From: exactEarth Ltd
Posted: Tuesday, January 21, 2020
exactEarth Ltd. exactEarth Ltd. ("the Company") (TSX:XCT), a leading provider of Satellite-AIS ("SAIS") data services, announces that it has reached agreement on updated terms to the original Satellite-AIS Business Agreement ("SABA") with L3Harris Technologies, Inc. (NYSE:LHX) entered into in 2015 (such amended and restated agreement, the "A&R SABA").
In June 2015, exactEarth and L3Harris (then Harris Corporation) entered into the SABA to provide a new level of AIS data service that delivers real-time global coverage for maritime vessel tracking through the implementation of 58 advanced maritime payloads hosted on the Iridium® NEXT constellation. This industry leading real-time global SAIS service capability, branded as exactView RT powered by L3Harris, leverages the persistent global coverage and real-time connectivity of the Iridium NEXT constellation, and began full operational service in February of 2019.
"This amended agreement provides exactEarth with a reduced and simplified cost structure for our Satellite-AIS data services going forward," said Peter Mabson CEO of exactEarth. "The amended agreement also opens up additional growth opportunities for both parties and further strengthens our alliance with L3Harris in delivering advanced high-performance satellite maritime service capabilities to customers around the world."
Key Terms of A&R SABA
Table 1 below provides a summary of the major changes from the SABA to the A&R SABA.
Fixed Fees and Revenue Shares
The parties agree that full deployment of the system has been achieved and that initial operational capacity ("IOC") has occurred.
The fixed fee of USD $750,000 per quarter (USD $3,000,000 per year) under the SABA is replaced by a fixed fee of USD $358,333.33 per month (USD $4,300,000 per year) under the A&R SABA.
Under the SABA, exactEarth paid L3Harris a quarterly revenue share amount of 40% of SAIS data revenues and L3Harris paid exactEarth an 18% share of L3Harris SAIS data revenues. Under the A&R SABA, exactEarth will pay a 30% share of SAIS data revenues for the portion of exactEarth annual SAIS data revenue which is in excess of USD $16,000,000 and exactEarth will receive no share of L3Harris SAIS data revenues. Under the A&R SABA no revenue share is owed by either party to the other with respect to AIS Analytics sales. For reference purposes, in Q3 Fiscal 2019, the amount of the exactEarth revenue share to L3Harris was USD $885,090 and the amount of the L3Harris revenue share to exactEarth was USD $144,618.
Under the SABA both parties were subject to achieving defined minimum revenue levels for SAIS product revenues. Under the A&R SABA this requirement has been removed.
Exclusive Market Territory
Under the prior SABA agreement, exclusive market territories were defined with respect to AIS data services and for AIS Analytics. Under the A&R SABA the exclusive market territories for AIS data services remain the same but the territory restrictions are removed for AIS Analytics so that neither Party is restricted by territorial limitations in the sale of AIS Analytics products.
Use of Excess Satellite Payload Capacity
This refers to the use of Satellite Payload capacity, which is not utilized to provide the SAIS capability, in order to implement other services. The old SABA called for the parties to negotiate terms with respect to any such new service which would utilize Excess Satellite Payload Capacity and L3Harris had reserved 10% of Excess Satellite Payload Capacity for its use. Under the A&R SABA, L3Harris has the right to utilize all Excess Satellite Payload Capacity for its own uses without any payments to exactEarth providing that such use does not impact the SAIS service level performance. exactEarth also has the right to bring forward new service concepts and negotiate terms with L3Harris providing that there is Excess Satellite Payload Capacity available at that time.
Background on the exactEarth & L3Harris Alliance
Originally, on June 8, 2015, exactEarth entered into the original SABA which allowed it to apply its expertise and technology in AIS signal detections from space on-board the Iridium NEXT constellation. The payloads on-board Iridium NEXT utilize L3Harris' powerful AppStar applications platform and employ an in-orbit version of exactEarth's patented AIS detection algorithms, creating an unrivaled AIS detection capability for global maritime tracking.
exactEarth's Second-Generation Constellation, exactView RT, collects information across the entire maritime frequency band and provides real-time delivery of the collected maritime information on a global scale. Among other things, under the A&R SABA, L3Harris continues to have the exclusive right to commercialize SAIS data produced by exactView RT to the U.S. Government market and exactEarth has this exclusive right for all other markets.
About exactEarth Ltd.
exactEarth is a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions. Since its formation in 2009, exactEarth has pioneered a powerful new method of maritime surveillance called Satellite AIS and has delivered to its clients a view of maritime behaviours across all regions of the world's oceans unrestricted by terrestrial limitations. exactEarth's second-generation constellation, exactView RT, securely relays satellite-detected AIS vessel signals from any location on the earth's surface to the ground in seconds – thus enabling global real-time vessel tracking. This unique capability consists of 58 advanced satellite payloads designed and built by L3Harris Technologies, Inc. under agreement with exactEarth and that are hosted onboard the Iridium NEXT constellation of satellites. www.exactearth.com
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