-disclosure agreement for the benefit of HNS and
Endgate.
-2-
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6. TECHNICAL SUPPORT
Endgate agrees to provide to HNS, at HNS' request and at no additional
cost to HNS, technical support for the purpose of ensuring the technical
adequacy of the Pertinent Materials provided by Endgate to HNS under this
Agreement. Such support shall consist of telephonic and on-site support by
Endgate sufficient to explain to HNS technical personnel the function,
performance, design, operation, manufacture, structure and composition of the
Pertinent Materials.
7. TERM
This Agreement shall survive the termination or expiration of the Terms
and Conditions for 38 GHz ODU between Hughes Network Systems and Endgate
Corporation (Contract No. JBG-020798-l) and shall continue until termination
hereof by HNS.
8. INCONSISTENT TERMS
In the event of any inconsistency between the terms and conditions of
Amendment #2 and the terms and conditions of this Agreement, the terms and
conditions of this Agreement shall control.
-3-
