SEC Filing | Viasat, Inc.

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As filed with the Securities and Exchange Commission on October 1, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ViaSat, Inc.
(Exact name of registrant as specified in its charter)

CALIFORNIA 3663 33-0174996
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)

2290 COSMOS COURT
CARLSBAD, CALIFORNIA 92009
(619) 438-8099

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

MARK D. DANKBERG
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
VIASAT, INC.
2290 COSMOS COURT
CARLSBAD, CALIFORNIA 92009
(619) 438-8099

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies to:

THOMAS A. EDWARDS, ESQ. GREGORY D. MONAHAN, ESQ. GARY APFEL, ESQ.
LATHAM & WATKINS VICE PRESIDENT, CHIEF FINANCIAL OFFICER KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
701 "B" STREET, SUITE 2100 AND GENERAL COUNSEL 1999 AVENUE OF THE STARS, SUITE 1600
SAN DIEGO, CALIFORNIA 92101 VIASAT, INC. LOS ANGELES, CALIFORNIA 90067
(619) 236-1234 2290 COSMOS COURT (310) 788-1000
CARLSBAD, CALIFORNIA 92009
(619) 438-8099

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______________.

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ___________.

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

====================================================================================================================
Proposed
Proposed Maximum Amount of
Amount Maximum Aggregate Registration
Title of Each Class of to be Offering Offering Fee
Securities to be Registered Registered(1) Price Per Price
Share(2)
====================================================================================================================

Common Stock, $.01 par value ......... 2,530,000 shares $12.00 $30,360,000 $10,469
====================================================================================================================

(1) Includes 330,000 shares subject to Underwriters' option to cover
over-allotments.

(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457 under the Securities Act of 1933.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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ViaSat, Inc.

CROSS-REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-1

REGISTRATION STATEMENT
ITEM AND HEADING PROSPECTUS CAPTIONS
---------------- -------------------

1. Forepart of the Registration Statement and Outside Front Cover
Page of Prospectus.............................................. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus

2. Inside Front and Outside Back Cover Pages of Prospectus......... Inside Front and Outside Back Cover
Pages of Prospectus

3. Summary Information, Risk Factors and Ratio of Earnings to
Fixed Charges................................................... Prospectus Summary; Risk Factors;
Selected Financial Data

4. Use of Proceeds................................................. Prospectus Summary; Use of Proceeds

5. Determination of Offering Price................................. Outside Front Cover; Risk Factors;
Underwriting

6. Dilution........................................................ Dilution

7. Selling Security Holders........................................ Principal and Selling Shareholders

8. Plan of Distribution............................................ Outside Front Cover Page of
Prospectus; Underwriting

9. Description of Securities to be Registered...................... Description of Capital Stock

10. Interests of Named Experts and Counsel.......................... Not Applicable

11. Information with Respect to the Registrant...................... Prospectus Summary; Risk Factors;
Dividend Policy; Selected Financial
Data; Management's Discussion and
Analysis of Financial Condition and
Results of Operations; Business;
Management; Certain Transactions;
Description of Capital Stock; Shares
Eligible for Future Sale; Financial
Statements

12. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities...................................... Not Applicable

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED OCTOBER 1, 1996

PROSPECTUS

2,200,000 SHARES

ViaSat, Inc.

COMMON STOCK

Of the 2,200,000 shares of Common Stock ("Common Stock") offered
hereby, 1,650,000 shares are being sold by ViaSat, Inc. ("ViaSat" or the
"Company") and 550,000 shares are being sold by certain shareholders of the
Company (the "Selling Shareholders"). The Company will not receive any of the
proceeds from the sale of shares by the Selling Shareholders. See "Principal and
Selling Shareholders."

Prior to this offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price will be
between $10.00 and $12.00. See "Underwriting" for information relating to the
determination of the initial public offering price. The Company has applied to
have the Common Stock approved for quotation and trading on The Nasdaq National
Market under the symbol "VSAT."

------------------------

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.

SEE "RISK FACTORS" COMMENCING ON PAGE 6.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

===================================================================================================================
Underwriting
Price to Discounts and Proceeds to Proceeds to
Public Commissions(1) Company(2) Selling
Shareholders
- -------------------------------------------------------------------------------------------------------------------

Per Share.......................... $ $ $ $
===================================================================================================================
Total (3)......................... $ $ $ $
===================================================================================================================

(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting offering expenses payable by the Company, estimated to be
$650,000.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
an additional 330,000 shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised
in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $____________, $____________
and $____________, respectively.

------------------------

The shares of Common Stock are offered severally by the Underwriters
when, as and if delivered to and accepted by them, subject to their right to
withdraw, cancel or reject orders in whole or in part and subject to certain
other conditions. It is expected that delivery of the certificates representing
the shares will be made against payment on or about __________, 1996 at the
office of Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center,
New York, New York 10281.

------------------------

OPPENHEIMER & CO., INC.

NEEDHAM & COMPANY, INC.

UNTERBERG HARRIS

The date of this Prospectus is ____________, 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS
(IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET MAKING
TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE
WITH RULE 10b-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information appearing elsewhere in
this Prospectus. Except as otherwise noted, all information in this Prospectus
(i) assumes no exercise of the Underwriters' over-allotment option, (ii)
reflects the conversion of all outstanding shares of the Company's Preferred
Stock ("Preferred Stock") into Common Stock upon the closing of this offering
and (iii) has been adjusted to give effect to the 0.7335-for-one reverse stock
split of the Common Stock to be consummated prior to this offering.

THE COMPANY

ViaSat designs, produces and markets advanced digital satellite
telecommunications and wireless signal processing equipment. The Company has
achieved ten consecutive years of internally generated revenue growth and nine
consecutive years of profitability, primarily through defense-related
applications. More recently, the Company has been developing and marketing its
technology through strategic alliances for emerging commercial markets, such as
rural telephony, alternative carrier access and Internet/Intranet access by
satellite to multiple servers. ViaSat is a leading provider of Demand Assigned
Multiple Access ("DAMA") technology, which allows a large number of Very Small
Aperture Terminal ("VSAT") subscribers to economically share common satellite
transponders for high-performance voice, fax or data communications.

The Company believes that DAMA satellite technology is superior to
other existing VSAT networking technologies. The existing Time Division
Multiplex/Time Division Multiple Access ("TDM/TDMA") networking technology
features a "hub and spoke" architecture which requires all transmissions to be
routed through a central terrestrial hub. Unlike TDM/TDMA systems, DAMA provides
direct, on-demand switched networking capabilities which do not require a
terrestrial hub and allow faster and more efficient use of expensive satellite
transponder resources. In addition, the Company believes that its DAMA products,
commercially marketed under the tradename StarWire(TM), offer greater network
flexibility and permit up to 50% greater satellite capacity than competing DAMA
systems.

ViaSat's DAMA products include satellite modems, networking processors
and network control systems for managing large numbers of network subscribers.
The Company's DAMA technology consists of proprietary real-time firmware and
software designed to run on industry-standard digital signal processors. The
Company also has developed DAMA network control software that operates on
IBM-compatible personal computers running Windows NT(TM) operating systems. The
Company's DAMA technology operates on satellites in the military UHF and SHF
frequency bands, and commercial C and K(u) bands. In addition to DAMA products,
the Company offers network information security products, communications
simulation and test equipment, and spread spectrum digital radios for satellite
and terrestrial data networks.

The wireless communications industry has experienced significant
worldwide growth in both the government and commercial markets during the past
decade, primarily as a result of cost reductions and improvements in quality and
performance. As demand for wireless communications services grows, service
providers are expanding the associated infrastructure. A growing segment of the
wireless communications industry involves networked VSAT communication systems.
The Company believes DAMA products offer customers using VSAT networks a more
cost-effective opportunity than other existing VSAT networking technologies to
expand and better utilize existing satellite capacity. The Company believes it
can capitalize on this market opportunity through its leadership position with
respect to DAMA technology and related networking and software products.

BUSINESS STRATEGY

ViaSat's objective is to become a leading developer and supplier of
DAMA-based products to commercial markets and to retain a leadership position in
developing and supplying DAMA-based products to the government market. The
Company's strategy incorporates the following key elements:

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Maintain and Enhance Technology Leadership Position. The Company's
strategy is to maintain and enhance its leadership position in DAMA-based
satellite technology by continuing its participation in selected programs with
the U.S. Department of Defense and its prime contractors (collectively, the
"DOD") involving networking technology and other related real-time signal
processing and networking software. The Company is also investing in proprietary
research for commercial applications. The Company's objective is to continue to
offer high-performance, software-oriented products which provide the most
effective use of satellite power and bandwidth as well as offering the most
flexible platform for continued growth.

Leverage Technological Expertise into Commercial Markets. The Company's
strategy is to continue using its technological expertise developed in defense
applications to develop and market products to respond to the increasing demand
for DAMA-based VSAT solutions for commercial voice and data applications. The
Company is targeting commercial markets which it believes will offer high growth
potential and where ViaSat's technology will have competitive advantages, such
as rural telephony, alternative carrier access and Internet/Intranet access by
satellite to multiple servers. The Company believes its products are competitive
largely because of their technological advantages over competing products. The
Company's strategy is to capitalize on these technological advantages by
utilizing a "cost of ownership" marketing approach that emphasizes the overall
lower cost to customers over the operating life of the Company's products
because of the products' adaptability and more efficient use of limited
satellite capacity.

Develop Broad Base of Innovative Proprietary Products. The Company's
strategy is to continue to develop and market to both defense and commercial
customers a broad variety of signal processing and networking software products.
The Company has over 150 research engineers on staff and emphasizes offering
technologically-superior products. The Company generally retains certain
proprietary rights from the government-funded research and development of its
defense products and is also devoting a significant amount of its own resources
to independent product development.

Develop Strategic Alliances. The Company's strategy is to develop
strategic alliances with leading prime defense contractors and major
international telecommunications companies and equipment suppliers. The Company
targets those companies whose financial and technological resources and
established customer bases allow them to jointly introduce new technologies and
penetrate new markets sooner and at a lower cost than the Company could alone.
The Company has entered into strategic alliances with defense companies, such as
Hughes Defense Communications (formerly Magnavox) and Lockheed Martin, and
commercial telecommunications companies, such as AT&T Tridom and HCL Comnet.

Establish Global Presence. The Company's strategy is to develop its
products so that they may be marketed and used throughout the world. The Company
is a market leader in DAMA-based defense products for the United States and its
allies. The Company believes that the commercial market opportunities for the
Company's products are greater internationally. The Company believes its focus
on meeting applicable international communication standards and establishing key
international strategic alliances will enable it to effectively penetrate
foreign markets.

Address Rural Telephony Market. The Company believes there is a
substantial unmet demand for rural telephony services, especially in developing
countries. The Company's strategy is to capitalize on its networking software
expertise to develop technology for establishing regional rural telephony
network infrastructures of strategically located VSAT terminals capable of
handling multiple satellite telephone calls ("Point-of-Entry Terminals"). The
Company believes such an infrastructure would have a competitive advantage over
a single Point-of-Entry system by minimizing the ground transmission cost of
each satellite telephone call by permitting such calls to enter the Public
Switched Telephone Network (PSTN) through the Point-of-Entry Terminal closest
to the call's destination. The Company's strategy also includes seeking
partnerships with regional and local service providers to create distribution
channels for rural telephony infrastructures and to provide related retail
distribution services, including sales of Company-designed subscriber
terminals, installation and maintenance, as well as customer service, billing
and revenue collection.

THE OFFERING

Common Stock Offered by the Company.................... 1,650,000 Shares

Common Stock Offered by the Selling Shareholders....... 550,000 Shares

Common Stock to be Outstanding After the Offering...... 7,525,342 Shares(1)

Use of Proceeds........................................ For working capital and general corporate purposes.
See "Use of Proceeds."

Proposed Nasdaq National Market Symbol................. VSAT

- ------------
(1) Based on shares outstanding as of October 1, 1996. Does not include
330,000 shares of Common Stock issuable upon the full exercise of the
Underwriters' over-allotment option. Also does not include 375,509
shares of Common Stock issuable upon the exercise of outstanding
options. See "Capitalization."

The Company was incorporated in California in 1986. Its principal
executive offices are located at 2290 Cosmos Court, Carlsbad, California 92009,
and its telephone number is (619) 438-8099.

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SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEARS ENDED MARCH 31, THREE MONTHS ENDED
----------------------------------------------------- -------------------
JUNE 30, JUNE 30,
1992 1993 1994 1995 1996 1995 1996
------- ------- --------- -------- -------- ------- --------
(UNAUDITED)

STATEMENT OF INCOME DATA:
Revenues......................... $ 4,019 $5,072 $ 11,579 $22,341 $29,017 $6,768 $ 9,732
Cost of revenues................. 3,006 3,939 9,033 16,855 20,983 4,830 6,862
------- ------ -------- ------- ------- ------ -------
Gross profit................... 1,013 1,133 2,546 5,486 8,034 1,938 2,870
Operating expenses:
Selling, general and
administrative................. 503 740 1,554 2,416 3,400 918 1,040
Independent research and
development.................... -- 59 134 788 2,820 467 1,058
------- ------ -------- ------- ------- ------ -------

Income from operations........... 510 334 858 2,282 1,814 553 772
Interest income (expense)........ 7 (17) (45) (87) (231) (29) (32)
------- ------- --------- -------- -------- ------- --------
Income before income taxes....... 517 317 813 2,195 1,583 524 740
Provision (benefit) for income
taxes............................ 159 93 328 888 (50) (17) 262
------- ------ -------- ------- -------- ------- -------

Net income....................... $ 358 $ 224 $ 485 $ 1,307 $ 1,633 $ 541 $ 478
====== ===== ======= ====== ====== ===== ======
Pro forma net income
per share(1)................... $ 0.27 $ 0.08
====== =======
Shares used in per share
calculations(1)............... 6,001 6,003

MARCH 31, JUNE 30, 1996
--------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 ACTUAL AS ADJUSTED(2)
------ ----- ------ ------ ------ ------ --------------
(UNAUDITED)

BALANCE SHEET DATA:
Cash and cash equivalents........ $ 101 $ 75 $ 9 $2,731 $2,297 $1,733 $17,963
Working capital.................. 912 964 1,486 2,808 4,651 4,850 21,080
Total assets..................... 1,750 2,550 4,986 9,377 13,262 13,248 29,478
Long-term debt, less current 50 124 297 1,220 1,747 1,531 1,531
portion........................

Total shareholders' equity....... 1,226 1,465 1,956 3,413 5,217 5,712 21,942

- ---------------
(1) For an explanation of the determination of the number of shares used in
computing pro forma net income per share, see Note 1 of Notes to
Financial Statements.

(2) As adjusted to reflect the sale of 1,650,000 shares of Common Stock
offered by the Company hereby at an assumed offering price of $11.00
per share, based on the midpoint of the offering price range set forth
on the cover page of this Prospectus, and the application of the net
proceeds therefrom as described under "Use of Proceeds." If the
Company issues 1,980,000 shares of Common Stock upon the full
exercise of the Underwriters' option to cover over-allotments, Cash
and cash equivalents, Working capital, Total assets and Total
shareholders' equity would be $21,338, $24,455, $32,853 and $25,317,
respectively. See "Use of Proceeds" and "Capitalization."

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RISK FACTORS

This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"). Discussions containing such forward-looking statements may be found
throughout this Prospectus, including without limitation in the materials set
forth under "Summary," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business." Actual events or results
may differ materially from those discussed in the forward-looking statements
as a result of various factors, including without limitation the risk factors
set forth below and the matters set forth in this Prospectus generally.

DEPENDENCE ON DEFENSE MARKET

Over 95% of the Company's revenues for the fiscal year ended March 31,
1996 and the quarter ended June 30, 1996 were derived from U.S. government
defense applications. Although the Company has invested heavily in developing
commercial satellite products, there can be no assurance that the percentage of
the Company's commercial business will increase. U.S. government business is
subject to various risks including (i) unpredictable contract or project
terminations, reductions in funds available for the Company's projects due to
government policy changes, budget cuts and contract adjustments and penalties
arising from post-award contract audits, and incurred cost audits in which the
value of the contract may be reduced, (ii) risks of underestimating ultimate
costs, particularly with respect to software and hardware development, for work
performed pursuant to fixed-price contracts where the Company commits to achieve
specified deliveries for a predetermined fixed price, (iii) limited
profitability from cost-reimbursement contracts under which the amount of profit
attainable is limited to a specified negotiated amount and (iv) unpredictable
timing of cash collections of certain unbilled receivables as they may be
subject to acceptance of contract deliverables by the customer and contract
close-out procedures, including government approval of final indirect rates. In
addition, substantially all of the Company's backlog scheduled for delivery can
be terminated at the convenience of the government since orders are often made
well in advance of delivery, and the Company's contracts typically provide that
orders may be terminated with limited or no penalties.

Certain of the Company's contracts individually contribute a
significant percentage of the Company's revenues. For the fiscal year ended
March 31, 1996 and the quarter ended June 30, 1996, the Company's largest
contracts (by revenues) were contracts related to the Company's UHF DAMA
technology, which generated approximately 42.8% and 70.3% of the Company's total
revenues for such periods, respectively, including a contract with Hughes
Defense Communications (formerly Magnavox) which generated approximately 9.4%
and 29.4% of the Company's total revenues for such periods, respectively.
Scheduled delivery pursuant to firm purchase orders under this contract are to
be completed in June 1997. Hughes Defense Communications is an affiliate of
Hughest Network Systems (HNS), which is the Company's principal competitor in
the commercial DAMA market. See "Business -- Competition." The Company's five
largest contracts (by revenues) generated approximately 36.5% and 64.0% of the
Company's total revenues for the fiscal year ended March 31, 1996 and the
quarter ended June 30, 1996, respectively. The Company expects revenues to
continue to be concentrated in a relatively small number of large U.S.
government contracts. Termination of such contracts, or the Company's inability
to renew or replace such contracts when they expire, could have a material
adverse effect on the Company's business, financial condition and results of
operations.

PENETRATION OF COMMERCIAL MARKETS; NEW PRODUCT INTRODUCTIONS

The Company's ability to grow will depend substantially on its ability
to apply its expertise and technologies to existing and emerging commercial
wireless communications markets. The Company's efforts to penetrate commercial
markets has resulted, and the Company anticipates that it will continue to
result, in increased sales and marketing and research and development expenses.
If the Company's net revenues do not correspondingly increase, the Company's
business, financial condition and results of operations could be materially
adversely affected. The Company's success in penetrating commercial markets also
depends upon the success of new product introductions by the Company, which will
be dependent upon several factors, including timely completion and introduction
of new product designs, achievement of acceptable product costs, establishment
of close working relationships with major customers for the design of their new
wireless communications systems incorporating the Company's products and market
acceptance. Sales of the Company's commercial StarWire(TM) products (see
"Business--Commercial Markets, Products and Customers--Commercial Products")
have not yet achieved profitability. The Company believes that as the market
expands for the StarWire(TM) products,

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average production costs for such products should decrease and sales of such
products should become profitable. However, there can be no assurance that the
market for such products will expand or that average production costs will
decrease. If the Company is unable to design, manufacture and market profitable
new products for existing or emerging commercial markets, its business,
financial condition and results of operations will be adversely affected. No
assurance can be given that the Company's product development efforts for
commercial products will be successful or that any new commercial products it
develops will achieve market acceptance. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Business--Commercial Markets, Products and Customers."

FLUCTUATIONS IN RESULTS OF OPERATIONS

The Company has experienced and expects to continue to experience
significant fluctuations in quarterly and annual revenues, gross margins and
operating results. The procurement process for most of the Company's current and
potential customers is complex and lengthy, and the timing and amount of
revenues is difficult to predict reliably. The Company recognizes a majority of
its revenues under the percentage of completion method which requires estimates
regarding costs that will be incurred over the life of a specific contract.
Actual results may differ from those estimates. In such event, the Company has
been and may in the future be required to adjust revenues in subsequent periods
relating to revisions of prior period estimates, resulting in fluctuations in
the Company's results of operations from period to period. In addition, a single
customer's order scheduled for delivery in a quarter can represent a significant
portion of the Company's potential revenues for such quarter. The Company has at
times failed to receive expected orders, and delivery schedules have been
deferred as a result of, among other factors, changes in customer requirements.
As a result of the foregoing and other factors, the Company's operating results
for particular periods have in the past been and may in the future be materially
adversely affected by a delay, rescheduling or cancellation of even one purchase
order. Moreover, purchase orders are often received and accepted substantially
in advance of delivery, and the failure to reduce actual costs to the extent
anticipated or an increase in anticipated costs before delivery could materially
adversely affect the gross margins for such orders, and as a result, the
Company's results of operations.

A large portion of the Company's expenses are fixed and difficult to
reduce should revenues not meet the Company's expectations, thus magnifying the
material adverse effect of any revenue shortfall. Furthermore, announcements by
the Company or its competitors of new products and technologies could cause
customers to defer or cancel purchases of the Company's products and services,
which could materially adversely affect the Company's business, financial
condition and results of operations or result in fluctuations in the Company's
results of operations from period to period. Additional factors that may cause
the Company's revenues, gross margins and results of operations to vary
significantly from period to period include mix of products and services sold;
manufacturing efficiencies, costs and capacity; price discounts; market
acceptance and the timing of availability of new products by the Company or its
customers; usage of different distribution and sales channels; warranty and
customer support expenses; customization of products and services; and general
economic and political conditions. In addition, the Company's results of
operations are influenced by competitive factors, including the pricing and
availability of, and demand for, competitive products. All of the above factors
are difficult for the Company to forecast, and these and other factors could
materially adversely affect the Company's business, financial condition and
results of operations or result in fluctuations in the Company's results of
operations from period to period. As a result, the Company believes that
period-to-period comparisons are not necessarily meaningful and should not be
relied upon as indications of future performance. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Quarterly Results
of Operations."

CONTRACT PROFIT EXPOSURE

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services. The balance of the Company's revenues for the fiscal year ended March
31, 1996 and the quarter ended June 30, 1996, respectively, were derived from
cost-reimbursement contracts under which the Company is reimbursed for actual
costs incurred in performing the contract to the extent that such costs are
within the contract ceiling and allowable, allocable and reasonable under the
terms of the contract, plus a fee or profit.

The Company assumes greater financial risk on fixed-price contracts
than on either time-and-materials or cost-reimbursement contracts. As the
Company increases its commercial business, it believes that an increasing
percentage of its contracts will be fixed-priced. Failure to anticipate
technical problems, estimate costs accurately or control costs during
performance of a fixed-price contract may reduce the Company's profit or cause a
loss. In addition, greater risks are involved under time-and-materials contracts
than under cost-reimbursement contracts because the Company assumes the
responsibility for the delivery of specified products or services at a fixed
hourly rate. Although management believes that it adequately estimates costs for
fixed-price and time-and-materials contracts, no assurance can be given that
such estimates are adequate or that losses on fixed-price and time-and-materials
contracts will not occur in the future.

To compete successfully for business, the Company must satisfy client
requirements at competitive rates. Although the Company continually attempts to
lower its costs, there are other companies that may provide the same or similar
products or services at comparable or lower prices than the Company. There can
be no assurance that the Company will be able to compete effectively on pricing
or other requirements, and as a result, the Company could lose clients or be
unable to maintain historic gross margin levels or to operate profitably.

DECLINING AVERAGE SELLING PRICES; FLUCTUATIONS IN GROSS MARGINS

Average selling prices for the Company's products may fluctuate from
period to period due to a number of factors, including product mix, competition
and unit volumes. In particular, the average selling prices of a specific
product tend to decrease over that product's life. To offset such decreases, the
Company intends to rely primarily on obtaining yield improvements and
corresponding cost reductions in the manufacture of existing products and on
introducing new products that incorporate advanced features and therefore can be
sold at higher average selling prices. However, there can be no assurance that
the Company will be able to obtain any such yield improvements or cost
reductions or introduce any such new products in the future. To the extent that
such cost reductions and new product introductions do not occur in a timely
manner or the Company's or its customers' products do not achieve market
acceptance, the Company's business, financial condition and results of
operations could be materially adversely affected.

The Company's gross margins in any period are affected by a number of
different factors. Because of the different gross margins on various products,
changes in product mix can impact gross margins in any particular period. In
addition, in the event that the Company is not able to adequately respond to
pricing pressures, the Company's current customers may decrease, postpone or
cancel current or planned orders, and the Company may not be able to secure new
customers or orders. As a result, the Company may not be able to achieve
desired production volumes or gross margins.

GOVERNMENT REGULATIONS

The Company's products are incorporated into wireless communications
systems that are subject to various government regulations. Regulatory changes,
including changes in the allocation of available frequency spectrum and in the
military standards and specifications ("MIL-STDs") which define the current
satellite networking environment, could significantly impact the Company's
operations by restricting development efforts by the Company's customers, making
current products obsolete or increasing the opportunity for additional
competition. There can be no assurance that regulatory bodies will not
promulgate new regulations that could have a material adverse effect on the
Company's business, financial condition and results of operations. Changes in,
or the failure by the Company to comply with, applicable domestic and
international regulations could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, the
increasing demand for wireless communications has exerted pressure on regulatory
bodies worldwide to adopt new standards for such products and services,
generally following extensive investigation of and deliberation over

8
11
competing technologies. The delays inherent in this governmental approval
process have caused and may continue to cause the cancellation, postponement or
rescheduling of the installation of communications systems by the Company's
customers, which in turn may have a material adverse effect on the sale of
products by the Company to such customers. See "Business--Government
Regulations."

The Company has benefitted and continues to benefit from the Small
Business Innovation Research ("SBIR") program, through which the government
provides research and development funding for companies with fewer than 500
employees. While the Company has already harvested significant benefits from the
SBIR program throughout the initial developmental stages of its core technology
base, the Company believes that its business, financial condition and results
of operations would not be materially adversely affected if the Company were to
lose its SBIR funding status.

EMERGING MARKETS IN WIRELESS COMMUNICATIONS

A number of the commercial markets for the Company's products in the
wireless communications area, including its DAMA products, have only recently
begun to develop. Because these markets are relatively new, it is difficult to
predict the rate at which these markets will grow, if at all. If the markets for
the Company's products in the commercial wireless communications area fail to
grow, or grow more slowly than anticipated, the Company's business, financial
condition and results of operations could be materially adversely affected.
Conversely, to the extent that growth in these markets results in capacity
limitations in the wireless communications area, the Company's business,
financial condition and results of operations could also be materially adversely
affected. See "Business--Commercial Markets, Products and Customers."

RURAL TELEPHONY MARKET

The Company's strategy includes focusing on establishing rural
telephony networking infrastructure for developing countries through strategic
alliances with regional and local service providers (see
"Business--Strategy--Address Rural Telephony Market"). There can be no assurance
that a substantial market for rural telephony equipment in developing countries
will ever develop, or if such a market does develop that fixed-site DAMA
VSAT-based equipment will capture a significant portion of that market. The
Company's ability to penetrate such markets will be dependent upon its ability
to develop equipment and software which can be utilized by the regional and
local service providers to develop and implement such infrastructure and for
such service providers to market and sell the use of such systems. Furthermore,
there can be no assurance that the regional and local service providers will be
able to successfully market subscriber terminals to rural subscribers. The
development and implementation of such rural telephony systems will be dependent
upon, among other things, the continued development of the necessary hardware
and software technologies (including the necessary expenditures of a large
amount of funds and resources), the implementation of cost-effective systems,
market acceptance for such systems and approval by the appropriate regulatory
agencies. There can be no assurance that the Company will be able to develop
equipment and software which can be utilized in such rural telephony systems and
accepted by regional and local service providers or that any regional or local
service providers will be able to develop, implement and market rural telephony
systems. Even if a market does develop for rural telephony, there can be no
assurance that the Company will be able to develop products incorporated into
and accepted by regional and local service providers or that regional and local
service providers will be able to develop and implement such systems.
Furthermore, if the Company successfully introduces such products and the
regional and local service providers successfully develop and implement such
systems, there is no assurance that the Company will generate enough revenues to
cover the Company expenditures in the development and marketing of such
products. Even if the Company is able to realize sales of such products, the
Company believes it is not likely that the Company will realize any significant
revenues from rural telephony applications any time in the foreseeable future,
including at least the next two years.

DEPENDENCE ON CONTRACT MANUFACTURERS; RELIANCE ON SOLE OR LIMITED SOURCES OF
SUPPLY

The Company's internal manufacturing capacity is limited. The Company
has recently begun to utilize contract manufacturers to produce its products and
expects to rely increasingly on such manufacturers in the future. The Company
also relies on outside vendors to manufacture certain components and
subassemblies, including printed wiring boards. Certain components,
subassemblies and services necessary for the manufacture of the Company's
products are obtained from a sole supplier or a limited group of suppliers. In
particular, Texas Instruments is a sole source supplier of digital signal
processing chips, which are critical components used by the Company in
substantially all of its products. There can be no assurance that the Company's
internal manufacturing capacity and that of its contract manufacturers and
suppliers will be sufficient to timely fulfill the Company's orders.

The Company's reliance on contract manufacturers and on sole suppliers
or a limited group of suppliers involves several risks, including a potential
inability to obtain an adequate supply of required components, and reduced
control over the price, timely delivery, reliability and quality of finished
products. From time to time, the Company enters into long-term supply agreements
with its manufacturers and suppliers. See Note 9 of Notes to Financial
Statements. Manufacture of the Company's products and certain of its components
and subassemblies is an extremely complex process, and the Company has from time
to time experienced and may in the future experience delays in the delivery of
and quality problems with products and certain components and subassemblies from
vendors. Certain of the Company's suppliers have relatively limited financial
and other resources. Any inability to obtain timely deliveries of components and
subassemblies of acceptable quality or any other circumstance that would require
the Company to seek alternative sources of supply, or to manufacture its
finished products or such components and subassemblies internally, could delay
or prevent the Company from timely delivery of its systems or raise issues
regarding quality, which could damage relationships with current or prospective
customers and have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Manufacturing."

COMPETITION

The markets for the Company's products and services are extremely
competitive, and the Company expects that competition will increase in such
markets. Many of the Company's competitors have entrenched

9
12
market positions, established patents, copyrights, tradenames, trademarks,
service marks and intellectual property rights and substantial technological
capabilities. The Company's existing and potential competitors include large and
emerging domestic and international companies, many of which have significantly
greater financial, technical, manufacturing, marketing, sales and distribution
resources and management expertise than the Company. The Company believes that
its ability to compete successfully in the markets for its products and services
depends upon a number of factors within and outside its control, including
price, quality, availability, product performance and features, timing of new
product introductions by the Company, its customers and competitors, and
customer service and technical support. The Company's customers continuously
evaluate whether to develop and manufacture their own products and could elect
to compete with the Company at any time. Price competition in the markets in
which the Company currently competes is likely to increase, which could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Competition."

LIMITED PROTECTION OF THE COMPANY'S INTELLECTUAL PROPERTY

The Company's ability to compete may depend, in part, on its ability to
obtain and enforce intellectual property protection for its technology in the
United States and internationally. The Company relies on a combination of trade
secrets, copyrights, trademarks, service marks and contractual rights to protect
its intellectual property. There can be no assurance that the steps taken by the
Company will be adequate to deter misappropriation or impede third party
development of the Company's technology. In addition, the laws of certain
foreign countries in which the Company's products are or may be sold do not
protect the Company's intellectual property rights to the same extent as do the
laws of the United States. The failure of the Company to protect its proprietary
information could have a material adverse effect on the Company's business,
financial condition and results of operations.

Litigation may be necessary to protect the Company's intellectual
property rights and trade secrets, to determine the validity and scope of the
proprietary rights of others or to defend against claims of infringement or
invalidity. Such litigation could result in substantial costs and diversion of
resources and could have a material adverse effect on the Company's business,
financial condition and results of operations. There can be no assurance that
infringement, invalidity, right to use or ownership claims by third parties or
claims for indemnification resulting from infringement claims will not be
asserted in the future. If any claims or actions are asserted against the
Company, the Company may seek to obtain a license under a third party's
intellectual property rights. There can be no assurance, however, that a license
will be available under reasonable terms or at all. In addition, should the
Company decide to litigate such claims, such litigation could be extremely
expensive and time consuming and could materially adversely affect the Company's
business, financial condition and results of operations, regardless of the
outcome of the litigation. If the Company's products are found to infringe upon
the rights of third parties, the Company may be forced to incur substantial
costs to develop alternative products. There can be no assurance that the
Company would be able to develop such alternative products or that if such
alternative products were developed, they would perform as required or be
accepted in the applicable markets. See "Business--Intellectual Property."

REQUIREMENT FOR RESPONSE TO RAPID TECHNOLOGICAL CHANGE AND REQUIREMENT FOR
FREQUENT NEW PRODUCT INTRODUCTIONS

The wireless communications market is subject to rapid technological
change, frequent new product introductions and enhancements, product
obsolescence and changes in end-user requirements. The Company's ability to be
competitive in this market will depend in significant part upon its ability to
successfully develop, introduce and sell new products and enhancements on a
timely and cost-effective basis that respond to changing customer requirements.
Any success of the Company in developing new and enhanced products will depend
upon a variety of factors, including new product selection, integration of the
various elements of its complex technology, timely and efficient completion of
product design, timely and efficient implementation of manufacturing and
assembly processes and its cost reduction efforts, development and completion of
related software tools, product performance, quality and reliability and
development of competitive products by competitors. The Company may experience
delays from time to time in completing development and introduction of new
products. Moreover, there can be no assurance that the Company will be
successful in selecting, developing, manufacturing and marketing new products or
enhancements. There can be no assurance that errors will not be found in the
Company's products

10
13
after commencement of deliveries, which could result in the
loss of or delay in market acceptance. The inability of the Company to introduce
in a timely manner new products that achieve market acceptance and thereby
contribute to revenues could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--Research
and Development."

INTERNATIONAL OPERATIONS; RISKS OF DOING BUSINESS IN DEVELOPING COUNTRIES

The Company anticipates that international sales will account for an
increasing percentage of its revenues for the foreseeable future. The Company's
international sales may be denominated in foreign or U.S. currencies. The
Company does not currently engage in foreign currency hedging transactions. As a
result, a decrease in the value of foreign currencies relative to the U.S.
dollar could result in losses from transactions denominated in foreign
currencies. With respect to the Company's international sales that are U.S.
dollar-denominated, such a decrease could make the Company's products less
price-competitive. Additional risks inherent in the Company's international
business activities include various and changing regulatory requirements, cost
and risks of localizing systems in foreign countries, increased sales and
marketing and research and development expenses, availability of suitable export
financing, timing and availability of export licenses, tariffs and other trade
barriers, political and economic instability, difficulties in staffing and
managing foreign operations, difficulties in managing distributors, potentially
adverse taxes, complex foreign laws and treaties and the possibility of
difficulty in accounts receivable collections. Certain of the Company's customer
purchase agreements are governed by foreign laws, which may differ significantly
from U.S. laws. Therefore, the Company may be limited in its ability to enforce
its rights under such agreements and to collect damages, if awarded. There can
be no assurance that any of these factors will not have a material adverse
effect on the Company's business, financial condition and results of operations.

ABSENCE OF PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that a viable public market for the Common
Stock will develop or be sustained after this offering. The Company believes
that factors such as announcements of developments related to the Company's
business, announcements of technological innovations or new products or
enhancements by the Company or its competitors, developments in the Company's
relationships with its customers, partners, distributors and suppliers, changes
in analysts' estimates, regulatory developments, fluctuations in results of
operations and general conditions in the Company's market or the markets served
by the Company's customers or the economy could cause the price of the Common
Stock to fluctuate, perhaps substantially. In addition, in recent years the
stock market in general, and technology companies in particular have been
subject to significant price fluctuations, which have often been unrelated to
the operating performance of affected companies. Such fluctuations could
adversely affect the market price of the Common Stock. There can be no assurance
that the market price of the Common Stock will not experience significant
fluctuations in the future, including fluctuations that are unrelated to the
Company's performance.

CONTROL BY EXISTING SHAREHOLDERS

Following the completion of this offering, members of the Board of
Directors and the executive officers of the Company, together with members of
their families and entities that may be deemed affiliates of or related to such
persons or entities, will beneficially own approximately 36.1% of the
outstanding shares of Common Stock of the Company. Accordingly, these
shareholders will be able to elect all members of the Company's Board of
Directors and determine the outcome of corporate actions requiring shareholder
approval, such as mergers and acquisitions. This level of ownership may have a
significant effect in delaying, deferring or preventing a change in control of
the Company and may adversely affect the voting and other rights of other
holders of the Common Stock. See "Management--Executive Officers and Directors"
and "Principal and Selling Shareholders."

ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

Certain provisions of the Company's Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws could discourage potential
acquisition proposals, could delay or prevent a change in control of the Company
and could make removal of management more difficult. Such provisions could
diminish the opportunities for a shareholder to participate in tender offers,
including tender offers that are priced above the then

11
14
current market value of the Common Stock. The provisions also may inhibit
increases in the market price of the Common Stock that could result from
takeover attempts. Additionally, the Board of Directors of the Company, without
further shareholder approval, may issue up to 5,000,000 shares of Preferred
Stock, in one or more series, with such terms as the Board of Directors may
determine, including rights such as voting, dividend and conversion rights which
could adversely affect the voting power and other rights of the holders of
Common Stock. Preferred Stock may be issued quickly with terms which delay or
prevent the change in control of the Company or make removal of management more
difficult. Also, the issuance of Preferred Stock may have the effect of
decreasing the market price of the Common Stock. See "Description of Capital
Stock--Preferred Stock."

DEPENDENCE ON KEY PERSONNEL

The Company's future success depends in large part on the continued
service of its key technical, marketing and management personnel and on its
ability to continue to attract and retain qualified employees, particularly its
Chief Executive Officer, Mark D. Dankberg, and those highly skilled design,
process and test engineers involved in the manufacture of existing products and
the development of new products and processes. The competition for such
personnel is intense, and the loss of key employees could have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company does not have employment agreements with any of its
officers or employees. The Company has obtained, however, a key man insurance
policy on the life of Mr. Dankberg in the amount of $500,000, of which the
Company is the sole beneficiary. See "Business--Employees" and "Management."

MANAGEMENT'S DISCRETION OVER PROCEEDS OF THE OFFERING

The Company has no current specific plan for the net proceeds of this
offering. As a consequence, the Company's management will have discretion over
the proceeds for the foreseeable future. There can be no assurance that the
proceeds can or will be invested to yield a return as great as the Company has
historically experienced or any significant return at all. See "Use of
Proceeds."

DILUTION

The initial public offering price is expected to be substantially
higher than the net tangible book value per share of the Common Stock. Investors
purchasing shares of Common Stock in this offering will therefore incur
immediate and substantial net tangible book value dilution. To the extent that
stock options (currently outstanding or subsequently granted) to purchase Common
Stock are exercised, there will be further dilution. See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of shares in the public market or the
prospect of such sales could adversely affect the market price of the Common
Stock. Upon completion of this offering, the Company will have outstanding
7,525,342 shares of Common Stock. Immediately upon the effectiveness of this
offering, the 2,200,000 shares offered hereby (plus any shares issued upon
exercise of the Underwriters' over-allotment option) will be freely tradeable.
Of the remaining shares, __________ are subject to lock-up agreements pursuant
to which the holders of such shares have agreed not to sell or otherwise dispose
of such shares for a period of 180 days after the date of the offering without
the prior written consent of the representatives of the Underwriters. The shares
not subject to lock-up agreements may be freely sold after the offering, subject
to certain volume and other limitations of Rule 144 under the Securities Act.
The Company intends to file a registration statement under the Securities Act
after this offering covering the sale of 1,384,143 shares of Common Stock
reserved for issuance under the Company's 1993 Stock Option Plan, 1996 Equity
Participation Plan and Employee Stock Purchase Plan. See "Shares Eligible for
Future Sale" and "Underwriting."

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CAPITALIZATION

The following table sets forth as of June 30, 1996 (i) the Company's
actual capitalization (as if the 0.7335-for-one reverse stock split of the
Common Stock to be consummated prior to this offering had occurred prior to June
30, 1996) and (ii) pro forma capitalization as adjusted to reflect the
conversion of all outstanding shares of Preferred Stock into Common Stock upon
the closing of this offering, the amendments to the Company's Articles of
Incorporation to increase the Company's authorized capital stock and the sale
of the 1,650,000 shares of Common Stock offered by the Company hereby at an
assumed offering price of $11.00 per share, based on the midpoint of the
offering price range set forth on the cover page of this Prospectus (after
deduction of the underwriting discounts and commissions and estimated offering
expenses), and the application of the net proceeds therefrom as described under
"Use of Proceeds."

AS OF JUNE 30, 1996
------------------------------------------
ACTUAL AS ADJUSTED

Total long-term debt, less current portion............................... $1,531,000 $1,531,000
Shareholders' equity(1):
Preferred Stock, $.01 par value, 3,225,000 shares authorized, 3,225,000
shares issued and outstanding actual; 5,000,000 shares
authorized, no shares issued or outstanding as adjusted........... 32,000 --
Common Stock, $.01 par value, 7,335,000 shares authorized,
3,386,396 shares issued and outstanding actual; 25,000,000 shares
authorized, 7,401,933 shares issued and outstanding as adjusted... 46,000 95,000
Paid-in capital..................................................... 754,000 16,967,000
Retained earnings................................................... 4,880,000 4,880,000
---------- ------------
Total shareholders' equity.......................................... 5,712,000 21,942,000
---------- ------------
Total capitalization............................................ $7,243,000 $ 23,473,000
========== ============

- ---------------
(1) Excludes 330,000 shares of Common Stock issuable by the Company upon
the full exercise of the Underwriters' over-allotment option. Also
excludes 265,683 shares of Common Stock issuable upon exercise of
options outstanding as of June 30, 1996 at an average exercise price of
$0.85 per share. See "Management--1993 Stock Option Plan," "--1996
Equity Participation Plan" and Note 6 of Notes to Financial Statements.

(2) Common Stock, Paid-in capital, Total shareholders' equity and Total
capitalization would be $98,000, $20,339,000, $25,317,000 and
$26,848,000, respectively, if the Underwriters' over-allotment option
is exercised in full.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,650,000 shares
of Common Stock being offered by the Company are estimated to be $16,230,000
($19,605,000 if the Underwriters' over-allotment option is exercised in full),
based on an assumed offering price of $11.00 per share and after deducting the
underwriting discounts and commissions and estimated offering expenses payable
by the Company. The Company intends to use the net proceeds of this offering for
working capital and general corporate purposes, including without limitation
facilities expansion, inventory financing, contract financing and debt
reduction. Pending their use, the proceeds will be invested in short-term,
investment-grade, interest-bearing securities. The Company will not receive any
of the proceeds from the sale of Common Stock by the Selling Shareholders. See
"Principal and Selling Shareholders."

DIVIDEND POLICY

To date, the Company has neither declared nor paid any dividends on the
Common Stock. The Company currently intends to retain all future earnings, if
any, for use in the operation and development of its business and, therefore,
does not expect to declare or pay any cash dividends on the Common Stock in the
foreseeable future. In addition, an equipment financing agreement of the Company
prohibits the payment of any cash dividends on the Company's capital stock.

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DILUTION

The pro forma net tangible book value of the Company as of June 30,
1996 was $5,712,000 or $0.99 per share. Pro forma net tangible book value per
share represents the amount of total tangible assets of the Company reduced by
the amount of its total liabilities, divided by the total number of shares of
Common Stock outstanding, including shares of Common Stock resulting from the
conversion of the Preferred Stock. After giving effect to the net proceeds from
the sale of 1,650,000 shares of Common Stock offered by the Company at an
assumed offering price of $11.00 per share, the pro forma net tangible book
value of the Company as of June 30, 1996 would have been $21,942,000 or $2.96
per share of Common Stock. This represents an immediate increase in net tangible
book value of $1.97 per share to existing shareholders and an immediate dilution
of $8.04 per share to new investors. The following table illustrates the per
share dilution in net tangible book value to new investors.

Assumed initial public offering price per share..................... $ 11.00
Net tangible book value per share................................... $ 0.99
Increase per share attributable to new investors.................... 1.97
--------
Pro forma net tangible book value per share after the offering...... 2.96
---------
Dilution per share to new investors................................. $ 8.04
=========

The following table summarizes, on a pro forma basis, as of June 30,
1996, the differences in total consideration paid and the average price per
share paid by existing shareholders and new investors with respect to the number
of shares of Common Stock purchased from the Company assuming an offering price
of $11.00 per share:

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------------ --------------------------------- PRICE PAID
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ---------- -------------- ------------- ------------

Existing shareholders(1)..... 5,751,933 77.7% $ 832,000 4.4% $ 0.15
New investors(2)............. 1,650,000 22.3 18,150,000 95.6 11.00
----------- ---------- -------------- -------------
Total(2)............ 7,401,933 100% $ 18,982,000 100%
=========== ========== ============= =============

- ---------------
(1) Sales by Selling Shareholders in this offering will reduce the number
of shares of Common Stock held by existing shareholders to 5,201,933 or
approximately 70.3% (5,201,933 shares or approximately 67.3% if the
Underwriters' over-allotment option is exercised in full) and will
increase the number of shares of Common Stock held by new investors to
2,200,000 or approximately 29.7% (2,530,000 shares or approximately
32.7% if the Underwriters' over-allotment option is exercised in full)
of the total number of shares of Common Stock outstanding after the
closing of this offering.

(2) The Company has granted the Underwriters an option to purchase up to
330,000 shares of Common Stock to cover over-allotments, if any. If the
Underwriters' over-allotment option is exercised in full, the Company
will issue an aggregate of 1,980,000 shares of Common Stock to new
investors (25.6% of the total of 7,731,933 shares outstanding) and the
total consideration from new investors will be $21,780,000 (96.3% of
the total of $22,612,000 consideration paid for all shares
outstanding).

The information presented with respect to existing shareholders assumes
no exercise of the Underwriters' over-allotment option and no exercise of
outstanding options after June 30, 1996. As of June 30, 1996, options to
purchase 265,683 shares of Common Stock were outstanding. In addition, options
to purchase an aggregate of 118,460 shares of Common Stock were granted on July
1, 1996. An additional 750,000 shares of Common Stock will be reserved for
issuance under the 1996 Equity Participation Plan and 250,000 shares will be
reserved for issuance under the Employee Stock Purchase Plan. The issuance of
Common Stock under these plans will result in further dilution to new investors.
See "Management--1993 Stock Option Plan," "--1996 Equity Participation Plan" and
"--Employee Stock Purchase Plan."

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SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected financial data as of March 31, 1995 and 1996 and
for the years ended March 31, 1994, 1995 and 1996 have been derived from, and
are qualified by reference to, the audited financial statements of the Company
included elsewhere in this Prospectus. The selected financial data as of March
31, 1992, 1993 and 1994 and for the years ended March 31, 1992 and 1993 have
been derived from the audited financial statements of the Company not included
herein. The selected financial data as of June 30, 1996 and for the three months
ended June, 30, 1995 and 1996 have been prepared on a basis consistent with the
audited financial statements and derived from unaudited financial statements
also appearing herein which, in the opinion of management, include all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the financial position and results of operations of the
Company for the unaudited interim periods. The statement of operations data for
any particular period are not necessarily indicative of the results of
operations for any future period, including the Company's fiscal year ending
March 31, 1997. The data set forth below are qualified by reference to, and
should be read in conjunction with, the Financial Statements and Notes thereto
and the discussion thereof included elsewhere in this Prospectus.

YEARS ENDED MARCH 31, THREE MONTHS ENDED
---------------------------------------------------- --------------------
JUNE 30, JUNE 30,
1992 1993 1994 1995 1996 1995 1996
------- ------ -------- ------- ------- ------ -------
(UNAUDITED)

STATEMENT OF INCOME DATA:

Revenues......................... $ 4,019 $5,072 $ 11,579 $22,341 $29,017 $6,768 $ 9,732
Cost of revenues................. 3,006 3,939 9,033 16,855 20,983 4,830 6,862
------- ------ -------- ------- ------- ------ -------
Gross profit................... 1,013 1,133 2,546 5,486 8,034 1,938 2,870
Operating expenses:
Selling, general and
administrative................. 503 740 1,554 2,416 3,400 918 1,040
Independent research and
development.................... -- 59 134 788 2,820 467 1,058
------- ------ -------- ------- ------- ------ -------
Income from operations........... 510 334 858 2,282 1,814 553 772
Interest income (expense)........ 7 (17) (45) (87) (231) (29) (32)
------- ------- --------- -------- -------- ------- -------
517 317 813 2,195 1,583 524 740
Income before income taxes.......
Provision (benefit) for income
taxes............................ 159 93 328 888 (50) (17) 262
------- ------ -------- ------- -------- ------- -------

Net income....................... $ 358 $ 224 $ 485 $ 1,307 $ 1,633 $ 541 $ 478
====== ===== ======= ====== ====== ===== ======
Pro forma net income per share(1) $ 0.27 $ 0.08
====== ======
Shares used in per share 6,001 6,003
calculations(1)................

MARCH 31, JUNE 30, 1996
-------------------------------------------------- ------------------------

1992 1993 1994 1995 1996 ACTUAL AS ADJUSTED(2)
------ ------ ------ ------ ------ ------ --------------
(UNAUDITED)
BALANCE SHEET DATA:

Cash and cash equivalents........ $ 101 $ 75 $ 9 $2,731 $2,297 $1,733 $17,963
Working capital.................. 912 964 1,486 2,808 4,651 4,850 21,080
Total assets..................... 1,750 2,550 4,986 9,377 13,262 13,248 29,478
Long-term debt, less current 50 124 297 1,220 1,747 1,531 1,531
portion........................

Total shareholders' equity....... 1,226 1,465 1,956 3,413 5,217 5,712 21,942

- ---------------
(1) For an explanation of the determination of the number of shares used in
computing pro forma net income per share, see Note 1 of Notes to
Financial Statements.

(2) As adjusted to reflect the sale of 1,650,000 shares of Common Stock
offered by the Company hereby at an assumed offering price of $11.00
per share, and the application of the net proceeds therefrom as
described under "Use of Proceeds." If the Company issues 1,980,000
shares of Common Stock upon the full exercise of the Underwriters'
option to cover over-allotments, Cash and cash equivalents,
Working capital, Total assets and Total shareholders' equity would be
$21,338, $24,455, $32,853 and $25,317, respectively. See "Use of
Proceeds" and "Capitalization."

15
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act. Discussions containing such
forward-looking statements may be found throughout this Prospectus, including
without limitation in the materials set forth under "Summary," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business." Actual events or results may differ materially from those discussed
in the forward-looking statements as a result of various factors, including
without limitation the risks set forth under "Risk Factors" and the matters set
forth in this Prospectus generally.

Historically, the Company's revenues have been principally derived from
contracts with the DOD. The Company's DOD revenues have continued to grow
significantly despite government budgetary constraints. Since 1992, such
revenues have grown at a compounded annual growth rate of 63.9%. DOD revenues
amounted to $11.1 million, $21.2 million and $28.3 million for the fiscal years
ended March 31, 1994, 1995 and 1996, respectively, and $6.8 million and $9.6
million for the quarters ended June 30, 1995 and 1996, respectively. The Company
has achieved this growth rate entirely through internal growth, and not through
acquisitions.

The Company's products and services are provided primarily through
three types of contracts: fixed-price, time-and-materials and cost-reimbursement
contracts. Approximately 56.3% and 51.6% of the Company's total revenues for the
fiscal year ended March 31, 1996 and for the quarter ended June 30, 1996,
respectively, were derived from fixed-price contracts which require the Company
to provide products and services under a contract at a stipulated price. The
Company derived approximately 5.0% and 7.0% of its revenues during such periods
from time-and-materials contracts which reimburse the Company for the number of
labor hours expended at an established hourly rate negotiated in the contract,
plus the cost of materials utilized in providing such products or services. The
balance of the Company's revenues for the fiscal year ended March 31, 1996 and
the quarter ended June 30, 1996, respectively, were derived from
cost-reimbursement contracts under which the Company is reimbursed for all
actual costs incurred in performing the contract to the extent that such costs
are within the contract ceiling and allowable under the terms of the contract,
plus a fee or profit. See "Risk Factors--Contract Profit Exposure."

As of June 30, 1996, the Company had firm backlog of $38.0 million, of
which $34.7 million was funded. Of the $38.0 million in firm backlog,
approximately $30.0 million is expected to be delivered in the fiscal year
ending March 31, 1997 and the balance is expected to be delivered in the fiscal
year ending March 31, 1998. Such backlog includes $20.0 million in awards
received during the three months ended June 30, 1996, consisting of $13.2
million in UHF DAMA satellite communications awards, $4.5 million in awards for
the defense simulator business, $2.1 million in other defense awards and
$189,000 in commercial satellite communications awards. The Company's $38.0
million in firm backlog does not include an additional $25.9 million of customer
options. See "Business--Backlog."

Historically, a portion of the Company's revenue has been derived from
research and development contracts with the DOD. The research and development
efforts are conducted in direct response to the specific requirements of a
customer's order and, accordingly, expenditures related to such efforts are
included in cost of sales when incurred and the related funding (which includes
a profit component) is included in net revenues at such time. Revenues are
recognized using the percentage of completion method on these long-term
development contracts. Revenues for funded research and development during the
fiscal years ended March 31, 1994, 1995 and 1996 were approximately $9.7
million, $20.7 million and $19.5 million, respectively. See "Business--Research
and Development."

Beginning in fiscal 1995, production contracts for delivery of
previously developed equipment became a more significant percentage of total
revenues. Production contracts amounted to approximately 6.5% of fiscal 1995
total revenues, approximately 19.4% of fiscal 1996 total revenues and
approximately 32.2% of total revenues for the three months ended June 30, 1996.
Based on the significant increase in production revenues, the Company

16
19
began recognizing revenues and related costs of revenues when products are
delivered on most production orders in fiscal 1996.

The Company invests in independent research and development ("IR&D"),
which is not directly funded by a third party. The Company expenses IR&D costs
as they are incurred. IR&D expenses consist primarily of salaries and other
personnel-related expenses, supplies and prototype materials related to research
and development programs. IR&D expenses for governmental and commercial
applications were minimal prior to fiscal 1995. In the fourth quarter of fiscal
1995, the Company began investing a significant amount of IR&D funds primarily
in the development of satellite telephony and other satellite DAMA products. The
Company expended 9.7% and 10.9% of revenues in IR&D, respectively, in the fiscal
year ended March 31, 1996 and the quarter ended June 30, 1996. The Company
expects that IR&D expenditures will continue to increase in order to fund growth
in governmental and commercial applications. As a government contractor, the
Company is able to recover a portion of its IR&D expenses pursuant to its
government contracts.

RESULTS OF OPERATIONS

The following table sets forth, as a percentage of total revenues,
certain income data for the periods indicated.

FISCAL YEARS ENDED THREE MONTHS ENDED
MARCH 31, JUNE 30,
--------------------------------- ------------------

1994 1995 1996 1995 1996
---- ---- ---- ---- ----

Revenues 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues 78.0 75.4 72.3 71.4 70.5
----- ----- ----- ----- -----
Gross profit 22.0 24.6 27.7 28.6 29.5
Operating expenses:
Selling, general and 13.4 10.8 11.7 13.6 10.7
administrative
Independent research and development 1.2 3.5 9.7 6.9 10.9
----- ----- ----- ----- -----

Income from operations 7.4 10.3 6.3 8.1 7.9
Income before income taxes 7.0 9.9 5.5 7.7 7.6
Net income 4.2 5.9 5.7 8.0 4.9

THREE MONTHS ENDED JUNE 30, 1996 VS. THREE MONTHS ENDED JUNE 30, 1995

Revenues. Revenues increased 44.0% from $6.8 million for the three
months ended June 30, 1995 to $9.7 million for the three months ended June 30,
1996. This increase was primarily due to Enhanced Manpack UHF Terminal ("EMUT")
DAMA modem production of $2.9 million and a $1.7 million increase in revenues
generated by contracts with the U.S. Air Force for UHF DAMA network control
stations and modems, offset in part by reduced activity in other product lines
and the completion of certain contracts.

Gross Profits. Gross profits increased 48.1% from $1.9 million (28.6%
of revenues) for the three months ended June 30, 1995 to $2.9 million (29.5% of
revenues) for the three months ended June 30, 1996. This increase primarily
reflects higher prices related to the recovery of allowable IR&D costs under
certain government contracts and improved contract profitability under certain
production contracts.

Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses increased 13.3% from $918,000 (13.6% of
revenues) for the three months ended June 30, 1995 to $1.0 million (10.7% of
revenues) for the three months ended June 30, 1996. This decrease in SG&A
expenses as a percentage of revenues reflects an increased expense in connection
with a large bid and proposal effort in the three months ended June 30, 1995
offset by the impact of a 44.0% growth in revenues between the two periods. SG&A
expenses consist primarily of personnel costs and expenses for business
development, marketing and sales, finance, contract administration and general
management. They also include bid and proposal costs. Certain SG&A expenses are
difficult to predict and vary based on specific government and commercial sales
opportunities.

Independent Research and Development. IR&D expenses increased 135.5%
from $467,000 (6.9% of revenues) in the three months ended June 30, 1995 to $1.1
million (10.9% of revenues) in the three months ended June 30, 1996. This
increase resulted primarily from higher IR&D expenses related to the Company's
StarWire(TM) DAMA product, which represented approximately 91.1% of total IR&D.

17
20
Interest Expense. Interest expense increased 44.2% from $43,000 for the
three months ended June 30, 1995 to $62,000 for the three months ended June 30,
1996. Interest expense relates to loans for the purchase of capital equipment,
which are generally four year fixed-rate term loans, and to short-term
borrowings under the Company's line of credit to cover working capital
requirements. Total outstanding equipment loans were $1.8 million at June 30,
1995 and $2.4 million at June 30, 1996. The Company owed no amounts on its line
of credit at the end of either period.

Interest Income. Interest income increased 114.3% from $14,000 for the
three months ended June 30, 1995 to $30,000 for the three months ended June 30,
1996. Interest income related to interest earned on short-term deposits of cash.

Provision (Benefit) for Income Taxes. The income tax benefit in the
three months ended June 30, 1995 was primarily attributable to the utilization
of research and development credits generated during the current period and the
impact of a United States Federal judicial decision which clarified the tax law
related to the utilization of research and development credits generated from
funded research and development. As of June 30, 1996, all of such income tax
benefit was utilized by the Company. The Company's effective tax rate for the
three months ended June 30, 1996 was 35.4%.

FISCAL YEAR ENDED MARCH 31, 1996 VS. FISCAL YEAR ENDED MARCH 31, 1995

Revenues. The Company's revenues increased 30.0% from $22.3 million in
fiscal 1995 to $29.0 million in fiscal 1996. This increase reflects the growth
in defense related production contracts, primarily associated with the Company's
EMUT DAMA modem products, which experienced a $5.3 million increase, and
Advanced Data Controller ("ADC") products, which experienced a $1.5 million
increase. Revenues from production orders (compared to funded research and
development) increased from $1.4 million (6.5% of revenues) in fiscal 1995 to
$5.6 million (19.4% of revenues) in fiscal 1996.

Revenues from UHF DAMA satellite communications products increased to
42.8% of revenues in fiscal 1996. This increase was due to the first EMUT DAMA
modem production deliveries in the fourth quarter of 1996. UHF DAMA business
area revenues grew from $7.1 million (31.7% of revenues) in fiscal 1995 to $12.4
million (42.8% of revenues) in fiscal 1996.

Gross Profits. Gross profits increased 46.4% from $5.5 million (24.6%
of revenues) in fiscal 1995 to $8.0 million (27.7% of revenues) in fiscal 1996.
This increase primarily reflects higher prices related to the recovery of
allowable IR&D costs under certain government contracts and improved contract
profitability under certain production contracts.

Selling, General and Administrative Expenses. SG&A expenses increased
40.7% from $2.4 million (10.8% of revenues) in fiscal 1995 to $3.4 million
(11.7% of revenues) in fiscal 1996. Increased spending was offset somewhat by
the continuing revenue growth. The Company continued to increase staff to
support IR&D related to its StarWire(TM) DAMA product, increased its business
development staff for defense programs, and added to finance and administrative
staffing. Bid and proposal efforts increased from $321,000 in fiscal 1995 to
$1.0 million in fiscal 1996.

Independent Research and Development. IR&D expenses increased 257.9%
from $788,000 (3.5% of revenues) in fiscal 1995 to $2.8 million (9.7% of
revenues) in fiscal 1996. Expenditures on the development of the Company's
StarWire(TM) DAMA product began in the last quarter of fiscal 1995 and have been
steadily increasing.

Interest Expense. Interest expense increased 128.1% from $114,000 in
fiscal 1995 to $260,000 in fiscal 1996. Total outstanding equipment loans for
the periods were $1.7 million at the end of fiscal 1995 and $2.5 million at the
end of fiscal 1996. There were no amounts outstanding under the Company's line
of credit at the end of either fiscal year.

18
21
Interest Income. Interest income increased 7.4% from $27,000 in fiscal
1995 to $29,000 in fiscal 1996. Interest income related to interest earned on
short-term deposits of cash.

Provision (Benefit) for Income Taxes. The income tax provision in
fiscal 1995 approximates the combined federal and state statutory rate of 40.0%.
The income tax benefit in fiscal 1996 was primarily attributable to the
utilization of research and development credits generated during the current
period and the impact of a United States Federal judicial decision which
clarified the tax law related to the utilization of research and development
credits generated from funded research and development.

FISCAL YEAR ENDED MARCH 31, 1995 VS. FISCAL YEAR ENDED MARCH 31, 1994

Revenues. The Company's revenues increased 92.9% from $11.6 million in
fiscal 1994 to $22.3 million in fiscal 1995. Funded development in the UHF DAMA
business area had the largest impact on revenue growth. Revenues for the UHF
DAMA business area increased 317.1% from $1.7 million (14.7% of revenues) in
fiscal 1994 to $7.1 million (31.7% of revenues) in fiscal 1995. Other increases
occurred in the simulator business area which increased from $2.2 million (18.9%
of revenues) in fiscal 1994 to $4.0 million (18.0% of revenues) in fiscal 1995,
and in the Joint Tactical Information Distribution System ("JTIDS") business
area which increased from $1.3 million (10.9% of revenues) in fiscal 1994 to
$2.6 million (11.8% of revenues) in fiscal 1995.

Gross Profits. Gross profits increased 111.5% from $2.5 million (22.0%
of revenues) in fiscal 1994 to $5.5 million (24.6% of revenues) in fiscal 1995.
This increase primarily reflects higher prices related to the recovery of
allowable IR&D costs under certain government contracts and improved contract
profitability under certain contracts.

Selling, General and Administrative Expenses. SG&A expenses increased
55.5% from $1.6 million (13.4% of revenues) in fiscal 1994 to $2.4 million
(10.8% of revenues) in fiscal 1995. This decrease in SG&A expenses as a
percentage of revenues was due to the larger growth in revenues during the
period. Near the end of fiscal 1995 the Company added administrative staff to
support increasing revenue and the associated increase in direct labor. The
Company added other indirect staff in both years to support the commercial DAMA
business. Bid and proposal efforts in fiscal 1995 were minimal due to the
concentration on performance in the existing defense backlog.

Independent Research and Development. IR&D expenses increased 488.1%
from $134,000 (1.2% of revenues) in fiscal 1994 to $788,000 (3.5% of revenues)
in fiscal 1995. Expenditures on the development of the Company's StarWire(TM)
DAMA product began in the last quarter of fiscal 1995, accounting for most of
the increase.

Interest Expense. Interest expense increased 142.6% from $47,000 in
fiscal 1994 to $114,000 in fiscal 1995. Total outstanding equipment loans for
the periods were $392,000 at the end of fiscal 1994 and $1.7 million at the end
of fiscal 1995, reflecting an increase in purchases of capital equipment to
support the increased requirements of development programs. There was $350,000
outstanding under the Company's line of credit at the end of fiscal 1994, and no
amounts outstanding at the end of fiscal 1995.

Interest Income. There was no material interest income in fiscal 1994
and $27,000 of interest income in fiscal 1995, which related to interest earned
on short-term deposits of cash.

Provision (Benefit) for Income Taxes. The income tax provisions in
fiscal 1994 and 1995 approximate the combined federal and state statutory rate
of 40.0%.

19
22
QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain financial information for each
of the Company's last nine quarters. The information for each of these quarters
is unaudited but includes all adjustments, consisting only of normal recurring
adjustments, which the Company considers necessary for a fair presentation of
this information when read in conjunction with the Financial Statements and
Notes thereto appearing elsewhere in this Prospectus. The results of operations
for any quarter and any quarter-to-quarter trends are not necessarily indicative
of the results to be expected for any future periods.

QUARTERS ENDED
--------------------------------------------------------------------------------------
FISCAL YEAR 1995 FISCAL YEAR 1996 FISCAL YEAR 1997
------------------------------- ------------------------------- ----------------
JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1994 1994 1994 1995 1995 1995 1995(1) 1996 1996
---- ---- ---- ---- ---- ---- ------- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues $4,726 $5,489 $5,641 $6,485 $6,768 $7,388 $5,755 $9,106 $9,732
Cost of revenues 3,718 4,319 4,330 4,488 4,830 5,280 4,042 6,831 6,862
----- ----- ----- ----- ----- ----- ----- ----- -----
Gross profit 1,008 1,170 1,311 1,997 1,938 2,108 1,713 2,275 2,870
Operating expenses:
SG&A 478 576 639 723 918 844 815 823 1,040
IR&D 54 95 184 455 467 719 769 865 1,058
------ ------ ------ ------ ------ ------ ------ ------ -----
Income from operations 476 499 488 819 553 545 129 587 772
Income before income taxes 454 479 466 796 524 488 68 503 740
Net income 271 286 278 472 541 503 70 519 478

- ----------------
(1) The Company experienced reduced revenues, gross profit and income from
operations for the third quarter of fiscal 1996 due primarily to delays
on the EMUT contract. Production deliveries were scheduled to begin in
the third quarter of fiscal 1996, but were delayed at the customer's
request. Deliveries began instead in the fourth quarter of fiscal 1996.

The following table sets forth the above unaudited quarterly financial
information as a percentage of total net revenues.

QUARTERS ENDED
--------------------------------------------------------------------------------------
FISCAL YEAR 1995 FISCAL YEAR 1996 FISCAL YEAR 1997
------------------------------- ------------------------------- ----------------
JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1994 1994 1994 1995 1995 1995 1995 1996 1996
---- ---- ---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues 78.7 78.7 76.8 69.2 71.4 71.5 70.2 75.0 70.5
---- ---- ---- ---- ---- ---- ---- ---- ----
Gross profit 21.3 21.3 23.2 30.8 28.6 28.5 29.8 25.0 29.5
Operating expenses:
SG&A 10.1 10.5 11.3 11.1 13.6 11.4 14.2 9.0 10.7
IR&D 1.1 1.7 3.3 7.0 6.9 9.7 13.4 9.5 10.9
--- --- --- --- --- --- ---- --- ----
Income from operations 10.1 9.1 8.6 12.7 8.1 7.4 2.2 6.5 7.9
Income before income taxes 9.6 8.7 8.3 12.3 7.7 6.7 1.2 5.6 7.6
Net income 5.7 5.2 4.9 7.3 8.0 6.9 1.2 5.8 4.9

Historically, development contracts have been a significant source of
revenue. The Company recognizes a majority of its revenues under the percentage
of completion method which requires engineering estimates and assumptions
regarding costs that will be incurred over the life of a specific contract.
Actual results may differ from those estimates. In such event, the Company has
been required to adjust revenues in subsequent periods relating to revisions of
prior period estimates, resulting in fluctuations in the Company's results of
operations from period to period. See "Risk Factors--Fluctuations in Results of
Operations."

20
23
LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations to date primarily from cash
flow from operations, bank line of credit financing and loans for the purchase
of capital equipment. Cash provided from operations for the fiscal years ended
March 31, 1994, 1995 and 1996 was $183,000, $3.3 million and $456,000,
respectively, and cash used in operating activities was $112,000 for the quarter
ended June 30, 1996. The relative decrease in cash generated from operations in
fiscal 1996 compared to fiscal 1995 was due to higher levels of accounts
receivable and inventory. The increase in accounts receivable resulted from an
increase in revenues. The growing share of revenues from production led to the
need to build inventory levels to support production demands. The Company
anticipates that in future periods the level of inventories will be higher than
historical levels.

Cash provided by financing activities, principally from equipment
financing and to a lesser extent from the sale of Common Stock, was $262,000 in
fiscal 1994, $1.1 million in fiscal 1995 and $1.0 million in fiscal 1996, and
cash used in financing activities was $65,000 for the quarter ended June 30,
1996. Purchases of property and equipment, primarily consisting of test
equipment and computers, were $511,000, $1.7 million and $1.9 million,
respectively, in fiscal 1994, 1995 and 1996, and $387,000 in the quarter ended
June 30, 1996.

At June 30, 1996, the Company had $1.7 million in cash and cash
equivalents, $4.8 million in working capital and $2.4 million in long-term debt,
consisting of equipment financing, and no amounts outstanding under the
Company's line of credit. In September 1995, the Company entered into a credit
facility with Union Bank, which includes a $4.0 million line of credit and $4.0
million in commitments for equipment financing. The line of credit allows the
Company to borrow, for general working capital purposes, the greater of $1.0
million or 80.0% of eligible accounts receivable plus 50.0% of the Company's
eligible inventory. It accrues interest at the bank's prime rate, which was
8.25% at June 30, 1996, and expires on September 15, 1997. The Company is
required to pay a fee equal to 0.25% of the unused portion of the line of credit
on an annual basis.

The equipment line consists of two loans, each of which allows the
Company to borrow, for purchases of equipment, machinery and software directly
related to the Company's principal line of business, up to $2.0 million while
limiting borrowings to an 80.0% advance against the purchase price, net of sales
tax, delivery and insurance. All borrowings under the first loan were made
before September 15, 1996, at which time all unpaid principal under such loan
was converted into a fully amortizing loan for a period of 36 months with a
maturity date of September 15, 1999. All borrowings under the second loan must
be made before September 15, 1997, at which time all unpaid principal under such
loan will be converted into a fully amortizing loan for a period of 36 months
with a maturity date of September 15, 2000. As of June 30, 1996, there was
approximately $1.0 million outstanding under the first loan and no amounts
outstanding under the second loan. The equipment loans accrue interest at the
bank's prime rate plus 0.35% per annum, or 8.6% as of June 30, 1996.

The credit agreement with Union Bank contains customary financial
covenants regarding, among other things, the maintenance of stated net worth
amounts, net income levels and specific liquidity and long-term solvency ratios.
In addition, the credit agreement restricts the Company's ability to borrow
money, except in the ordinary course of business or pursuant to agreements made
with Union Bank. Amounts borrowed are secured by substantially all of the
Company's assets.

The Company's future capital requirements will depend upon many
factors, including the progress of the Company's research and development
efforts, expansion of the Company's marketing efforts, and the nature and timing
of commercial orders. The Company believes that the net proceeds from the sale
of the Common Stock offered hereby, together with its current cash balances,
amounts available under its credit facility and net cash provided by operating
activities, will be sufficient to meet its working capital and capital
expenditure requirements for at least the next 12 months. Management intends to
invest the Company's cash in excess of current operating requirements in
short-term, interest-bearing, investment-grade securities.

21
24
BUSINESS

INTRODUCTION

ViaSat designs, produces and markets advanced digital satellite
telecommunications and wireless signal processing equipment. The Company has
achieved ten consecutive years of internally generated revenue growth and nine
consecutive years of profitability, primarily through defense-related
applications. More recently, the Company has been developing and marketing its
technology through strategic alliances for emerging commercial markets, such as
rural telephony, alternative carrier access and Internet/Intranet access by
satellite to multiple servers. ViaSat is a leading provider of DAMA technology,
which allows a large number of VSAT subscribers to economically share common
satellite transponders for high-performance voice, fax or data communications.

The Company believes that DAMA satellite technology is superior to
other existing VSAT networking technologies. The existing TDM/TDMA networking
technology features a "hub and spoke" architecture which requires all
transmissions to be routed through a central terrestrial hub. Unlike TDM/TDMA
systems, DAMA provides direct, on-demand switched networking capabilities which
do not require a terrestrial hub and allow faster and more efficient use of
expensive satellite transponder resources. In addition, the Company believes
that its DAMA products, commercially marketed under the tradename StarWire(TM),
offer greater network flexibility and permit up to 50% greater satellite
capacity than competing DAMA systems.

INDUSTRY BACKGROUND

A broad array of new consumer, business and government markets, as well
as the development of new technologies, have driven the significant expansion of
the wireless communications industry. In addition to common consumer
applications such as paging, cellular telephony and new Personal Communications
Services ("PCS"), there is a wide range of other specialized terrestrial- and
space-based wireless applications. Such wireless applications include government
fixed and mobile wireless networking and commercial fixed-site, switched
satellite services, ViaSat's principal lines of business. The growth in
software-intensive wireless equipment markets stems from, among other things,
increasing dependence on voice and data networks of all types, regulatory
reform, advances in technology, decreasing costs of equipment and services,
economic growth in developing nations, the increasing importance of
communications infrastructure as a catalyst of economic growth, and increasing
user acceptance of and confidence in wireless solutions. This growth in wireless
equipment markets corresponds to a transition away from mere point to point
radio links connecting remote or mobile users towards offering more
comprehensive wireless network services. Market demands for wireless services
are being addressed by both terrestrial- and satellite-based systems.

Government Applications. Historically, the military has driven
development of many new wireless technologies -- pioneering applications of
satellite communications, digital radios, spread spectrum and mobile wireless
networks to connect widely dispersed operations. In many cases these
technologies have been extended and increased in scale for broader non-defense
use. Defense applications of wireless technologies also have evolved over the
same time period. The break-up of the Soviet Union has caused a de-emphasis on
strategic missions and a shift towards more localized tactical roles such as
peace-keeping, counter-terrorism, counter-insurgency and drug enforcement. These
missions create new demands for rapidly deployable, mobile connectivity. Overall
reductions in the defense budget have led to a numerically smaller, more
technologically-advanced force structure. As a result, defense networks
increasingly build around real-time transmission of digital

22
25
tactical data. Defense systems also are adopting and extending low cost
commercial technologies to meet their needs.

There has been a constantly shifting flow of technology between
government and commercial network applications. Both government and commercial
users developed fixed-site, long-haul applications. The government pioneered
mobile satellite terminals, as well as non-geosynchronous, high power and
extremely high frequency satellites. Commercial users adopted elements of these
technologies for Low Earth Orbit ("LEO") mobile telephony and high-powered
Direct Broadcast Satellite ("DBS") television systems. Now government agencies
are planning to integrate these technologies into still more advanced military
networks. Often, companies with both government and commercial expertise have
facilitated such technology transitions.

Commercial Applications. The recent worldwide trend toward
privatization of public telephone operators and deregulation of local telephone
("local loop") services has resulted in increased competition in the delivery of
telephone services from alternative access providers. Many of these new access
providers, such as long-distance telephone carriers, must install or upgrade
infrastructure to support basic and enhanced services. In addition, worldwide
demand for basic telephone service has grown, especially in developing
countries. As new infrastructure is established to deliver local telephone
service, the technology exists to provide cost-effective, satellite-based
wireless transmission systems, instead of a traditional wired approach, to
connect subscribers to the public telephone network.

A growing segment of the wireless communications industry involves
VSATs, which are communications systems utilizing fixed-site satellite
terminals. Historically, these systems were primarily designed for certain
specific data applications. But recent improvements in VSAT technology for
satellite-based wireless voice and data networks have led to their increasing
use in a variety of broader, higher system throughput commercial applications
such as mobile and rural telephony and more complicated data transmissions.
Satellite telephony systems are being utilized by developing countries that lack
a terrestrial-based telecommunication infrastructure, and which seek to provide
telephone service for large areas fairly rapidly and on a cost-effective basis.
Additionally, even where terrestrial systems exist, satellite systems are used
to fill in coverage for remote areas.

Evolution of VSAT Technology. The commercial VSAT business began with
U.S. customers who operated large, sophisticated private terrestrial networks
using TDM/TDMA technology. Customers such as chain retailers, hotels and auto
dealers operated private data networks with hundreds or thousands of sites and a
high flow of transactions from remote terminals to host mainframe computers for
credit card validations, point-of-sale data collection, reservations or similar
applications. Customers who used VSATs for data networking still relied on
terrestrial providers for telephone service and possibly other
telecommunications needs for their sites. Sales of such VSAT systems are often
quite sensitive to prices from telephone carriers for equivalent packet
transaction services. Users with large networks generally are the only ones who
can justify the significant one-time cost of a VSAT network management hub.

TDM/TDMA technology, while more established than DAMA technology,
features a "hub and spoke" architecture which requires all transmissions to be
routed through a central hub and is most useful for remote to mainframe network
connections. Remote-to-remote TDM/TDMA connections require two satellite hops.
DAMA is better suited for remote-to-remote connections than TDM/TDMA because the
voice quality is better and DAMA networks use expensive satellite transponders
more efficiently. DAMA satellite technology allows individual subscribers to
request links on demand directly to any other subscriber with a single satellite
hop. DAMA allows users to make exactly the connections needed, lasting only for
the duration of a voice call, fax, electronic mail or digital file transfer.
DAMA technology has been under development for many years by the DOD to serve
large networks of fixed and mobile subscribers sharing a limited amount of
satellite capacity, but is only recently being deployed in significant
quantities.

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[TDM/TDMA Hub Spoke Graphic] [DAMA Fully Connected Graphic]
(TDM/TDMA vs. DAMA)

The Company believes the opportunities for government and commercial
ground station equipment sales are increasing. The government is investing over
$1.0 billion over several years in the UHF space segment alone for tactical
communications. DAMA is applicable to several different satellite bands,
including government UHF and SHF and commercial C, K(u) and K(a) bands. DAMA is
also being required by commercial customers who believe that it is better suited
for their applications than the earlier VSAT technologies.

THE VIASAT ADVANTAGE

In light of the limitations of the TDM/TDMA architecture, and the
magnitude of the potential market for primary telecommunications services
compared to the more limited market for data transaction services, ViaSat
believes that DAMA networks will better serve the emerging international market
for VSAT, voice and data services. Virtually all of the VSAT equipment makers
are now adding DAMA products to their line of products. This represents a
discontinuity in the VSAT market. VSAT vendors are now developing new
transmission waveforms, multiple access techniques, DAMA protocols, DAMA control
software, subscriber terminals and interface protocols to support the targeted
applications (voice, fax, dial-up data, video conferencing or others), which
creates an opportunity for new equipment suppliers such as the Company.

The Company believes that its DAMA-based products have technological
advantages over competing DAMA products in offering practical solutions for
telecommunications applications through several means:

Flexibility

Since communications networks are evolving so quickly, a
system such as the Company's that can be easily extended and configured
has a competitive advantage.

-- REAL-TIME DIGITAL SIGNAL PROCESSING FIRMWARE. The Company's
technology involves extensive use of real-time digital signal
processing firmware to implement both signal processing and DAMA
networking protocol functions. This approach was developed and
proven under several government programs, especially UHF DAMA. The
Company believes that digital signal processing firmware offers
great flexibility in adding new features and that product costs
should decrease if prices of Texas Instruments digital signal
processing chips and associated peripherals continue to decline.
The Company's digital signal processing design allows common
hardware to be applied to both government and commercial markets.
-- WINDOWS NT(TM)-BASED NETWORK CONTROL. ViaSat believes that it is
the only company using an Intel PC/Windows NT(TM) computer
platform for its network control system. Most vendors still use
Unix platforms. ViaSat developed and proved Windows NT(TM) as a
viable network control platform under government funded UHF and
SHF DAMA programs. Windows NT(TM) has several advantages which the
Company believes support its technical leadership position:
-- True real-time multi-tasking, allowing many functions to be
moved from specialized VSAT hardware into an industry-standard
personal computer. Such functions can be developed more
quickly and are more easily modified to support new
communications applications and interfaces.
-- Lower overall costs and faster time to market in terms of
development hardware and software tools, a more readily
available pool of experienced software engineers, lower
recurring cost of network control computer platforms, less
expensive networking and communications interfaces and lower
operator training costs than Unix-based systems.

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-- DOD approved access-control is built directly into the
network-controller computer operating system. This includes
secure remote-access via many built-in communication paths.
The Company believes computer security is essential technology
for mission critical telecommunication tasks such as billing.
-- STANDARD VSAT PLATFORM. ViaSat believes that it is the only
company building on a standard "open systems" VSAT platform for
commercial and SHF DAMA products. Open systems enable mix and
match of satellite equipment and baseband terrestrial interfaces
on a circuit by circuit basis. The architecture supports third
party interface cards for faster time to market for specialized
terrestrial interfaces. While open systems architecture does not
offer the lowest possible manufacturing cost for any single fixed
terminal configuration, it is consistent with two other strategic
objectives: (i) rapid time to market by building on industry
standard third-party hardware and software and (ii) flexibility to
support a broad array of services and applications consistent with
the Company's target distribution channels of service providers.
-- INTERNALLY-DEVELOPED TECHNOLOGY. Many competing VSAT providers are
primarily systems integrators with little internally-developed
technology, particularly in the software and firmware areas. The
Company believes its extensive internal technology development
capability gives it an advantage in flexibility, time-to-market
and product quality.

Capacity

ViaSat's narrow-spacing technology, developed during the
course of its government DAMA contracts, has less unused bandwidth
between voice channels than other DAMA systems, and this, along with
more precise power-usage control software, allows ViaSat's DAMA
products to achieve up to 50% greater satellite capacity than competing
DAMA systems.

Certification

ViaSat is currently the only provider of DAMA products which
has received certification from the U.S. government that one of its
DAMA products meets the required military specifications for 5 kHz
products in accordance with MIL-STD 188-182. The rigorous military
certification process may take up to several months to complete.

STRATEGY

Maintain and Enhance Technology Leadership Position. The Company's
strategy is to maintain and enhance its leadership position in DAMA-based
satellite technology by continuing its participation in selected DOD programs
involving networking technology and other related real-time signal processing
and networking software. The Company is also investing in proprietary research
for commercial applications. The Company's objective is to continue to offer
high-performance, software-oriented products which provide the most effective
use of satellite power and bandwidth as well as offering the most flexible
platform for continued growth.

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software products. The Company has over 150 research engineers on staff and
emphasizes offering technologically-superior products. The Company generally
retains certain proprietary rights from the government-funded research and
development of its defense products and is also devoting a significant amount of
its own resources to independent product development.

Address Rural Telephony Market. The Company believes there is a
substantial unmet demand for rural telephony services, especially in developing
countries. The Company's strategy is to capitalize on its networking software
expertise to develop technology for establishing regional rural telephony
network infrastructures of strategically located VSAT terminals capable of
handling multiple satellite telephone calls ("Point-of-Entry Terminals"). The
Company believes such an infrastructure would have a competitive advantage over
a single Point-of-Entry system by minimizing the ground transmission cost of
each satellite telephone call by permitting such calls to enter the Public
Switched Telephone Network (PSTN) through the Point-of-Entry Terminal closest to
the call's destination. The Company's strategy also includes seeking
partnerships with regional and local service providers to create distribution
channels for rural telephony infrastructures and to provide related retail
distribution services, including sales of Company-designed subscriber terminals,
installation and maintenance, as well as customer service, billing and revenue
collection.

TECHNOLOGY

The Company's VSAT technology is focused on DAMA which allows
individual subscribers to request links on demand to any other subscriber
through one satellite hop. TDM/TDMA technology, while more established than DAMA
technology, features a "hub and spoke" architecture which requires all
transmissions to be routed through a central hub and is most useful for remote
to mainframe network connections. Remote-to-remote TDM/TDMA connections require
two satellite hops. DAMA is better suited for remote-to-remote connections than
TDM/TDMA because the voice quality is better and DAMA networks use expensive
satellite transponders more efficiently.

DAMA technology has been under development for many years by the DOD,
but is only recently being deployed in significant quantities. DAMA is
applicable to several different satellite bands, including government UHF and
SHF and commercial C, K(u) and K(a) bands. A major objective for the DOD is to
improve capacity of extremely expensive government-owned satellite transponders.
The government expects DAMA to increase capacity for UHF tactical users by as
much as a factor of ten, depending on the application and traffic usage,
compared to dedicated non-DAMA links.

A DAMA system consists of (i) a set of subscribers with DAMA-capable
terminals, (ii) a network management terminal which orchestrates access to a
shared satellite resource, and (iii) satellite transponder capacity managed by
the network controller and shared by subscribers. DAMA subscribers use
networking protocols to interact with the controller and each other. The essence
of DAMA is that the network controller allocates a shared satellite resource to
a particular combination of subscribers only when they request it, and then
terminates the connection when they are finished.

DAMA protocols may be either "open" or "proprietary." Open standards
are published so that multiple manufacturers can develop equipment that works
together. The DOD has designated two different open DAMA standards defining
over-the-air interfaces for narrowband UHF satellite communications channels.
MIL-STD 188-182 defines an interoperable waveform for channels with 5 kHz
bandwidth, and MIL-STD 188-183 defines the 25 kHz channel waveform. The DOD is
currently defining open standards for SHF channels and for government DAMA use
of commercial C and K(u) band transponders. There are no widely accepted
commercial open DAMA standards, and no open standards have evolved for TDM/TDMA
VSATs.

DAMA vs. TDM/TDMA. DAMA is being sought by customers who see that it is
a better fit than TDM/TDMA VSATs for non-transaction applications such as voice
and fax. The principal limitations of TDM/TDMA for non-transaction applications
are:

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Capacity Limitations and Costs

-- The TDM/TDMA hub and spoke architecture is primarily designed for
rapid service for sporadic, short, burst transactions between a
remote site and a mainframe computer. The hubs typically only
support a maximum instantaneous aggregate data rate of 256 kbps to
approximately 1 Mbps divided among the entire subscriber
population (often several thousand terminals). This is a severe
bottleneck for sustained circuit-type services like telephony, fax
or peer-to-peer file transfers, which often dominate when the VSAT
becomes the primary communication means for a site, as in
telephony uses. In contrast, a comparable DAMA system has a much
higher aggregate capacity. For small networks the TDM/TDMA hub
performance is not a capacity bottleneck, but the typical hub
price of approximately $1.0 million, amortized over a small
number of subscribers, is usually prohibitively expensive. The
equipment cost for a comparable DAMA system for voice use, in
contrast, would be significantly less.

Transmission Time

-- The hub and spoke architecture requires all calls (voice or data)
between two remote nodes to be routed through the hub. This causes
each call to traverse two separate satellite hops in each
direction (remote A-to-satellite-to-hub and then
hub-to-satellite-to-remote B, with the return path from remote B
to remote A also traversing two satellite hops). The additional
time delay due to the extra satellite hops is striking for voice
communications and is unacceptable to many users. Plus, the two
satellite hops consume more expensive transponder resources per
call than a single hop DAMA connection.

DAMA vs. Dedicated SCPC. In contrast to DAMA, which allows individual
subscribers to request links to other subscribers on demand, dedicated Single
Channel Per Carrier ("SCPC")-based systems maintain dedicated, unswitched links
between subscribers, such as for long distance trunk lines. Dedicated links
provide high quality transmissions, but only between particular subscriber sets.
In order to provide connections among many sites, an SCPC-based system would
require a dedicated link between each subscriber and each other subscriber,
which would be prohibitively expensive. As a result, DAMA is a much more
attractive solution for managing large numbers of network subscribers, as DAMA
provides transmissions of equally high quality, without restricting the
subscribers' ability to establish links on demand to any other subscriber.

Mobile Satellite vs. Fixed-site DAMA. The obvious advantage of
commercial mobile satellite systems, such as Iridium(TM) and GlobalStar(TM), is
that they allow subscribers to be mobile. A mobile satellite terminal can be
used by either a mobile or a fixed subscriber, while a fixed terminal cannot be
used by a mobile subscriber. However, in order to gain mobility, mobile
terminals employ an omni-directional antenna which operates at lower frequencies
and provides less bandwidth than is available in the fixed-site DAMA satellite
bands. Less bandwidth corresponds to less capacity and fewer voice circuits.
Also, mobile satellite systems typically require a greater investment in unique
space-based satellite resources than fixed-site DAMA systems which use existing
capacity on general purpose communication satellites. The combination of lower
capacity plus higher capital investments means that mobile service providers are
projecting per-minute service costs that are five to ten times higher than that
possible through fixed-site DAMA-based systems. Therefore, the Company believes
that customers who require satellite telephony services at fixed locations will
find fixed-site DAMA services to be much more economical than using mobile
satellite phones -- even if they already own mobile satellite phones for mobile
use.

Non-DAMA Technology. The Company offers products outside of DAMA and
satellite communications that benefit from the Company's wireless networking
software and related technology. Important non-DAMA applications include:

-- Spread spectrum digital radios for real-time tactical data
networks among ground and airborne users. The JTIDS (Joint
Tactical Information Distribution System) radio builds on the
Company's software,

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firmware and hardware technology. The government is investing in
"digitized battlefield" communications in an effort to obtain
greater effectiveness from expensive tactical aircraft.
-- Information security modules that encrypt classified information
that can be broadcast and routed across unclassified wired or
wireless networks. This technology allows the government to make
better use of commercial networks for securely transmitting
classified information.
-- Equipment that tests wireless receivers in the presence of
complex, simulated radio wave environments. This technology allows
the government to thoroughly test sophisticated airborne radio
equipment without expensive flight exercises.

GOVERNMENT MARKETS, PRODUCTS AND CUSTOMERS

Government Markets

The Company believes it has an opportunity to build on its government
DAMA technology, software, hardware design and manufacturing base to capture
significant revenues in the government markets.

UHF DAMA Markets. The Company is considered a leader in the UHF DAMA
market. The DOD requires all UHF satellite communications terminals to meet open
DAMA standards. This mandate has helped stimulate the UHF DAMA market. ViaSat is
active in the following business segments:

-- UHF DAMA NETWORK CONTROL INFRASTRUCTURE. ViaSat has over $20.0
million in contracts with the U.S. Air Force for an initial
network control system. This includes development, production,
installation and support for four global sites. Each site serves
as a primary controller for seven channels and as an alternate for
seven channels. Each satellite has 38 channels, offering a
potential market for additional production, installation and
support services.
-- MANPACK TERMINALS. ViaSat has a contract with Hughes Defense
Communications (formerly Magnavox) for over 3,000 DAMA modems for
manpacks. The contract has options which allow the DOD in its
discretion to purchase up to an additional 4,000 of such modems.
-- AIRBORNE DAMA TERMINALS. The 5 kHz channel DAMA protocols were
designed to support U.S. Air Force aircraft. The U.S. Navy is also
a major user of airborne UHF terminals. ViaSat equipment has been
designed into a number of platforms, including P-3, S-3, Air Force
One, EP-3, ES-3, Tomahawk cruise missiles and others.
-- INTERNATIONAL UHF DAMA MARKET. Cooperative efforts among
multiple nations, such as in the Gulf War and Bosnia, require that
allies have a standard communications platform. There are
requirements for some units of NATO and other allies to have UHF
DAMA capable satellite terminals.

The Company's strategy includes actively working to expand the UHF DAMA
market as a whole, while sustaining its leading market share. Increasing the
market means extending UHF satellite communications capability to new users. UHF
satellite communications access and market size is limited in the following
ways:

-- AVAILABILITY OF SATELLITE CAPACITY. Without DAMA, many users are
denied access because higher priorities consume all channels. DAMA
expands capacity. The Company anticipates increases in the UHF
market, versus pre-DAMA levels, due to pent-up demand for service.
-- EQUIPMENT SIZE AND WEIGHT. Most users are mobile and thus size and
weight sensitive. They carry equipment in back-packs, or airframes
where communication gear displaces weapons or mission critical
payloads. Easier to carry, smaller, lighter equipment may expand
the market beyond a core group who require DAMA to complete their
mission.
-- EQUIPMENT PRICE. The Company believes that the UHF DAMA market can
expand by reducing the price of DAMA equipment. Embedded DAMA
radios are less expensive than stand-alone models, and offer
reduced size and weight.
-- IMPROVED DAMA SUBSCRIBER SERVICES. The current DAMA system is a
data "pipe." The Company anticipates that demand for DAMA can grow
by increasing the value of the content sent over the

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pipes. Several areas are being explored, including improved secure
voice quality, increased message routing capability, higher data
rates and improved service set-up times.
-- DAMA SIGNAL PROCESSING. Airborne DAMA is currently limited to
large, slow aircraft for surveillance, airlift, command and
control, or similar missions. High performance aircraft are
excluded because current satellite communications antennas degrade
mission performance or safety. A promising solution is to use low
profile, conformal antennas with active combiners. The Company has
a combiner contract with Lockheed Martin which, if successful,
opens the possibility of extending the UHF DAMA market to high
performance aircraft.

ViaSat is also applying the market expansion strategy to its Advanced
Data Controller ("ADC") products. ADC conforms to MIL-STD 188-184 for packet
processing. It provides error-free data transmission over noisy channels. ADC
works for terrestrial and satellite communications wireless links. The Company
is working to reduce size, weight and price for ADC products, and potentially
licensing other manufacturers to embed ViaSat's ADC digital signal processing
firmware directly into their radios.

Tri-band DAMA Markets. The U.S. government is a major consumer of
leased commercial satellite capacity in the C and K(u) bands. Since satellite
availability is limited, the government has specified the purchase of "tri-band"
terminals (i.e., terminals which can operate on any of three bands, SHF (X
band), C or K(u) band). This makes it easier for subscribers to use available
capacity in any band, as a function of time and location. The government
established the Commercial Satellite Communications Initiative ("CSCI") program
to manage:

-- Long term leases for commercial satellite transponders.
-- Contracts to purchase tri-band satellite terminals.
-- Bandwidth Management Centers to act as network controllers for the
tri-band terminals.

The DOD is defining an "open" standard for DAMA in SHF and commercial
satellite bands. The government owns and operates the Defense Satellite
Communication System ("DSCS") constellation at SHF. Bandwidth at SHF is much
greater than at UHF -- over 200 MHz per satellite compared to less than 2 MHz at
UHF. Still, SHF capacity is insufficient and could be improved via DAMA. More
effective SHF use should reduce the government's monthly lease on commercial
satellites used for overflow. The potential market for SHF DAMA capable
terminals may be as large as that for UHF DAMA terminals.

Extending DAMA to commercial satellites vastly increases the bandwidth
available for government users. Increased bandwidth should support many more
terminals, increasing the potential DAMA user equipment market.

In 1994, ViaSat was awarded a $2.0 million contract by the U.S. Air
Force for prototype demonstration of a draft SHF DAMA standard. This contract is
still underway. In February 1996, the Company delivered and installed equipment
which performs many, but not all, of the protocols in the draft. The DOD has not
yet designated a final version of SHF DAMA, nor has the DOD yet issued a mandate
for DAMA in SHF terminals.

The government tri-band DAMA market is very immature. This market will
likely not grow substantially until the DOD adopts a final standard and mandates
its use. However, there can be no assurance that the Company's products will be
procured by the government or prime contractors, even if a final standard
similar to the draft version is adopted. The Company is working to position its
SHF DAMA products through participation in government-industry standards working
groups and by providing proof-of-concept equipment through an existing SHF DAMA
contract with the U.S. Air Force. ViaSat also has been working with terminal
manufacturers to help ensure that its DAMA equipment integrates easily into
their products. Finally, the Company is working to maintain a prudent level of
commonality between the government and commercial DAMA modem platforms. The
benefit of commonality is that the larger commercial market offers economies of
scale that reduce manufacturing costs for the smaller government market. There
is a potential disadvantage if unique government product requirements increase
the cost of commercial products. The Company considers issues arising from this
trade-off on a case-by-case basis.

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Government Products

ViaSat's DAMA products for the government market include:

-- EMUT (ENHANCED MANPACK UHF TERMINAL) is a battery-operated UHF
satellite radio which Hughes Defense Communications (formerly
Magnavox) builds for the U.S. Army. ViaSat provides a DAMA modem
to Hughes under subcontract. EMUT is used to send encrypted voice,
electronic mail, fax or other data via satellite. The DAMA modem
allows the operator to automatically request a portion of a
satellite channel to a selected destination whenever the operator
asks to send a message or make a call. The EMUT radio, combined
with a portable satellite antenna, can be used to make a secure
voice or data call almost anywhere in the world.
-- INCS (INITIAL NETWORK CONTROL SYSTEM) is the DAMA network
management system for the U.S. Air Force. There are four sites
worldwide (Guam, Hawaii, Naples and Virginia) that manage
automatic DAMA access to 5 kHz band with UHF satellite channels.
The network control computer automatically allocates satellite
resources to subscriber terminals (such as EMUT) whenever a
subscriber requests a voice or data service. The INCS also keeps
track of which satellite terminals are active, how much capacity
is used and how much is available. ViaSat designs, installs and
supports the whole system at each site.
-- VM-200 (ALSO CALLED MD-1324) is ViaSat's stand-alone UHF DAMA
modem product. The modem can be used with many UHF satellite
radios having an industry standard 70 MHz interface. The VM-200
enables a satellite radio to connect to a DAMA network. VM-200
modems also are used in the INCS to communicate with subscribers.
The modems connect to external voice coders, computers or
encryption equipment and provide network access for those devices.

ViaSat's other government wireless networking products include:

-- JTIDS (JOINT TACTICAL INFORMATION DISTRIBUTION SYSTEM) is an
anti-jam radio and message protocol standard for communicating
real-time data among aircraft and ground units. It connects to
sensors (like radar), computers, and targeting systems and
provides information used for navigation, target identification,
tracking and fire control. JTIDS is currently used as the wireless
communication system for "digital battlefields." It allows
individual fighter planes to obtain a broad view of the
battlefield that is synthesized based on many different views from
many different participants.
-- CES/JCS (COMMUNICATION ENVIRONMENT SIMULATOR/JOINT COMMUNICATION
SIMULATOR) is used to simulate a realistic radio environment which
can be used to test how well surveillance or other radio systems
work in the presence of various and changing signals. It can
simulate friendly military signals, neutral signals, commercial
signals and enemy signals. The government uses the simulated total
environment to verify that a system under test can correctly
analyze specific target signals within a complicated and cluttered
composite signal.
-- EIP (EMBEDDABLE INFOSEC PRODUCT) is a plug-in module that encrypts
classified information so that it can be broadcast over wireless
systems (terrestrial or satellite) or sent over unclassified
wirelines. EIP is unique because it can work for packet data
systems instead of on circuits. For instance, EIP can encrypt
information for the Internet (or government equivalents). EIP also
can separate the addressing and routing information from a packet
and allow such information to remain unencrypted so that the
network can correctly route the packet to its destination.
-- ADC (ADVANCED DATA CONTROLLER) is a packet processing system which
provides error-free data transmission over noisy channels. ADC
works for terrestrial and satellite communications wireless lines.

Government Customers

The Company's major customers in the government DAMA market include:

-- Hughes Defense Communications (formerly Magnavox) is the customer
for the EMUT DAMA modem. Hughes is also a customer for the
Tomahawk Baseline Improvement Program which includes adding a UHF
DAMA satellite link to Tomahawk cruise missiles.

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-- The U.S. Air Force Electronics System Center ("ESC") is the
customer for the 5 kHz UHF DAMA Global Initial Network Control
System. ESC also procures stand-alone DAMA modems and
Control/Indicators for various Air Force user agencies.
-- Lockheed Martin is the customer for the VM-200 under the
Communications Improvement Program.
-- Lockheed Martin Loral is the customer for the airborne
DAMA-capable UHF satellite communications antenna combiner.
-- The U.S. Air Force Rome Labs has entered into a contract with the
Company for SHF and tri-band DAMA development and production.
-- The Company also has entered into a number of smaller contracts
with the DOD for UHF DAMA and ADC satellite equipment.

The Company's major government customers for other wireless networking
products include:

-- Lockheed Martin, the U.S. Air Force and Logicon are the customers
for JTIDS.
-- The U.S. Navy and U.S. Air Force are the customers for CES/JCS.
-- The U.S. Navy is the customer for EIP.

COMMERCIAL MARKETS, PRODUCTS AND CUSTOMERS

Commercial Markets

DAMA technology is increasingly being used in emerging commercial
telecommunications markets. In contrast to "pre-assigned" or "hub and spoke"
satellite networks, DAMA is well suited to primary "circuit-oriented"
telecommunication because it routes connections in real-time on a call-by-call
basis from any subscriber to any other subscriber with only one satellite hop.
See "--Industry Background" and "--Technology." DAMA commercial markets can be
segmented as follows:

-- TURN-KEY PRIVATE NETWORK EQUIPMENT SALES for corporations and
government agencies in developing nations. These customers require
voice and/or data services. Users manage their own networks and/or
contract for management services. They lease satellite capacity in
bulk. DAMA equipment is selected based primarily on purchase and
operating costs for specific needs. Customers typically need to
operate ten or more sites for a turn-key private network to be
economical.
-- "SHARED HUB" PRIVATE NETWORK SERVICE PROVIDERS. Customers with
small networks may use a satellite service provider. The provider
purchases a DAMA network and obtains transponder capacity at
wholesale rates. The provider manages small "virtual" nets for its
customers. Customers buy capacity from the provider at retail
daily, hourly or minute rates. Service providers have different
priorities than turn-key operators. Breadth and depth of service
offerings are more important to providers since they must attract
a broad base of customers. DAMA terminals must support a range of
telephone and data equipment. Providers generally prefer flexible
user terminal configurations to meet varying customer needs. They
profit from the spread between wholesale transponder lease costs
and retail minute prices, so DAMA performance is important.
Efficiency advantages (measured, for example, by voice circuits
per unit bandwidth) can offset a higher initial terminal purchase
price over the term of a service contract.
-- PUBLIC NETWORK CARRIER SERVICE PROVIDERS. Many telecommunications
carriers use satellite links as part of their long distance
networks. However, the satellite segment usually consists of a
pre-planned link establishing a particular geographic connection
at a fixed capacity. A satellite DAMA network can reduce costs for
independent carriers by bypassing transit switching charges
through a telecommunications hub city. Satellite DAMA can serve as
either a primary link or as a back-up when terrestrial links are
congested. DAMA satellite technology provides an economical
secondary connection because the satellite pool of trunk lines can
be quickly applied to any of the primary terrestrial routes. The
DAMA network's ability to reach many different destinations offers
a competitive advantage to a DAMA operator whose business is
selling wholesale minutes of long distance service to national or
regional carriers.

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-- PUBLIC NETWORK "LOCAL LOOP" SUBSCRIBER SERVICE PROVIDERS.
Subscriber services differ from the carrier services in that there
is a local loop interface between the DAMA satellite switch and a
subscriber telephone. This allows a subscriber with a small VSAT
terminal to connect directly into the public switched telephone
network by using a single dial-tone to call to other satellite
subscribers or to terrestrial phones through national (and/or
international) switches. While the Company believes the local loop
subscriber service has, by far, the greatest potential market
volume for equipment manufacturers and also represents the
greatest opportunity for service providers, there are numerous
technical, regulatory and business management hurdles to
implementing this service.

Commercial Products

STARWIRE(TM) is a satellite networking system consisting of two major
elements, a network control system and a subscriber terminal. The network
control system sends and receives messages over the satellite, while the
subscriber terminal switches all user interface ports (voice and data)
individually and connects them call-by-call to an available satellite modem.
StarWire(TM) provides toll-quality voice circuits on a demand basis, efficiently
sharing satellite resources and thereby reducing costs to the end-user and the
network service provider.

StarWire(TM) products include:

-- AURORA TERMINAL is a ten slot rack mountable chassis configured
with one VMM-101 and one TIM-201 (described below). The terminal
is expandable to six user traffic channels by inserting additional
VMM modems and TIM modules. Expansion beyond six channels is
possible by using additional Aurora chassis with VMM modems and
TIM modules installed.
-- VMM-101 is a DAMA modem module designed for the Aurora. The
VMM-101 is a single modem used for both user-data transmission and
order-wire control channels.
-- TIM-201 is a dual channel voice encoder/decoder module designed
for the Aurora. The TIM-201 has a fax modem on board, along with
an integrated echo canceller.
-- TMC-101 is a terminal monitor and control card designed for the
Aurora. The "EIP" version has an integrated LAN Ethernet port and
supports multiple daughter-cards for data communications and
additional external equipment control support.
-- STARWIRE(TM) NETWORK CONTROL TERMINAL (NCT) is a ten slot rack
mountable Aurora chassis with one Network Control Computer (NCC)
interface card and two VMM-101 modems (operating as DAMA system
control channel modems).
-- STARWIRE(TM) DAMA NETWORK CONTROL SOFTWARE (NCS) provides the
real-time network control and monitoring functions of the
StarWire(TM) DAMA networking system. The NCS software acts as a
switch to route calls through the network. In addition, the
StarWire(TM) NCS monitors all aspects of system operation as well
as collecting historical information about calls and maintaining
detailed call records for billing purposes.
-- STARWIRE(TM) NETWORK CONTROL COMPUTER (NCC) is computing and
networking equipment designed to support the operation of the NCS
software. The non-redundant configuration (NCC-100) provides for
one operator workstation/server, Ethernet interface, Windows
NT(TM) operating system and back-up media. The redundant
configuration (NCC-200) provides two operator
workstations/servers, Ethernet adapter cards, Windows NT(TM)
operating system and back-up media.
-- EXTERNAL DEVICE INTERFACE DRIVER (EDID) supports third party modem
and RF terminal equipment.

Commercial Customers

The Company is in the early stages of establishing sales for its
StarWire(TM) commercial DAMA product. Activities to date have primarily focused
on establishing distribution agreements with "in-country" service providers,
distributors and original equipment manufacturers ("OEMs"). The Company also has
delivered several test versions of the StarWire(TM) product for customer
evaluation and demonstration purposes. To date, the Company has received
purchase orders from its commercial customers to purchase approximately $3.0
million, and commitments to purchase an additional $1.0 million, of its
products. The Company's major customers in the commercial DAMA market include:

32
35
-- AT&T Tridom - Tridom has the second largest VSAT revenues
(counting equipment and services) in the United States. Tridom
selected ViaSat as the private label manufacturer of a Tridom
"Clearlink"-labeled DAMA VSAT product through competitive bids.
Tridom has taken delivery of two test systems, one of which is
installed at a customer site in Indonesia.
-- HCL Comnet - HCL, located in India, operates the largest single
VSAT network in India for the national stock exchange. HCL
selected ViaSat's StarWire(TM) system for HCL's DAMA private
network products and services. ViaSat's contract with HCL provides
that HCL must use ViaSat as its exclusive supplier of DAMA
networks and that ViaSat may not supply DAMA networks to any other
India-based company, although ViaSat may supply such networks to
companies based in other areas which provide VSAT services in
India. HCL has placed an order for initial production systems.
-- ViaSat also has executed distribution agreements and purchase
contracts with companies operating VSAT networks in Mexico, the
Caribbean, South America and other regions.

RESEARCH AND DEVELOPMENT

The Company believes that its future success depends on its ability to
adapt to the rapidly changing satellite communications and related real-time
signal processing and networking software environment, and to continue to meet
its customers' needs. Therefore, the continued timely development and
introduction of new products is essential in maintaining its competitive
position. The Company develops most of its products in-house and currently has
a research and development staff which includes over 150 engineers. A
significant portion of the Company's research and development efforts in the
defense industry have generally been conducted in direct response to the
specific requirements of a customer's order and, accordingly, such amounts are
included in the cost of sales when incurred and the related funding (which
includes a profit component) is included in net revenues at such time. Revenues
for funded research and development during the fiscal years ended March 31,
1994, 1995 and 1996 were approximately $9.7 million, $20.7 million and $19.5
million, respectively. In addition, the Company invested $134,000, $788,000 and
$2.8 million, respectively, during the fiscal years ended March 31, 1994, 1995
and 1996 on independent research and development, which is not directly funded
by a third party. Funded research and development contains a profit component
and is therefore not directly comparable to independent research and
development. As a government contractor, the Company also is able to recover a
portion of its independent research and development expenses, consisting
primarily of salaries and other personnel-related expenses, supplies and
prototype materials related to research and development programs, pursuant to
its government contracts.

The Company has benefitted and continues to benefit from the SBIR
program, through which the government provides research and development funding
for companies with fewer than 500 employees. While the Company has already
harvested significant benefits from the SBIR program throughout the initial
developmental stages of its core technology base, the Company believes that its
business, financial condition and results of operations would not be materially
adversely affected if the Company were to lose its SBIR funding status. The
Company plans to leverage from this technology base to further develop products
for commercial applications.

MANUFACTURING

The Company's manufacturing objective is to produce products that
conform to its specifications at the lowest possible manufacturing cost. The
Company is engaged in an effort to increase the standardization of its
manufacturing process in order to permit it to more fully utilize contract
manufacturers. As part of its program to reduce the cost of its manufacturing
and to support an increase in the volume of orders, the Company primarily
utilizes contract manufacturers in its manufacturing process. The Company
conducts extensive testing and quality control procedures for all products
before they are delivered to customers.

The Company also relies on outside vendors to manufacture certain
components and subassemblies used in the production of the Company's products.
Certain components, subassemblies and services necessary for the manufacture of
the Company's products are obtained from a sole supplier or a limited group of
suppliers. In particular, Texas Instruments is a sole source supplier of digital
signal processing chips, which are critical components used by the Company in
substantially all of its products. The Company intends to reserve its limited

36
internal manufacturing capacity for new products and products manufactured in
accordance with a customer's custom specifications or expected delivery
schedule. Therefore, the Company's internal manufacturing capability for
standard products has been, and is expected to continue to be, very limited, and
the Company intends to rely on contract manufacturers for large scale
manufacturing. There can be no assurance that the Company's internal
manufacturing capacity and that of its contract manufacturers and suppliers will
be sufficient to fulfill the Company's orders in a timely manner. Failure to
manufacture, assemble and deliver products and meet customer demands on a timely
and cost effective basis could damage relationships with customers and have a
material adverse effect on the Company's business, financial condition and
operating results.

SALES AND MARKETING

The Company markets its products to the DOD and to commercial customers
worldwide primarily through the Company's internal sales and marketing staff of
nine people. After the Company has identified key potential customers in its
market segments, the Company makes sales calls with its sales, management and
engineering personnel. Many of the companies entering the wireless
communications markets possess expertise in digital processing and wired systems
but relatively little experience in DAMA wireless transmission. In order to
promote widespread acceptance of its products and provide customers with support
for their wireless transmission needs, the Company's sales and engineering teams
work closely with its customers to develop tailored solutions to their wireless
transmission needs. The Company believes that its customer engineering support
provides it with a key competitive advantage.

During the fiscal year ended March 31, 1996 and the quarter ended June
30, 1996, respectively, ViaSat sold products to approximately 42 and 23
customers of which DOD contracts accounted for approximately 97.5% and 98.6% of
total revenues.

BACKLOG

At June 30, 1996, the Company had firm backlog of $38.0 million, of
which $34.7 million was funded, not including options of $25.9 million. Of the
$38.0 million in firm backlog, approximately $30.0 million is expected to be
delivered in the fiscal year ending March 31, 1997 and the balance is expected
to be delivered in the fiscal year ending March 31, 1998. The Company had firm
backlog of $28.7 million, not including options of $28.0 million, at March 31,
1996, compared to firm backlog of $31.7 million, not including options of $27.3
million, at March 31, 1995. The Company includes in its backlog only those
orders for which it has accepted purchase orders. However, backlog is not
necessarily indicative of future sales. A majority of the Company's backlog
scheduled for delivery can be terminated at the convenience of the government
since orders are often made substantially in advance of delivery, and the
Company's contracts typically provide that orders may be terminated with limited
or no penalties. In addition, purchase orders may set forth product
specifications that would require the Company to complete additional product
development. A failure to develop products meeting such specifications could
lead to a termination of the related purchase order.

The backlog amounts as presented are comprised of funded and unfunded
components. Funded backlog represents the sum of contract amounts for which
funds have been specifically obligated by customers to contracts. Unfunded
backlog represents future contract or option amounts that customers may obligate
over the specified contract performance periods. The Company's customers
allocate funds for expenditures on long-term contracts on a periodic basis. The
Company is committed to produce products under its contracts to the extent funds
are provided. The funded component of the Company's backlog at June 30, 1996 was
approximately $34.7 million, and the funded components of the Company's backlog
at March 31, 1995 and 1996 were $29.6 million and $26.3 million, respectively.
The ability of the Company to realize revenues from government contracts in
backlog is dependent upon adequate funding for such contracts. Although funding
of its government contracts is not within the Company's control, the Company's
experience indicates that actual contract fundings have ultimately been
approximately equal to the aggregate amounts of the contracts.

GOVERNMENT CONTRACTS

A substantial portion of the Company's revenues are derived from
contracts and subcontracts with the DOD and other federal government agencies.
Many of the Company's contracts are competitively bid and awarded

34
37
on the basis of technical merit, personnel qualifications, experience and price.
The Company also receives some contract awards involving special technical
capabilities on a negotiated, noncompetitive basis due to the Company's unique
technical capabilities in special areas. Future revenues and income of the
Company could be materially affected by changes in procurement policies, a
reduction in expenditures for the products and services provided by the Company,
and other risks generally associated with federal government contracts. See
"Risk Factors--Dependence on Defense Market" and "--Government Regulations."

The Company provides products under federal government contracts that
usually require performance over a period of one to five years. Long-term
contracts may be conditioned upon continued availability of Congressional
appropriations. Variances between anticipated budget and Congressional
appropriations may result in a delay, reduction or termination of such
contracts. Contractors often experience revenue uncertainties with respect to
available contract funding during the first quarter of the government's fiscal
year beginning October 1, until differences between budget requests and
appropriations are resolved.

The Company's federal government contracts are performed under
cost-reimbursement contracts, time-and-materials contracts and fixed-price
contracts. Cost-reimbursement contracts provide for reimbursement of costs (to
the extent allowable, allocable and reasonable under Federal Acquisition
Regulations) and for payment of a fee. The fee may be either fixed by the
contract (cost-plus-fixed fee) or variable, based upon cost control, quality,
delivery and the customer's subjective evaluation of the work (cost-plus-award
fee). Under time-and-materials contracts, the Company receives a fixed amount by
labor category for services performed and is reimbursed (without fee) for the
cost of materials purchased to perform the contract. Under a fixed-price
contract, the Company agrees to perform certain work for a fixed price and,
accordingly, realizes the benefit or detriment to the extent that the actual
cost of performing the work differs from the contract price. Contract revenues
for the fiscal year ended March 31, 1996 and the quarter ended June 30, 1996,
respectively, were approximately 38.7% and 41.4% from cost-reimbursement
contracts, approximately 5.0% and 7.0% from time-and-materials contracts and
approximately 56.3% and 51.6% from fixed-price contracts. See "Risk
Factors--Contract Profit Exposure."

The Company's allowable federal government contract costs and fees are
subject to audit by the Defense Contract Audit Agency. Audits may result in
non-reimbursement of some contract costs and fees. While the government reserves
the right to conduct further audits, audits conducted for periods through fiscal
1994 have resulted in no material cost recovery disallowances for the Company.

The Company's federal government contracts may be terminated, in whole
or in part, at the convenience of the government. If a termination for
convenience occurs, the government generally is obligated to pay the cost
incurred by the Company under the contract plus a pro rata fee based upon the
work completed. When the Company participates as a subcontractor, the Company is
at risk if the prime contractor does not perform its contract. Similarly, when
the Company as a prime contractor employs subcontractors, the Company is at risk
if a subcontractor does not perform its subcontract.

Some of the Company's federal government contracts contain options
which are exercisable at the discretion of the customer. An option may extend
the period of performance for one or more years for additional consideration on
terms and conditions similar to those contained in the original contract. An
option may also increase the level of effort and assign new tasks to the
Company. In the Company's experience, options are usually exercised.

The Company's eligibility to perform under its federal government
contracts requires the Company to maintain adequate security measures. The
Company has implemented security procedures which it believes are adequate to
satisfy the requirements of its federal government contracts.

GOVERNMENT REGULATIONS

Certain of the Company's products are incorporated into wireless
telecommunications systems that are subject to regulation domestically by the
Federal Communications Commission and internationally by other government
agencies. Although the equipment operators and not the Company are responsible
for compliance

35
38
with such regulations, regulatory changes, including changes in the allocation
of available frequency spectrum and in the military standards which define the
current networking environment, could materially adversely affect the Company's
operations by restricting development efforts by the Company's customers,
obsoleting current products or increasing the opportunity for additional
competition. Changes in, or the failure by the Company to manufacture products
in compliance with, applicable domestic and international regulations could have
a material adverse effect on the Company's business, financial condition and
results of operations. In addition, the increasing demand for wireless
telecommunications has exerted pressure on regulatory bodies worldwide to adopt
new standards for such products, generally following extensive investigation and
deliberation over competing technologies. The delays inherent in this
governmental approval process have in the past caused and may in the future
cause the cancellation, postponement or rescheduling of the installation of
communication systems by the Company's customers, which in turn may have a
material adverse effect on the sale of products by the Company to such
customers.

The Company is also subject to a variety of local, state and federal
governmental regulations relating to the storage, discharge, handling, emission,
generation, manufacture and disposal of toxic or other hazardous substances used
to manufacture the Company's products. The failure to comply with current or
future regulations could result in the imposition of substantial fines on the
Company, suspension of production, alteration of its manufacturing processes or
cessation of operations.

The Company believes that it operates its business in material
compliance with applicable government regulations.

COMPETITION

The markets for the Company's products and services are extremely
competitive, and the Company expects that competition will increase in such
markets. See "Risk Factors--Competition." The Company faces intense competition
in both government and commercial wireless networking markets.

Government DAMA Competition. Competition in the government DAMA market
consists primarily of other companies offering DAMA capable modem, radio or
network control equipment that is compatible with the open MIL-STD protocols.
The government DAMA competitors are significantly larger companies than ViaSat
and include Titan Corporation, Rockwell International, Raytheon (E-Systems) and
GEC-Marconi. The Company believes that it is well-positioned among these
competitors because of its significant backlog of DAMA modem orders, its market
lead time with respect to 5 kHz DAMA product certification and its participation
in both the network control and subscriber terminal markets.

Government Non-DAMA Competition. There is also intense competition in
other wireless networking markets. The JTIDS market, in particular, is dominated
by two very large competitors (Rockwell and GEC-Marconi). The Company believes
its strategic alliance with Lockheed Martin provides the Company with a relative
advantage because Lockheed Martin is the single largest government contractor
and is also a large potential customer, as it manufactures and upgrades many
aircraft that are candidates for JTIDS radios.

The Company's simulation and test equipment and information security
products represent relatively new technologies in markets that are still small.
Most of the Company's competition in these markets stems from alternative
technologies that may or may not be applicable to any particular customer.

Commercial DAMA Competition. There is intense competition in the
commercial DAMA market from companies that have strong positions in the TDM/TDMA
VSAT business, as well as from other companies that seek to enter the VSAT
market using DAMA technology. Most of the leading TDM/TDMA VSAT companies are
offering DAMA products, including Hughes Network Systems (HNS), an affiliate of
Hughes Defense Communications (formerly Magnavox) (see "Risk Factors --
Dependence on Defense Market"), Scientific Atlanta, Gilat, STM Wireless and NEC.
In addition, there are also other types of competing DAMA technologies being
developed.

AT&T Tridom, which is one of the largest VSAT equipment and service
providers and which offers TDM/TDMA products, has entered into a strategic
alliance with the Company to sell the Company's products

36
39
under an OEM agreement. The Company believes that this may allow it to compete
for customers seeking hybrid TDM/TDMA and DAMA VSAT solutions.

In different situations, DAMA products may be evaluated in comparison
with either TDM/TDMA technology, DAMA technology from other companies, dedicated
SCPC technology, mobile satellite technology or possibly terrestrial wireless
solutions. The Company believes that it has a good understanding of those
situations where DAMA systems in general, and its technology in particular,
offer the best overall value to its customers, and tends to focus its marketing
and selling efforts on those applications. DAMA technology is most attractive
for customers with telephone, fax or other circuit-oriented applications. DAMA
technology also allows networks to achieve much higher total capacity, with
better voice quality than TDM/TDMA networks.

The Company seeks to establish strategic alliances with satellite
service providers which would most benefit from its particular technological
advantages. The Company has established such relationships with a few key
companies, including HCL Comnet in India. The Company believes that its products
offer the lowest total cost of ownership for service providers considering the
flexibility of its equipment, its transponder capacity advantages and the
breadth of its service offerings.

INTELLECTUAL PROPERTY

The Company relies on a combination of trade secrets, copyrights,
trademarks, service marks and contractual rights to protect its intellectual
property. The Company attempts to protect its trade secrets and other
proprietary information through agreements with its customers, suppliers,
employees and consultants, and through other security measures. Although the
Company intends to protect its rights vigorously, there can be no assurance that
these measures will be successful. In addition, the laws of certain countries in
which the Company's products are or may be developed, manufactured or sold may
not protect the Company's products and intellectual property rights to the same
extent as the laws of the United States.

While the Company's ability to compete may be affected by its ability
to protect its intellectual property, the Company believes that, because of the
rapid pace of technological change in the wireless personal communications
industry, its technical expertise and ability to introduce new products on a
timely basis will be more important in maintaining its competitive position than
protection of its intellectual property and that patent, trade secret and
copyright protections are important but must be supported by other factors such
as the expanding knowledge, ability and experience of the Company's personnel,
new product introductions and frequent product enhancements. Although the
Company continues to implement protective measures and intends to defend
vigorously its intellectual property rights, there can be no assurance that
these measures will be successful. See "Risk Factors--Limited Protection of
the Company's Intellectual Property."

There can be no assurance that third parties will not assert claims
against the Company with respect to existing and future products. In the event
of litigation to determine the validity of any third party's claims, such
litigation could result in significant expense to the Company and divert the
efforts of the Company's technical and management personnel, whether or not such
litigation is determined in favor of the Company. The wireless communications
industry has been subject to frequent litigation regarding patent and other
intellectual property rights. Leading companies and organizations in the
industry have numerous patents that protect their intellectual property rights
in these areas. In the event of an adverse result of any such litigation, the
Company could be required to expend significant resources to develop
non-infringing technology or to obtain licenses to the technology which is the
subject of the litigation. There can be no assurance that the Company would be
successful in such development or that any such license would be available on
commercially reasonable terms.

EMPLOYEES

As of June 30, 1996, the Company had 244 employees (11 of which were
temporary employees), including over 150 in research and development, nine in
marketing and sales, 36 in production, and 49 in corporate, administration and
production coordination. The Company believes that its future prospects will
depend, in part, on its ability to continue to attract and retain skilled
engineering, marketing and management personnel, who are in great demand. In
particular, there is a limited supply of highly qualified engineers with

40
appropriate experience. See "Risk Factors--Dependence on Key Personnel." Each of
the Company's employees is required to sign an Invention and Confidential
Disclosure Agreement upon joining the Company. Under such agreement, each
employee agrees that any inventions developed by such employee during the term
of employment are the exclusive property of the Company and that such employee
will not disclose or use in any way information related to the Company's
business or products, either during the term of such employee's employment or at
any time thereafter. The Company currently employs over 150 engineers,
including 75 engineers who have masters degrees and seven engineers who have
doctorate degrees. None of the Company's employees are covered by a collective
bargaining agreement and the Company has never experienced any strike or work
stoppage. The Company believes that its relations with its employees are good.

PROPERTIES

The Company's headquarters are located in an approximately 37,000
square foot leased facility in Carlsbad, California. This facility houses the
Company's management, marketing and sales personnel. The lease for this facility
terminates in November 1998 with an option to renew for one additional period of
five years. The Company also leases another facility in Carlsbad, California
containing approximately 49,000 square feet for research and development,
application engineering and manufacturing coordination activities. This lease
terminates in August 1999 with options to renew for two additional periods of
two years each. In addition, the Company leases two smaller sales facilities
aggregating approximately 2,600 square feet located in Boston, Massachusetts,
and Melbourne, Florida. The Boston lease terminates in May 1998 with an option
to renew for one additional period of two years. The Melbourne lease terminates
in March 1997 with no renewal options. The Company believes that its existing
facilities are adequate to meet its current needs and that suitable additional
or alternative space will be available on commercially reasonable terms as
needed.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings other than various
claims and lawsuits arising in the ordinary course of its business which, in the
opinion of the Company's management, are not individually or in the aggregate
material to its business.

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41
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company, and their ages as
of June 30, 1996, are as follows:

NAME AGE POSITION

- ---- --- --------

Mark D. Dankberg 41 Chairman of the Board, President and Chief Executive Officer
Gregory D. Monahan 50 Vice President, Chief Financial Officer and General Counsel
Thomas E. Carter 42 Vice President-- Engineering
Andrew M. Paul 40 Vice President-- Commercial Operations
James P. Collins 52 Vice President-- Business Development
Mark J. Miller 36 Vice President, Chief Technical Officer and Secretary
Steven R. Hart 43 Vice President and Chief Technical Officer
Robert W. Johnson 46 Director
Jeffrey M. Nash 48 Director
B. Allen Lay 61 Director

Mr. Dankberg was a founder of the Company and has served as Chairman of
the Board, President and Chief Executive Officer of the Company since its
inception in May 1986. Prior to joining the Company, he was Assistant Vice
President of M/A-COM Linkabit from 1979 to 1986 and Communications Engineer for
Rockwell International from 1977 to 1979. Mr. Dankberg holds B.S.E.E. and M.E.E.
degrees from Rice University.

Mr. Monahan has served as Vice President, Chief Financial Officer and
General Counsel of the Company since December 1988. Prior to joining the
Company, Mr. Monahan was Assistant Vice President of M/A-COM Linkabit from 1978
to 1988. Mr. Monahan holds a J.D. degree from the University of San Diego and
B.S.M.E. and M.B.A. degrees from the University of California, Berkeley.

Dr. Carter has served as Vice President -- Engineering of the Company
since November 1990. Prior to joining the Company, Dr. Carter served in several
positions including Business Area Manager, Program Manager and System
Engineering Department Manager in the Military Electronics and Avionics Division
of TRW Inc. Dr. Carter holds a Ph.D. in Electrical Engineering from the
University of Southern California and B.S.E.E. and M.S.E.E. degrees from Rice
University.

Mr. Paul has served as Vice President -- Commercial Operations of the
Company since March 1993. Prior to joining the Company, Mr. Paul served as Vice
President and General Manager of the Western Region of Evernet Systems, Inc.
from 1992 to 1993. Previously, Mr. Paul was Vice President of Sales at ComStream
Corp. from 1989 to 1992. Mr. Paul holds a B.A. degree from Stanford University.

Mr. Collins has served as Vice President -- Business Development of the
Company since December 1988. Prior to joining the Company, Mr. Collins was
Assistant Vice President of M/A-COM Linkabit from 1982 to 1988. Mr. Collins was
a Director of Marketing at General Dynamics from 1976 to 1982 and prior to that
served on active duty in the U.S. Army for ten years. Mr. Collins currently
serves in the U.S. Army Reserve and was recently selected for assignment as a
Brigadier General. He holds a B.A. degree from Hofstra University and an M.S.
degree in Geodetic Science from Ohio State University.

Mr. Miller was a founder of the Company and has served as Vice
President and Chief Technical Officer of the Company since 1993 and as
Engineering Manager and Secretary since 1986. Prior to joining the Company, Mr.
Miller was a Staff Engineer at M/A-COM Linkabit from 1983 to 1986. Mr. Miller
holds a B.S.E.E. degree from the University of California, San Diego and a
M.S.E.E. degree from the University of California, Los Angeles.

Mr. Hart was a founder of the Company and has served as Vice President
and Chief Technical Officer since 1993 and as Engineering Manager since 1986.
Prior to joining the Company, Mr. Hart was a Staff Engineer and Manager at
M/A-COM Linkabit

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42
from 1982 to 1986. Mr. Hart holds a B.S. in Mathematics from the University of
Nevada, Las Vegas and a M.A. in Mathematics from the University of California,
San Diego.

Mr. Johnson has been a director of the Company since 1986. Mr. Johnson
has been self-employed as a private investor and consultant from 1988 to the
present. From 1983 to 1988, Mr. Johnson was a Principal of Southern California
Ventures ("SCV"). Mr. Johnson currently is a director of STAC Inc., a
publicly-held company which manufactures semiconductors and software for data
storage and communications, Proxima Corporation, a publicly-held company which
manufactures computer display equipment, and TransTech Information Management
Systems, Inc., a privately held company which manufactures software for the
towing and recovery industry.

Dr. Nash has been a director of the Company since 1987. Since August
1995, he has been President, Chief Executive Officer and a director of TransTech
Information Management Systems, Inc., a privately held company which
manufactures software for the towing and recovery industry. From 1994 to the
present, Dr. Nash has been Chairman of the Board of Digital Perceptions, Inc.,
and, from 1989 to 1994, was the Chief Executive Officer and President of Visqus
as well as Conner Technology, Inc., both subsidiaries of Conner Peripherals,
Inc. Dr. Nash is currently a director of REMEC, Inc., a publicly-held company
which manufactures microwave multi-function modules, Proxima Corporation, a
publicly-held company which manufactures computer display equipment, and Esscor,
Inc., a privately-held electrical utility simulation company.

Mr. Lay has been a director of the Company since 1996. Since 1983, he
has been a General Partner of SCV. Mr. Lay is Chief Executive Officer and a
director of Vestro Natural Foods Inc., a publicly-held natural foods marketing
company. Mr. Lay is also a director of Pair Gain Technology, Inc., a
publicly-held telecommunications company, Physical Optics Company, a
privately-held optical systems and subsystems company, Kofax Imaging Systems, a
privately-held document imaging systems company, and Medclone Inc., a
privately-held biotech company.

Members of the Company's Board of Directors are each elected for one
year terms at the annual shareholders meeting. The Company intends to recruit
an additional outside director with experience in industries complementary to
the Company's business following the closing of this offering.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee. Following the closing of this offering, the Board of
Directors will establish an audit committee (the "Audit Committee"), which will
consist of two or more independent directors. The Audit Committee will be
established to make recommendations concerning the engagement of independent
public accountants, review with the independent public accountants the plans and
results of the audit engagement, approve professional services provided by the
independent public accountants, review the independence of the independent
public accounts, consider the range of audit and non-audit fees and review the
adequacy of the Company's internal accounting controls.

Compensation Committee. Following the closing of this offering, the
Board of Directors will establish a compensation committee (the "Compensation
Committee"), which will consist of two or more non-employee or independent
directors to the extent required by Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), to determine compensation for the
Company's executive officers and awards under the Company's 1996 Equity
Participation Plan and Employee Stock Purchase Plan.

The Board of Directors initially will not have a nominating committee
or any other committee.

COMPENSATION OF DIRECTORS

During the fiscal year ended March 31, 1996, Messrs. Johnson, Nash and
Lay each received options to purchase 3,668 shares of Common Stock at an
exercise price of $1.36 per share. Other than such options, the directors of the
Company received no compensation from the Company for services rendered as a
director during the fiscal year ended March 31, 1996. The Company expects that,
following the closing of this offering, its independent directors will be paid
in a manner and at a level consistent with industry practice.

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43
EXECUTIVE COMPENSATION

The following table sets forth certain information concerning
compensation for the fiscal year ended March 31, 1996 received by the Chief
Executive Officer and the five other most highly compensated executive officers
of the Company (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

LONG-TERM
FISCAL YEAR COMPENSATION
COMPENSATION AWARDS
---------------------- ------------
NUMBER OF
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION(S) SALARY BONUS OPTIONS COMPENSATION(1)
--------------------- ------ ----- ------- ---------------

Mark D. Dankberg.......................... $165,000 $35,000 14,670 $5,726
Chairman of the Board, President and
Chief Executive Officer

Thomas E. Carter.......................... 131,500 10,000 40,343 4,723
Vice President-- Engineering
Gregory D. Monahan........................ 124,000 8,000 14,670 4,703
Vice President, Chief Financial
Officer and General Counsel
Andrew M. Paul............................ 125,938 5,000 8,802 2,274
Vice President-- Commercial Operations
Steven R. Hart............................ 112,500 8,000 3,668 4,716
Vice President, Chief Technical
Officer and Secretary
Mark J. Miller............................ 112,000 8,000 3,668 1,582
Vice President and Chief Technical
Officer

- ---------------
(1) Includes contributions to the Company's 401(k) Plan.

The following table sets forth certain information concerning
individual grants of stock options made by the Company during the fiscal year
ended March 31, 1996 to each of the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
------------------------------------------------------ ------------------

NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE OR
UNDERLYING GRANTED TO BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL 1996 PER SHARE DATE 5% 10%
- ---- ------- ------------ --------- ---------- ------- -------

Mark D. Dankberg...... 14,670 12.54% $1.50 6/26/00 $28,078 $35,431
Thomas E. Carter...... 40,343 34.47 1.36 6/26/00 70,195 88,578
Gregory D. Monahan.... 14,670 12.54 1.36 6/26/00 25,526 32,210
Andrew M. Paul........ 8,802 7.52 1.36 6/26/00 15,315 19,326
Steven R. Hart........ 3,668 3.13 1.50 6/26/00 7,020 8,858
Mark J. Miller........ 3,668 3.13 1.36 6/26/00 6,381 8,053

- ---------------
(1) These amounts represent assumed rates of appreciation in the price of
the Common Stock during the terms of the options in accordance with
rates specified in applicable federal securities regulations. Actual
gains, if any, on stock option exercises will depend on the future
price of the Common Stock and overall stock market conditions. There is
no representation that the rates of appreciation reflected in this
table will be achieved.

41
44
The following table sets forth certain information concerning exercises
of stock options by the Named Executive Officers during the fiscal year ended
March 31, 1996, and the number of options and value of unexercised options held
by each of the Named Executive Officers at March 31, 1996.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR

AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END(1)
-------------------------- -----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- ----------- ----------- ------------- ----------- -------------

Mark D. Dankberg...... -- -- 0 14,670 -- $ 0
Thomas E. Carter...... -- -- 37,225 72,800 $34,738 27,013
Gregory D. Monahan.... 8,215 $5,705 0 28,093 -- 8,720
Andrew M. Paul........ -- -- 5,135 18,338 2,800 5,200
Steven R. Hart........ -- -- 0 3,668 -- 0
Mark J. Miller........ -- -- 0 3,668 -- 0

- ---------------
(1) The dollar values have been calculated by determining the difference
between the fair market value of the securities underlying the options
as determined in good faith by the Board of Directors at the applicable
date and the exercise price of the options.

1993 STOCK OPTION PLAN

In 1993, the Company adopted the ViaSat, Inc. 1993 Stock Option Plan
(the "1993 Stock Option Plan") to enable key employees, consultants and
non-employee directors of the Company to acquire a proprietary interest in the
Company, and thus to create in such persons an increased interest in and a
greater concern for the welfare of the Company. The 1993 Stock Option Plan
provided for aggregate option grants of up to 733,500 shares. As of June 30,
1996, options to purchase an aggregate of 265,683 shares of Common Stock at
prices ranging from $0.34 to $1.50 were outstanding under the 1993 Stock Option
Plan. In addition, options to purchase an aggregate of 118,460 shares of Common
Stock were granted on July 1, 1996 at prices ranging from $4.09 to $4.50 per
share. No additional grants will be made under the 1993 Stock Option Plan after
the consummation of this offering.

1996 EQUITY PARTICIPATION PLAN

In connection with this offering, the Company has adopted the ViaSat,
Inc. 1996 Equity Participation Plan (the "1996 Equity Participation Plan")
designed to update and replace the 1993 Stock Option Plan. The 1996 Equity
Participation Plan provides for the grant to executive officers, other key
employees, consultants and non-employee directors of the Company of a broad
variety of stock-based compensation alternatives such as nonqualified stock
options, incentive stock options, restricted stock and performance awards.
Grants under the 1996 Equity Participation Plan may provide participants with
rights to acquire shares of Common Stock.

The 1996 Equity Participation Plan will be administered by the
Compensation Committee, which is authorized to select from among the eligible
participants the individuals to whom options, restricted stock purchase rights
and performance awards are to be granted and to determine the number of shares
to be subject thereto and the terms and conditions thereof. The members of the
Compensation Committee who are not affiliated with the Company will select from
among the eligible participants the individuals to whom nonqualified stock
options are to be granted, except as set forth below, and will determine the
number of shares to be subject thereto and the terms and conditions thereof. The
Compensation Committee is also authorized to adopt, amend and rescind rules
relating to the administration of the 1996 Equity Participation Plan.

Nonqualified stock options will provide for the right to purchase
Common Stock at a specified price which may be less than fair market value on
the date of grant (but not less than par value), and usually will become
exercisable in installments after the grant date. Nonqualified stock options may
be granted for any reasonable term.

45
Incentive stock options will be designed to comply with the provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), and will be
subject to restrictions contained in the Code, including exercise prices equal
to at least 100% of fair market value of Common Stock on the grant date and a
ten year restriction on their term, but may be subsequently modified to
disqualify them from treatment as an incentive stock option.

Restricted stock may be sold to participants at various prices (but not
below par value) and made subject to such restrictions as may be determined by
the Compensation Committee. Restricted stock, typically, may be repurchased by
the Company at the original purchase price if the conditions or restrictions are
not met. In general, restricted stock may not be sold, or otherwise transferred
or hypothecated, until restrictions are removed or expire. Purchasers of
restricted stock, unlike recipients of options, will have voting rights and will
receive dividends prior to the time when the restrictions lapse.

Performance awards may be granted by the Compensation Committee on an
individual or group basis. Generally, these awards will be based upon specific
agreements and may be paid in cash or in Common Stock or in a combination of
cash and Common Stock. Performance awards may include "phantom" stock awards
that provide for payments based upon increases in the price of the Company's
Common Stock over a predetermined period. Performance awards also may include
bonuses which may be granted by the Compensation Committee on an individual or
group basis and which may be payable in cash or in Common Stock or in a
combination of cash and Common Stock.

Upon the closing of this offering, the Company estimates that it will
issue to recently-hired executive officers and other key employees of the
Company options to purchase approximately 15,000 shares of Common Stock pursuant
to the 1996 Equity Participation Plan.

A maximum of 750,000 shares will be reserved for issuance under the
1996 Equity Participation Plan.

EMPLOYEE STOCK PURCHASE PLAN

In connection with this offering, the Company has adopted the ViaSat,
Inc. Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") to assist
employees of the Company in acquiring a stock ownership interest in the Company
and to encourage them to remain in the employment of the Company. The Employee
Stock Purchase Plan is intended to qualify under Section 423 of the Code. A
maximum of 250,000 shares of Common Stock will be reserved for issuance under
the Employee Stock Purchase Plan. The Employee Stock Purchase Plan permits
eligible employees to purchase Common Stock at a discount through payroll
deductions during specified six-month offering periods. No employee may purchase
more than $25,000 worth of stock in any calendar year. The price of shares
purchased under the Employee Stock Purchase Plan will be equal to 85% of the
fair market value of the Common Stock on the first or last day of the offering
period, whichever is lower. The Employee Stock Purchase Plan will be
administered by the Compensation Committee.

401(K) PLAN

The Company adopted a tax-qualified employee savings and retirement
plan (the "401(k) Plan") effective January 1990 covering all employees who have
been employed by the Company for at least 90 days and who are at least 21 years
of age. Pursuant to the 401(k) Plan, employees may elect to reduce their current
compensation by not less than 1.0% nor more than 15.0% of eligible compensation
and have the amount of such reduction contributed to the 401(k) Plan. The 401(k)
Plan permits, but does not require, additional cash contributions to the 401(k)
Plan by the Company. The trustee under the 401(k) Plan invests the assets of the
401(k) Plan in designated investment options. The 401(k) Plan is intended to
qualify under Section 401 of the Internal Revenue Code so that contributions to
the 401(k) Plan, and income earned on plan contributions, are not taxable to
employees until withdrawn from the 401(k) Plan, and so that contributions by the
Company are deductible by the Company when made for income tax purposes.

43
46
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended March 31, 1996, each director of the
Company, including Mark D. Dankberg, Chairman, President and Chief Executive
Officer of the Company, participated in all discussions and decisions regarding
salaries and incentive compensation for all employees and consultants of the
Company, except that Mr. Dankberg was excluded from discussions regarding his
own salary and incentive compensation.

Mr. Johnson, individually, and Mr. Lay, through his position as a
General Partner of SCV, had an interest in the Company's sale of Series A
Convertible Preferred Stock and the related transactions described under
"Certain Transactions."

CERTAIN TRANSACTIONS

In June 1986, the Company sold 3,000,000 shares of Series A Convertible
Preferred Stock to SCV and certain of its affiliates, including Robert W.
Johnson, a director of the Company, at a price of $0.10 per share in a private
placement transaction. Each outstanding share of Series A Convertible Stock will
automatically convert into one share of Common Stock upon the closing of this
offering. For a description of the rights, preferences and privileges of the
Series A Convertible Preferred Stock, see Note 5 of Notes to Financial
Statements.

In connection with the sale of the Series A Convertible Preferred Stock
in June 1986, the Company entered into a Shareholders Agreement with SCV and
certain of its affiliates, including Robert W. Johnson, a director of the
Company, providing for the corporate governance of the Company. The Shareholders
Agreement will terminate upon the closing of this offering.

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47
PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of October 1, 1996, and as adjusted
to reflect the sale of the shares offered by this Prospectus (i) by each of the
Company's directors and each of the Named Executive Officers, (ii) by all
directors and executive officers as a group, (iii) by each person who is known
by the Company to own beneficially more than 5% of the Common Stock, and (iv) by
the Selling Shareholders. Unless otherwise indicated, the address for all
shareholders listed in the table is c/o ViaSat, 2290 Cosmos Court, Carlsbad,
California 92009.

SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING(1) OFFERING(1)
------------------- --------------------
NUMBER OF SHARES
NAME AND ADDRESS NUMBER PERCENT(2) OFFERED NUMBER PERCENT(2)
- ---------------- ------ ---------- ------- ------ ----------

Southern California Ventures.... 1,995,120 33.96% 455,377 1,539,743 20.46%
406 Amapula Avenue, Suite 205
Torrance, California 90501

Mark D. Dankberg(3)............. 885,335 15.06 29,340 855,995 11.37
Steven R. Hart(4)............... 661,434 11.26 25,673 635,761 8.45
Mark J. Miller(5)............... 367,915 6.26 18,338 349,577 4.64
Maureen Miller.................. 293,519 5.00 7,335 286,184 3.80
3042 Spearman Lane
Spring Valley, California 91978

Robert W. Johnson(6)............ 183,375 3.12 -- 183,375 2.44
Thomas E. Carter(7)............. 183,925 3.10 9,536 174,389 2.30
Gregory D. Monahan(8)........... 175,560 2.99 -- 175,560 2.33
Jeffrey M. Nash(9).............. 165,038 2.81 -- 165,038 2.19
James P. Collins................ 115,893 1.97 4,401 111,492 1.48
Andrew M. Paul(10).............. 89,634 1.52 -- 89,634 1.19
B. Allen Lay(11)................ -- -- -- -- --
All directors and executive
officers
as a group (10 persons)(12)..... 2,828,109 47.53 87,288 2,740,821 36.06

- ---------------

(1) Assumes no exercise of the Underwriters' over-allotment option. Except
as indicated in the footnotes to this table, to the Company's
knowledge, each shareholder identified in the table possesses sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by such shareholder.

(2) Applicable percentage of ownership for each shareholder is based on
5,875,342 shares of Common Stock outstanding as of October 1, 1996
(including 2,365,538 shares of Common Stock to be issued upon
conversion of the Preferred Stock), together with applicable options
for such shareholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission (the
"Commission"), and includes voting and investment power with respect to
the shares. Shares of Common Stock subject to outstanding options which
are currently vested or which vest within 60 days are deemed
outstanding for computing the percentage ownership of the person
holding such options, but are not deemed outstanding for computing the
percentage ownership of any other person.

(3) Includes options to purchase 5,135 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 24,206
shares of Common Stock not exercisable within such 60-day period.

(4) Includes options to purchase 1,284 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 6,051
shares of Common Stock not exercisable within such 60-day period.

(5) Includes options to purchase 1,284 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 6,051
shares of Common Stock not exercisable within such 60-day period.

(6) Excludes options to purchase 3,668 shares of Common Stock not
exercisable within 60 days of October 1, 1996.

45
48
(7) Includes options to purchase 48,228 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 39,059
shares of Common Stock not exercisable within such 60-day period.

(8) Includes options to purchase 5,684 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 26,479
shares of Common Stock not exercisable within such 60-day period.

(9) Excludes options to purchase 3,668 shares of Common Stock not
exercisable within 60 days of October 1, 1996.

(10) Includes options to purchase 13,350 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 15,990
shares of Common Stock not exercisable within such 60-day period.

(11) Excludes options to purchase 3,668 shares of Common Stock not
exercisable within 60 days of October 1, 1996. Mr. Lay is a General
Partner of SCV and may therefore be deemed to have beneficial ownership
of 1,995,120 shares of Common Stock held by SCV. Mr. Lay disclaims
beneficial ownership of such shares.

(12) Includes options to purchase 63,411 shares of Common Stock exercisable
within 60 days of October 1, 1996. Excludes options to purchase 181,211
shares of Common Stock not exercisable within such 60-day period.

46
49
DESCRIPTION OF CAPITAL STOCK

The following summary description of the capital stock of the Company
does not purport to be complete and is subject to the provisions of the
Company's Amended and Restated Articles of Incorporation and Amended and
Restated Bylaws, which are included as exhibits to the Registration Statement of
which this Prospectus forms a part and by the provisions of applicable law.

Upon the closing of this offering, the authorized capital stock of the
Company will consist of 25,000,000 shares of Common Stock, par value $.01 per
share, and 5,000,000 shares of Preferred Stock, par value $.01 per share, after
giving effect to amendments to the Company's Articles of Incorporation that have
been approved by the Company's Board of Directors and shareholders.

COMMON STOCK

As of October 1, 1996, there were 3,509,804 shares of Common Stock
outstanding held of record by 177 shareholders, and 3,225,000 shares of
Preferred Stock outstanding held of record by two shareholders. Upon the
closing of this offering, there will be 7,525,342 shares of Common Stock
outstanding, including 1,650,000 shares to be issued by the Company hereunder
and 2,365,538 shares to be issued upon conversion of the Preferred Stock.

Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the shareholders of the Company. Additionally,
cumulative voting is permitted in connection with the election of directors so
long as at least one shareholder has given notice at the meeting prior to the
voting of that shareholder's intention to cumulate votes. Subject to the
preferences that may be applicable to any outstanding preferred stock, the
holders of Common Stock are entitled to a ratable distribution of any dividends
that may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to the prior liquidation rights
of any outstanding preferred stock. The Common Stock has no preemptive,
redemption or conversion rights. The outstanding shares of Common Stock are, and
the shares offered by the Company in the offering, when issued and paid for,
will be fully paid and nonassessable. The rights, preferences and privileges of
holders of Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any preferred stock which the Company may
designate and issue in the future. See "Dividend Policy."

PREFERRED STOCK

Upon the closing of this offering, each outstanding share of Series A
Convertible Preferred Stock will be converted into one share of Common Stock,
and the Series A Convertible Preferred Stock will be automatically retired.
Thereafter, the Board of Directors will be authorized, without further
shareholder approval, to issue up to 5,000,000 shares of Preferred Stock in one
or more series and to fix the rights, preferences, privileges and restrictions
granted or imposed upon any unissued shares of Preferred Stock and to fix the
number of shares constituting any series and the designations of such series.

The issuance of Preferred Stock may have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for distribution to
the holders of Common Stock or could adversely affect the rights and powers,
including voting rights, of the holders of the Common Stock. In certain
circumstances, such issuance could have the effect of decreasing the market
price of the Common Stock. As of the closing of the offering, no shares of
Preferred Stock will be outstanding, and the Company currently has no plans to
issue any shares of Preferred Stock.

LISTING

Application has been made to approve the shares of Common Stock for
quotation and trading on The Nasdaq National Market under the symbol "VSAT."

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is

- --------------------.

47
50
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offering, the Company will have outstanding
7,525,342 shares of Common Stock. Of these shares, the 2,200,000 shares sold in
the offering (plus any shares issued upon exercise of the Underwriters'
over-allotment option) will be freely tradeable without restriction under the
Securities Act, unless purchased by "affiliates" of the Company as that term is
defined in Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, a shareholder (or
shareholders whose shares are aggregated) who has beneficially owned shares
constituting "restricted securities" (generally defined as securities acquired
from the Company or an affiliate of the Company in a non-public transaction) for
at least two years, is entitled to sell within any three-month period a number
of shares that does not exceed the greater of one percent of the outstanding
Common Stock or the average weekly trading volume in the Common Stock during the
four calendar weeks preceding the date on which notice of such sale is filed
pursuant to Rule 144. Sales under Rule 144 are also subject to certain
provisions regarding the manner of sale, notice requirements and the
availability of current public information about the Company. A shareholder (or
shareholders whose shares are aggregated) who is not an affiliate of the Company
for at least 90 days prior to a proposed transaction and who has beneficially
owned "restricted securities" for at least three years is entitled to sell such
shares under Rule 144 without regard to the limitations described above.
Currently __________ shares of Common Stock are qualified for sale under this
rule. The Commission has proposed to amend Rule 144 to reduce the two and three
year holding periods specified above to one and two years, respectively.

Of the remaining ____________ shares, holders of ____________ shares,
including all officers and directors of the Company, have entered into
contractual "lock-up" agreements generally providing that they will not directly
or indirectly offer, sell, contract to sell or grant any option to purchase or
otherwise transfer or dispose of shares of Common Stock or other equity
securities of the Company or any securities exercisable for or convertible into
Common Stock or other equity securities of the Company owned by them for a
period of 180 days after the closing of the offering without the prior written
consent of representatives of the Underwriters.

The Company has entered into a Stock Restriction Agreement with each of
its shareholders for the purpose of limiting the sale, succession or other
transfer of the Common Stock during the lifetime or upon the death of each
shareholder. The Stock Restriction Agreement provides that the Company's
shareholders will not transfer their shares of Common Stock during their
lifetime or upon their death, except in limited instances, without first
offering such shares for sale to the Company. In addition, the Stock Restriction
Agreement requires each shareholder to approve an offer to purchase all of the
outstanding Common Stock if such offer is accepted by shareholders owning at
least two-thirds of the outstanding shares. The Stock Restriction Agreement with
respect to each shareholder will terminate upon the closing of this offering,
regardless of whether any of such shareholder's shares are included in this
offering.

The Company intends to file a registration statement under the
Securities Act after the offering covering the sale of 1,384,143 shares of
Common Stock reserved for issuance under the 1993 Stock Option Plan, the 1996
Equity Participation Plan and the Employee Stock Purchase Plan. See
"Management--1993 Stock Option Plan," "--1996 Equity Participation Plan" and
"--Employee Stock Purchase Plan." Such registration statement will automatically
become effective upon filing. Accordingly, shares registered under such
registration statement will, subject to Rule 144 volume and other limitations
applicable to affiliates of the Company, be available for sale in the public
market, except to the extent that such shares are subject to vesting
restrictions.

Prior to the offering, there has been no public market for the Common
Stock and no predictions can be made as to the effect, if any, that sales of
shares of Common Stock will have on the market price of the Common Stock
prevailing from time to time. Nevertheless, sales of significant numbers of
shares of the Common Stock in the public market could adversely affect the
market price of the Common Stock and could impair the Company's future ability
to raise capital through an offering of its equity securities.

48
51
UNDERWRITING

Under the terms and subject to the conditions of the Underwriting
Agreement, the Underwriters named below, for whom Oppenheimer & Co., Inc.,
Needham & Company, Inc. and Unterberg Harris are acting as representatives (the
"Representatives"), have severally agreed to purchase from the Company and
Selling Shareholders, and the Company and Selling Shareholders have agreed to
sell to each Underwriter, the aggregate number of shares of Common Stock set
forth opposite their respective names in the table below. The Underwriting
Agreement provides that the obligations of the Underwriters to pay for and
accept delivery of the shares of Common Stock are subject to certain conditions
precedent, and that the Underwriters are committed to purchase and pay for all
shares if any shares are purchased.

NAME NUMBER OF SHARES
---- ----------------

Oppenheimer & Co., Inc............................................
Needham & Company, Inc............................................
Unterberg Harris..................................................

----------
Total.................................................... 2,200,000
==========

The Representatives have advised the Company that the Underwriters
propose to offer the shares of Common Stock to the public at the initial public
offering price set forth on the cover page of this Prospectus, and to certain
dealers (who may include the Underwriters) at such price less a concession not
in excess of $_____ per share, of which $_____ may be reallowed to other
dealers. After the offering to the public, the offering price and other selling
terms may be changed by the Representatives. No such reduction shall change the
amount of the proceeds to be received by the Company and the Selling
Shareholders as set forth on the cover page of this Prospectus.

The Company has granted an option to the Underwriters, exercisable
during the 30-day period after the date of this Prospectus, to purchase up to
330,000 shares of Common Stock at the same price per share set forth on the
cover page of this Prospectus solely to cover over-allotments, if any. To the
extent that the Underwriters exercise such option, each of the Underwriters will
be committed, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares of Common Stock to
be purchased by such Underwriter, as shown in the above table, bears to the
total shown.

In connection with the offering, certain Underwriters and selling group
members (if any) or their respective affiliates may engage in passive market
making transactions in the Common Stock on The Nasdaq National Market in
accordance with Rule 10b-6A under the Exchange Act during the two business day
period before commencement of offers or sales of the Common Stock. The passive
market making transactions must comply with applicable volume and price limits
and be identified as such. In general, a passive market maker may display its
bid at a price not in excess of the highest independent bid for such security;
if all independent bids are lowered below the passive market maker's bid,
however, such bid must then be lowered when certain purchase limits are
exceeded.

The Underwriting Agreement contains covenants of indemnity and
contribution between the Company and the Underwriters and the Selling
Shareholders against certain civil liabilities that may be incurred in
connection with this offering, including liabilities under the Securities Act.

Pursuant to the terms of lock-up agreements, all officers, directors,
Selling Shareholders and certain other shareholders of the Company have agreed
with the Representatives not to sell, otherwise dispose of, contract to sell,
grant any option to sell, transfer or otherwise dispose of, directly or
indirectly, shares of Common Stock or other equity securities of the Company or
securities exchangeable for or convertible into shares of Common Stock or other
equity securities of the Company for a period of 180 days after the date of this
Prospectus, without the prior written consent of the Representatives. The
Company has agreed not to sell, contract to sell, grant any option to sell,
transfer or otherwise dispose of, directly or indirectly, shares of Common Stock

49
52
or other equity securities of the Company for a period of 180 days after the
date of this Prospectus, without the prior written consent of the
Representatives, except that the Company may issue securities pursuant to the
1993 Stock Option Plan, the 1996 Equity Participation Plan and the Employee
Stock Purchase Plan and upon the exercise of outstanding stock options or
purchase rights under such plans. See "Shares Eligible for Future Sale."

The Underwriters will not make sales to accounts over which they
exercise discretionary authority (i) in excess of five percent of the number of
shares of Common Stock offered hereby, and (ii) unless they obtain specific
written consent of the customer.

Prior to the offering, there has been no public market for the Common
Stock. The initial public offering price for the Common Stock has been
determined by negotiation among the Company, the Selling Shareholders and the
Representatives. Among the factors considered in determining the initial public
offering price were prevailing market and economic conditions, revenues and
earnings of the Company, estimates of the business potential and prospects of
the Company, the present state of the Company's business operations, the
Company's management and other factors deemed relevant.

LEGAL MATTERS

The legality of the Common Stock offered hereby will be passed upon for
the Company by Latham & Watkins, San Diego, California. Certain legal matters in
connection with the offering will be passed upon for the Underwriters by Kaye,
Scholer, Fierman, Hays & Handler, LLP, Los Angeles, California.

EXPERTS

The financial statements of the Company as of March 31, 1995 and 1996,
and for each of the three years in the period ended March 31, 1996 included in
this Prospectus have been so included in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on
Form S-1 under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto. For further information with respect to
the Company and the Common Stock offered hereby, reference is hereby made to
such Registration Statement, exhibits and schedules filed as part of the
Registration Statement. Statements contained in this Prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or document filed as an exhibit to the Registration Statement or such other
document. Each such statement is qualified in all respects by such reference to
such exhibit.

After consummation of the offering, the Company will be subject to the
informational and reporting requirements of the Exchange Act and, in accordance
therewith, will be required to file reports, proxy and information statements,
and other information with the Commission. Such reports, proxy statements and
other information, as well as the Registration Statement of which this
Prospectus is a part and the exhibits and schedules thereto, can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at
the following regional offices: 7 World Trade Center, Suite 1300, New York, New
York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials also can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Electronic reports, proxy and information
statements, and other information filed through the Commission's Electronic Data
Gathering, Analysis and Retrieval system are publicly available through the
Commission's Web site (http://www.sec.gov).

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53
INDEX TO FINANCIAL STATEMENTS

PAGES
-----
VIASAT, INC.

Report of Independent Accountants......................................... F-2
Balance Sheet............................................................. F-3
Statement of Income....................................................... F-4
Statement of Shareholders' Equity......................................... F-5
Statement of Cash Flows................................................... F-6
Notes to Financial Statements............................................. F-7

F-1
54
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of ViaSat, Inc.

The recapitalization described in Note 1 to the financial statements has not
been consummated at September 30, 1996. When it has been consummated, we will
be in a position to furnish the following report:

"In our opinion, the accompanying balance sheet and the related statements
of income, of shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of ViaSat, Inc. at March 31, 1996
and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended March 31, 1996, in conformity with
generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above."

PRICE WATERHOUSE LLP

San Diego, California
June 11, 1996

F-2
55
VIASAT, INC.

BALANCE SHEET

ASSETS

MARCH 31, PRO FORMA
------------------------------------- JUNE 30, SHAREHOLDERS'
1995 1996 1996 EQUITY
------------------ ---------------- ------------------ ------------------
(UNAUDITED) (UNAUDITED)
(NOTE 1)

Current assets:
Cash and cash equivalents ................ $ 2,731,000 $ 2,297,000 $ 1,733,000
Accounts receivable ...................... 4,300,000 6,171,000 5,923,000
Inventory ................................ 204,000 1,223,000 1,476,000
Deferred income taxes .................... 134,000 484,000 558,000
Other current assets ..................... 64,000 170,000 445,000
----------- ----------- -----------

Total current assets ......................... 7,433,000 10,345,000 10,135,000
Property and equipment, net .................. 1,896,000 2,789,000 2,877,000
Other assets ................................. 48,000 128,000 236,000
----------- ----------- -----------
Total assets ................................. $ 9,377,000 $13,262,000 $13,248,000
=========== =========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable ......................... $ 1,480,000 $ 2,774,000 $ 2,388,000
Accrued liabilities ...................... 2,669,000 2,157,000 2,000,000
Current portion of notes payable ......... 476,000 763,000 897,000
----------- ----------- -----------
Total current liabilities .................... 4,625,000 5,694,000 5,285,000
----------- ----------- -----------
Notes payable ................................ 1,220,000 1,747,000 1,531,000
Other liabilities ............................ 119,000 604,000 720,000
----------- ----------- -----------
Total long-term liabilities .............. 1,339,000 2,351,000 2,251,000
----------- ----------- -----------
Commitments (Note 9)
Shareholders' equity:

Series A, convertible preferred stock,
$.01 par value; 3,225,000 shares
authorized, issued and outstanding actual,
no shares outstanding pro forma .......... 32,000 32,000 32,000 --
Common stock, $.01 par value, 7,335,000 shares
authorized; 3,207,339, 3,342,101 and
3,386,396 issued and outstanding actual,
respectively; 5,751,933 shares issued and
outstanding pro forma ................... 44,000 46,000 46,000 78,000
Paid in capital .............................. 568,000 737,000 754,000 754,000
Retained earnings ............................ 2,769,000 4,402,000 4,880,000 4,880,000
----------- ----------- ----------- -----------
Total shareholders' equity ................... 3,413,000 5,217,000 5,712,000 $ 5,712,000
----------- ----------- ----------- ===========
Total liabilities and shareholders' equity ... $ 9,377,000 $13,262,000 $13,248,000
=========== =========== ===========

See accompanying notes to financial statements.

F-3
56
VIASAT, INC.

STATEMENT OF INCOME

YEAR ENDED MARCH 31,
------------------------------------------------------
1994 1995 1996
------------ -------------- ---------------

Revenues ............................... $ 11,579,000 $ 22,341,000 $ 29,017,000
Cost of revenues ....................... 9,033,000 16,855,000 20,983,000
------------ ------------ ------------
Gross profit ........................ 2,546,000 5,486,000 8,034,000
Operating expenses:
Selling, general and ................ 1,554,000 2,416,000 3,400,000
administrative
Independent research and development 134,000 788,000 2,820,000
------------ ------------ ------------

Income from operations ................. 858,000 2,282,000 1,814,000
Other income (expense):
Interest income ........................ 2,000 27,000 29,000
Interest expense ....................... (47,000) (114,000) (260,000)
------------ ------------ ------------
Income before income taxes ............. 813,000 2,195,000 1,583,000
Provision (benefit) for income taxes ... 328,000 888,000 (50,000)
------------ ------------ ------------
Net income ............................. $ 485,000 $ 1,307,000 $ 1,633,000
============ ============ ============
Pro forma net income per share ......... $ 0.27
Shares used in computing pro forma ============
net income per share ................ 6,000,894
============

THREE MONTHS ENDED
---------------------------------
JUNE 30, JUNE 30,
1995 1996
-------------- ---------------
(UNAUDITED) (UNAUDITED)

Revenues ............................... $ 6,768,000 $ 9,732,000
Cost of revenues ....................... 4,830,000 6,862,000
------------ ------------
Gross profit ........................ 1,938,000 2,870,000
Operating expenses:
Selling, general and ................ 918,000 1,040,000
administrative
Independent research and development 467,000 1,058,000
------------ ------------

Income from operations ................. 553,000 772,000
Other income (expense):
Interest income ........................ 14,000 30,000
Interest expense ....................... (43,000) (62,000)
------------ ------------
Income before income taxes ............. 524,000 740,000
Provision (benefit) for income taxes ... (17,000) 262,000
------------ ------------
Net income ............................. $ 541,000 $ 478,000
============ ============
Pro forma net income per share ......... $ 0.08
Shares used in computing pro forma ============
net income per share ................ 6,003,110
============

See accompanying notes to financial statements.

F-4
57
VIASAT, INC.

STATEMENT OF SHAREHOLDERS' EQUITY

PREFERRED STOCK COMMON STOCK
------------ -- ----------- ------------- -- -----------
NUMBER OF NUMBER OF PAID IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS
----------- ----------- ------------- ----------- ------- --------

Balance at March 31, 1993........... 3,225,000 $32,000 2,949,697 $40,000 $416,000 $ 977,000
Issuance of common stock......... 17,311 6,000
Net income.......................
485,000
--------- ------- --------- ------- -------- ----------
Balance at March 31, 1994........... 3,225,000 32,000 2,967,008 40,000 422,000 1,462,000
Issuance of common stock......... 240,331 4,000 146,000
Net income....................... 1,307,000
--------- ------- --------- ------- -------- ----------
Balance at March 31 , 1995.......... 3,225,000 32,000 3,207,339 44,000 568,000 2,769,000

Issuance of common stock......... 134,762 2,000 169,000
Net income....................... 1,633,000
--------- ------- --------- ------- -------- ----------
Balance at March 31, 1996........... 3,225,000 32,000 3,342,101 46,000 737,000 4,402,000
Issuance of common stock
(unaudited)......................... 44,295 17,000
Net income (unaudited)........... 478,000
--------- ------- --------- ------- -------- ----------
Balance at June 30, 1996 (unaudited) 3,225,000 $32,000 3,386,396 $46,000 $754,000 $4,880,000
========= ======= ========= ======= ======== ==========

See accompanying notes to financial statements.

F-5
58
VIASAT, INC.

STATEMENT OF CASH FLOWS

THREE MONTHS ENDED
YEAR ENDED MARCH 31, ------------------------------
------------------------------------------- JUNE 30, JUNE 30,
1994 1995 1996 1995 1996
------------- ------------- ------------ ----------- --------------
(UNAUDITED) (UNAUDITED)

Cash flows from operating activities:

Net income .................................. $ 485,000 $ 1,307,000 $ 1,633,000 $ 541,000 $ 478,000
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation .......................... 316,000 542,000 982,000 198,000 299,000
Loss on disposal of fixed assets ...... 83,000
Deferred income taxes ................. (66,000) (13,000) (350,000) (228,000) (74,000)
Increase (decrease) in cash resulting from
changes in:

Accounts receivable ...................... (2,256,000) (265,000) (1,871,000) (1,061,000) 248,000
Inventory ................................ (15,000) (189,000) (1,019,000) (480,000) (253,000)
Other assets ............................. (53,000) (43,000) (186,000) 34,000 (383,000)
Accounts payable ......................... 670,000 530,000 1,294,000 184,000 (386,000)
Accrued liabilities ...................... 1,019,000 1,331,000 (512,000) (383,000) (157,000)
Other liabilities ........................ -- 119,000 485,000 (294,000) 116,000
----------- ----------- ----------- ----------- -----------

Net cash provided by (used in)
operating activities ............... 183,000 3,319,000 456,000 (1,489,000) (112,000)
----------- ----------- ----------- ----------- -----------

Cash flows from investing activities:

Purchases of property and equipment ......... (511,000) (1,701,000) (1,875,000) (432,000) (387,000)
----------- ----------- ----------- ----------- -----------

Cash flows from financing activities:

Proceeds from short-term bank borrowings .... 170,000 -- 1,400,000
Repayment of short-term bank borrowings ..... (150,000) (350,000) (1,400,000)
Proceeds from issuance of notes payable ..... 289,000 1,650,000 2,778,000 190,000 75,000
Repayment of notes payable .................. (53,000) (346,000) (1,964,000) (118,000) (157,000)
Proceeds from issuance of common stock ...... 6,000 150,000 171,000 5,000 17,000
----------- ----------- ----------- ----------- -----------

Net cash provided by (used in)
financing activities ............... 262,000 1,104,000 985,000 77,000 (65,000)
----------- ----------- ----------- ----------- -----------

Net (decrease) increase in cash and cash
equivalents .................................... (66,000) 2,722,000 (434,000) (1,844,000) (564,000)

Cash and cash equivalents at beginning of
period ......................................... 75,000 9,000 2,731,000 2,731,000 2,297,000
----------- ----------- ----------- ----------- -----------

Cash and cash equivalents at end of period ..... $ 9,000 $ 2,731,000 $ 2,297,000 $ 887,000 $ 1,733,000
=========== =========== =========== =========== ===========

Supplemental information:

Cash paid for interest ...................... $ 48,000 $ 116,000 $ 260,000 $ 43,000 $ 62,000
=========== =========== =========== =========== ===========

Cash paid for income taxes .................. $ 121,000 $ 642,000 $ 468,000 $ 38,000 $ 210,000
=========== =========== =========== =========== ===========

See accompanying notes to financial statements.

F-6
59
VIASAT, INC.

NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

ViaSat, Inc. (the "Company") designs, produces and markets advanced
digital satellite telecommunications and wireless signal processing equipment.

Management Estimates and Assumptions

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Cash Equivalents

Cash equivalents consist of highly liquid investments with original
maturities of 90 days or less.

Revenue Recognition

The majority of the Company's revenues are derived from services
performed for the United States Government and its prime contractors under a
variety of contracts including cost-plus-fixed fee, fixed-price, and time and
materials type contracts. Such sales amounted to $28,305,000, $21,226,000 and
$11,143,000 for the years ended March 31, 1996, 1995 and 1994, respectively.
Included in these revenues are sales to a significant customer under various
subcontracts totaling $5,269,000 and $4,166,000 during the years ended March 31,
1996 and 1995, respectively. Sales to this customer were not significant during
the year ended March 31, 1994. Generally, revenues are recognized as services
are performed using the percentage of completion method, measured primarily by
costs incurred to date compared with total estimated costs at completion or
based on the number of units delivered. The Company provides for anticipated
losses on contracts by a charge to income during the period in which they are
first identified.

Contract costs, including indirect costs, are subject to audit and
negotiations with Government representatives. These audits have been completed
and agreed upon through fiscal year 1994. Contract revenues and accounts
receivable are stated at amounts which are expected to be realized upon final
settlement.

Unbilled Accounts Receivable

Unbilled receivables consist of costs and fees earned and billable on
contract completion or other specified events. The majority of unbilled
receivables is expected to be collected within one year. The amount of contract
retention included in unbilled accounts receivable as of March 31, 1996 and 1995
is $45,000 and $22,000, respectively, and is expected to be collected beyond one
year.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist primarily of cash equivalents
and trade accounts receivable which are generally not collateralized. The
Company limits its exposure to credit loss by placing its cash equivalents with
high credit quality financial institutions. Concentrations of credit risk with
respect to receivables are limited because the Company's primary customers are
various agencies of the United States Government and its prime contractors.

Inventories

Inventories are valued at the lower of cost or market, cost being
determined by the first-in, first-out method.

F-7
60
Software Costs

Software product development costs incurred from the time technological
feasibility is reached until the product is available for general release to
customers are capitalized and reported at the lower of cost or net realizable
value. Through March 31, 1996, no significant amounts were expended subsequent
to reaching technological feasibility.

Property and Equipment

Equipment, computers, and furniture and fixtures are recorded at cost,
and depreciated over estimated useful lives of 3 to 7 years under the
straight-line method. Additions to property and equipment together with major
renewals and betterments are capitalized. Maintenance, repairs and minor
renewals and betterments are charged to expense. When assets are sold or
otherwise disposed of, the cost and related accumulated depreciation or
amortization are removed from the accounts and any resulting gain or loss is
recognized.

Long-lived Assets

The Company assesses potential impairments to its long-lived assets
when there is evidence that events or changes in circumstances have made
recovery of the asset's carrying value unlikely. An impairment loss would be
recognized when the sum of the expected future net cash flows is less than the
carrying amount of the asset. No such impairment losses have been identified by
the Company.

Warranty Reserves

The Company provides limited warranties on certain of its products for
periods of up to three years. The Company recognizes warranty reserves based
upon an estimate of total warranty costs, with amounts expected to be incurred
within twelve months classified as a current liability.

Income Taxes

Income taxes are provided utilizing the liability method. The liability
method requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying
amounts and tax bases of assets and liabilities. Additionally, under the
liability method, changes in tax rates and laws will be reflected in income in
the period such changes are enacted.

Fair Value of Financial Instruments

At March 31, 1996, the carrying amounts of the Company's financial
instruments, including cash equivalents, trade receivables and accounts payable,
approximated their fair values due to their short term maturities. At March 31,
1996, the estimated fair value of the Company's long-term debt approximated its
carrying value.

New Accounting Pronouncement

In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123). The
Company does not intend to adopt the measurement provisions of SFAS 123 with
regard to employee-based stock compensation, and will adopt the disclosure
provisions during the fiscal year ending March 31, 1997.

Pro forma net income per share

Pro forma net income per share is computed based on the weighted
average number of common shares and common stock equivalents, using the treasury
stock method, outstanding during the respective periods after giving retroactive
effect to the conversion, which will occur upon the closing of the Company's
initial public offering, of all outstanding shares of preferred stock into
2,365,538 shares of common stock. Pursuant to Securities and Exchange Commission
Staff Accounting Bulletin No. 83, all issuances of common stock and all stock
options granted within one year prior to the Company's planned initial public
offering have been included as outstanding for all periods using the treasury
stock method. Historical earnings per share are not presented because such
amounts are not deemed meaningful due to the significant change in the Company's
capital structure that will occur in connection with the planned initial public
offering.

Recapitalization

In contemplation of the Public Stock Offering, the Company expects to
file Amended and Restated Articles of Incorporation to effect a .7335 for 1
reverse stock split of all outstanding shares of common stock and stock

F-8
61
options. All shares and per share data in the accompanying financial statements
have been adjusted retroactively to give effect to the reverse stock split. The
Amended and Restated Articles of Incorporation will increase the authorized
stock of the Company such that the Company will be authorized to issue 5,000,000
shares of $0.01 par value preferred stock, and 25,000,000 shares of $0.01 par
value common stock.

Interim results (unaudited)

The accompanying balance sheet at June 30, 1996 and the related
statements of income and of cash flows for the three months ended June 30, 1995
and 1996, and the statement of shareholders' equity for the three months ended
June 30, 1996 are unaudited. In the opinion of management, these statements have
been prepared on the same basis as the audited financial statements and include
all adjustments, consisting only of normal recurring adjustments, necessary for
the fair statement of results of the interim periods. The data disclosed in
these notes to the financial statements at such dates and for such periods are
also unaudited.

Pro forma shareholders' equity (unaudited)

The unaudited pro forma information presented in the accompanying
balance sheet as of June 30, 1996 reflects the conversion of all outstanding
preferred stock into 2,365,538 shares of common stock, which will occur upon
completion of the Company's planned initial public offering.

2. COMPOSITION OF CERTAIN BALANCE SHEET CAPTIONS

March 31, June 30,
------------------------------- ----------------
1995 1996 1996
------------------ ----------- ----------------
(Unaudited)

Accounts receivable:
Billed ............................. $ 2,890,000 $ 5,653,000 $ 4,695,000
Unbilled ........................... 1,410,000 518,000 1,228,000
----------- ----------- -----------
$ 4,300,000 $ 6,171,000 $ 5,923,000
=========== =========== ===========
Inventory:
Raw materials ...................... $ 67,000 $ 753,000 $ 994,000
Work in process .................... 137,000 402,000 458,000
Finished goods ..................... 68,000 24,000
----------- ----------- -----------
$ 204,000 $ 1,223,000 $ 1,476,000
----------- ----------- -----------

Property and equipment:
Machinery and equipment ............ $ 1,288,000 $ 2,313,000 $ 2,580,000
Computer equipment ................. 1,564,000 2,213,000 2,326,000
Furniture and fixtures ............. 179,000 380,000 387,000
----------- ----------- -----------

3,031,000 4,906,000 5,293,000
Less accumulated depreciation ..... (1,135,000) (2,117,000) (2,416,000)
----------- ----------- -----------

$ 1,896,000 $ 2,789,000 $ 2,877,000
=========== =========== ===========

Accrued liabilities:
Accrued vacation ................... $ 406,000 $ 591,000 $ 650,000
Accrued 401(k) matching contribution 275,000 444,000 145,000
Current portion of warranty reserve 67,000 413,000 564,000
Accrued bonus ...................... 488,000 347,000 144,000
Collections in excess of revenues .. 773,000 237,000 106,000
Income taxes payable ............... 601,000 40,000 326,000
Other .............................. 59,000 85,000 65,000
----------- ----------- -----------

$ 2,669,000 $ 2,157,000 $ 2,000,000
=========== =========== ===========

F-9
62
3. SHORT-TERM BANK BORROWINGS

The Company has a $4,000,000 line of credit with a bank which allows it
to borrow the greater of $1,000,000 or 80% of eligible accounts receivable plus
50% of the Company's eligible inventory at the bank's prime rate (8.25% at March
31, 1996). There were no borrowings outstanding as of March 31, 1996 and 1995.
The Company is required to pay a fee equal to 0.25% of the unused portion of the
line of credit on an annual basis. The credit agreement includes covenants
which, among other things, require the Company to maintain stated net worth
amounts plus specific liquidity and long-term solvency ratios as well as a
minimum net income level. The line of credit expires on September 15, 1997.
Amounts borrowed are secured by substantially all of the Company's assets.

4. NOTES PAYABLE

Notes payable are as follows:

MARCH 31,
------------------------------- JUNE 30,
1995 1996 1996
----------------- ------------ ----------------
(UNAUDITED)

Bank installment loans, with various expiration dates through
September 1999, total monthly payments of $74,000 with
interest rates ranging between 8% and 12%,
collateralized by equipment $ 1,092,000 $ 1,989,000 $ 1,947,000
Finance company installment loans, with various expiration
dates through April 1999, total monthly payments of
$20,000 with interest rates ranging between 10.23% and
11.81%, collateralized by equipment 604,000 521,000 481,000
----------- ----------- -----------

1,696,000 2,510,000 2,428,000

Less current portion (476,000) (763,000) (897,000)
----------- ----------- -----------

$ 1,220,000 $ 1,747,000 $ 1,531,000
=========== =========== ===========

Principal maturities of notes payable as of March 31, 1996 are
summarized as follows:

Year Ending March 31,

1997 763,000
1998 932,000
1999 623,000
2000 192,000
----------
$2,510,000
==========

5. CONVERTIBLE PREFERRED STOCK

At March 31, 1996, the Company had 3,225,000 shares of its convertible
$.01 par value Series A preferred stock (preferred stock) outstanding with a
liquidation preference of $.10 per share. Each share of preferred stock is
convertible at the option of the holder into one share of common stock subject
to adjustment for stock splits and certain other transactions (Note 1).
Holders of the preferred stock have votes per share equivalent to the number
of shares of common stock to which the preferred stock may be converted.

Each share of preferred stock shall automatically convert at its then
effective conversion price (i) upon the closing of any public offering of the
Company's common stock at an offering price of not less than $.50 per share and
having an aggregate offering price of at least $3,000,000, or (ii) immediately
prior to the closing of a merger, consolidation or combination of the Company
with any other corporation, or (iii) immediately prior to a sale of
substantially all of the Company's assets in which the Company receives at least
$3,000,000 in cash or negotiable securities.

F-10
63
Each share of preferred stock is entitled to receive dividends on a
cumulative basis at the annual rate of $.009 per share, when and as declared by
the Board of Directors. Such dividends have preference over any distribution to
holders of common stock. Undeclared cumulative dividends amounted to $260,000 at
March 31, 1996.

6. COMMON STOCK AND OPTIONS

In July 1993, the Company adopted the 1993 Stock Option Plan (the Plan)
which authorizes 733,500 shares to be granted no later than July 2003. The Plan
provides for the grant of both incentive stock options and non-qualified stock
options which are subject to a three year vesting period. The option prices
represent the estimated fair market value of the Company's common stock as
determined by the Company's Board of Directors.

Transactions under the stock option plan are summarized as follows:

Number Option Price
of Shares per share

Outstanding at March 31, 1994

(all granted in fiscal 1994) 54,829 $ .34
Options granted 61,137 $ .48
Options granted 74,450 $ .82
-------

Outstanding at March 31, 1995 190,416 $ .34 - $ .82

Options granted 128,033 $ 1.36
Options canceled (147) $ .82
Options exercised (8,215) $ .34 - $ .82
-------

Outstanding at March 31, 1996 310,087 $ .34 - $1.36

Options granted (unaudited) -

Options canceled (unaudited) (183) $ 1.36
Options exercised (unaudited) (44,221) $ .34 - $1.36
-------
Outstanding at June 30, 1996 (unaudited) 265,683
=======

At March 31, 1996, options to purchase 77,570 shares of the Company's
Common Stock were currently exercisable at $.34 to $.82 per share.

The Company also granted certain officers and employees the opportunity
to purchase at fair market value 254,855 shares and 124,805 shares of the
Company's common stock in fiscal 1995 and 1996, respectively.

F-11
64
7. INCOME TAXES

The provision (benefit) for income taxes includes the following:

YEAR ENDED MARCH 31, THREE MONTHS
----------------------------------------------------------- ENDED JUNE 30,
1994 1995 1996 1996
----------------- ------------------- --------------- -------------------
(UNAUDITED)

Current tax provision
Federal $ 361,000 $ 708,000 $ 344,000 $ 420,000
State 109,000 193,000 9,000 25,000
--------- --------- --------- ---------

470,000 901,000 353,000 445,000
--------- --------- --------- ---------

Deferred tax provision:
Federal (109,000) (10,000) (310,000) (141,000)
State (33,000) (3,000) (93,000) (42,000)
--------- --------- --------- ---------

(142,000) (13,000) (403,000) (183,000)
--------- --------- --------- ---------
Total provision (benefit) for
income taxes $ 328,000 $ 888,000 $ (50,000) $ 262,000
========= ========= ========= =========

Significant components of the Company's deferred tax assets and
liabilities are as follows:

MARCH 31,
----------------------------- JUNE 30,
1995 1996 1996
------------ ------------- -----------
(UNAUDITED)

Deferred tax assets:
Warranty reserve $ 36,000 $ 219,000 $ 349,000
Accrued vacation 129,000 190,000 209,000
Other 60,000 142,000 180,000
--------- --------- ---------

Total deferred tax assets 225,000 551,000 738,000

Deferred tax liabilities:
Depreciation (91,000) (14,000) (18,000)
--------- --------- ---------

Net deferred tax assets $ 134,000 $ 537,000 $ 720,000
========= ========= =========

F-12
65
A reconciliation of the provision for income taxes to the amount
computed by applying the statutory federal income tax rate to income before
income taxes is as follows:

THREE MONTHS
ENDED
YEAR-ENDED MARCH 31, JUNE 30,
---------------------------------------------- ------------
1994 1995 1996 1996
------------ ------------- ----------- ------------
UNAUDITED

Tax expense at statutory rate $ 276,000 $ 746,000 $ 538,000 $ 252,000
State tax provision (benefit),
net of federal benefit 87,000 153,000 (60,000) 7,000

Research tax credit -- (18,000) (480,000) --
Other (35,000) 7,000 (48,000) 3,000
--------- --------- --------- ---------

$ 328,000 $ 888,000 $ (50,000) $ 262,000
========= ========= ========= =========

The Company's income tax benefit for the fiscal year ended March 31,
1996 was primarily attributable to the utilization of research and development
credits generated in the period and the impact of a favorable United States
Federal judicial decision which clarified the tax law related to the utilization
of research and development credits generated from the Company's funded research
and development.

8. EMPLOYEE BENEFITS

The Company has a voluntary deferred compensation plan under Section
401(k) of the Internal Revenue Code. The Company may make discretionary
contributions to the plan which vest equally over six years. Employees who have
completed 90 days of service and are at least 21 years of age are eligible to
participate in the plan. Participants are entitled, upon termination or
retirement, to their vested portion of the plan assets which are held by an
independent trustee. Discretionary contributions accrued by the Company during
fiscal years 1996, 1995 and 1994 amounted to $444,000, $275,000 and $45,000,
respectively. The cost of administering the plan is not significant.

9. COMMITMENTS

The Company leases office facilities under noncancelable operating
leases with terms ranging from one to five years which expire between March 7,
1997 and August 11, 1999. Certain of the Company's facilities leases contain
option provisions which allow for extension of the lease terms. Rent expense
was $608,000, $493,000 and $387,000 in fiscal years 1996, 1995 and 1994,
respectively.

Future minimum lease payments are as follows:

Year Ending March 31,
---------------------

1997 $ 655,000
1998 650,000
1999 335,000
2000 135,000
================
$ 1,775,000
================

Additionally, the Company enters into long term purchase commitments
with certain of its vendors to purchase materials used to manufacture products
delivered under long term contracts. At March 31, 1996, the Company had
commitments to purchase $2,689,000 and $11,000 of materials in fiscal 1997 and
1998, respectively. Purchases under these contracts totaled $692,000 during the
year ended March 31, 1996.

F-13
66
10. SUBSEQUENT EVENTS (UNAUDITED)

In July 1996, the Company granted certain officers and employees the
opportunity to purchase 118,607 shares of the Company's Common Stock at $4.09
per share. Additionally, the Company granted options to purchase 118,460 shares
of Common Stock to certain officers and employees at an exercise price of $4.09
per share.

The Company currently intends to complete an initial public offering of
its Common Stock. Upon the closing of the offering, after giving effect to the
conversion of the Convertible Preferred Stock and an amendment of the Company's
Amended and Restated Articles of Incorporation to eliminate all references to
the previously outstanding Convertible Preferred Stock, the Company's authorized
Capital Stock will consist of 25,000,000 shares of Common Stock, $0.01 par
value, and 5,000,000 shares of Preferred Stock with terms as determined by the
Board of Directors.

F-14
67
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY SELLING SHAREHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.

--------------------

TABLE OF CONTENTS

PAGE
----

Prospectus Summary..........................
Risk Factors................................
Capitalization..............................
Use of Proceeds.............................
Dividend Policy.............................
Dilution....................................
Selected Financial Data.....................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations... ..........................
Business....................................
Management..................................
Certain Transactions........................
Principal and Selling Shareholders..........
Description of Capital Stock................
Shares Eligible for Future Sale.............
Underwriting................................
Legal Matters...............................
Experts.....................................
Available Information.......................
Index to Financial Statements...............

--------------------

UNTIL ____________, 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

2,200,000 SHARES

VIASAT, INC.

COMMON STOCK

_____________________

PROSPECTUS

____________________

OPPENHEIMER & CO., INC.

NEEDHAM & COMPANY, INC.

UNTERBERG HARRIS

____________, 1996

68
PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is an itemized statement of expenses incurred in
connection with this Registration Statement. All such expenses will be paid by
the Company.

Securities and Exchange Commission registration fee... $ 10,469
NASD filing fee....................................... 3,536
NASDAQ NMS listing fee................................ *
Legal fees and expenses............................... *
Accounting fees and expenses.......................... *
Printing and engraving expenses....................... *
Blue Sky fees and expenses............................ *
Transfer agent and registrar fees..................... *
Miscellaneous......................................... *
--------
TOTAL....................................... $650,000
========

- ---------------
* To be filed by amendment.

All of the above items are estimates, except the Securities and Exchange
Commission registration fee and the NASD filing fee.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 204 of the California General Corporation Law (the "CGCL")
provides for the indemnification of directors and officers in terms sufficiently
broad to indemnify directors and officers of the Company under certain
circumstances from liabilities (including reimbursement for expenses incurred)
arising under the Securities Act. The Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws of the Company provide for the
indemnification of directors and officers against monetary damages to the
fullest extent permissible under California law.

The Company's Amended and Restated Articles of Incorporation also
authorize the Company to indemnify its agents (as defined in Section 317 of the
CGCL) for breach of duty to the Company and its shareholders through bylaw
provisions, or through agreements with the agents, or otherwise, in excess of
the indemnification otherwise permitted by Section 317 of the CGCL, subject to
the limits on such excess indemnification set forth in Section 204 of the CGCL.
The general effect of Section 317 of the CGCL and Article V of the Company's
Amended and Restated Bylaws is to provide for indemnification of its agents to
the fullest extent permissible under California law. Reference is also made to
the indemnification provisions of the underwriting agreement which provides for
indemnification by the underwriters of the Company and its officers and
directors for certain liabilities arising under the Securities Act or otherwise.

In addition, the Company intends to enter into separate indemnification
agreements with each of its directors to effectuate the indemnity provisions
described above and to purchase director's and officer's liability insurance.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

(a) Securities sold.

The following table sets forth the date of sale, title and amount of
shares of Common Stock sold by the Company within the past three years which
were not registered under the Securities Act:

II-1
69

Date of Sale Title No. of Shares Offering Price
------------ ----- ------------- --------------

03/01/94 Common Stock 140,832 $ 67,200
10/04/94 Common Stock 114,023 93,270
06/26/95 Common Stock 124,805 170,150
07/01/96 Common Stock 118,607 485,100
------- -------
498,267 $ 815,720
======= =======

In addition, the Company has granted stock options under the 1993 Stock
Option Plan since such plan's inception. For a description of these options to
employees and directors of the Company, see "Management--1993 Stock Option
Plan."

(b) Underwriters and other purchasers.

Underwriters were not retained in connection with the sale of any of
the Company's currently outstanding securities. All sales were made in private
sales to employees or directors of the Company.

The Common Stock was sold by the Company for cash in the amounts set
forth in Item 15(a) above.

(d) Exemption from registration claimed.

The Company relied upon an exemption from registration under Section
4(2) of the Securities Act in connection with each of these transactions. All
sales were made through non-public offerings.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------

1.1 Form of Underwriting Agreement.(1)

3.1 Amended and Restated Articles of Incorporation.(2)

3.2 Amended and Restated Bylaws.(2)

4.1 Form of Common Stock Certificate.(2)

5.1 Opinion of Latham & Watkins.(2)

10.1 Preferred Stock Purchase Agreement, dated as of June 11, 1986, by and among the Company,
Southern California Ventures, Robert W. Johnson and Thomas A. Tisch.(1)

10.2 Shareholders' Agreement, dated June 11, 1986, by and among Southern California Ventures, Robert
W. Johnson, Thomas A. Tisch, the Company, Mark D. Dankberg, Steven R. Hart and Mark J. Miller.(1)

10.3 Form of Stock Restriction Agreement by and between the Company and each shareholder of the
Company.(1)

10.4 Form of Invention and Confidential Disclosure Agreement by and between the Company and each
employee of the Company.(1)

10.5 ViaSat, Inc. 1993 Stock Option Plan (the "1993 Stock Option Plan").(1)

II-2
70

EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
- ------- ----------------------

10.6 Form of Incentive Stock Option Agreement under the 1993 Stock Option Plan.(1)

10.7 Form of Nonqualified Stock Option Agreement under the 1993 Stock Option Plan.(1)

10.8 The 1996 Equity Participation Plan of ViaSat, Inc. (the "1996 Equity Participation Plan").(2)

10.9 Form of Incentive Stock Option Agreement under the 1996 Equity Participation Plan.(2)

10.10 Form of Nonqualified Stock Option Agreement under the 1996 Equity Participation Plan.(2)

10.11 The ViaSat, Inc. Employee Stock Purchase Plan.(2)

10.12 ViaSat, Inc. 401(k) Profit Sharing Plan.(1)

10.13 Loan Agreement, dated as of September 15, 1995, by and between the Company and Union Bank.(1)

10.14 Business Loan Agreement, dated as of April 5, 1994, as amended, by and between the Company and
Scripps Bank.(1)

10.15 Equipment Financing Agreement, dated April 28, 1994, by and between the Company and Heritage
Leasing Capital.(1)

10.16 Equipment Financing Agreement, dated May 13, 1994, by and between the Company and Heritage
Leasing Capital.(1)

10.17 Equipment Financing Agreement, dated September 19, 1994, by and between the Company and
Heritage Leasing Capital.(1)

10.18 Equipment Financing Agreement, dated December 6, 1994, by and between the Company and Heritage
Leasing Capital.(1)

10.19 Sublease, dated as of August 20, 1993, by and between Whittaker Corporation and the Company
(2290 Cosmos Court, Carlsbad, California).(1)

10.20 Lease Agreement, dated December 8, 1994, by and between The Campus, LLC and the Company (The
Campus, Carlsbad, California).(1)

10.21 Lease, dated March 21, 1995, by and between Nagog Development Company and the Company (125
Nagog Park, Acton, Massachusetts).(1)

10.22 Lease, dated March 8, 1996, by and between Harry and Wendy Brandon and the Company (1900 S.
Harbor City Blvd., Melbourne, Florida).(1)

10.23 Basic Ordering Agreement, dated November 8, 1994, as amended, by and between the Company and
AT&T acting through its Tridom division.(1)

10.24 Supply & Services Contract, dated June 2, 1996, by and between HCL Comnet Systems and Services
Limited and the Company.(2)

10.25 Basic Ordering Agreement Subcontract, dated March 4, 1994, by and between Magnavox Electronic
Systems Company and the Company.(2)

10.26 Award/Contract, effective March 29, 1996, as amended, issued by Electronic Systems Center/MCK
Air Force Materiel Command, USAF to the Company.(2)

10.27 Award/Contract, effective October 2, 1995, issued by Electronic Systems Center/
MCK Air Force Materiel Command, USAF to the Company.(2)

II-3
71

EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
- ------- ----------------------

10.28 Subcontract, dated May 1, 1996, by and between Lockheed Martin Tactical Defense Systems and the
Company.(2)

10.29 Award/Contract, effective September 29, 1993, as amended, issued by Information Technology
Acquisition Center to the Company.(2)

10.30 Letter Contract, dated October 21, 1994, by and between McDonnell Douglas Corporation and the
Company.(2)

10.31 Award/Contract, effective July 30, 1991, issued by Electronic Systems Division Air Force
Systems Command, USAF to the Company.(2)

10.32 Award/Contract, effective September 27, 1993, as amended, issued by Contracting Officer Naval
Research Laboratory to the Company.(2)

10.33 Award Contract, effective September 21, 1994, as amended, issued by Technical Contract
Management Office to the Company.(2)

10.34 Fixed Price Contract, dated as of October 18, 1995, by and between the Company and
Spectragraphics.(1)

11.1 Statement re computation of per share earnings.(1)

21.1 Subsidiaries.(1)

23.1 Consent of Price Waterhouse LLP.(1)

23.2 Consent of Latham & Watkins (contained in Exhibit 5.1).

24.1 Power of Attorney (contained on signature page).

27.1 Financial Data Schedule.(1)

- ---------------
(1) Filed herewith.
(2) To be filed by amendment.

(b) Financial Statement Schedules.

All required information is set forth in the financial statements
included in the Prospectus constituting part of this Registration Statement.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-4
72
The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.

(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.

II-5
73
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Carlsbad,
State of California, on October 1, 1996.

ViaSat, Inc.

By: /s/ MARK D. DANKBERG
---------------------------------
Mark D. Dankberg
Chairman, President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Mark D. Dankberg and Gregory D.
Monahan, his true and lawful attorney-in-fact, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities to sign any and all amendments including
post-effective amendments and any registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933 to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact or their substitutes, each acting
alone, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ MARK D. DANKBERG Chairman of the Board, President and Chief October 1, 1996
- --------------------------------------- Executive Officer (Principal Executive
Mark D. Dankberg Officer)

/s/ GREGORY D. MONAHAN Vice President, Chief Financial Officer and October 1, 1996
- --------------------------------------- General Counsel (Principal Financial Officer
Gregory D. Monahan and Principal Accounting Officer)

/s/ ROBERT W. JOHNSON
- --------------------------------------- Director October 1, 1996
Robert W. Johnson

/s/ JEFFREY M. NASH Director October 1, 1996
- ---------------------------------------
Jeffrey M. Nash

/s/ B. ALLEN LAY Director October 1, 1996
- ---------------------------------------
B. Allen Lay

II-6
74
EXHIBIT INDEX

The following exhibits are filed as part of this Form S-1 Registration
Statement.

EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
- ------- ----------------------

1.1 Form of Underwriting Agreement.(1)
3.1 Amended and Restated Articles of Incorporation.(2)
3.2 Amended and Restated Bylaws.(2)
4.1 Form of Common Stock Certificate.(2)
5.1 Opinion of Latham & Watkins.(2)
10.1 Preferred Stock Purchase Agreement, dated as of June 11, 1986, by and among the Company,
Southern California Ventures, Robert W. Johnson and Thomas A. Tisch.(1)
10.2 Shareholders' Agreement, dated June 11, 1986, by and among Southern California Ventures, Robert
W. Johnson, Thomas A. Tisch, the Company, Mark D. Dankberg, Steven R. Hart and Mark J. Miller.(1)
10.3 Form of Stock Restriction Agreement by and between the Company and each shareholder of the
Company.(1)
10.4 Form of Invention and Confidential Disclosure Agreement by and between the Company and each
employee of the Company.(1)
10.5 ViaSat, Inc. 1993 Stock Option Plan (the "1993 Stock Option Plan").(1)
10.6 Form of Incentive Stock Option Agreement under the 1993 Stock Option Plan.(1)
10.7 Form of Nonqualified Stock Option Agreement under the 1993 Stock Option Plan.(1)
10.8 The 1996 Equity Participation Plan of ViaSat, Inc. (the "1996 Equity Participation Plan").(2)
10.9 Form of Incentive Stock Option Agreement under the 1996 Equity Participation Plan.(2)
10.10 Form of Nonqualified Stock Option Agreement under the 1996 Equity Participation Plan.(2)
10.11 The ViaSat, Inc. Employee Stock Purchase Plan.(2)
10.12 ViaSat, Inc. 401(k) Profit Sharing Plan.(1)
10.13 Loan Agreement, dated as of September 15, 1995, by and between the Company and Union Bank.(1)
10.14 Business Loan Agreement, dated as of April 5, 1994, as amended, by and between the Company and
Scripps Bank.(1)
10.15 Equipment Financing Agreement, dated April 28, 1994, by and between the Company and Heritage
Leasing Capital.(1)
10.16 Equipment Financing Agreement, dated May 13, 1994, by and between the Company and Heritage
Leasing Capital.(1)
10.17 Equipment Financing Agreement, dated September 19, 1994, by and between the Company and
Heritage Leasing Capital.(1)
10.18 Equipment Financing Agreement, dated December 6, 1994, by and between the Company and Heritage
Leasing Capital.(1)
10.19 Sublease, dated as of August 20, 1993, by and between Whittaker Corporation and the Company
(2290 Cosmos Court, Carlsbad, California).(1)

EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
- ------- ----------------------

10.20 Lease Agreement, dated December 8, 1994, by and between The Campus, LLC and the Company (The
Campus, Carlsbad, California).(1)
10.21 Lease, dated March 21, 1995, by and between Nagog Development Company and the Company (125
Nagog Park, Acton, Massachusetts).(1)
10.22 Lease, dated March 8, 1996, by and between Harry and Wendy Brandon and the Company (1900 S.
Harbor City Blvd., Melbourne, Florida).(1)
10.23 Basic Ordering Agreement, dated November 8, 1994, as amended, by and between the Company and
AT&T acting through its Tridom division.(1)
10.24 Supply & Services Contract, dated June 2, 1996, by and between HCL Comnet Systems and Services
Limited and the Company.(2)
10.25 Basic Ordering Agreement Subcontract, dated March 4, 1994, by and between Magnavox Electronic
Systems Company and the Company.(2)
10.26 Award/Contract, effective March 29, 1996, as amended, issued by Electronic Systems Center/MCK
Air Force Materiel Command, USAF to the Company.(2)
10.27 Award/Contract, effective October 2, 1995, issued by Electronic Systems Center/MCK Air Force
Materiel Command, USAF to the Company.(2)
10.28 Subcontract, dated May 1, 1996, by and between Lockheed Martin Tactical Defense Systems and the
Company.(2)
10.29 Award/Contract, effective September 29, 1993, as amended, issued by Information Technology
Acquisition Center to the Company.(2)
10.30 Letter Contract, dated October 21, 1994, by and between McDonnell Douglas Corporation and the
Company.(2)
10.31 Award/Contract, effective July 30, 1991, issued by Electronic Systems Division Air Force
Systems Command, USAF to the Company.(2)
10.32 Award/Contract, effective September 27, 1993, as amended, issued by Contracting Officer Naval
Research Laboratory to the Company.(2)
10.33 Award Contract, effective September 21, 1994, as amended, issued by Technical Contract
Management Office to the Company.(2)
10.34 Fixed Price Contract, dated as of October 18, 1995, by and between the Company and
Spectragraphics.(1)
11.1 Statement re computation of per share earnings.(1)
21.1 Subsidiaries.(1)
23.1 Consent of Price Waterhouse LLP.(1)
23.2 Consent of Latham & Watkins (contained in Exhibit 5.1).
24.1 Power of Attorney (contained on signature page).
27.1 Financial Data Schedule.(1)

- ---------------
(1) Filed herewith.

(2) To be filed by amendment.

   1
                                                                     EXHIBIT 1.1


                              _____________ Shares

                                  VIASAT, INC.

                                  Common Stock

                             UNDERWRITING AGREEMENT


                                                              September __, 1996


Oppenheimer & Co., Inc.Needham & Company, Inc.
Volpe, Welty & Company
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York  10281

On behalf of the several Underwriters named on Schedule I attached hereto.

Ladies and Gentlemen:

         ViaSat, Inc., a California corporation (the "Company"), and the selling
shareholders named on Schedule II attached to this Agreement (the "Selling
Shareholders") propose to sell to you and the other underwriters named on
Schedule I attached to this Agreement (the "Underwriters"), for whom you are
acting as Representatives, an aggregate of _________ shares (the "Firm Shares")
of the Company's Common Stock, $.01 par value (the "Common Stock"). Of the
_________ Firm Shares, _____________ are to be issued and sold by the Company
and _____________ are to be sold by the Selling Shareholders. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional _________ shares (the "Option Shares") of Common Stock solely for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
   2
         1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:

             (a) The Company and the Selling Shareholders agree severally and
         not jointly, to sell to each of the Underwriters, and each of the
         Underwriters agrees, severally and not jointly, to purchase, at $[ ]
         per share (the "Initial Price"), the number of Firm Shares (adjusted by
         the Representatives to eliminate fractions) which bears the same
         proportion to the total number of Firm Shares to be sold by the Company
         or the Selling Shareholders, as the case may be, as the number of Firm
         Shares set forth opposite the name of such Underwriter on Schedule I
         attached to this Agreement bears to the total number of Firm Shares to
         be sold by the Company and the Selling Shareholders.

             (b) The Selling Shareholders grant to the Underwriters an option to
         purchase, severally and not jointly, all or any part of the Option
         Shares at the Initial Price. The number of Option Shares to be
         purchased by each Underwriter shall be the same percentage (adjusted by
         the Representatives to eliminate fractions) of the total number of
         Option Shares to be purchased by the Underwriters as such Underwriter
         is purchasing of the Firm Shares. Such option may be exercised only to
         cover over-allotments in the sales of the Firm Shares by the
         Underwriters and may be exercised in whole or in part at any time on or
         before 12:00 noon, New York City time, on the business day before the
         Firm Shares Closing Date (as defined below), and [ONLY ONCE] thereafter
         within 30 days after the date of this Agreement, in each case upon
         written or facsimile notice, or verbal or telephonic notice confirmed
         by written or facsimile notice, by the Representatives to the Company
         no later than 12:00 noon, New York City time, on the business day
         before the Firm Shares Closing Date or at least two business days
         before the Option Shares Closing Date (as defined below), as the case
         may be, setting forth the number of Option Shares to be purchased and
         the time and date (if other than the Firm Shares Closing Date) of such
         purchase.

         2. Delivery and Payment. Delivery of the certificates for the Firm
Shares shall be made by the Company and the Custodian (as hereinafter defined)
on behalf of the Selling Shareholders to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by certified or
official bank check or checks payable in New York Clearing House (next day)
funds to the Company and the Custodian, respectively, shall take place at the
offices of Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center,
New York, New York 10281, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, provided, however, that if
the Shares sold hereunder are priced and this Agreement is entered into after
4:30 p.m., New York City time, on any business day, payment and delivery in
respect of the Firm Shares shall take place on the fourth business day following
the date of this Agreement; in either case unless another time shall be

                                        2
   3
agreed upon by the Company, the Selling Shareholders and the Representatives
(such time and date of delivery and payment are called the "Firm Shares Closing
Date").

         In the event the option with respect to the Option Shares is exercised,
delivery of the certificates for the Option Shares shall be made by the Company
to the Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (next day) funds to the Company shall take
place at the offices of Oppenheimer & Co., Inc. specified above at the time and
on the date (which may be the same date as, but in no event shall be earlier
than, the Firm Shares Closing Date) specified in the notice referred to in
Section 1(b) (such time and date of delivery and payment are called the "Option
Shares Closing Date"). The Firm Shares Closing Date and the Option Shares
Closing Date are called, individually, a "Closing Date" and, together, the
"Closing Dates."

         Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, [ON THE DAY OF NOTICE OF EXERCISE OF THE OPTION,] as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).

         3. Registration Statement and Prospectus; Public Offering. The Company
has prepared in conformity with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations thereunder (the
"Rules") adopted by the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1 (No. 333-[ ]), including a preliminary
prospectus relating to the Shares, and has filed with the Commission the
Registration Statement (as hereinafter defined) and such amendments thereof as
may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to you. The
term "preliminary prospectus" means the preliminary prospectus (as described in
Rule 430 of the Rules) included at any time as a part of the Registration
Statement or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The Registration
Statement, as amended at the time and on the date it becomes effective (the
"Effective Date"), including all exhibits and information, if any, deemed to be
part of the Registration Statement pursuant to Rule 424(b) and Rule 430A of the
Rules, is called the "Registration Statement." The term "Prospectus" means the
prospectus in the form first used to confirm sales of the Shares (whether such
prospectus was included in the Registration Statement at the time of
effectiveness or was subsequently filed with the Commission pursuant to Rule
424(b) of the Rules). If the Company files a registration statement to register
a portion of the Shares and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule 462(b)
Registration Statement"), then any

                                        3
   4
reference to the "Registration Statement" herein shall be deemed to include both
the registration statement referred to above (No. 333-_____) and the Rule 462(b)
Registration Statement, as each such registration statement may be amended
pursuant to the Securities Act.

         The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Shareholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each preliminary prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).

         4. Representations and Warranties of the Company and the Selling
Shareholders. The Company and the Selling Shareholders hereby, jointly and
severally, represent and warrant to each Underwriter as follows:

             (a) On the Effective Date, the Registration Statement and all other
         registration statements and reports filed with the Commission by the
         Company complied, and on the date of the Prospectus, on the date any
         post-effective amendment to the Registration Statement shall become
         effective, on the date any supplement or amendment to the Prospectus is
         filed with the Commission, at all times that a prospectus must be
         delivered by the Underwriters pursuant to the Securities Act and on
         each Closing Date, the Registration Statement, the Prospectus (and any
         amendment thereof or supplement thereto) and all other registration
         statements and reports filed with the Commission by the Company will
         comply, in all material respects, with the applicable provisions of the
         Securities Act and the Rules and the Securities Exchange Act of 1934,
         as amended (the "Exchange Act"), and the rules and regulations
         thereunder adopted by the Commission; the Registration Statement did
         not, as of the Effective Date, contain any untrue statement of a
         material fact or omit to state any material fact required to be stated
         therein or necessary in order to make the statements therein not
         misleading; and on the other dates referred to above neither the
         Registration Statement nor the Prospectus, nor any amendment thereof or
         supplement thereto, will contain any untrue statement of a material
         fact or will omit to state any material fact required to be stated
         therein or necessary in order to make the statements therein not
         misleading. When any related preliminary prospectus was first filed
         with the Commission (whether filed as part of the Registration
         Statement or any amendment thereto or pursuant to Rule 424(a) of the
         Rules) and when any amendment thereof or supplement thereto was first
         filed with the Commission, such preliminary prospectus, as amended or
         supplemented, complied in all material respects with the applicable
         provisions of the Securities Act and the Rules and did not contain any
         untrue statement of a material fact or omit to state any material fact
         required to be stated therein or necessary in order to make the
         statements therein not misleading.

                                        4
   5
         Notwithstanding the foregoing, the Company and the Selling Shareholders
         make no representation or warranty as to the last paragraph of the
         cover page of the Prospectus, the paragraph with respect to
         stabilization on the inside front cover page of the Prospectus and the
         statements contained under the caption "Underwriting" in the Prospectus
         (to the extent such statements relate to the Underwriters). The Company
         and each of the Selling Shareholders acknowledge that the statements
         referred to in the previous sentence constitute the only information
         furnished in writing by the Representatives on behalf of the several
         Underwriters specifically for inclusion in the Registration Statement,
         any preliminary prospectus or the Prospectus.

             (b) The financial statements of the Company and [ITS SUBSIDIARY (AS
         DEFINED BELOW)] (including all notes and schedules thereto) included in
         the Registration Statement and the Prospectus comply as to form in all
         material respects with the requirements of the Securities Act and the
         Rules and present fairly on a consolidated basis the financial
         position, the results of operations and cash flows and the
         shareholders' equity and the other information purported to be shown
         therein of the Company [AND ITS SUBSIDIARY] at the respective dates and
         for the respective periods to which they apply; and such financial
         statements have been prepared in conformity with generally accepted
         accounting principles, consistently applied throughout the periods
         involved, and all adjustments necessary for a fair presentation of the
         results for such periods have been made; and the other financial and
         statistical information and the supporting schedules included in the
         Prospectus and in the Registration Statement present fairly, in all
         material respects, the information required to be stated therein.

             (c) Price Waterhouse LLP, whose reports are filed with the
         Commission as a part of the Registration Statement, are and, during the
         periods covered by their reports, were independent public accountants
         as required by the Securities Act and the Rules.

             (d) The Company has been duly organized and is validly existing as
         a corporation in good standing under the laws of the State of
         California. [EXCEPT FOR THE COMPANY'S SUBSIDIARY LISTED IN EXHIBIT 21
         TO THE REGISTRATION STATEMENT (THE "SUBSIDIARY"),] The Company does not
         control, directly or indirectly, any corporation, partnership, joint
         venture, association or other business organization. [THE SUBSIDIARY
         HAS BEEN DULY ORGANIZED AND IS VALIDLY EXISTING AS A CORPORATION IN
         GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION.]
         [EACH OF] The Company [AND ITS SUBSIDIARY] is duly qualified and in
         good standing as a foreign corporation in each jurisdiction in which
         the character or location of its assets or properties (owned, leased or
         licensed) or the nature of its business makes such qualification
         necessary or desirable, except for such jurisdictions where the failure
         to so qualify would not have a material adverse effect on the assets or
         properties, business, results of operations, prospects or condition
         (financial or otherwise) of the Company [AND ITS SUBSIDIARY,

                                        5
   6
         TAKEN AS A WHOLE.] [EACH OF] The Company [AND ITS SUBSIDIARY] has all
         requisite power and authority, and all necessary authorizations,
         approvals, consents, orders, licenses, certificates and permits of and
         from all governmental or regulatory agencies, bodies or authorities,
         [INCLUDING THE FEDERAL COMMUNICATIONS COMMISSION (THE "FCC")] or any
         other person or entity, to own, lease and license its assets and
         properties and conduct its businesses as now being conducted and as
         described in the Registration Statement and the Prospectus, except for
         such authorizations, approvals, consents, orders, licenses,
         certificates and permits the failure to so obtain would not have a
         material adverse effect upon the assets or properties, business,
         results of operations, prospects or condition (financial or otherwise)
         of the Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE]; no such
         authorization, approval, consent, order, license, certificate or permit
         contains a materially burdensome restriction other than as disclosed in
         the Registration Statement and the Prospectus; and the Company has all
         such corporate power and authority, and such authorizations, approvals,
         consents, orders, licenses, certificates and permits to enter into,
         deliver and perform this Agreement and to authorize, issue and sell the
         Shares (except as may be required under the Securities Act and state
         Blue Sky or securities laws).

                  (e) Neither the Commission nor the Blue Sky or securities
         authorities of any jurisdiction has issued an order suspending the
         effectiveness of the Registration Statement, preventing or suspending
         the use of any preliminary prospectus, the Prospectus, the Registration
         Statement, or any amendment or supplement thereto, refusing to permit
         the effectiveness of the Registration Statement or suspending the
         registration or qualification of the Shares, nor has any of such
         authorities instituted or threatened to institute any proceedings with
         respect to such an order in any jurisdiction in which the Shares are to
         be sold.

                  (f) [EACH OF] The Company [AND ITS SUBSIDIARY] owns, or
         possesses adequate and enforceable rights to use, all trademarks,
         trademark applications, trade names, service marks, copyrights,
         copyright applications, licenses, know-how and other similar rights and
         proprietary knowledge (collectively, "Intangibles") necessary or
         desirable for the conduct of its business as described in the
         Registration Statement and the Prospectus. Neither the Company nor its
         Subsidiary has received any notice of, or is aware of, any infringement
         of or conflict with asserted rights of others with respect to any
         Intangibles which, singly or in the aggregate, if the subject of an
         unfavorable decision, ruling or finding, would have a material adverse
         effect upon the assets or properties, business, results of operations,
         prospects or condition (financial or otherwise) of the Company [AND ITS
         SUBSIDIARY, TAKEN AS A WHOLE].

                  (g) [EACH OF] The Company [AND ITS SUBSIDIARY] has good title
         to each of the items of real and personal property which are reflected
         in the financial statements referred to in Section 4(c) or are referred
         to in the Registration Statement and the Prospectus as being owned by
         it and valid and enforceable leasehold interests in each of the items
         of real and personal property which


                                        6
   7
         are referred to in the Registration Statement and the Prospectus as
         being leased by it, in each case free and clear of all liens,
         encumbrances, claims, security interests and defects, other than those
         described in the Registration Statement and the Prospectus and those
         which do not and will not have a material adverse effect upon the
         assets or properties, business, results of operations, prospects or
         condition (financial or otherwise) of the Company [AND ITS SUBSIDIARY,
         TAKEN AS A WHOLE].

                  (h) There is no litigation or governmental or other proceeding
         or investigation before any court or before or by any public body,
         agency or authority, including the FCC, pending or, to the best
         knowledge of the Company after due inquiry, threatened (and the Company
         does not know of any basis therefor) against, or involving the assets,
         properties or business of, the Company [OR ITS SUBSIDIARY] which would
         materially adversely affect the value or the operation of any such
         assets or properties or the business, results of operations, prospects
         or condition (financial or otherwise) of the Company [AND ITS
         SUBSIDIARY, TAKEN AS A WHOLE], or which would prevent the consummation
         of the transactions contemplated by this Agreement or is required to be
         disclosed in the Prospectus.

                  (i) Subsequent to the respective dates as of which information
         is given in the Registration Statement and the Prospectus, except as
         described therein: (i) there has not been any material adverse change
         in the assets or properties, business, results of operations, prospects
         or condition (financial or otherwise) of the Company [OR OF ITS
         SUBSIDIARY], whether or not arising from transactions in the ordinary
         course of business; (ii) [NEITHER] the Company [NOR ITS SUBSIDIARY] has
         not sustained any material loss or interference with its assets,
         businesses or properties (whether owned or leased) from fire,
         explosion, earthquake, hurricane, flood or other calamity, whether or
         not covered by insurance, or from any labor dispute or any court or
         legislative or other governmental or regulatory action, order or
         decree; and (iii) since the date of the latest balance sheet included
         in the Registration Statement and the Prospectus, except as reflected
         therein, [NEITHER] the Company [NOR ITS SUBSIDIARY] has not (A) issued
         any securities or incurred any liability or obligation, direct or
         contingent, for borrowed money, except such liabilities or obligations
         incurred in the ordinary course of business, (B) entered into any
         transaction not in the ordinary course of business or (C) declared or
         paid any dividend or made any distribution on any shares of its stock
         or redeemed, purchased or otherwise acquired or agreed to redeem,
         purchase or otherwise acquire any shares of its stock or other
         securities.

                  (j) There is no document or contract of a character required
         to be described in the Registration Statement and the Prospectus or to
         be filed as an exhibit to the Registration Statement which is not
         described or filed as required. Each agreement listed in the Exhibits
         to the Registration Statement is in full force and effect and is valid
         and enforceable by and against the Company or its Subsidiary, as the
         case may be, in accordance with its terms, assuming the


                                        7
   8
         due authorization, execution and delivery thereof by each of the other
         parties thereto. Neither the Company [NOR ITS SUBSIDIARY,] nor, to the
         best knowledge of the Company after due inquiry, any other party is in
         default in the observance or performance of any term or obligation to
         be performed by it under any such agreement, and no event has occurred
         which, with notice or lapse of time or both, would constitute such a
         default, in any such case which default or event would have a material
         adverse effect on the assets or properties, business, results of
         operations, prospects or condition (financial or otherwise) of the
         Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE]. No default exists, and
         no event has occurred which, with notice or lapse of time or both,
         would constitute a default, in the due performance and observance of
         any term, covenant or condition, by the Company [OR ITS SUBSIDIARY] of
         any other agreement or instrument to which the Company [OR ITS
         SUBSIDIARY] is a party or by which it or its assets, properties or
         business may be bound or affected which default or event would have a
         material adverse effect on the assets or properties, business, results
         of operations, prospects or condition (financial or otherwise) of the
         Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE].

                  (k) [NEITHER] The Company [NOR ITS SUBSIDIARY] is not in
         violation of any term or provision of its charter or by-laws, or of any
         franchise, license, permit, judgment, decree, order, statute, rule or
         regulation, where the consequences of such violation could have a
         material adverse effect on the assets or properties, business, results
         of operations, prospects or condition (financial or otherwise) of the
         Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE].

                  (l) The Company [AND ITS SUBSIDIARY] has obtained all
         authorizations, approvals, consents, orders, licenses, certificates and
         permits which are required under federal, state and local statutes,
         rules and regulations relating to pollution or protection of the
         environment, including laws relating to emissions, discharges, releases
         or threatened releases of pollutants, contaminants or hazardous,
         radioactive or toxic materials or wastes into ambient air, surface
         water, ground water or land, or otherwise relating to the manufacture,
         processing, distribution, use, treatment, storage, disposal, transport
         or handling of pollutants, contaminants or hazardous, radioactive or
         toxic materials or wastes. The Company [AND ITS SUBSIDIARY] complies in
         all respects with all terms and conditions of the authorizations,
         approvals, consents, orders, licenses, certificates and permits, and
         are also in full compliance with all other limitations, restrictions,
         obligations, schedules and timetables contained in such statutes, rules
         and regulations or contained in any code, plan, order, decree,
         judgment, notice or demand letter issued, entered, promulgated or
         approved thereunder. Except as described in the Registration Statement
         and the Prospectus, [NEITHER] the Company [NOR ITS SUBSIDIARY] is not
         aware of, nor has the Company [OR ITS SUBSIDIARY] received notice of,
         any past, present or future events, conditions, circumstances,
         activities, practices, incidents, actions or plans which may interfere
         with or prevent continued compliance, or which may give rise to any
         common law or legal liability, or otherwise form the basis of any
         claim, action, suit, proceeding, hearing or


                                        8
   9
         investigation, based on or related to the manufacture, processing,
         distribution, use, treatment, storage, disposal, transport or handling,
         or the emission, discharge, release or threatened release into the
         environment, of any pollutant, contaminant or hazardous, radioactive or
         toxic material or waste.

                  (m) Neither the execution, delivery and performance of this
         Agreement by the Company nor the consummation of any of the
         transactions contemplated hereby (including, without limitation, the
         issuance and sale by the Company of the Shares and the sale by the
         Selling Shareholders of the Shares to be sold by them) will give rise
         to a right to terminate or accelerate the due date of any payment due
         under, or conflict with or result in the breach or violation of any
         term or provision of, or constitute a default (or an event which with
         notice or lapse of time or both would constitute a default) under, or
         require any consent or waiver under, or result in the execution or
         imposition of any lien, charge or encumbrance upon any properties or
         assets of the Company [OR ITS SUBSIDIARY] pursuant to the terms of, any
         indenture, mortgage, deed of trust, note or other agreement or
         instrument to which the Company [OR ITS SUBSIDIARY] is a party or by
         which the Company or [ITS SUBSIDIARY] is bound or to which the Company
         [OR ITS SUBSIDIARY] or any of its properties, assets or businesses is
         subject or affected, or any franchise, license, consent, certificate,
         permit, judgment, decree, order, notice, plan, code, statute, rule or
         regulation, including, without limitation, the Communications Act,
         applicable to the Company [OR ITS SUBSIDIARY] or violate any term or
         provision of the Articles of Incorporation, as amended, and By-laws, as
         amended, of the Company [OR THE CHARTER OR BY-LAWS OF ITS SUBSIDIARY],
         except for such consents or waivers which have already been obtained
         and are in full force and effect.

                  (n) The Company has authorized and outstanding capital stock
         as set forth under the captions "Capitalization" and "Description of
         Capital Stock" in the Prospectus. All of the outstanding Common Stock
         and Series A Preferred Stock, par value, $.01 per share, have been duly
         and validly issued and are fully paid and nonassessable and none of
         them was issued in violation of any preemptive or other similar right.
         [THE COMPANY OWNS ALL OF THE SHARES OF CAPITAL STOCK OR OTHER
         BENEFICIAL INTERESTS OF ITS SUBSIDIARY, FREE AND CLEAR OF ALL LIENS,
         CHARGES, CLAIMS, SECURITY INTERESTS, ENCUMBRANCES, SHAREHOLDERS'
         AGREEMENTS, VOTING TRUSTS AND ANY OTHER RESTRICTIONS WHATSOEVER.] The
         Shares to be issued and sold by the Company, when issued and sold by
         the Company pursuant to this Agreement and the Shares to be sold by the
         Selling Shareholders, when sold by the Selling Shareholders pursuant to
         this Agreement, will be duly and validly issued, fully paid and
         nonassessable and none of them will be issued in violation of any
         preemptive or other similar right. Except as disclosed in the
         Registration Statement and the Prospectus, there is no outstanding
         option, warrant or other right calling for the issuance of, and there
         is no commitment, plan or arrangement to issue, any share of stock of
         the Company [OR ITS SUBSIDIARY], or any security convertible into, or
         exercisable or


                                        9
   10
         exchangeable for, such stock. The Common Stock and the Shares conform
         in all material respects to all statements in relation thereto
         contained in the Registration Statement and the Prospectus.

                  (o) Except as described in the Registration Statement and the
         Prospectus, no holder of any security of the Company has the right to
         have any security owned by such holder included in the Registration
         Statement or to demand registration of any security owned by such
         holder during the period ending 180 days after the date of this
         Agreement.

                  (p) Each shareholder listed on Schedule III hereto, director
         and executive officer of the Company has delivered to the
         Representatives his or her enforceable written agreement that, except,
         in the case of the Selling Shareholders, for the sale of the Shares to
         be sold by the Selling Shareholders pursuant to the Registration
         Statement, he, she or it will not, for a period of 180 days after the
         date of this Agreement, sell (including "short sales"), loan, pledge,
         assign, transfer, encumber, distribute, grant or otherwise transfer or
         dispose of, directly or indirectly (collectively, "Transfer"), or
         offer, contract or otherwise agree to Transfer, any Common Stock or any
         other securities convertible into or exchangeable for Common Stock or
         any other equity securities of the Company owned by him, her or it,
         without the prior written consent of the Representatives, except for
         (i) sales to the several Underwriters pursuant to this Agreement or
         (ii) pursuant to will or the laws of intestate succession, provided the
         transferee thereof agrees in writing to be bound by such restrictions.

                  (q) All necessary corporate action has been duly and validly
         taken by the Company to authorize the execution, delivery and
         performance of this Agreement and the issuance and sale of the Shares.
         This Agreement has been duly and validly authorized, executed and
         delivered by the Company and constitutes a legal, valid and binding
         obligation of the Company enforceable against the Company in accordance
         with its terms, except (i) as the enforceability thereof may be limited
         by bankruptcy, insolvency, fraudulent conveyance, reorganization,
         moratorium or other similar laws affecting the enforcement of
         creditors' rights generally and by general equitable principles and
         (ii) to the extent that rights to indemnity or contribution under this
         Agreement may be limited by Federal and state securities laws or the
         public policy underlying such laws.

                  (r) [NEITHER] The Company [NOR ITS SUBSIDIARY] is not involved
         in any labor dispute nor, to the best knowledge of the Company after
         due inquiry, is any such dispute threatened, which dispute would have a
         material adverse effect on the assets or properties, business, results
         of operations, prospects or condition (financial or otherwise) of the
         Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE]; and the Company is not
         aware of any existing or imminent labor disturbance by the employees of
         any of its principal suppliers, manufacturers or

                                       10
   11
         contractors which would have a material adverse effect on the assets or
         properties, business, results of operations, prospects or condition
         (financial or otherwise) of the Company [AND ITS SUBSIDIARY, TAKEN AS A
         WHOLE].

                  (s) No transaction has occurred between or among the Company
         [OR ITS SUBSIDIARY] and any of its [OR THEIR] officers, directors or
         shareholders, as the case may be, or any affiliate or affiliates of any
         such officer, director or shareholder, that is required to be described
         in and is not described in the Registration Statement and the
         Prospectus.

                  (t) [NEITHER] The Company [NOR ITS SUBSIDIARY] has not taken,
         nor will it take, directly or indirectly, any action designed to or
         which might reasonably be expected to cause or result in, or which has
         constituted or which might reasonably be expected to constitute, the
         stabilization or manipulation of the price of the Common Shares to
         facilitate the sale or resale of any of the Shares.

                  (u) [EACH OF] The Company [AND ITS SUBSIDIARY] has filed all
         Federal, state, local and foreign tax returns which are required to be
         filed through the date hereof, or has received valid extensions
         thereof, and has paid all taxes shown on such returns and all
         assessments received by it to the extent that the same have become due.

                  (v) The Shares have been duly authorized for quotation and
         trading on the National Association of Securities Dealers, Inc.
         Automated Quotation ("NASDAQ") National Market.

                  (w) The Company has complied with all of the requirements and
         filed the required forms as specified in Florida Statutes Section
         517.075.

                  (x) The Company is not an "investment company" or an
         "affiliated person" of, or "promoter" or "principal underwriter" for,
         an "investment company," as each such term is defined in the Investment
         Company Act of 1940, as amended.

                  (y) [EACH OF] The Company [AND ITS SUBSIDIARY] is insured by
         insurers of recognized financial responsibility against such losses and
         risks and in such amounts as are customary in the business in which it
         is engaged; and the Company has no reason to believe that it [OR ITS
         SUBSIDIARY] will not be able to renew its existing insurance coverage
         as and when such coverage expires or to obtain similar coverage from
         similar insurers as may be necessary to continue its business at a cost
         that would not materially and adversely affect the assets or
         properties, business, results of operations, prospects or condition
         (financial or otherwise) of the Company [AND ITS SUBSIDIARY, TAKEN AS A
         WHOLE].


                                       11
   12
             (z) [NEITHER] The Company [NOR ITS SUBSIDIARY] has not, directly or
         indirectly, paid or delivered any fee, commission or other sum of money
         or item of property, however characterized, to any finder, agent,
         government official or other party, in the United States or any other
         country, which is in any manner related to the assets, properties,
         business or operations of the Company [OR SUCH SUBSIDIARY], which the
         Company knows or has reason to believe to have been illegal under any
         federal, state or local laws of the United States or any other country
         having jurisdiction; and neither the Company nor its Subsidiary has
         participated, directly or indirectly, in any boycotts or other similar
         practices in contravention of law affecting any of its actual or
         potential customers.

             (aa) The Company meets, and on the Effective Date of the
         Registration Statement and on each Closing Date will meet, the
         conditions for use of Form S-1 under the Securities Act and the Rules.

             (bb) The Company maintains a system of internal accounting controls
         sufficient to provide reasonable assurances that (i) transactions are
         executed in accordance with management's general or specific
         authorization; (ii) transactions are recorded as necessary to permit
         preparation of financial statements in conformity with generally
         accepted accounting principles and to maintain accountability for
         assets; (iii) access to assets is permitted only in accordance with
         management's general or specific authorization; and (iv) the accounting
         records for assets are compared with existing assets at reasonable
         intervals and appropriate action is taken with respect to any
         differences.

             (cc) There are no claims, payments, issuances, agreements,
         arrangements or understandings, whether oral or written, for services
         in the nature of a finder's fee, brokerage fee, origination fee or
         otherwise with respect to the offerings contemplated by this Agreement,
         the Registration Statement and the Prospectus or any other
         arrangements, agreements, understandings, payments or issuances that
         may affect the Underwriters' compensation as determined by the National
         Association of Securities Dealers, Inc. other than as disclosed in the
         Registration Statement and Prospectus and other than as the
         Representatives may themselves have agreed to with third parties.

         5. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders, severally and not jointly, represents and warrants to
each Underwriter that:

             (a) Such Selling Shareholder is, and on the Firm Shares Closing
         Date will be, the sole lawful owner of the Shares to be sold by it
         hereunder, and has, and on such date will have, good and marketable
         title to the Shares to be sold by such Selling Shareholder hereunder,
         free and clear of any lien, charge, claim, encumbrance, security
         interest, shareholders' agreement, voting trust, restriction on
         transfer or other defect in title.

                                       12
   13
                  (b) Such Selling Shareholder has, and on the Firm Shares
         Closing Date will have, full legal right, power and authority, and
         every approval, authorization or other consent, required to sell,
         assign, transfer and deliver such Shares in the manner provided in this
         Agreement; delivery of certificates for the Shares to be sold by such
         Selling Shareholder pursuant hereto will, upon payment therefor, pass
         good and marketable title thereto to each Underwriter, free and clear
         of any lien, charge, claim, encumbrance, security interest,
         shareholders' agreement, voting trust, restriction on transfer or other
         defect in title; and there are no outstanding options, warrants, rights
         or other agreements or arrangements requiring such Selling Shareholder
         at any time to transfer any Shares which may be sold to the
         Underwriters pursuant to this Agreement.

                  (c) Such Selling Shareholder has duly executed and delivered a
         power of attorney (the "Power of Attorney"), in the form heretofore
         delivered to the Representatives, appointing [                ] and 
         [               ], as such Selling Shareholder's attorneys-in-fact 
         (the "Attorneys-in- Fact"), each of them, together or individually, 
         with full power and authority to execute, deliver and perform this
         Agreement on behalf of such Selling Shareholder.

                  (d) Such Selling Shareholder has duly executed and delivered a
         custody agreement (the "Custody Agreement"), in the form heretofore
         delivered to the Representatives pursuant to which certificates in
         negotiable form for the Shares to be sold by such Selling Shareholder
         under this Agreement were deposited with [                  ], as a 
         custodian (the "Custodian"). The Custody Agreement and the Custodian's
         authority thereunder and the appointment of the Attorneys-in-Fact are
         irrevocable and the obligations of such Selling Shareholder hereunder
         and under the Custody Agreement are not subject to termination by such
         Selling Shareholder, except as provided in this Agreement, the Power of
         Attorney or the Custody Agreement, or by operation of law, whether by
         the death or incapacity of such Selling Shareholder (if such Selling
         Shareholder is an individual), the death or incapacity of any trustee
         or executor or the termination of any trust or estate (if such Selling
         Shareholder is a trust or estate), the dissolution or liquidation of
         any corporation or partnership (if such Selling Shareholder is a
         corporation or a partnership), or the occurrence of any other event. If
         any event referred to in the preceding sentence should occur before the
         delivery of the Shares hereunder, the certificates for the Shares to be
         sold by such Selling Shareholder shall be delivered by the Custodian on
         behalf of such Selling Shareholder in accordance with the terms and
         conditions of this Agreement and the Custody Agreement, and action
         taken by the Custodian pursuant to the Custody Agreement shall be as
         valid as if such event had not occurred, whether or not the Custodian
         or the Attorneys-in- Fact, or any one of them, shall have received
         notice of such event.

                  (e) The execution, delivery and performance of this Agreement,
         the Power of Attorney and the Custody Agreement and the consummation of
         the transactions to be performed by such Selling Shareholder
         contemplated hereby and thereby, including the delivery and sale


                                       13
   14
         of the Shares to be delivered and sold by such Selling Shareholder
         hereunder and thereunder, will not conflict with or result in a breach
         or violation of, or constitute a default (or an event which with notice
         or lapse of time or both would constitute a default) under, any
         agreement, indenture or other instrument to which such Selling
         Shareholder is a party or by which it is bound, or to which any of its
         assets or properties are subject or affected, nor will the performance
         by such Selling Shareholder of its obligations hereunder or thereunder
         violate any statute, rule, regulation, including, without limitation,
         the Communications Act, or order or decree of any court or any
         governmental or regulatory agency, authority or body, including,
         without limitation, the FCC, having jurisdiction over such Selling
         Shareholder or any of its assets or properties or result in the
         creation or imposition of any lien, charge, claim, security interest,
         encumbrance or restriction whatsoever upon such Shares.

                  (f) Except for permits and similar authorizations required
         under the Securities Act, the securities or Blue Sky laws of certain
         jurisdictions, and such permits and authorizations which have been
         obtained, no consent, approval, authorization, license, permit or
         certificate or order of any court, governmental or regulatory agency,
         authority or body, including the FCC, or financial institution is
         required in connection with the consummation of the transactions to be
         performed by such Selling Shareholder contemplated by this Agreement,
         including the delivery and sale of the Shares to be sold by such
         Selling Shareholder.

                  (g) Each of this Agreement, the Power of Attorney and the
         Custody Agreement has been duly and validly authorized, executed and
         delivered by such Selling Shareholder and constitutes a legal, valid
         and binding obligation of such Selling Shareholder, enforceable against
         such Selling Shareholder in accordance with its terms, except (i) as
         the enforceability thereof may be limited by bankruptcy, insolvency,
         fraudulent conveyance, reorganization, moratorium or other similar laws
         affecting the enforcement of creditors' rights generally and by general
         equitable principles and (ii) to the extent that rights to indemnity or
         contribution under this Agreement may be limited by Federal and state
         securities laws or the public policy underlying such laws.

                  (h) All information furnished to the Company by such Selling
         Shareholder or on such Selling Shareholder's behalf for use in
         connection with the preparation of the Registration Statement and
         Prospectus (including, without limiting the generality of the
         foregoing, all representations and warranties of such Selling
         Shareholder in such Selling Shareholder's Power of Attorney and the
         information relating to such Selling Shareholder which is set forth in
         the Registration Statement under the caption "Principal and Selling
         Shareholders") is true and correct and does not omit any material fact
         necessary to make such information not misleading.


                                       14
   15

                  (i) The sale by such Selling Shareholder of Shares pursuant
         hereto is not prompted by any adverse information concerning the
         Company or its Subsidiary.

                  (j) Such Selling Shareholder has not since the filing of the
         Registration Statement (i) sold, bid for, purchased, attempted to
         induce any person to purchase, or paid anyone any compensation for
         soliciting purchases of, the Common Shares or (ii) paid or agreed to
         pay to any person any compensation for soliciting another to purchase
         any securities of the Company, except for the sale of the Shares by the
         Selling Shareholders under this Agreement.

                  (k) Such Selling Shareholder has not taken and will not take,
         directly or indirectly, any action designed to cause or result in, or
         which has constituted or which might reasonably be expected to
         constitute, the stabilization or manipulation of the price of the
         Common Shares to facilitate the sale or resale of the Shares.

         6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:

                  (a) The Prospectus shall have been timely filed with the
         Commission in accordance with Section 7(A)(a) of this Agreement. The
         Registration Statement shall have become effective no later than 5:00
         p.m., New York City time, on the date of this Agreement or such later
         time and date as shall be consented to in writing by the
         Representatives.

                  (b) No order preventing or suspending the use of any
         preliminary prospectus or the Prospectus shall have been or shall be in
         effect and no order suspending the effectiveness of the Registration
         Statement shall be in effect and no proceedings for such purpose shall
         be pending before or threatened by the Commission, and any requests for
         additional information on the part of the Commission (to be included in
         the Registration Statement or the Prospectus or otherwise) shall have
         been complied with to the satisfaction of the Representatives.

                  (c) The representations and warranties of the Company and the
         Selling Shareholders contained in this Agreement and in the
         certificates delivered pursuant to Section 6(d) and 6(e), respectively,
         shall be true and correct when made and on and as of each Closing Date
         as if made on such date and the Company and the Selling Shareholders
         shall have performed all covenants and agreements and satisfied all the
         conditions contained in this Agreement required to be performed or
         satisfied by it or them at or before such Closing Date.

                  (d) The Representatives shall have received on each Closing
         Date a certificate, addressed to the Representatives and dated such
         Closing Date, of the chief executive or chief operating officer and the
         chief financial officer or chief accounting officer of the Company to
         the



                                       15
   16
         effect that the signers of such certificate have carefully examined the
         Registration Statement, the Prospectus and this Agreement and that the
         representations and warranties of the Company in this Agreement are
         true and correct on and as of such Closing Date with the same effect as
         if made on such Closing Date and the Company has performed all
         covenants and agreements and satisfied all conditions contained in this
         Agreement required to be performed or satisfied by it at or prior to
         such Closing Date.

                  (e) The Representatives shall have received on the Firm Shares
         Closing Date a certificate, addressed to the Representatives and dated
         such Closing Date, of each Selling Shareholder, to the effect that such
         Selling Shareholder has carefully examined the Registration Statement,
         the Prospectus and this Agreement and that the representations and
         warranties of such Selling Shareholder contained in this Agreement are
         true and correct as if made on and as of such Closing Date, with the
         same effect as if made on such Closing Date, and such Selling
         Shareholder has performed all covenants and agreements and satisfied
         all conditions contained in this Agreement required to be performed or
         satisfied by such Selling Shareholder at or prior to such Closing Date.

                  (f) The Representatives shall have received on the Effective
         Date, at the time this Agreement is executed and on each Closing Date
         signed letters from Price Waterhouse LLP addressed to the
         Representatives and dated, respectively, the Effective Date, the date
         of this Agreement and each such Closing Date, in form and substance
         satisfactory to the Representatives, confirming that they are
         independent accountants within the meaning of the Securities Act and
         the Rules, that the response to Item 10 of the Registration Statement
         is correct insofar as it relates to them and stating in effect that:

                           (i) in their opinion the audited financial statements
                  and the schedules to the financial statements included in the
                  Registration Statement and the Prospectus and reported on by
                  them comply as to form in all material respects with the
                  applicable accounting requirements of the Securities Act and
                  the Rules;

                           (ii) on the basis of a reading of the amounts
                  included in the Registration Statement and the Prospectus
                  under the headings "Summary Financial [INFORMATION],"
                  "Capitalization," "Dilution," "Selected Financial Data" and
                  "Management's Discussion and Analysis of Financial Condition
                  and Results of Operations," carrying out certain procedures
                  (but not an examination in accordance with generally accepted
                  auditing standards) which would not necessarily reveal matters
                  of significance with respect to the comments set forth in such
                  letter, a reading of the minutes of the meetings of the
                  shareholders and directors of the Company [AND ITS SUBSIDIARY]
                  (including any committees thereof), and inquiries of certain
                  officials of the Company [AND ITS



                                       16
   17
                  SUBSIDIARY] who have responsibility for financial and
                  accounting matters of the Company [AND ITS SUBSIDIARY] as to
                  transactions and events subsequent to the date of the latest
                  audited financial statements, except as disclosed in the
                  Registration Statement and the Prospectus, nothing came to
                  their attention which caused them to believe that:

                                    (A) the amounts in "Summary Financial
                           [INFORMATION]," "Capitalization," "Dilution,"
                           "Selected Financial Data" and "Management's
                           Discussion and Analysis of Financial Condition and
                           Results of Operations" included in the Registration
                           Statement and the Prospectus do not agree with the
                           corresponding amounts in the audited financial
                           statements from which such amounts were derived; or

                                    (B) (x) there were, at a specified date not
                           more than five business days prior to the date of the
                           letter, any changes in the short-term or long-term
                           debt of the Company and its Subsidiary or capital
                           stock of the Company or its Subsidiary or any
                           decreases in net income or in working capital or the
                           shareholders' equity in the Company or its
                           Subsidiary, as compared with the amounts shown on the
                           Company's unaudited June 30, 1996 balance sheet
                           included in the Registration Statement or, (y) for
                           the period from June 30, 1996 to such specified
                           business date not more than five business days prior
                           to the date of the letter, there were any decreases,
                           as compared with the corresponding period in the
                           preceding year, in net revenues or in the total or
                           per share amounts of net income in which case the
                           Company shall deliver to the Representatives a letter
                           containing an explanation by the Company as to the
                           significance thereof unless said explanation is not
                           deemed necessary by the Representatives or is set
                           forth in or contemplated by the Registration
                           Statement;

                           (iii) on the basis of a reading of the pro forma
                  financial information included in the Registration Statement
                  and the Prospectus, carrying out certain procedures that would
                  not necessarily reveal matters of significance with respect to
                  the comments set forth in this clause (iii), inquiries of
                  certain officials of the Company [AND ITS SUBSIDIARY] who have
                  responsibility for financial and accounting matters and
                  proving the arithmetic accuracy of the application of the pro
                  forma adjustments to the historical amounts in the pro forma
                  financial information, nothing came to their attention that
                  caused them to believe that the pro forma financial
                  information included in the Prospectus do not comply in form
                  in all material respects with the applicable accounting
                  requirements of Rule 11-02 of Regulation S-X, or that the pro
                  forma adjustments have not been properly applied to the
                  historical amounts in the compilation of those statements; and



                                       17
   18
                           (iv) they have performed certain other procedures as
                  a result of which they have determined that certain
                  information of an accounting, financial or statistical nature
                  (which is limited to accounting, financial or statistical
                  information derived from the general accounting records of the
                  Company) set forth in the Registration Statement and the
                  Prospectus and reasonably specified by the Representatives
                  agrees with the accounting records of the Company.

                  References to the Registration Statement and the Prospectus in
                  this paragraph (f) are to such documents as amended and
                  supplemented as of the date of the letter.

                  (g)      The Representatives shall have received:

                           (i) an opinion from Latham & Watkins, counsel for the
                  Company, addressed to the Representatives, dated each Closing
                  Date, stating in effect that:

                                    (A) The Company has been duly organized and
                           is validly existing as a corporation in good standing
                           under the laws of the State of California. To the
                           best of such counsel's knowledge after due inquiry,
                           [EXCEPT FOR THE SUBSIDIARY,] the Company has no
                           [OTHER] subsidiary and does not control, directly or
                           indirectly, any corporation, partnership, joint
                           venture, association or other business organization.
                           [THE SUBSIDIARY HAS BEEN DULY ORGANIZED AND IS
                           VALIDLY EXISTING AS A CORPORATION IN GOOD STANDING
                           UNDER THE LAWS OF THE JURISDICTION OF ITS
                           ORGANIZATION.] [EACH OF] The Company [AND ITS
                           SUBSIDIARY] is duly qualified and in good standing as
                           a foreign corporation in each jurisdiction in which
                           the character or location of its assets or properties
                           (owned, leased or licensed) or the nature of its
                           businesses makes such qualification necessary or
                           desirable, except for such jurisdictions where the
                           failure to so qualify would not have a material
                           adverse effect on the assets or properties, business,
                           results of operations, prospects or condition
                           (financial or otherwise) of the Company [AND ITS
                           SUBSIDIARY, TAKEN AS A WHOLE].

                                    (B) [EACH OF] The Company [AND ITS
                           SUBSIDIARY] has all requisite power and authority to
                           own, lease and license its assets and properties and
                           conduct its business as now being conducted and as
                           described in the Registration Statement and the
                           Prospectus; and the Company has all requisite
                           corporate power and authority and all necessary
                           authorizations, approvals, consents, orders,
                           licenses, certificates and permits, other than those
                           required under state Blue Sky or securities laws, to
                           enter into, deliver and perform this Agreement and to
                           authorize, issue and sell the Shares.



                                       18
   19
                                    (C) The Company has authorized and issued
                           capital stock as set forth in the Registration
                           Statement and the Prospectus. The certificates
                           evidencing the Shares are in due and proper legal
                           form and have been duly authorized for issuance by
                           the Company. All of the outstanding Common Stock of
                           the Company have been duly and validly authorized and
                           have been duly and validly issued and are fully paid
                           and nonassessable and none of them was issued in
                           violation of any preemptive or other similar right.
                           [THE COMPANY OWNS ALL OF THE SHARES OF CAPITAL STOCK
                           OR OTHER BENEFICIAL INTERESTS OF ITS SUBSIDIARY, FREE
                           AND CLEAR OF ALL LIENS, CHARGES, CLAIMS, SECURITY
                           INTERESTS, ENCUMBRANCES, SHAREHOLDERS' AGREEMENTS,
                           VOTING TRUSTS AND ANY OTHER RESTRICTIONS WHATSOEVER.
                           ] The Shares, when issued and sold pursuant to this
                           Agreement, will be duly and validly issued,
                           outstanding, fully paid and nonassessable and none of
                           them will have been issued in violation of any
                           preemptive or other similar right. To such counsel's
                           knowledge after due inquiry, except as disclosed in
                           the Registration Statement and the Prospectus, there
                           is no outstanding option, warrant or other right
                           calling for the issuance of, and no commitment, plan
                           or arrangement to issue, any share of stock of the
                           Company or any security convertible into, exercisable
                           for, or exchangeable for stock of the Company. The
                           Common Stock and the Shares conform in all material
                           respects to the descriptions thereof contained in the
                           Registration Statement and the Prospectus.

                                    (D) The agreement of the Company's
                           shareholders set forth on Schedule III to this
                           Agreement and directors and officers stating that
                           (except in the case of the Selling Shareholders, for
                           the sale of the Shares to be sold by the Selling
                           Shareholders pursuant to the Registration Statement)
                           for a period of 180 days from the date of this
                           Agreement they will not, without the Representatives'
                           prior written consent, directly or indirectly,
                           Transfer, or offer, contract or otherwise agree to
                           Transfer, any Common Stock or any other securities
                           convertible into or exchangeable for Common Stock or
                           any other equity securities owned by them, except for
                           (i) sales to the several Underwriters pursuant to
                           this Agreement or (ii) pursuant to will or the laws
                           of intestate succession, provided the transferee
                           thereof agrees in writing to be bound by such
                           restrictions, has been duly and validly executed and
                           delivered by such persons and constitutes the legal,
                           valid and binding obligation of each such person
                           enforceable against each such person in accordance
                           with its terms, except as the enforceability thereof
                           may be limited by applicable bankruptcy, insolvency,
                           fraudulent conveyance, reorganization, moratorium or
                           other similar laws



                                       19
   20
                           affecting the enforcement of creditors' rights
                           generally and by general equitable principles.

                                    (E) All necessary corporate action has been
                           duly and validly taken by the Company to authorize
                           the execution, delivery and performance of this
                           Agreement and the issuance and sale of the Shares.
                           This Agreement has been duly and validly authorized,
                           executed and delivered by the Company and constitutes
                           the legal, valid and binding obligation of the
                           Company enforceable against the Company in accordance
                           with its terms, except (i) as such enforceability may
                           be limited by applicable bankruptcy, insolvency,
                           fraudulent conveyance, reorganization, moratorium or
                           other similar laws affecting the enforcement of
                           creditors' rights generally and by general equitable
                           principles and (ii) to the extent that rights to
                           indemnity or contribution under this Agreement may be
                           limited by Federal or state securities laws or the
                           public policy underlying such laws.

                                    (F) Neither the execution, delivery and
                           performance of this Agreement by the Company nor the
                           consummation of any of the transactions contemplated
                           hereby (including, without limitation, the issuance
                           and sale by the Company of the Shares to be issued
                           and sold by the Company) will give rise to a right to
                           terminate or accelerate the due date of any payment
                           due under, or conflict with or result in the breach
                           or violation of any term or provision of, or
                           constitute a default (or any event which with notice
                           or lapse of time, or both, would constitute a
                           default) under, or require consent or waiver under,
                           or result in the execution or imposition of any lien,
                           charge or encumbrance upon any properties or assets
                           of the Company [OR ITS SUBSIDIARY] pursuant to the
                           terms of, any indenture, mortgage, deed of trust,
                           note or other agreement or instrument to which the
                           Company [OR ITS SUBSIDIARY] is a party or by which
                           the Company [OR ITS SUBSIDIARY] is bound or to which
                           the Company [OR ITS SUBSIDIARIES] or any of its
                           respective properties, assets or businesses is
                           subject or affected, or any franchise, license,
                           consent, certificate, permit, judgment, decree,
                           order, notice, plan, code, statute, rule or
                           regulation or violate any provision of the Articles
                           of Incorporation, as amended, or By-laws, as amended,
                           of the Company [OR THE CHARTER OR BY-LAWS OF THE
                           SUBSIDIARY].

                                    (G) To the best of such counsel's knowledge
                           after due inquiry, no default exists, and no event
                           has occurred which with notice or lapse of time, or
                           both, would constitute a default, in the due
                           performance and observance of any term, covenant or
                           condition by the Company [OR ITS SUBSIDIARY] of any



                                       20
   21
                           indenture, mortgage, deed of trust, note or any other
                           agreement or instrument to which the Company [OR ITS
                           SUBSIDIARY] is a party or by which the Company [OR
                           ITS SUBSIDIARY] may be bound or to which the Company
                           [OR ITS SUBSIDIARY] or of any of its assets,
                           properties or businesses may be subject or affected,
                           where the consequences of such default would have a
                           material adverse effect on the assets, properties,
                           business, results of operations, prospects or
                           condition (financial or otherwise) of the Company
                           [AND ITS SUBSIDIARY, TAKEN AS A WHOLE].

                                    (H) To the best of such counsel's knowledge
                           after due inquiry, [NEITHER] the Company [NOR ITS
                           SUBSIDIARY] is not in violation of any term or
                           provision of its Articles of Incorporation, as
                           amended, or the By-laws, as amended, or any
                           franchise, license, consent, certificate, permit,
                           judgment, decree, order, notice, plan, code, statute,
                           rule or regulation, where the consequences of such
                           violation would have a material adverse effect on the
                           assets or properties, businesses, results of
                           operations, prospects or condition (financial or
                           otherwise) of the Company [AND ITS SUBSIDIARY, TAKEN
                           AS A WHOLE.]

                                    (I) No consent, approval, authorization,
                           license, certificate, permit or order of any court or
                           governmental or regulatory agency, authority or body
                           is required for the execution, delivery or
                           performance of this Agreement by the Company or the
                           consummation of the transactions contemplated hereby
                           or by the Registration Statement or the Prospectus,
                           except such as have been obtained under the
                           Securities Act and such as may be required under
                           state securities or Blue Sky laws in connection with
                           the purchase and distribution of the Shares by the
                           several Underwriters.

                                    (J) To the best of such counsel's knowledge
                           after due inquiry, there is no litigation or
                           governmental or other proceeding or investigation
                           before any court or before or by any public body,
                           agency or authority pending or threatened against, or
                           involving the assets, properties or businesses of,
                           the Company [OR ITS SUBSIDIARY] which might have a
                           material adverse effect upon the assets or
                           properties, business, results of operations,
                           prospects or condition (financial or otherwise) of
                           the Company [AND ITS SUBSIDIARY, TAKEN AS A WHOLE].

                                    (K) The statements in the Prospectus under
                           the captions "Description of Capital Stock," "Shares
                           Eligible for Future Sale," "Business," "Management,"
                           "Capitalization," "Management's Discussion and
                           Analysis of Financial



                                       21
   22
                           Condition and Results of Operations," "Principal and
                           Selling Shareholders," "Certain Transactions," and
                           "Risk Factors" insofar as such statements constitute
                           a summary of documents referred to therein or matters
                           of law, are fair summaries in all material respects
                           and accurately present the information called for
                           with respect to such documents and matters. All
                           contracts and other documents required to be filed as
                           exhibits to, or described in, the Registration
                           Statement have been so filed with the Commission or
                           are fairly described in the Registration Statement,
                           as the case may be.

                                    (L) The Registration Statement, all
                           preliminary prospectuses, the Prospectus and each
                           amendment or supplement thereto (except for the
                           financial statements and schedules and other
                           financial data included therein, as to which such
                           counsel expresses no opinion) comply as to form in
                           all material respects with the requirements of the
                           Securities Act and the Rules. The descriptions in the
                           Registration Statement, all preliminary prospectuses,
                           the Prospectus, and each amendment or supplement
                           thereto, of statutes, legal and governmental
                           proceedings, contracts and other documents are
                           accurate in all material respects; such counsel does
                           not know of any statutes or legal or governmental
                           proceedings required to be described in the
                           Prospectus that are not described as required, or of
                           any contracts or documents of a character required to
                           be described in the Registration Statement or
                           Prospectus or to be filed as exhibits to the
                           Registration Statement that are not described and
                           filed as required.

                                    (M) The Registration Statement has become
                           effective under the Securities Act, and no stop order
                           suspending the effectiveness of the Registration
                           Statement has been issued and no proceedings for that
                           purpose have been instituted or are threatened,
                           pending or contemplated.

                                    (N) Such counsel does not know that any of
                           the representations and warranties of the Company
                           contained in this Agreement are not true or correct
                           or that any of the covenants and agreements herein
                           contained to be performed on the part of the Company
                           or any of the conditions herein contained, or set
                           forth in the Registration Statement and the
                           Prospectus, to be fulfilled or complied with by the
                           Company, have not been or will not be duly and timely
                           performed, fulfilled or complied with.

                           To the extent deemed advisable by such counsel, they
                  may rely as to matters of fact on certificates of responsible
                  officers of the Company and public officials and on the
                  opinions of other counsel satisfactory to the Representatives
                  as to matters which are



                                       22
   23
                  governed by laws other than the laws of the State of
                  California, the State of New York, the General Corporation Law
                  of the State of Delaware and the Federal laws of the United
                  States; provided that such counsel shall state that in their
                  opinion the Underwriters and they are justified in relying on
                  such other opinions. Copies of such certificates and other
                  opinions shall be furnished to the Representatives and counsel
                  for the Underwriters.

                           In addition, such counsel shall state that such
                  counsel has participated in conferences with officers and
                  other representatives of the Company, representatives of the
                  Representatives and representatives of the independent
                  certified public accountants of the Company, at which
                  conferences the contents of the Registration Statement and the
                  Prospectus and related matters were discussed and, although
                  such counsel is not passing upon and does not assume any
                  responsibility for the accuracy, completeness or fairness of
                  the statements contained in the Registration Statement and the
                  Prospectus (except as specified in the foregoing opinions), on
                  the basis of the foregoing, no facts have come to the
                  attention of such counsel which lead such counsel to believe
                  that the Registration Statement at the time it became
                  effective (except with respect to the financial statements and
                  notes and schedules thereto and other financial data, as to
                  which such counsel need express no belief) contained any
                  untrue statement of a material fact or omitted to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein not misleading, or that the
                  Prospectus as amended or supplemented (except with respect to
                  the financial statements and notes and schedules thereto and
                  other financial data, as to which such counsel need express no
                  belief) on the date thereof contained any untrue statement of
                  a material fact or omitted to state a material fact necessary
                  in order to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading.

                           (ii) an opinion from [LATHAM & WATKINS], counsel for
                  the Selling Shareholders, addressed to the Representatives,
                  dated the Firm Shares Closing Date, stating in effect that:

                                    (A) Assuming that the Underwriters acquire
                           their respective interests in the Shares to be sold
                           by the Selling Shareholders in good faith and without
                           notice of any adverse claims (within the meaning of
                           Section 8-302 of the Uniform Commercial Code), upon
                           delivery to the Underwriters of such Shares
                           registered in their names, the Underwriters will
                           acquire good and marketable title to such Shares free
                           and clear of all liens, charges, claims, security
                           interests, encumbrances, pledges, shareholders'
                           agreements, voting trusts and any other restrictions
                           whatsoever.



                                       23
   24
                                    (B) To the best of such counsel's knowledge
                           after due inquiry, the execution, delivery and
                           performance of this Agreement, the Power of Attorney
                           and the Custody Agreement and the consummation of the
                           transactions to be performed by each such Selling
                           Shareholder contemplated hereby and thereby
                           (including, without limitation, the delivery and sale
                           of the Shares to be delivered and sold by such
                           Selling Shareholder hereunder and thereunder), will
                           not give rise to a right to terminate or accelerate
                           the due date of any payment due under, or conflict
                           with or result in the breach or violation of any term
                           or provision of, or constitute a default (or any
                           event which with notice or lapse of time, or both,
                           would constitute a default) under, or require consent
                           or waiver under, or result in the execution or
                           imposition of any lien, charge or encumbrance upon
                           any properties or assets of such Selling Shareholder
                           pursuant to the terms of any indenture, mortgage,
                           deed of trust, note or other agreement or instrument
                           to which such Selling Shareholder is a party or bound
                           or by which it or any of such Selling Shareholder's
                           assets, properties or businesses are subject or
                           affected, or any franchise, license, consent,
                           certificate, permit, judgment, decree, order, notice,
                           plan, code, statute, rule or regulation of which such
                           counsel is aware or result in the creation of
                           imposition of any lien, charge, claim, encumbrance,
                           security interest or restriction whatsoever upon the
                           Shares to be sold by such Selling Shareholder.

                                    (C) No consent, approval, authorization,
                           license, certificate, permit or order of any court,
                           governmental or regulatory agency, authority or body
                           or financial institution is required in connection
                           with the performance of this Agreement by each
                           Selling Shareholder or the consummation of the
                           transactions contemplated hereby, by the Power of
                           Attorney or by the Custody Agreement, including the
                           delivery and sale of the Shares to be delivered and
                           sold by such Selling Shareholder, except such as have
                           been obtained under the Securities Act and such as
                           may be required under state securities or Blue Sky
                           laws in connection with the purchase and distribution
                           of the Shares by the several Underwriters.

                                    (D) Each of this Agreement, the Power of
                           Attorney and the Custody Agreement has been duly and
                           validly authorized, executed and delivered by each
                           Selling Shareholder and constitutes a legal, valid,
                           and binding obligation of such Selling Shareholder,
                           enforceable against such Selling Shareholder in
                           accordance with its terms, except (i) as such
                           enforceability may be limited by bankruptcy,
                           insolvency, fraudulent conveyance, reorganization,
                           moratorium or other similar laws affecting the
                           enforcement of creditors' rights generally and (ii)



                                       24
   25
                           to the extent that rights to indemnity or
                           contribution under this Agreement may be limited by
                           Federal and state securities laws or the public
                           policy underlying such laws.

                                    (E) Such counsel does not know that any of
                           the representations and warranties of the Selling
                           Shareholders contained in this Agreement are not true
                           or correct or that any of the covenants and
                           agreements herein contained to be performed on the
                           part of the Selling Shareholders or any of the
                           conditions herein contained, or set forth in the
                           Registration Statement and the Prospectus, to be
                           fulfilled as complied with by the Selling
                           Shareholders, have not been or will not be duly and
                           timely performed, fulfilled or complied with.

                           To the extent deemed advisable by such counsel, they
                  may rely as to matters of fact on certificates of the Selling
                  Shareholders and on the opinions of other counsel satisfactory
                  to the Representatives as to matters which are governed by
                  laws other than the laws of the State of California, the State
                  of New York, the General Corporation Law of the State of
                  Delaware and the Federal laws of the United States; provided
                  that such counsel shall state that in their opinion the
                  Underwriters and they are justified in relying on such other
                  opinions. Copies of such certificates and other opinions shall
                  be furnished to the Representatives and counsel for the
                  Underwriters.

                           In addition, such counsel shall state that such
                  counsel has participated in conferences with officers and
                  other representatives of the Company, representatives of the
                  Representatives and representatives of the independent
                  certified public accountants of the Company, at which
                  conferences the contents of the Registration Statement and the
                  Prospectus and related matters were discussed and, although
                  such counsel is not passing upon and does not assume any
                  responsibility for the accuracy, completeness or fairness of
                  the statements contained in the Registration Statement and the
                  Prospectus (except as specified in the foregoing opinion), on
                  the basis of the foregoing, no facts have come to the
                  attention of such counsel which lead such counsel to believe
                  that the Registration Statement at the time it became
                  effective (except with respect to the financial statements and
                  notes and schedules thereto and other financial data, as to
                  which such counsel need express no belief) contained any
                  untrue statement of a material fact or omitted to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein not misleading, or that the
                  Prospectus as amended or supplemented (except with respect to
                  the financial statements and notes and schedules thereto and
                  other financial data, as to which such counsel need express no
                  belief) on the date thereof contained any untrue statement of
                  a material fact or omitted to state a material fact necessary
                  in order to make



                                       25
   26
                  the statements therein, in the light of the circumstances
                  under which they were made, not misleading.

                  (h) All proceedings taken in connection with the sale of the
         Firm Shares and the Option Shares as herein contemplated shall be
         reasonably satisfactory in form and substance to the Representatives
         and their counsel and the Underwriters shall have received from Kaye,
         Scholer, Fierman, Hays & Handler, LLP a favorable opinion, addressed to
         the Representatives and dated each Closing Date, with respect to the
         Shares, the Registration Statement and the Prospectus, and such other
         related matters, as the Representatives may reasonably request, and the
         Company shall have furnished to Kaye, Scholer, Fierman, Hays & Handler,
         LLP such documents as they may reasonably request for the purpose of
         enabling them to pass upon such matters.

                  (i) The Representatives shall have received on each Closing
         Date a certificate, addressed to the Representatives, and dated such
         Closing Date, of an executive officer of the Company to the effect that
         the signer of such certificate has reviewed and understands the
         provisions of Section 517.075 of the Florida Statutes, and represents
         that the Company has complied, and at all times will comply, with all
         provisions of Section 517.075 and further, that as of such Closing
         Date, neither the Company nor any of its affiliates does business with
         the government of Cuba or with any person or affiliate located in Cuba.

                  (j) The Representatives shall have received from each of the
         shareholders listed on Schedule III hereto and each director and
         executive officer of the Company the enforceable written agreements
         described in Section 4(p).

                  (k) The Company shall have furnished or caused to be furnished
         to the Representatives such further certificates and documents as the
         Representatives shall have reasonably requested.

                  (l) At each Closing Date, the Shares shall have been approved
         for listing on the Nasdaq National Market.

         7. Covenants of the Company. (A) The Company covenants and agrees as
follows:

                  (a) The Company shall prepare the Prospectus in a form
         approved by the Representatives and file such Prospectus pursuant to
         Rule 424(b) under the Securities Act not later than the Commission's
         close of business on the second business day following the execution
         and delivery of this Agreement, or, if applicable, such earlier time as
         may be required by Rule 430A(a)(3) under the Securities Act, and shall
         promptly advise the Representatives (i) when any amendment to the
         Registration Statement shall have become effective, (ii) of any



                                       26

   27

         request by the Commission for any amendment of the Registration
         Statement or the Prospectus or for any additional information, (iii) of
         the prevention or suspension of the use of any preliminary prospectus
         or the Prospectus or of the issuance by the Commission of any stop
         order suspending the effectiveness of the Registration Statement or the
         institution or threatening of any proceeding for that purpose and (iv)
         of the receipt by the Company of any notification with respect to the
         suspension of the qualification of the Shares for sale in any
         jurisdiction or the initiation or threatening of any proceeding for
         such purpose. The Company shall not file any amendment of the
         Registration Statement or supplement to the Prospectus unless the
         Company has furnished the Representatives with a copy for their review
         prior to filing and shall not file any such proposed amendment or
         supplement to which the Representatives reasonably object. The Company
         shall use its best efforts to prevent the issuance of any such stop
         order and, if issued, to obtain as soon as possible the withdrawal
         thereof.

                  (b) If, at any time when a prospectus relating to the Shares
         is required to be delivered under the Securities Act and the Rules, any
         event occurs as a result of which the Prospectus, as then amended or
         supplemented, would include any untrue statement of a material fact or
         omit to state any material fact necessary to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading, or if it shall be necessary to amend or supplement the
         Prospectus to comply with the Securities Act or the Rules, the Company
         promptly shall prepare and file with the Commission, subject to the
         second sentence of paragraph (a) of this Section 7(A), an amendment or
         supplement which shall correct such statement or omission or an
         amendment which shall effect such compliance.

                  (c) The Company shall make generally available to its security
         holders and to the Representatives as soon as practicable, but not
         later than 45 days after the end of the 12-month period beginning at
         the end of the fiscal quarter of the Company during which the Effective
         Date occurs (or 90 days if such 12-month period coincides with the
         Company's fiscal year), an earnings statement (which need not be
         audited) of the Company, covering such 12-month period, which shall
         satisfy the provisions of Section 11(a) of the Securities Act or Rule
         158 of the Rules.

                  (d) The Company shall furnish to the Representatives and
         counsel for the Underwriters, without charge, signed copies of the
         Registration Statement (including all exhibits thereto and amendments
         thereof) and to each other Underwriter a copy of the Registration
         Statement (without exhibits thereto) and all amendments thereof and, so
         long as delivery of a prospectus by an Underwriter or dealer may be
         required by the Securities Act or the Rules, as many copies of any
         preliminary prospectus and the Prospectus and any amendments thereof
         and supplements thereto as the Representatives may reasonably request.



                                       27
   28
                  (e) The Company shall use its best efforts to assist the
         Representatives and their counsel in endeavoring to qualify the Shares
         for offer and sale under the laws of such jurisdictions as the
         Representatives may designate and shall maintain such qualifications in
         effect so long as required for the distribution of the Shares;
         provided, however, that the Company shall not be required in connection
         therewith, as a condition thereof, to qualify as a foreign corporation
         or to execute a general consent to service of process in any
         jurisdiction or subject itself to taxation as doing business in any
         jurisdiction.

                  (f) For a period of five years after the date of this
         Agreement, the Company shall supply to the Representatives, and to each
         other Underwriter who may so request in writing, copies of such
         financial statements and other periodic and special reports as the
         Company may from time to time distribute generally to the holders of
         any class of its capital stock and to furnish to the Representatives a
         copy of each annual or other report it shall be required to file with
         the Commission (including the Report on Form SR required by Rule 463 of
         the Rules).

                  (g) Without the prior written consent of the Representatives,
         for a period of 180 days after the date of this Agreement, the Company
         shall not, directly or indirectly, Transfer, or offer, contract or
         otherwise agree to Transfer, any Common Stock, or any other securities
         convertible into or exchangeable for Common Stock or any other equity
         securities of the Company, except for (i) the issuance of Common Stock
         pursuant to stock options outstanding on the date hereof or the
         issuance of Common Stock pursuant to the Company's [1996 STOCK OPTION
         PLAN] (the "Plans"); and (ii) the issuance of Common Stock in
         connection with any acquisition of another entity. In the event that
         during this period, (i) any Common Stock is issued pursuant to the
         Plans; (ii) any Common Stock is issued in connection with any
         acquisition of another entity; or (iii) any registration is effected on
         Form S-8 or on any successor form, the Company shall obtain the
         enforceable written agreement of such grantee or purchaser or holder of
         such securities that, for a period of 180 days after the date of this
         Agreement, such person will not directly or indirectly, without the
         prior written consent of the Representatives, Transfer, or offer,
         contract or otherwise agree to Transfer, or exercise any registration
         rights with respect to, any Common Stock (or any other securities
         convertible into or exchangeable for any Common Stock, or any other
         equity securities) owned by such person.

                  (h) The Company shall cause each director and executive
         officer of the Company and each shareholder set forth on Schedule III
         to this Agreement to deliver to the Representatives his or her
         enforceable written agreement that, except, in the case of a Selling
         Shareholder, for the sale of the Shares to be sold by such Selling
         Shareholder pursuant to the Registration Statement, he or she will not,
         without the prior written consent of the Representatives, directly or
         indirectly, Transfer, or offer, contract or otherwise agree to
         Transfer, any Common Stock or any other securities convertible into or
         exchangeable for Common Stock



                                       28
   29
         or any other equity securities of the Company until 180 days after the
         date of this Agreement, except for (i) sales to the several
         Underwriters pursuant to this Agreement or (ii) pursuant to will or the
         laws of intestate succession, provided the transferee thereof agrees in
         writing to be bound by such restrictions.

                  (i) On or before completion of this offering, the Company
         shall make all filings required under applicable securities laws and by
         the Nasdaq (including any required registration under the Exchange
         Act).

                  (j) The Company shall file timely and accurate reports in
         accordance with the provisions of Florida Statutes Section 517.075, or
         any successor provision, and any regulations promulgated thereunder, if
         at any time after the Effective Date, the Company or any of its
         affiliates commences engaging in business with the government of Cuba
         or any person or affiliate located in Cuba.

                  (k) The Company will apply the net proceeds from the offering
         of the Shares in the manner set forth under "Use of Proceeds" in the
         Prospectus.

                  (B) The Company agrees to pay, or reimburse if paid by the
         Representatives, whether or not the transactions contemplated hereby
         are consummated or this Agreement is terminated, all costs and expenses
         incident to the public offering of the Shares and the performance of
         the obligations of the Company and of the Selling Shareholders under
         this Agreement including those relating to: (i) the preparation,
         printing, filing and distribution of the Registration Statement
         including all exhibits thereto, each preliminary prospectus, the
         Prospectus, all amendments and supplements to the Registration
         Statement, the Prospectus, and the printing, filing and distribution of
         this Agreement; (ii) the fees and disbursements of counsel for the
         Company and the Selling Shareholders and of the Company's independent
         public accountants; (iii) the preparation and delivery of certificates
         for the Shares to the Underwriters; (iv) the registration or
         qualification of the Shares for offer and sale under the securities or
         Blue Sky laws of the various jurisdictions referred to in Section 
         7(A)(e), including the reasonable fees and disbursements of counsel for
         the Underwriters in connection with such registration and qualification
         and the preparation, printing, distribution and shipment of preliminary
         and supplementary Blue Sky memoranda; (v) the furnishing (including
         costs of shipping and mailing) to the Representatives and to the
         Underwriters of copies of each preliminary prospectus, the Prospectus
         and all amendments or supplements to the Prospectus, and of the several
         documents required by this Section to be so furnished, as may be
         reasonably requested for use in connection with the offering and sale
         of the Shares by the Underwriters or by dealers to whom Shares may be
         sold; (vi) the filing fees of the National Association of Securities
         Dealers, Inc. in connection with its review of the terms of the public
         offering; (vii) the furnishing



                                       29
   30
         (including costs of shipping and mailing) to the Representatives and to
         the Underwriters of copies of all reports and information required by
         Section 7(A)(f); (viii) inclusion of the Common Stock for quotation on
         the Nasdaq National Market; and (ix) all transfer taxes, if any, with
         respect to the sale and delivery of the Shares by the Company and the
         Selling Shareholders to the Underwriters. Subject to the provisions of
         Section 10, the Underwriters agree to pay, whether or not the
         transactions contemplated hereby are consummated or this Agreement is
         terminated, all costs and expenses incident to the performance of the
         obligations of the Underwriters under this Agreement not payable by the
         Company pursuant to the preceding sentence, including, without
         limitation, the fees and disbursements of counsel for the Underwriters.

         8.       Indemnification.

                  (a) The Company and each Selling Shareholder agree, jointly
         and severally, to indemnify and hold harmless each Underwriter and each
         person, if any, who controls any Underwriter within the meaning of
         Section 15 of the Securities Act or Section 20 of the Exchange Act
         against any and all losses, claims, damages and liabilities, joint or
         several (including any reasonable investigation, legal and other
         expenses incurred in connection with, and any amount paid in settlement
         of, any action, suit or proceeding or any claim asserted), to which
         they, or any of them, may become subject under the Securities Act, the
         Exchange Act, the Rules or other Federal or state law or regulation, at
         common law or otherwise, insofar as such losses, claims, damages or
         liabilities arise out of or are based upon any untrue statement or
         alleged untrue statement of a material fact contained in any
         preliminary prospectus, the Registration Statement or the Prospectus or
         any amendment thereof or supplement thereto, or arise out of or are
         based upon any omission or alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         therein not misleading; provided, however, that such indemnity shall
         not inure to the benefit of any Underwriter (or any person controlling
         such Underwriter) on account of any losses, claims, damages or
         liabilities arising from the sale of the Shares to any person by such
         Underwriter if such untrue statement or omission or alleged untrue
         statement or omission was made in such preliminary prospectus, the
         Registration Statement or the Prospectus, or such amendment or
         supplement, and was contained in the last paragraph of the cover page
         of the Prospectus, in the paragraph relating to stabilization on the
         inside front cover page of the Prospectus or under the caption
         "Underwriting" in the Prospectus (to the extent such statements relate
         to the Underwriters). Notwithstanding the foregoing, the liability of
         each Selling Shareholder pursuant to the provisions of this Section 
         8(a) shall be limited to an amount equal to the aggregate net proceeds
         received by such Selling Shareholder from the sale of the Shares sold
         by such Selling Shareholder hereunder. This indemnity agreement will be
         in addition to any liability which the Company and each Selling
         Shareholder may otherwise have.



                                       30
   31
                 (b) Each Underwriter agrees, severally and not jointly, to
        indemnify and hold harmless the Company, the Selling Shareholders, each
        person, if any, who controls the Company within the meaning of either
        Section 15 of the Securities Act or Section 20 of the Exchange Act,
        each director of the Company, and each officer of the Company who signs
        the Registration Statement, to the same extent as the foregoing
        indemnities from the Company or such Selling Shareholder to each
        Underwriter, but only insofar as such losses, claims, damages or
        liabilities arise out of or are based upon any untrue statement or
        omission or alleged untrue statement or omission which was made in any
        preliminary prospectus, the Registration Statement or the Prospectus,
        or any amendment thereof or supplement thereto, and was contained in
        the last paragraph of the cover page of the Prospectus, in the
        paragraph relating to stabilization on the inside front cover page of
        the Prospectus or under the caption "Underwriting" in the Prospectus
        (to the extent such statements relate to the Underwriters); provided,
        however, that the obligation of each Underwriter to indemnify the
        Company or any Selling Shareholder (including any controlling person,
        director or officer thereof), as the case may be, shall be limited to
        the net proceeds received by the Company or the Selling Shareholder, as
        the case may be, from such Underwriter.

                 (c) Any party that proposes to assert the right to be
        indemnified under this Section will, promptly after receipt of notice
        of commencement of any action, suit or proceeding against such party in
        respect of which a claim is to be made against an indemnifying party or
        parties under this Section , notify each such indemnifying party of the
        commencement of such action, suit or proceeding, enclosing a copy of
        all papers served. The indemnification provided for in Section 8(a) or
        8(b) shall be limited for any party who shall fail to give notice as
        provided in this Section 8(c) to the extent the indemnifying party was
        materially prejudiced by the failure to give such notice, if the party
        to whom notice was not given was unaware of the proceeding to which
        such notice would have related but the omission to so notify such
        indemnifying party of any such action, suit or proceeding shall not
        relieve it from any liability that it may have to any indemnified party
        for contribution or otherwise than under this Section . In case any
        such action, suit or proceeding shall be brought against any
        indemnified party and it shall notify the indemnifying party of the
        commencement thereof, the indemnifying party shall be entitled to
        participate in, and, to the extent that it shall wish, jointly with any
        other indemnifying party similarly notified, to assume the defense
        thereof, with counsel reasonably satisfactory to such indemnified
        party, and after notice from the indemnifying party to such indemnified
        party of its election so to assume the defense thereof and the approval
        by the indemnified party of such counsel, the indemnifying party shall
        not be liable to such indemnified party for any legal or other
        expenses, except as provided below and except for the reasonable costs
        of investigation subsequently incurred by such indemnified party in
        connection with the defense thereof. The indemnified party shall have
        the right to employ its counsel in any such action, but the fees and
        expenses of such counsel shall be at the expense of such indemnified
        party unless (i) the



                                       31
   32
         employment of counsel by such indemnified party has been authorized in
         writing by the indemnifying parties, (ii) the indemnified party shall
         have reasonably concluded that there may be a conflict of interest
         between the indemnifying parties and the indemnified party in the
         conduct of the defense of such action (in which case the indemnifying
         parties shall not have the right to direct the defense of such action
         on behalf of the indemnified party) or (iii) the indemnifying parties
         shall not have employed counsel, as provided above, to assume the
         defense of such action within a reasonable time after notice of the
         commencement thereof, in each of which cases the fees and expenses of
         counsel shall be at the expense of the indemnifying parties. An
         indemnifying party shall not be liable for any settlement of any
         action, suit, proceeding or claim effected without its written consent.

         9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8(a) or 8(b) for any reason is unavailable to or insufficient to hold
harmless an indemnified party under Section 8(a) or 8(b), then each indemnifying
party shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted) to which the indemnified party may be subject
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company and the Selling Shareholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company or the Selling
Shareholders, as set forth in the table on the cover page of the Prospectus,
bear to (y) the underwriting discounts received by the Underwriters, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company, the Selling Shareholders or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact related to information supplied by the Company, the Selling
Shareholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 9, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder less the



                                       32
   33
amount of any damages which such Underwriter has otherwise been required to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission which was made in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto; and
(ii) the Company shall be liable and responsible for any amount in excess of the
amount set forth in clause (i) of this sentence; and (iii) in no case shall any
Selling Shareholder be liable and responsible for any amount in excess of the
aggregate net proceeds of the sale of the Shares received by such Selling
Shareholder hereunder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section 
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i), (ii)
and (iii) in the immediately preceding sentence of this Section 9. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Section , notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this Section . No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its written consent. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to their respective underwriting commitments and not joint.

         10. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives notifying the
Company and the Selling Shareholders at any time:

                  (a) in the absolute discretion of the Representatives at or
         before any Closing Date: (i) if on or prior to such date, any domestic
         or international event or act or occurrence has materially disrupted,
         or in the opinion of the Representatives will in the future materially
         disrupt, the securities markets; (ii) if the Company [OR ITS
         SUBSIDIARY] shall have sustained a loss or interference with its
         business by fire, flood, accident, hurricane, earthquake, theft,
         sabotage or other calamity or malicious act which is material to the
         Company [AND THE SUBSIDIARY, TAKEN AS A WHOLE,] whether or not said
         loss shall have been insured, or by court or governmental action, order
         or decree which will, in the opinion of the Representatives, make it
         inadvisable or impractical to proceed with the offering; (iii) if there
         has been, since the respective dates as of which information is given
         in the Prospectus, any material adverse change in the assets or



                                       33
   34
         properties, business, results of operations, prospects or condition
         (financial or otherwise) of the Company [AND ITS SUBSIDIARY, TAKEN AS A
         WHOLE,] whether or not arising in the ordinary course of business; (iv)
         if there has occurred any new outbreak or material escalation of
         hostilities or other calamity or crisis the effect of which on the
         financial markets of the United States is such as to make it, in the
         judgment of the Representatives, inadvisable or impractical to proceed
         with the offering; (v) if there shall be such a material adverse change
         in general financial, political or economic conditions in the United
         States or elsewhere or the effect of international conditions on the
         financial markets in the United States is such as to make it, in the
         judgment of the Representatives, inadvisable or impractical to proceed
         with the offering; (vi) if trading in the Shares has been suspended by
         the Commission or trading generally on the New York Stock Exchange,
         Inc., on the American Stock Exchange, Inc. or Nasdaq has been suspended
         or limited, or minimum or maximum ranges for prices for securities
         shall have been fixed, or maximum ranges for prices for securities have
         been required, by said exchanges or automated quotation system or by
         order of the Commission, the National Association of Securities
         Dealers, Inc., or any other governmental or regulatory agency,
         authority or body; or (vii) if a banking moratorium has been declared
         by any state or Federal agency, authority, or body, or

                  (b) at or before any Closing Date, that any of the conditions
         specified in Section 6 shall not have been fulfilled when and as
         required by this Agreement.

                  If this Agreement is terminated pursuant to any of its
         provisions, neither the Company nor any of the Selling Shareholders
         shall be under any liability to any Underwriter (except as otherwise
         provided in Section 7(B) and Sections 8 and 9, and no Underwriter shall
         be under any liability to the Company or the Selling Shareholders
         except that (y) if this Agreement is terminated by the Representatives
         because of any failure, refusal or inability on the part of the Company
         or the Selling Shareholders to comply with the terms or to fulfill any
         of the conditions of this Agreement, the Company will reimburse the
         Underwriters for all out-of-pocket expenses (including the reasonable
         fees and disbursements of their counsel) incurred by them in connection
         with the proposed purchase and sale of the Shares or in contemplation
         of performing their obligations hereunder and (z) no Underwriter who
         shall have failed or refused to purchase the Shares agreed to be
         purchased by it under this Agreement, without some reason sufficient
         hereunder to justify cancellation or termination of its obligations
         under this Agreement, shall be relieved of liability to the Company,
         the Selling Shareholders or to the other Underwriters for damages
         occasioned by its failure or refusal.

         11. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to



                                       34
   35
purchase such Shares or make such other arrangements as the Representatives may
deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,

                  (a) if the number of Shares to be purchased by the defaulting
         Underwriters on such Closing Date shall not exceed 10% of the Shares
         that all the Underwriters are obligated to purchase on such Closing
         Date, then each of the nondefaulting Underwriters shall be obligated to
         purchase such Shares on the terms herein set forth in proportion to
         their respective obligations hereunder; provided, that in no event
         shall the maximum number of Shares that any Underwriter has agreed to
         purchase pursuant to Section 1 be increased pursuant to this Section 11
         by more than one-ninth of such number of Shares without the written
         consent of such Underwriter, or

                  (b) if the number of Shares to be purchased by the defaulting
         Underwriters on such Closing Date shall exceed 10% of the Shares that
         all the Underwriters are obligated to purchase on such Closing Date,
         then the Company shall be entitled to an additional business day within
         which it may, but is not obligated to, find one or more substitute
         underwriters reasonably satisfactory to the Representatives to purchase
         such Shares upon the terms set forth in this Agreement.

                  In any such case, either the Representatives or the Company
         shall have the right to postpone the applicable Closing Date for a
         period of not more than five business days in order that necessary
         changes and arrangements (including any necessary amendments or
         supplements to the Registration Statement or Prospectus) may be
         effected by the Representatives and the Company. If the number of
         Shares to be purchased on such Closing Date by such defaulting
         Underwriter or Underwriters shall exceed 10% of the Shares that all the
         Underwriters are obligated to purchase on such Closing Date, and none
         of the nondefaulting Underwriters or the Company shall make
         arrangements pursuant to this Section within the period stated for the
         purchase of the Shares that the defaulting Underwriters agreed to
         purchase, this Agreement shall terminate with respect to the Shares to
         be purchased on such Closing Date without liability on the part of any
         nondefaulting Underwriter to the Company or the Selling Shareholders,
         and without liability on the part of the Company or the Selling
         Shareholders, except in both cases as provided in Sections 7(B), 8, 9
         and 10. The provisions of this Section shall not in any way affect the
         liability of any defaulting Underwriter to the Company, the Selling
         Shareholders or to the nondefaulting Underwriters arising out of such
         default. A substitute underwriter hereunder shall become an Underwriter
         for all purposes of this Agreement.



                                       35
   36
         12. Submission to Jurisdiction. The Company hereby irrevocably (i)
agrees that any legal suit, action or proceeding against the Company brought by
any Underwriter or by any person who controls any Underwriter arising out of or
based upon this Agreement or the transactions contemplated hereby, including any
legal suit, action or proceeding to enforce the provisions of Sections 8 and 9
hereof, may be instituted in any United States or State court in the County of
New York, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may have now or hereafter based on forum non convenient or to
the laying of venue of any such suit, action or proceeding, and (iii) expressly
consents and submits to the exclusive jurisdiction of any such court in any such
suit, action or proceeding. The Company has designated and appointed
__________________ (or any successor corporation) (the "Authorized Agent"), as
such person's authorized agent upon whom process may be served in any such suit,
action or proceeding at the office of such agent at ______________________ (or
such other address in the Borough of Manhattan, the City of New York, as such
person may designate by written notice received by you). The Company represents
and warrants that the Authorized Agent has agreed to act as such agent for
service of process and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointments in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of said service to the Company mailed by
first class mail shall be deemed in every respect effective and valid personal
service of process upon the Company. Nothing herein shall affect the right of
any Underwriter or any person controlling any Underwriter to serve process in
any other manner permitted by law.

         13. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its directors or
officers, of the Selling Shareholders and of the Underwriters set forth in or
made pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or the Selling Shareholders or any of the officers, directors or
controlling persons referred to in Sections 8 and 9 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 7(B), 8, 9
and 10 shall survive the termination or cancellation of this Agreement.

         This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters and the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from any Underwriter merely because of such purchase.

         All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone, telex or facsimile transmission if subsequently
confirmed in writing, (a) if to the Representatives, c/o Oppenheimer & Co.,
Inc., Oppenheimer Tower, World Financial Center, New



                                       36
   37
York, New York 10281 Attention: ________________ (b) if to the Company, to its
agent for service as such agent's address appears on the cover page of the
Registration Statement; and (c) if to a Selling Shareholder, to the
Attorneys-in-Fact, c/o ___________________________________________.



                                       37
   38
         This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.

         This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

         Please confirm that the foregoing correctly sets forth the agreement
among us.

                                       Very truly yours,

                                       VIASAT, INC.

                                       By:  
                                            -------------------------------
                                              Name:
                                              Title:

                                       SELLING SHAREHOLDERS NAMED ON
                                       SCHEDULE II ANNEXED HERETO

                                       By:
                                            -------------------------------
                                            Attorney-in-Fact for the Selling
                                            Shareholders listed on Schedule II 
                                            annexed hereto

Confirmed:
OPPENHEIMER & CO., INC.
NEEDHAM & COMPANY, INC.
VOLPE, WELTY & COMPANY

Acting severally on behalf of themselves and
as representatives of the several Underwriters 
named in Schedule I annexed hereto.

By:  OPPENHEIMER & CO., INC.

By:
    ------------------------------
      Name:
      Title:



                                       38
   39
                                   SCHEDULE I

                                            Number of Firm



 Name                                       Shares to Be Purchased
 ----                                       ----------------------
                                                 
 Oppenheimer & Co., Inc.
 Needham & Company, Inc.
 Volpe, Welty & Company





                                                    ---------
 Total Shares:
                                                    =========



                                        1
   40

                                   SCHEDULE II

                              SELLING SHAREHOLDERS




Selling Shareholder                       Number of Firm Shares to be Sold
- -------------------                       --------------------------------
                                                





                                                   ---------
Total Shares:                                           
                                                   =========



                                        1
   41
                                  SCHEDULE III

                         SHAREHOLDERS EXECUTING CERTAIN

                     AGREEMENTS PURSUANT TO SECTION 7(A)(h)



                                        1

   1
                                                         EXHIBIT 10.1


                                  VIASAT, INC.


                       ----------------------------------

                       PREFERRED STOCK PURCHASE AGREEMENT



                       ----------------------------------

            3,000,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK

                            Dated as of June 11, 1986
   2
                                TABLE OF CONTENTS
                             (NOT PART OF Agreement)
                                                                         Page
                                                                         ----
1.      Authorization, Purchase and Sale of the Shares................     1
        1.1   Authorization of the Shares.............................     1
        1.2   Sale and Purchase of the Shares.........................     1

2.      Closing, Payment and Delivery.................................     1
        2.1   Closing Date and Place of Closing.......................     1
        2.2   Payment and Delivery....................................     1
        2.3   Covenant of Best Efforts and Good Faith.................     2

3.      Representations and Warranties of the Company.................     2
        3.1   organization and Standing; Articles and
              Bylaws..................................................     2
        3.2   Subsidiaries............................................     2
        3.3   Capitalization..........................................     2
        3.4   Authorization...........................................     3
        3.5   Financial Information...................................     4
        3.6   Absence of Undisclosed Liabilities......................     4
        3.7   Contracts...............................................     4
        3.8   Interested Party Transactions...........................     5
        3.9   Litigation..............................................     5
        3.10  Title to Properties; Liens and
              Encumbrances ...........................................     6
        3.11  Condition of Properties.................................     6
        3.12  Intangible Assets.......................................     6
        3.13  Employees...............................................     7
        3.14  Compliance with Laws and Other Instruments..............     7
        3.15  Insurance...............................................     7
        3.16  No Brokers or Finders...................................     8
        3.17  Business Plan...........................................     8
        3.18  Disclosure..............................................     8

  4.     Representations and Warranties of the Purchaser..............     8
        4.1   Authorization...........................................     8
        4.2   Investigation and Experience............................     9
        4.3   Investment Intent.......................................     9
        4.4   Accredited Investor.....................................     9
        4.5   No Brokers or Finders...................................     9

  5.    Conditions of Purchasers' Obligations.........................    10
        5.1   Representations and Warranties..........................    10
        5.2   Performance.............................................    10
        5.3   Opinion of Company's Counsel............................    10
        5.4   Legal Investment........................................    10
        5.5   Compliance Certificate..................................    10
        5.6   Proceedings and Documents...............................    10


                                       i.
   3
                                                                         Page
                                                                         ----
        5.7   Qualification...........................................    10
        5.8   Certificate.............................................    11
        5.9   Election of Directors...................................    11
        5.10  Shareholders' Agreement.................................    11
        5.11  Supporting Documents....................................    11
        5.12  Founders' Stock Purchase................................    11

6.      Conditions to Closing of the Company..........................    12
        6.1   Representations.........................................    12
        6.2   Legal Investment........................................    12

7.      Affirmative Covenants of the Company..........................    12
        7.1   Accounts and Records....................................    12
        7.2   Financial Information...................................    12
        7.3   Additional Information..................................    13
        7.4   Preparation of Operating Plan...........................    14

        7.5   Prompt Payment of Taxes and Other
              Liabilities.............................................    15
        7.6   Maintenance of Properties and Leases....................    15
        7.7   Insurance...............................................    15
        7.8   Compliance with Laws....................................    15
        7.9   Maintenance of Corporate Existence, etc.................    15
        7.10  Availability of Common Stock for Conversion.............    16
        7.11  Expenses of Purchasers..................................    16
        7.12  Board of Directors Meetings.............................    16
        7.13  Right of First Refusal..................................    16
        7.14  Replacement of Certificates.............................    18
        7.15  Notice of Litigation....................................    18
        7.16  Securities Law Filings..................................    18
        7.17  Termination of Certain Obligations......................    18

8.      Transfer of Securities........................................    18
        8.1    Restrictions on Transfer...............................    18
        8.2    Restrictive Legend.....................................    19
        8.3    Transfers..............................................    19
        8.4    Requested Registration.................................    19
        8.5    Company Registration...................................    21
        8.6    Expenses of Registration...............................    22
        8.7    Registration Procedures................................    22
        8.8    Indemnification........................................    23
        8.9    Information by Holder..................................    25
        8.l0   Limitations on Registration of issues
               of Securities..........................................    25
        8.11   Rule 144 Reporting.....................................    26
        8.12   Transfer of Registration Rights........................    26

        8.13   "Market Stand-Off" Agreement...........................    27
        8.14   No Action Letter or Opinion of Counsel
               in Lieu of Registration; Conversion of
               Restricted Stock.......................................    27


                                       ii.
   4
                                                                         Page
                                                                         ----
9.      Enforcement...................................................    27
        9.1    Remedies at Law or in Equity...........................    27
        9.2    Cumulative Remedies....................................    28

10.     Definitions...................................................    28

11.     Miscellaneous  ...............................................    30
        11.1   Governing Law..........................................    30
        11.2   Survival...............................................    30
        11.3   Successors and Assigns.................................    31
        11.4   Entire Agreement.......................................    31
        11.5   Notices................................................    31
        11.6   Severability; Counterparts.............................    31
        11.7   Titles and Subtitles...................................    32
        11.8   Waivers and Amendments.................................    32


                 Exhibit A         Amended and Restated
                                   Articles of Incorporation

                 Exhibit B         Schedule of Purchasers

                 Exhibit C         Schedule of Exceptions

                 Exhibit D         Schedule of Shareholders

                 Exhibit E         Balance Sheet

                 Exhibit F         Schedule of Contracts and
                                   Leases


                                      iii.
   5
                       PREFERRED STOCK PURCHASE AGREEMENT

          THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of the 11th day of June, 1986, by and among ViaSat, Inc., a California
corporation (the "Company"), and Southern California Ventures, a California
limited partnership, Robert W. Johnson and Thomas A. Tisch (collectively, the
"Purchasers").

                                    SECTION 1

                 Authorization, Purchase and Sale of the Shares

          1.1 Authorization of the Shares. The Company has authorized the
issuance and sale of up to 3,000,000 shares of its Series A Convertible
Preferred Stock (the "Shares") having the rights, restrictions, privileges and
preferences as set forth in the Amended and Restated Articles of Incorporation
(the "Certificate") attached to this Agreement as Exhibit A.

          1.2 Sale and Purchase of the Shares. At the Closing (as defined in
Section 2.1 hereof), subject to the terms and conditions hereof and in reliance
upon the representations, warranties and agreements contained herein, the
Company agrees to issue and sell to the Purchasers and the Purchasers agree to
purchase from the Company a total of 3,000,000 Shares at a purchase price of
$.10 per share and an aggregate purchase price of $300,000 (the "Purchase
Price"), in the individual amounts set forth on Exhibit B hereto.

                                    SECTION 2

                          Closing, Payment and Delivery

          2.1 Closing Date and Place of Closing. The closing of the purchase and
sale of the Shares hereunder (the "Closing") shall occur at 3 o'clock P.M.,
Pacific Standard Time, on the date hereof or on such later date (within 30 days
thereafter) as the Company and the Purchasers shall agree (the date of such
Closing being referred to as the "Closing Date"). The place of the Closing
(including the place of delivery to the Purchasers by the Company of the
certificates evidencing all Shares being purchased and the place of payment to
the Company by the Purchasers of the Purchase Price therefor) shall be at such
place as the Purchasers and the Company shall agree.
   6
           2.2 Payment and Delivery. At the Closing, each Purchaser shall pay
the portion of the aggregate Purchase Price set forth opposite the Purchaser's
name on Exhibit B hereto to the Company by check or wire transfer and the
Company shall deliver to each Purchaser a certificate or certificates
representing the number of Shares purchased, as set forth on Exhibit B
registered in the Purchaser's name.

           2.3 Covenant of Best Efforts and Good Faith. The Company and the
Purchasers agree to use their respective best efforts and to act in good faith
to cause to occur all conditions to Closing, as set forth in Sections 5 and 6
hereof, which are in the control of such party.

                                    SECTION 3

                  Representations and Warranties of the Company

          The Company hereby covenants with and represents and warrants to the
Purchasers that, except as set forth in the Schedule of Exceptions, attached to
this Agreement as Exhibit C:

           3.1   Organization and Standing; Articles and Bylaws.

                 (a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. The
Company has all requisite corporate power and authority to own its properties,
to conduct its business, to enter into this Agreement, to file the Certificate,
to issue and sell the Shares, to issue the Common Stock issuable upon conversion
of the Shares, and to carry out and perform its obligations under this Agreement
and the Certificate.

                 (b) The Company has furnished the Purchasers or Special Counsel
with true, correct and complete copies of its Articles of Incorporation, Bylaws
and all amendments thereto to date.

           3.2 Subsidiaries. The Company has no Subsidiaries or direct or
indirect equity interest, by way of stock ownership or otherwise, in any other
firm, corporation, association or business enterprise.

           3.3 Capitalization. The Company's authorized capital stock consists
of (a) 10,000,000 shares of common stock, par value $.01 per share (the "Common
Stock"), of which 3,000,000 shares are issued and outstanding, and (b) 3,000,000
shares of preferred stock (the "Preferred Stock"), 3,000,000 of which have been
designated "Series A Convertible Preferred Stock," no par value, and the Company
has no authority to issue any other capital stock.


                                       2.
   7
No shares of Preferred Stock have been issued prior to the Closing. ALL of the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, and have been offered, issued,
sold and delivered by the Company in compliance with all applicable Federal and
state securities laws. Exhibit D hereto contains a true and complete list of the
names and addresses of the beneficial holders of all of the outstanding Common
Stock and of the holders of all outstanding options or other rights to purchase
Common Stock. Except as expressly provided in this Agreement or disclosed in
Exhibit D, there are no outstanding preemptive, conversion or other rights,
options, warrants or agreements granted or issued by or binding upon the Company
for the purchase or acquisition of any shares of its capital stock. To the best
of the Company's knowledge and belief, no holder of Common Stock has granted
options or other rights to purchase any shares of Common Stock from such
shareholder, and there is no voting trust agreement or arrangement among any of
the beneficial holders of Common Stock affecting the exercise of the voting
rights of such Common Stock. The Company has reserved 1,500,000 shares of Common
Stock for issuance to future employees either upon the exercise of stock options
or upon the issuance of stock, in all cases subject to approval of such options
or stock by the Board.

          3.4 Authorization. ALL corporate actions and proceedings on the part
of the Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement and the
Certificate, and otherwise for the authorization, issuance and delivery of the
Shares and the Common Stock issuable upon conversion thereof have been lawfully
and validly conducted. This Agreement and the Certificate are valid and binding
obligations of the Company, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws and equitable
princples relating to or affecting the enforcement of creditors' rights in
general and by general principles of equity, and except that enforcement of the
indemnity provisions of Section 8.8 of this Agreement may be limited by Federal
or state securities laws or public policy underlying such laws. The execution,
delivery and performance by the Company of this Agreement, and the compliance by
the Company with the Certificate, will not result in any violation of, conflict
with, or result in a breach of any of the terms of, or constitute a default
under, any provision of Federal or state law to which the Company is subject,
the Company's Articles of Incorporation or Bylaws, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule, regulation or other
restriction to which the Company is a party or by which it or any of its assets
are bound, or result in the creation of any Lien upon any of the assets of the
Company, which violation, conflict, breach, default or Lien could have a
material adverse effect on the condition, financial or otherwise, or operation
of


                                       3.
   8
the Company. The Shares have been duly authorized, and when issued in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will be free of any Liens and restrictions (except
restrictions arising under the Securities Act or the California Corporate
Securities Law of 1968) and will have the rights, preferences, privileges and
restrictions as provided in the Certificate. The shares of Common Stock issuable
upon conversion of the Shares have been duly and validly reserved and, upon
issuance in accordance with the terms of the Certificate, will be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all Liens and restrictions, except those arising from any acts of the Purchaser
(except restrictions arising under the Securities Act or the California
Corporate Securities Law of 1968).

           3.5 Financial Information. The Company's unaudited balance sheet at
May 23, 1986, a copy of which is attached hereto as Exhibit E, (i) is in
accordance with the books and records of the Company, (ii) presents fairly the
financial condition of the Company at such date and (iii) was prepared in
accordance with generally accepted accounting principles.

           3.6 Absence of Undisclosed Liabilities. Except as disclosed on
Exhibit E hereto, the Company has no obligations or liabilities (whether
accrued, absolute, contingent, liquidated or otherwise, including without
limitation, any tax liabilities due or to become due), except current
liabilities incurred and obligations under agreements entered into in the usual
and ordinary course of business since the inception of the Company, none of
which (individually or in the aggregate) is material.

           3.7 Contracts. Except as to those contracts, leases and other
documents set forth in the Schedule of Contracts and Leases, attached hereto as
Exhibit F (correct and complete copies of which have been previously delivered
to Special Counsel or described in all material respects in Exhibit F), the
Company is not a party to any material written or oral agreement not made in the
ordinary course of business and the Company is not a party to any written or
oral:

                 (a) Employment, bonus or consulting agreement, pension, profit
sharing, deferred compensation, stock bonus, retirement, stock option, stock
purchase, phantom stock or similar plan, including any agreement evidencing
rights to purchase securities of the Company or agreement among shareholders and
the Company;

                 (b) Loan or other agreement, note, indenture, or instrument
relating to or evidencing Indebtedness for Borrowed Money, or mortgaging,
pledging, granting or creating a Lien or security interest or other encumbrance
on, any of the Company's


                                       4.
   9
properties or assets, or any agreement or instrument evidencing any guaranty by
the Company of payment or performance by any other Person;

                 (c) Joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which the Company is a party;

                 (d) Agreement limiting the freedom of the Company to compete in
any line of business or in any geographic area or with any person;

                 (e) Agreement or letter of intent with respect to the
acquisition of the business assets or shares of any other business;

                 (f) Agreement obligating the Company to pay any royalty or
similar charge for the use or exploitation of any tangible or intangible
property;

                 (g) Lease of real property or any material lease of personal
property or equipment; or

                 (h) Agreement to register securities of the Company under the
Securities Act.

           3.8 Interested Party Transactions. No officer, director, or
shareholder of the Company or any "affiliate" or "associate" (as such terms are
defined in Rule 405 under the Securities Act) of any such Person or the Company
has or has had either directly or indirectly, (a) a beneficial interest in any
Person which (i) furnishes or sells services or products which are furnished or
sold or proposed to be furnished or sold by the Company or (ii) purchases from
or sells or furnishes to the Company any goods or services, or (b) a beneficial
interest in any contract or agreement to which the Company is a party or by
which it may be bound or affected, except to the extent arising solely from the
ownership of shares of the Company's capital stock.

           3.9 Litigation. There is neither pending nor, to the Company's best
knowledge, threatened any action, suit, arbitration, proceeding (whether
Federal, state, local or foreign) or claim, or any basis therefor, whether or
not purportedly on behalf of the Company, to which the Company is or may be
named as a party or its property, assets or business is or may be subject and in
which an unfavorable outcome, ruling or finding could have a material adverse
effect on the condition, financial or otherwise, or operations of the Company.
The Company has no knowledge of any unasserted claim, the assertion of which is
likely and which, if asserted, will be for legal or equitable relief which


                                       5.
   10
if granted would have a material adverse effect on the condition, financial or
otherwise, or operations of the Company.

            3.10 Title to Properties; Liens and Encumbrances. The Company has
good and marketable title to all of its properties and assets, excluding any and
all property and assets described in Section 3.15 hereof, and has good title to
all of its leasehold interests in each case subject to no Lien except as
disclosed in Exhibit F and except for any Lien on personal property in the
nature of a purchase money security interest granted in the usual and ordinary
course of business.

            3.11 Condition of Properties. All facilities, machinery, equipment
fixtures, vehicles and other tangible property owned, leased or used by the
Company are in good operating condition and repair.

            3.12 Intangible Assets.

                  (a) The Company has all franchises, permits, certificates,
authorizations, licenses and other similar authority required by law or
governmental regulations from all applicable Federal, state or local authorities
and any other regulatory authorities, which are necessary for the conduct of its
business as now being conducted by it and as planned to be conducted, the lack
of which could have a material and adverse effect on the operations or
condition, financial or otherwise, of the Company, and it is not in default or
noncompliance in any material respect under any of such franchises, permits,
certificates, authorizations, licenses or other similar authority.

                  (b) The Company owns or has the right to use all patents,
trademarks, trade names, copyrights and rights with respect to any of the
foregoing necessary to conduct its business as now being conducted and as
planned to be conducted, without conflict with or infringement upon any right or
claimed right of any Person and without any obligation or liability for
royalties, fees, or other compensation to any owner, licensor, or other claimant
to any of the foregoing.

                  (c) The Company owns and has the unrestricted right to use all
trade secrets, including know-how, inventions, designs, processes, computer
programs and technical data and information (collectively herein "Intellectual
Property") required for or incident to the development, manufacture, operation
and sale of all products and services sold or proposed to be sold by the
Company, free and clear of any right, Lien, or claim of any Person, including
without limitation former employers of its employees; provided, however, the
possibility exists that other Persons, completely independent of the Company or
its employees


                                       6.
   11
or agents, could have developed trade secrets or items of technical information
similar or identical to those of the Company.

                 (d) The Company has taken reasonable security measures to
protect the secrecy, confidentiality and value of all of its Intellectual
Property. Each employee of the Company and all other Persons who, either alone
or in concert with others, have developed, discovered or conceived the
Intellectual Property, or who have or have had access to the Intellectual
Property, will have entered into proprietary information agreements in
substantially the form approved by Special Counsel on or prior to September 9,
1986.

           3.13 Employees. To the best of the Company's knowledge, no officer or
key employee of the Company has any plans to terminate his or her employment
with the Company and no employee of the Company is in violation of any term of
any employment contract, invention assignment or nondisclosure agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or to be conducted by
the Company or relating to the use of trade secrets or proprietary information
of others, and the employment of the Company's employees does not subject the
Company or the Purchaser to any liability arising by reason of any such
contract, agreement or restrictive covenant or by reason of trade secret or
unfair competition laws. The Company does not have any collective bargaining
agreement covering any of its employees and has encountered no material labor
difficulties.

           3.14 Compliance with Laws and Other Instruments. The business and
operations of the Company have been and are being conducted in accordance with
all applicable Federal, state and local laws, rules and regulations. The Company
is not in violation of any term of its Articles of Incorporation or Bylaws or
any term of any mortgage, indenture, contract, agreement, instrument, judgment,
decree, order, statute, rule or regulation to which the Company is subject. The
offer, issuance and sale of the Shares as contemplated by this Agreement, and
the issuance of Common Stock upon conversion of the Shares in accordance with
the terms of the Certificate are and will be, exempt from the registration and
prospectus delivery requirements of the Securities Act and have been registered
or qualified (or are exempt from registration and qualification) under all
applicable state securities laws.

           3.15 Insurance. There are in full force and effect one or more
policies of insurance issued by insurers of recognized


                                       7.
   12
responsibility, insuring the Company and its properties and business against
such losses and risks, and in such amounts, as are customary for the
contemplated business of the Company. On or before September 9, 1986, the
Company will have acquired a policy of guaranteed renewable term life insurance
naming the Company as beneficiary and providing $330,000 of coverage on the life
of Mark D. Dankberg.

           3.16 No Brokers or Finders. The Company has retained no finder or
broker with the transactions contemplated by this Agreement, and hereby agrees
to indemnify and hold harmless the Purchasers from any liability for any
commission or compensation in the nature of an agent's fee to any broker or
other Person (and the costs and expenses of defending against such liability or
asserted liability) arising from any act by the Company or any of its employees
or representatives.

           3.17 Business Plan. The Company has heretofore furnished to each of
the Purchasers and Special Counsel a business plan of the Company dated May 24,
1986 ("Business Plan"). The Business Plan represents a good faith effort by the
Company to describe its proposed business and projected growth and the Company
does not believe that these projections, or any other information contained in
the Business Plan are materially and adversely misleading or that there are any
materially and adversely misleading omissions in the Business Plan.

           3.18 Disclosure. To the best of the Company's knowledge, this
Agreement: and all other documents or writings delivered to the Purchasers or
Special Counsel pursuant to this Agreement or otherwise in connection with the
offering of the Shares do not contain any untrue statement of a material fact,
or omit to state any fact necessary to make the statements made therein not
misleading.

                                    SECTION 4

                Representations and Warranties of the Purchasers

          Each of the Purchasers represents and warrants to the Company as
follows:

              4.1 Authorization. The execution, delivery and performance of
this Agreement have been duly authorized by each Purchaser as necessary and this
Agreement is a valid and binding obligation of each Purchaser, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws and equitable
principles relating to or affecting the enforcement of creditors' rights in
general and by general principles of equity


                                       8.
   13
and except that enforcement of the indemnity provisions of Section 8.8 of this
Agreement may be limited by Federal or state securities laws or public policy
underlying such laws.

          4.2 Investigation and Experience. Each Purchaser has carefully
reviewed the representations concerning the Company contained in this Agreement.
Each Purchaser understands that this investment involves substantial risks and
has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management and has had the opportunity to
inspect the Company's facilities. The officers of the Company have made
available to the Purchasers any and all written information that has been
requested and have answered to the satisfaction of the Purchasers all inquiries
made by them. Each Purchaser is experienced in evaluating and investing in newly
organized companies in the electronics and communications industries such as the
Company and has such knowledge and experience in financial and business matters
that he or it is capable of evaluating the merits and risks of an investment in
the Company and has the capacity to protect his or its own interests in
connection with this Agreement and the transactions contemplated hereby and at
the present time could afford a complete loss of such investment, within the
meaning of Section 25102(f) of the California Corporations Code. Each Purchaser
has been further advised that no public market now exists for any of the
securities issued by the Company and that a public market may never exist for
the Shares.

          4.3 Investment Intent. Each Purchaser is acquiring the Shares, and the
shares of Common Stock issuable upon conversion of the Shares, for investment
for the Purchaser's own account and not with the view to, or for resale in
connection with, any distribution thereof. Each Purchaser understands that the
Shares and the shares of Common Stock issuable upon conversion of the Shares
have not been registered under the Securities Act by reason of specified
exemptions therefrom which depend upon, among other things, the bona fide nature
of its investment intent as expressed herein.

          4.4 Accredited Investor. Each Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act.

          4.5 No Brokers or Finders. Each Purchaser has retained no finder or
broker in connection with the transactions contemplated by this Agreement and
hereby agrees to indemnify and to hold the Company harmless from any liability
for any commission or compensation in the nature of an agent's fee to any broker
or other Person (and the costs and expenses of defending against such liability
or asserted liability) arising from any act by the Company or any of its
employees or representatives.


                                       9.
   14
                                    SECTION 5

                      Conditions of Purchasers' Obligations

          The obligation of the Purchasers to purchase the Shares at the Closing
is subject to the fulfillment on or prior to the Closing Date of each of the
following conditions, any of which may be waived in whole or in part by the
Purchasers:

          5.1 Representations and Warranties. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
respects when made and shall be true and correct in all respects on the Closing
Date with the same force and effect as if they had been made on and as of the
Closing Date.

          5.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with in all respects.

          5.3 Opinion of Company's Counsel. The Purchasers shall have received
from Wiles, Circuit and Tremblay, counsel to the Company, an opinion addressed
to them, dated the Closing Date, in form and substance acceptable to the
Purchasers and Special Counsel.

          5.4 Legal Investment. At the time of the Closing, the purchase of the
Shares hereunder shall be legally permitted by all laws and regulations to which
the Purchasers and the Company are subject.

          5.5 Compliance Certificate. The Company, if requested by Special
Counsel, shall have delivered to the Purchasers a certificate of the President
of the Company, dated the Closing Date, certifying the fulfillment of the
conditions specified in Sections 5.1 and 5.2.

          5.6 Proceedings and Documents. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to such transactions shall be satisfactory in substance and form to
the Purchasers and Special Counsel.

          5.7 Qualification. All authorizations, registrations, qualifications,
approvals or permits, if any, of any governmental authority or regulatory body
that are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement, the conversion of the Shares into Common Stock and
the issuance of such Common Stock upon such conversion, shall have


                                       10.
   15
been duly obtained and shall be effective on and as of the Closing.

           5.8 Certificate. The Certificate shall have been properly executed
and filed with the Secretary of State of California and a copy of the
Certificate certified by the Secretary of State shall have been delivered to
Special Counsel.

           5.9 Election of Directors. The Company's Bylaws shall provide for
three authorized directors. Robert W. Johnson shall have been elected to the
Board as a representative of the Purchasers effective as of the Closing.

           5.10 Shareholders' Agreement. Mark D. Dankberg, Steven R. Hart, Mark
J. Miller, the Company and the Purchasers shall have entered into a
Shareholders' Agreement in form and substance acceptable to the Purchasers,
relating to the election to the Board of Directors of certain persons chosen or
nominated by the Purchasers and other shareholders.

           5.11 Supporting Documents. The Purchasers or Special Counsel
shall have received the following:

                 (a) Copies of resolutions of the Board certified by the
Secretary of the Company, authorizing and approving the Certificate and the
execution, delivery and performance of this Agreement and and all other
documents and instruments to be delivered pursuant hereto;

                 (b) A certificate of incumbency executed by the Secretary of
the Company certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in paragraph (a) above and
certifying that the Articles of Incorporation and Bylaws delivered to the
Purchasers pursuant to Section 3.1 are in full force and effect without
modification or amendment.

                 (c) Such additional supporting documentation with respect to
the transactions contemplated hereby as the Purchasers or Special Counsel may
reasonably request.

           5.12 Founders' Stock Purchase. Each of Mark D. Dankberg, Steven R.
Hart and Mark J. Miller shall have entered into stock restriction agreements
with the Company in form and substance satisfactory to the Purchasers.


                                      11.
   16
                                    SECTION 6

                    Conditions to Obligations of the Company

          The Company's obligation to sell the Shares at the Closing is subject
to the fulfillment on or prior to the Closing Date of each of the following
conditions:

           6.1 Representations. The representations and warranties made by the
Purchasers in Section 4 hereof shall be true and correct in all respects when
made and shall be true and correct in all respects on the Closing Date with the
same force and effect as if they had been made on and as of the Closing Date.

           6.2 Legal Investment. At the time of the Closing, the conditions set
forth in Sections 5.4, 5.6, 5.7, 5.8 and 5.10 shall have been satisfied.

                                    SECTION 7

                      Affirmative Covenants of the Company

          The Company hereby covenants and agrees that, so long as the
Purchasers or their assigns are the Holders in the aggregate of more than 50% of
the Restricted Stock purchased hereunder:

          7.1 Accounts and Records. The Company will keep true records and books
of account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.

          7.2 Financial Information. The Company will furnish the following
reports to the Purchasers (or their representative):

                  (a) As soon as available and in any event within 60 days after
the end of each fiscal year of the Company, a consolidated balance sheet of
the Company and its Subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of income, shareholders' equity and changes in financial
condition of the Company and its Subsidiaries, if any, for such year, prepared
in accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and, if unaudited, certified by the
principal financial or accounting officer of the Company. Upon written request
delivered prior to the end of any fiscal year of the Company from Purchasers
holding a majority of the Restricted Stock, such financial statements for that
fiscal year shall be audited and certified by independent accountants of
recognized national


                                       12.
   17
reputation selected by the Company. If audited financial information is so
requested, the Company shall provide such audited information within 90 days of
the end of the fiscal year for which the audited financial information was
requested.

                 (b) As soon as available and in any event within 30 days after
the end of each fiscal quarter of the Company, a consolidated balance sheet of
the Company and its Subsidiaries, if any, as of the end of each such fiscal
quarter and consolidated statements of income, shareholders' equity and changes
in financial position of the Company and its Subsidiaries, if any, for such
fiscal quarter and for the current fiscal year to date, prepared in accordance
with generally accepted accounting principles consistently applied and setting
forth in comparative form the figures for the corresponding periods of the
previous fiscal year, subject only to changes resulting from normal year-end
audit adjustments, if any, all in reasonable detail and certified by the
principal financial or accounting officer of the Company.

                 (c) During such time as the Company is subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act, and in lieu of the
financial information required pursuant to Sections 7.2(a) and (b), copies of
its Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively, or any
similar successor forms, and all registration statements proxy statements and
other reports, filed with the Commission, such reports to be furnished to the
Purchasers no later than the deadline for filing them with the Commission.

            7.3   Additional Information.

                 (a) Except as prohibited by federal law, the Company will
permit representatives of the Purchasers to visit and inspect any of the
properties of the Company (with the understanding that, when security demands,
the Purchasers shall be accompanied by an authorized individual), including its
books of account, and to discuss its affairs, finances and accounts with the
Company's officers and its independent public accountants, during normal
business hours and as often as the Purchasers may reasonably request. Partners
and full-time employees of the Purchasers shall be granted access to proprietary
data on the same basis as employees and directors of the Company provided that,
if requested, they agree in writing to undertake the same fiduciary duty and
responsibility to protect the proprietary data as would be required of an
employee or a director having access to such proprietary data. As used herein,
"proprietary data" shall mean data which has been classified and is being
controlled (as of the date of the requested access) as confidential and
proprietary by the Company.

                 (b) As long as a Purchaser holds at least 150,000 of the Shares
or 150,000 shares of Restricted Stock, adjusted as


                                       13.
   18
appropriate for stock splits and combinations and stock dividends and other
distributions, the Company will deliver to such Purchaser:

                       (i) As soon as available and in any event within 30 days
after the end of each month, a consolidated balance sheet of the Company and its
Subsidiaries, if any, as of the end of such month, and consolidated statements
of income and sources and applications of funds of the Company and its
Subsidiaries, for each month and for the current fiscal year of the Company to
date, prepared in accordance with generally accepted accounting principles
consistently applied, together with a comparison of such statements to the
Company's operating plan then in effect and approved by its Board, and
certified, subject only to changes resulting from normal year-end audit
adjustments, by the principal financial or accounting officer of the Company,
together with a report of operations by the Company's President including a
statement of orders received, shipments made and a backlog analysis reflecting
orders to be delivered within six months of the reporting date, and orders to be
delivered after six months from the reporting date.

                       (ii) As soon as available and in any event within 60 days
after the Closing Date for the Company's partial fiscal year ending after the
Closing Date and within 30 days before the commencement of each subsequent
fiscal year, a copy of the operating plan for such partial or full fiscal year
prepared and approved by the Board in accordance with section 7.4. Any
modifications in such operating plan shall be submitted as promptly as
practicable after such changes have been approved by the Board.

                       (iii) With reasonable promptness, such other information
and data with respect to the Company and its Subsidiaries, if any, as any
Purchaser may from time to time reasonably request.

           7.4 Preparation of Operating Plan. The Company shall, within 60 days
after the Closing Date for the Company's partial fiscal year ending after the
Closing Date and at least 30 days prior to the beginning of each subsequent
fiscal year, prepare and submit to the Board, for its approval, an annual plan
for such partial or full fiscal year which shall include monthly capital and
operating expense budgets, cash flow statements and profit and loss and
quarterly balance sheet projections. Each annual plan shall be modified as often
as necessary, but in any event every six months to reflect material changes
required as a result of operating results and other events that occur, or may be
reasonably expected to occur, during the year covered by the annual plan, and
copies of these modifications shall be submitted to and approved by the Board.
The Company may dispense with any


                                       14.
   19
six month modification if the Board reasonably determines that no material
change is required in the budget for that six-month fiscal period.

           7.5 Prompt Payment of Taxes and Other Liabilities. The Company will
promptly pay and discharge, or cause to be paid and discharged, before the same
shall become delinquent and before penalties accrue thereon, all lawful taxes,
assessments and governmental charges or levies imposed upon the income, profits,
property or business of the Company; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof shall
concurrently be contested in good faith and by appropriate proceedings in such a
manner as not to have any materially adverse effect on the Company's financial
condition or operation and if the Company shall have set aside on its books
adequate reserves with respect thereto; provided, further, that the Company will
promptly pay all such taxes, assessments, charges or levies upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor. The Company will promptly pay or cause to be paid when due,
or in conformance with customary trade terms, all other Indebtedness incident to
operations of the Company.

           7.6 Maintenance of Properties and Leases. The Company will keep its
tangible properties and those of any Subsidiary necessary to the business of the
Company or such Subsidiary in good repair and in working order and condition,
reasonable wear and tear excepted, and will from time to time make all necessary
and proper repairs, renewals, replacements, additions and improvements thereto.
The Company and all of its Subsidiaries will at all times comply with each
provision of all leases to which any of them is a party or under which any of
them occupies property if the breach of such provision might have a material
adverse effect on the condition, financial or otherwise, or operations of the
Company or such Subsidiary.

           7.7 Insurance. The Company will keep its assets and those of any
Subsidiary which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, extended coverage, explosion
and such other hazards, risks and liability to persons and property, and in such
amounts, as are customary and prudent for companies in similar businesses
similarly situated.

           7.8 Compliance with Laws. The Company and all of its Subsidiaries
shall duly observe and conform to all applicable laws and requirements of
governmental authorities relating to the conduct of their businesses or to their
property or assets.

           7.9 Maintenance of Corporate Existence. The Company shall maintain in
full force and effect its corporate existence,


                                      15.
   20
rights and franchises and all licenses and other rights to use patents,
processes, licenses, trademarks, trade names or copyrights owned or licensed by
it or any Subsidiary, and deemed by the Company to be necessary for the conduct
of its business, and conduct its business in an orderly manner without voluntary
interruption.

           7.10 Availability of Common Stock for Conversion. The Company will,
from time to time, in accordance with the laws of California, increase the
authorized amount of Common Stock prior to such time as the failure to do so
would cause the number of shares of Common Stock remaining authorized and
unissued to be insufficient to permit conversion of all the then outstanding
Shares.

           7.11 Expenses of Purchasers. The Company shall pay, and hold the
Purchasers harmless from liability for the payment of, (i) all reasonable fees
and expenses of Special Counsel arising in connection with the negotiation of
execution of this Agreement and consummation of the transactions contemplated
hereby, which fees (not including expenses) shall not exceed $12,000.

           7.12 Board of Directors Meetings. The Company shall hold meetings of
the Board at least once every month unless the failure to hold any meeting is
consented to by Purchasers holding a majority of the Restricted Stock, and shall
furnish to the Purchasers upon request, a complete and accurate copy of the
minutes and other records of all meetings and other proceedings of the Board and
its committees as well as of the written consents of the members of the Board by
which action is taken by the Board or any committee without a meeting.

           7.13 Right of First Refusal. The Company hereby grants to each
Purchaser the right of first refusal to purchase a pro rata part of any New
Securities (as defined in this section 7.13) which the Company may, from time to
time, propose to sell and issue. Each Purchaser's pro rata share, for purposes
of this right of first refusal, is the ratio of (i) the number of shares of
Restricted Stock held by the Purchaser as of the date of the proposed sale (ii)
the aggregate number of shares of Common Stock outstanding and the aggregate
number of shares of such stock issuable upon the conversion of all securities
convertible into Common Stock. This right of first refusal shall be subject to
the following provisions:

                 (a) "New Securities" shall mean any capital stock (including
Common Stock or preferred shares) of the Company and all rights, options or
warrants to purchase capital stock, and securities of any type whatsoever that
are, or may become, convertible into capital stock; provided, however, that the
term


                                       16.
   21
"New Securities" does not include (i) securities purchased under this Agreement
and securities outstanding on the Closing date; (ii) securities offered to the
public pursuant to a registration statement filed pursuant to the Securities
Act; (iii) securities issued pursuant to the acquisition of another corporation
by the Company by merger, purchase of all or substantially all the assets or
other reorganization whereby the Company shall become the owner of more than 50%
of the voting power of such corporation; (iv) shares of Common Stock issued in
connection with any stock split, stock dividend or recapitalization of the
Company; (v) any borrowings, direct or indirect, from financial institutions or
other Persons by the Company, whether or not presently authorized, including any
type of loan or payment evidenced by any type of debt instrument, provided such
borrowings do not have equity features, including warrants, options or other
rights to purchase capital stock, and are not convertible into capital stock of
the Company; or (vi) shares of Common Stock of the Company issued to employees,
consultants or directors of the Company upon the exercise of stock options or
pursuant to stock purchase agreements or other incentive arrangements or
otherwise, all of which options, agreements, arrangements and other issuances
are approved by the Board.

                 (b) In the event the Company proposes to undertake an issuance
of New Securities, it shall give each Purchaser written notice of its intention,
describing the type or New Securities, the price and the general terms upon
which the Company proposes to issue the same. Each Purchaser shall have 30 days
from the date such notice is given to agree to purchase all or any portion of
the Purchaser's pro rata share of such New Securities for the price and upon the
general terms specified in the notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased.

                 (c) In the event the Purchasers fail to exercise the right of
first refusal as to all of the New Securities proposed to be issued within
said 30-day period, the Company shall give written notice of such fact,
specifying the amount of securities not elected to be purchased, to each
Purchaser who has elected to purchase any of such New Securities, and each such
Purchaser shall have five days, after the giving of such further notice, to
purchase all or any part of its pro rata share of such unpurchased portion by
giving written notice thereof to the Company. After the expiration of the period
for the exercise of the over-allotment provisions of this section 7.13, the
Company shall have 180 days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within 180 days from the date of said agreement) to sell that portion
of the New Securities for which the Purchasers' option was not exercised, at a
price and upon general terms no more favorable to the purchasers thereof than


                                       17.
   22
specified in the Company's notice. In the event the Company has not sold the New
Securities within said 180-day period (or sold and issued New Securities in
accordance with the foregoing within 180 days from the date of said agreement),
the Company shall not thereafter issue or sell any New Securities, without first
offering such securities to the Purchasers in the manner provided above.

          7.14 Replacement of Certificates. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any certificate representing any of the Shares, and upon receipt of an
appropriate indemnity bond in the case of any reasonable request therefor by the
Company, the Company shall issue a new certificate representing such Shares in
lieu of such lost, stolen, destroyed or mutilated certificate.

          7.15 Notice of Litigation. The Company shall promptly provide notice
to the Purchasers of any material suit or litigation instituted against the
Company.

          7.16 Securities Law Filings. The Company shall make any filing
necessary to perfect in a timely fashion an exemption from the registration and
prospectus delivery requirements of the Securities Act, and to register or
qualify or secure an exemption from such registration or qualification under any
applicable Blue Sky or securities laws of any state or other jurisdiction for
the issuance of the Shares to the Purchasers.

          7.17 Termination of Certain Obligations. The obligations of the
Company under Sections 7.1, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.12, 7.13, and
7.15 hereof shall terminate upon the occurrence of any event specified in the
Certificate as a condition precedent for the automatic conversion of the Shares
or upon the voluntary conversion pursuant to the Certificate of more than 50% of
the Shares.

                                    SECTION 8

                             Transfer of Securities

          8.1 Restrictions on Transfer. The Shares shall not be transferable,
except upon the conditions specified in this Section 8, which are intended to
insure compliance with the provisions of the Securities Act and the California
Corporate Securities Act of 1968 or, in the case of Section 8.13 hereof, to
assist in an orderly distribution. Each Purchaser agrees to cause any proposed
transferee of Shares held by the Purchaser to agree to take and hold those
securities subject to the provisions of this Section 8.


                                       18.
   23
          8.2 Restrictive Legend. Each certificate representing the Shares or
any Restricted Stock shall be imprinted with a legend substantially in the
following form:

                 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                 SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
                 SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A)
                 COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER
                 THE SECURITIES ACT OF 1933, AS AMENDED, (B) IN
                 COMPLIANCE WITH RULE 144 UNDER SUCH ACT, OR (C) THE
                 COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL
                 ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
                 REGISTRATION IS LEGALLY REQUIRED BY SUCH TRANSFER.

          8.3 Transfers. Prior to any proposed transfer of any Shares or any
Restricted Stock (other than under circumstances described in Section 8.4 and
8.5 hereof), and so long as such securities bear the restrictive legend required
under Section 8.2, the Holder thereof shall deliver to the Company (except in
transactions demonstrated to the Company's reasonable satisfaction to be in
compliance with Rule 144 of the Commission, or any substantially similar
successor rule of the Commission) either (i) a written opinion of legal counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
of such securities may be effected without registration under the Securities Act
and any applicable state securities laws, or (ii) a "no action" letter from the
Commission (and any necessary state securities administrators) to the effect
that the distribution of such securities without registration will not result in
a recommendation by the staff of the Commission (or such administrators) that
action be taken with respect thereto, whereupon the Holder of such securities
shall be entitled to transfer such securities in accordance with the terms of
such opinion or "no action" letter. Upon the request of a Holder complying with
either of these conditions, the Company will issue a new certificate for such
securities free of any legend.

           8.4   Requested Registration.

                 (a) If the Company shall receive from any Purchaser or
Purchasers a written request that the Company effect a registration for the sale
of Restricted Stock, the Company will, as soon as practicable, effect such
registration as may be so requested and as would permit or facilitate the sale
and distribution of the Restricted Stock specified in such request, provided
that the Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 8.4:


                                       19.
   24
                 (i) Prior to the earlier of the fifth anniversary of the date
           hereof or the completion of the initial, firm-commitment underwritten
           public offering of the Common Stock pursuant to an effective
           registration statement under the Securities Act;

                 (ii) If the request from the Purchaser(s) is for a registration
           on Form S-1, S-2 or S-18 (or their equivalents) and the Company has
           previously effected two such registrations pursuant to this Section 
           8.4(a);

                 (iii) If the Company has effected any registration pursuant to
           this Section 8.4(a) within twelve months of such request;

                 (iv) If the aggregate proposed selling price of the Restricted
           Stock to be included by the Purchaser(s) is less than $1,000,000 in
           the case of a registration on Form S-1, S-2 or S-18 or $500,000 in
           the case of a registration on Form S-3; or

                 (v) If the request from the Purchaser(s) is for registration of
           a class of securities other than Common Stock, and the Company has
           not previously effected a registered public offering of such class of
           securities.

                 (b) If a Purchaser, in making a valid request for registration
pursuant to Section 8.4(a), intends to distribute the Restricted Stock covered
by its request by means of an underwriting, it shall so advise the Company as a
part of its request and the Company shall include such information in the
written notice referred to in Section 8.4(a) above. The right of the Purchaser
to registration pursuant to this Section 8.4 shall be conditioned upon the
inclusion of the Purchaser's Restricted Stock in the underwriting. If holders of
securities of the Company (other than holders of Restricted Stock) who are
entitled by contract with the Company to have securities included in any
registration initiated pursuant to this Section 8.4 (the "Other Shareholders")
request such inclusion, the Purchaser(s) shall offer to include the securities
of such Other Shareholders in the underwriting and may condition such offer on
their acceptance of the further applicable provisions of this Section 8. If the
managing underwriter or underwriters of the offering advise the Purchaser(s) in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by the Other Shareholders
shall, to the extent necessary, be first excluded from such registration before
any shares of Restricted Stock held by the Purchaser(s) are excluded. No
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in


                                       20.
   25
such registration. If any Purchaser disapproves of the terms of any
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the underwriter. In such event, the registration shall not be
counted as a registration for the purposes of Section 8.4(a). If the managing
underwriter or underwriters have not limited the amount of Restricted Stock to
be underwritten, the Company may include its securities for its own account in
such registration unless such inclusion will limit the sale of any Restricted
Stock in the underwriting. The managing underwriter or underwriters of any
underwritten public offering requested pursuant to this Section 8.4 shall be
selected by mutual agreement of the Company and the Purchaser(s).

           8.5   Company Registration.

                 (a) If the Company shall determine to register any of its
securities either for its own account or the account of any security holder or
holders, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a transaction pursuant to Rule 145 of the
Commission (or substantially similar successor rule) or a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information regarding the Company as would be required to
be included in a registration statement covering the sale of Restricted Stock,
the Company will:

                 (i) promptly give to each Holder of Restricted Stock written
           notice thereof (which shall include a list of the jurisdictions in
           which the Company intends to attempt to qualify such securities under
           the applicable Blue Sky or other state securities laws, and the name
           of the managing underwriter or underwriters, if any, of the
           offering); and

                (ii) include in such registration all the Restricted Stock of
           the same class or classes of securities to be registered by the
           Company, as specified in a written request or requests given by any
           Holder within 15 days after such written notice from the Company
           described in clause (i) above is given, except as set forth in
           Section 8.5(b) below.

                 (b) The right of any Holder to include Restricted Stock in a
registration pursuant to Section 8.5 involving an underwritten public offering
shall be conditioned upon the inclusion of such Holder's Restricted Stock in the
underwriting to the extent provided herein. Notwithstanding any other provision
of this Section 8.5, if the managing underwriter or underwriters determine that
marketing factors require a limitation on the number of shares to be
underwritten, and if such registration is


                                       21.
   26
the first registered public offering of the Company's securities, the
underwriter may (subject to the allocation priority set forth below) exclude
from such registration and underwriting some or all of the Restricted Stock
requested to be included. The Company shall so advise all holders of securities
requesting registration, and the securities of the Company held by Other
Shareholders shall, to the extent necessary, be first excluded from such
registration before any shares of Restricted Stock held by the Purchaser are
excluded. If the Purchaser disapproves of the terms of any such underwriting, it
may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Restricted Stock excluded or withdrawn from such underwriting
shall be withdrawn from such registration.

            8.6 Expenses of Registration. The Company shall bear all
Registration Expenses incurred in connection with (i) the first two
registrations on Form S-1, S-2, S-3 or S-18 (or their equivalents) effected
pursuant to Section 8.4, and (ii) all registrations pursuant to Section 8.5;
provided, however, that if any holder of Registrable Securities shall withdraw
from any registration commenced pursuant to this Section 8, such holder shall
pay his or its portion of any expenses incurred in connection with such
registration prior to such withdrawal pro rata, on the basis of the number of
shares such holder had requested to include in the registration. All Selling
Expenses shall be borne by the holders of the securities so registered and sold,
pro rata on the basis of the number of their shares so registered and sold.

            8.7 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 8, the Company will advise the
Purchasers in writing as to the initiation of such registration and as to the
completion thereof, and the Company will as expeditiously as possible:

                  (a) Keep such registration effective for a period of 90 days
or until the Holder or Holders of Restricted Stock included in such registration
have completed the distribution described in the registration statement relating
thereto, whichever first occurs;

                  (b) Furnish such number of prospectuses and other documents
incident thereto as a Holder of Restricted Stock included in such registration
may from time to time reasonably request;

                  (c) If the offering is to be underwritten, in whole or in
part, enter into a written underwriting agreement in form and substance
reasonably satisfactory to the Company, the underwriter of the public offering
and the Holders of the Restricted Stock included in such offering;


                                       22.
   27
                  (d) Register or qualify the securities covered by such
registration statement under state securities or Blue Sky laws of such
jurisdictions as such participating Holders of Restricted Stock and underwriters
may reasonably request, except in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the Company is
already subject to service in such jurisdiction;

                  (e) Notify the Holders participating in such registration,
promptly after it shall receive notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;

                  (f) Notify counsel for such Holders promptly of any request by
the Commission for the amending or supplementing of such registration statement
or prospectus or for additional information;

                  (g) Advise such Holders promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and

                  (h) Refrain from making any sale or distribution of Common
Stock or other equity security, except pursuant to any employee benefit plan
approved by the Board and any pre-existing agreement for the sale or
distribution of such securities, for at least 90 days after the closing of the
public offering pursuant to such registration statement.

            8.8   Indemnification.

                  (a) The Company will indemnify and hold harmless each Holder
of Restricted Stock included in a registration pursuant to this Section 8, each
of such Holder's officers, directors and partners, and each person controlling
such Holder within the meaning of the Securities Act and the rules and
regulations thereunder, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated


                                       23.
   28
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of such Holder's officers,
directors and partners, and each Person controlling such Holder, each such
underwriter and each Person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action; provided, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission (or alleged untrue statement or omission) based upon
written information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein; provided, however, that in the case
of a registration pursuant to Section 8.5 hereof, the obligation of the Company
hereunder shall be limited to an amount equal to the aggregate proceeds to the
Company of securities sold in such registration.

                 (b) Each Holder of Restricted Stock included in a registration
pursuant to this Section 8 will indemnify the Company, each of the Company's
directors and officers and each underwriter, if any, of the Company's securities
covered by such registration, each Person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other such Holder of Restricted Stock included in
such registration and such other Holder's officers, directors and partners, and
each Person controlling such other Holder against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such underwriters and such other
Holders, directors, officers, partners, and control Persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of the Purchaser hereunder shall be limited to an amount equal to
the proceeds to the Purchaser of securities sold as contemplated herein.


                                       24.
   29
                 (c) Each party entitled to indemnification under this Section 
8.8 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 8. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.

           8.9 Information by Holder. Each Holder of Restricted Stock included
in a registration pursuant to this Section 8 shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 8.

           8.10 Limitations on Registration of Issues of Securities. From and
after the date of this Agreement, so long as the Purchasers or their assigns are
together the Holders of more than 50% of the Restricted Stock purchased
hereunder, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder the right to require the Company to initiate any registration
of any securities of the Company or to participate in any registration effected
pursuant to Section 8.4 hereof. This Section 8.10 shall not limit the right of
the Company to enter into any agreements with any holder or prospective holder
of any securities of the Company giving such holder or prospective holder the
right to require the Company, upon any registration of any of its securities
other than pursuant to Section 8.4 hereof, to include, among the securities
which the Company is then registering, securities owned by such holder subject
to the terms and conditions of this Section 8 applicable to Other Shareholders.
Any right given by the Company to any holder or prospective holder of the
Company's securities in connection with the registration of securities shall be
conditioned such that it shall be consistent with the rights of the Holders of
Restricted Stock provided in this Agreement.


                                       25.
   30
           8.11 Rule 144 Reporting. With a view to making available the benefits
of the rules and regulations of the Commission which may permit the sale of the
Restricted Stock to the public without registration and the benefits of using
Form S-3, the Company agrees to:

                  (a) Make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
from and after 90 days following the effective date of the first registration of
the Company under the Securities Act of an offering of its securities to the
general public;

                  (b) File with the Commission in a timely manner all reports
and other documents as the Commission may prescribe under Section 13(a) or
15(d) of the Exchange Act, whether or not the Company is required to do so, at
any time after it has become subject to such reporting requirements of the
Exchange Act; and

                  (c) So long as any Purchaser holds any Restricted Stock,
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time from and after 90 days following the effective date of the first
registration of the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as the Purchaser may reasonably request to avail itself of any rule or
regulation of the Commission allowing the Purchaser to sell any such securities
without registration.

                    (d) Use reasonable efforts to qualify for the use
of Form S-3 (or its equivalent).

         8.12 Transfer of Registration Rights. The rights to cause the Company
to register securities granted by the Company under Sections 8.4 and 8.5 may be
assigned by any Purchaser to any of its limited partners or to the spouse of any
Purchaser, without regard to the amount of securities transferred, and to any
other transferees or assignees of such stock acquiring at least 50% of the
shares held by the Purchaser, provided that the Company is given written notice
at the time of or within a reasonable time after any said transfer, stating the
name and address of said transferees or assignees and identifying the securities
with respect to which such registration rights are being assigned, and provided
further that the transferees or assignees of such rights assume the obligations
of the Purchaser(s) under this section 8.


                                       26.
   31
          8.13 "Market Stand-Off" Agreement. The Purchasers, if requested by the
Company and the underwriter of any public offering of the Company, shall agree
not to sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by it during the 90 day period following the
effective date of the registration statement covering the public offering,
provided that all officers and directors of the Company shall also enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the securities subject to the foregoing
restrictions until the end of said 90 day period.

          8.14 No Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Restricted Stock. Notwithstanding anything else in this Section 8,
if Company shall have obtained from the Commission a "no action" letter in which
the Commission has indicated that it will take no action, if without
registration under the Securities Act, any holder disposes of securities covered
by any request for a registration made under this section in the specific manner
in which such holder proposes to dispose of the Restricted Stock, included in
such request, or if in the opinion of counsel for the Company concurred in by
counsel for such holder, which concurrence shall not be unreasonably withheld,
no registration under the Securities Act is required in connection with such
disposition, the shares included in such request shall not be eligible for
registration under this Section 8.

                                    SECTION 9

                                   Enforcement

          9.1 Remedies at Law or in Equity. If any Default should occur or if
any representation or warranty made by or on behalf of either party to this
Agreement or in any certificate, report or other instrument delivered under or
pursuant to any term hereof shall be untrue or misleading in any material
respect as of the date of this Agreement or as of the Closing Date or as of the
date it was made, furnished or delivered, the other party may proceed to protect
and enforce its rights by suit in equity or action at law, whether for the
specific performance of any term contained in this Agreement or the Certificate
or for the injunction against the breach of any such term or in aid of the
exercise of any power granted in this Agreement or the Certificate or to enforce
any other legal or equitable right of such party, or to take any one or more of
such actions. In the event of such an action, the prevailing party in any such
dispute shall


                                       27.
   32
be entitled to recover from the losing party all fees, costs, and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement or the Certificate, including without limitation such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs, and expenses of appeals.

          9.2 Cumulative Remedies. None of the rights, powers or remedies
conferred under this Agreement shall be mutually exclusive, and each such right,
power or remedy shall be cumulative and in addition to any other right, power or
remedy whether conferred by this Agreement or by the Certificate or now or
hereafter available at law, in equity, by statute or otherwise.

                                   SECTION 10

                                   Definitions

           Unless the context otherwise requires, the terms defined in this
section 10 shall have the meaning herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined. All accounting terms used in this Agreement not defined in this
section 10 shall, except as otherwise provided for herein, be construed in
accordance with those generally accepted accounting principles that the Company
is required to employ by the terms of this Agreement. If and so long as the
Company has any Subsidiary, the accounting terms appearing in this Agreement
shall refer to accounting on a consolidated basis for the Company and each of
its Subsidiaries.

           "Agreement" shall mean this Agreement.

           "Certificate" shall have the meaning assigned to it in section 1.1
hereof.

           "Board" shall mean the Board of Directors of the Company.

           "Business Plan" shall have the meaning assigned to it in section 3.20
hereof.

           "Closing" and "Closing Date" shall have the meanings assigned to them
in section 2.1 hereof.

           "Common Stock" shall have the meaning assigned to it in section 3.3
hereof.


                                       28.
   33
           "Commission" shall mean the Securities and Exchange Commission.

           "Company" shall mean Intellicom, Inc.

           "Default" shall mean a default or failure in the due observance or
performance of any covenant, condition or agreement to be observed or performed
under the terms of this Agreement or the Certificate, if such default or failure
in performance shall remain unremedied for thirty days.

           "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

           "Holder" shall mean, with respect to any outstanding security, the
record owner of such security and, with respect to the Common Stock or other
securities issuable upon conversion of any Shares, the record owner of such
Shares.

           "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any
conditional sales or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial code of any jurisdiction and including any lien or charge
arising by statute or other law.

           "Other Shareholder" shall have the meaning assigned to it in section
8.4(b) hereof.

           "Person" shall include all natural persons, corporations, business
trusts, associations, companies, partnerships, joint ventures and other entities
and governments and agencies and political subdivisions.

           "Preferred Stock" shall have the meaning assigned to it in section
3.3 hereof.

           "Purchasers" shall mean Southern California Ventures, Robert W.
Johnson and Thomas A. Tisch.

           The terms "register", "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

           "Registration Expenses" shall mean all expenses incurred by the
Company in order to comply with sections 8.4, 8.5 and 8.7 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of accountants


                                       29.
   34
and legal counsel for the Company, fees and disbursements NASD fees, blue sky
fees and expenses, and the expenses associated with the Company's obligations
under section 8.7, but excluding Selling Expenses.

           "Restricted Stock" shall mean (i) all Common Stock issued or issuable
upon conversion of the Shares and (ii) any securities issued or issuable with
respect to such Common Stock or the Shares upon any stock dividend, stock split,
recapitalization, merger, consolidation or similar event; provided, however,
that any shares of such Common Stock or other, securities shall cease to be
Restricted Stock after they have been lawfully sold to the public or
certificates representing such shares shall be issued in accordance with Section
8.3 without the legend required under Section 8.2.

           "Securities Act" shall mean the Securities Act of 1933, as amended.

           "Selling Expenses" shall mean all underwriting discounts and selling
commissions relating solely to the sale of Restricted Stock.

           "Shares" shall have the meaning assigned to it in section 1.1 hereof.

           "Special Counsel" shall mean Riordan & McKinzie, legal counsel for
the Purchasers in connection with the purchase and sale of the Shares.

           "Subsidiary" shall mean any corporation, association or other
business entity at least 50% of the outstanding voting stock of which is at the
time owned or controlled directly or indirectly by the Company or by one or more
of such subsidiary entities or both.

                                   SECTION 11

                                  Miscellaneous

           11.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of California.

           11.2 Survival. All representations, warranties, covenants and
agreements made in Section 3 of this Agreement, the Exhibits hereto or in the
Business Plan shall survive until 30 days following the delivery to the
Purchasers of the financial statements for the year ended April 30, 1988
pursuant to Section 7.2(a) hereof. All statements contained in any certificate,
instrument or other writing delivered by or on behalf of the Company pursuant


                                       30.
   35
hereto or in connection with or in contemplation of the transactions herein
contemplated shall constitute representations and warranties by the Company
hereunder.

           11.3 Successors and Assigns. Except as otherwise expressly provided
herein, the terms and provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto; provided, however, that the Company may not assign its
rights hereunder and the Purchasers may not assign their rights hereunder except
to any Purchaser's limited partners or to the spouse of any Purchaser, without
regard to the amount of shares transferred to such Person or to any other
person to whom a Purchaser transfers at least 50% of the Restricted Stock
purchased by such Purchaser.

           11.4 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

           11.5 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon delivery, if delivered personally,
or upon the expiration of 72 hours after mailing, if mailed, first class mail,
postage prepaid, addressed as follows:

                  (a) If to the Purchasers, at the addresses set forth below or
at such other address or addresses as the Purchaser may specify by written
notice to the Company:

Mr. Robert W. Johnson                        James W. Geisz, Esq.
Southern California Ventures                 Riordan & McKinzie
2102 Business Center Drive                   300 South Grand Avenue
Suite 218                                    Suite 2900
Irvine, CA 92715                             Los Angeles, CA 90071

                  (b) If to the Company, at the addresses set forth below or at
such other address or addresses as the Company may specify by written notice to
the Purchaser:

Mr. Mark D. Dankberg                      Richard K. Circuit, Esq.
ViaSat, Inc.                              Wiles, Circuit and Tremblay
1239 Crest Drive                          1205 Prospect Street, Suite 400
Encinitas, California 92024               La Jolla, California 92037

           11.6 Severability; Counterparts.

                  (a) In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and


                                       31.
   36
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  (b) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.

            11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed And delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.

VIASAT, INC.                              SOUTHERN CALIFORNIA VENTURES

By /s/ Mark D. Dankberg                    By
_______________________________________   ______________________________________

_______________________________________   ______________________________________
Robert W. Johnson                         Thomas A. Tisch


                                       32.
   37
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  (b) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.

            11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.

VIASAT, INC.                             SOUTHERN CALIFORNIA VENTURES

By____________________________________   By_____________________________________

                                          /s/ Thomas A. Tisch
______________________________________    ______________________________________
Robert W. Johnson                        Thomas A. Tisch


                                       32.
   38
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  (b) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.

            11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.


VIASAT, INC.                      SOUTHERN CALIFORNIA VENTURES

By____________________________________   By_____________________________________

  /s/ Robert W. Johnson
______________________________________   _______________________________________
Robert W. Johnson                        Thomas A. Tisch


                                       32.
   39
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  (b) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.

            11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.

VIASAT, INC.                             SOUTHERN CALIFORNIA VENTURES

By                                         By /s/             ,General Partner 
______________________________________   _______________________________________

______________________________________   _______________________________________
Robert W. Johnson                        Thomas A. Tisch


                                      32.
   40
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  (b) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.

            11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.

VIASAT, INC.                             SOUTHERN CALIFORNIA VENT

By                                       By /s/           ,General Partner
______________________________________   _______________________________________

______________________________________   _______________________________________
Robert W. Johnson                        Thomas A. Tisch


                                       32.
   41
                                                          EXHIBIT A          


                        AMENDED AND RESTATED ARTICLES OF

                                INCORPORATION OF

                                  VIASAT, INC.

                            a California Corporation

          MARK D. DANKBERG and RICHARD K. CIRCUIT hereby certify that:

          1. They are the President and Assistant Secretary, respectively, of
ViaSat, Inc., a California corporation.

          2. The Articles of Incorporation of this corporation are amended and
restated to read as follows:

                 ONE:   The name of this corporation is ViaSat, Inc.

                 TWO: The purpose of this corporation is to engage in any lawful
           act or activity for which a corporation may be organized under the
           General Corporation Law of California other than the banking
           business, the trust company business or the practice of a profession
           permitted to be incorporated by the California Corporations Code.

                 THREE: A. This corporation is authorized to issue thirteen
           million (13,000,000) shares of its capital stock, which shall be
           divided into two classes known as common stock and preferred stock,
           respectively, and the par value of each share of common and
           preferred stock shall be One Cent ($.01).

                             B. The total number of shares of common stock which
           this corporation is authorized to issue is ten million (10,000,000).
           The total number of shares of preferred stock which this corporation
           is authorized to issue is three million (3,000,000). This corporation
           is authorized to issue one series of its preferred stock, which shall
           be known as its Series A convertible preferred stock ("Series A
           Preferred Stock") and shall consist of three million (3,000,000)
           shares.

                             C. This corporation shall from time to time, in
           accordance with the laws of the State of
   42
            California, increase the authorized amount of its common stock, if
            at any time the number of shares of common stock remaining unissued
            and available for issuance shall not be sufficient to permit
            conversion of the preferred stock in accordance with the applicable
            conversion provisions.

                  FOUR: The rights, preferences, privileges and restrictions
            granted to or imposed upon the shares of Series A Preferred Stock
            or the holders thereof are as follows:

            (a)   Dividends.

                 (1) Right to Dividends. The holders of the outstanding shares
of Series A Preferred Stock shall be entitled to receive, when and as declared
by the Corporation's Board of Directors, and out of any funds legally available
therefor, cumulative dividends at the annual rate of $.009 per share, payable,
if earned and declared, in cash on the 1st day of May of each year with respect
to the prior fiscal year. Subject to the remainder of this subsection (a), such
dividends shall accrue on each such share from the date of its original issue
and shall accrue from month to month. Such dividends shall accumulate and accrue
during each fiscal year only to the extent of the net income of the Company for
such fiscal year. For the purposes of this section, "net income" of the Company
for a period shall mean the consolidated net income of the Company, and its
subsidiaries, for that period determined in accordance with generally accepted
accounting principles.

                 (2) Priority. No dividend shall be paid or declared and no
distribution shall be made on any Common Stock, no shares of Common Stock shall
be purchased, redeemed or otherwise acquired by the Corporation and no monies
shall be paid into or set aside or otherwise made available for a sinking fund
for the purchase, redemption or acquisition of any shares of Common Stock if
dividends on the Series A Stock for the then current annual dividend period and
accrued dividends for all previous dividend periods, at the annual rate
specified above, have not been paid or declared and a sum sufficient for the
payment thereof set apart; provided, however, that subject to subparagraph
(g)(1)(i), the restrictions shall not apply to the repurchase of shares of
Common Stock from directors or employees of, or consultants to the Corporation
pursuant to stock purchase or stock option agreements under which the
Corporation has the option or obligation to repurchase such shares upon the
occurrence of certain events including the termination of employment. Any
accumulation of dividends on Series A Stock shall not bear interest.

                 (3) Partial Payment. If the Board shall declare a payment of
dividend and the amount declared for dividend payment


                                       2.
   43
is insufficient to permit the payment of the full preferential amounts required
to be paid to the holders of the outstanding Series A Stock and to holders of
any other Preferred Stock on a parity therewith as to dividend preferences,
then the entire amount declared for dividend payment shall be distributed
ratably among the holders of Series A Stock and such other holders according to
the respective preferential amounts to which such holders would otherwise be
entitled.

              (b)   Preference on Liquidation.

                  (1) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of shares of
Series A Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to it stockholders, whether from
capital, surplus or earnings before any payment shall be made in respect of the
Common Stock of the Corporation, an amount equal to $.10 plus all accrued, but
unpaid dividends, if any, per share (the "Preference Price"). In the case of any
liquidation, dissolution, or winding up of the corporation occurring on or prior
to June 11, 1989, after the holders of shares of Series A Stock have received an
amount equal to the Preference Price, and the further payment of the full
preferential amounts to which the holders of any other Preferred Stock are
specifically entitled, the assets remaining shall be distributed ratably among
the holders of Common Stock until each holder of Common Stock has received an
amount per share equal to the price paid per share to the Corporation by the
original holder of each share of Common Stock plus all accrued but unpaid
dividends, if any, on such Common Stock. Thereafter, any assets remaining
shall be distributed ratably among the holders of all of the stock of the
Corporation (Preferred and Common). In case of any liquidation, dissolution or
winding up of the Corporation occurring subsequent to June 11, 1989, after the
holders of shares of Series A Stock have received an amount equal to the
Preference Price, and the further payment of the full preferential amounts to
which the holders of any other Preferred Stock are specifically entitled, the
assets remaining shall be distributed ratably among the holders of Common Stock
until each holder of Common Stock has received an amount equal to the Preference
Price. (The amount required to pay the full Preference Price to each holder of
Series A Stock and other preferred stock and the amount required to be paid to
each holder of Common Stock hereunder is hereinafter collectively referred to as
the "Payout.") Thereafter, any assets remaining shall be distributed ratably
among the holders of all of the stock of the Corporation (Preferred and Common).

                  (2) The sale, transfer or lease of all or substantially all of
the assets of the Corporation, the gross proceeds of which do not exceed the
Payout, shall be deemed to be a liquidation, dissolution or winding up of the
Corporation as those terms are used in this paragraph (b).


                                      - 3 -
   44
                 (3) If upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
available for distribution to its shareholders shall be insufficient to pay the
full preferential amounts required to be paid to the holders of series A Stock
and the holders of any other Preferred Stock on a parity therewith as to
liquidation preferences, then the entire assets of the Corporation legally
available to be distributed shall be distributed ratably among the holders of
Series A Stock and such other holders according to the respective preferential
amounts to which such holders would otherwise be entitled.

            (c) voting.

                 (1) Preferred Stock. Each holder of shares of Series A Stock
shall be entitled to vote on all matters and, except as otherwise expressly
provided herein, shall be entitled to the number of votes equal to the largest
number of full shares of Common Stock into which such shares of Series A Stock
could be converted, pursuant to the provisions of paragraph (d) of this Article
Four, at the record date for the determination of the shareholders entitled to
vote on such matters or, if no such record date is established, at the date such
vote is taken.

                 (2) Common Stock. Each holder of shares of Common stock shall
be entitled to one vote for each share thereof held. Except as otherwise
expressly provided herein or as required by law, the holders of Series A Stock
and the holders of Common Stock shall vote together and not as separate classes.

            (d)   Conversion Rights.

            The holders of Series A Stock shall have the following conversion
rights (the "Conversion Rights"):

                 (1) Right to Convert. The Series A Stock shall be convertible,
at any time or from time to time, at the option of any holder thereof, into
fully paid and nonassessable shares of Common Stock.

                 (2) Conversion Price. Each share of Series A Stock shall be
convertible into the number of shares of Common Stock which results from
dividing the Conversion Price in effect at the time of conversion into $.10 for
each share of Series A Stock being converted. The initial Conversion Price shall
be $.10 subject to adjustment from time to time as provided below.

                 (3) Mechanics of Conversion. Each holder of Series A Stock who
desires to convert the same into shares of Common Stock shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of


                                       4.
   45
any transfer agent for the Series A Stock or Common Stock, and shall give
written notice to the Corporation at such office that such holder elects to
convert the same and shall state therein the number of shares of Series A Stock
being converted. Thereupon, the Corporation shall promptly issue and deliver at
such office to such holder a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series A Stock to be converted and the
person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.

                 (4) Adjustment for Stock Splits and Combinations. If the
Corporation at any time or from time to time after the date of original issue of
the Series A Stock (the "Commitment Date") effects a subdivision of the
outstanding Common Stock, the Conversion Price then in effect immediately before
the subdivision shall be proportionately decreased, and conversely, if the
Corporation at any time or from time to time after the Commitment Date combines
the outstanding shares of Common Stock, the Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this subparagraph (4) shall become effective as of the date and
time the subdivision or combination becomes effective.

                 (5) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Commitment Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Conversion Price then in
effect shall be decreased as of the time of such issuance or, in the event such
a record date is fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction (i) the numerator
of which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date, and (ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date is fixed and such dividend or
distribution is not fully paid on the date fixed therefor, the Conversion Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Conversion Price shall be adjusted pursuant to this
subparagraph (5) as of the time of and on the basis of the actual dividend or
distribution paid.


                                       5.
   46
                 (6) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Commitment Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of Series A Stock shall receive upon
conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation which they
would have received had their Series A Stock been converted into Common Stock on
the date of such event and had they thereafter, during the period from the date
of such event to and including the date of conversion, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called for during such period under this paragraph (d) with respect
to the rights of the holders of Series A Stock.

                 (7) Adjustment for Recapitalizations, Reclassifications and
Exchanges. If the Common Stock issuable upon the conversion of the Series A
Stock is changed into the same or a different number of shares of any class or
classes of stock, whether by recapitalization, reclassification or exchange
(other than by subdivision, combination, stock dividend, reorganization,
merger, consolidation or sale of assets, as provided for elsewhere in this
paragraph (d)), then the holders of Series A Stock shall have the right
thereafter to convert their Series A Stock into the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification or exchange by holders of the maximum number of shares of
Common Stock into which such shares of Series A Stock might have been converted
immediately prior to such recapitalization, reclassification or exchange, all
subject to further adjustment as provided herein.

                  (8)   Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time there is a capital
reorganization of the Common Stock (other than a recapitalization,
reclassification, exchange, subdivision, combination, or stock dividend provided
for elsewhere in this paragraph (d)), merger or consolidation of the Corporation
with or into another corporation, or sale of all or substantially all of the
Corporation's properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
the holders of Series A Stock shall thereafter be entitled to receive, upon
conversion of the Series A Stock, the number of shares of stock or other
securities or property of the Corporation, or of the successor corporation
resulting from such reorganization, merger, consolidation or sale, to which a
holder of Common Stock deliverable upon conversion would otherwise have been
entitled on such reorganization, merger, consolidation, or sale. In any such
case, appropriate adjustment


                                       6.
   47
shall be made in the application of the provisions of this paragraph (d) with
respect to the rights of the holders of the Series A Stock after the
reorganization, merger, consolidation or sale to the end that the provisions of
this paragraph (d) (including adjustment of the Conversion Price then in effect
and number of shares purchasable upon conversion of the Series A Stock) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable.

            (9) Accountants' Certificate of Adjustment. In any case of an
adjustment or readjustment of the Conversion Price or the number of shares of
Common Stock, or other securities issuable upon conversion of Series A Stock,
the Corporation at its expense, shall cause independent public accountants of
recognized standing selected by the Corporation (who may be the independent
public accountants then auditing the books of the Corporation) to compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
Series A Stock at the holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment showing in detail
the facts upon which such adjustment or readjustment is based.

            (10) Notices of Record Date. In the event of (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital reorganization of the
Corporation, any reclassification or recapitalization of the capital stock of
the Corporation, any transfer of all or substantially all of the assets of the
Corporation to any other person, any consolidation, any merger, or any voluntary
or involuntary dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series A Stock no less than 10 days and
no more than 50 days prior to the record date specified therein or the effective
date thereof, a notice specifying (A) the material terms and conditions of the
proposed action, (B) the date on which any such record is to be taken for the
purpose of such dividend or distribution and a description of such dividend or
distribution, (C) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (D) the time, if any, that is to
be fixed, as to when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding up.


                                       7.
   48
            (11) Automatic Conversion.

                  (i) Each share of Series A Stock shall automatically be
converted into shares Of Common Stock based on the then effective Conversion
Price immediately upon the closing of any public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
in which the aggregate gross proceeds received by the Corporation at the public
offering price equals or exceeds $3,000,000, and the public offering price per
share of which equals or exceeds $.50 per share of Common Stock (appropriately
adjusted for stock dividends, recapitalizations, subdivisions and combinations
of shares of Common Stock).

                  (ii) Each share of Series A Stock shall automatically be
converted into shares of Common Stock based on the then effective Conversion
Price immediately prior to the closing of a merger, consolidation or combination
of the Corporation with or into another Corporation or entity, or a sale of
substantially all of the Corporation's assets, in which the Corporation receives
cash in the aggregate amount of, or freely tradeable securities with an
aggregate value of, at least $3,000,000 and at a price per share of Common Stock
equal to or exceeding $.50 per share.

                  (iii) Upon the occurrence of the event specified in
subparagraph (i) or (ii) above, the outstanding shares of Series A Stock shall
be converted automatically without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of Series A Stock are either delivered to the Corporation
or its transfer agent as provided below, or the holder notifies the Corporation
or its transfer agent that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith. Upon the
occurrence of such automatic conversion of the Series A Stock, each holder of
Series A Stock shall surrender the certificates representing such shares at the
office of the Corporation or any transfer agent for the Series A Stock or Common
Stock. Thereupon, there shall be issued and delivered to such holder promptly at
such office and in his name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of Series A Stock surrendered were convertible on
the date on which such automatic conversion occurred.


                                       8.
   49
                 (12) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the shares of Series A Stock of any holder.
In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall, to the extent legally permissible, pay cash
equal to the product of such fraction multiplied by the Common Stock's fair
market value as of the date of conversion as determined in good faith by the
Board.

                 (13) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series A Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Stock, the Corporation
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.

                 (14) Notices. Any notice required by the provisions of this
paragraph (d) to be given to the holder of shares of the Series A Stock shall be
deemed given upon the earlier of actual receipt or 72 hours after the same has
been deposited in the United States mail, by certified or registered mail,
return receipt requested, postage prepaid, and addressed to each holder of
record at his address appearing on the books of the Corporation.

                 (15) Payment of Taxes. The Corporation will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of Series A Stock, including without limitation, any tax or
other charge imposed in connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Stock so converted were registered.

            (e)  Redemption.

            The Company may only redeem or otherwise acquire for value any
outstanding Series A Stock as follows:

                  (1) Mandatory Redemption. So long as any Series A Stock
remains outstanding, the Company will, if it may lawfully do so, redeem one
third of the number of shares of Series A Stock held on January 1, 1991 by each
holder thereof, on each of April


                                       9.
   50
1, 1991, April 1, 1992, and April 1, 1993 ("Redemption Date(s)"), at the
redemption price hereinafter specified; provided, however, that the Company
shall not redeem any shares of Series A Stock required to be redeemed on a
Redemption Date which a holder elects not to have redeemed by delivery of a
written notice to the Company within 45 days after the receipt of the Redemption
Notice (as defined below) for such Redemption Date. If the funds of the Company
legally available for redemption of Series A Stock on any Redemption Date are
insufficient to redeem the total number of shares required under this subsection
to be redeemed on such date, the funds which are legally available will be used
to redeem the maximum possible number of shares. At any time thereafter when
additional funds of the Company are legally available for the redemption of the
Series A Stock, such funds will immediately be used to redeem Series A Stock
which the Company has become obligated to redeem on any Redemption Date but has
not yet redeemed. In the event of the redemption of less' than one third of the
Series A Stock held by each holder thereof on any Redemption Date, the Company
shall effect such redemption pro rata from the holders of Series A Stock
according to the number of shares held by each.

            (2) Redemption Price. The redemption price shall be an amount per
share in cash equal to $.10 plus all accrued and unpaid dividends thereon (the
"Redemption Price").

            (3) Redemption Notice. The Company shall, not less than 60 nor more
than 90 days prior to each date for the redemption of the Series A Stock, mail
written notice ("Redemption Notice"), postage prepaid, to each holder of record
of Series A Stock to be redeemed at such post office address last shown on the
records of the Company. The Redemption Notice shall state:

                  (i) The total number of the outstanding shares of Series A
Stock to be redeemed;

                  (ii) The number of shares of Series A Stock held by the holder
which the Company intends to redeem;

                  (iii) The Redemption Date and Redemption Price;

                  (iv) The date on or before which the holder of Series A Stock
may elect not to have redeemed any or all of such holder's Series A Stock
scheduled for redemption.

                  (v) The time and manner in, and place at, which the holder is
to surrender to the Company the certificate or certificates representing the
shares of Series A Stock to be redeemed.


                                       10.
   51
                 (4) Surrender of Stock. On or before the Redemption Date, each
holder of Series A Stock to be redeemed, unless the holder has converted the
shares to be redeemed as provided in paragraph (d), shall surrender the
certificate or certificates representing such shares to the Company, in the
manner and at the place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be cancelled and retired. In the event less
than all of the shares of Series A Stock represented by such certificate are
redeemed, a new certificate representing the unredeemed shares shall be issued
to the holder of such shares.

                 (5) Termination of Rights. If the Redemption Notice is duly
given, and if on or prior to the Redemption Date the Redemption Price is either
paid or made available for payment through the arrangement specified in
subparagraph (6) below, then notwithstanding that the certificates evidencing
any of the shares of Series A Stock so called for redemption have not been
surrendered, such shares will thereupon be deemed to be redeemed and no longer
outstanding, and the dividends with respect to such shares shall cease to accrue
and all rights with respect to such shares shall forthwith cease and terminate,
except the right of the holders to receive the Redemption Price without interest
upon surrender of their certificates therefor.

                 (6) Deposit of Funds. On or prior to the Redemption Date, the
Company shall deposit with any bank or trust company in San Diego, California,
having a capital and surplus of at least $100,000,000, as a trust fund, a sum
equal to the aggregate Redemption Price of all outstanding shares of Series A
Stock and any other Preferred Stock on a parity therewith as to redemption,
called for redemption and not yet redeemed, with irrevocable instructions and
authority to the bank or trust company to pay, on or after the Redemption Date
or prior thereto, the Redemption Price to the respective holders upon the
surrender of their share certificates. Any monies so deposited and unclaimed at
the end of one year from the Redemption Date shall be released or repaid to the
Company, after which the holders of shares called for redemption shall be
entitled only to receive payment of the Redemption Price from the Company.

            (f)   Restrictions and Limitations.

                 (1) So long as at least 300,000 shares of Series A Stock remain
outstanding, the Corporation shall not, and shall not permit any Subsidiary (as
hereinafter defined) to, without the vote or written consent by the holders of
more than 50% of the then outstanding Series A Stock voting as a single class:


                                       11.
   52
                  (i) Purchase, redeem or otherwise acquire (or pay into or set
aside for a sinking fund for such purpose) any of the Common Stock; provided,
however, that this restriction shall not apply to the repurchase of shares of
Common Stock from Corporation or any Subsidiary pursuant to an agreement under
which the Corporation has the option or the obligation to repurchase such shares
upon the occurrence of certain events, including the termination of employment,
provided that the total amount applied to such repurchase does not exceed
$50,000 during any twelve-month period;

                  (ii) Prior to April 1, 1993, effect any sale, lease,
assignment, transfer or other conveyance of all or substantially all of the
assets of the Corporation or any corporation more than 50% of whose outstanding
voting stock is owned by the Corporation ("Subsidiary"), or any consolidation or
merger involving the Corporation or any Subsidiary, or any recapitalization,
dissolution, liquidation or winding up, of the Corporation in which the
consideration received by or allocable to the holders of the Series A Stock is
cash in an amount, or freely tradeable Securities with a value, which is less
than $.50 per share, appropriately adjusted for stock splits, combinations and
dividends, or make any agreement or become obligated to do so unless the
obligations of the Corporation under the agreement are expressly conditioned
upon the requisite approval of the holders of the Series A Stock.

                  (iii) Permit any Subsidiary to issue or sell, except to the
Corporation or any wholly-owned Subsidiary, any stock of such Subsidiary;

                  (iv) Until the earlier of April 1, 1993 or the end of the
second consecutive fiscal year in which the Corporation has pre-tax earned
income (determined in accordance with generally accepted accounting principles
consistently applied) of at least $500,000, amend the Bylaws of the Corporation
to change the authorized number of directors.

            (2) The Corporation shall not amend its Articles of Incorporation
without the approval, by vote or written consent, of the holders of more than
50% of the Series A Stock voting as a single class if such amendment would
change any of the rights, preferences, privileges of or limitations provided for
herein for the benefit of the Series A Stock.

      (g) Replacement of Certificates. Upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction, or mutilation
of any certificate representing any of the Series A Stock, and, in the case of
loss, theft, or destruction, the execution of an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred


                                       12.
   53
by it in connection therewith, the Corporation will issue, or cause to be
issued, a new certificate representing such Series A Stock in lieu of such lost,
stolen, destroyed, or mutilated certificate.

            3. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors.

            4. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Sections 902 and 903 of the California Corporations Code. The
total number of outstanding shares of common stock of the corporation is three
million (3,000,000). The number of shares voting in favor of the amendment and
restatement equaled or exceeded the vote required. The percentage vote required
was more than fifty percent (50%).

            We declare, under the penalty of perjury, under the laws of the
State of California, that the matters set forth in this certificate are true on
our own knowledge.

      Executed this 9th day of June, 1986, at La Jolla, California.

                                             /s/ Mark D. Dankberg
                                             ___________________________________
                                             MARK D. DANKBERG
                                             President

                                             /s/ Richard K. Circuit
                                             ___________________________________
                                             RICHARD K. CIRCUIT
                                             Assistant Secretary


                                       13.
   54
                                    EXHIBIT B

                             SCHEDULE OF PURCHASERS



                                                  Number of
Purchaser                                          Shares            Consideration
- ---------                                        ----------          -------------
                                                                  
Southern California
   Ventures                                       2,720,000             $272,000

Robert W. Johnson                                   250,000               25,000

Thomas A. Tisch                                      30,000                3,000
                                                 ----------             --------
                                                  3,000,000             $300,000
                                                 ----------             --------

   55
                                  ViaSat, Inc.

                            Schedule of Exceptions to
                       Preferred Stock Purchase Agreement
                              Dated June 11 , 1986

      1. Mark Dankberg, the Company's President, owns 263 shares of the common
stock of M/A - COM, Inc., his former employer and a potential competitor of the
Company.

                                    EXHIBIT C
   56
                                  ViaSat, Inc.

                       Schedule of Shareholders of Record
                                  June 11, 1986

Mark Dankberg                                                  1,200,000 shares
1239 Crest Drive
Encinitas, California 92024

Steven R. Hart                                                   900,000 shares
1858 Avenida Flores
Encinitas, California 92024

Mark J. Miller                                                   900,000 shares
11384 Avenger Road
San Diego, California 92126

                                   EXHIBIT "D"
   57
                                  ViaSat, Inc.

                   Opening Statement of Assets and Liabilities
                                  May 23, 1986



                                                             
ASSETS
      Cash in bank accounts                     $ 5,000.00
      Notes receivable                            25,000.00
                                                 ----------
                  Total Assets:                                    $30,000.00

LIABILITIES AND SHAREHOLDERS' EQUITY

      Liabilities                                    None

      Shareholders' equity:

            Common stock, par value $.01,         30,000.00
            10,000,000 shares authorized,
            3,000,000 issued and out-
            standing                             ----------

                  Total Liabilities and
                  Shareholders' Equity                             $30,000.00


                                   EXHIBIT "E"
   58
                                  ViaSat, Inc.

                        Schedule of Contracts and Leases

      1. Cincinnati Electric Technical Support Contract dated May 22, 1986.

      2. TRW Personal Consulting Contracts with Messr. Dankberg, Miller and
Hart, beneficially assigned to Company, dated May 20, 1986.

                                    EXHIBIT F

   1
                                                                EXHIBIT 10.2
                                  VIASAT, INC.

                             SHAREHOLDERS' AGREEMENT

          This Shareholders' Agreement (the "Agreement") is made and entered
into this 11th day of June, 1986, by and among Southern California Ventures, a
California limited partnership ("SCV"), Robert W. Johnson and Thomas A. Tisch
(SCV and Messrs. Johnson and Tisch are collectively referred to herein as the
"Investors" and singly as an "Investor"), ViaSat, Inc., a California corporation
(the "Corporation"), and Mark D. Dankberg, Steven R. Hart and Mark J. Miller
(Messrs. Dankberg, Hart and Miller are collectively referred to herein as the
"Common Shareholders").

                                 R E C I T A L S

           A. The Investors desire to purchase from the Corporation shares of
its Series A Convertible Preferred Stock (the "Preferred Stock") on the terms
and conditions set forth in a Preferred Stock Purchase Agreement among each of
the Investors and the Corporation dated as of June 11, 1986 (the "Purchase
Agreement").

           B. The Amended and Restated Articles of Incorporation of the
Corporation provide that each holder of Preferred Stock is entitled to the
number of votes equal to the largest number of full shares of the Corporation's
Common Stock into which such shares of Preferred Stock could be converted on all
matters submitted to a vote of shareholders.

           C. The Common Shareholders own all or substantially all of the
outstanding Common Stock of the Corporation and have entered into certain
agreements ("Stock Restriction Agreements") with the Corporation providing for
the right of the Corporation to repurchase such stock under certain
circumstances.

           D. The Stock Restriction Agreements between the Company and the
Common Stockholders grant the Investors the option to purchase the shares of
Common Stock of the Common Shareholders in certain circumstances; accordingly,
the Investors are third party beneficiaries under such Stock Restriction
Agreements.

           E. The Investors are willing to purchase the Preferred Stock on the
terms and conditions contained in the Purchase Agreement if the Investors can
obtain assurances from the Corporation and the Common Shareholders regarding,
among other things, election of the Corporation's Board of Directors. To induce
the Investors to purchase the Preferred Stock, the Corporation and the Common
Shareholders are willing to enter into certain agreements as set forth herein.
   2
                                A G R E E M E N T

          NOW, THEREFORE, IT IS AGREED among the parties as follows:

           1. Definitions. Except as otherwise specifically provided in this
Agreement, or unless the context otherwise requires, the following terms shall
have the following respective meanings:

                 1.1 "Board" shall mean the Board of Directors of the
Corporation.

                 1.2 "Capital Stock" shall mean all shares or other units into
which the proprietary interest of the Corporation is divided pursuant to its
Articles of Incorporation, as amended and restated from time to time, and shall
include Common Stock and Preferred Stock.

                 1.3 "Common Shareholders" shall mean Mark Dankberg, Steve Hart
and Mark Miller.

                 1.4 "Common Stock" shall mean all shares of Capital Stock other
than Preferred Stock.

                 1.5 "Corporation" shall mean Intellicom, Inc., a California
corporation.

                 1.6 "Investor" shall mean SCV or Robert W. Johnson or Thomas A.
Tisch, and "Investors" shall mean all three of such individuals and entities and
any successor or successors to them as holders of any portion of the Preferred
Stock or the Common Stock into which the Preferred Stock is convertible.

                 1.7 "Investors' Common Stock" shall mean the shares of Common
Stock issued upon conversion of the Preferred Stock.

                 1.8 "Preferred Stock" shall mean the shares of Series A 
Convertible Preferred Stock sold to the Investors by the Corporation pursuant 
to the Purchase Agreement.

                 1.9 "Purchase Agreement" shall mean that certain Preferred
Stock Purchase Agreement by and among the corporation and the Investors.

                 1.10 "SCV" shall mean Southern California Ventures, a
California limited partnership.


                                       2.
   3
                 1.11 "Stock Restriction Agreement" shall mean any of the
agreements between the Corporation and a Common Shareholder providing for the
right of the Corporation to repurchase the Common Stock of such Common
Shareholder under certain circumstances.

           2.    Representations and warranties.

                 2.1 Common Shareholders. Each of the Common Shareholders
represents and warrants to each Investor that (a) Exhibit 1 attached hereto sets
forth his true name and address and contains a true and complete description of
the number of shares of Common Stock owned by him, and (b) no other individual
(besides his spouse, if any), estate, corporation, trust, partnership, joint
venture, association or other entity has any present or contingent interest in
any of the shares of Common Stock listed on Exhibit 1 hereof.

                 2.2 Investors. Each Investor represents and warrants to each
Common Share holder that (a) Exhibit B to the Purchase Agreement contains a true
and complete description of the number of shares of Preferred Stock owned by him
or it after giving effect to the transactions contemplated by the Purchase
Agreement, and (b) no other individual (besides his spouse, if any), estate,
corporation, trust, partnership, joint venture, association or other entity has
any present or contingent interest in any of the shares of Preferred Stock
listed on such Exhibit B (other than as a general or limited partner of SCV).

            3.   Irrevocable Proxies.

                 3.1 Intent. The purpose of this Agreement is to provide for a
Board composed as follows:

                       (a) One person less than a majority of the Board selected
by the vote of the holders of outstanding Preferred Stock and Investors' Common
Stock voting as a class (the "Preferred Directors");

                       (b) One person less than a majority of the Board selected
by the vote of the holders of Common Stock, excluding the holders of the
Investors' Common Stock (the "Common Directors");

                       (c) One person (who shall not be an officer or full-time
employee of the Corporation, except as is specifically otherwise approved by the
Investors) selected by the Common Shareholders and not objected to by holders of
a majority of the Preferred Stock and Investors' Common Stock as a class (the
"Independent Director").


                                       3.
   4
                 3.2 Grant of irrevocable Proxy. The Common Shareholders and
each of them hereby appoint the Preferred Directors (or if less than two
directors are acting, the one so acting) as their attorney and proxy to attend
meetings, vote, give consents and in all other ways to act in their place with
respect to the shares of Common Stock held respectively by them, in order to
effect the following actions:

                       (a) To maintain a Board consisting of an odd number of
Directors;

                       (b) To provide for prompt elections to assure that
vacancies on the Board are replaced in a manner so that Common Directors
continue to be elected by holders of the Common Stock (excluding the Investors'
Common Stock), Preferred Directors continue to be elected by holders of the
Preferred Stock and the Investors' Common Stock, and the Independent Director
continues to be selected and elected as hereinafter provided.

                       (c) To vote or withhold the vote of the shares of Common
Stock for which the irrevocable proxy has been granted for the person nominated
by the holders of the Common Stock to be the Independent Director, it being
understood that if such vote is withheld no votes may be cast for such nominee
by any holder of the Preferred Stock or by any bolder of the Investors' Common
Stock. It is understood that it is the intent of this provision to provide to a
majority of the persons acting as Preferred Directors the right to disapprove a
nominee selected by the holders of the Common Stock to act as the Independent
Director. The proxy granted hereunder shall not permit the Preferred Directors
to nominate or select any person to act as Independent Director, if such person
has not been nominated on the same occasion by the holders of the Common Stock.
if no action in favor or against a nominee is taken by the holders of the proxy,
the holders of the Common Stock may vote in favor of the nominee.

                 3.3 Directors to Act as Nominees. The Investors, as holders of
the option to purchase common Stock of the Common Shareholders 'pursuant to the
Stock Restriction Agreements, each hereby appoint the Preferred Director or
Directors, as their nominees, to accept the irrevocable proxy granted under
Section 3.2 of this Agreement. It is the express intention of the Investors, as
holders of such option, and the Common Shareholders that such persons be
appointed as proxy holders so that the irrevocable proxy granted under Section 
3.2 meets the requirements of Section 705(e)(2) of the California General
Corporation Law.

                 3.4 Term. The proxy granted under Section 3.2 shall remain in
effect and shall be irrevocable for the period of


                                       4.
   5
time commencing on the date of this Agreement and ending upon termination of
this Agreement pursuant to Section 6.6 of this Agreement.

                 3.5 Agreement Not to Amend Stock Restriction Agreements. The
Corporation and the Common Shareholders shall not amend any of the Stock
Restriction Agreements without the consent of Investors who are holders of a
majority of the number of shares of Common Stock issued or issuable upon
conversion of the Preferred Stock.

           4. Legend. All shares and certificates representing the Common Stock
held by the Common Shareholders shall have the following legend printed thereon:

           "These shares are subject to a Shareholders' Agreement which grants
           under certain limited circumstances an irrevocable proxy to vote
           these shares. Such Agreement is binding upon succeeding holders of
           these shares. A copy of such Agreement is on file and may be
           inspected at the principal office of the Corporation."

Such legend shall be promptly removed upon the earlier of termination of the
irrevocable proxy or the written consent of a majority of the then living
Selling Shareholders.

           5. Assistance of the Corporation. The Corporation shall use its
reasonable best efforts to cause the nomination and election to the Board of
Directors of the persons chosen in accordance with Section 3.1 above.

           6.    Miscellaneous.

                 6.1 Amendment and Waiver. No modification or amendment of any
provision of this Agreement shall be valid unless it is in writing and signed by
all of the parties hereto, and no waiver of any provision hereof shall be
binding upon any party unless in writing and signed by the party so waiving.

                 6.2 Notices. All notices and other communications given or made
pursuant to or in connection with this Agreement shall be in writing, shall be
addressed to the Corporation at its principal place of business or to the Common
Shareholders and Investors as specified on Exhibit 1 or 2 hereto, or at such
other address or to such other person as each party shall furnish by notice to
all the others with respect to himself, and shall be delivered personally or
sent by certified mail, postage prepaid, return receipt requested. Unless
otherwise specifically provided


                                       5.
   6
herein, all such notices and other communications shall be deemed given or made
only (a) upon personal delivery to the appropriate address or (b) on the second
business day following deposit in the mail, if sent by certified mail, return
receipt requested.

                 6.3 Governing Law and Interpretation. This Agreement shall
be governed and construed in accordance with the laws of the State of
California. The headings of the various Sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

                 6.4 Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one and the same
instrument.

                 6.5 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of each of the parties hereto and their respective
administrators, executors, legal representatives, heirs, devisees, legatees,
successors, assigns, and transferees. The invalidity or unenforceability of any
provisions hereof shall in no way affect the validity or enforceability of any
other provisions.

                 6.6 Termination. The provisions of this Agreement shall
terminate upon the earlier of (i) the closing of a firm commitment underwritten
public offering of the Corporation's Common Stock pursuant to a registration
statement declared effective under the Securities Act of 1933, as amended, in
which the aggregate gross proceeds are at least $3,000,000 at a price per share
(subject to adjustment for events occurring after the date hereof) of at least
$0.50, (ii) the end of the second consecutive fiscal year of the Corporation in
which the Corporation has earned income before taxes (determined in accordance
with generally accepted accounting principles consistently applied) of


                                       6.
   7
at least $500,000, or (iii) the conversion of more than 50% of the shares of
Preferred Stock issued to the Investors pursuant to the Purchase Agreement.

          IN WITNESS WHEREOF, the parties have executed this Shareholders'
Agreement as of the day and year first above written.

VIASAT, INC.                             SOUTHERN CALIFORNIA VENTURES

By /s/ Mark D. Dankberg                  By
  ---------------------------------        -------------------------------------

                                         /s/ Mark D. Dankberg
- -----------------------------------      ---------------------------------------
 Robert W. Johnson                       Mark D. Dankberg

                                         /s/ Steven R. Hart
- -----------------------------------      ---------------------------------------
 Thomas A. Tisch                         Steven R. Hart

                                         /s/ Mark J. Miller
                                         ---------------------------------------
                                         Mark J. Miller


                                       7.
   8
at least $500,000, or (iii) the conversion of more than 50% of the shares of
Preferred Stock issued to the Investors pursuant to the Purchase Agreement.

          IN WITNESS WHEREOF, the parties have executed this Shareholders'
Agreement as of the day and year first above written.

VIASAT, INC.                             SOUTHERN CALIFORNIA VENTURES

                                                    
 By                                      By /s/
___________________________________      _______________________________________

___________________________________      _______________________________________
 Robert W. Johnson                       Mark D. Dankberg

___________________________________      _______________________________________
 Thomas A. Tisch                         Steven R. Hart

                                         _______________________________________
                                         Mark J. Miller


                                       7.

   1
                                                                    EXHIBIT 10.3

                           STOCK RESTRICTION AGREEMENT

         THIS STOCK RESTRICTION AGREEMENT is entered into between ViaSat, Inc.,
a California corporation ("Company"), and _______________________
("Shareholder") and is made effective for

all purposes on _________________, 19___.

                                    ARTICLE I
                             PURPOSE AND DEFINITIONS

                  1.1 PURPOSE. This Stock Restriction Agreement ("Agreement") is
entered into with Shareholder for the purpose of limiting the sale, succession,
or other transfer of ownership of common stock of the Company ("shares") during
the lifetime or at the death of Shareholder in accordance with the provisions
herein. The Agreement also requires the acceptance of an offer to purchase all
of the shares if Shareholders owning sixty-six and two-thirds percent (66-2/3%)
of the outstanding shares of the Company agree to accept such an offer. This
Agreement covers all shares of the Company capital stock now or subsequently
owned by Shareholder ("shares") and a reference to this agreement shall be
endorsed on all of the certificates of shares owned by Shareholder or which may
be subsequently issued to him.

                  1.2 EFFECT ON SPOUSE'S INTEREST. All references in this
Agreement to "shares" or to a "Shareholder's shares" shall include the community
or separate property interest, if any, of Share- holder's spouse in any shares
of the Company's stock regardless of

                                       -1-


   2
whether registered in said spouse's name only or registered in any manner in the
names of both spouses. All of the conditions and restrictions contained in this
Agreement to Shareholder's shares shall be equally binding on Shareholder's
spouse with respect to his or her interest in shares. For purposes of this
Agreement if the shares are owned jointly or by either spouse, Shareholder shall
refer only to the spouse associated with Company by employment, agency, or other
relationship where financial consideration is paid to such person for services
performed for Company.

                  1.3 DATE OF EMPLOYMENT. Any reference in this Agreement to
"Date of Employment" shall mean the day and year when "Shareholder" commenced
his first day of employment with the Company.

                  1.4 FIRST YEAR OF EMPLOYMENT. Any reference to "First Year of
Employment" shall mean any day beginning after the Date of Employment and ending
one (1) year thereafter.

                  1.5 EMPLOYMENT ANNIVERSARY. Any reference to "Employment
Anniversary" shall include the date(s) in any subsequent year(s) which coincide
with the Date of Employment of Shareholder.

                  1.6 DATE OF GRANT. The "Date of Grant" shall mean (i) any
Employment Anniversary of Shareholder that is prior to or is on the same date as
the fiscal year-end of the Company that is utilized as a basis by the Company
for determining the amount of shares that may be purchased by Shareholder, or
(ii) if shares are being purchased as a result of exercising a right to purchase
shares under the Company's 1993 Stock Option Plan or any subsequently created
Company Stock Option Plan, the Date of Grant shall mean the Employment
Anniversary of Shareholder that is prior

                                       -2-


   3
to or is the same date as the fiscal year-end of the Company that is utilized as
a basis by the Company for determining the amount of shares subject to the
option that are granted to the Shareholder pursuant to the Company's Stock
Option Plan or any subsequently created Company Stock Option Plan.

                                   ARTICLE II
                               TRANSFERS OF STOCK
                        RESTRICTIONS AND MANDATORY OFFERS

                  2.1 LIFETIME GRATUITOUS TRANSFERS TO SPOUSE OR ISSUE
(MANDATORY OFFER BY DONEE UPON DEATH OF SHAREHOLDER). Shareholder may make a
gift of shares to his spouse or issue outright or to the Trustee of a trust for
his or her benefit, or to his spouse or issue as joint tenants with right of
survivorship ("Donee"). The Donee of these shares shall hold them subject to all
of the provisions of this Agreement, and shall not make any transfers other than
as provided in this Agreement, except for gifts to revocable trusts or members
of a Shareholder's family as described above.

                           Within thirty (30) days after the date of Share-
holder's death, such Donee shall be required to offer these shares for sale as
provided at Article III of this Agreement ("Mandatory Offer"). All references to
shares in this Agreement shall include shares owned by any Donee or held in
trust on behalf of the Donee. Payment for a Donee's shares on the death of
Shareholder shall be made to the Donee or, where held in trust, pursuant to the
provisions of the trust.

                  2.2  OTHER LIFETIME GRATUITOUS TRANSFERS.  Except as

                                       -3-


   4
permitted at Section 2.1, Shareholder shall not transfer any shares gratuitously
during his lifetime unless he shall have first offered the shares for sale as
provided at Article III of this Agreement ("Mandatory Offer").

                  2.3 OFFER UPON DEATH OF SHAREHOLDER. Within ten (10) days
after the receipt of notice of the death of Shareholder, or within ten (10) days
after the qualification of his personal representative (if Shareholder's shares
will be part of his probate estate), whichever is later, the Shareholder's
shares shall be offered for sale as provided at Article III of this Agreement by
the person or persons entitled to do so ("Mandatory Offer").

                  2.4 LIFETIME SALES OF SHARES. Shareholder shall not sell or
transfer shares during his lifetime for a valuable consideration without first
offering such shares for sale as provided at Article III of this Agreement
("Sale of Shares").

                  2.4.1 A shareholder desiring to complete the Sale of Shares
shall give written notice of his intention to transfer to the President or
Secretary, but not to himself, of the Company ("Notice"). The Notice shall name
the proposed purchaser, his or its business or residence address, and shall
specify the number of shares to be transferred, the price per share, and the
terms of transfer.

                  2.5 PURCHASE OR MANDATORY OFFER ON TERMINATION OF MARITAL
STATUS. In the event that the marital status of Shareholder is terminated, that
termination of marital status shall be an event giving rise to options to
purchase all, but not less than all, of whatever interest is held by the spouse
of such Shareholder

                                       -4-


   5
in the shares.

                  2.5.1 OPTION OF SHAREHOLDER. The Shareholder whose marital
status is terminated shall have the first option to purchase whatever interest
is held by his spouse in the stock held in their name, or owned by them. This
option shall be exercised by the Shareholder giving written notice to his spouse
and to the Company within 30 days following the date of termination of marital
status of the Shareholder and his spouse. The purchase price shall be determined
by the Shareholder and his spouse using the same procedure described at Article
IV of this Agreement. The price shall be paid to the selling spouse in the
manner selected by the Shareholder from the alternatives described at Article V
of this Agreement.

                  2.5.2 SECONDARY OPTION TO PURCHASE. If the Shareholder whose
marital status is terminated does not exercise the option to purchase all of
whatever interest is held by his spouse in the shares held in their name or
owned by them, the Shareholder and his spouse shall each notify the Company in
writing that the Shareholder has not exercised his option pursuant to Paragraph
2.5.1 of this Agreement. If both the Shareholder and his spouse fail to notify
the Company in writing of the termination of their marital status, the Company
shall not be deemed to have received notice until the Company has actual notice
of the termination of marital status of Shareholder and his spouse. For a period
of thirty (30) days commencing upon the date that Company has received the
notice specified in this paragraph, the Shareholder's spouse shall be required
to offer those shares to the

                                       -5-


   6
Company for sale as provided at Article III of this Agreement ("Mandatory
Offer").

                  2.5.3 BIFURCATION OF MARITAL STATUS AND PROPERTY RIGHTS.
Notwithstanding Subparagraphs 2.5.1 and 2.5.2 to the contrary, in the event that
the marital status of Shareholder is terminated prior to the determination by a
court of the right to ownership of the shares, then in such circumstance, the
event giving rise to the option specified or notice required in Sub-paragraphs
2.5.1 and 2.5.2 shall be the date of entry of judgment by the court determining
ownership of the shares.

                  2.6  TERMINATION OF EMPLOYMENT.

                           2.6.1  If Shareholder's employment with Company
terminates within three (3) years from the Date of Employment by the Company,
for any reason whatsoever, Shareholder, or his Donee at Section 2.1, or his
former spouse under Section 2.5.2, shall offer his shares to the Company in
accordance with Article III of this Agreement ("Mandatory "Offer").

                           2.6.2  The price of the shares purchased during the
first year commencing on the Date of Employment shall be based on Shareholder's
completed months of service determined from his Date of Employment, as follows:



                           Unvested                 Vested
                        Shares Required         Shares Required
 Completed Months     to be Sold at Price     to be Sold at Price
 of Service From       Originally Paid by        Determined in
Date of Employment        Shareholder             Section 4.1
- ------------------        -----------             ------------
                            ("Cost")          ("Higher of Cost or
                                              Fair Market Value")
                                                  
  Less than 6                100%                       0
6 but less than 7             75%                      25%


 7 and continuing thereafter through 36 months, Shareholder shall

                                       -6-


   7
vest to his shares at a rate of 1/30 (3.333 % per month).

                  2.6.3 The price of any shares purchased by Shareholder after
the First Year of Employment shall be based on Shareholder's completed months of
service as determined for each subsequent purchase by Shareholder beginning from
the Date of Grant, as follows:



                           Unvested                 Vested
 Completed Months       Shares Required         Shares Required
 of Service From      to be Sold at Price     to be Sold at Price
     Date of           Originally Paid by        Determined in
      Grant               Shareholder             Section 4.1
      -----               -----------             -----------
                            ("Cost")          ("Higher of Cost or
                                              Fair Market Value")
                                                
  Less than 6                100%                       0
6 but less than 7             75%                      25%


 7 and continuing thereafter through 36 months, Shareholder shall vest to his
shares at a rate of 1/30 (3.333 % per month).

              2.6.4 If Shareholder's employment with the Company terminates
after three (3) years from the date of his employment with the Company, for any
reason whatsoever, Shareholder or his Donee at Section 2.1 or his former spouse
under Section 2.5.2, shall offer his shares to Company in accordance with
Article III of the Agreement ("Mandatory Offer") and at the price determined by
Section 4.1.

                  2.6.5 The term "employment" or "employed" for purposes of this
Agreement shall include but not be limited to any relationship in which
Shareholder is paid for his service to the Company whether by way of salary,
hourly compensation, commission, director's fees, fringe benefits, reimbursement
and the like.

                  2.6.6 In the event of any conflict between Section 2.6 and
Section 2.4, the provisions of Section 2.6 shall prevail.

                                       -7-


   8
                  2.6.7 Notwithstanding anything in this Agreement to the
contrary, so long as Shareholder's share or portion thereof are subject to the
restrictions in this Section 2.6, Shareholder shall not transfer such shares, or
portion thereof, gratuitously or for consideration, except as permitted at
Sections 2.1, 2.3, or 2.5.

               2.7 TRANSFEREES SUBJECT TO RESTRICTIONS. Any Transferee upon
receiving shares (or any interest in shares) shall be subject to all of the
provisions and restrictions contained in this Agreement, and shall, prior to
receiving delivery of the shares, become a signatory to the then current Stock
Restriction Agreement of the Company.

               2.8 OFFER TO ALL SHAREHOLDERS. If an offer is made to all
Shareholders to purchase all of the outstanding shares of the Company, and if
that offer is accepted by Shareholders owning sixty-six and two-thirds (66-2/3)
percent of the shares, Shareholder agrees he will be bound by such acceptance.
Shareholder further agrees he will sell all of the shares owned by him to the
offeror on the terms and conditions contained in the offer to all Shareholders.
Should such an offer be made, the provisions of this Agreement requiring that
shares be offered to Company or its designated purchaser shall not apply and the
purchaser shall acquire the shares free and clear of this Agreement and of any
of its terms and conditions.

                                   ARTICLE III
                  OPTION TO PURCHASE TO COMPANY OR SHAREHOLDERS

                  3.1 SUBMISSION TO COMPANY. A Mandatory Offer required by
Sections 2.1, 2.2, 2.3 2.5 or 2.6 or a Notice required

                                       -8-


   9
by Section 2.4.1, shall be submitted to the Company by the person
required to do so (Offeror).

                  3.2 OPTION TO COMPANY. The Company shall have the right to
elect to purchase any or all of the shares which are the subject of a Mandatory
Offer or Notice (the "shares offered") for the price and on the terms set forth
in this Agreement. This option shall expire sixty (60) days after receiving a
Mandatory Offer or Notice or sixty (60) days after termination of Share-
holder's employment, whichever is applicable.

                  3.3 NON-EXERCISE OF OPTION. If for any reason the Company 
does not exercise its option in a timely manner to purchase any or all of the 
offered shares, the Offeror shall be entitled to do whichever of the following 
is applicable:

                                    3.3.1 Continue to hold such shares under
Section 2.1 of this Agreement either outright or as a trustee subject to the
terms of the trust. In either event, the holder of such shares shall be treated
in all respects as a Shareholder subject to the terms of this Agreement;

                                    3.3.2 Complete the gratuitous transfer under
Section 2.2 in which case the Transferee will be a Shareholder subject to the
terms of this Agreement;

                                    3.3.3 Continue to hold such shares under
Section 2.3 of this Agreement as a Shareholder subject to the terms of this
Agreement or to distribute them according to law to the deceased Shareholder's
beneficiaries who will then be treated as Shareholders subject to the terms of
this Agreement;

                                    3.3.4 Complete the transfer of shares for

                                       -9-


   10
consideration under Section 2.4 of this Agreement in which case the Transferee
shall be a Shareholder subject to the terms of this Agreement; provided,
however, that the transfer must be completed within six (6) months of
termination of the Company's and Share- holders' option period, and at the price
and upon terms no more favorable than those specified in the Notice;

                                    3.3.5 Continue to hold shares under Section
2.5 of this Agreement as a Shareholder subject to the terms of this Agreement;
provided, however, that a Shareholder who has acquired shares as a result of
dissolution of marriage with a Shareholder who is then employed by the Company,
shall remain subject to the provisions of Section 2.6 of this Agreement as
though the Shareholder is employed by the Company.

                                    3.3.6 Continue to hold shares under Section
2.6 of this Agreement as a Shareholder subject to the terms of this Agreement.

                  3.4 RESTRICTION. Notwithstanding the foregoing, the Company
shall not have the option to purchase such shares as designated at Section 3.2
if such purchase would violate Sections 500 and 501 of the California
Corporations Code or any statute of similar import restricting the right of a
corporation to purchase its own shares. This Section 3.6 does not restrict the
Company's option to designate, appoint or approve as a purchaser for such
shares, any person or persons including other Shareholders of the Company.

                                      -10-


   11
                                   ARTICLE IV
                                 PURCHASE PRICE

                  4.1 DETERMINATION. Except when a purchase price per share is
stated in a Notice required by Section 2.4, the option price per share shall be
based on the original cost of the stock to the Offeror, in the case of unvested
shares, and on the higher of original cost of the stock to Offeror or fair
market value ("Fair Market Value") as agreed upon by the Offeror and the Company
in the case of vested shares. If the Offeror and the Company cannot agree upon
the Fair Market Value for the Offeror's shares within fifteen (15) days
("Agreement Period") after the Company has received a Mandatory Offer of Notice,
or termination of Shareholder's employment, whichever is applicable, the Fair
Market Value shall be determined by an appraiser chosen by Offeror and an
appraiser chosen by the Company. Within fifteen (15) days after the expiration
of the Agreement Period, Offeror and Company shall each choose an appraiser
("Appointment Period") and notify the other in writing of the name, address and
phone number of such appraiser. The two appraisers shall thereafter have fifteen
(15) days to determine the Fair Market Value of the shares ("First Appraisal
Period"). In the event the two appraisers cannot agree within fifteen (15) days
after expiration of the First Appraisal Period, they shall thereupon immediately
choose a third appraiser and the decision in writing of any two of the three
appraisers ("Second Appraisal Period") so appointed shall be deemed binding and
conclusive on the Offeror and the Company with respect to the price per share of
shares being offered for sale.

                                    In the event that either Company or Offeror

                                      -11-


   12
fails to appoint an appraiser during the Appointment Period, the appraiser
appointed by the non-failing party shall determine the Fair Market Value of the
shares. Each party shall bear the cost and expense of the appraiser appointed by
such party. All costs and expenses of the tie-breaking appraiser appointed for
the Second Appraisal Period shall be borne equally by the Company and Offeror.

                  4.2 CANCELLATION OF SHARES. If the Offeror refuses to tender
shares after Fair Market Value (or other purchase price specified in this
Agreement) has been determined, the Company may thereafter cancel Offeror's
shares provided, however, that Company first tenders full payment of the
purchase price of the shares to Offeror.

                  4.3 TIME FOR DETERMINATION. In the event of the necessity of
appointment of such appraisers, the price per share shall be determined within
thirty (30) days of the appointment or such additional time as may be agreed
upon between Offeror and the Company.

                  4.4 PAYMENT WHERE DEATH BENEFIT EXISTS. Upon the valuation of
shares of a deceased Shareholder, who at the time of his death was also an
employee of the Company (Shareholder- Employee), or Donee of a deceased
Shareholder or employee, the purchase price for all shares shall be reduced by
$5,000 in the event that the Company is obligated to pay a death benefit in this
amount to the beneficiary designated by such Shareholder-Employee.

                                    ARTICLE V
                                     PAYMENT

               5.  TIME AND MANNER.  In the event that the Company shall

                                      -12-


   13
exercise its option to purchase shares, payment for the shares shall be made in
accordance with whichever of the following options the purchaser shall choose:

                         5.1  In cash or certified check within the time
periods designated for the exercise of options under Sections 2.3, 2.5 or 2.6,
which give rise to the option to purchase such shares; or

                         5.2  On the terms and conditions set forth in the
Notice from the offering Shareholder under Section 2.4.

                                   ARTICLE VI
                                    INSURANCE

               6.1 INSURANCE POLICIES. In order to fund the payment of the
purchase price of the shares to be purchased under this Agreement by Company
upon the death of Shareholder, the Company may apply for (but is under no
obligation to do so), acquire, and maintain in force policies of life insurance
in face amounts sufficient to pay the purchase price of the shares owned by
Shareholder. The policies, if any, shall be described on Exhibit A; and any
additional policies acquired by Company on the life of Shareholder, or changes
in the face amounts of the policies, shall also be listed on Exhibit A. All
policies shall belong solely and absolutely to Company and shall be subject to
the provisions of this Agreement; Company reserves all the powers and rights of
ownership, will name itself as primary beneficiary, and agrees to pay all
premiums on the policies as they fall due. Company shall not exercise any of its
powers of ownership by cancelling the policies, lowering the face amount of the
policies, changing the

                                      -13-


   14
name of the beneficiary, electing optional methods of payment, converting the
policies, borrowing against them, or in any other way changing their nature,
reducing their value or the rights under them without first giving fifteen (15)
days written notice of its intention to do so to Shareholder. Any dividends paid
upon any of the policies shall be paid to Company. Receipts showing payment of
premiums shall be held by the Secretary of Company for inspection by
Shareholder.

                                   ARTICLE VII
                               TRANSFER OF SHARES

                         7.1  TRANSFERS.   Upon the payment in full of the
purchase price, Offeror shall deliver to the purchaser a receipt for the payment
of the purchase price, together with a stock assignment separate from
certificate transferring the shares to the purchaser; and, if applicable, the
personal representative shall deliver his receipt for the payment of the
purchase price to the Company, together with a court order confirming sale, and
any documents necessary for clearance of inheritance tax liens, as well as an
appropriate stock or assignment separate from certificate duly transferring the
shares to the Company. The stock or assignment shall have the signature or
signatures guaranteed by a commercial bank or trust company or savings and loan
association or a member firm of the National Association of Security Dealers.
Upon the presentation of the foregoing documents, the Company shall cause the
shares purchased to be transferred to the purchaser.

                                      -14-


   15
                                  ARTICLE VIII
                           LEGEND ON SHARE CERTIFICATE

                         8.1  LEGEND.  Each share certificate of the Company

shall have on its face the following words:

                "ANY TRANSFER OR PLEDGE OF THE SHARES REPRESENTED BY THIS
                CERTIFICATE, OR THE TRANSFER OF ANY INTEREST IN THOSE SHARES IS
                RESTRICTED BY THE PROVISIONS OF THE COMPANY'S STOCK RESTRICTION
                AGREEMENT, PRESENTLY EFFECTIVE, A COPY OF WHICH MAY BE INSPECTED
                AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL OF THE
                PROVISIONS OF WHICH ARE INCORPORATED HEREIN."

                         An executed copy of this Agreement shall be delivered
to the Secretary of the Company and shall be shown by him to any person duly
authorized in writing by Shareholder who then holds shares subject to this
Agreement.

                                   ARTICLE IX
                             RESTRICTIONS ON PLEDGE

                         9.1  RESTRICTION.  Shareholder shall not pledge or
otherwise encumber any shares or any interest in any shares, unless he shall
have first complied with the following requirements.

                                    9.1.1  Shareholder, desiring to pledge any
shares as security, or any interest in any shares, shall give notice to the
Company, settling forth the proposed pledge, his or its business and residence
address, and specifying the number of shares to be pledged, the total obligation
secured and the terms of that obligation. A meeting of the Board of Directors of
the Company shall be held within fifteen (15) days from the receipt of the
notice, for the purpose of reviewing the proposed pledge.

                                    9.1.2 It shall be a condition precedent to
the approval of any proposed pledge that Shareholder and the proposed

                                      -15-


   16
pledgee enter into a written Consent Agreement with the Company pursuant to
which the Company will be given notice of any default by the pledgor, allowed
sufficient time to cure the default prior to any execution upon the pledged
shares, and granted a security interest in the pledged shares upon curing the
default. Upon delivery of such a Consent Agreement satisfactory to the Company,
together with other documentation which may, in the sole discretion of the Board
of Directors of the Company, be necessary or desirable to effectuate the purpose
of this Agreement, the Board of Directors shall act to authorize the pledge of
the shares and shall give written notice to Shareholder of this approval.

                                    ARTICLE X
                            TERMINATION OF AGREEMENT

                         10.1  TERMINATION.  This Agreement shall terminate
upon the occurrence of any of the following:

                                    10.1.1  The written agreement of all of the
parties to this Agreement;

                                    10.1.2  The dissolution of the Company;

                                    10.1.3 The appointment of a receiver to take
possession of all or substantially all of the assets of the Company, a general
assignment by the Company for the benefit of creditors, or any action
voluntarily taken by the Company under any insolvency or bankruptcy act;

                                    10.1.4  Any action involuntarily suffered by
the Company under any insolvency or bankruptcy act, which continues
for a period of thirty (30) days; or

                                    10.1.5 When only one Shareholder remains,
the

                                      -16-


   17
shares of all others having been transferred or repurchased.

                                    10.1.6  When the Company makes a public
offering to sell its shares by filing a registration with the Securities and
Exchange Commission to register shares for sale to the general public, such
registration is made effective by the Securities and Exchange Commission and
such registration is properly qualified in those states of the United States
where the shares will be sold. The foregoing sentence is applicable whether or
not shares subject to this Agreement are made part of the registration with the
Securities and Exchange Commission.

                                   ARTICLE XI
                         LIFE INSURANCE UPON TERMINATION

                         11.1 DISPOSITION OF LIFE INSURANCE POLICIES UPON
TERMINATION. If this Agreement is terminate as provided in Article X, or if a
Shareholder dispose of all of the Shares owned, Shareholder shall have an
option, exercisable within sixty (60) days after the termination of this
Agreement or the sale of shares, to purchase any or all life insurance policies
on himself owned by Company listed on Exhibit A by payment of the following
amount:

                                    11.1.1 The interpolated terminal reserve of
the policy and any paid-up additions as of the date of transfer, plus 

                                    11.1.2 Any dividends or dividend 
accumulations credited to the policy, plus

                                    11.1.3 The unearned portion of the premium
paid beyond the date of transfer, less

                                    11.1.4 Any indebtedness against the policy
plus any interest accrued as of the date of transfer.

                                      -17-


   18
                                   ARTICLE XII
                            MISCELLANEOUS PROVISIONS

                  12.1 PRIOR AGREEMENTS. This Agreement supersedes all other
agreements in force at the date of this Agreement, and all rights and
obligations of the parties under them which are inconsistent with the terms of
this Agreement, are terminated.

                  12.2 NOTICE. Any notice given under the terms of
this Agreement shall be given in writing and shall be given by registered or
certified mail, postage prepared and return receipt requested, to the Company at
its principal office of business, and to Shareholder at the address last
provided by Shareholder to the Company. Any address may be changed by giving
notice in writing to the Company. The date of receipt by any notice shall be the
third business day following the postmark on the registered or certified mail.

                   12.3 BINDING ON HEIRS. This Agreement shall be
binding upon and inure to the benefit of the successors, heirs, personal
representatives, and assignees of the parties.

                   12.4 COORDINATION WITH WILL. Each Shareholder agrees to
insert in his will a direction and authorization to his personal representative
to comply with the provisions of this Agreement.

                   12.5 AMENDMENT. This Agreement may be amended at any
time by the written agreement of the Company and all of its then Shareholders.

                   12.6 VALIDITY. In the event that any of the provisions
of this Agreement are held invalid under any law, this invalidity shall not
affect the remainder of the Agreement.

                                      -18-


   19
                         12.7  ATTORNEY'S FEES.  In a suit or proceeding
brought or instituted by any of the parties to enforce or interpret any of the
provisions of this Agreement or on account of any damages sustained by any party
by reason of the violation of another party of any of the terms or provisions of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees in such amount as shall be fixed by the court.

                         12.8 CALIFORNIA LAW. This Agreement shall be governed
by the laws of the State of California.

                         12.9 GENDER AND NUMBER. As used herein, masculine terms
and number shall include the equivalent feminine terms and numbers.

                         12.10 CAPTION AND PARAGRAPH HEADINGS. Captions and
paragraph headings used herein are for convenience only and are not a part of
this Agreement and shall not be used in construing it.

                         IN WITNESS WHEREOF, the parties have executed this
Agreement at San Diego, California, effective for all purposes on

- -------------------------.

COMPANY                                               SHAREHOLDER

ViaSat, Inc.

By: _________________________                         _______________________





                                      -19-


   20
                 SPOUSE'S CONSENT TO STOCK RESTRICTION AGREEMENT

                         I acknowledge that I have read the foregoing Stock
Restriction Agreement and that I know its contents. I am aware that my community
property or other interest, if any, in shares registered in the name of my
spouse or in both of our names is subject to the terms of this Agreement
including, without limitation, of the following: Section 1.2, rendering my
shares subject to the terms of this Agreement; Section 2.3, providing for the
mandatory offer of my interest in shares to the Company upon my spouse's death;
and Section 2.5, requiring a mandatory offer of my shares to my spouse (or the
Company) in the event of the termination of our marital status.

                         I agree to sell my interest in the Company's shares
upon termination of my marital status on the terms and conditions set forth in
the Stock Restriction Agreement. I agree to provide notice to the Company, as
required by Paragraph 2.5.2, in the event my spouse does not purchase my shares
in the Company upon termination of our marital status. I consent to the sale of
my interest in the Company's shares upon my spouse's death. I approve of the
remaining provisions of the Agreement.

                         I acknowledge that I have been advised to obtain
independent legal advice prior to signing this Consent and have either done so
or declined to do so of my own free will and choice.
Dated:______________________            Spouse:

                                        ________________________________________



                                      -20-

   1
                                                                 EXHIBIT 10.4
                 INVENTION AND CONFIDENTIAL DISCLOSURE AGREEMENT

      THIS INVENTION AND CONFIDENTIAL DISCLOSURE AGREEMENT ("Agreement") is made
between ViaSat, Inc., a California corporation ("Company"), and
______________________________ ("Employee").

      In consideration of the employment or contractual relationship between the
Employee and the Company, the parties hereto agree as follows:

      1. Employee is retained by the Company as a research and development
engineer to invent, discover, develop and improve methods, formulas, machines
and devices relating in any manner to the Company's business or related to the
Company's products or to any research, design, experimental or production work
carried on by the Company. On inventing, discovering, developing or improving
any of the aforesaid methods, formulas, machines and devices, Employee shall
immediately make a full disclosure thereof to the Company and shall thereafter
keep the Company fully informed at all times of all progress in connection
therewith. Such disclosure shall be made in confidence, and the Company shall
provide a review process available to Employee, upon request, to determine such
issues as may arise with such disclosure.

      2. All such inventions, designs, improvements and discoveries, whether or
not conceived by Employee alone or with others and whether or not conceived
during regular working hours, shall be the exclusive property of the Company,
and Employee agrees to assign and hereby assigns his entire right, title and
interest in the same to the Company.

      3. Employee acknowledges notification under California Labor Code Section
2872 that this Agreement does not apply to any invention which qualifies fully 
under the provisions of Labor Code Section 2870, which reads in pertinent part 
as follows:

            Any provision in an employment agreement which provides that an
            employee shall assign or offer to assign any of his or her rights in
            an invention to his or her employer shall not apply to an invention
            for which no equipment, supplies, facility, or trade secret
            information of the employer was used and which was developed
            entirely on the employee's own time, and (a) which does not relate
            (1) to the business of the employer or (2) to the employer's actual
            or demonstrably anticipated research or development, or (b) which
            does not result from any work performed by the employee for the
            employer.
   2
      4. Employee shall assist the Company to obtain patents on all such
inventions, designs, improvements and discoveries deemed patentable by the
Company and shall execute all documents and do all things necessary to obtain
letters patent, vest the Company with full and exclusive title thereto and
protect the same against infringement, all at the Company's expense, but for no
consideration to Employee in excess of Employee's usual wages or contract
compensation from the Company. In the event that the Company requires Employee's
assistance under this section 4 after termination of Employee's employment or
contractual relationship with the Company, Employee shall be compensated for
Employee's time actually spent in providing such assistance at an hourly rate
equivalent to Employee's salary or wages or contract compensation during the
last year of employment or contractual relationship with the Company.

      5. All experiments, developments, formulas, patterns, devices, secret
inventions and compilations of information, records and specifications regarding
the Company's business or related to the Company's products or to any research,
design, experimental or production work carried on by Company are trade secrets,
which Employee shall not disclose, directly or indirectly, or use in any way,
either during the term of Employee's employment by or contractual relationship
with the Company or at any time thereafter, except as required by the Company.
Employee recognizes and agrees that the foregoing obligation applies not only to
technical information, but any business information which the Company treats as
confidential. Any information of the Company which is not readily publicly
available shall be considered to be a trade secret unless the Company advises
Employee otherwise.

      6. Employee agrees to return to the Company upon termination of Employee's
employment or contractual relationship with the Company, all papers, records,
documents, drawings, plans, models and equipment in Employee's possession,
relating to the Company's business or related to the Company's products or to
any research, design, experimental or production work carried on by the Company,
and Employee shall not make or retain any copies thereof.

      7. In the event of a breach or threatened breach by Employee of any
provision of this Agreement, the Company shall be entitled to an injunction
restricting Employee from committing such a breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedy available to
the Company for such breach or threatened breach, including the recovery of
damages from Employee.

      8. Should any part of this Agreement be declared invalid for any reason,
then such portion shall be invalid only to the extent of the prohibition without
invalidating or affecting the remaining provisions of this Agreement, or without
invalidating or altering such portion within states or localities where not
prohibited by law or court decree.


                                      - 2 -
   3
       9. In any action to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to attorneys' fees and costs.

      10. This Agreement shall be construed under the laws of the State of
California and shall be binding upon the heirs, assigns, administrators and
executors of the parties.

DATED:____________________________      DATED:

                                        VIASAT, INC., a California
                                        Corporation

__________________________________      By:_____________________________________
          "Employee"                                    "Company"


                                      - 3 -

   1
                                                              EXHIBIT 10.5

                                  VIASAT, INC.

                             1993 STOCK OPTION PLAN

1.       PURPOSE

         1.1 VIASAT, INC., a California corporation ("Company") desires to
afford certain of its employees and independent contractors whom the Company's
Board of Directors specifically finds have substantial business contacts with
the Company and who are performing services of special significance to the
Company, and non-employee members of the Company's Board of Directors who are
responsible for the continued growth of the Company, an opportunity to acquire a
proprietary interest in the Company, and thus to create in such persons an
increased interest in and a greater concern for the welfare of the Company and
its affiliates.

         1.2 The stock options ["Option(s)"] offered pursuant to this 1993 Stock
Option Plan ("Plan") are a matter of separate inducement and are not in lieu of
any salary or other compensation for the services of any person.

         1.3 The Options granted under the Plan are intended to be either
incentive stock options ["Incentive Option(s)"] within the meaning of Section
422A of the Internal Revenue Code of 1986, as it may from time to time be
amended ("Code"), or options that do not meet the requirements for Incentive
Options ["Non-Qualified Option(s)"].

         1.4 Employees of the Company may receive Incentive Options and/or
Non-Qualified Options. Persons who are not employees, but who are directors of,
or who are independent contractors found to have substantial business contacts
with and to be performing significant services for, the Company may also receive
Options pursuant to the Plan, provided, however, that such persons may only
receive Non-Qualified Options.

         1.5 For the purposes of the Plan, the term "employee" shall have the
same meaning required by Section 422A of the Code.

2.       SHARES SUBJECT TO THE PLAN

         2.1 The total number of shares of common stock of the Company issuable
under the Plan shall not exceed, in the aggregate, One Million (1,000,000)
shares of the authorized common stock, $.01 par value, as of the Effective Date,
consisting of Incentive Options and Non-Qualified Options in amounts determined
by the Board of

                                       -1-


   2
Directors of the Company ("Shares"). The term "Shares" shall include any
securities, cash or other property into which Shares may be changed through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
issuance of rights to subscribe or change in capital structure.

         2.2 Shares which may be acquired under the Plan shall be authorized but
unissued Shares. If and to the extent that Options granted under the Plan expire
or terminate without having been exercised, new Options may be granted with
respect to the Shares covered by such expired or terminated Options, provided
that the grant and the terms of such new Options shall in all respects comply
with the applicable provisions of the Plan.

3.       ADMINISTRATION

         3.1 The Company's Board of Directors ("Board") shall designate a
committee ("Committee") to administer the Plan. In the absence of a Committee,
the Plan shall be administered by the Board. The Committee shall consist of no
fewer than three members of the Board. The Board shall have the power to
redesignate the composition of the Committee at any time. A majority of the
members of the Committee shall constitute a quorum, and the act of a majority of
the members of the Committee shall be the act of the Committee. Any member of
the Committee may be removed at any time either with or without cause by
resolution adopted by the Board, and any vacancy on the Committee may at any
time be filled by resolution adopted by the Board.

         3.2 Subject to the express provisions of the Plan, the Committee shall
have authority, in its discretion, to determine the persons to whom Options
shall be granted, the time when such Options shall be granted, the number of
Shares which shall be subject to each Option, the purchase price of each Share
which shall be subject to each Option, the period(s) during which such Options
shall be exercisable (whether in whole or in part), and the other terms and
provisions thereof. In determining the persons to whom Options shall be granted
and the number of Shares subject to each such grant, the Committee shall
consider the length of service, the amount of earnings, the responsibilities and
duties of each person, and/or other factors it deems relevant.

         3.3 Subject to the express provisions of the Plan, the Committee shall
have authority to construe the Plan and any Options granted thereunder, to amend
the Plan and any Options granted thereunder, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the Options granted under the Plan and to make all other
determinations that the Committee deems necessary or advisable for administering
the Plan. The Committee also shall have the authority to require, in its
discretion, that the Optionee agree, promptly after the grant of an Option to
such person, not to sell or otherwise dispose

                                       -2-


   3
of Shares acquired pursuant to the exercise of the Option for a period of time
to prevent any undesirable federal and/or state securities law consequences or
the volatility of the Company's Shares in connection with a secondary and/or
primary offering thereof. The determination of the Committee on matters referred
to in this Section 3 shall be conclusive.

         3.4 Any or all powers and functions of the Committee may at any time
and from time to time be exercised by the Board or an executive committee
thereof.

         3.5 The Committee may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely upon
any opinion received from any such counsel or consultant or agent. Expenses
incurred by the Board or the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company. No member or former member of
the Committee or of the Board shall be liable for any action or determination
made in good faith with respect to the Plan.

4.       ELIGIBILITY

         4.1 The persons eligible to receive Options under the Plan are
identified in Section 1 hereof.

         4.2 An Option shall not be granted to any person who, at the time such
Option is granted, owns shares of the Company or any subsidiary or parent
corporation of the Company which share possess more than ten percent (10%) of
the total combined voting power of all classes of shares of the Company or of
any subsidiary or parent corporation of the Company, unless (a) the exercise
price per share is not less than one hundred ten percent (110%) of the fair
market value per share on the date such Option is granted, and (b) in the case
of an Incentive Option, the Option by its terms is not exercisable after the
expiration of five (5) years from the date such Option is granted. In
determining share ownership of a proposed grantee, the rules of Section 425(d)
of the Code shall be applied, and the Committee may rely on representations of
fact made to it by the proposed grantee.

5.       OPTION GRANT PROGRAM

         5.1 Each Option granted under the Plan shall be evidenced by a Stock
Option Agreement (and all necessary supporting documentation, as determined by
the Committee in its discretion) that complies with (or incorporates) each of
the applicable terms and conditions of this Plan (as well as the applicable
terms and conditions set forth elsewhere in the Plan) and any additional terms
which the Committee deems appropriate. Each Stock Option Agreement shall
identify such Option as either an Incentive Stock Option that is intended to
comply with the requirements of Section 422A of the Internal Revenue Code or as
a Non-Qualified Option

                                       -3-


   4
that is intended not to be an Incentive Stock Option. The Stock Option Agreement
and all supporting documentation shall contain such representations and
warranties as the Committee shall require.

6.       OPTION PRICE AND PAYMENT

         6.1 The price for each Share purchasable under any option granted
pursuant hereto shall not be less than one hundred percent (100%) of the fair
market value per Share on the date the Option is granted, provided, however,
that in the case of an Incentive Option granted to a person who, at the time
such Option is granted, owns shares of the Company or any subsidiary or parent
corporation which shares possess more than ten percent (10%) of the total
combined voting power of all classes of shares of the Company or of any
subsidiary or parent corporation, the purchase price for each Share shall be
determined in accordance with paragraph 4.2 of the Plan.

         6.2 If the Shares are listed on a national securities exchange in the
United States on the date any Option is granted, the fair market value per Share
shall be deemed to be the closing quotation at which the Shares are sold on such
national securities exchange on the date such option is granted. If the Shares
are listed on a national securities exchange in the United States on such date
but the Shares are not traded on such date, or such national securities exchange
is not open for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Shares were traded. If the Shares are listed on
more than one national securities exchange in the United States on the date any
such Option is granted, the Committee shall determine which national securities
exchange shall be used for the purpose of determining the fair market value per
Share.

         6.3 If at the date any Option is granted, a public market exists for
the Shares but the Shares are not listed on a national securities exchange in
the United States, the fair market value per Share shall be deemed to be the
mean between the closing bid and asked quotations on the over-the-counter market
for the Shares in the United States on the date such Option is granted. If there
are no bid and asked quotations for the Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations on the over-the-counter market in the United States for the Shares on
the closest date, preceding the date such Option is granted, for which such
quotations are available.

         6.4 If the Shares are not listed on a National Securities Exchange in
the United States, and fair market value per Share cannot be determined pursuant
to paragraph 6.3 hereof, then the fair market value of the Shares shall be as
determined by the Committee, using the following criteria: (a) the price at
which securities of reasonably comparable corporations (if any) in the same
industry are being traded, subject to appropriate adjustments

                                       -4-


   5
for the dissimilarities between the corporations being compared, or (b) in the
absence of any reliable indicator under subsection (a), the earnings history,
book value and prospects of the Company in light of market conditions generally.

7.       TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

         7.1 Subject to the provisions of Section 18, the holder of an Option
("Optionee") may exercise such Option in accordance with a vesting schedule set
forth hereafter:

                                                     Percentage of Total Options
              Date                                Granted Which May be Exercised
              ----                                ------------------------------
1st anniversary from date of grant                            35%
2nd anniversary from date of grant                            35%
3rd anniversary from date of grant                            30%

The date after which the Option may no longer be exercisable ("Expiration Date")
shall be five (5) years after the Grant Date.

         7.2 Except as provided in Paragraph 11.1 hereafter, no Option may be
exercised unless, at the time of such exercise, the Optionee is in the employ of
the Company and shall have been so employed continuously since the date the
Option is granted. For purposes of this paragraph, the term "employment" shall
include any association with the Company as an independent contractor, director
or in any other capacity where such person is granted an Option under the Plan.

         7.3 The grant of Options under the Plan shall not effect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

         7.4 To the extent that an Option is not exercised prior to the
Expiration Date (or prior to its earlier termination as provided herein or in
the Stock Option Agreement), it shall expire as to the then unexercised part. If
any Option shall terminate prior to the Termination Date, as defined in Section
18, the Committee shall have the right to use the Shares as to which such Option
shall not have been exercised to grant one or more additional Options to any
eligible person, but any such grant of an additional Option shall be made prior
to the close of business on the Termination Date.

                                       -5-


   6
8.       $100,000 LIMITATION

         8.1 The aggregate fair market value (determined at the time the Option
is granted) of the Shares with respect to which Incentive Options granted to an
individual are exercisable for the first time by such individual during any one
calendar year (under the Plan or another stock option plan of the Company, a
Parent or Subsidiary Corporation, or predecessor thereof) shall not exceed
$100,000 or such greater amounts as may be permitted under Section 422A of the
Code. To the extent that the aggregate fair market value of the Shares with
respect to which Incentive Options are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
Parent and Subsidiary Corporations) exceeds $100,000, such Options shall be
treated as Non-Qualified Options, by taking Options into account in the order in
which they were granted.

9.       EXERCISE OF OPTIONS

         9.1 Options granted under the Plan shall be exercised by the Optionee
as to all or part of the Shares covered thereby by the giving of written notice
(in the form acceptable to the Committee) of the exercise thereof to the
Corporate Secretary of the Company at the principle business office of the
Company, specifying the number of Shares to be purchased and accompanied by
payment of the full purchase price (in the form (s) permitted by the Option).

10.      NON-TRANSFERABILITY OF OPTIONS

         10.1 An Option shall not be transferable other than by will or the laws
of descent and distribution, and any Option shall be exercisable, during the
lifetime of the holder, only by such holder.

11.      TERMINATION OF EMPLOYMENT AND/OR ASSOCIATION

         11.1 Upon termination of the association of an Optionee with the
Company for any reason other than disability or death, any Option previously
granted to the Optionee, to the extent said Option is then exercisable as of
said termination date based upon the vesting schedule set forth in Optionee's
Stock Option Agreement with the Company, but not theretofore exercised, shall
terminate and become null and void thirty (30) days after the termination date
("Association Termination Date"). Upon termination of the association of an
Optionee with the Company by reason of said Optionee's disability (as defined in
Code Section 22(e)(3) or death, any Option previously granted to the Optionee,
to the extent said Option is then exercisable as of said Association Termination
Date based upon the vesting schedule set forth in Optionee's Stock Option
Agreement with the Company, but not therefore executed, shall terminate and
become null and void no sooner than the date

                                       -6-


   7
which is six (6) months from the Optionee's Association Termination Date. For
purposes of determining the rights of the Optionee under the vesting contained
in Paragraph 7.1, the vesting rights shall be calculated to the Association
Termination Date.

         11.2 If an Option shall be exercised by the legal representative of a
deceased Optionee or an Optionee whose relationship with the Company has been
terminated, or by a person who acquired an Option by bequest or inheritance or
by reason of the death of any Optionee or an Optionee whose relationship with
the Company (and/or a parent or subsidiary corporation thereof) has been
terminated, written notice of such exercise shall be accompanied by a certified
copy of letters testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Option.

         11.3 The Plan shall not impose any obligation on the Company to
continue the employment, and/or other relationship of whatever nature, of any
holder of an Option and/or Shares acquired pursuant to an exercise of an Option,
nor shall it impose any obligation on the part of any holder of an Option or
Shares to remain in the employ of the Company.

12.  RESTRICTION ON SHARES

         12.1     All shares issued pursuant to the exercise of the Options
shall contain the following restrictive legends:

                  12.1.1 IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
SECURITY, OF ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREOF,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

                  12.1.2 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH
ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION IS LEGALLY REQUIRED BY SUCH
TRANSFER.

                  12.1.3 ANY TRANSFER OR PLEDGE OF THE SHARES REPRESENTED BY
THIS CERTIFICATE, OR THE TRANSFER OF ANY INTEREST IN THOSE SHARES, IS RESTRICTED
BY THE PROVISIONS OF A STOCK RESTRICTION AGREEMENT, A COPY OF WHICH MAY BE
INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL PROVISIONS OF WHICH
ARE INCORPORATED HEREIN.

                                       -7-


   8
13.  ISSUANCE OF CERTIFICATES; PAYMENT OF EXPENSES

         13.1 Upon any exercise of an Option and payment of the purchase price,
a certificate or certificates for the Shares as to which the Option has been
exercised shall be issued by the Company in the name of the person exercising
the Option and shall be delivered to or upon the order of such person or
persons.

         13.2 The Company shall pay all issue or transfer taxes with respect to
the issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer.

         13.3 All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.

14.  WITHHOLDING TAXES

         14.1 The Company may require a person exercising a Non- Qualified
Option (or making a "disqualifying disposition," as defined in Code Section 421,
of an Incentive Option), to reimburse the Company for any taxes required by any
government to be withheld or otherwise deducted and paid by the Company. In lieu
thereof, the Company shall have the right to withhold the amount of such taxes
from any other sums due or to become due from the Company to such person upon
such terms and conditions as the Committee shall prescribe or withhold an
appropriate number of Shares whose fair market value is equal to taxes required
to be withheld.

15.  AMENDMENT OF THE PLAN

         15.1 The Board may, from time to time, amend the Plan, provided that no
amendment shall be made, without the approval of the shareholders of the
Company, that will (a) increase the total number of Shares reserved for Options
under the Plan (other than an increase merely reflecting a change in
capitalization such as a stock dividend or stock split as provided in paragraph
2.1), (b) reduce the exercise price of any Incentive Option granted pursuant
hereto below the price required by Section 6, (c) modify the provisions of the
Plan relating to eligibility, (d) materially increase the benefits accruing to
participants under the Plan, or (e) change the requirements applicable to
Options granted to directors. The rights and obligation under any Option granted
before amendment of the Plan or any unexercised portion of such Option, shall
not be adversely affected by amendment of the Plan or the Option without the
consent of the beneficiary thereof.

16.  TERMINATION OR SUSPENSION OF THE PLAN

         16.1     The Board may at any time suspend or terminate the Plan.
The Plan shall terminate at the close of business on the Termina-

                                       -8-


   9
tion Date. An Option may not be granted while the Plan is suspended or after it
is terminated. The rights and obligations under any Option granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except upon the consent of the person to whom the Option or Right
was granted.

17.  GOVERNING LAW

         17.1 The Plan and all related matters shall be governed by, and
construed and enforced in accordance with, the laws of the State of California
in effect from time to time.

18.  EFFECTIVE DATE AND TERMINATION DATE OF THE PLAN

         18.1 The Plan shall become effective when, as and if it shall be
approved by the Commissioner of Corporations for the State of California
("Effective Date"). The Plan shall terminate ten (10) years from July 9, 1993
(the date the Plan was adopted by the Board) or the date the Plan is approved by
the shareholders of the Company, whichever is earlier. ("Termination Date").

19.  USE OF PROCEEDS

         19.1 The cash proceeds of the sale of Shares pursuant to the exercise
of Options granted pursuant to the Plan shall be added to the general funds of
the Company and used for its general corporate purposes, as the Board shall
determine.

20.      INFORMATION TO EMPLOYEES, INDEPENDENT CONTRACTORS AND
         DIRECTORS

         20.1 All persons who receive Options under the Plan shall receive
annual financial statements of the Company.

21.      SHAREHOLDER APPROVAL AND CALIFORNIA COMMISSIONER OF
         CORPORATIONS

         21.1 This Plan shall be submitted to the shareholders of the Company
for approval within twelve (12) months from July 9, 1993 (the date of adoption
by the Board). Options may be granted hereunder prior to but conditional upon
the obtaining of such approval, and no option may be exercised until such
approval has been obtained.

         21.2 The adoption of this Plan is conditioned upon the obtaining of a
Permit from the California Commissioner of Corporations for the Plan and options
to be granted and shares to be issued thereunder.

                                       -9-


   10
22.      SHARES SUBJECT TO STOCK RESTRICTION AGREEMENT

         22.1 Upon the exercise of any Option granted pursuant to the Plan, the
Optionee shall be required to sign the Company's then- effective Stock
Restriction Agreement. If at the time of exercise of any Option the Optionee has
been terminated as an employee and/or associate of the Company, the provisions
of the Company's then-effective Stock Restriction Agreement shall be superior to
the Plan and shall control Optionee's rights with respect to the disposition of
the Shares purchased pursuant to the Plan.

                                      -10-

   1
                                                                    EXHIBIT 10.6

                          VIASAT STOCK OPTION AGREEMENT
                               (INCENTIVE OPTION)

               This ViaSat Stock Option Agreement ("Agreement) is entered into
effective the _____ day of ________________, _____ ("Date of Grant"), between
ViaSat, Inc., a California corporation ("Company"), and __________________
("Employee").

               Company desires, by affording the Employee an opportunity to
purchase shares of its common stock ("Common Stock") as hereinafter provided, to
carry out the purpose of the ViaSat, Inc., 1993 Stock Option Plan ("Plan").

               NOW, THEREFORE, in consideration of the promises and the mutual
covenants hereinafter set forth and for other good and valuable consideration,
the parties hereto have agreed, and do hereby agree, as follows:

               1. Grant. The Company hereby irrevocably grants to the Employee,
as a matter of separate agreement and not in lieu of salary or any other
compensation for services, the right and option ("Option") to purchase all or
any part of an aggregate of ___________________ (__________) shares of Common
Stock on the terms and conditions herein set forth. The Option is intended to be
an "incentive stock option" ("Incentive Stock Option"), as authorized by Section
422A of the Internal Revenue Code of 1986, as such may be amended from time to
time ("Code").

               2. Purchase Price.  The purchase price of the shares of
Common Stock subject to the Option shall be                
($_____) per share.

               3. Term and Vesting. The Option shall expire at the close of
business on ___________________, _____ [five years after the Date of Grant], or
such shorter period as prescribed in Paragraph 5 hereof. The Option shall be
exercisable in installments as follows:



                                               Percentage of Total Options
                Date                         Granted Which May Be Exercised
                ----                         ------------------------------
                                                      
1st anniversary from date of grant                       35%
2nd anniversary from date of grant                       35%
3rd anniversary from date of grant                       30%


                         Except as provided in Paragraph 5 hereafter, no Option
may be exercised unless, at the time of such exercise, the Optionee is in the
employ of the Company and shall have been so employed continuously since the
date the Option is granted. For purposes of

                                       -1-


   2
this paragraph, the term "employment" shall include any association with the
Company as an independent contractor, director or in any other capacity where
such person is granted an Option under the Plan.

                         The right to exercise this Option is conditioned upon
the approval of the Plan by the Shareholders of the Company within twelve (12)
months after the adoption of the Plan by the Company's Board of Directors. If
such approval is not secured on a timely basis, this Option shall be null and
void in its entirely.

               4. Transferability of Option. The Option shall not be
transferable other than by will or the laws of descent and distribution, and the
Option may be exercised, during the lifetime of the Employee, only by him. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as aforesaid), pledged or hypothecated
in any way (whether by operation of law or otherwise), and shall not be subject
to execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.

               5. Termination of Employment. Upon termination of employment of
the Employee with the Company, the Option, to the extent the Option is then
exercisable as of said termination date based upon the vesting schedule set
forth in Section 3 hereof, but not theretofore exercised, shall terminate and
become null and void thirty (30) days after the date of such termination
("Employment Termination Date"); except that if the Employee shall die, or
become totally and permanently disabled (as described in Section 22(e)(3) of the
Code), while in the employ of such corporation, in case of death the legal
representative of the Employee (or such person who acquired such Option by
reason of the death of the Employee), or in the case of total and permanent
disability the Employee, may, not later than six (6) months from the date of
death or total and permanent disability, exercise the Option in respect of any
or all of the Common Stock subject to the Option.

                         In no event, however, shall any person be entitled to
exercise the Option (i) after the expiration of the period of exercisability of
the Option as specified herein, or (ii) with respect to any portion of the
Option which is only exercisable after Optionee's date of termination, based
upon the vesting schedule set forth in Section 3 hereof. For purposes of
determining the rights of the Employee under the vesting schedule set forth in
Section 3 hereof, the vesting rights shall be calculated to the Employment
Termination Date.

                  6. Obligation to Continue Employment. Neither the Plan nor the
Option shall impose any obligation on the Company to continue the employment of
the Employee, nor shall it impose any

                                       -2-


   3
obligation on the part of the Employee to remain in the employ of
the Company.

               7. Recapitalization, Stock Dividends, Etc. If after the date of
this Option the shares of the common stock of the Company shall be changed into
or exchanged for a different number and/or kind of shares of stock or other
securities of the Company or of another Company (whether by reason of merger,
consolidation, recapitalization, reclassification, split-up, combination of
shares or otherwise), there shall be substituted for each share of common stock
of the Company then subject to this Option, the number and kind of shares of
stock and/or other securities into which each share of common stock of the
Company shall be so changed, or for which each such share shall be exchanged. In
the event the Company shall pay any dividend in common shares of the Company
upon the common stock of the Company, during the period of any option, the
number of shares then subject to such option shall be adjusted by adding to each
such share the shares or fractions thereof which would have been distributable
as a stock dividend thereon had such share been outstanding at the record date
for the payment of the stock dividend. If, after the granting of this Option, a
substitution or an adjustment shall be required to be made under the immediately
foregoing provisions in the number and/or kind of shares of stock or other
securities then subject to such option, the price per unit payable by the
Optionee for shares or securities which he may thereafter be entitled to
purchase under such option shall be concurrently adjusted so that the aggregate
purchase price of all shares or securities not theretofore purchased under such
option will be apportioned ratably and equitably to and among the substituted or
adjusted number and/or kind of shares of stock or other securities.

               8. Exercise. Subject to the terms and conditions hereof, the
Option may be exercised by written notice to the Company at its principal
executive office, Attention: Corporate Secretary. The written notice shall be in
the form attached hereto as Exhibit "A." Such notice shall be accompanied by
payment of the full purchase price of said shares. The Company shall issue and
deliver a certificate or certificates representing such shares as soon as
practicable after the notice is received. The purchase price of shares may be
paid in cash (by check payable to the Company). In the event the Option shall be
exercised, pursuant to Section 5 hereof, by any person or persons other than the
Employee, such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise the Option. All shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and nonassessable.

               9. Reservation of Shares. The Company shall, at all times during
the term of the Option, reserve and keep available, as authorized and unissued
shares or as treasury shares, such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all original
issue and transfer taxes, if any, with respect to the issue and transfer of

                                       -3-


   4
shares pursuant hereto and all other fees and expenses necessarily incurred by
the Company in connection therewith, and will from time to time use its best
efforts to comply with all laws and regulations which in the option of counsel
for the Company shall be applicable thereto.

                  10. Listing and Registration of Shares. The exercise of this
Option is subject to the obtaining of any consent or approval of any
governmental or other regulatory body which the Board, in its discretion, deems
necessary or desirable.

                  11. Shareholder Rights. The holder of this Option shall not be
entitled to any rights of a shareholder of the Company with respect to any
Common Stock subject to this Option until such shares have been paid for in full
and issued to him.

                  12. Restrictions on Shares. All shares issued pursuant to the
exercise of this Option shall contain the following restrictive legends:

                         (a) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF
THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

                         (b) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH
ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION IS LEGALLY REQUIRED BY SUCH
TRANSFER.

                         (c) ANY TRANSFER OR PLEDGE OF THE SHARES REPRESENTED BY
THIS CERTIFICATE, OR THE TRANSFER OF ANY INTEREST IN THOSE SHARES, IS RESTRICTED
BY THE PROVISIONS OF A STOCK RESTRICTION AGREEMENT, A COPY OF WHICH MAY BE
INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL PROVISIONS OF WHICH
ARE INCORPORATED HEREIN.

               13. Representations. Employee hereby represents and warrants to
the Company as follows: (i) Employee acknowledges that this Option has been
issued pursuant to an exemption from registration under the Securities Act of
1933, as amended; (ii) Employee has acquired the Option and will acquire any of
the stock underlying this Option for his own account, with no view to any
distribution thereof; (iii) Employee will not make any distribution thereof
other than pursuant to an exemption from registration under the Securities Act
and an exemption from qualification under the California Corporate Securities
Law of 1968; (iv) Employee has received from the Company such financial,
business and other information regarding the Company as he has deemed necessary
for an independent evaluation of the business prospects of the Company, the
fairness of the

                                       -4-


   5
investment and the merits and risks of holding the Option, and Employee has had
such opportunity as he has deemed necessary to ask and receive answers to
questions from personnel of the Company; and (v) Employee has a pre-existing
personal or business relationship with the Company or one or more of its
officers or directors of a nature and duration such as would enable a reasonably
prudent purchaser to be aware of the character, business acumen and general and
financial circumstances of the person or entity with whom such relationship
exists.

               14. Optional Form of Payment for Shares. Payment for any number
of shares of Common Stock of the Company purchased pursuant to the exercise of
this Option may, at the option of the Committee appointed by the Board to
administer the Plan (or the Board itself in the absence of such a Committee), be
made by delivering to the Company a number of shares of the Common Stock of the
Company previously acquired and held for not less than one year by the Employee,
with a fair market value (as determined by the Board), on the date this Option
is exercised, equal to the option exercise price for such shares.

               15. Notice of Disqualifying Disposition. Employee agrees that, in
the event that he shall dispose of any shares of Common Stock acquired pursuant
to the Option prior to the later of two (2) years from the date of this
Agreement or one (1) year after the transfer of such shares to him pursuant to
the Option, the Employee will notify the Company in writing of such disposition,
such notice to be sent to the attention of the Corporate Secretary and state the
date of disposition, the nature of the disposition, the number of shares
disposed of and the price, if any, received for the Common Stock. Employee
agrees that, in the event of a disqualifying disposition by the Employee, the
Company may withhold from other compensation then or in the future due to the
Employee if the Company and its counsel determine that such action is necessary
to secure a deduction by the Company in the amount of income reported by
Employee in connection with the disqualifying disposition.

               16. Stock Restriction Agreement. Upon the exercise of any Option
granted pursuant to the Plan, the Optionee shall be required to sign the
Company's then-effective Stock Restriction Agreement. If at the time of exercise
of any Option the Optionee has been terminated as an employee and/or associate
of the Company, the provisions of the Company's then-effective Stock Restriction
Agreement shall be superior to the Plan and shall control Optionee's rights with
respect to the disposition of the Shares purchased pursuant to the Plan.

               17. The Plan. The Employee's and the Company's respective rights
and obligations under this Agreement are also subject to the applicable terms,
conditions, requirements and other provisions set forth in the Plan. By
executing this Agreement, the Employee acknowledges that he has had the
opportunity to review the Plan at the Company's principal executive offices,
upon Employee's request, and to seek whatever professional consultation
necessary to fully

                                       -5-


   6
understand the content thereof. EXCEPT AS MODIFIED OR AMPLIFIED BY THE SPECIFIC
TERMS OF THIS AGREEMENT, ALL OF THE TERMS AND PROVISIONS OF THE PLAN ARE HEREBY
INCORPORATED BY REFERENCE AS IF SET FORTH AT LENGTH HEREIN.

               18. Status of Option. Employee acknowledges and agrees that
neither the Company nor any of its stockholders, directors, officers, employees,
agents or legal counsel are making any representations and/or warranties
regarding the status of the Option as an "incentive stock option" (as that term
is defined in Section 422A(b) of the Code). Employee, for himself and his
successors and assigns, hereby expressly agrees that he has no claim, now or
hereafter, against the Company, its stockholders, directors, officers,
employees, agents and/or legal counsel, that has (or may) arise from loss,
liability or damage that has been (or may be) incurred by or on behalf of
Employee and/or his successors or assigns, if the Internal Revenue Service
and/or any state taxing agency takes the position that the Option does not
constitute an "incentive stock option" (as defined in Code Section 422A(b)).

               IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by its officers thereunto duly authorized, and the Employee has
executed it, all as of the day and year first above written.

EMPLOYEE:                                             COMPANY:

______________________________                        ViaSat, Inc.
(signature)                                           A California Corporation

______________________________
(name printed)

Address:

                                                      By:_______________________
______________________________                           Mark D. Dankberg
______________________________                           President

Social Security Number:

______________________________





                                       -6-

   1
                                                                    EXHIBIT 10.7
                          VIASAT STOCK OPTION AGREEMENT
                              (NONQUALIFIED OPTION)

               This ViaSat Stock Option Agreement ("Agreement) is entered into
effective the _____ day of ________________, 1993 ("Date of Grant"), between
ViaSat, Inc., a California corporation ("Company"), and __________________
("Optionee").

               Company desires, by affording the Optionee an opportunity to
purchase shares of its common stock ("Common Stock") as hereinafter provided, to
carry out the purpose of the ViaSat, Inc., 1993 Stock Option Plan ("Plan").

               NOW, THEREFORE, in consideration of the promises and the mutual
covenants hereinafter set forth and for other good and valuable consideration,
the parties hereto have agreed, and do hereby agree, as follows:

               1. Grant. The Company hereby irrevocably grants to the Optionee,
as a matter of separate agreement and not in lieu of salary or any other
compensation for services, the right and option ("Option") to purchase all or
any part of an aggregate of ___________________ (__________) shares of Common
Stock on the terms and conditions herein set forth. This option is not intended
to constitute an "incentive stock option" subject to Section 422A of the
Internal Revenue Code of 1986, as such may be amended from time to time
("Code").

               2. Purchase Price. The purchase price of the shares of Common
Stock subject to the Option shall be ___________ Dollars
($_____) per share.

               3. Term and Vesting. The Option shall expire at the close of
business on ___________________, 19___ [five years after the date of grant], or
such shorter period as prescribed in Paragraph 5 hereof. The Option shall be
exercisable in installments as follows:



                                               Percentage of Total Options
                Date                         Granted Which May Be Exercised
                ----                         ------------------------------
                                                      
1st anniversary from date of grant                       35%
2nd anniversary from date of grant                       35%
3rd anniversary from date of grant                       30%


               Except as provided in Paragraph 5 hereafter, no Option may be
exercised unless, at the time of such exercise, the Optionee

                                       -1-


   2
is in the employ of the Company and shall have been so employed continuously
since the date the Option is granted. For purposes of this paragraph, the term
"employment" shall include any association with the Company as an independent
contractor, director or in any other capacity where such person is granted an
Option under the Plan.

               The right to exercise this Option is conditioned upon the
approval of the Plan by the Shareholders of the Company within twelve (12)
months after the adoption of the Plan by the Company's Board of Directors. If
such approval is not secured on a timely basis, this Option shall be null and
void in its entirely.

               4. Transferability of Option. The Option shall not be
transferable other than by will or the laws of descent and distribution, and the
Option may be exercised, during the lifetime of the Optionee, only by him. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as aforesaid), pledged or hypothecated
in any way (whether by operation of law or otherwise), and shall not be subject
to execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.

               5. Termination of Association. Upon termination of association of
the Optionee with the Company, the Option, to the extent the Option is then
exercisable as of said termination date based upon the vesting schedule set
forth in Section 3 hereof, but not theretofore exercised, shall terminate and
become null and void thirty (30) days after the date of such termination
("Association Termination Date"); except that if the Optionee shall die, or
become totally and permanently disabled (as described in Section 22(e)(3) of the
Code), while associated with the Company, in case of death the legal
representative of the Optionee (or such person who acquired such Option by
reason of the death of the Optionee), or in the case of total and permanent
disability the Optionee, may, not later than six (6) months from the date of
death or total and permanent disability, exercise the Option in respect of any
or all of the Common Stock subject to the Option.

                         In no event, however, shall any person be entitled to
exercise the Option (i) after the expiration of the period of exercisability of
the Option as specified herein, or (ii) with respect to any portion of the
Option which is only exercisable after Optionee's date of termination, based
upon the vesting schedule set forth in Section 3 hereof. For purposes of
determining the rights of the Optionee under the vesting schedule set forth in
Section 3 hereof, the vesting rights shall be calculated to the Association
Termination Date.

               6. Obligation to Continue Association. Neither the Plan nor the
Option shall impose any obligation on the Company to

                                       -2-


   3
continue the employment of the Optionee and/or continue any other association;
nor shall it impose any obligation on the part of the Optionee to remain in the
employ of and/or other association with the Company.

               7. Recapitalization, Stock Dividends, Etc. If after the date of
this Option the shares of the common stock of the Company shall be changed into
or exchanged for a different number and/or kind of shares of stock or other
securities of the Company or of another Company (whether by reason of merger,
consolidation, recapitalization, reclassification, split-up, combination of
shares or otherwise), there shall be substituted for each share of common stock
of the Company then subject to this Option, the number and kind of shares of
stock and/or other securities into which each share of common stock of the
Company shall be so changed, or for which each such share shall be exchanged. In
the event the Company shall pay any dividend in common shares of the Company
upon the common stock of the Company, during the period of any option, the
number of shares then subject to such option shall be adjusted by adding to each
such share the shares or fractions thereof which would have been distributable
as a stock dividend thereon had such share been outstanding at the record date
for the payment of the stock dividend. If, after the granting of this Option, a
substitution or an adjustment shall be required to be made under the immediately
foregoing provisions in the number and/or kind of shares of stock or other
securities then subject to such option, the price per unit payable by the
Optionee for shares or securities which he may thereafter be entitled to
purchase under such option shall be concurrently adjusted so that the aggregate
purchase price of all shares or securities not theretofore purchased under such
option will be apportioned ratably and equitably to and among the substituted or
adjusted number and/or kind of shares of stock or other securities.

     8. Exercise. Subject to the terms and conditions hereof, the Option may be
exercised by written notice to the Company at its principal executive office,
Attention: Corporate Secretary. The written notice shall be in the form attached
hereto as Exhibit "A." Such notice shall be accompanied by payment of the full
purchase price of said shares. The Company shall issue and deliver a certificate
or certificates representing such shares as soon as practicable after the notice
is received, subject to the provisions of Paragraph 13 hereof. The purchase
price of shares may be paid in cash (by check payable to the Company). In the
event the Option shall be exercised, pursuant to Section 5 hereof, by any person
or persons other than the Optionee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.

     9. Reservation of Shares. The Company shall, at all times during the term
of the Option, reserve and keep available, as authorized and unissued shares or
as treasury shares, such number of shares of Common Stock as will be sufficient
to satisfy the

                                       -3-


   4
requirements of this Agreement, shall pay all original issue and transfer taxes,
if any, with respect to the issue and transfer of shares pursuant hereto and all
other fees and expenses necessarily incurred by the Company in connection
therewith, and will from time to time use its best efforts to comply with all
laws and regulations which in the option of counsel for the Company shall be
applicable thereto.

    10. Listing and Registration of Shares. The exercise of this Option is
subject to the obtaining of any consent or approval of any governmental or other
regulatory body which the Board, in its discretion, deems necessary or
desirable.

    11. Shareholder Rights. The holder of this Option shall not be entitled to
any rights of a shareholder of the Company with respect to any Common Stock
subject to this Option until such shares have been paid for in full and issued
to him.

    12. Restrictions on Shares. All shares issued pursuant to the exercise of
this Option shall contain the following restrictive legends:

                         (a) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF
THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

                         (b) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH
ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION IS LEGALLY REQUIRED BY SUCH
TRANSFER.

                         (c) ANY TRANSFER OR PLEDGE OF THE SHARES REPRESENTED BY
THIS CERTIFICATE, OR THE TRANSFER OF ANY INTEREST IN THOSE SHARES, IS RESTRICTED
BY THE PROVISIONS OF A STOCK RESTRICTION AGREEMENT, A COPY OF WHICH MAY BE
INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL PROVISIONS OF WHICH
ARE INCORPORATED HEREIN.

    13. Representations. Optionee hereby represents and warrants to the Company
as follows: (i) Optionee acknowledges that this Option has been issued pursuant
to an exemption from registration under the Securities Act of 1933, as amended;
(ii) Optionee has acquired the Option and will acquire any of the stock
underlying this Option for his or her own account, with no view to any
distribution thereof; (iii) Optionee will not make any distribution thereof
other than pursuant to an exemption from registration under the Securities Act
and an exemption from qualification under the California Corporate Securities
Law of 1968; (iv) Optionee has received from the Company such financial,
business and other information regarding the Company

                                       -4-


   5
as he has deemed necessary for an independent evaluation of the business
prospects of the Company, the fairness of the investment and the merits and
risks of holding the Option, and Optionee has had such opportunity as he has
deemed necessary to ask and receive answers to questions from personnel of the
Company; and (v) Optionee has a pre-existing personal or business relationship
with the Company or one or more of its officers or directors of a nature and
duration such as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general and financial circumstances of the person
or entity with whom such relationship exists.

               14. Optional Form of Payment for Shares. Payment for any number
of shares of Common Stock of the Company purchased pursuant to the exercise of
this Option may, at the option of the Committee appointed by the Board to
administer the Plan (or the Board itself in the absence of such a Committee), be
made by delivering to the Company a number of shares of the Common Stock of the
Company previously acquired and held for not less than one year by the Optionee,
with a fair market value (as determined by the Board), on the date this Option
is exercised, equal to the option exercise price for such shares.

    15. Withholding. Optionee agrees that the Company may withhold such number
of shares of Common Stock upon each exercise of the Option (or otherwise charge
the Optionee) as may be required by the Code with respect to federal income tax
and/or social security tax withholding and, additionally, any applicable state
income and/or employment tax laws.

    16. Stock Restriction Agreement. Upon the exercise of any Option granted
pursuant to the Plan, the Optionee shall be required to sign the Company's
then-effective Stock Restriction Agreement. If at the time of exercise of any
Option the Optionee has been terminated as an employee and/or associate of the
Company, the provisions of the Company's then-effective Stock Restriction
Agreement shall be superior to the Plan and shall control Optionee's rights with
respect to the disposition of the Shares purchased pursuant to the Plan.

    17. The Plan. The Optionee's and the Company's respective rights and
obligations under this Agreement are also subject to the applicable terms,
conditions, requirements and other provisions set forth in the Plan. By
executing this Agreement, the Optionee acknowledges that he has had the
opportunity to review the Plan at the Company's principal executive offices,
upon Optionee's request, and to seek whatever professional consultation
necessary to fully understand the content thereof. EXCEPT AS MODIFIED OR
AMPLIFIED BY THE SPECIFIC TERMS OF THIS AGREEMENT, ALL OF THE TERMS AND
PROVISIONS OF THE PLAN ARE HEREBY INCORPORATED BY REFERENCE AS IF SET FORTH AT
LENGTH HEREIN.

               IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by its officers thereunto duly authorized, and the

                                       -5-


   6
Optionee has executed it, all as of the day and year first above written.

OPTIONEE:                                             COMPANY:

______________________________                        ViaSat, Inc.
(signature)                                           A California Corporation

______________________________
(name printed)

Address:

______________________________                        By:_______________________
______________________________                           Mark D. Dankberg
                                                         President
Social Security Number:

______________________________




                                       -6-

   1
                                                               EXHIBIT 10.12

                                  VIASAT, INC.
                           401(K) PROFIT SHARING PLAN

                            SUMMARY PLAN DESCRIPTION
   2
                                TABLE OF CONTENTS

                                        I

                            INTRODUCTION TO YOUR PLAN

                                       II

                       GENERAL INFORMATION ABOUT YOUR PLAN

  1.      General Plan Information ........................................... 2
  2.      Employer Information................................................ 2
  3.      Plan Administrator Information...................................... 2
  4.      Plan Trustee Information.............................................3
  5.      Service of Legal Process.............................................3

                                       III

                           PARTICIPATION IN YOUR PLAN

  1.      Eligibility Requirements.............................................3
  2.      Participation Requirements...........................................4
  3.      Excluded Employees...................................................4

                                       IV

                           CONTRIBUTIONS TO YOUR PLAN

  1.      Employer Contributions to the Plan...................................4
  2.      Participant Salary Reduction Election................................5
  3.      Your Share of Employer Contributions.................................6
  4.      Compensation.........................................................7
  5.      Forfeitures..........................................................8
  6.      Transfers From Qualified Plans (Rollovers)...........................8
  7.      Directed. Investments................................................8
   3
                                       V
 
                            BENEFITS UNDER YOUR PLAN

  1.  Distribution of Benefits Upon Normal Retirement .........................8

  2.  Distribution of Benefits Upon Early Retirement ..........................9

  3.  Distribution of Benefits Upon Late Retirement ...........................9

  4.  Distribution of Benefits Upon Death .....................................9

  5.  Distribution of Benefits Upon Disability ...............................11

  6.  Distribution of Benefits Upon Termination of
      Employment..............................................................11

  7.  Vesting in Your Plan....................................................12

  8.  Benefit Payment Options.................................................12

  9.  Hardship Distribution of Benefits.......................................13

  10. Treatment of Distributions From Your Plan...............................14

  11. Domestic Relations Order................................................15

  12. Pension Benefit Guaranty Corporation....................................16

                                       VI

                              YEAR OF SERVICE RULES

  1.  Year of Service and Hour of Service ....................................16

  2.  1-Year Break in Service ................................................17

                                       VII

                          YOUR PLAN'S "TOP HEAVY RULES"

  1.  Explanation of "Top Heavy Rules" .......................................18

                                      VIII
  
                                      LOANS

  1.  Loan Requirements ......................................................18
   4
                                       IX

                    CLAIMS BY PARTICIPANTS AND BENEFICIARIES

  1.  The Claims Review Procedure ............................................20

                                        X

                            STATEMENT OF ERISA RIGHTS

  1.  Explanation of Your ERISA Rights .......................................21

                                       XI

                     AMENDMENT AND TERMINATION OF YOUR PLAN

1.  Amendment ................................................................23

2.  Termination ..............................................................23
   5
                                  VIASAT, INC.
                           401(K) PROFIT SHARING PLAN

                            SUMMARY PLAN DESCRIPTION

                                       I
                            INTRODUCTION TO YOUR PLAN

         VIASAT, INC. wishes to recognize the efforts its employees have made to
its success and to reward them by adopting a 401(k) Profit Sharing Plan and
Trust. This 401(k) Profit Sharing Plan and Trust will be for the exclusive
benefit of eligible employees and their beneficiaries.

         Your Plan is a "salary reduction plan." It is also called a "401(k)
plan." Under this type of plan, you may choose to reduce your compensation and
have these amounts contributed to this Plan on your behalf.

         The purpose of this Plan is to reward eligible employees for long and
loyal service by providing them with retirement benefits.

         Between now and your retirement, your Employer intends to make
contributions for you and other eligible employees. When you retire, you will be
eligible to receive the value of the amounts which have accumulated in your
account.

         Your Employer has the right to submit this Plan to the Internal Revenue
Service for approval. The Internal Revenue Service will issue a "determination
letter" to your Employer approving this Plan as a "qualified" retirement plan,
if this Plan meets specific legal requirements.

         This Summary Plan Description is a brief description of your Plan and
your rights, obligations , and benefits under that Plan. Some of the statements
made in this Summary Plan Description are dependent upon this Plan being
"qualified" under the provisions of the Internal Revenue Code. This Summary Plan
Description is not meant to interpret, extend, or change the provisions of your
Plan in any way. The provisions of your Plan may only be determined accurately
by reading the actual Plan document, including the Adoption Agreement.

         A copy of your Plan and the Adoption Agreement are on file at your
Employer's office and may be read by you, your beneficiaries, or your legal
representatives at any reasonable time. If you have any questions regarding
either your Plan, the Adoption Agreement or this Summary Plan Description, you
should ask your Plan's Administrator. In the event of any discrepancy between
this Summary Plan Description and the actual provisions of the Plan, the Plan
will govern.

                                       1
   6
                                       II

                       GENERAL INFORMATION ABOUT YOUR PLAN

         There is certain general information which you may need to know about
your Plan. This information has been summarized for you in this Section.

1.       General Plan Information

         VIASAT, INC. 401(k) Profit Sharing Plan is the name of your Plan.

         Your Employer has assigned Plan Number 001 to your Plan.

         The provisions of your Plan become effective on January 1, 1990, which
is called the Effective Date of the Plan.

         Your Plan's records are maintained on a twelve-month period of time.
This is known as the Plan Year. The Plan Year begins on January 1st and ends on
December 31st.

         Certain valuations and distributions are made on the Anniversary Date
of your Plan. This date is December 31st.

         The contributions made to your Plan will be held and invested by the
Trustee of your Plan.

         Your Plan and Trust will be governed by the laws of the State of
California.

2.       Employer Information

         Your Employer's name, address and identification number are:

         VIASAT, INC.
         2290 Cosmos Court
         Carlsbad, California 92009-1585
         33-0174996

         Your Plan allows other employers to adopt its provisions. You or your
beneficiaries may examine or obtain a complete list of employers, if any, who
have adopted your Plan by making a written request to the Administrator.

3.       Plan Administrator Information

         The name, address and business telephone number of your Plan's
Administrator are:

         VIASAT, INC.
         2290 Cosmos Court
         Carlsbad California 92009-1585
         (619) 438-8099

                                        2
   7
         Your Plan's Administrator keeps the records for the Plan and is
responsible for the administration of the Plan. The Administrator has
discretionary authority to construe the terms of the Plan and make
determinations on questions which may affect your eligibility for benefits. Your
Plan's Administrator will also answer any questions you may have about your
Plan.

4.       Plan Trustee Information

         The name of your Plan's Trustee is:

         First Interstate Bank

         The principal place of business of your Plan's Trustee is:

         P.O. Box 129113 
         San Diego, California 92112-9113

         Your Plan's Trustee has been designated to hold and invest Plan assets
for the benefit of you and other Plan participants. The trust fund established
by the Plan's Trustee will be the funding medium used for the accumulation of
assets from which benefits will be distributed.

5.       Service of Legal Process

         The name and address of your Plan's agent for service of legal process
are:

         VIASAT, INC.
         2290 Cosmos Court
         Carlsbad, California 92009-1585

         Service of legal process may also be made upon the Trustee or
Administrator.

                                       III
                           PARTICIPATION IN YOUR PLAN

         Before you become a member or a "participant" in the Plan, there are
certain eligibility and participation rules which you must meet. These rules are
explained in this Section.

1.       Eligibility Requirements

         You will participate in the Plan as of the Effective Date of the Plan
which is January 1, 1990 if you were employed on such date. Otherwise, you will
be eligible to participate in the Plan if you have completed 90 days and have
attained age 21.

         You should review the Article in this Summary entitled "YEAR OF SERVICE
RULES" for a further explanation of these eligibility requirements.

                                        3
   8
2.       Participation Requirements 

         Once you have satisfied your Plan's eligibility requirements, your next
step will be to actually become a member or a "participant" in the Plan. You
will become a participant on a specified day of the Plan Year. This day is
called the Effective Date of Participation.

         You will become a participant on the first day of the month coinciding
with or next following the date you satisfy the eligibility requirements.

3.       Excluded Employees

         There are certain employees who will not be eligible to participate in
your Plan. Those employees are:

                  (a) employees whose employment is governed by a collective
         bargaining agreement under which retirement benefits were the subject
         of good faith bargaining, unless such agreement expressly provides for
         participation in this Plan.

                  (b) certain non-resident aliens who have no earned income from
         sources within the United States.

                                       IV
                           CONTRIBUTIONS TO YOUR PLAN

1.       Employer Contributions to the Plan

         Each year, your Employer will contribute to your Plan the following
amounts:

                  (a) The total amount of the salary reduction you elected to
         defer. (See the Section in this Article entitled "Participant Salary
         Reduction Election.")

                  (b) A discretionary matching contribution equal to a
         percentage of the amount of the salary reduction you elected to defer,
         which percentage will be determined each year by the Employer.

                  For a participant to qualify for a matching contribution, the
         following conditions apply:

                  -If you are actively employed on the last day of the Plan
                  Year, you will share regardless of the number of Hours of
                  Service credited during the Plan Year.

                  -You will share in the matching contribution for the year
                  regardless of the number of Hours of Service credited in the
                  year of your death, disability or retirement.

                                        4
   9
                  (c) A discretionary amount determined each year by your
         Employer.

                  For a participant to qualify for the discretionary
         contribution, the following conditions apply:

                  - If you are actively employed on the last day of the Plan
                  Year, you will share regardless of the number of Hours of
                  Service credited during the Plan Year.

                  - If you terminate employment (not actively employed on the
                  last day of the Plan Year), you must be credited with more
                  than 500 Hours of Service.

                  - You will share for the year regardless of the number of
                  Hours of Service credited in the year of your death,
                  disability or retirement.

2.       Participant Salary Reduction Election

         Effective July 1, 1994, you may elect to defer not less than 1% nor
more than 15% of your compensation each year instead of receiving that amount in
cash. However, your total deferrals in any taxable year may not exceed a dollar
limit which is set by law. The limit for 1994 is $9,240. This limit will be
increased in future years for cost of living changes.

         You may elect to defer your salary as of the first day of each month.
Such election will become effective as soon as administratively feasible. Your
election will remain in effect until you modify or terminate it. You may modify
your election as of January 1st and July 1st of any year. The modification will
become effective as soon as administratively feasible..

         The amount you elect to defer, and any earnings on that amount, will
not be subject to income tax until it is actually distributed to you. This money
will, however, be subject to Social Security taxes at all times.

         You should also be aware that the annual dollar limit is an aggregate
limit which applies to all deferrals you may make under this plan or other cash
or deferred arrangements (including tax-sheltered 403(b) annuity contracts,
simplified employee pensions or other 401(k) plans in which you may be
participating). Generally, if your total deferrals under all cash or deferred
arrangements for a calendar year exceed the annual dollar limit, the excess must
be included in your income for the year. For this reason, it is desirable to
request in writing that these excess deferrals be returned to you. If you fail
to request such a return, you may be taxed a second time when the excess
deferral is ultimately distributed from the Plan.

         You must decide which plan or arrangement you would like to have return
the excess. If you decide that the excess should be

                                        5
   10
distributed from this Plan, you should communicate this in writing to the
Administrator no later than the March 1st following the close of the calendar
year in which such excess deferrals were made. The Administrator may then return
the excess deferral and any earnings to you by April 15th.

         In the event you receive a hardship distribution from your deferrals to
this Plan or any other plan maintained by your Employer, you will not be allowed
to make additional salary reductions for a period of twelve (12) months after
you receive the distribution. Furthermore, the dollar limitation set by law with
respect to your taxable year following the year in which you received the
distribution, will be reduced by your salary reductions, if any, for the taxable
year of the distribution.

         You will always be 100% vested in the amount you deferred. This means
that you will always be entitled to all of the deferred amount. This money will,
however, be affected by any investment gains or losses. If the Trustee invested
this money and there was a gain, the balance in your account would increase. Of
course, if there was a loss, the balance in your account would decrease.

         Distributions from your deferred account are not permitted before age
59 1/2 EXCEPT in the event of death, disability, termination of employment or
financial hardship (See Section in Article V entitled Hardship Distribution of
Benefits).

         In addition, if you are a highly compensated employee (generally
owners, officers or individuals receiving wages in excess of certain amounts
established by law), a distribution from your deferred account of certain excess
contributions may be required to comply with the law. The Administrator will
notify you when a distribution is required.

3.       Your Share of Employer Contributions 

         Your Employer will allocate the amount you elect to defer to an
account maintained on your behalf. 

         If you are eligible, your Employer will also allocate the matching
contribution made to the Plan on your behalf. (See the Section in this
Article entitled "Employer Contributions to the Plan.")

         Your Employer's discretionary contribution will be "allocated" or
divided among participants eligible to share in the contribution for the Plan
Year. Your share of the contribution will depend upon how much compensation you
received during the year and the compensation received by other eligble 
participants.

                                        6
   11
Your share of your Employer's discretionary contribution is determined by the
following fraction:

                                                  Your Compensation
Employer's                                X  ___________________________________
Discretionary Contribution                        Total Compensation of All 
                                                  Participants Eligible to
                                                            Share

         For example:

         Suppose the Employer's discretionary contribution for the Plan Year is
         $20,000. Employee A's compensation for the Plan Year is $25,000. The
         total compensation of all participants eligible to share, including
         Employee A, is $250,000. Employee A's share will be:

                                     $25,000
                          $20,000 X ----------  or $2,000
                                     $250,000

         In addition to the Employer's contributions made to your account, your
account will be credited annually with a share of the investment earnings or
losses of the trust fund.

         You should also be aware that the law imposes certain limits on how
much money may be allocated to your account for a year. These limits are
extremely complex, but generally no more than the lesser of $30,000 or 25% of
your compensation may be allocated to you (excluding earnings) in any year. The
Administrator will inform you if these limits have affected you.

4.       Compensation

         Your Compensation during the Calendar Year coinciding with or ending
within the Plan Year determines your share of the Employer contribution for that
Plan Year. Compensation is defined as follows:

                  Total compensation actually paid that is subject to income tax
         and is reflected on your W-2 Form for such year.

         In addition, salary reduction contributions to any cafeteria plan, tax
sheltered annuity, SEP or 401(k) Plan will not be included as compensation for
Plan purposes.

         Your compensation will be recognized for benefit purposes from your
date of entry into the Plan.

         The Plan, by law, cannot recognize compensation in excess of $150,000.
This amount will be adjusted in future years for cost of living increases. It
will also be applied to certain highly compensated employees and their family
members as if they were a single participant. If you or a member of your family
may be

                                        7
   12
affected by this rule, ask your Administrator for further details.

5.       Forfeitures

         Forfeitures are created when participants terminate employment before
becoming entitled to their full benefits under the Plan. Your account may grow
from the forfeitures of other participants. Forfeitures will be "allocated" or
divided among participants eligible to share for a Plan Year.

6.       Transfers From Qualified Plans (Rollovers)

         At the discretion of the Administrator, you may be permitted to deposit
into your Plan distributions you have received from other plans. Such a deposit
is called a "rollover" and may result in tax savings to you. You should consult
qualified counsel to determine if a rollover is in your best interest.

         Your rollover will be placed in a separate account called a
"participant's rollover account." The Administrator may establish rules for
investment.

         You will always be 100% vested in your "rollover account." This means
that you will always be entitled to all of your rollover contributions. Rollover
contributions will be affected by any investment gains or losses. If the Trustee
invested this money and there was a gain, the balance in your account would
increase. Of course, if there was a loss from an investment, the balance in your
account would decrease.

7.       Directed Investments

         The Administrator may establish rules for investment of your account
balance. If the Administrator approves, you may direct the investment of your
account balance.

                                        V
                            BENEFITS UNDER YOUR PLAN

1.       Distribution of Benefits Upon Normal Retirement 

         Your Normal Retirement Date is the date of your 65th birthday or your
5th anniversary of joining the Plan, if later (Normal Retirement Age).

         At your Normal Retirement Age, you will be entitled to 100% of your
account balance. Payment of your benefits will begin as soon as practicable
following your Normal Retirement Date.

                                       8
   13
2.       Distribution of Benefits Upon Early Retirement

         Your Early Retirement Date is the date on which you have reached your
55th birthday and completed 10 Years of Service with your Employer. You will
have completed a Year of Service if you are credited with 1000 Hours of Service
during a Plan Year, even if you were not employed on the first or last day of
the Plan Year. You may elect to retire when you reach your Early Retirement
Date.

         On your Early Retirement Date, you will be entitled to 100% of your
account balance. Payment of your Early Retirement benefits will begin, at your
election, as soon as practicable following your Early Retirement Date.

3.       Distribution of Benefits Upon Late Retirement

         You may remain employed past your Plan's Normal Retirement Date and
retire instead on your Late Retirement Date. Your Late Retirement Date is any
date you choose to retire, after first having reached your Normal Retirement
Date. On your Late Retirement Date, you will be entitled to 100% of your account
balance. Actual benefit payments will begin as soon as practicable following
your Late Retirement Date.

4.       Distribution of Benefits Upon Death

         Your beneficiary will be entitled to 100% of your account balance upon
your death and 50% of such account balance is the "spouses death benefit."

         If you are married at the time of your death, your spouse will be the
beneficiary of the "spouse's death benefit," which will be equal in value to 50%
of your account balance as of your date of death. You may elect in writing, on a
form to be furnished to you by the Administrator, a beneficiary for the
"spouse's death benefit" other than your spouse. IF YOU WISH TO DESIGNATE A
BENEFICIARY OTHER THAN YOUR SPOUSE, YOUR SPOUSE MUST IRREVOCABLY CONSENT TO
WAIVE ANY RIGHT TO THE "SPOUSE'S DEATH BENEFIT." YOUR SPOUSE'S CONSENT MUST BE
IN WRITING, BE WITNESSED BY A NOTARY OR A PLAN REPRESENTATIVE AND ACKNOWLEDGE
THE SPECIFIC NONSPOUSE BENEFICIARY.

         If no valid waiver is in effect, the "spouse's death benefit" payable
to your spouse will be in the form of a survivor annuity, that is, periodic
payments over the life of your spouse. Your spouse may direct that payments
begin within a reasonable period of time after your death. The size of the
monthly payments will depend on the value of your account at the time of your
death. The death benefit may also be distributed in a single 1ump sum, provided
your spouse consents in writing to this alternative form.

                                        9
   14
         Generally, the period during which you and your spouse may waive this
survivor annuity begins as of the first day of the Plan Year in which you reach
age 35 and ends when you die. The Administrator must provide you with a detailed
explanation of the survivor annuity. This explanation must be given to you
during the period of time beginning on the first day of the Plan Year in which
you reach age 32 and ending on the first day of the Plan Year in which you reach
age 35.

         It is, therefore, important that you inform the Administrator when you
turn age 32 so that you may receive this information.

         If, however,

                  (a) your spouse has validly waived any right to the death
         benefit in the manner outlined above,

                  (b) your spouse cannot be located; or

                  (c) you are not married at the time of your death,

then the "spouse's death benefit" will be paid to the beneficiary of your own
choosing in a single lump sum. You may designate the beneficiary on a form to be
supplied to you by the Administrator. If you change your designation, your
spouse must again consent to the change. Also, since the death benefit upon your
death is your entire account balance, you may, at all times designate the
beneficiary for amounts in excess of the "spouse's death benefit" without your
spouse's consent.

         Under a special rule, you and your spouse may waive the survivor
annuity form of payment any time before you turn age 35. However, any waiver
will become invalid at the beginning of the Plan Year in which you turn age 35,
and you and your spouse will be required to make another waiver.

         Regardless of the method of distribution selected, your entire death
benefit must generally be paid to your beneficiaries within five years after
your death (the "5-year rule"). However, if your designated beneficiary is a
person (instead of your estate or most trusts), then you or your beneficiary may
elect to have minimum distributions begin within one year of your death and it 
may be paid over the designated beneficiary's life expectancy (the "1-year 
rule"). If your spouse is the beneficiary, then under the "1-year rule" the
start of payments may be delayed until the year in which you would have attained
age 70 1/2. The election to have death benefits distributed under the "1-year
rule" instead of the "5 year rule" must be made no later than the time at which
minimum distributions must commence under the "1-year rule" (or, in the case of
a surviving spouse, the "5-year rule," if earlier).

                                       10
   15
         Since your spouse participates in these elections and has certain
rights in the death benefit, you should immediately report any change in your
marital status to the Administrator.

5.       Distribution of Benefits Upon Disability 

         Under your Plan, disability is defined as a physical or mental
condition resulting from bodily injury, disease, or mental disorder which
renders you incapable of continuing any gainful occupation with your Employer.
Your disability will be determined by a licensed physician chosen by the
Administrator. However, if your condition constitutes total disability under the
federal Social Security Act, then the Administrator may deem that you are
disabled for purposes of the Plan.

         If you become disabled while a participant, you will be entitled to
100% of your account balance. Payment of your disability benefits will be made
to you as if you had retired. (See the Section in this Article entitled "Benefit
Payment Options.")

6.       Distribution of Benefits Upon Termination of Employment 

         Your Plan is designed to encourage you to stay with your Employer until
retirement. Payment of your account balance under your Plan is generally only
available upon your death, disability or retirement.

         If your employment terminates for reasons other than those listed
above, you will be entitled to receive only your "vested percentage" of your
account balance and the remainder of your account will be forfeited. Only
contributions made by your Employer are subject to forfeiture. (See the Section
in this Article entitled "Vesting in Your Plan.")

         If you so elect, the Administrator will direct the Trustee to
distribute your vested benefit to you before the date it would normally be
distributed (upon your death, disability or retirement). If your vested benefit
under the Plan at the time of any prior distribution exceeded $3,500 or
currently exceeds $3,500, you (and your spouse, if you are married) must give
written consent before the distribution may be made. Also, if you want the
distribution to be in a form other than an annuity payment, you and your spouse
must first waive the annuity form of payment. Amounts of $3,500 or less will be
distributed without the need for consent. (See the Section in this Article
entitled "Benefit Payment Options" for a further explanation of how benefits are
paid from the Plan.)

         Under the Plan's administrative procedures, if the value of your vested
account is zero, any non-vested account balance will be forfeited immediately.

                                       11
   16
7.       Vesting in Your Plan

         Your "vested percentage" in your account is determined under the
following schedule and is based on vesting Years of Service. You will always,
however, be 100% vested upon your Early or Normal Retirement Age. (See the
Section in this Article entitled "Distribution of Benefits Upon Normal
Retirement.")

                                Vesting Schedule
            Years of Service                         Percentage

                   2                                     20%
                   3                                     40%
                   4                                     60%
                   5                                     80%
                   6                                    100%

         Regardless of this vesting schedule, you are always 100% vested in your
salary reduction amounts contributed to the Plan.

8.       Benefit Payment Options

         There are various methods by which benefits may be distributed to you
from your Plan. The method depends on your marital status, as well as the
elections you and your spouse make. All methods of distribution, however, have
equivalent values. The rules under this Section apply to all distributions you
will receive from the Plan, whether by reason of retirement, termination, or any
other event which may result in a distribution of benefits.

         If you are married on the date your benefits are to begin, you will
automatically receive a joint and 50% survivor annuity, unless you otherwise
elect. This means that if you die and are survived by a spouse, your spouse will
receive a monthly benefit for the remainder of his life equal to 50% of the
benefit you were receiving at the time of your death. You may elect a joint and
75% or 100% survivor annuity instead of the standard joint and 50% survivor
annuity. It should be noted that a joint and survivor annuity may provide a
lower monthly benefit than other forms of payment. You should consult qualified
tax counsel before making such election.

         If you are not married on the date your benefits are to begin, you will
automatically receive a life annuity, which means you will receive payments for
as long as you live.

         You may, however, elect to waive these forms of payment, subject to the
following rules.

         When you are about to receive any distribution, the Administrator will
explain the joint and survivor annuity or the life annuity to you in greater
detail. You will be given the option of waiving the joint and survivor annuity
or the life

                                       12
   17
annuity form of payment during the 90-day period before the annuity is to begin.
IF YOU ARE MARRIED, YOUR SPOUSE MUST IRREVOCABLY CONSENT IN WRITING TO THE
WAIVER IN THE PRESENCE OF A NOTARY OR A PLAN REPRESENTATIVE. You may revoke any
waiver. The Administrator will provide you with forms to make these elections.
Since your spouse participates in these elections, you must immediately inform
the Administrator of any change in your marital status.

         If you and your spouse elect not to take a joint and survivor annuity,
or if you are not married when your benefits are scheduled to begin and have
elected not to take a life annuity, you may elect to receive your benefits in
one lump-sum payment in cash or in property.

         Regardless of the form of payment you receive, its value to you will be
the same value as each alternative form of payment.

         GENERALLY, WHENEVER A DISTRIBUTION IS TO BE MADE TO YOU ON OR BEFORE AN
ANNIVERSARY DATE, IT MAY BE POSTPONED BY THE PLAN FOR A PERIOD OF UP TO 180
DAYS, FOR ADMINISTRATIVE CONVENIENCE. HOWEVER, UNLESS YOU ELECT IN WRITING TO
DEFER THE RECEIPT OF BENEFITS, NO DISTRIBUTION MAY BEGIN LATER THAN THE 60TH DAY
AFTER THE CLOSE OF THE PLAN YEAR IN WHICH THE LATEST OF THE FOLLOWING EVENTS
OCCURS:

                  (a) the date on which you reach the age of 65 or your Normal
         Retirement Age;

                  (b) the 10th anniversary of the year in which you become a
         participant in the Plan;

                  (c) the date you terminated employment with your Employer.

         Regardless of whether you elect to delay the receipt of benefits, there
are other rules which generally require minimum payments to begin no later than
the April 1st following the year in which you reach age 70 1/2. You should see
the Administrator if you feel you may be affected by this rule.

9.       Hardship Distribution of Benefits

         The Administrator may direct the Trustee to distribute up to 100% of
your account balance attributable to your salary reduction election in the event
of immediate and heavy financial need. This hardship distribution is not in
addition to your other benefits and will therefore reduce the value of the
benefits you will receive at normal retirement.

         Withdrawal will be authorized only if the distribution is to be used
for one of the following purposes:

                                       13
   18
                  (a) The payment of medical expenses (described in Section
         213(d) of the Internal Revenue Code) previously incurred by you or your
         dependent or necessary for you or your dependent to obtain medical
         care;

                  (b) The costs directly related to the purchase Of your
         principal residence (excluding mortgage payments);

                  (c) The payment of tuition and related educational fees for
         the next twelve (12) months of post-secondary education for yourself,
         your spouse or dependent;

                  (d) The payment necessary to prevent your eviction from your
         principal residence or foreclosure on the mortgage of your principal
         residence.

         There are restrictions placed on hardship distributions which are made
from certain accounts. These accounts are generally the accounts which receive
your salary reduction contributions and other Employer contributions which are
used to satisfy special rules that apply to 401(k) plans. Any hardship
distribution from these accounts will be limited to your salary reduction
contributions. Ask your Administrator if you need further details.

         In addition, a distribution will be made from these accounts only if
you certify and agree that all of the following conditions are satisfied:

                  (a) The distribution is not in excess of the amount of your
         immediate and heavy financial need;

                  (b) You have obtained all distributions, other than hardship
         distributions, and all nontaxable loans currently available under all
         plans maintained by your Employer;

                  (c) That your elective contributions and employee
         contributions will be suspended for at least twelve (12) months after
         your receipt of the hardship distribution; and

                  (d) That you will not make elective contributions for your
         taxable year immediately following the taxable year of the hardship
         distribution, except to the extent permitted by the Plan.

10.      Treatment of Distributions From Your Plan

         Whenever you receive a distribution from your Plan, it will normally be
subject to income taxes. You may, however, reduce, or defer entirely, the tax
due on your distribution through use of one of the following methods:

                                       14
   19
                  (a) The rollover of all or a portion of the distribution to an
         Individual Retirement Account (IRA) or another qualified employer plan.
         This will result in no tax being due until you begin withdrawing funds
         from the IRA or other qualified employer plan. The rollover of the
         distribution, however, MUST be made within strict time frames
         (normally, within 60 days after you receive your distribution). Under
         certain circumstances all or a portion of a distribution may not
         qualify for this rollover treatment. In addition, most distributions
         made after December 31, 1992 will be subject to mandatory federal
         income tax withholding at a rate of 20%. This will reduce the amount
         you actually receive. For this reason, if you wish to rollover all or a
         portion of your distribution amount, the direct transfer option
         described in paragraph (b) below would be the better choice.

                  (b) You may request for most distributions made after December
         31, 1992, that a direct transfer of all or a portion of your
         distribution amount be made to either an Individual Retirement Account
         (IRA) or another qualified employer plan willing to accept the
         transfer. A direct transfer will result in no tax being due until you
         withdraw funds from the IRA or other qualified employer plan. Like the
         rollover, under certain circumstances all or a portion of the amount to
         be distributed may not qualify for this direct transfer. If you elect
         to actually receive the distribution rather than request a direct
         transfer, then in most cases 20% of the distribution amount will be
         withheld for federal income tax purposes. If you decide to directly
         transfer all or a portion of your distribution amount, you (and your
         spouse, if you are married) must first waive the annuity form of
         payment. (See the Section in this Article entitled "Benefit Payment
         Options" for a further explanation of this waiver requirement.)

                  (c) The election of favorable income tax treatment under
         "10-year forward averaging," "5-year forward averaging" or, if you
         qualify, "capital gains" method of taxation.

         WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO
YOU A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH
DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX. YOU
SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.

11.      Domestic Relations Order

         As a general rule, your interest in your account, including your
"vested interest," may not be alienated. This means that your interest may not
be sold, used as collateral for a loan, given away or otherwise transferred. In
addition, your creditors may not attach, garnish or otherwise interfere with
your account.

                                       15
   20
         There is an exception, however, to this general rule. The Administrator
may be required by law to recognize obligations you incur as a result of court
ordered child support or alimony payments. The Administrator must honor a
"qualified domestic relations order." A "qualified domestic relations order" is
defined as a decree or order issued by a court that obligates you to pay child
support or alimony, or otherwise allocates a portion of your assets in the Plan
to your spouse, former spouse, child or other dependent. If a qualified domestic
relations order is received by the Administrator, all or a portion of your
benefits may be used to satisfy the obligation. The Administrator will determine
the validity of any domestic relations order received.

12.      Pension Benefit Guaranty Corporation

         Benefits provided by your Plan are NOT insured by the Pension Benefit
Guaranty Corporation (PBGC) under Title IV of the Employee Retirement Income
Security Act of 1974 because the insurance provisions under ERISA are not
applicable to your Plan.

                                       VI
                              YEAR OF SERVICE RULES

1.       Year of Service and Hour of Service

         The term "Year of Service" is used throughout this Summary Plan
Description and throughout your Plan. A Year of Service for eligibility purposes
is defined as follows:

         You will have completed a Year of Service if, at the end of your first
         twelve consecutive months of employment with your Employer, you have
         been credited with 1000 Hours of Service.

         You will have completed a Year of Service for vesting purposes if you
are credited with 1000 Hours of Service during a Plan Year, even if you were not
employed on the first or last day of the Plan Year.

         An "Hour of Service" has a special meaning for Plan purposes. You will
be credited with an Hour of Service for:

                  (a) each hour for which you are directly or indirectly
         compensated by your Employer for the performance of duties during the
         Plan Year;

                  (b) each hour for which you are directly or indirectly
         compensated by your Employer for reasons other than performance of
         duties (such as vacation, holidays, sickness, disability, lay-off,
         military duty, jury duty or leave of absence during the Plan Year); and

                  (c) each hour for back pay awarded or agreed to by your
         Employer.

                                       16
   21
         You will not be credited for the same Hours of Service both under (a)
or (b), A the case may be, and under (c).

2.       1-Year Break in Service

         A 1-Year Break in Service is a computation period during which you have
not completed more than 500 Hours of Service with your Employer.

         A 1-Year Break in Service does NOT occur, however, in the computation
period in which you enter or leave the Plan for reasons of:

                  (a) an authorized leave of absence;

                  (b) certain maternity or paternity absences.

         The Administrator will be required to credit you with Hours of Service
for a maternity or paternity absence. These are absences taken on account of
pregnancy, birth, or adoption of your child. No more than 501 Hours of Service
will be credited for this purpose and these Hours of Service will be credited
solely to avoid your incurring a 1-Year Break in Service. The Administrator may
require you to furnish proof that your absence qualifies as a maternity or
paternity absence.

         These break in service rules may be illustrated by the following
examples:

         Employee A works 300 hours in a Plan Year. At the end of the Plan
         Year, Employee A will have a 1-Year Break in Service because she has
         worked less than 501 hours in a Plan Year. Employee B works 300 hours
         in a Plan Year and takes an authorized leave of absence for which he is
         credited with an additional 250 hours. Employee B will NOT have a
         1-Year Break in Service because he is credited with more than 500 hours
         in a Plan Year.

         If you are reemployed after a 1-Year Break in Service and were vested
in any portion of your account derived from Employer contributions, you will
receive credit for all Years of Service credited to you before your 1-Year Break
in Service.

         If you do not have a "vested interest" in the Employer contributions
allocated to your account when you terminate your employment, you will lose
credit for your pre-break Years of Service when your consecutive 1-Year Breaks
in Service equal or exceed the greater of 5 years, or your pre-break Years of
Service. For example:

         Employee B terminated employment on January 1, 2000 with 2 Years of
         Service. Employee B was not vested at the time of his termination of
         employment. Employee B returns to work on January 1, 2003.  Employee B
         will be credited with his 2

                                       17
   22
         pre-break Years of Service because his period of termination (3 years)
         did not exceed 5 years.

                                       VII
                          YOUR PLAN'S "TOP HEAVY RULES"

1.       Explanation of "Top Heavy Rules"

         A 401(k) Profit Sharing Plan that primarily benefits "key employees" is
called a "top heavy plan." Key employees are certain owners or officers of your
Employer. A Plan is a "top heavy plan" when more than 60% of the contributions
or benefits have been allocated to key employees.

         Each year, the Administrator is responsible for determining whether
your Plan is a "top heavy plan."

         If your Plan becomes top heavy in any Plan Year, then non-key employees
will be entitled to certain "top heavy minimum benefits," and other special 
rules will apply.  Among these top heavy rules are the following:

                  (a) Your Employer may be required to make a contribution equal
         to 3% of your compensation to your account;

                  (b) If you are a participant in more than one Plan, you may
         not be entitled to minimum benefits under both Plans.

                                      VIII
                                      LOANS

         You may apply to the Administrator for a loan from the Plan. Your
application must be in writing on forms which the Administrator will provide to
you. The Administrator may also request that you provide additional information,
such as financial statements, tax returns and credit reports. After considering
your application, the Administrator may, in its discretion, determine that you
qualify for the loan. The Administrator will inform the Trustee that you
qualify. The Trustee may then review the Administrator's determination and make
a loan to you if it is a prudent investment for the Plan.

1.       Loan Requirements

         There are various rules and requirements that apply for any loan. These
rules are outlined in this Section. In addition, your Employer has established a
written loan program which explains these requirements in more detail. You can
request a copy of the loan program from the Administrator. Generally, the rules
for loans include the following:

                                       18
   23
                  (a) Loans must be made available to all participants and their
         beneficiaries on a uniform and non-discriminatory basis.

                  (b) All loans must be adequately secured. You may use up to
         one-half (1/2) of your vested account balance under the Plan as
         security for the loan. If more security is required, your principal
         residence may be used, if permitted by State law. The Plan may also
         require that repayments on the loan obligation be by payroll deduction.

                  (c) All loans must bear a reasonable rate of interest. The
         interest rate must be one a bank or other professional lender would
         charge for making a loan in a similar circumstance.

                  (d) All loans must have a definite repayment period which
         provides for payments to be made not less frequently than quarterly,
         and for the loan to be amortized on a level basis over a reasonable
         period of time, not to exceed five (5) years. However, if you use the
         loan to acquire your principal residence, you may repay the loan over a
         reasonable period of time that may be longer than five (5) years.

                  (e) All loans will be considered a directed investment from
         your account under the Plan. All payments of principal and interest by
         you on a loan will be credited to your account.

                  (f) The amount the Plan may loan to you is limited by rules
         under the Internal Revenue Code. All loans, when added to the
         outstanding balance of all other loans from the Plan, will be limited
         to the lesser of:

                  (1) $50,000 reduced by the excess, if any, of your highest
                  outstanding balance of loans from the Plan during the one-year
                  period prior to the date of the loan over your current
                  outstanding balance of loans; or

                  (2) 1/2 of your vested account balance.

                  (g) Your spouse must consent to any loan before it can be made
         if you use your vested interest as security for the loan. This rule
         only applies if the vested interest used as security exceeds $3,500.

                  (h) If you fail to make payments when they are due under the
         loan, you will be considered to be "in default". The Trustee would
         then have authority to take all reasonable actions to collect the
         balance owing on the loan. This could include filing a lawsuit or
         foreclosing on the security for the loan. Under certain circumstances,
         a loan that is in default may be considered a distribution from the
         Plan, and could result in taxable income to you. In any event, your

                                       19
   24
         failure to repay a loan will reduce the benefit you would otherwise be
         entitled to from the Plan.

                                       IX
                    CLAIMS BY PARTICIPANTS AND BENEFICIARIES

         Benefits will be paid to participants and their beneficiaries without
the necessity of formal claims. You or your beneficiaries, however, may make a
request for any Plan benefits to which you may be entitled. Any such request
must be made in writing, and it should be made to the Administrator. (See the
Article in this Summary entitled "GENERAL INFORMATION ABOUT YOUR PLAN.")

         Your request for Plan benefits will be considered a claim for Plan
benefits, and it will be subject to a full and fair review. If your claim is
wholly or partially denied, the Administrator will furnish you with a written
notice of this denial. This written notice must be provided to you within a
reasonable period of time (generally 90 days) after the receipt of your claim by
the Administrator. The written notice must contain the following information:

                  (a) the specific reason or reasons for the denial;

                  (b) specific reference to those Plan provisions on which the
         denial is based;

                  (c) a description of any additional information or material
         necessary to correct your claim and an explanation of why such
         material or information is necessary; and

                  (d) appropriate information as to the steps to be taken if you
         or your beneficiary wishes to submit your claim for review.

         If notice of the denial of a claim is not furnished to you in
accordance with the above within a reasonable period of time, your claim will be
deemed denied. You will then be permitted to proceed to the review stage
described in the following paragraphs.

         If your claim has been denied, and you wish to submit your claim for
review, you must follow the Claims Review Procedure.

1.       The Claims Review Procedure

                  (a) Upon the denial of your claim for benefits, you may file
         your claim for review, in writing, with the Administrator.

                  (b) YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 60 DAYS
         AFTER YOU HAVE RECEIVED WRITTEN NOTIFICATION OF THE DENIAL OF YOUR
         CLAIM FOR BENEFITS OR, IF NO WRITTEN DENIAL OF

                                       20
   25
YOUR CLAIM WAS PROVIDED, NO LATER THAN 60 DAYS AFTER THE DEEMED DENIAL OF YOUR
CLAIM.

                  (c) You may review all pertinent documents relating to the
         denial of your claim and submit any issues and comments, in writing, to
         the Administrator.

                  (d) Your claim for review must be given a full and fair
         review. If your claim is denied, the Administrator must provide you
         with written notice of this denial within 60 days after the
         Administrator's receipt of your written claim for review. There may be
         times when this 60-day period may be extended. This extension may only
         be made, however, where there are special circumstances which are
         communicated to you in writing within the 60-day period. If there is an
         extension, a decision will be made as soon as possible, but not later
         than 120 days after receipt by the Administrator of your claim for
         review.

                  (e) The Administrator's decision on your claim for review will
         be communicated to you in writing and will include specific references
         to the pertinent Plan provisions on which the decision was based.

                  (f) If the Administrator's decision on review is not furnished
         to you within the time limitations described above, your claim will be
         deemed denied on review.

                  (g) If benefits are provided or administered by an insurance
         company, insurance service, or other similar organization which is
         subject to regulation under the insurance laws, the claims procedure
         relating to these benefits may provide for review. If so, that company,
         service, or organization will be the entity to which claims are
         addressed. If you have any questions regarding the proper person or
         entity to address claims, you should ask the Administrator.

                                       X
                            STATEMENT OF ERISA RIGHTS

1.       Explanation of Your ERISA Rights

         As a participant in this Plan you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974, also
called ERISA. ERISA provides that all Plan participants are entitled to:

                  (a) examine without charge, all Plan documents, including:

                  (1) insurance contracts;

                  (2) collective bargaining agreements; and

                                       21
   26
                  (3) copies of all documents filed by the Plan with the U.S.
                  Department of Labor, such as detailed annual reports and Plan
                  descriptions.

         This examination may take place at the Administrator's office and at
other specified employment locations of the Employer. (See the Article in this
Summary entitled "GENERAL INFORMATION ABOUT YOUR PLAN");

                  (b) obtain copies of all Plan documents and other Plan
         information upon written request to the Plan Administrator. The
         Administrator may make a reasonable charge for the copies;

                  (c) receive a summary of the Plan's annual financial report.
         The Administrator is required by law to furnish each participant with a
         copy of this summary annual report;

                  (d) obtain a statement telling you whether you have a right to
         receive a retirement benefit at Normal Retirement Age and, if so, what
         your benefits would be at Normal Retirement Age if you stop working
         under the Plan now. If you do not have a right to a retirement benefit,
         the statement will tell you how many years you have to work to get a
         right to a retirement benefit. THIS STATEMENT MUST BE REQUESTED IN
         WRITING AND IS NOT REQUIRED TO BE GIVEN MORE THAN ONCE A YEAR. The Plan
         must provide the statement free of charge.

         In addition to creating rights for Plan participants, ERISA imposes
duties upon the people who are responsible for the operation of the Plan. The
people who operate your Plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one including your employer or any other person, may fire you
or otherwise discriminate against you in any way to prevent you from obtaining a
pension benefit or exercising your rights under ERISA.

         If your claim for a retirement benefit is denied in whole or in part,
you must receive a written explanation of the reason for the denial. You have
the right to have the Administrator review and reconsider your claim. (See the
Article in this Summary entitled "CLAIMS BY PARTICIPANTS AND BENEFICIARIES.")

         Under ERISA, there are steps you can take to enforce the above rights.
For instance, if you request materials from the Plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the court
may require the Administrator to provide the materials and pay you up to $100.00
a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator.

                                       22
   27
         If you have a claim for benefits which is denied or ignored, in whole
or in part, you may file suit in a state or federal court.

         If the Plan's fiduciaries misuse the Plan's money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees if, for example, it
finds your claim is frivolous.

         If you have any questions about this statement, or about your rights
under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.

                                       XI
                     AMENDMENT AND TERMINATION OF YOUR PLAN

1.       Amendment

         Your Employer has the right to amend your Plan at any time. Any such
amendment shall be adopted by formal action of the Employer's board of directors
and executed by an officer authorized to act on behalf of the Employer. In no
event, however, will any amendment:

                  (a) authorize or permit any part of the Plan assets to be used
         for purposes other than the exclusive benefit of participants or their
         beneficiaries; or

                  (b) cause any reduction in the amount credited to your
         account; or

                  (c) cause any part of your Plan assets to revert to the
         Employer.

2.       Termination

         Your Employer has the right to terminate the Plan at any time. Upon
termination, all amounts credited to your accounts will become 100% vested.

                                       23

   1
                                                               EXHIBIT 10.13
                                 LOAN AGREEMENT

      THIS LOAN AGREEMENT ("Agreement") is made and entered into as of 9/15,
1995 by and between ViaSat, Inc., a California corporation ("Borrower") and 
Union Bank, a California banking corporation ("Bank").

      SECTION 1. THE LOAN

            1.1.1 THE REVOLVING LOAN. Bank will loan to Borrower an amount not
to exceed Four Million Dollars ($4,000,000) outstanding in the aggregate at any
one time (the "Revolving Loan"). Borrower may borrow, repay and reborrow all or
part of the Revolving Loan in amounts of not less than Ten Thousand Dollars
($10,000) in accordance with the terms of the Revolving Note. All borrowings of
the Revolving Loan must be made before September 15, 1997 at which time all
unpaid principal and interest of the Revolving Loan shall be due and payable.
The Revolving Loan shall be evidenced by a promissory note (the "Revolving
Note") on the standard form used by Bank for commercial loans as modified by
the Addendum attached thereto. Bank shall enter each amount borrowed and repaid
in Bank's records and such entries shall be deemed to be the amount of the
Revolving Loan outstanding. Omission of Bank to make any such entries shall not
discharge Borrower of its obligation to repay in full with interest all amounts
borrowed.

            1.1.2 THE EQUIPMENT LOAN I. Bank will loan to Borrower an amount not
to exceed Two Million Dollars ($2,000,000) outstanding in the aggregate at any
one time ("Equipment Loan I"). Borrower may borrow all or part of Equipment Loan
I in amounts of not less than Ten Thousand Dollars ($10,000) in accordance with
the terms of Equipment Note I. All borrowings will be limited to an Eighty
percent (80%) advance against the purchase price, net of sales tax, delivery,
and insurance. All borrowings of Equipment Loan I must be made before September
15, 1996, at which time all unpaid principal under Equipment Loan I shall be
converted to a fully amortizing loan for a period of Thirty-six (36) months with
a maturity date of September 15, 1999. In the event of a prepayment of principal
after such conversion and payment of any resulting fees, any prepaid amounts
shall be applied to the scheduled principal payments in the reverse order of
their maturity. Equipment Loan I shall be evidenced by a promissory note
("Equipment Note I") on the standard form used by Bank for commercial loans as
modified by the Addendum attached thereto. Bank shall enter each amount borrowed
and repaid in Bank's records and such entries shall be deemed to be the amount
of Equipment Loan I outstanding. Omission of Bank to make any such entries
shall not discharge Borrower of its obligation to repay in full with interest
all amounts borrowed.

            1.1.3 THE EQUIPMENT LOAN II. Beginning September 16, 1996 Bank will
loan to Borrower an amount not to exceed Two Million Dollars ($2,000,000)
outstanding in the aggregate


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at any one time ("Equipment Loan II"). Borrower may borrow all or part of
Equipment Loan II in amounts of not less than Ten Thousand Dollars ($10,000) in
accordance with the terms of Equipment Note II. All borrowings will be limited
to an Eighty percent (80%) advance against the purchase price, net of sales tax,
delivery, and insurance. All borrowings of Equipment Loan II must be made before
September 15, 1997, at which time all unpaid principal under Equipment Loan II
shall be converted to a fully amortizing loan for a period of Thirty-six (36)
months with a maturity date of September 15, 2000. In the event of a prepayment
of principal after such conversion and payment of any resulting fees, any
prepaid amounts shall be applied to the scheduled principal payments in the
reverse order of their maturity. Equipment Loan II shall be evidenced by a
promissory note ("Equipment Note II") on the standard form used by Bank for
commercial loans attached hereto as Exhibit "A". Bank shall enter each amount
borrowed and repaid in Bank's records and such entries shall be deemed to be the
amount of Equipment Loan II outstanding. Omission of Bank to make any such
entries shall not discharge Borrower of its obligation to repay in full with
interest all amounts borrowed.

              1.2 TERMINOLOGY.

                  As used herein the word "Loan" shall mean, collectively, all
the credit facilities described above.

                  As used herein the word "Note" shall mean, collectively, all
the promissory notes described above.

                  As used herein, the words "Loan Documents" shall mean all
documents executed in connection with this Agreement.

            1.3 BORROWING BASE. Notwithstanding any other provision of this
Agreement, Bank shall not be obligated to advance funds under the Revolving
Loan, at any time when both (i) the aggregate of Borrower's obligations
thereunder is greater than One Million Dollars ($ 1,000,000) and (ii) the
aggregate of said obligation exceeds the sum of Eighty percent (80%) of
Borrower's Eligible Billed Accounts plus Fifty (50%) of Borrower's Eligible
Inventory. In no event, however, shall the aggregate amount of advances based on
Eligible Inventory exceed, at any one time, the sum of Five Hundred Thousand
Dollars ($500,000). If at any time Borrower's obligations to Bank under the
above facilities exceed the sum so permitted, Borrower shall immediately repay
to Bank such excess.

            1.3.1 ELIGIBLE BILLED ACCOUNTS. The term "Billed Accounts" means all
presently existing and hereafter arising accounts receivable, contract rights,
chattel paper, and all other forms of obligations owing to Borrower, payable in
United States Dollars, arising out of the sale or lease of goods, or the
rendition of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower's books and
records relating to any of the foregoing.

      The term "Eligible Billed Accounts" means those Billed Accounts, net of
finance charges, which are due and payable within Ninety (90) days, or less,
from the date of the invoice, have been


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validly assigned to Bank and strictly comply with all of Borrower's warranties
and representations to Bank, but Eligible Billed Accounts shall not include the
following:

                  (a) Any Billed Account with respect to which the account
debtor is an officer, shareholder, director, employee or agent of Borrower;

                  (b) Any Billed Account with respect to which the account
debtor is a subsidiary of, related to, or affiliated or has common officers or
directors with Borrower;

                  (c) Any Billed Account relating to goods placed on
consignment, guaranteed sale or other terms by reason of which the payment by
the account debtor may be conditional;

                  (d) Any Billed Account with respect to which the account
debtor is not a resident of the United States or Canada;

                  (e) Intentionally deleted;

                  (f) Any Billed Account with respect to which Borrower is or
may become liable to the account debtor for goods sold or services rendered by
the account debtor to Borrower;

                  (g) Any Billed Account with respect to which there is asserted
a defense, counterclaim, discount or setoff, whether well-founded or otherwise,
except for those discounts, allowances and returns arising in the ordinary
course of Borrower's business;

                  (h) Any Billed Account with respect to which the account
debtor becomes insolvent, fails to pay its debts as they mature or goes out of
business or is owed by an account debtor which has become the subject of a
proceeding under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including, but not limited to,
assignments for the benefit of creditors, formal or informal moratoriums,
compositions or extensions with all or substantially all of its creditors;

                  (i) Intentionally deleted;

                  (j) Any Billed Account that is not paid by the account debtor
within ninety (90) days of date of invoice;

                  (k) Intentionally deleted; and

                  (l) Intentionally deleted.

            1.3.2 ELIGIBLE INVENTORY. The term "Eligible Inventory" means that
portion of Borrower's inventory of raw materials and finished goods consisting
of Borrower's main lines of business products, which is (a) owned by Borrower,
free and clear of all liens or encumbrances except those in favor of Bank, (b)
held for sale or lease by Borrower and normally and currently saleable in


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the ordinary course of Borrower's business, (c) of good and merchantable
quality, free from defects, (d) located only at locations of which Bank is
notified in writing, and (e) as to which Bank has been able to perfect and
maintain perfected a first priority security interest. Eligible Inventory does
not include any of the following: work in process, spare parts, returned items,
damaged, defective or recalled items, items unfit for further processing,
obsolete or unmerchantable items, items used as salesperson's samples or
demonstrators, inventory held in stock more than twelve (12) months.

            1.4 PURPOSE OF LOAN. The proceeds of the Revolving Loan shall be
used for general working capital purposes and the proceeds of the Equipment Loan
shall be used only for purchases of equipment, machinery, and software directly
related to Borrower's main lines of business.

            1.5.1 REVOLVING LOAN INTEREST. The unpaid principal balance of the
Revolving Loan shall bear interest at the Reference Rate as more specifically
provided in the Revolving Note.

            1.5.2 EQUIPMENT LOANS INTEREST. The unpaid principal balance of
Equipment Loans I & II shall bear interest at the rate of Thirty-five hundredths
percent (.35%) per annum in excess of the Reference Rate as more specifically
provided in Equipment Notes I & II.

            1.6 UNUSED COMMITMENT FEE. On the last calendar day of the third
month following the execution of this Agreement and on the last calendar day of
each three-month period thereafter until September 15, 1997, or the earlier
termination of the Loan, Borrower shall pay to Bank a fee of Twenty-five
hundredths percent (.25%) per year on the average unused portion of the
Revolving Loan for the preceding quarter computed on the basis of actual days
elapsed of a year of 360 days.

            1.7 EQUIPMENT LOANS COMMITMENT FEE. Borrower shall pay in advance a
commitment fee of Three Thousand Five Hundred Dollars ($3,500) on or before the
date of execution of this Agreement and a commitment fee of Two Thousand
Dollars ($2,000) on September 15 of each year thereafter for so long as any
portion of either Equipment Loan I or Equipment Loan II is outstanding. No
portion of this fee shall be reimbursable.

            1.8 BALANCES. Borrower shall maintain its major depository accounts
with Bank until the Note and all sums payable pursuant to this Agreement have
been paid in full.

            1.9 DISBURSEMENT. Upon execution hereof, Bank shall disburse the
proceeds of the Loan as provided in Bank's standard form Authorization executed
by Borrower.

            1.10 SECURITY. Prior to any disbursement of the Loan, Borrower shall
have executed a security agreement, on Bank's standard form, and a financing
statement, suitable for filing in the office of the Secretary of State of the
State of California and any other state designated by Bank, granting to Bank a
first priority security interest in such of Borrower's property as is described
in said security agreement. Exceptions to Bank's first priority, if any, are
permitted only as otherwise


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provided in this Agreement. At Bank's request, Borrower will also obtain
executed landlord's and mortgagee's waivers on Bank's form covering all of
Borrower's property located on leased or encumbered real property.

            1.11 CONTROLLING DOCUMENT. In the event of any inconsistency between
the terms of this Agreement and any Note or any of the other Loan Documents, the
terms of such Note or other Loan Document will prevail over the terms of this
Agreement.


      SECTION 2. CONDITIONS PRECEDENT

      Bank shall not be obligated to disburse all or any portion of the proceeds
of the Loan unless at or prior to the time for the making of such disbursement,
the following conditions have been fulfilled to Bank's reasonable satisfaction:

            2.1 COMPLIANCE. Borrower shall have performed and complied with all
terms and conditions required by this Agreement to be performed or complied with
by it prior to or at the date of the making of such disbursement and shall have
executed and delivered to Bank the Note and other documents deemed necessary by
Bank.

            2.2 BORROWING RESOLUTION. Borrower shall have provided Bank with
certified copies of resolutions duly adopted by the Board of Directors of
Borrower, authorizing this Agreement and the Loan Documents. Such resolutions
shall also designate the persons who are authorized to act on Borrower's behalf
in connection with this Agreement and to do the things required of Borrower
pursuant to this Agreement.

            2.3 TERMINATION STATEMENTS. Borrower shall have provided Bank with
UCC-2 termination statements executed by such secured creditors as may be
required by Bank suitable for filing with the Secretary of State in each state
designated by Bank.

            2.4 CONTINUING COMPLIANCE. At the time any disbursement is to be
made, there shall not exist any event, condition or act which constitutes an
event of default under Section 6 hereof or any event, condition or act which
with notice, lapse of time or both would constitute such event of default; nor
shall there be any such event, condition, or act immediately after the
disbursement were it to be made.

            2.5 FINANCIAL STATEMENTS. Borrower shall have provided its audited
fiscal year ending March 31, 1995 financial statements to Bank including both a
balance sheet at March 31, 1995, together with supporting schedules, and an
income statement for the Twelve (12) months ended March 31, 1995. Borrower shall
have provided, if appropriate, a management letter from the certified public
accountant which prepared its audited financial statements for the fiscal year
ending March 31, 1995. Borrower shall have provided its unaudited financial
statements to Bank for the fiscal quarter ending June 30, 1995 including both a
balance sheet at June 30, 1995 and an income


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and expense statement with supportive schedules and statement of retained
earnings for that fiscal quarter, prepared in accordance with generally accepted
accounting principles;

            2.6 ACCOUNTS RECEIVABLE AND INVENTORY CERTIFICATION. Prior to any
advance under the Revolving Loan which would cause the total amount of the
Revolving Loan to exceed One Million Dollars ($ 1,000,000), the Borrower shall
have delivered to the Bank its monthly accounts receivable aging schedule along
with a Compliance Certificate and Borrowing Base Certificate in the form of
Exhibits D and E, respectively, executed by Borrower's chief financial officer
or other duly authorized officer of the Borrower. The Borrowing Base Certificate
shall accurately report Borrower's accounts receivable, Eligible Billed
Accounts, inventory and Eligible Inventory as of the end of the calendar month
preceding the month most recently ended.

      SECTION 3. REPRESENTATIONS AND WARRANTIES

      Borrower represents and warrants that:

            3.1 BUSINESS ACTIVITY. The principal business of Borrower is the
design and development of digital satellite and terrestrial communications
equipment.

            3.2 AFFILIATES AND SUBSIDIARIES. Borrower's affiliates and
subsidiaries (those entities in which Borrower has either a controlling interest
or at least a 25% ownership interest), if applicable, and their addresses, and
the names of Borrower's shareholders holding at least 15% of the issued and
outstanding common stock of Borrower, are as provided on Exhibit B attached
hereto.

            3.3 AUTHORITY TO BORROW. The execution, delivery and performance of
this Agreement, the Note and all other agreements and instruments required by
Bank in connection with the Loan are not in contravention of any of the terms of
any indenture, agreement or undertaking to which Borrower is a party or by which
it or any of its property is bound or affected.

            3.4 FINANCIAL STATEMENTS. The audited financial statements of
Borrower, including both a balance sheet at March 31, 1995, together with
supporting schedules, and an income statement for the Twelve (12) months ended
March 31, 1995, as well as its unaudited balance sheet at June 30, 1995,
together with supporting schedules, and an income statement for the Three (3)
months ended June 30, 1995 have heretofore been furnished to Bank, and are true
and complete and fairly represent the financial condition of Borrower during the
period covered thereby. Since June 30, 1995, there has been no material adverse
change in the financial condition or operations of Borrower.

            3.5 TITLE. Except for assets which may have been disposed of in the
ordinary course of business, Borrower has good and marketable title to all of
the property reflected in its financial statements delivered to Bank and to all
property acquired by Borrower since the date of said


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financial statements, free and clear of all liens, encumbrances, security
interests and adverse claims except those specifically referred to in Section 5,
paragraph 5.1 of this Agreement.

            3.6 LITIGATION. Except as set forth (with estimates of the dollar
amounts involved) on Exhibit C attached hereto, there is no litigation or
proceeding pending or threatened against Borrower or any of its property which
is reasonably likely to affect the financial condition, property or business of
Borrower in a materially adverse manner.

            3.7 DEFAULT. Borrower is not now in default in the payment of any of
its material obligations, and there exists no event, condition or act which
constitutes an event of default under Section 6 hereof and no condition, event
or act which with notice or lapse of time, or both, would constitute an event of
default.

            3.8 ORGANIZATION. Borrower is duly organized and existing under the
laws of the state of its organization, and has the power and authority to carry
on the business in which it is engaged and/or proposes to engage.

            3.9 POWER. Borrower has the power and authority to enter into this
Agreement and to execute and deliver the Note and all of the other Loan
Documents.

            3.10 AUTHORIZATION. This Agreement and all things required by this
Agreement have been duly authorized by all requisite action of Borrower.

            3.11 QUALIFICATION. Borrower is duly qualified and in good standing
in any jurisdiction where such qualification is required.

            3.12 COMPLIANCE WITH LAWS. Borrower is not in violation with respect
to any applicable laws, rules, ordinances or regulations which materially affect
the operations or financial condition of Borrower.

            3.13 ERISA. Any defined benefit pension plans as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), of
Borrower meet, as of the date hereof, the minimum funding standards of Section 
302 of ERISA, and no Reportable Event or Prohibited Transaction as defined in
ERISA has occurred with respect to any such plan.

            3.14 REGULATION U. No action has been taken or is currently planned
by Borrower, or any agent acting on its behalf, which would cause this Agreement
or the Note to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities and
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect. Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock as one of its important
activities and none of the proceeds of the Loan will be used directly or
indirectly for such purpose.


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            3.15 CONTINUING REPRESENTATIONS. These representations shall be
considered to have been made again at and as of the date of each disbursement of
the Loan and shall be true and correct as of such date or dates.

      SECTION 4. AFFIRMATIVE COVENANTS

      Until the Note and all sums payable pursuant to this Agreement or any
other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:

            4.1 USE OF PROCEEDS. Borrower will use the proceeds of the Loan only
as provided in subsection 1.4 above.

            4.2 PAYMENT OF OBLIGATIONS. Borrower will pay and discharge promptly
all taxes, assessments and other governmental charges and claims levied or
imposed upon it or its property, or any part thereof, provided, however, that
Borrower shall have the right in good faith to contest any such taxes,
assessments, charges or claims and, pending the outcome of such contest, to
delay or refuse payment thereof provided that adequately funded reserves are
established by it to pay and discharge any such taxes, assessments, charges and
claims.

            4.3 MAINTENANCE OF EXISTENCE. Borrower will maintain and preserve
its existence and assets and all rights, franchises, licenses and other
authority necessary for the conduct of its business and will maintain and
preserve its property, equipment and facilities in good order, condition and
repair. Bank may, at reasonable times and upon reasonable notice to Borrower,
visit and inspect any of the properties of Borrower.

            4.4 RECORDS. Borrower will keep and maintain full and accurate
accounts and records of its operations according to generally accepted
accounting principles and will permit Bank to have access thereto, to make
examination and photocopies thereof, and to make audits during regular business
hours. Costs for such audits shall be paid by Borrower.

            4.5 INFORMATION FURNISHED. Borrower will furnish to Bank:

                  (a) Within Thirty (30) days after the close of each calendar
month its unaudited balance sheet as of the close of such calendar month, its
unaudited income and expense statement with supportive schedules and statement
of retained earnings for that calendar month, prepared in accordance with
generally accepted accounting principles;

                  (b) Within Forty-five (45) days after the close of each fiscal
quarter, except for the final quarter of each fiscal year, its unaudited balance
sheet as of the close of such fiscal quarter, its unaudited income and expense
statement with supportive schedules and statement of retained earnings for that
fiscal quarter, prepared in accordance with generally accepted accounting
principles;

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                  (c) Within One Hundred Twenty (120) days after the close of
each fiscal year, a copy of its statement of financial condition including at
least its balance sheet as of the close of such fiscal year, its income and
expense statement and retained earnings statement for such fiscal year, examined
and prepared on an audited basis by independent certified public accountants
selected by Borrower and reasonably satisfactory to Bank, in accordance with
generally accepted accounting principles applied on a basis consistent with that
of the previous year;

                  (d) Upon request of Bank, copies of such financial statements
and reports as Borrower may file with any state or federal agency;

                  (e) Such other financial statements and information as Bank
may reasonably request from time to time,

                  (f) Intentionally deleted;

                  (g) In connection with each fiscal year-end statement required
hereunder, any management letter of Borrower's certified public accountants,

                  (h) Within Forty-five (45) days after each fiscal quarter, a
certification of compliance with all covenants under this Agreement, executed by
Borrower's chief financial officer or other duly authorized officer of Borrower,
in the form of Exhibit D;

                  (i) As soon as possible, and in no event later than five (5)
days after the occurrence of an event of default under Section 6 hereof or the
occurrence of an event, condition or act which with notice, lapse of time or
both would constitute such an event of default, a statement of the chief
executive officer, the president or the chief financial officer of Borrower
setting forth the details thereof and the action which Borrower has taken, is
taking or proposes to take with respect thereto;

                  (j) Prompt written notice to Bank of all events of any
litigation which, if decided adversely to Borrower, would have a material
adverse effect on Borrower's financial condition; and of any other matter which
has resulted in, or is likely to result in, a material adverse change in its
financial condition or operations;

                  (k) Nor written notice to Bank of any changes in Borrower's
officers (to the extent that prior knowledge exists), Borrower's name, the
location of Borrower's assets, or Borrower's principal place of business or
chief executive office.

                  (l) Within Thirty (30) days after each calendar month end, but
only if a Revolving Loan is then outstanding in an aggregate amount greater than
One Million Dollars ($1,000,000), a copy of Borrower's monthly accounts
receivable aging and a certification of compliance with the Borrowing Base
described above, executed by Borrower's chief financial officer or other duly
authorized officer of Borrower, in the form of Exhibit E, which certificate
shall accurately report Borrower's accounts receivable, Eligible Billed
Accounts, inventory and Eligible

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Inventory. Borrower will permit Bank to audit Bank's collateral upon reasonable
notice and during regular business hours.

            4.6 TANGIBLE NET WORTH. Beginning with fiscal year ending March 31,
1995, Borrower will at all times maintain Tangible Net Worth of not less than
Two Million Nine Hundred Thousand Dollars ($2,900,000). Thereafter, Borrower
will at all times maintain a minimum Tangible Net Worth that increases from said
amount as of the end of each of Borrower's fiscal quarter by Ninety percent
(90%) of Borrower's net profit after taxes. "Tangible Net Worth" shall mean net
worth increased by indebtedness of Borrower subordinated to Bank and decreased
by patents, licenses, trademarks, trade names, goodwill and other similar
intangible assets, organizational expenses, and monies due from affiliates
(including officers, shareholders and directors).

            4.7 DEBT TO TANGIBLE NET WORTH. Borrower will at all times maintain
a ratio of Total Debt ("Total Debt" shall mean all of Borrower's liabilities
with the exception of cash advances from customers) to Tangible Net Worth of not
greater than 3.0: 1.O.

            4.8 PROFITABILITY. Borrower will maintain a net profit, before
provision for income taxes, of a positive amount as reported at its fiscal year
end.

            4.9 CASH FLOW. Borrower will maintain a ratio of Cash Flow to Debt
Service of not less than 1.5: 1.O. Compliance with this subsection shall be
measured as of the end of each fiscal quarter. "Cash Flow" shall mean net profit
after taxes to which depreciation, amortization, other non cash expenses, and
interest expense are added for the twelve (12) month period immediately
preceding the date of calculation. "Debt Service" shall mean the sum of that
portion of long-term liabilities and capital leases coming due within twelve
(12) months of the date of calculation plus interest expense and dividends for
the twelve (12) month period immediately preceding the date of calculation.

            4.10 INSURANCE. Borrower will keep all of its insurable property,
real, personal or mixed, insured by companies and in amounts approved by Bank,
which approval shall not be unreasonably withheld, against fire and such other
risks, and such amounts, as is customarily obtained by companies conducting
similar business with respect to like properties. Borrower will furnish to Bank
statements of its insurance coverage, will promptly furnish other or additional
insurance deemed necessary by and upon request of Bank to the extent that such
insurance may be available and hereby assigns to Bank, as Security for
Borrower's obligations to Bank, the proceeds of any such insurance. Prior to any
disbursement of the Loan, Bank will be named loss payee on all policies insuring
collateral. Borrower will maintain adequate worker's compensation insurance and
adequate insurance against liability for damage to persons or property. All
policies shall require at least ten (10) days' written notice to Bank before any
policy may be altered or cancelled.

            4.11 ADDITIONAL REQUIREMENTS. Borrower will promptly, upon demand by
Bank, take such further action and execute all such additional documents and
instruments in connection with this Agreement as Banking its reasonable
discretion deems necessary in order to consummate the


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transactions contemplated hereby or of any future amendments, modifications, or
supplements to this Agreement or the other Loan Documents, and promptly supply
Bank with such other information concerning its affairs as Bank may reasonably
request from time to time.

            4.12 LITIGATION AND ATTORNEYS' FEES. Borrower will pay promptly to
Bank upon demand, reasonable attorneys' fees (including but not limited to the
reasonable estimate of the allocated costs and expenses of in-house legal
counsel and legal staff) and all costs and other expenses paid or incurred by
Bank in collecting, modifying or compromising the Loan or in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement or any of the Loan Documents, whether or not an arbitration,
judicial action or other proceeding is commenced. If such proceeding is
commenced, only the prevailing party shall be entitled to attorneys' fees and
court costs.

            4.13 BANK EXPENSES. Borrower will pay or reimburse Bank for all
costs, expenses and fees incurred by Bank in preparing and documenting all
amendments and modifications to this Agreement and the Loan, including but not
limited to all filing and recording fees, costs of appraisals, insurance and
reasonable attorneys' fees, including the reasonable estimate of the allocated
costs and expenses of in-house legal counsel and legal staff.

            4.14 REPORTS UNDER PENSION PLANS. Borrower will furnish to Bank, as
soon as possible and in any event within 15 days after Borrower knows or has
reason to know that any event or condition with respect to any defined benefit
pension plans of Borrower described in Section 3 above has occurred, a statement
of an authorized officer of Borrower describing such event or condition and the
action, if any, which Borrower proposes to take with respect thereto.

      SECTION 5. NEGATIVE COVENANTS

      Until the Note and all other sums payable pursuant to this Agreement or
any other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:

            5.1 ENCUMBRANCES AND LIENS. Borrower will not create, assume or
suffer to exist any mortgage, pledge, security interest, encumbrance, or lien
(other than for taxes not delinquent and for taxes and other items being
contested in good faith) on property of any kind, whether real, personal or
mixed, now owned or hereafter acquired, or upon the income or profits thereof,
except to Bank and except for; (a) minor encumbrances and easements on real
property which do not materially affect its market value; (b) existing liens on
Borrower's personal property; described in Borrower's most recent financial
statement delivered to Bank or otherwise described in a schedule heretofore
delivered by Borrower to Bank; (c) future purchase money security interests
encumbering only the personal property purchased; (d) statutory liens of
bankers, carriers, warehousemen, mechanics, materialmen, and other similar liens
imposed by law, which are incurred in the ordinary course of business for sums
not delinquent or which are being contested in good faith by appropriate
proceedings; (e) deposits made in the ordinary course of business to secure
liability to insurance carriers; (f) attachment and judgement liens securing
claims less than $250,000 in the


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aggregate (excluding for purposes of said calculation any such liens for which
payment is covered in full by insurance, or the Borrower is prosecuting an
appeal in good faith by appropriate proceedings, a stay of execution pending
appeal having been secured): and (g) monetary obligations of the Borrower under
any leasing or similar arrangement which, in accordance with generally accepted
accounting principles is classified as a capital lease. All of such permitted
personal property liens, excluding liens in favor of Bank, shall not exceed, in
the aggregate, Three Million Dollars ($3,000,000) at any time.

            5.2 BORROWINGS. Borrower will not sell, discount or otherwise
transfer any account receivable or any note, draft or other evidence of
indebtedness, except to Bank or except to a financial institution at face value
for deposit or collection purposes only and without any fee other than fees
normally charged by the financial institution for deposit or collection
services. Borrower will not borrow any money, become contingently liable to
borrow money, nor enter any agreement to directly or indirectly obtain borrowed
money, except, (a) pursuant to agreements made with Bank, (b) trade debt
incurred in the ordinary course of business, and (c) debt secured by liens
permitted pursuant to Section 5.1 above.

            5.3 SALE OF ASSETS, LIQUIDATION OR MERGER. Borrower will neither
liquidate nor dissolve nor enter into any consolidation, merger, partnership or
other combination, nor convey, nor sell, nor lease all or the greater part of
its assets or business, nor purchase or lease all or the greater part of the
assets or business of another, nor acquire the stock or assets of another
business or corporation.

            5.4 LOANS, ADVANCES AND GUARANTIES. Borrower will not, except in the
ordinary course of business as currently conducted, make any loans or advances,
become a guarantor or surety, pledge its credit or properties in any manner
except as set forth herein, or extend credit.

            5.5 INVESTMENTS. Borrower shall not purchase any debt of another
person except for:

                  (a) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers'
acceptances, having in each case a maturity date of not more than twelve months
from the date of acquisitions by Borrower issued by the Bank or any U.S.
commercial bank or any branch or agency of a non-U.S. bank licensed to conduct
business in the U.S. having combined capital and surplus or not less than
$50,000,000 whose short term securities are rated at least "A" by Standard &
Poor's Corporation (or the equivalent rating provided by any of Moody's
Investors Service, Inc., Duff & Phelps Credit Rating Co. or Fitch Investors
Services, Inc.),

                  (b) interest bearing or discounted obligations of the United
States Government, any agency thereof (including without limitation the Federal
Home Loan Mortgage Corporations, the Government National Mortgage Association,
the Federal National Mortgage Association and the Federal Farm Credit System)
or any entities or pools of mortgages or other instruments formed by the United
States Government or any such agencies, and in any case only if such obligation
has a maturity date not more than twelve months from the date of acquisition by
Borrower;


                                       12
   13
                  (c) obligations issued by states and local governments or
their agencies, instrumentalities, authorities or subdivisions, is such issuer
has received a rating of at least "A" by Standard & Poor's Corporation (or the
equivalent rating provided by any of Moody's Investors Service, Inc., Duff &
Phelps Credit Rating Co. or Fitch Investors Services, Inc., and in any case only
if such obligation has a maturity date of not more than twelve months from the
date of acquisition by Borrower;

                  (d) commercial paper of an issuer rated at least "A" by
Standard & Poor's Corporation (or the equivalent rating provided by any of
Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co. or Fitch
Investors Services, Inc., and in any case only if such obligation has a maturity
date of not more than twelve months from the date of acquisition by Borrower; or

                  (e) investments in money market funds including short-term
adjustable rate money market funds.

            5.6 PAYMENT OF DIVIDENDS. Intentionally deleted.

            5.7 RETIREMENT OF STOCK. Borrower will not acquire or retire any
share of its capital stock for value in excess of Five percent (5%) of market
value in any fiscal year.

            5.8 CAPITAL EXPENDITURES. Borrower will not make capital
expenditures in excess of Four Million Dollars ($4,000,000) in any fiscal year;
and shall only make such expenditures as are necessary for Borrower in the
conduct of its ordinary course of business. Each said expenditure shall be
needed by Borrower in the ordinary course of its business. Expenditures as used
in this subsection shall include without limitation, expenditures under Capital
Leases.

            5.9 LEASE OBLIGATIONS. Intentionally deleted.

      SECTION 6. EVENTS OF DEFAULT

      The occurrence of any of the following events ("Events of Default") shall
terminate any obligation on the part of Bank to make or continue the Loan and
automatically, unless otherwise provided under the Note, shall make all sums of
interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:

            6.1 Borrower shall fail to pay within three (3) days of the date
when due any principal, interest or other payment required under the terms of
the Note, this Agreement or any of the other Loan Documents (as each of the same
may be amended, modified, extended, supplemented or replaced from time to time);
or

            6.2  Any default shall occur under the Note; or


                                       13
   14
            6.3 Any guaranty or subordination agreement required hereunder is
breached or becomes ineffective, or any Guarantor or subordinating creditor
dies, disavows or attempts to revoke or terminate such guaranty or subordination
agreement; or

            6.4 There is a change in ownership or control of ten percent (10%)
or more of the issued and outstanding capital stock of Borrower or any
Guarantor.

        SECTION 7. MISCELLANEOUS PROVISIONS

              7.1 ADDITIONAL REMEDIES. The rights, powers and remedies given to
Bank hereunder shall be cumulative and not alternative and shall be in addition
to all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.

            7.2 NONWAIVER. Any forbearance or failure or delay by Bank in
exercising any right, power or remedy hereunder shall not be deemed a waiver
thereof and any single or partial exercise of any right, power or remedy shall
not preclude the further exercise thereof No waiver shall be effective unless it
is in writing and signed by an officer of Bank.

            7.3 INUREMENT. The benefits of this Agreement shall inure to the
successors and assigns of Bank and the permitted successors and assignees of
Borrower, and any assignment of Borrower without Bank's consent shall be null
and void.

            7.4 APPLICABLE LAW. This Agreement and all other agreements and
instruments required by Bank in connection therewith shall be governed by and
construed according to the laws of the State of California.

            7.5 SEVERABILITY. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions
nevertheless shall be effective.

            7.6 INTEGRATION CLAUSE. Except for documents and instruments
specifically referenced herein, this Agreement constitutes the entire agreement
between Bank and Borrower regarding the Loan and all prior communications verbal
or written between Borrower and Bank shall be of no further effect or
evidentiary value.

            7.7 CONSTRUCTION. The section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

            7.8 AMENDMENTS. This Agreement may be amended only in writing signed
by all parties hereto.


                                       14
   15
            7.9 COUNTERPARTS. Borrower and Bank may execute one or more
counterparts to this Agreement, each of which shall be deemed an original.

      SECTION 8. SERVICE OF NOTICES

            8.1 Any notices or other communications provided for or allowed
hereunder shall be effective only when given by one of the following methods and
addressed to the respective party at its address given with the signatures at
the end of this Agreement and shall be considered to have been validly given:
(a) upon delivery, if delivered personally; (b) upon receipt, if mailed, first
class postage prepaid, with the United States Postal Service; (c) on the next
business day, if sent by overnight courier service of recognized standing; and
(d) upon telephoned confirmation of receipt, if telecopied.

            8.2 The addresses to which notices or demands are to be given may be
changed from time to time by notice delivered as provided above.

      THIS AGREEMENT is executed on behalf of the parties by duly authorized
officers as of the date first above written.

UNION BANK

    /s/                                        /s/
By:_______________________________          By:_________________________________

          Vice President                              Vice President          
Title_____________________________          Title_______________________________

Address:
530 "B" Street, Fourth Floor
San Diego, California 92101
Attention: Dick Petrie

Telecopier: (619) 230-3766
Telephone: (619) 230-3754

VIASAT, INC.

      /s/
By:_______________________________          By:_________________________________

           Vice President
Title_____________________________          Title_______________________________

Address:
2290 Cosmos Court
Carlsbad, California 92009-1585
Attention: Mark Dankberg

Telecopier: (619) 438-8489
Telephone: (619) 438-8099


                                       15
   16

[UNION BANK FORM]
                                                                    EXHIBIT "A"
                           COMMERCIAL PROMISSORY NOTE

- --------------------------------------------------------------------------------

Borrower Name           ViaSat, Inc.
- --------------------------------------------------------------------------------
Borrower Address                      Office          Loan Number
                                      40061
                                     -------------------------------------------
2290 COSMOS CT.                      Maturity Date                   Amount
CARLSBAD, CA 92009-1585
- --------------------------------------------------------------------------------
     SAN DIEGO
________________________, California     Date__________________ $_______________

FOR VALUE RECEIVED, the undersigned ("Debtor") promises to pay to the order of
UNION BANK ("Bank"), as indicated below, the principal sum of _________________
_____________________________Dollars ($_____________), or so much thereof as is
disbursed, together with interest on the balance of such principal sum from
time to time outstanding, at a per annum rate equal to the Reference Rate plus 
______________________ percent (____________%), such per annum rate to change
as and when the Reference Rate shall change, provided, however, Debtor shall
pay total interest over the term of this note of not less than $500.

As used herein, the term "Reference Rate" shall mean the rate announced by Bank
from time to time at its corporate headquarters as its "Reference Rate." The
Reference Rate is an index rate determined by Bank from time to time as a means
of pricing certain extensions of credit and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of interest
charged by Bank at any given time. All computations of interest under this note
shall be made on the basis of a year of 360 days, for actual days elapsed.

1. PAYMENTS. INTEREST PAYMENTS. Debtor shall pay interest on the ____________
day of each ________________________commencing ___________________________ .

                     ON          ALL PRINCIPAL THEN OUTSTANDING SHALL BE PAID
PRINCIPAL PAYMENTS. __________________________________________________________

       IN 36 EQUAL MONTHLY INSTALLMENTS BEGINNING ON
______________________________________________________________________________

______________________________________________________________________________

On _____________________________ all principal and interest then unpaid shall
be due and payable.

Debtor shall pay all amounts due under this note in lawful money of the United

                      SAN DIEGO REGIONAL
States at Bank's ___________________________________ Office, or such other
office as may be designated by Bank, from time to time.

2. LATE PAYMENTS. If any installment payment required by the terms of this note
shall remain unpaid ten days after due, at the option of Bank, Debtor shall pay
a fee of $100 to Bank.

3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in the initial paragraph of this
note, calculated from the date of default until all amounts payable under this
note are paid in full.

4. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT.*

5. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are
not paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement
of this note. Debtor and any endorsers of this note, for the maximum period of
time and the full extent permitted by law, (a) waive diligence, presentment,
demand, notice of nonpayment, protest, notice of protest, and notice of every
kind; (b) waive the right to assert the defense of any statute of limitations
to any debt or obligation hereunder; and (c) consent to renewals and extensions
of time for the payment of any amounts due under this note. If this note is
signed by more than one party, the term "Debtor" includes each of the
undersigned and any successors in interest thereof; all of whose liability
shall be joint and several. Any married person who signs this note agrees that
recourse may be had against the separate property of that person for any
obligations hereunder. The receipt of any check or other item of payment by
Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank. Bank may delay the credit of such payment based upon Bank's
schedule of funds availability, and interest under this note shall accrue until
the funds are deemed collected. In any action brought under or arising out of
this note, Debtor and any Obligor, including their successors or assigns,
hereby consents to the jurisdiction of any competent court within the State of
California, as provided in any addendum attached hereto, and consents to
service of process by any means authorized by California law. The term "Bank"
includes, without limitation, any holder of this note. This note shall be
construed in accordance with and governed by the laws of the State of
California. 

THIS NOTE IS SUBJECT TO THE ARBITRATION AGREEMENT ATTACHED HERETO AND
INCORPORATED BY REFERENCE HEREIN.

* See Addendum "A", consisting of two (2) pages, attached hereto and
  incorporated herein.

 
   17
                                                          EXHIBIT "A" ATTACHMENT

                   ADDENDUM "A" TO COMMERCIAL PROMISSORY NOTE,
                     DATED XXXXXXXXXXXXXX, 1995, EXECUTED BY
                       VIASAT, INC. IN FAVOR OF UNION BANK

4. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) Debtor shall fail to pay within three
(3) days of the date when due any principal, interest or other payment required
under the terms of this note, that certain Loan Agreement between Debtor and
Bank, of even date herewith, and any amendments, modifications, extensions,
supplements or replacements thereof (the "Loan Agreement") or any of the other
Loan Documents (as defined in the Loan Agreement); (b) Debtor shall fail to
observe or perform any covenant, obligation, condition or agreement set forth in
Section 5, or in paragraphs 4.5(i), 4.6, 4.7, 4.8 or 4.9, of the Loan Agreement;
(c) Debtor shall fail to observe or perform any other covenant, obligation,
condition or agreement contained in the Loan Agreement or the other Loan
Documents, and such failure shall continue for twenty (20) days after written
notice thereof to Debtor from Bank; (d) any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Debtor to Bank in or in connection with this note, the Loan
Agreement or any of the other Loan Documents, or as an inducement to Bank to
enter into the Loan Agreement and the other Loan Documents, shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished; (e) Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") shall fail to pay
when due any principal or interest payment required under the terms of any bond,
debenture, note or other evidence of indebtedness required to be paid by such
obligor (except for payments required hereunder, under the Loan Agreement or
under the other Loan Documents) beyond any period of grace provided with respect
thereto, or shall default in the observance or performance of any other
agreement, term or condition contained in any such bond, debenture, note or
other evidence of indebtedness, and the effect of such failure or default is to
cause, or permit the holder or holders thereof to cause, the indebtedness
evidenced by such bond, debenture, note or other evidence of indebtedness to
become due prior to its stated date of maturity; (f) any obligor shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated (or an obligor who is a natural
person shall die), (v) commence a voluntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession of
its


Form of Note                       Page 1 of 2
Exhibit A
   18
property by any official in an involuntary case or other proceeding commenced
against it, or (vi) take any corporate action for the purpose of effecting any
of the foregoing; (g) proceedings for the appointment of a receiver, trustee,
liquidator or custodian of any Obligor or of all or a substantial part of its
property, or an involuntary case or other proceedings seeking liquidation,
reorganization or other similar relief with respect to any Obligor or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect, shall be commenced and shall not be dismissed or discharged within
thirty (30) days of commencement; or (h) a final judgment or order for the
payment of money in excess of Two Hundred Fifty Thousand Dollars ($250,000.00)
(exclusive of amounts covered by insurance) shall be rendered against any
Obligor and the same shall remain undischarged for a period of thirty (30) days
during which execution shall not be effectively stayed, or any judgment, writ,
warrant of attachment, or execution or similar process shall be issued or levied
against a substantial part of any Obligor's property and such judgment, writ or
similar process shall not be released, stayed, vacated, bonded or otherwise
dismissed within twenty (20) days after its issue or levy. Upon the occurrence
of any such default, Bank, in its discretion, may cease to advance funds
hereunder and may declare all obligations under this note immediately due and
payable; provided, however, upon the occurrence of a default under (f) or (g) ,
all principal and interest shall automatically become immediately due and
payable.


Form of Note                       Page 2 of 2
Exhibit A
   19
                                   EXHIBIT "B"

Shareholders holding at least fifteen (15%) percent of the issued and
outstanding common stock of ViaSat, Inc. are:

                                   Mark Dankberg
                                   Steven Hart

                                   EXHIBIT "C"

Litigation:   None
   20
VIASAT(R) [LOGO]

2290 Cosmos Court
Carlsbad, CA 92009-1585
Tel: (619) 438-8099
Fax: (619) 438-8489

                         FORM OF COMPLIANCE CERTIFICATE

  13 September 1995

  Mr. Richard A. Petrie
  Vice President
  Union Bank
  Post Office Box 85324
  San Diego, CA 92186-9879

  Dear Dick:

  For the quarter ended _____, ViaSat, Inc. has performed and observed each and
  every covenant to be performed by it as contained in the Loan Agreement dated
  _____. ViaSat, Inc. does hereby certify that the Company is in compliance with
  all stated covenants and that no event of default has occurred and no
  condition exists which constitutes an event of default thereunder, or would
  constitute an event of default upon giving notice, the lapse of time or both.

  Sincerely,

  Gregory D. Monahan
  Vice President, Administration
  and General Counsel

                                   EXHIBIT "D"
   21
                                                                     DATE:

                           BORROWING BASE CERTIFICATE
                                       for

                       ______________________ ("BORROWER")

As defined in and pursuant to that Loan Agreement by and between Borrower and
Union Bank dated ______________ ("LOAN AGREEMENT")

Date of aging:

  1. Total Accounts(A/R)                          _____________________

  2. Less Ineligible A/R.

  a.) Cross Aged _____%                           _____________________

  b.) Concentration %                             _____________________

  c.) Offer/Emp/Inter-Co.                         _____________________

  d.) Foreign/Gov't Accts                         _____________________

  e.) Retentions                                  _____________________

  f.) Contra Accts                                _____________________

  g.) Insolvent Accts                             _____________________

  h.) Consignments/CODs                           _____________________

  i.) Credit Balances >90                         _____________________

  j.) Other                                       _____________________

            Total Ineligible A/R                  _____________________

  3. Total Eligible A/R (1-2)                     _____________________

  4. Advance Rate on A/R (%)                     _____________________

  5. Funds Available ON A/R (3*4)                 _____________________

  6. Inventory:

  a.) Raw Materials                               _____________________

  b.) Advance Rate on
      Raw Materials (%)                           _____________________

  c.) Finished Goods                              _____________________

  d.) Advance Rate on
      Finished Goods (%)                          _____________________

  e.) Ineligible Inventory                        _____________________

  f.) Inventory Availability                      _____________________

      Calculation [(A*B)+(C*D)-E]

  g.) Inventory Sublimit

  h.) Funds Available on

      Inventory (Not to exceed 3g)

  7.  Borrowing Base (5+6)                        _____________________

  8.  Loan Balance                                _____________________

  9.  Outstanding Letters of Credit               _____________________

 10.  Availability/(OverAdvanced) (7-8-9)         _____________________

The undersigned represents and warrants that i.) the foregoing information is
true, correct and complete, ii.) that the accompanying accounts receivable
aging, accounts payable aging, and inventory report provided in support of this
certificate are true, correct and complete, and iii.) Borrower is in compliance
with the terms, conditions, warranties, representations and covenants as set
forth in the Loan Agreement.

________________________________
Signature of officer, title


                                   Exhibit E
   22
at least $500,000, or (iii) the conversion of more than 50% of the shares of
Preferred Stock issued to the Investors pursuant to the Purchase Agreement.

          IN WITNESS WHEREOF, the parties have executed this Shareholders'
Agreement as of the day and year first above written.

VIASAT, INC.                            SOUTHERN CALIFORNIA VENTURES

By__________________________________    By______________________________________

/s/Robert W. Johnson
____________________________________    ________________________________________
Robert W. Johnson                       Mark D. Dankberg

____________________________________    ________________________________________
Thomas A. Tisch                         Steven R. Hart

                                        ________________________________________
                                        Mark J. Miller


                                       7.
   23
at least $500,000, or (iii) the conversion of more than 50% of the shares of
Preferred Stock issued to the Investors pursuant to the Purchase Agreement.

          IN WITNESS WHEREOF, the parties have executed this Shareholders'
Agreement as of the day and year first above written.

VIASAT, INC.                            SOUTHERN CALIFORNIA VENTURES

By__________________________________    By______________________________________

____________________________________    ________________________________________
Robert W. Johnson                       Mark D. Dankberg

/s/Thomas A. Tisch
____________________________________    ________________________________________
Thomas A. Tisch                         Steven R. Hart

                                        ________________________________________
                                        Mark J. Miller


                                       7.

   1
                                                                  EXHIBIT 10.14
                        COMMERCIAL SECURITY AGREEMENT



- ----------------------------------------------------------------------------------------------------------------------
   PRINCIPAL       LOAN DATE       MATURITY      LOAN NO      CALL    COLLATERAL     ACCOUNT     OFFICER     INITIALS
                                                                                    
$1,000,000.00     04-05-1994      07-05-1995   17650-34733    040       50/51                      105          /s/
- ----------------------------------------------------------------------------------------------------------------------


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- -------------------------------------------------------------------------------

BORROWER:   VIASAT, INC.                 LENDER:   SCRIPPS BANK
            2290 COSMOS COURT                      LA JOLLA
            CARLSBAD, CA 92009-1565                7817 IVANHOE AVENUE
                                                   P.O. BOX 8669
                                                   LA JOLLA, CA 92038-8669

===============================================================================

THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN VIASAT, INC.
(REFERRED TO BELOW AS "GRANTOR"); AND SCRIPPS BANK (REFERRED TO BELOW AS
"LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY
INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER
SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT TO THE COLLATERAL,
IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.

DEFINITIONS.  The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

     AGREEMENT.  The word "Agreement" means this Commercial Security Agreement,
     as this Commercial Security Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Commercial Security Agreement from time to time.

     COLLATERAL.  The word "Collateral" means the following described property
     of Grantor, whether now owned or hereafter acquired, whether now existing
     or hereafter arising, and wherever located:

        ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, CONTRACT RIGHTS, EQUIPMENT,
        GENERAL INTANGIBLES AND FIXTURES

     In addition, the word "Collateral" includes all the following, whether now
     owned or hereafter acquired, whether now existing or hereafter arising, and
     wherever located:

        (a) All attachments, accessions, accessories, tools, parts, supplies,
        increases, and additions to and all replacements of and substitutions
        for any property described above.

        (b) All products and produce of any of the property described in this
        Collateral section.

        (c) All accounts, contract rights, general intangibles, instruments,
        rents, monies, payments, and all other rights arising out of a sale,
        lease, or other disposition of any of the property described in this
        Collateral section.

        (d) All proceeds (including insurance proceeds) from the sale,
        destruction, loss, or other disposition of any of the property described
        in this Collateral section. 

        (e) All records and data relating to any of the property described in
        this Collateral section, whether in the form of a writing, photograph,
        microfilm, microfiche, or electronic media, together with all of
        Grantor's right, title, and interest in and to all computer software
        required to utilize, create, maintain, and process any such records or
        data on electronic media.

     EVENT OF DEFAULT.  The words "Event of Default" mean and include any of the
     Events of Default set forth below in the section titled "Events of
     Default."

     GRANTOR.  The word "Grantor" means VIASAT, INC., its successors and
     assigns 

     GUARANTOR.  The word "Guarantor" means and includes without limitation,
     each and all of the guarantors, sureties, and accommodation parties in
     connection with the Indebtedness.

     INDEBTEDNESS.  The word "Indebtedness" means the indebtedness evidenced by
     the Note, including all principal and interest, together with all other
     indebtedness and costs and expenses for which Grantor is responsible under
     this Agreement or under any of the Related Documents.

     LENDER.  The word "Lender" means Scripps Bank, its successors and assigns.

     NOTE.  The word "Note" means the note or credit agreement dated April 5,
     1994, in the principal amount of $1,000,000.00 from Grantor to Lender,
     together with all renewals of, extensions of, modifications of,
     refinancings of, consolidations of and substitutions for the note or credit
     agreement.

     RELATED DOCUMENTS.  The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     guaranties, security agreements, mortgages, deeds of trust, and all other
     instruments, agreements and documents, whether now or hereafter existing,
     executed in connection with the Indebtedness.

DEPOSIT ACCOUNTS.  Grantor hereby grants Lender a contractual possessory
security interest in and hereby assigns, conveys, delivers, pledges, and
transfers all of Grantor's right, title and interest in and to Grantor's
accounts with Lender (whether checking, savings, or some other account),
including all accounts held jointly with someone else and all accounts Grantor
may open in the future, excluding however all IRA, Keogh, and trust accounts.

OBLIGATIONS OF GRANTOR.  Grantor warrants and covenants to Lender as follows:

     PERFECTION OF SECURITY INTEREST.  Grantor agrees to execute such financing
     statements and to take whatever other actions are requested by Lender to
     perfect and continue Lender's security interest in the Collateral. Upon
     request of Lender, Grantor will deliver to Lender any and all of the
     documents evidencing or constituting the Collateral, and Grantor will note
     Lender's interest upon any and all chattel paper if not delivered to Lender
     for possession by Lender. Grantor hereby appoints Lender as its irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect or to continue the security interest granted in this Agreement.
     Lender may at any time, and without further authorization from Grantor,
     file a carbon, photographic or other reproduction of any financing
     statement or of this Agreement for use as a financing statement. Grantor
     will reimburse Lender for all expenses for the perfection and the
     continuation of the perfection of Lender's security interest in the
     Collateral. Grantor promptly will notify Lender before any change in
     Grantor's name including any change to the assumed business names of
     Grantor. THIS IS A CONTINUING SECURITY AGREEMENT AND WILL CONTINUE IN
     EFFECT EVEN THOUGH ALL OR ANY PART OF THE INDEBTEDNESS IS PAID IN FULL AND
     EVEN THOUGH FOR A PERIOD OF TIME GRANTOR MAY NOT BE INDEBTED TO LENDER.

     NO VIOLATION.  The execution and delivery of this Agreement will not
     violate any law or agreement governing Grantor or to which Grantor is a
     party, and its certificate or articles of incorporation and bylaws do not
     prohibit any term or condition of this Agreement.

     ENFORCEABILITY OF COLLATERAL.  To the extent the Collateral consists of
     accounts, contract rights, chattel paper, or general intangibles, the
     Collateral is enforceable in accordance with its terms, is genuine, and
     complies with applicable laws concerning form, content and manner of
     preparation and execution, and all persons appearing to be obligated on the
     Collateral have authority and capacity to contract and are in fact
     obligated as they appear to be on the Collateral. At the time any account
     becomes subject to a security interest in favor of Lender, the account
     shall be a good and valid account representing an undisputed, bona fide
     indebtedness incurred by the account debtor, for merchandise held subject
     to delivery instructions or theretofore shipped or delivered pursuant to a
     contract of sale, or for services theretofore performed by Grantor with or
     for the account debtor; there shall be no setoffs or counterclaims against
     any such account; and no agreement under which any deductions or discounts
     may be claimed shall have been made with the account debtor except those
     disclosed to Lender in writing.

     LOCATION OF THE COLLATERAL.  Grantor, upon request of Lender, will deliver
     to Lender in form satisfactory to Lender a schedule of real properties and
     Collateral locations relating to Grantor's operations, including without
     limitation the following: (a) all real property owned or being purchased by
     Grantor; (b) all real property being rented or leased by Grantor; (c) all
     storage facilities owned, rented, leased, or being used by Grantor; and (d)
     all other properties where Collateral is or may be located. Except in the
     ordinary course of its business, Grantor shall not remove the Collateral
     from its existing locations without the prior written consent of Lender.

     REMOVAL OF COLLATERAL.  Grantor shall keep the Collateral (or to the extent
     the Collateral consists of intangible property such as accounts, the
     records concerning the Collateral) at Grantor's address shown above, or at
     such other locations as are acceptable to Lender. Except in the ordinary
     course of its business, including the sales of inventory, Grantor shall not
     remove the Collateral from its existing locations without the prior written
     consent of Lender. To the extent that the Collateral consists of vehicles,
     or other titled property, Grantor shall not take or permit any action which
     would require application for certificates of title for the vehicles
     outside the State of California, without the prior written consent of
     Lender.

TRANSACTIONS INVOLVING COLLATERAL.  Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may sell inventory, but
only in the ordinary course of its business and only to buyers who qualify as a
buyer in the ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer in partial or total satisfaction
of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security interest,
encumbrance or charge other than the

   2
04-05-1994                COMMERCIAL SECURITY AGREEMENT                   Page 2
Loan No 17650-34733                (Continued)
================================================================================

security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right to
the security interests granted under this Agreement. Unless waived by Lender,
all proceeds from any disposition of the Collateral (for whatever reason) shall
be held in trust for Lender and shall not be commingled with any other funds;
provided however, this requirement shall not constitute consent by Lender to
any sale or other disposition. Upon receipt, Grantor shall immediately deliver
any such proceeds to Lender.

TITLE.  Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than those
which reflect the security interest created by this Agreement or to which
Lender has specifically consented. Grantor shall defend Lender's rights in the
Collateral against the claims and demands of all other persons.

COLLATERAL SCHEDULES AND LOCATIONS.  As often as Lender shall require, and
insofar as the Collateral consists of accounts and general intangibles, Grantor
shall deliver to Lender schedules of such Collateral, including such
information as Lender may require, including without limitation names and
addresses of account debtors and agings of accounts and general intangibles.
Insofar as the Collateral consists of inventory and equipment, Grantor shall
deliver to Lender, as often as Lender shall require, such lists, descriptions,
and designations of such Collateral as Lender may require to identify the
nature, extent, and location of such Collateral. Such information shall be
submitted for Grantor and each of its subsidiaries or related companies.

MAINTENANCE AND INSPECTION OF COLLATERAL.  Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall have the right at
all reasonable times to examine, inspect, and audit the Collateral wherever
located. Grantor shall immediately notify Lender of all cases involving the
return, rejection, repossession, loss or damage of or to any Collateral; of any
request for credit or adjustment or of any other dispute arising with respect
to the Collateral; and generally of all happenings and events affecting the
Collateral or the value or the amount of the Collateral.

TAXES, ASSESSMENTS AND LIENS.  Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the indebtedness, or upon any of the
other Related Documents. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. If the collateral
is subjected to a lien which is not discharged with fifteen (15) days, Grantor
shall deposit with Lender cash, a sufficient corporate surely bond or other
security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could accrue as a result of foreclosure or sale of the Collateral.
In any contest Grantor shall defend itself and Lender and shall satisfy any
final adverse judgment before enforcement against the Collateral. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the
contest proceedings.

COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS.  Grantor shall comply promptly with
all laws, ordinances and regulations of all governmental authorities applicable
to the production, disposition, or use of the collateral. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in
the Collateral, in Lender's opinion, is not jeopardized.

HAZARDOUS SUBSTANCES.  Grantor represents and warrants that the Collateral never
have been, and never will be so long as this Agreement remains a lien on the
collateral, used for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any hazardous waste or
substance, as those terms are defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 ("SATA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 49 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of
Division 20 of the California Health and Safety Code, Section 25100, et seq.,
or other applicable state or Federal laws, rules, or regulations adopted
pursuant to any of the foregoing. The terms "hazardous waste" and "hazardous
substance" shall also include, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos. The representations and
warranties contained herein  are based on Grantor's due diligence in
investigating the Collateral for hazardous wastes and substances. Grantor
hereby (a) releases and waives any future claims against Lender for indemnity
or contribution in the event Grantor becomes liable for cleanup or other costs
under any such laws, and (b) agrees to indemnify and hold harmless Lender
against any and all claims and losses resulting from a breach of this provision
of this Agreement. This obligation to indemnify shall survive the payment of
the indebtedness and the satisfaction of this Agreement.

MAINTENANCE OF CASUALTY INSURANCE.  Grantor shall procure and maintain all
risks insurance, including with limitation fire, theft and liability coverage
together with such other insurance as Lender may require with respect to the
Collateral, in form, amount, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at
least ten (10) days' prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a notice. In
connection with all policies covering assets in which Lender holds or is
offered a security interest, Grantor will provide Lender with such loss payable
or other endorsements as Lender may require. In no event shall the insurance be
in an amount less than the amount agreed upon in the Agreement to Provide
Insurance. If Grantor at any time fails to obtain or maintain any insurance as
required under this Agreement, Lender may (but shall not be obligated to)
obtain such insurance as Lender deems appropriate, including if it so chooses
"single interest insurance," which will cover only Lender's interest in the
Collateral.

APPLICATION OF INSURANCE PROCEEDS.  Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. All proceeds of any
insurance on the Collateral, including accrued proceeds thereon, shall be held
by Lender as part of the Collateral. If Lender consents to repair or
replacement of the damaged or destroyed Collateral, Lender shall, upon
satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
for the reasonable cost of repair or restoration. If Lender does not consent to
repair or replacement of the Collateral, Lender shall retain a sufficient amount
of the proceeds to pay all of the Indebtedness, and shall pay the balance to
Grantor. Any proceeds which have not been disbursed within six (6) months after
their receipt and which Grantor has not committed to the repair or restoration
of the Collateral shall be used to prepay the indebtedness.

INSURANCE RESERVES.  Lender may require Grantor to maintain with lender
reserves for payment of insurance premiums, which reserves shall be created by
monthly payments from Grantor of a sum estimated by lender to be sufficient to
produce, at least fifteen (15) days before the premium due date, amounts at
least equal to the insurance premiums to be paid. If fifteen (15) days before
payment is due, the reserve funds are insufficient, Grantor shall upon demand
pay any deficiency to Lender. The reserve funds shall be held by lender as a
general deposit and shall constitute a non-interest-bearing account which lender
may satisfy by payment of the insurance premiums required to be paid by Grantor
as they become due. Lender does not hold the reserve funds in trust for
Grantor, and Lender is not the agent of Grantor for payment of the insurance
premiums required to be paid by Grantor. The responsibility for the payment of
premiums shall remain Grantor's sole responsibility.

INSURANCE REPORTS.  Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as Lender
amy reasonably request including the following: (a) the name of the insurer; (b)
the risks insured; (c) the amount of the policy; (d) the property insured; (e)
the then current value on the basis of which insurance has been obtained and
the manner of determining that value; and (f) the expiration date of the
policy. In addition, Grantor shall upon request by Lender (however not more
often than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS.  Until default and
except as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to
possession and beneficial use shall not apply to any Collateral where
possession of the Collateral by Lender is required by law to perfect Lender's
security interest in such Collateral. Until otherwise notified by lender,
Grantor may collect any of the Collateral consisting of accounts. At any time
and even though no Event of Default exists, Lender may exercise its rights to
collect the accounts and to notify account debtors to make payment directly to
Lender for application to the Indebtedness. If Lender at any time has
possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by
Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Collateral.

EXPENDITURES BY LENDER.  If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date or repayment by Grantor. All
such expenses shall become a part of the Indebtedness and, at Lender's option,
will (a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default
under this Agreement:
   3
04-05-1994                   COMMERCIAL SECURITY AGREEMENT               Page 3
Loan No. 17650-34733                (Continued)
===============================================================================

        DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due
        on the Indebtedness.

        OTHER DEFAULTS. Failure of Grantor to comply with or to perform any
        other term, obligation, covenant or condition contained in this
        Agreement or in any of the Related Documents or in any other agreement
        between Lender and Grantor. If any default, other than a Default on
        Indebtedness, is curable and if Grantor has not been given a prior
        notice of a breach of the same provision of this Agreement, it may be
        cured (and no Event of Default will have occurred) if Grantor, after
        Lender sends written notice demanding cure of such default, (a) cures
        the default within fifteen (15) days; or (b), if the cure requires more
        than fifteen (15) days, immediately initiates steps which Lender deems
        in Lender's sole discretion to be sufficient to cure the default and
        thereafter continues and completes all reasonable and necessary steps
        sufficient to product compliance as soon as reasonably practical.

        FALSE STATEMENTS. Any warranty, representation or statement made or
        furnished to Lender by or on behalf of Grantor under this Agreement is
        false or misleading in any material respect, either now or at the time 
        made or furnished.

        DEFECTIVE COLLATERALIZATION. This Agreement or any other Related
        Documents ceases to be in full force and effect (including failure of
        any collateral documents to create a valid and perfected security
        interest or lien) at any time and for any reason.

        INSOLVENCY. The dissolution or termination of Grantor's existence as a
        going business, the insolvency of Grantor, the appointment of a
        receiver for any part of Grantor's property, any assignment for the
        benefit of creditors, or the commencement of any proceeding under any
        bankruptcy or insolvency laws by or against Grantor.

        CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or 
        forfeiture proceedings, whether by judicial proceeding, self-help,
        repossession or any other method, by any creditor of Grantor or by any
        governmental agency against the Collateral or any other collateral
        securing the Indebtedness. This includes a garnishment of any of
        Grantor's deposit accounts with Lender. However, this Event of Default
        shall not apply if there is a good faith dispute by Grantor as to the
        validity or reasonableness of the claim which is the basis of the
        creditor or forfeiture proceeding and if Grantor gives Lender written
        notice of the creditor or forfeiture proceeding and deposits with
        Lender monies or a surety bond for the creditor or forfeiture 
        proceeding, in an amount determined by the Lender, in its sole
        discretion, as being an adequate reserve or bond for the dispute.

        EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
        respect to any Guarantor of any of the Indebtedness or such Guarantor
        dies or becomes incompetent. Lender, at its option, may, but shall not
        be required to, permit the Guarantor's estate to assume unconditionally
        the obligations arising under the guaranty in a manner satisfactory to
        Lender, and, in doing so, cure the Event of Default.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the California Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following rights
and remedies:

        ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
        including any prepayment penalty which Grantor would be required to
        pay, immediately due and payable, without notice.

        ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
        all or any portion of the Collateral and any and all certificates of
        title and other documents relating to the Collateral. Lender may
        require Grantor to assemble the Collateral and make it available to
        Lender at a place to be designated by Lender. Lender shall have
        full power to enter upon the property of Grantor to take possession of
        and remove the Collateral. If the Collateral contains other goods not 
        covered by this Agreement at the time of repossession, Grantor agrees 
        Lender may take such other goods, provided that Lender makes reasonable
        efforts to return them to Grantor after repossession.
        
        SELL THE COLLATERAL. Lender shall have full power to sell, lease,
        transfer, or otherwise deal with the Collateral or proceeds thereof in
        its own name or that of Grantor. Lender may sell the collateral at
        public auction or private sale. Unless the Collateral threatens to
        decline speedily in value or is of a type customarily sold on a
        recognized market, Lender will give Grantor reasonable notice of the
        time after which any private sale or any other intended disposition of
        the Collateral is to be made. The requirements of reasonable notice
        shall be met if such notice is given at least ten (10) days, or such
        lesser time as required by state law, before the time of the sale or
        disposition. All expenses relating to the disposition of the Collateral,
        including without limitation the expenses of retaking, holding,
        insuring, preparing for sale and selling the Collateral, shall become
        a part of the Indebtedness secured by this Agreement and shall be 
        payable on demand, with interest at the Note rate from date of 
        expenditure until repaid.

        APPOINT RECEIVER. To the extent permitted by applicable law, Lender
        shall have the following rights and remedies regarding the appointment
        of a receiver: (a) Lender may have a receiver appointed as a matter of
        right, (b) the receiver may be an employee of Lender and may serve
        without bond, and (c) all fees of the receiver and his or her attorney
        shall become part of the Indebtedness secured by this Agreement and
        shall be payable on demand, with interest at the Note rate from date of
        expenditure until repaid.

        COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
        receiver, may collect the payments, rents, income, and revenues from
        the Collateral. Lender may at any time in its discretion transfer any
        Collateral into its own name or that of its nominee and receive the
        payments, rents, income, and revenues therefrom and hold the same as
        security for the Indebtedness or apply it to payment of the
        Indebtedness in such order of preference as Lender may determine.
        Insofar as the Collateral consists of accounts, general intangibles,
        insurance policies, instruments, chattel paper, chooses in action, or
        similar property, Lender may demand, collect, receipt for, settle,
        compromise, adjust, sue for, foreclose, or realize on the Collateral
        as Lender may determine, whether or not Indebtedness or Collateral is
        then due. For these purposes, Lender may, on behalf of and in the name
        of Grantor, receive, open and dispose of mail addressed to Grantor;
        change any address to which mail and payments are to be sent; and
        endorse notes, checks, drafts, money orders, documents of title,
        instruments and items pertaining to payment, shipment, or storage of
        any Collateral. To facilitate collection, Lender may notify account 
        debtors and obligors on any Collateral to make payments directly to 
        Lender.

        OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
        Collateral, Lender may obtain a judgment against Grantor for any
        deficiency remaining on the Indebtedness due to Lender after
        application of all amounts received from the exercise of the rights
        provided in this Agreement. Grantor shall be liable for a deficiency
        even if the transaction described in this subsection is a sale of 
        accounts or chattel paper.

        OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
        remedies of a secured creditor under the provisions of the Uniform
        Commercial Code, as may be amended from time to time. In addition,
        Lender shall have and may exercise any or all other rights and remedies
        it may have available at law, in equity, or otherwise.

        CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
        evidenced by this Agreement or the Related Documents or by any other
        writing, shall be cumulative and may be exercised singularly or
        concurrently. Election by Lender to pursue any remedy shall not exclude
        pursuit of any other remedy, and an election to make expenditures or to
        take action to perform an obligation of Grantor under this Agreement,
        after Grantor's failure to perform, shall not affect Lender's right to
        declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

        AMENDMENTS. This Agreement, together with any Related Documents,
        constitutes the entire understanding and agreement of the parties as to
        the matters set forth in this Agreement. No alteration of or amendment
        to this Agreement shall be effective unless given in writing and signed
        by the party or parties sought to be charged or bound by the alteration
        or amendment.

        APPLICABLE LAW. This Agreement has been delivered to Lender and
        accepted by Lender in the State of California. It there is a lawsuit,
        Grantor agrees upon Lender's request to submit to the jurisdiction of
        the courts of San Diego County, State of California. This Agreement 
        shall be governed by and construed in accordance with the laws of the 
        State of California.

        ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
        Lender's costs and expenses, including attorneys' fees and Lender's
        legal expenses, incurred in connection with the enforcement of this
        Agreement. Lender may pay someone else to help enforce this Agreement,
        and Grantor shall pay the costs and expenses of such enforcement. Costs
        and expenses include Lender's attorneys' fees and legal expenses
        whether or not there is a lawsuit, including attorneys' fees and legal
        expenses for bankruptcy proceedings (and including efforts to modify or
        vacate any automatic stay or injunction), appeals, and any anticipated
        post-judgment collection services. Grantor also shall pay all court 
        costs and such additional fees as may be directed by the court.

        CAPTION HEADINGS. Caption headings in this Agreement are for convenience
        purposes only and are not to be used to interpret or define the 
        provisions of this Agreement.

        MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under
        this Agreement shall be joint and several, and all references to
        Grantor shall mean each and every Grantor. This means that each of the
        persons signing below is responsible for ALL obligations in this 
        Agreement.

        NOTICES. All notices required to be given under this Agreement shall be
        given in writing and shall be effective when actually delivered or when
        deposited with a nationally recognized overnight courier or deposited
        in the United States mail, first class, postage prepaid, addressed to
        the party to whom the notice is to be given at the address shown above.
        Any party may change its address for notices under this Agreement by
        giving formal written notice to the other parties, specifying that the
        purpose of the notice is to change the parties address. To the extent
        permitted by applicable law, if there is more than one grantor, notice
        to any grantor will constitute notice to all grantors. For notice
        purposes, Borrower agrees to keep Lender informed at all times of
        Borrower's current address(es).
   4

04-05-1994                COMMERCIAL SECURITY AGREEMENT              Page 4
Loan No 17650-34733                (Continued)

===============================================================================

        POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
        attorney-in-fact, irrevocably, with full power of substitution to do the
        following: (b) to execute, sign and endorse any and all claims,
        instruments, receipts, checks, drafts or warrants issued in payment for
        the Collateral; (c) to settle or compromise any and all claims arising
        under the Collateral, and, in the place and stead of Grantor, to execute
        and deliver its release and settlement for the claim; and (d) to file
        any claim or claims or to take any action or institute or take part in
        any proceedings, either in its own name or in the name of Grantor, or
        otherwise, which in the discretion of Lender may seem to be necessary or
        advisable. this power is given as security for the indebtedness, and the
        authority hereby conferred is and shall be irrevocable and shall remain
        in full force and effect until renounced by Lender.

        PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
        preference claim in Borrower's bankruptcy will become a part of the
        indebtedness and, at Lender's option, shall be payable by Borrower as
        provided above in the "EXPENDITURES BY LENDER" paragraph.

        SEVERABILITY. If a court of competent jurisdiction finds any provision
        of this Agreement to be invalid or unenforceable as to any person or
        circumstance, such finding shall not render that provision invalid or
        unenforceable as to any other persons or circumstances. If feasible, any
        such offending provision shall be deemed to be modified to be within the
        limits of enforceability or validity; however, if the offending
        provision cannot be so modified, it shall be stricken and all other
        provisions of this Agreement in all other respects shall remain valid
        and enforceable.

        SUCCESSOR INTERESTS. Subject to the limitations set forth above on
        transfer to the Collateral, this Agreement shall be binding upon and
        inure to the benefit of the parties, their successors and assigns.

        WAIVER. Lender shall not be deemed to have waived any rights under this
        Agreement unless such waiver is given in writing and signed by Lender.
        No delay or omission on the part of Lender in exercising any right shall
        operate as a waiver of such right or any other right. A waiver by Lender
        of a provision of this Agreement shall not prejudice or constitute a
        waiver of Lender's right otherwise to demand strict compliance with that
        provision or any other provision of this Agreement. No prior waiver by
        Lender, nor any course of dealing between Lender and Grantor, shall
        constitute a waiver of any of Lender's rights or of any of Grantor's
        obligations as to any future transactions. Whenever the consent of
        Lender is required under this Agreement, the granting of such consent by
        Lender in any instance shall not constitute continuing consent to
        subsequent instances where such consent is required and in all cases
        such consent may be granted or withheld in the sole discretion of
        Lender.

        WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
        the indebtedness, Borrower irrevocably waives, disclaims and
        relinquishes  all claims against such other person which Borrower has or
        would otherwise have by virtue of payment of the indebtedness or any
        part thereof, specifically including but not limited to all rights of
        indemnity, contribution or exoneration.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED APRIL 5,
1994. 

GRANTOR:

VIASAT, INC.

X  /s/ Gregory Monahan
 -------------------------------------
  AUTHORIZED SIGNER

===============================================================================
   5

                        NOTICE OF INSURANCE REQUIREMENTS
- --------------------------------------------------------------------------------
  LOAN DATE    LOAN NO.    CALL   COLLATERAL   CUSTOMER NO   OFFICER   INITIALS
 04-05-1994  17650-34733   040      50/51                      105
- --------------------------------------------------------------------------------
  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------

BORROWER:  VIASAT, INC.                     LENDER:  SCRIPPS BANK
           2290 COSMOS COURT                         LA JOLLA
           CARLSBAD, CA 92009-1565                   7817 IVANHOE AVENUE
                                                     P.O. BOX 8669
                                                     LA JOLLA, CA 92039-8669
===============================================================================


     -------------------------------
      E.J. PHELPS, INC.
TO:   2250 FOURTH AVENUE, SUITE 200                         DATE: APRIL 5, 1994
      SAN DIEGO, CA 92101-2100
     -------------------------------


DEAR INSURANCE AGENT:

                         RE: POLICY NUMBER(S): 35290456

VIASAT, INC. ("BORROWER") IS OBTAINING A LOAN FROM SCRIPPS BANK. PLEASE SEND
APPROPRIATE EVIDENCE OF INSURANCE TO SCRIPPS BANK, TOGETHER WITH THE REQUESTED
ENDORSEMENTS, ON THE FOLLOWING PERPERTY, WHICH BORROWER IS GIVING AS SECURITY
FOR THE LOAN.

COLLATERAL: ALL INVENTORY, EQUIPMENT AND FIXTURES.
            TYPE. All risks, including fire, theft and liability
            AMOUNT. $1,000,000.00.
            BASIS. Replacement value.
            ENDORSEMENTS. Lender's loss payable clause with stipulation that
            coverage will not be cancelled or diminished without a minimum of
            ten (10) days' prior written notice to Lender.
            DEDUCTIBLES. $250.00.

BORROWER:

VIASAT, INC.


X  /s/ Gregory Monahan
   ----------------------------------
   AUTHORIZED SIGNER




MAIL TO:
     -------------------------------
        SCRIPPS BANK
        7817 IVANHOE AVENUE
        P.O. BOX 8669
        LA JOLLA, CA 92038-8669
     -------------------------------




   6
                         AGREEMENT TO PROVIDE INSURANCE




     Principal       Loan Date      Maturity       Loan No     Call    Collateral   Account    Officer    Initials

                                                                                    

   $1,000,000.00     04-05-1994     07-05-1995   17650-34733    040       50/51                   105


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Borrower:  VIASAT, INC.                 Lender:   Scripps Bank
           2290 COSMOS COURT                      La Jolla
           CARLSBAD, CA 92009-1565                7817 Ivanhoe Avenue
                                                  P.O. Box 8669
                                                  La Jolla, CA 92038-8669
================================================================================

INSURANCE REQUIREMENTS. VIASAT, INC. ("Grantor") understands that insurance
coverage is required in connection with the extending of a loan of the
providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"): 

Collateral: All Inventory, Equipment and Fixtures.
            Type. All risks, including fire, theft and liability.
            Amount. $1,000,000.00.
            Basis. Replacement value.
            Endorsements. Lender's loss payable clause with stipulation that
            coverage will not be cancelled or diminished without a minimum of 
            ten (10) days prior written notice to Lender.
            Deductibles. $250.00.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased
through Lender.

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, ten (10)
days from the date of this Agreement, evidence of the required insurance as
provided above, with an effective date of April 5, 1994, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required insurance
or fails to continue such insurance in force, Lender may do so at Grantor's
expense as provided in the applicable security document. The cost of any such
insurance, at the option of Lender, shall be payable on demand or shall be
added to the indebtedness as provided in the security document. GRANTOR
ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL
PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE
BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE
INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR
PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY
FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED APRIL 5,
1994. 

GRANTOR:

VIASAT, INC.

x  /s/  Gregory Monahan
 ------------------------
  AUTHORIZED SIGNER

- --------------------------------------------------------------------------------
\                               FOR LENDER USE ONLY                            /
\                              INSURANCE VERIFICATION                          /
\                                                                              /
\  DATE:______________________                    PHONE:_____________________  /
\  AGENT'S NAME: E.J. PHELPS, INC.                                             /
\  ADDRESS: 2250 FOURTH AVENUE, SUITE 200, SAN DIEGO, CA 92101-2100            /
\  INSURANCE COMPANY:________________________________________________________  /
\  POLICY NUMBER(S): 35290456                                                  /
\  EFFECTIVE DATES:__________________________________________________________  /
\  COMMENTS:_________________________________________________________________  /
- --------------------------------------------------------------------------------

================================================================================
   7
                     DISBURSEMENT REQUEST AND AUTHORIZATION




     Principal       Loan Date      Maturity       Loan No     Call    Collateral   Account    Officer    Initials

                                                                                    

   $1,000,000.00     04-05-1994     07-05-1995   17650-34733    040       50/51                   105       /s/


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Borrower:  VIASAT, INC.                 Lender:   Scripps Bank
           2290 COSMOS COURT                      La Jolla
           CARLSBAD, CA 92009-1565                7817 Ivanhoe Avenue
                                                  P.O. Box 8669
                                                  La Jolla, CA 92038-8669
================================================================================

LOAN TYPE. This is a Variable Rate (1.500% over Wall Street Journal Prime Rate
as published in the Money Rates section. When a range of rates is shown, the
higher rate will be used., making an initial rate of 7.750%), Revolving Line of
Credit Loan to a Corporation for $1,000,000.00 due on July 5, 1995.

PRIMARY PURPOSE OF LOAN. The primary purpose of the loan is for:
        [ ] Personal, Family, or Household Purposes or Personal Investment.
        [X] Business (including Real Estate Investment).

SPECIFIC PURPOSE. The specific purpose of this loan is: INCREASE EXISTING
$700,000.00 REVOLVING LINE OF CREDIT TO SUPPORT COMPANY GROWTH IN REVENUE AND
ACCOUNT RECEIVABLE.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $1,000,000.00 as follows:

           Amount paid on Borrower's account:                     $350,000.00
           $350,000.00 Payment on Loan # 17650-34733 (RENEW)

           Amount paid to others on Borrower's behalf:            $650,000.00
           $650,000.00 UNDISBURSED; TO BE DISBURSED
           PER FUNDS TRANSFER AGREEMENT
                                                                -------------
           Note Principal:                                      $1,000,000.00

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges.

           Prepaid Finance Charges Paid In Cash:                      $500.00
                $500.00 DOCUMENT FEE
                                                                -------------
           Total Charges Paid In Cash:                                $500.00

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED APRIL 5, 1994.

BORROWER:

VIASAT, INC.

x   /s/ Gregory Monahan
   ----------------------
    AUTHORIZED SIGNER

================================================================================
   8
                            BUSINESS LOAN AGREEMENT



- ----------------------------------------------------------------------------------------------------------------------
   PRINCIPAL       LOAN DATE       MATURITY      LOAN NO      CALL    COLLATERAL     ACCOUNT     OFFICER     INITIALS
                                                                                       
$1,000,000.00     04-05-1994      07-05-1995   17650-34733    040       50/51                      105          /s/
- ----------------------------------------------------------------------------------------------------------------------


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- -------------------------------------------------------------------------------

BORROWER:   VIASAT, INC.                 LENDER:   SCRIPPS BANK
            2290 COSMOS COURT                      LA JOLLA
            CARLSBAD, CA 92009-1565                7817 IVANHOE AVENUE
                                                   P.O. BOX 8669
                                                   LA JOLLA, CA 92038-8669

===============================================================================

THIS BUSINESS LOAN AGREEMENT BETWEEN VIASAT, INC. ("BORROWER") AND SCRIPPS BANK
("LENDER") IS MADE AND EXECUTED ON THE FOLLOWING TERMS AND CONDITIONS. BORROWER
HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS APPLIED TO LENDER FOR A
COMMERCIAL LOAN OR LOANS AND OTHER FINANCIAL ACCOMMODATIONS, INCLUDING THOSE
WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT.
ALL SUCH LOANS AND FINANCIAL ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND
FINANCIAL ACCOMMODATIONS FROM LENDER TO BORROWER, ARE REFERRED TO IN THIS
AGREEMENT INDIVIDUALLY AS THE "LOAN" AND COLLECTIVELY AS THE "LOANS." BORROWER
UNDERSTANDS AND AGREES THAT: (a) IN GRANTING, RENEWING, OR EXTENDING ANY LOAN,
LENDER IS RELYING UPON BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS,
AS SET FORTH IN THIS AGREEMENT; (b) THE GRANTING, RENEWING, OR EXTENDING OF ANY
LOAN BY LENDER AT ALL TIMES SHALL BE SUBJECT TO LENDER'S SOLE JUDGMENT AND
DISCRETION; AND (c) ALL SUCH LOANS SHALL BE AND SHALL REMAIN SUBJECT TO THE
FOLLOWING TERMS AND CONDITIONS OF THIS AGREEMENT.

TERM.  This Agreement shall be effective as of APRIL 5, 1994, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

     AGREEMENT.  The word "Agreement" means this Business Loan Agreement, as
     this Business Loan Agreement may be amended or modified from time to time,
     together with all exhibits and schedules attached to this Business Loan
     Agreement from time to time.

     BORROWER.  The word "Borrower" means VIASAT, INC. The word "Borrower" also
     includes, as applicable, all subsidiaries and affiliates of Borrower as
     provided below in the paragraph titled "Subsidiaries and Affiliates."

     CERCLA.  The word "CERCLA" means the Comprehensive Environmental Response,
     Compensation, and Liability Act of 1980, as amended.

     COLLATERAL.  The word "Collateral" means and includes without limitation
     all property and assets granted as collateral security for a Loan, whether
     real or personal property, whether granted directly or indirectly, whether
     granted now or in the future, and whether granted in the form of a security
     interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien, charge, lien or title retention contract, lease or
     consignment intended as a security device, or any other security or lien
     interest whatsoever, whether created by law, contract, or otherwise.

     ERISA.  The word "ERISA" means the Employee Retirement Income Security Act
     of 1974, as amended.

     EVENT OF DEFAULT.  The words "Event of Default" mean and include any of the
     Events of Default set forth below in the section titled "EVENTS OF
     DEFAULT."

     GRANTOR.  The word "Grantor" means and includes each and all of the persons
     or entities granting a Security Interest in any Collateral for the
     Indebtedness, including without limitation all Borrowers granting such a
     Security Interest.

     GUARANTOR.  The word "Guarantor" means and includes without limitation,
     each and all of the guarantors, sureties, and accommodation parties in
     connection with any Indebtedness.

     INDEBTEDNESS.  The word "Indebtedness" means and includes without
     limitation all Loans, together with all other obligations, debts and
     liabilities of Borrower to Lender, or any one or more of them, as well as
     all claims by Lender against Borrower, or any one or more of them; whether
     now or hereafter existing, voluntary or involuntary, due or not due,
     absolute or contingent, liquidated or unliquidated; whether Borrower may be
     liable individually or jointly with others; whether Borrower may be
     obligated as a guarantor, surety, or otherwise; whether recovery upon such
     Indebtedness may be or hereafter may become barred by any statute of
     limitations; and whether such Indebtedness may be or hereafter may become
     otherwise unenforceable.

     LENDER.  The word "Lender" means Scripps Bank, its successors and assigns.

     LOAN.  The word "Loan" or "Loans" means and includes any and all commercial
     loans and financial accommodations from Lender to Borrower, whether now or
     hereafter existing, and however evidenced, including without limitation
     those loans and financial accommodations described herein or described on
     any exhibit or schedule attached to this Agreement from time to time.

     NOTE.  The word "Note" means Borrower's promissory note or notes, if any,
     evidencing Borrower's Loan obligations in favor of Lender, as well as any
     substitute, replacement or refinancing note or notes therefor.

     RELATED DOCUMENTS.  The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     guaranties, security agreements, mortgages, deeds of trust, and all other
     instruments, agreements and documents, whether now or hereafter existing,
     executed in connection with the Indebtedness.

     SECURITY AGREEMENT.  The words "Security Agreement" mean and include
     without limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     SECURITY INTEREST.  The words "Security Interest" mean and include without
     limitation any type of collateral security, whether in the form of a lien,
     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien or title retention contract, lease or consignment intended as
     a security device, or any other security or lien interest whatsoever,
     whether created by law, contract, or otherwise.

     SARA.  The word "SARA" means the Superfund Amendments and Reauthorization
     Act of 1986 as now or hereafter amended.

REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to Lender as
of the date of this Agreement and as of the date of each disbursement of Loan
proceeds; 

     ORGANIZATION.  Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of California.
     Borrower has the full power and authority to own its properties and to
     transact the businesses in which it is presently engaged or presently
     proposes to engage. Borrower also is duly qualified as a foreign
     corporation and is in good standing in all states in which the failure to
     so qualify would have a material adverse effect on its business or
     financial condition.

     AUTHORIZATION.  The execution, delivery, and performance of this Agreement
     and all Related Documents by Borrower, to the extent to be executed,
     delivered or performed by Borrower, have been duly authorized by all
     necessary action by Borrower; do not require the consent or approval of any
     other person, regulatory authority or governmental body; and do not
     conflict with, result in a violation of, or constitute a default under (a)
     any provision of its articles of incorporation or organization, or bylaws,
     or any agreement or other instrument binding upon Borrower or (b) any law,
     governmental regulation, court decree, or order applicable to Borrower.

     FINANCIAL INFORMATION.  Each financial statement of Borrower supplied to
     Lender truly and completely disclosed Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change in
     Borrower's financial condition subsequent to the date of the most recent
     financial statement supplied to Lender. Borrower has no material contingent
     obligations except as disclosed in such financial statements.

     LEGAL EFFECT.  This Agreement constitutes, and any instrument or agreement
     required hereunder to be given by Borrower when delivered will constitute,
     legal, valid and binding obligations of Borrower enforceable against
     Borrower in accordance with their respective terms.

     PROPERTIES.  Except as contemplated by this Agreement or a previously
     disclosed in Borrower's financial statements or in writing to Lender and as
     accepted by Lender, and except for property tax liens for taxes not
     presently due and payable, Borrower owns and has good title to all of
     Borrower's properties free and clear of all Security Interests, and has not
     executed any security documents or financing statements relating to such
     properties. All of Borrower's properties are titled in Borrower's legal
     name, and Borrower has not used, or filed a financing statement under, any
     other name for at least the last five (5) years.

HAZARDOUS SUBSTANCES.  The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq.,
Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
Code, Section 25100, et seq., or other applicable state or Federal laws, rules,
or regulations adopted pursuant to any of the foregoing. Except as disclosed to
and acknowledged by Lender in writing, Borrower represents and warrants that:
(a) During the period of
   9

04-05-1994                  BUSINESS LOAN AGREEMENT                  Page 2
Loan No 17650-34733               (Continued)
===============================================================================

     Borrower's ownership of the properties, there has been no use, generation,
     manufacture, storage, treatment, disposal, release or threatened release of
     any hazardous waste or substance by any person on, under, or about any of
     the properties. (b) Borrower has no knowledge of, or reason to believe that
     there has been (i) any use, generation, manufacture, storage, treatment,
     disposal, release, or threatened release of any hazardous waste or
     substance by any prior owners or occupants of any of the properties, or
     (ii) any actual or threatened litigation or claims of any kind by any
     person relating to such matters. (c) Neither Borrower nor any tenant,
     contractor, agent or other authorized user of any of the properties shall
     use, generate, manufacture, store, treat, dispose of, or release any
     hazardous waste or substance on, under, or about any of the properties; and
     any such activity shall be conducted in compliance with all applicable
     federal, state, and local laws, regulations, and ordinances, including
     without limitation those laws, regulations and ordinances described above.
     Borrower authorizes Lender and its agents to enter upon the properties to
     make such inspections and tests as Lender may deem appropriate to determine
     compliance of the properties with this section of the Agreement. Any
     inspections or tests made by Lender shall be at Borrower's expense and for
     Lender's purposes only and shall not be construed to create any
     responsibility or liability on the part of Lender to Borrower or to any
     other person. The representations and warranties contained herein are based
     on Borrower's due diligence in investigating the properties for hazardous
     waste. Borrower hereby (a) releases and waives any future claims against
     Lender for indemnity or contribution in the event Borrower becomes liable
     for cleanup or other costs under any such laws, and (b) agrees to indemnify
     and hold harmless Lender against any and all claims, losses, liabilities,
     damages, penalties, and expenses which Lender may directly or indirectly
     sustain or suffer resulting from a breach of this section of the Agreement
     or as a consequence of any use, generation, manufacture, storage, disposal,
     release or threatened release occurring prior to Borrower's ownership or
     interest in the properties, whether or not the same was or should have been
     known to Borrower. The provisions of this section of the Agreement,
     including the obligation to indemnify, shall survive the payment of the
     indebtedness and the termination or expiration of this Agreement and shall
     not be affected by Lender's acquisition of any interest in any of the
     properties, whether by foreclosure or otherwise.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and no other event has occurred which
     may materially adversely affect Borrower's financial condition or
     properties, other than litigation, claims, or other events, if any, that
     have been disclosed to and acknowledged by Lender in writing.

     TAXES. To the best of Borrower's knowledge, all tax returns and reports of
     Borrower that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges have been paid in full,
     except those presently being or to be contested by Borrower in good faith
     in the ordinary course of business and for which adequate reserves have
     been provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security Interests and rights in and to such
     Collateral.

     BINDING EFFECT. This Agreement, the Note and all Security Agreements
     directly or indirectly securing repayment of Borrower's Loan and Note are
     binding upon Borrower as well as upon Borrower's successors,
     representatives and assigns, and are legally enforceable in accordance with
     their respective terms. 

     COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
     business or commercial related purposes.

     EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
     have any liability complies  in all material respects with all applicable
     requirements of law and regulations, and (i) no Reportable Event nor
     Prohibited Transaction (as defined in ERISA) has occurred with respect to
     any such plan, (ii) Borrower has not withdrawn from any such plan or
     initiated steps to do so, and (iii) no steps have been taken to terminate
     any such plan.

     LOCATION OF BORROWER'S OFFICES AND RECORDS. the chief place of business of
     Borrower and the office or offices where Borrower keeps its records
     concerning the Collateral is located at 2290 COSMOS COURT, CARLSBAD, CA
     92009-1565.

     INFORMATION. All information heretofore or contemporaneously herewith
     furnished by Borrower to Lender for the purposes of or in connection with
     this Agreement or any transaction contemplated hereby is, and all
     information hereafter furnished by or on behalf of Borrower to Lender will
     be, true and accurate in every material respect on the date as of which
     such information is dated or certified; and none of such information is or
     will be incomplete by omitting to state any material fact necessary to make
     such information not misleading. 

     SURVIVAL OF REPRESENTATION AND WARRANTIES. Borrower understands and agrees
     that Lender is relying upon the above representations and warranties in
     extending Loan Advances to Borrower. Borrower further agrees that the
     foregoing representations and warranties shall be continuing in nature and
     shall remain in full force and effect until such time as Borrower's Loan
     and Note shall be paid in full, or until this Agreement shall be terminated
     in the manner provided above, whichever is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

     LITIGATION. Promptly inform Lender in writing of (a) all material adverse
     changes in Borrower's financial condition, and (b) all litigation and
     claims and all threatened litigation and claims affecting Borrower or any
     Guarantor which could materially affect the financial condition of Borrower
     or the financial condition of any Guarantor.

     FINANCIAL RECORDS. Maintain its books and records in accordance with
     generally accepted accounting principles, applied on a consistent basis,
     and permit Lender to examine and audit Borrower's books and records at all
     reasonable times.

     ADDITIONAL INFORMATION. Furnish such additional information and statements,
     lists of assets and liabilities, agings of receivables and payables,
     inventory schedules, budgets, forecasts, tax returns, and other reports
     with respect to Borrower's financial condition and business operations as
     Lender may request from time to time.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably acceptable to Lender. Borrower, upon request
     of Lender, will deliver to Lender from time to time the policies or
     certificates of insurance in form satisfactory to Lender, including
     stipulations that coverages will not be cancelled or diminished without at
     least ten (10) days' prior written notice to Lender. In connection with all
     policies covering assets in which Lender holds or is offered a security
     interest for the Loans, Borrower will provide Lender with such loss payable
     or other endorsements as Lender may require. 

     INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonably request, including without limitation the following: (a) the
     name of the insurer; (b) the risks insured; (c) the amount of the policy;
     (d) the properties insured; (e) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (f) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all assessments,
     taxes, governmental charges, levies and liens, of every kind and nature,
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach, and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income, or profits. Provided however, Borrower will not be required to pay
     and discharge any such assessment, tax, charge, levy, lien or claim so long
     as (a) the legality of the same shall be contested in good faith by
     appropriate proceedings, and (b) Borrower shall have established on its
     books adequate reserves with respect to such contested assessment, tax,
     charge, levy, lien, or claim in accordance with generally accepted
     accounting practices. Borrower, upon demand of Lender, will furnish to
     Lender evidence of payment of the assessments, taxes, charges, levies,
     liens and claims and will authorize the appropriate governmental official
     to deliver to Lender at any time a written statement of any assessments,
     taxes, charges, levies, liens and claims against Borrower's properties,
     income, or profits.

     PERFORMANCE. Perform and comply with all terms, conditions, and provisions
     set forth in this Agreement and in all other instruments and agreements
     between Borrower and Lender in a timely manner, and promptly notify Lender
     if Borrower learns of the occurrence of any event which constitutes an
     Event of Default under this Agreement.

     OPERATIONS. Substantially maintain its present executive and management
     personnel; conduct its business affairs in a reasonable and prudent manner
     and in compliance with all applicable federal, state and municipal laws,
     ordinances, rules and regulations respecting its properties, charters,
     businesses and operations, including without limitation, compliance with
     the Americans With Disabilities Act and with all minimum funding standards
     and other requirements of ERISA and other laws applicable to Borrower's
     employee benefit plans.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession of
     a third party, Borrower, upon request of Lender, shall
   10
04-05-1994                    BUSINESS LOAN AGREEMENT                     Page 3
Loan No 17650-34733                 (Continued)
================================================================================

        notify such party to permit Lender free access to such records at all
        reasonable times and to provide Lender with copies of any records it may
        request, all at Borrower's expense.

        COMPLIANCE CERTIFICATE.  Unless waived in writing by Lender, provide
        Lender at least annually and at the time of each disbursement of Loan
        proceeds with a certificate executed by Borrower's chief financial
        officer, or other officer or person acceptable to Lender, certifying
        that the representations and warranties set forth in this Agreement are
        true and correct as of the date of the certificate and further
        certifying that, as of the date of the certificate, no Event of Default
        exists under this Agrement.

        ADDITIONAL ASSURANCES.  Make, execute and deliver to Lender such
        promissory notes, mortgages, deeds of trust, security agreements,
        financing statements, instruments, documents and other agreements as
        Lender or its attorneys may reasonably request to evidence and secure
        the Loans and to perfect all Security Interests.

NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

        INDEBTEDNESS AND LIENS.  (a) Except for trade debt incurred in the
        normal course of business and indebtedness to Lender contemplated by
        this Agreement, create, incur or assume indebtedness for borrowed money,
        including capital leases, (b) sell, transfer, mortgage, assign, pledge,
        lease, grant a security interest in, or encumber any of Borrower's
        assets, or (c) sell with recourse any of Borrower's accounts, except to
        Lender.

        CONTINUITY OF OPERATIONS.  (a) Engage in any business activities
        substantially different than those in which Borrower is presently
        engaged, (b) cease operations, liquidate, merge, transfer, acquire or
        consolidate with any other entity, change ownership, dissolve or
        transfer or sell Collateral out of the ordinary course of business, or
        (c) pay any dividends on Borrower's stock (other than dividends payable
        in its stock and except as may be statutorily required for Subchapter S
        corporations) or purchase or retire any of Borrower's outstanding shares
        or alter or amend Borrower's capital structure.

        LOANS, ACQUISITIONS AND GUARANTIES.  (a) Loan, invest in or advance
        money or assets, (b) purchase, create or acquire any interest in any
        other enterprise or entity, or (c) incur any obligation as surety or
        guarantor other than in the ordinary course of business.

CESSATION OF ADVANCES.  If Lender has made any commitment to make any Loan to
Borrower whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement
or any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there occurs
a material adverse change in Borrower's financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any
Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, modify or
revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or
(e) Lender in good faith deems itself insecure even though no Event of Default
shall have occurred.

ADDITIONAL PROVISIONS.

1) TOTAL ADVANCES ARE RESTRICTED TO 75% OF ELIGIBLE ACCOUNTS RECEIVABLE,
DEFINED AS THOSE ACCOUNTS RECEIVABLE LESS THAN 90 DAYS OLD, EXCLUDING ALL
FOREIGN AND CONTRA ACCOUNTS RECEIVABLE.

2) A COMPLETED BORROWING BASE CERTIFICATE WILL BE SUBMITTED TO SCRIPPS BANK AT
THE TIME OF ANY REQUEST FOR LINE ADVANCE.

3) BORROWER WILL PROVIDE SCRIPPS BANK, ON A TIMELY BASIS, MONTHLY FINANCIAL
STATEMENTS, INCLUDING AN ACCOUNTS RECEIVABLE AGING REPORT WITH A COMPLETED
BORROWING BASE CERTIFICATE.

4) BORROWER WILL PROVIDE SCRIPPS BANK A COPY OF ITS FEDERAL TAX RETURN UPON
FILING, AND PROVIDE SCRIPPS BANK WITH A COPY OF ITS CPA AUDITED FINANCIAL
STATEMENTS WITHIN 120 DAYS OF FISCAL YEAR END.

5) BORROWER AGREES TO MAINTAIN AT ALL TIMES, A CURRENT RATIO ABOVE 1.5 TO 1.0,
A DEBT TO WORTH RATIO NOT TO EXCEED 1.5 TO 1.0, AND MAINTAIN A NET WORTH ABOVE
$1,250,000.00.

6) BORROWER AGREES TO ASSIGN SCRIPPS BANK ALL U.S. GOVERNMENT CONTRACTS IF IT
IS OUT OF COMPLIANCE ON ANY OF THE FINANCIAL COVENANTS LISTED ABOVE FOR MORE
THAN 60 CONSECUTIVE DAYS. ASSIGNMENTS WILL BE PERFECTED THROUGH THE ASSIGNMENT
OF CLAIMS ACT OF 1940 AND CORRESPONDING UNIFORM COMMERCIAL CODE FILINGS WITH
THE SECRETARY OF STATE.

7) BORROWER AGREES TO BEAR THE COST OF SCRIPPS BANK ACCOUNTS RECEIVABLE AUDITS,
NOT TO EXCEED $200.00 PER QUARTER, AND AUTHORIZES BANK TO DEBIT ITS ACCOUNT FOR
PAYMENT.

8) BORROWER AGREES TO MAINTAIN ITS PRIMARY OPERATING ACCOUNTS WITH SCRIPPS BANK
WHILE THIS CREDIT FACILITY IS IN PLACE.

DEPOSIT ACCOUNTS.  Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, Keogh, and trust
accounts.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default
under this Agreement:

        DEFAULT ON INDEBTEDNESS.  Failure of Borrower to make any payment when
        due on the Loans.

        OTHER DEFAULTS.  Failure of Borrower or any Grantor to comply with or to
        perform when due any other term, obligation, covenant or condition
        contained in this Agreement or in any of the Related Documents, or
        failure of Borrower to comply with or to perform any other term,
        obligation, covenant or condition contained in any other agreement
        between Lender and Borrower.

        DEFAULT IN FAVOR OF THIRD PARTIES.  Should Borrower or any Grantor
        default under any loan, extension of credit, security agreement,
        purchase or sales agreement, or any other agreement, in favor of any
        other creditor or person that may materially affect any of Borrower's
        property or Borrower's or any Grantor's ability to repay the Loans or
        perform their respective obligations under this Agreement or any of the
        Related Documents.

        FALSE STATEMENTS.  Any warranty, representation, or statement made or
        furnished to Lender by or on behalf of Borrower or any Grantor under
        this Agreement or the Related Documents is false or misleading in any
        material respect, either now or at the time made or furnished.

        DEFECTIVE COLLATERALIZATION.  This Agreement or any of the Related
        Documents ceases to be in full force and effect (including failure of
        any Security Agreement to create a valid and perfected Security
        Interest) at any time and for any reason. 

        INSOLVENCY.  The dissolution or termination of Borrower's existence as a
        going business, insolvency, appointment of a receiver for any part of
        Borrower's property, any assignment for the benefit of creditors, any
        type of creditor workout, or the commencement of any proceeding under
        any bankruptcy or insolvency laws by or against Borrower.

        CREDITOR OR FORFEITURE PROCEEDINGS.  Commencement of foreclosure or
        forfeiture proceedings, whether by judicial proceeding, self-help,
        repossession or any other method, by any creditor of Borrower, any
        creditor of any Grantor against any collateral securing the
        indebtedness, or by any governmental agency. This includes a
        garnishment, attachment, or levy on or of any of Borrower's deposit
        accounts with Lender. However, this Event of Default shall not apply if
        there is a good faith dispute by Borrower or Grantor, as the case may
        be, as to the validity or reasonableness of the claim which is the basis
        of the creditor or forfeiture proceeding, and if Borrower or Grantor
        gives Lender written notice of the creditor or forfeiture proceeding and
        furnishes reserves or a surety bond for the creditor or forfeiture
        proceeding satisfactory to Lender.

        EVENTS AFFECTING GUARANTOR.  Any of the preceding events occurs with
        respect to any Guarantor of any of the indebtedness or such Guarantor
        dies or becomes incompetent. Lender, at its option, may, but shall not
        be required to, permit the Guarantor's estate to assume unconditionally
        the obligations arising under the guaranty in a manner satisfactory to
        lender, and, in doing so, cure the Event of Default.

        CHANGE IN OWNERSHIP.  Any change in ownership of twenty-five percent
        (25%) or more of the common stock of Borrower.

        INSECURITY.  Lender, in good faith, deems itself insecure.

        RIGHT TO CURE.  If any default, other than a Default on Indebtedness, is
        curable and if Borrower or Grantor, as the case may be, has not been
        given a notice of a similar default within the preceding twelve (12)
        months, it may be cured (and no Event of Default will have occurred) if
        Borrower or Grantor, as the case may be, after receiving written notice
        from Lender demanding cure of such default: (a) cures the default with
        fifteen (15) days; or (b) if the cure requires more than fifteen (15)
        days, immediately initiates steps which Lender deems in Lender's sole
        discretion to be sufficient to cure the default and thereafter continues
        and completes all reasonable and necessary steps sufficient to produce
        compliance as soon as reasonably practical.
   11
04-05-1994                     BUSINESS LOAN AGREEMENT                   Page 4
Loan No 17650-34733                  (Continued)
===============================================================================
Related Documents or any other agreement immediately will terminate (including
any obligation to make Loan Advances or disbursements), and, at Lender's
option, all loans immediately will become due and payable, all without notice
of any kind to Borrower, except that in the case of an Event of Default of the
type described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

        AMENDMENTS. This Agreement, together with any Related documents,
        constitutes the entire understanding and agreement of the parties as to
        the matters set forth in this Agreement. No alteration of or amendment
        to this Agreement shall be effective unless given in writing and signed
        by the party or parties sought to be charged or bound by the alteration
        or amendment.

        APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND
        ACCEPTED BY LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT,
        BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF
        THE COURTS OF SAN DIEGO COUNTY, THE STATE OF CALIFORNIA. THIS AGREEMENT
        SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE 
        STATE OF CALIFORNIA.
        
        CAPTION HEADINGS. Caption headings in this Agreement are for
        convenience purposes only and are not to be used to interpret or define
        the provisions of this Agreement.

        MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Borrower
        under this Agreement shall be joint and several, and all references to
        Borrower shall mean each and every Borrower. This means that each of
        the persons signing below is responsible for ALL obligations in this 
        Agreement.

        CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
        sale or transfer, whether now or later, of one or more participation
        interests in the Loans to one or more purchasers, whether related or
        unrelated to Lender. Lender may provide,without any limitation
        whatsoever, to any one or more purchasers, or potential purchasers, any
        information or knowledge Lender may have about Borrower or about any
        other matter relating to the Loan, and Borrower hereby waives any
        rights to privacy it may have with respect to such matters. Borrower
        additionally waives any and all notices of sale of participation
        interests, as well as all notices of any repurchase of such
        participation interest. Borrower also agrees that the purchasers of any
        such participation interests will be considered as the absolute owners
        of such interests in the Loans and will have all the rights granted
        under the participation agreement or agreements governing the sale of 
        such participation interests. Borrower further waives all rights of
        offset or counterclaim that it may have now or later against Lender or
        against any purchaser of such a participation interest and
        unconditionally agrees that either Lender or such purchaser may enforce
        Borrower's obligation under the Loans irrespective of the failure or
        insolvency of any holder of any interest in the Loans. Borrower
        further agrees that the purchaser of any such participation interests 
        may enforce its interests irrespective of any personal claims or 
        defenses that Borrower may have against Lender.

        COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
        out-of-pocket expenses, including attorneys' fees, incurred in
        connection with the preparation, execution, enforcement and collection
        of this Agreement or in connection with the Loans made pursuant to this
        Agreement. Lender may pay someone else to help collect the Loans and to
        enforce this Agreement, and Borrower will pay that amount. This
        includes, subject to any limits under applicable law, Lender's
        attorneys' fees and Lender's legal expenses, whether or not there is a
        lawsuit, including attorneys' fees for bankruptcy proceedings (including
        efforts to modify or vacate any automatic stay or injunction), appeals,
        and any anticipated post-judgment collection services. Borrower also
        will pay any court costs, in addition to all other sums provided by law.

        NOTICES. All notices required to be given under this Agreement shall be
        given in writing and shall be effective when actually delivered or when
        deposited with a nationally recognized overnight courier or deposited in
        the United States mail, first class, postage prepaid, addressed to the
        party to whom the notice is to be given at the address shown above. any
        party may change its address for notices under this Agreement by giving
        formal written notice to the other parties, specifying that the purpose
        of the notice is to change the party's address. To the extent permitted
        by applicable law, if there is more than one Borrower, notice to any
        Borrower will constitute notice to all Borrowers. For notice purposes,
        Borrower agrees to keep Lender informed at all times of Borrower's
        current address(es).

        SEVERABILITY. If a court of competent jurisdiction finds any provision
        of this Agreement to be invalid or unenforceable as to any person or
        circumstance, such finding shall not render that provision invalid or
        unenforceable as to any other persons or circumstances. If feasible, any
        such offending provision shall be deemed to be modified to be within the
        limits of enforceability or validity; however, if the offending
        provision cannot be so modified, it shall be stricken and all other
        provisions of this Agreement in all other respect shall remain valid 
        and enforceable.

        SUBSIDIARIES AND AFFILIATES OF BORROWER.  To the extent the context of
        any provisions of this Agreement makes it appropriate, including without
        limitation any representation, warranty or covenant, the word "Borrower"
        as used herein shall include all subsidiaries and affiliates of
        Borrower. Notwithstanding the foregoing however, under no circumstances
        shall this Agreement be construed to require Lender to make any Loan or
        other financial accommodation to any subsidiary or affiliate of
        Borrower.

        SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
        behalf of Borrower shall bind its successors and assigns and shall inure
        to the benefit of Lender, its successors and assigns. Borrower shall
        not, however, have the right to assign its rights under this Agreement
        or any interest therein, without the prior written consent of Lender.

        SURVIVAL. All warranties, representations, and covenants made by
        Borrower in this Agreement or in any certificate or other instrument
        delivered by Borrower to Lender under this Agreement shall be considered
        to have been relied upon by Lender and will survive the making of the
        Loan and delivery to Lender of the Related Documents, regardless of any
        investigation made by Lender or on Lender's behalf.

        TIME IS OF THE ESSENCE. Time is of the essence in the performance of
        this Agreement.

        WAIVER. Lender shall no be deemed to have waived any rights under this
        Agreement unless such waiver is given in writing and signed by Lender.
        No delay or omission on the part of Lender in exercising any right shall
        operate as a waiver of such right or any other right. A waiver by Lender
        of a provision of this Agreement shall not prejudice or constitute a
        waiver of Lender's right otherwise to demand strict compliance with that
        provision or any other provision of this Agreement. No prior waiver by
        Lender, no any course of dealing between Lender and Borrower, or between
        Lender and any Grantor, shall constitute a waiver of any of Lender's
        rights or of any obligations of Borrower or of any Grantor as to any
        future transactions. Whenever the consent of Lender is required under
        this Agreement, the granting of such consent by Lender in any instance
        shall not constitute continuing consent in subsequent instances where
        such consent is required and in all cases such consent may be granted or
        withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
APRIL 5, 1994.

BORROWER:

VIASAT, INC.

X  /s/ Gregory Monahan
   -----------------------------------
   AUTHORIZED SIGNER


LENDER:
Scripps Bank

By: __________________________________
    Authorized Officer

================================================================================
   12
                         CORPORATE RESOLUTION TO BORROW




     Principal       Loan Date      Maturity       Loan No     Call    Collateral   Account    Officer    Initials

                                                                                    

   $1,000,000.00     04-05-1994     07-05-1995   17650-34733    040       50/51                   105      /s/


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Borrower:  VIASAT, INC.                 Lender:   Scripps Bank
           2290 COSMOS COURT                      La Jolla
           CARLSBAD, CA 92009-1565                7817 Ivanhoe Avenue
                                                  P.O. Box 8669
                                                  La Jolla, CA 92038-8669
================================================================================

I, the undersigned Secretary or Assistant Secretary of VIASAT, INC. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of California as a corporation for
profit, with its principal office at 2290 COSMOS COURT, CARLSBAD, CA
92009-1565, and is duly authorized to transact business in the State of
California. 

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation (or by
other duly authorized corporate action in lieu of a meeting), duly called and
held on ______________________________, at which a quorum was present and
voting, the following resolutions were adopted:

BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:




        NAMES                   POSITIONS           ACTUAL SIGNATURES
        -----                   ---------           -----------------    

                                              
        MARK DANKBERG           PRESIDENT           X  /s/ Mark Dankberg
                                                      ------------------
        GREG MONAHAN            VICE PRESIDENT      X  /s/ Greg Monahan
                                                      ------------------


acting for and on behalf of this Corporation and as its act and deed be, and
they hereby are, authorized and empowered:

        BORROW MONEY. To borrow from time to time from Scripps Bank ("Lender"),
        on such terms as may be agreed upon between the officers, employees, or
        agents and Lender, such sum or sums of money as in their judgment should
        be borrowed; however, not exceeding at any one time the amount of One
        Million & 00/100 Dollars ($1,000,000.00), in addition to such sum or 
        sums of money as may be currently borrowed by the Corporation from
        Lender.

        EXECUTE NOTES. To execute and deliver to Lender the promissory note or
        notes of the Corporation, on Lender's forms, at such rates of interest
        and on such terms as may be agreed upon, evidencing the sums of money so
        borrowed or any indebtedness of the Corporation to Lender, and also to
        execute and deliver to Lender one or more renewals, extensions,
        modifications, refinancings, consolidations, or substitutions for one or
        more of the notes, or any portion of the notes.

        GRANT SECURITY. To mortgage, pledge, hypothecate, or otherwise encumber
        deliver to Lender, as security for the payment of any loans so obtained,
        any promissory notes so executed, or any other or further indebtedness
        of the Corporation to Lender at any time owing, however the same may be
        evidenced, any property now or hereafter belonging to the Corporation or
        in which the Corporation now or hereafter may have an interest,
        including without limitation all real property and all personal property
        of the Corporation. Such property may be mortgaged, pledged,
        hypothecated, or encumbered at the time such loans are obtained or such
        indebtedness is incurred, or at any other time or times, and may be
        either in addition to or in lieu of any property theretofore mortgaged,
        pledged, hypothecated, or encumbered.

        EXECUTE SECURITY DOCUMENTS. To execute and deliver to Lender the forms
        of mortgage, deed or trust, pledge agreement, hypothecation agreement,
        and other security agreements and financing statements which may be
        submitted by Lender, and which shall evidence the terms and conditions
        under and pursuant to which such liens and encumbrances, or any of them,
        are given; and also to execute and deliver to Lender any other written
        instruments, any chattel paper, or any other collateral, of any kind of
        nature, which they may in their discretion deem reasonably necessary or
        proper in connection with or pertaining to the giving of the liens and
        encumbrances. Notwithstanding the foregoing, any one of the above
        authorized officers, employees, or agents may execute, deliver, or 
        record financing statements.

        NEGOTIATE ITEMS. To draw, endorse, and discount with Lender all drafts,
        trade acceptances, promissory notes, or other evidences of indebtedness
        payable to or belonging to the Corporation or in which the Corporation
        may have an interest, and either to receive cash for the same or to 
        cause such proceeds to be credited to the account of the Corporation
        with Lender, or to cause such other disposition of the proceeds derived
        therefrom as they may deem advisable.

        FURTHER ACTS. In the case of lines of credit, to designate additional or
        alternate individuals as being authorized to request advances
        thereunder, and in all cases, to do and perform such other acts and
        things, to pay any and all fees and costs, and to execute and deliver
        such other documents and agreements as they may in their discretion deem
        reasonably necessary or proper in order to carry into effect the
        provisions of these Resolutions. The following person or persons are
        authorized to request advances and authorize payments under the line of
        credit until Lender receives written notice of revocation of their
        authority: MARK DANKBERG, PRESIDENT; and GREG MONAHAN, VICE PRESIDENT.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect
at the time notice is given.

I FURTHER CERTIFY that at a special meeting of the shareholders of the
Corporation, duly called and held (or by consent of the shareholders) in
accordance with the laws of the State of California), not less than the
required percentage of shareholders adopted or consented to all the Resolutions
set forth above.

I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever. The Corporation has no corporate seal, and
therefore, no seal is affixed to this certificate.

IN TESTIMONY WHEREOF, I have hereunto set my hand on April 5, 1994 and attest
that the signatures set opposite the names listed above are their genuine
signatures. 

                                           CERTIFIED TO AND ATTESTED BY:

                                           X  /s/ Mark J. Miller
                                             --------------------------------
                                            *Secretary or Assistant Secretary

                                           X 
                                             --------------------------------

*NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this certificate should
also be signed by a second Officer or Director of the Corporation.
   13
                                PROMISSORY NOTE



- ----------------------------------------------------------------------------------------------------------------------
  PRINCIPAL       LOAN DATE       MATURITY      LOAN NO      CALL    COLLATERAL     ACCOUNT     OFFICER     INITIALS
                                                                                     
$1,000,000.00     04-05-1994      07-05-1995   17650-34733    040       50/51                     105          /s/
- ----------------------------------------------------------------------------------------------------------------------


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- -------------------------------------------------------------------------------

BORROWER:   VIASAT, INC.                 LENDER:   SCRIPPS BANK
            2290 COSMOS COURT                      LA JOLLA
            CARLSBAD, CA 92009-1565                7817 IVANHOE AVENUE
                                                   P.O. BOX 8669
                                                   LA JOLLA, CA 92038-8669
===============================================================================

          PRINCIPAL AMOUNT:   $1,000,000.00    INITIAL RATE:   7.750%
                          DATE OF NOTE:   APRIL 5, 1994

PROMISE TO PAY.  VISAT, INC. ("BORROWER") PROMISES TO PAY SCRIPPS BANK
("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE
PRINCIPAL AMOUNT OF ONE MILLION & 00/100 DOLLARS ($1,000,000.00) OR SO MUCH AS
MAY BE OUTSTANDING, TOGETHER WITH INTEREST ON THE UNPAID OUTSTANDING PRINCIPAL
BALANCE OF EACH ADVANCE. INTEREST SHALL BE CALCULATED FROM THE DATE OF EACH
ADVANCE UNTIL REPAYMENT OF EACH ADVANCE.

PAYMENT.  BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON JULY 5, 1995. IN ADDITION,
BORROWER WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING
MAY 5, 1994, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE SAME DAY OF
EACH MONTH AFTER THAT. Interest on this Note is computed on a 365/365 simple
interest basis; that is, by applying the ratio of the annual interest rate over
the number of days in a year, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lender's address shown above or at such other place
as Lender may designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to accrued unpaid interest, then
to principal, and any remaining amount to any unpaid collection costs and late
charges. 

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change
from time to time based on changes in an independent index which is the Wall
Street Journal Prime Rate as published in the Money Rates section. When a range
of rates is shown, the higher rate will be used. (the "Index"). The Index is
not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the
current index rate upon Borrower's request. Borrower understands that Lender
may make loans based on other rates as well. The interest rate change will not
occur more often than each month (adjustment will be made on the last date of
each month). THE INDEX CURRENTLY IS 6.250% PER ANNUM. THE INTEREST RATE TO BE
APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE OF 1.500
PERCENTAGE POINTS OVER THE INDEX, RESULTING IN AN INITIAL RATE OF 7.750% PER
ANNUM. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT; MINIMUM INTEREST CHARGE.  Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even
upon full prepayment of this Note, Borrower understands that Lender is entitled
to a MINIMUM INTEREST CHARGE OF $100.00. Other than Borrower's obligation to
pay any minimum interest charge, Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments under the payment schedule. Rather,
they will reduce the principal balance due and may result in Borrower making
fewer payments.

LATE CHARGE.  If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $10.00, WHICHEVER IS GREATER.

DEFAULT.  Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to perform promptly at the time
and strictly in the manner provided in this Note or any agreement related to
this Note, or in any other agreement or loan Borrower has with Lender. (c)
Borrower defaults under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any other
creditor or person that may materially affect any of Borrower's property or
Borrower's ability to repay this Note or perform Borrower's obligations under
this Note or any of the Related Documents. (d) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's behalf is false or
misleading in any material respect. (e) Borrower becomes insolvent, a receiver
is appointed for any part of Borrower's property, Borrower makes an assignment
for the benefit of creditors, or any proceeding is commenced either by Borrower
or against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any of the events described in this default section occurs
with respect to any guarantor of this Note. (h) Lender in good faith deems
itself insecure.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender
demanding cure of such default; (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
on this Note and all accrued unpaid interest immediately due, without notice,
and then Borrower will pay that amount. Upon Borrower's failure to pay all
amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the variable interest rate
on this Note to 6.500 percentage points over the Index, and (b) add any unpaid
accrued interest to principal and such sum will bear interest therefrom until
paid at the rate provided in this Note (including any increase rate). Lender
may hire or pay someone else to help collect this Note if Borrower does not
pay. Borrower also will pay Lender that amount. This includes, subject to any
limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Borrower also will pay any court costs, in addition to all
other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO LENDER AND ACCEPTED
BY LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER AGREES
UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF SAN DIEGO
COUNTY, THE STATE OF CALIFORNIA. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

DEPOSIT ACCOUNTS. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, Keogh, and trust
accounts. 

LINE OF CREDIT.  This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directors by
telephone, or otherwise to Lender are to be directed to Lender's office shown
above. The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address
shown above written notice of revocation of their authority: MARK DANKBERG,
PRESIDENT; AND GREG MONAHAN, VICE PRESIDENT. Borrower agrees to be liable for
all sums either: (a) advanced in accordance with the instructions of an
authorized person (b) credited to any of Borrower's accounts with Lender. The
unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (a) Borrower or any guarantor is in default under the terms of the
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b) Borrower or
any guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized
by Lender; or (e) Lender in good faith deems itself insecure under this Note or
any other agreement between Lender and Borrower.

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
any applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made.

   14
04-05-1994                      PROMISSORY NOTE                          Page 2
Loan No 17650-34733              (Continued)
===============================================================================

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:

VIASAT, INC.


X  /s/ Gregory Monahan
  -------------------------------------------
  AUTHORIZED SIGNER

===============================================================================
   15
[SCRIPPS BANK LETTERHEAD]


May 17, 1995



Mr. Gregory Monahan, VP & General Counsel
ViaSat, Inc.
2290 Cosmos Court
Carlsbad, CA 92009-1565

Dear Greg,

Scripps Bank is pleased to provide the following credit commitment for ViaSat,
Inc. under these terms and conditions:

APPLICATION:

Type:           Equipment term financing commitment

Amount:         $500,000

Purpose:        To provide financing for equipment needs of company.

Maturity/Expiration: The term financing commitment will expire on July 5, 1995
(maturity date of company credit line). Each advance will be for a minimum
$25,000, and evidenced by a separate promissory note and other supporting
documents. Each note will be fully amortized over a maximum 48 month term with
monthly payments.

Interest Rate:  Prime Rate plus 1.5%, fixed as of the date of loan 
                documentation for 100% financing of total costs.

Fees:   There is a $150 documentation fee for each term loan extended, 
        plus $5.00 UCC recording fees.

Guarantors:     Not applicable.

Security/Collateral:    Scripps Bank will have a first lien position on the
equipment being purchased as evidenced by an executed security agreement and UCC
filing with the State of California.

Conditions:

        Borrower to have executed documentation reducing its revolving credit
        line facility with Bank from $1,000,000 to $500,000. Rate to be reduced
        to Prime plus 1% and maturity date extended to July 5, 1996 with 
        execution of documents.
   16
[SCRIPPS BANK LETTERHEAD]


Mr. Gregory Monhan, VP & General Counsel                     May 17, 1995
ViaSat, Inc.
Page 2



      Borrower to provide annually to Bank a copy of its audited financial
      statements and IRS return, and interim statements as may be requested by
      Bank.


      Borrower to provide Bank with invoices and any other documentation
      required by Bank to allow Bank to determine exact costs and sufficient
      information regarding equipment to allow Bank to perfect its lien.
       

Scripps Bank is pleased to provide thes credit commitment to support the growth
and succes of ViaSat, Inc.  It is understood that this commitment is subject to
specific loan documentation to follow which will embody other covenants and
conditions that the Bank deems appropriate.


Please acknowledge your understanding and acceptance of the terms and
conditions outlined above by signing below and returning a copy of this letter
to me.

 

Sincerely,

/s/ Rick Poe
_______________________
Rick Poe
Vice President






Accepted:  ViaSat, Inc.

/s/ Gregory Monahan
____________________________________       ________________________________  By:
Gregory Monahan, VP & General Counsel      Date
   17
                           CHANGE IN TERMS AGREEMENT



- --------------------------------------------------------------------------------------------------------------------
 PRINCIPAL       LOAN DATE       MATURITY      LOAN NO      CALL    COLLATERAL     ACCOUNT     OFFICER     INITIALS
                                                                                     
$500,000.00                     07-05-1995   17650-34733    040       50/51                      105         /s/
- --------------------------------------------------------------------------------------------------------------------


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- -------------------------------------------------------------------------------

BORROWER:   VIASAT, INC.                 LENDER:   SCRIPPS BANK
            2290 COSMOS COURT                      LA JOLLA
            CARLSBAD, CA 92009-1565                7817 IVANHOE AVENUE
                                                   P.O. BOX 8669
                                                   LA JOLLA, CA 92038-8669
===============================================================================

PRINCIPAL AMOUNT: $500,000.00                   DATE OF AGREEMENT: MAY 17, 1995


DESCRIPTION OF EXISTING INDEBTEDNESS, PROMISSORY NOTE DATED APRIL 5, 1994 IN
THE AMOUNT OF $1,000,000.00.

DESCRIPTION OF COLLATERAL.  BUSINESS ASSETS AS STATED ON THE SECURITY AGREEMENT
DATED APRIL 5, 1994, WHICH IS FURTHER SUPPORTED BY UCC-1 DATED NOVEMBER 13,
1990, FILED NOVEMBER 30, 1990, FILE #90-289875.

DESCRIPTION OF CHANGE IN TERMS.  THE ORIGINAL PROMISSORY NOTE DATED APRIL 5,
1994 IN THE AMOUNT OF $1,000,000.00 MODIFIED AS FOLLOWS: THE MATURITY DATE IS
EXTENDED FROM JULY 5, 1995 TO JULY 5, 1996, THE PRINCIPAL AMOUNT IS REDUCED
FROM $1,000,000.00 TO $500,00.00 AND THE RATE OF INTEREST IS REDUCED FROM THE
RATE OF 1.5% OVER THE PRIME AS SHOWN IN THE WALL STREET JOURNAL TO THE RATE OF
1% OVER THE PRIME RATE AS SHOWN IN THE WALL STREET JOURNAL.

PROMISE TO PAY.  VIASAT, INC. ("BORROWER") PROMISES TO PAY TO SCRIPPS BANK
("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE
PRINCIPAL AMOUNT OF FIVE HUNDRED THOUSAND & 00/1000 DOLLARS ($500,000.00) OR SO
MUCH AS MAY BE OUTSTANDING, TOGETHER WITH INTEREST ON THE UNPAID OUTSTANDING
PRINCIPAL BALANCE OF EACH ADVANCE. INTEREST SHALL BE CALCULATED FROM THE DATE
OF EACH ADVANCE UNTIL REPAYMENT OF EACH ADVANCE.

PAYMENT.  BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON JULY 5, 1996. IN ADDITION,
BORROWER WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING
JUNE 5, 1995, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE SAME DAY OF
EACH MONTH AFTER THAT. Interest on this Agreement is computed on a 365/365
simple interest basis; that is, by applying the ratio of the annual interest
rate over the number of days in a year, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.

VARIABLE INTEREST RATE.  The interest rate on this Agreement is subject to
change from time to time based on changes in an independent index which is the
Wall Street Journal Prime Rate as published in the Money Rates section. When a
range of rate is shown, the higher rate will be used, (the "Index"). The Index
is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the
current Index rate upon Borrower's request. Borrower understands that Lender
may make loans based on other rates as well. The interest rate change will not
occur more often than each time that Prime Rate changes as shown in the Money
Rates section of the Wall Street Journal. THE INDEX CURRENTLY IS 9.000% PER
ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS
AGREEMENT WILL BE AT A RATE OF 1.000 PERCENTAGE POINT OVER THE INDEX, RESULTING
IN AN INITIAL RATE OF 10.000% PER ANNUM.  NOTICE:  Under no circumstances will
the interest rate on this Agreement be more than the maximum rate allowed by
applicable law.

PREPAYMENT; MINIMUM INTEREST CHARGE.  Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even
upon full prepayment of this Agreement, Borrower understands that Lender is
entitled to a MINIMUM INTEREST CHARGE OF $100.00. Other than Borrower's
obligation to pay any minimum interest charge, Borrower may pay without penalty
all or a portion of the amount owed earlier than it is due. Early payments will
not, unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments of accrued unpaid interest. Rather,
they will reduce the principal balance due.

LATE CHARGE.  If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $10.00, WHICHEVER IS GREATER.

DEFAULT.  Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to perform promptly at the time
and strictly in the manner provided in this Agreement or any agreement related
to this Agreement, or in any other agreement or loan Borrower has with Lender.
(c) Any representation or statement made or furnished to Lender by Borrower or
on Borrower's behalf is false or misleading in any material respect. (d)
Borrower becomes insolvent, a receiver is appointed for any part of Borrower's
property, Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any of the events
described in this default section occurs with respect to any guarantor of this
Agreement. (g) Lender in good faith deems itself insecure.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Agreement
within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (a) cures the default with fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
on this Agreement and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay
upon final maturity, Lender, at its option, may also, if permitted under
applicable law, do one or both of the following: (a) increase the variable
interest rate on this Agreement to 6.000 percentage points over the Index, and
(b) add any unpaid accrued interest to principal and such sum will bear
interest therefrom until paid at the rate provided in this Agreement (including
any increased rate). Lender may hire or pay someone else to help collect this
Agreement if Borrower does not pay. Borrower also will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses whether or not there is a lawsuit, including
attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also will pay any court
costs, in addition to all other sums provided by law. THIS AGREEMENT HAS BEEN
DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE STATE OF CALIFORNIA. IF THERE
IS A LAWSUIT, BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF SAN DIEGO COUNTY, THE STATE OF CALIFORNIA. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.

DEPOSIT ACCOUNTS.  Borrower grants to lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, Keogh, and trust
accounts.

LINE OF CREDIT.  This Agreement evidences a revolving line of credit. Advances
under this Agreement may be requested either orally or in writing by Borrower
or by an authorized person. Lender may, but need not, require that all oral
requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. The following party or parties are authorized to request
advances under the line of credit until Lender receives from Borrower at
Lender's address shown above written notice of revocation of their authority:
GREGORY D. MONAHAN, VICE PRESIDENT. Borrower agrees to be liable for all sums
either: (a) advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Agreement at any time may be evidenced by
endorsements on this Agreement or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Agreement if: (a) Borrower or any guarantor is in default under the terms of
this Agreement or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Agreement;
(b) Borrower or any guarantor ceases doing business or is insolvent; (c) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Agreement or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Agreement for purposes
other than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Agreement or any other agreement between lender and
Borrower.

CONTINUING VALIDITY.  Except as expressly changed by this Agreement, the terms
of the original obligation or obligations, including all agreements evidenced
or securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of Lender to retain as
liable parties all makers and endorsers of the original obligation(s),
including accommodation parties, unless a party is expressly released by Lender
in writing. Any maker or endorser, including accommodation parties

   18
05-17-1995                     CHANGE IN TERMS AGREEMENT                 Page 2
Loan No 17650-34733                   (Continued)
===============================================================================

will not be released by virtue of this Agreement. If any person who signed the
original obligation does not sign this Agreement below, then all persons
signing below acknowledge that this Agreement is given conditionally, based on
the representation to Lender that the non-signing party consents to the changes
and provisions of this Agreement or otherwise will not be released by it. This
waiver applies not only to any initial extension, modification or release, but
also to all such subsequent actions.

MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Agreement without losing them. Borrower and any other
persons who signs, guarantees or endorses this Agreement, to the extent allowed
by law, waive any applicable statute of limitations, presentment, demand for
payment, protest and notice of dishonor. Upon any change in the terms of this
Agreement, and unless otherwise expressly stated in writing, no party who signs
this Agreement, whether as maker, guarantor, accommodation maker or endorser,
shall be released from liability. All such parties agree that Lender may renew
or extend (repeatedly and for any length of time) this loan, or release any
party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE AGREEMENT.

BORROWER:

VIASAT, INC.

By:  /s/ G.D. Monahan
    -----------------------------------
    GREGORY D. MONAHAN, VICE PRESIDENT
   19
                         AGREEMENT TO PROVIDE INSURANCE




     Principal       Loan Date      Maturity       Loan No     Call    Collateral   Account    Officer    Initials

                                                                                    

   $500,000.00                      07-05-1995   17650-34733    040       50/51                   105       /s/


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Borrower:  VIASAT, INC.                 Lender:   Scripps Bank
           2290 COSMOS COURT                      La Jolla
           CARLSBAD, CA 92009-1565                7817 Ivanhoe Avenue
                                                  P.O. Box 8669
                                                  La Jolla, CA 92038-8669
================================================================================

INSURANCE REQUIREMENTS. VIASAT, INC. ("Grantor") understands that insurance
coverage is required in connection with the extending of a loan or the
providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"): 

Collateral: All Inventory, Equipment and Fixtures.
            Type. All risks, including fire, theft and liability.
            Amount. Full insurable value.
            Basis. Replacement value.
            Endorsements. Lender's loss payable clause with stipulation that
            coverage will not be cancelled or diminished without a minimum of 
            ten (10) days prior written notice to Lender.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased
through Lender.

INSURANCE MAILING ADDRESS. All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the
following address:

            SCRIPPS BANK - NOTE DEPARTMENT
            P.O. BOX 8669
            LA JOLLA, CA 92038
            (619) 456-2265

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, ten (10)
days from the date of this Agreement, evidence of the required insurance as
provided above, with an effective date of May 17, 1995, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required insurance
or fails to continue such insurance in force, Lender may do so at Grantor's
expense as provided in the applicable security document. The cost of any such
insurance, at the option of Lender, shall be payable on demand or shall be
added to the indebtedness as provided in the security document. GRANTOR
ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL
PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE
BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE
INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR
PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY
FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MAY 17, 1995.

GRANTOR:

VIASAT, INC.

by   /S/ Gregory Monahan
   ------------------------------------
   Gregory D. Monahan, Vice President

- --------------------------------------------------------------------------------
\                               FOR LENDER USE ONLY                            /
\                              INSURANCE VERIFICATION                          /
\                                                                              /
\  DATE:______________________                    PHONE:_____________________  /
\  AGENT'S NAME: ____________________________________________________________  /
\  ADDRESS: _________________________________________________________________  /
\  INSURANCE COMPANY:________________________________________________________  /
\  POLICY NUMBER(S): ________________________________________________________  /
\  EFFECTIVE DATES:__________________________________________________________  /
\  COMMENTS:_________________________________________________________________  /
- --------------------------------------------------------------------------------

================================================================================
   20
                     DISBURSEMENT REQUEST AND AUTHORIZATION




     Principal       Loan Date      Maturity       Loan No     Call    Collateral   Account    Officer    Initials

                                                                                    

   $500,000.00                      07-05-1995   17650-34733    040       50/51                   105       /s/


References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Borrower:  VIASAT, INC.                 Lender:   Scripps Bank
           2290 COSMOS COURT                      La Jolla
           CARLSBAD, CA 92009-1565                7817 Ivanhoe Avenue
                                                  P.O. Box 8669
                                                  La Jolla, CA 92038-8669
================================================================================

LOAN TYPE. This is a Variable Rate (1.000% over Wall Street Journal Prime Rate
as published in the Money Rates section. When a range of rates is shown, the
higher rate will be used., making an initial rate of 10.000%), Revolving Line of
Credit Loan to a Corporation for $500,000.00 due on July 5, 1996.

PRIMARY PURPOSE OF LOAN. The primary purpose of the loan is for:
        [ ] Personal, Family, or Household Purposes or Personal Investment.
        [X] Business (including Real Estate Investment).

SPECIFIC PURPOSE. The specific purpose of this loan is: RENEWAL WITH VOLUNTARY
CREDIT LIMIT REDUCTION, WITH RATE LOWERED TO PRIME PLUS 1%.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:

           Amount paid to others on Borrower's behalf:            $500,000.00
           $500,000.00 UNDISBURSED; TO BE DISBURSED
           PER FUNDS 
           TRANSFER AGREEMENT
                                                                  -----------
           Note Principal:                                        $500,000.00

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges.

           Prepaid Finance Charges Paid In Cash:                      $500.00
                $500.00 DOCUMENT FEE
                                                                -------------
           Total Charges Paid In Cash:                                $500.00

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED MAY 17, 1995.

BORROWER:

VIASAT, INC.

x   /s/ G.D. Monahan
 -----------------------------------
  GREGORY D. MONAHAN, VICE PRESIDENT
================================================================================

   1
                                                                EXHIBIT 10.15
[HERITAGE LEASING CAPITAL LETTERHEAD]
                                                              EFA No. 16281-1
- -------------------------------------------------------------------------------

                         EQUIPMENT FINANCING COMMITMENT
- -------------------------------------------------------------------------------

Subject to the terms set forth in this commitment, the following equipment
financing transaction is agreed to by the undersigned Debtor and Heritage
Leasing Capital ("Secured Party") in connection with the terms of the Equipment
Financing Agreement herein referenced (the "Agreement").

Equipment Financing Agreement: dated as of April 28, 1994

Equipment (all Equipment to be acceptable to Secured Party):  COMPUTER AND
LABORATORY EQUIPMENT.

Commitment Amount:   $400,000.00

Installment Payments:  48 payments of 2.442% of advance payable monthly in
                       advance First and last such payments due at time of
                       scheduling.

Commitment Expiration Date:  June 30, 1994.  As more fully explained below.
                             Security Party has no obligation to make any
                             advance with respect to Equipment not covered by
                             a Schedule to the Agreement executed by Secured
                             Party and Debtor on or prior to this date.

Debtor will comply with, procure, execute and or have executed, acknowledge,
have acknowledged, deliver to Secured Party, record and file any documents set
forth in Exhibit A or accompanying this commitment. The form, substance and
sufficiency of all documents and showings employed in documenting the
contemplated financing transaction must be acceptable to Secured Party and its
counsel. Debtor will do likewise as to such further documents and showings as
Secured Party and its counsel may now or hereafter deem necessary or advisable
to protect Secured Party's rights under the Agreement and interest in the
Equipment. Debtor will pay as directed by Secured Party or reimburse Secured
Party for all searches, filings, title reports, attorney's services and other
charges incurred by Secured Party in connection with all such documents and
showings and any similar documents and showings Secured Party may procure.

Secured Party may, at its option, terminate its obligations to Debtor hereunder
with respect to any and all unscheduled Items of Equipment: (a) at or
subsequent to the Commitment Expiration Date, (b) upon the advent of a material
adverse change in Debtor's financial condition or Debtor's probable ability to
perform its obligations under the Agreement, (c) if the Agreement or any other
agreement under which Debtor has obligations to Secured Party is in default or
an event which with the giving of notice or lapse of time or both would
constitute such a default has occurred and is continuing or (d) with respect to
which more than fifteen percent (15%) would be advanced for shipping costs,
installation charges and design costs by giving Debtor written notice of such
termination. 

ACCEPTED AND AGREED to as of                  ACCEPTED AND AGREED to as of

  April 28, 1994                                 April 28, 1994
- ---------------------------------------       ---------------------------------

Heritage Leasing Capital                         VIASAT, INC.
(Secured Party)                               ---------------------------------
5775 Chesapeake Court                                     (Debtor)
San Diego, CA 92123                               
                                              Address:    2290 Cosmos Court
                                                      -------------------------
                                                          Carlsbad, CA 92009
                                                      -------------------------
   /s/ Ronald L. Wagner    President
By:_________________________________        /s/ Gregory Monahan  Vice President
   Ronald L. Wagner         (Title)                                    of
                                                                 Administration
                                         By:___________________________________
                                            Gregory Monahan          (Title)

                                         By:___________________________________
                                                                     (Title) 
   2

[HERITAGE LEASING CAPITAL LETTERHEAD]                      Page 1 of 2

                                                           EFA No. 16281-1
- -------------------------------------------------------------------------------

                  EXHIBIT A TO EQUIPMENT FINANCING COMMITMENT

                    Accepted by Debtor as of April 28, 1994

- -------------------------------------------------------------------------------

These provisions hereby become part of the Equipment Financing Commitment dated
April 28, 1994, between HERITAGE LEASING CAPITAL and its assignee(s), Secured
Party, and VIASAT, INC., Debtor.

In addition to the terms of the Agreement, Debtor further agrees to the
following additional provisions:

1.      UCC SEARCH/RELEASES 
        -------------------- 
        The Secured Party may search all public records of Debtor to locate and
        identify any conflicting liens against the above referenced Equipment.
        Releases from any intervening parties holding a security interest in
        said Equipment shall be required prior to funding provided herein.

2.      TYPE OF FINANCING
        -----------------
        This is a net equipment financing transaction whereby maintenance,
        insurance, property taxes, and all items of a similar nature are for
        the account of the Debtor.

3.      EXPENSES
        --------
        All expenses associated with the completion of this Agreement
        including, but not limited to, UCC filing fees and searches,
        documentation costs, legal expenses, and equipment verification
        costs are for the account of the Debtor.

4.      MASTER AGREEMENT
        ----------------
        This is a Master Equipment Financing Agreement whereby Schedules may be
        funded as equipment is delivered. Each Schedule to the Agreement,
        however, shall cover equipment with a minimum aggregate cost of
        $20,000.00.

 
                                                              INITIAL
                                                                /s/
   3

[HERITAGE LEASING CAPITAL LETTERHEAD]                      Page 2 of 2

                                                           EFA No. 16281-1
- -------------------------------------------------------------------------------

                  EXHIBIT A TO EQUIPMENT FINANCING COMMITMENT

                    Accepted by Debtor as of April 28, 1994

- -------------------------------------------------------------------------------

5.      INSTALLMENT PAYMENT AMOUNT
        --------------------------
        The installment payment amount of $24.42 per $1,000.00 of advance
        payable monthly in advance is based on the yield of two-year Treasury
        Notes yielding 5.03% as published in the Wall Street Journal on
        Wednesday, March 23, 1994 (the "Index") and will apply for all schedules
        funded by April 30, 1994. If a financing schedule is funded after April
        30, 1994 the rate shall be increased proportionally to any increase in
        the Index. No downward adjustment will be made below the floor index
        rate of 5.03%. Once a schedule is funded, however, the rate will then be
        fixed for the term of the agreement.

6.      COMMITMENT EXPIRATION DATE
        --------------------------
        The commitment expiration date of June 30, 1994 may be extended ninety
        (90) days upon review by Secured Party of the Debtor's then current
        financial condition. Debtor agrees to provide Secured Party such
        financial information and other information Secured Party may reasonably
        request to evaluate Debtor's financial condition for purposes of
        granting such extension.

                                                                

                                                                     INITIAL
                                                                       /s/
   4
[HERITAGE LEASING CAPITAL LETTERHEAD]

                                                                EFA No. 16281-1

                         EQUIPMENT FINANCING AGREEMENT

        THIS EQUIPMENT FINANCING AGREEMENT ("agreement") is dated as of the
        date set forth at the foot hereof and is between HERITAGE LEASING 
        CAPITAL ("Secured Party") and the debtor designated at the foot 
        hereof ("Debtor").

1.      EQUIPMENT; SECURITY INTEREST. The terms and conditions of this agreement
        cover each item of machinery, equipment and other property
        (individually an "Item" or "Item of Equipment" and collectively the
        "Equipment") described in a schedule now or hereafter executed by the
        parties hereto and made a part hereof (individually a "Schedule" and
        collectively the "Schedules"). Debtor hereby grants Secured Party a
        security interest in and to all Debtor's right, title and interest in
        and to the Equipment under the Uniform Commercial Code, such grant with
        respect to an Item of Equipment to be as of Debtor's execution of a
        related equipment financing commitment referencing this agreement or,
        if Debtor then has no interest in such Item, as of such subsequent time
        as Debtor acquires an interest in the Item. Such security interest is
        granted by Debtor to secure performance by Debtor of Debtor's
         obligations to Secured Party hereunder and under any other agreements
        under which Debtor has or may hereafter have obligations to Secured
        Party. Debtor will ensure that such security interest will be and
        remain a sole and valid first lien security interest subject only to
        the lien of current taxes and assessments not in default but only if
        such taxes are entitled to priority as a matter of law.

2.      DEBTOR'S OBLIGATIONS. The obligations of Debtor under this agreement
        respecting an Item of Equipment, except the obligation to pay
        installment payments with respect thereto which will commence as set
        forth in paragraph 3 below, commence upon the grant to Secured Party of
        a security interest in the Item. Debtor's obligations hereunder with
        respect to an Item of Equipment and Secured Party's security interest
        therein will continue until payment of all amounts due, and performance
        of all terms and conditions required, hereunder with respect thereto;
        provided, however, that if this agreement is then in default said
        obligations and security interest will continue during the continuance
        of said default. Upon termination of Secured Party's security interest
        in an Item of Equipment, Secured Party will execute such release of
        interest with respect thereto as Debtor reasonably requests.

3.      INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances
        Secured Party makes on account of the Equipment together with interest
        in installment payments in the amounts and at the times set forth in the
        Schedules, whether or not Secured Party has rendered an invoice
        therefor, at the office of Secured Party set forth at the foot hereof,
        or to such person and/or at such other place as Secured party may from
        time to time designate on notice to Debtor. Any other amounts required
        to be paid Secured Party by Debtor hereunder are due upon Debtor's
        receipt of Secured Party's invoice therefor and will be payable as
        directed in the invoice. Payments under this agreement may be applied to
        Debtor's then accrued obligations to Secured Party in such order as
        Secured Party may choose.

4.      NET AGREEMENT; NO OFFSET; SURVIVAL. This agreement is a net agreement,
        and Debtor will not be entitled to any abatement of installment payments
        or other payments due hereunder or any reduction thereof under any
        circumstances or for any reason whatsoever. Debtor hereby waives any and
        all existing and future claims, as offsets, against any installment
        payments or other payments due hereunder and agrees to pay the
        installment payments and other amounts due hereunder as and when due
        regardless of any offset or claim which may be asserted by Debtor or on
        its behalf. The obligations and liabilities of Debtor hereunder will
        survive the termination of this agreement.

5.      FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT.
        DEBTOR ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED
        AND ACQUIRED SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY
        IS NOT AND WILL NOT BE THE VENDOR OF ANY EQUIPMENT AND THAT SECURED
        PARTY HAS NOT MADE AND WILL NOT MAKE ANY AGREEMENT, REPRESENTATION OR
        WARRANTY WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALIFICATION
        OR FITNESS FOR A PARTICULAR PURPOSE OR VALUE OF THE EQUIPMENT OR ANY
        OTHER MATTER WITH RESPECT THERETO IN ANY RESPECT WHATSOEVER.

6.      NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR
        OTHER SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY
        IN CONNECTION WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED
        PARTY IS NOT BOUND BY A REPRESENTATION OF ANY SUCH PARTY AND, AS
        CONTEMPLATED IN PARAGRAPH 27 BELOW, THE ENTIRE AGREEMENT OF SECURED
        PARTY AND DEBTOR CONCERNING THE FINANCING OF THE EQUIPMENT IS CONTAINED
        IN THIS AGREEMENT AS IT MAY BE AMENDED AS PROVIDED IN THAT PARAGRAPH.

7.      ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering
        the Equipment or any Items thereof will conclusively establish that such
        Equipment has been included under and will be subject to all the terms
        and conditions of this agreement. If Debtor has not furnished Secured
        Party with a Schedule by the earlier of fourteen (14) days after receipt
        thereof or expiration of the commitment period set forth in the
        applicable equipment financing commitment, Secured Party may terminate
        its obligation to advance funds as to the applicable Equipment.

8.      LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor
        vehicles, permanently garage and not remove from the United States, as
        appropriate, each Item of Equipment in Debtor's possession and control
        at the Equipment Location designated in the applicable Schedule, or at
        such other location to which such Item may have been moved with the
        prior written consent of Secured Party. Whenever requested by Secured
        Party, Debtor will advise Secured Party as to the exact location of an
        Item of Equipment; Secured Party will have the right to inspect the
        Equipment and observe its use during normal business hours and to enter
        into and upon the premises where the Equipment may be located for such
        purpose. The Equipment will at all times be used solely for commercial
        or business purposes and operated in a careful and proper manner and in
        compliance with all applicable laws, ordinances, rules and regulations,
        all conditions and requirements of the policy or policies of insurance
        required to be carried by Debtor under the terms of this agreement and
        all manufacturer's instructions and warranty requirements. Any
        modifications or additions to the Equipment required by any such
        governmental edict or insurance policy will be promptly made by Debtor.



   5
INITIAL  /s/
        -----
17. DEFAULT. Any of the following will constitute an event of default hereunder:
    (a) Debtor's failure to pay when due any installment payment or other amount
    due hereunder, which failure continues for ten (10) days after the due date 
    thereof; (b) Debtor's default in performing any other obligation, term or
    condition of this agreement or any other agreement between Debtor and 
    Secured Party or default under any further agreement providing security for
    the performance by Debtor of its obligations hereunder, provided such 
    default has continued for more than twenty (20) days, except as provided in
    (c) and (d) hereinbelow, or, without limiting the generality of subparagraph
    (1) hereinbelow, default under any lease or any mortgage or other instrument
    contemplating the provision of financial accommodation applicable to the 
    real estate where an Item of Equipment is located; (c) any writ or order of 
    attachment or execution or other legal process being levied on or charged 
    against any Item of Equipment and not being released or satisfied within
    ten (10) days; (d) Debtor's failure to comply with its obligations under
    paragraph 14 above or any transfer by Debtor in violation of paragraph 21
    below; (e) a non-appealable judgment for the payment of money in excess of
    $100,000 being rendered by a court of record against Debtor which Debtor 
    does not discharge or make provision for discharge in accordance with the 
    terms thereof within ninety (90) days from the date of entry thereof; (f) 
    death or judicial declaration of incompetency of Debtor, if an individual; 
    (g) the filing by Debtor of a petition under the Bankruptcy Act or any 
    amendment thereto or under any other insolvency law or law providing for 
    the relief of debtors, including, without limitation, a petition for 
    reorganization, arrangement or extension, or the commission by Debtor of 
    an act of bankruptcy; (h) the filing against Debtor of any such petition 
    not dismissed or permanently stayed within thirty (30) days of the filing 
    thereof; (i) the voluntary or involuntary making of an assignment of 
    substantial portion of its assets by Debtor for the benefit of creditors,
    appointment of a receiver or trustee for Debtor or for any of Debtor's 
    assets, institution by or against Debtor or any other type of insolvency 
    proceeding (under the Bankruptcy Act or otherwise) or of any formal or
    informal proceeding for dissolution, liquidation, settlement of claims
    against or winding up of the affairs of Debtor, Debtor's cessation of 
    business activities or the making by Debtor of a transfer of all or a 
    material portion of Debtor's assets or inventory not in the ordinary 
    course of business; (j) the occurrence of any event described in parts 
    (e), (f), (g), (h) or (i) hereinabove with respect to any guarantor or 
    other party liable for payment or performance of this agreement; (k) any 
    certificate, statement, representation, warranty or audit heretofore or 
    hereafter furnished with respect hereto by or on behalf of Debtor or any 
    guarantor or other party liable for payment or performance of this 
    agreement proving to have been false in any material respect at the time 
    as of which the facts therein set forth were stated or certified or having 
    omitted any substantial contingent or unliquidated liability or claim 
    against Debtor or any such guarantor or other party; [struck through text] 
    (m) a transfer of effective control of Debtor, if an organization.

18. REMEDIES. Upon the occurrence of an event of default, Secured Party will
    have the rights, options, duties and remedies of a secured party, and Debtor
    will have the rights and duties of a debtor, under the Uniform Commercial
    Code (regardless of whether such Code or a law similar thereto has been
    enacted in a jurisdiction wherein the rights or remedies are asserted) and,
    without limiting the foregoing, Secured Party may exercise any one or more
    of the following remedies: (a) declare the Casualty Value or such lesser
    amounts as may be set by law immediately due and payable with respect to
    any or all Items of Equipment without notice or demand to Debtor; (b) sue 
    from time to time for and recover all installment payments and other 
    payments then accrued and which accrue during the pendency of such action
    with respect to any or all Items of Equipment; (c) take possession of and,
    if deemed appropriate, render unusable any or all Items of Equipment,
    without demand or notice, wherever same may be located, without any court
    order or other process of law and without liability for any damages 
    occasioned by such taking of possession and remove, keep and store the same
    or use and operate or lease the same until sold; (d) require Debtor to
    assemble any or all Items of Equipment at the Equipment Location therefor,
    such location to which such Equipment may have been moved with the written
    consent of Secured Party or such other location in reasonable proximity to
    either of the foregoing as Secured Party designates; (e) upon ten days 
    notice to Debtor or such other notice as may be required by law, sell or 
    otherwise dispose of any Item of Equipment, whether or not in Secured
    Party's possession, in a commercially reasonable manner at public or private
    sale at any place deemed appropriate and apply the net proceeds of such
    sale, after deducting all costs of such sale, including, but not limited to,
    costs of transportation, repossession, storage, refurbishing, advertising
    and brokers fees, to the obligations of Debtor to Secured Party hereunder or
    otherwise, with Debtor remaining liable for any deficiency and with any
    excess being returned to Debtor; (f) upon thirty (30) days notice to Debtor,
    retain any repossessed or assembled Items of Equipment as Secured Party's
    own property in full satisfaction of Debtor's liability for the installment
    payments due hereunder with respect thereto, provided that Debtor will have
    the right to redeem such Items by payment in full of its obligations to
    Secured Party hereunder or otherwise or to require Secured Party to sell or
    otherwise dispose of such Items in the manner set forth in subparagraph (e)
    hereinabove upon notice to Secured Party within such thirty (30) day period
    or (g) utilize any other remedy available to Secured Party under the Uniform
    Commercial Code or similar provision of law or otherwise at law or in
    equity.
      No right or remedy conferred herein is exclusive of any other right or
    remedy conferred herein or by law; but all such remedies are cumulative of
    every other right or remedy conferred hereunder or at law or in equity, by
    statute or otherwise, and may be exercised concurrently or separately from
    time to time. Any sale contemplated by subparagraph (e) of this paragraph 18
    may be adjourned from time to time by announcement at the time and place
    appointed for such sale, or for any such adjourned sale, without further
    published notice, and Secured Party may bid and become the purchaser at any
    such sale. Any sale of an Item of Equipment, whether under said subparagraph
    or by virtue of judicial proceedings, will operate to divest all right,
    title, interest, claim and demand whatsoever, either at law or in equity, of
    Debtor in and to said Item and will be a perpetual bar to any claim against
    such Item, both at law and in equity, against Debtor and all persons
    claiming by, through or under Debtor.

19. DISCONTINUANCE OF REMEDIES. If Secured Party proceeds to enforce any right
    under this agreement and such proceedings are discontinued or abandoned for
    any reason or are determined adversely, then and in every such case Debtor
    and Secured Party will be restored to their former positions and rights
    hereunder.

20. SECURED PARTY'S EXPENSES. Debtor will pay Secured Party all costs and
    expenses, including attorney's fees and court costs and sales costs not
    offset against sales proceeds under paragraph 18 above, incurred by Secured
    Party in exercising any of its rights or remedies hereunder or enforcing any
    of the terms, conditions or provisions hereof. This obligation includes the
    payment or reimbursement of all such amounts whether an action is ultimately
    filed and whether an action filed is ultimately dismissed.

21. ASSIGNMENT. Without the prior written consent of Secured Party, Debtor will 
    not sell, lease, pledge or hypothecate, except as provided in this 
    agreement, any Item of Equipment or any interest therein or assign, 
    transfer, pledge or hypothecate this agreement or any interest in this
    agreement or permit the Equipment to be subject to any lien, charge or 
    encumbrance of any nature except the security interest of Secured Party
    contemplated hereby. Debtor's interest herein is not assignable and will
    not be assigned or transferred by operation of law. Consent to any of the
    foregoing prohibited acts applies only in the given instance and is not a
    consent to any subsequent like act by Debtor or any other person.
      All rights of Secured Party hereunder may be assigned, pledged, mortgaged,
    transferred or otherwise disposed of, either in whole or in part, without
    notice to Debtor but always, however, subject to the rights of Debtor under
    this agreement. If Debtor is given notice of any such assignment, Debtor 
    will acknowledge receipt thereof in writing. In the event Secured Party 
    assigns this agreement or the installment payments due or to become due
    hereunder or any other interest herein, whether as security for any of its
    indebtedness or
   6
IN WITNESS WHEREOF, the undersigned have executed this agreement as of April 28,
1994. 

        HERITAGE LEASING CAPITAL                    VIASAT, INC.
                                         _______________________________________
                                                      (Debtor)
                                                                      Vice
                                                                   President of
By: /s/ Ronald L. Wagner   President     By: /s/ Gregory Monahan  Administration
   ____________________________________      ___________________________________
    Ronald L. Wagner        (Title)           Gregory Monahan        (Title)

                                         By: ___________________________________
                                                                      (Title)

                                         Address: 2290 Cosmos Court
                                                  ______________________________
                                                  Carlsbad, CA 92009
                                         _______________________________________
                                               (Individual or Partnership
                                                Notarial Acknowledgement)

INDIVIDUAL or PARTNERSHIP:

State of
County of                                 ss:

        On this _____ day of ______________, 19___, before me _________________,
a notary public for the County of ________________________, personally appeared
______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name (is)(are)
subscribed to this instrument, and acknowledged that (he)(she)(they) executed it
(in [his][her][their] capacity as a partner and as the act of the partnership).
        In witness whereof I hereunto set my hand and official seal.

(SEAL)

My commission expires.                  ___________________________________
                                                   Notary Public

86-585 (500)
   7

                            CERTIFICATE OF SECRETARY
                         AS TO ADOPTION OF RESOLUTIONS
                              (Corporate Customer)


The undersigned,                Mark J. Miller
                --------------------------------------------------------------
                             (Corporate Secretary)

hereby certifies that he/she is now, and at all times herein mentioned has
been, the duly elected, qualified and acting Secretary of

                                  VIASAT, INC.
- ---------------------------------------------------------------------------,
                             (Name of Corporation)

a duly organized and existing corporation, and in charge of the minute book and
corporate records of said corporation; that the following is a full, true and
correct copy of certain resolutions adopted by the Board of Directors of said
corporation at a meeting thereof duly held on
    4/18/94
- --------------------, at which meeting a quorum of said Board was at all times
     (Date)
present and acting; and that said resolutions have not been modified nor
rescinded and are at the date of this certificate in full force and effect:

     WHEREAS it is in the best interest of this corporation to enter into a
     certain Equipment Lease Agreement, Equipment Financing Agreement or other
     
                                 HERITAGE LEASING CAPITAL 
     agreement with ----------------------------------------------------------
     ("Lessor/Secured Party") and, where appropriate, commitments now or
     hereafter contemplating the receipt by this corporation of financial
     accommodation from Lessor/Secured Party under the terms and conditions of
     said Equipment Lease Agreement, Equipment Financing Agreement or other
     agreement and may in the future be in this corporation's best interests to
     enter into further such agreements or other agreements with Lessor/Secured
     Party.

     NOW THEREFORE BE IT RESOLVED: That the officers of this corporation listed
     below, and each of them, are hereby authorized and directed to execute,
     acknowledge and deliver in the name of and on behalf of this corporation
     said Equipment Lease Agreement, Equipment Financing Agreement or other
     agreement, said commitments and any such further agreement.

     RESOLVED FURTHER: That the officers, agents and employees of this
     corporation be and each of them is hereby authorized and empowered to do
     and perform such other acts and things, and to make, execute, acknowledge,
     procure and deliver all such other instruments and documents, on behalf of
     this corporation as may be necessary or be by such officer, agent or
     employee deemed appropriate to comply with, or to evidence compliance with,
     the terms, conditions or provisions of said Equipment Lease Agreement,
     Equipment Financing Agreement or other agreement, any such commitment or
     any said further agreement and to consummate the transactions from time to
     time contemplated thereby.

     RESOLVED FURTHER: That this corporation hereby ratifies and confirms the
     acts of the officers, agents or employees of this corporation in heretofore
     entering into any Equipment Lease Agreement, Equipment Financing Agreement,
     commitment or other agreement with Lessor/Secured Party together with any
     other acts performed in relation thereto.

     RESOLVED FURTHER: That the Secretary of this corporation be and he/she is
     hereby authorized and directed to execute, acknowledge and deliver a
     certified copy of these resolutions to Lessor/Secured Party and any other
     person or agency which may require a copy of these resolutions.

     RESOLVED FURTHER: That the following are the true names and specimen
     signatures of the incumbent officers of this corporation authorized by
     these resolutions to so execute, acknowledge and deliver said Equipment
     Lease Agreement, Equipment Financing Agreement or other agreement, said
     commitments and said further agreements.

     (Type names below)                         (For Signature)

     _____________________________, President   X ________________________

     _____________________________, Vice Pres.  X ________________________

       Mark J. Miller                               /s/ Mark J. Miller
     _____________________________, Secretary   X ________________________
                            Vice President of
       Gregory Monahan        Administration        /s/ Gregory Monahan
     _____________________________,__________   X ________________________
                                     (Title)

     RESOLVED FURTHER: That Lessor/Secured Party is authorized to act upon these
     resolutions until written notice of the revocation thereof is delivered to
     Lessor/Secured Party, any such revocation in no way to affect the
     obligations of this corporation to Lessor/Secured Party under any
     agreements entered into by this corporation pursuant to the terms of these
     resolutions prior to receipt by Lessor/Secured Party of such notice of
     revocation.

                                                                       28th 
IN WITNESS WHEREOF, the undersigned has executed this Certificate the ______ day

   April        94
of________, 19______.


                                                /s/ Mark J. Miller
                                           ----------------------------------
                                                      (Secretary)

(Corporate Seal Must Be Affixed
But Failure Not To Affect
Validity Or Reliance)

Heritage Leasing Capital
5775 Chesapeake Court
San Diego, CA 92123

   1
                                                                EXHIBIT 10.16


                     [HERITAGE LEASING CAPITAL LETTERHEAD]

                                                        EFA No. 16333

                         EQUIPMENT FINANCING COMMITMENT


        Subject to the terms set forth in this commitment, the following
equipment financing transaction is agreed to by the undersigned Debtor and
HERITAGE LEASING CAPITAL ("Secured Party") in connection with the terms of the
Equipment Financing Agreement herein referenced (the "Agreement").

        Equipment Financing Agreement: dated as of May 13, 1994

        Equipment (all Equipment to be acceptable to Secured Party): COMPUTER
        AND LABORATORY EQUIPMENT.

        Commitment Amount: $400,000.00

        Installment Payments:  48 payments of 2.442% of advance payable
        monthly in advance
        First and last such payments due at time of scheduling.

        Commitment Expiration Date: June 21, 1994. As more fully explained
        below, Security Party has no obligation to make any advance with respect
        to Equipment not covered by a Schedule to the Agreement executed by
        Secured Party and Debtor on or prior to this date.

Debtor will comply with, procure, execute and/or have executed, acknowledge,
have acknowledged, deliver to Secured Party, record and file any documents set
forth in Exhibit A or accompanying this commitment. The form, substance and
sufficiency of all documents and showings employed in documenting the
contemplated financing transaction must be acceptable to Secured Party and its
counsel. Debtor will do likewise as to such further documents and showings as
Secured Party and its counsel may now or hereafter deem necessary or advisable
to protect Secured Party's rights under the Agreement and interest in the
Equipment. Debtor will pay as directed by Secured Party or reimburse Secured
Party for all searches, filings, title reports, attorney's services and other
charges incurred by Secured Party in connection with all such documents and
showings and any similar documents and showings Secured Party may procure.

Secured Party may, at its option, terminate its obligations to Debtor hereunder
with respect to any and all unscheduled Items of Equipment: (a) at or subsequent
to the Commitment Expiration Date, (b) upon the advent of a material adverse
change in Debtor's financial condition or Debtor's probable ability to perform
its obligations under the Agreement, (c) if the Agreement or any other
agreement under which Debtor has obligations to Secured Party is in default or
an event which with the giving of notice or lapse of time or both would
constitute such a default has occurred and is continuing or (d) with respect to
which more than fifteen percent (15%) would be advanced for shipping costs,
installation charges and design costs by giving Debtor written notice of such
termination. 

ACCEPTED AND AGREED to as of               ACCEPTED AND AGREED to as of 

  May 13, 1994                                May 13, 1994
- ------------------------------------       -----------------------------------

   Heritage Leasing Capital                     VIASAT, INC.
      (Secured Party)                      -----------------------------------
    5775 Chesapeake Court                        (Debtor)
     San Diego, CA 92123                   
                                           Address   2290 Cosmos Court
                                                  ----------------------------
By:  /s/ RONALD L. WAGNER  President
     -------------------------------                 Carlsbad, CA 92009
      Ronald L. Wagner      (Title)               -----------------------------

                                                                    
                                           By: /s/ GREGORY MONAHAN   Vice
                                                                  President
                                                                      of
                                                                Administration
                                               --------------------------------
                                                 Gregory Monahan       (Title)

                                           By: 
                                              ---------------------------------
                                                                       (Title)
   2
                                                                  Page 1 of 2
                                                                  EFA No. 16333

                     [HERITAGE LEASING CAPITAL LETTERHEAD]



                  EXHIBIT A TO EQUIPMENT FINANCING COMMITMENT

                     Accepted by Debtor as of May 13, 1994


These provisions hereby become part of the Equipment Financing Commitment dated
May 13, 1994, between HERITAGE LEASING CAPITAL and its assignee(s), Secured
Party, and VIASAT, INC., Debtor.

In addition to the terms of the Agreement, Debtor further agrees to the
following additional provisions:

1.      UCC SEARCH/RELEASES
        The Secured Party may search all public records of Debtor to locate and
        identify any conflicting liens against the above referenced Equipment.
        Releases from any intervening parties holding a security interest in
        said Equipment shall be required prior to funding provided herein.

2.      TYPE OF FINANCING
        This is a net equipment financing transaction whereby maintenance,
        insurance, property taxes, and all items of a similar nature are for
        the account of the Debtor.

3.      EXPENSES
        All expenses associated with the completion of this Agreement including,
        but not limited to, UCC filing fees and searches, documentation costs,
        legal expenses, and equipment verification costs are for the account of
        the Debtor.

4.      MASTER AGREEMENT
        This is a Master Equipment Financing Agreement whereby Schedules may be
        funded as equipment is delivered. Each Schedule to the Agreement,
        however, shall cover equipment with a minimum aggregate cost of
        $20,000.00.





                                                        INITIAL

                                                        /s/
                                                        -----------------

   3
                                                                  Page 2 of 2
                                                                  EFA No. 16333

                     [HERITAGE LEASING CAPITAL LETTERHEAD]



                  EXHIBIT A TO EQUIPMENT FINANCING COMMITMENT

                     Accepted by Debtor as of May 13, 1994



5.      INSTALLMENT PAYMENT AMOUNT
        The installment payment amount of $24.42 per $1,000.00 of advance
        payable monthly in advance is based on the yield of two-year Treasury
        Notes yielding 5.03% as published in the Wall Street Journal on
        Wednesday, March 23, 1994 (the "Index") and will apply for all schedules
        funded by April 30, 1994. If a financing schedule is funded after
        April 30, 1994 the rate shall be increased proportionally to any
        increase in the Index. No downward adjustment will be made below the
        floor index rate of 5.03%. Once a schedule is funded, however, the rate
        will then be fixed for the term of the agreement.

6.      COMMITMENT EXPIRATION DATE
        The commitment expiration date of June 30, 1994 may be extended ninety
        (90) days upon review by Secured Party of the Debtor's then current
        financial condition. Debtor agrees to provide Secured Party such
        financial information and other information Secured Party may reasonably
        request to evaluate Debtor's financial condition for purposes of
        granting such extension.





                                                        INITIAL

                                                        /s/
                                                        -----------------


   4


                     [HERITAGE LEASING CAPITAL LETTERHEAD]

                                                                EFA No. 16333


                         EQUIPMENT FINANCING AGREEMENT

        THIS EQUIPMENT FINANCING AGREEMENT ("agreement") is dated as of the date
        set forth at the foot hereof and is between HERITAGE LEASING CAPITAL
        ("Secured Party") and the debtor designated at the foot hereof
        ("Debtor").


1.  EQUIPMENT; SECURITY INTEREST. The terms and conditions of this agreement
    cover each item of machinery, equipment and other property (individually an
    "Item" or "Item of Equipment" and collectively the "Equipment") described in
    a schedule now or hereafter executed by the parties hereto and made a part
    hereof (individually a "Schedule" and collectively the "Schedules"). Debtor
    hereby grants Secured Party a security interest in and to all Debtor's
    right, title and interest in and to the Equipment under the Uniform
    Commercial Code, such grant with respect to an Item of Equipment to be as of
    Debtor's execution of a related equipment financing commitment referencing
    this agreement or, if Debtor then has no interest in such Item, as of such
    subsequent time as Debtor acquires an interest in the Item. Such security
    interest is granted by Debtor to secure performance by Debtor of Debtor's
    obligations to Secured Party hereunder and under any other agreements under
    which Debtor has or may hereafter have obligations to Secured Party. Debtor
    will ensure that such security interest will be and remain a sole and valid
    first lien security interest subject only to the lien of current taxes and
    assessments not in default but only if such taxes are entitled to priority
    as a matter of law. 

2.  DEBTOR'S OBLIGATIONS. The obligations of Debtor under this agreement
    respecting an Item of Equipment, except the obligation to pay installment
    payments with respect thereto which will commence as set forth in paragraph
    3 below, commence upon the grant to Secured Party of a security interest in
    the Item. Debtor's obligations hereunder with respect to an Item of
    Equipment and Secured Party's security interest therein will continue until
    payment of all amounts due, and performance of all terms and conditions
    required, hereunder with respect thereto; provided, however, that if this
    agreement is then in default said obligations and security interest will
    continue during the continuance of said default. Upon termination of Secured
    Party's security interest in an Item of Equipment, Secured Party will
    execute such release of interest with respect thereto as Debtor reasonably
    requests.

3.  INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances Secured
    Party makes on account of the Equipment together with interest in
    installment payments in the amounts and at the times set forth in the
    Schedules, whether or not Secured Party has rendered an invoice therefor, at
    the office of Secured Party set forth at the foot hereof, or to such person
    and/or at such other place as Secured Party may from time to time designate
    on notice to Debtor. Any other amounts required to be paid Secured Party by
    Debtor hereunder are due upon Debtor's receipt of Secured Party's invoice
    therefor and will be payable as directed in the invoice. Payments under this
    agreement may be applied to Debtor's then accrued obligations to Secured
    Party in such order as Secured Party may choose.

4.  NET AGREEMENT; NO OFFSET; SURVIVAL. This agreement is a net agreement, and
    Debtor will not be entitled to any abatement of installment payments or
    other payments due hereunder or any reduction thereof under any
    circumstances or for any reason whatsoever. Debtor hereby waives any and all
    existing and future claims, as offsets, against any installment payments or
    other payments due hereunder and agrees to pay the installment payments and
    other amounts due hereunder as and when due regardless of any offset or
    claim which may be asserted by Debtor or on its behalf. The obligations and
    liabilities of Debtor hereunder will survive the termination of this
    agreement.

5.  FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT. DEBTOR
    ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED AND ACQUIRED
    SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY IS NOT AND WILL
    NOT BE THE VENDOR OF ANY EQUIPMENT AND THAT SECURED PARTY HAS NOT MADE AND
    WILL NOT MAKE ANY AGREEMENT, REPRESENTATION OR WARRANTY  WITH RESPECT TO THE
    MERCHANTABILITY, CONDITION, QUALIFICATION OR FITNESS FOR A PARTICULAR
    PURPOSE OR VALUE OF THE EQUIPMENT OR ANY OTHER MATTER WITH RESPECT THERETO
    IN ANY RESPECT WHATSOEVER.

6.  NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR OTHER
    SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY IN
    CONNECTION WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED PARTY
    IS NOT BOUND BY A REPRESENTATION OF ANY SUCH PARTY AND, AS CONTEMPLATED IN
    PARAGRAPH 27 BELOW, THE ENTIRE AGREEMENT OF SECURED PARTY AND DEBTOR
    CONCERNING THE FINANCING OF THE EQUIPMENT IS CONTAINED IN THIS AGREEMENT AS
    IT MAY BE AMENDED AS PROVIDED IN THAT PARAGRAPH.

7.  ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering the
    Equipment or any Items thereof will conclusively establish that such
    Equipment has been included under and will be subject to all the terms and
    conditions of this agreement. If Debtor has not furnished Secured Party with
    a Schedule by the earlier of fourteen (14) days after receipt thereof or
    expiration of the commitment period set forth in the applicable equipment
    financing commitment, Secured Party may terminate its obligation to advance
    funds as to the applicable Equipment.

8.  LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor
    vehicles, permanently garage and not remove from the United States, as
    appropriate, each Item of Equipment in Debtor's possession and control at
    the Equipment Location designated in the applicable Schedule, or at such
    other location to which such Item may have been moved with the prior written
    consent of Secured Party. Whenever requested by Secured Party, Debtor will
    advise Secured Party as to the exact location of an Item of Equipment;
    Secured Party will have the right to inspect the Equipment and observe its
    use during normal business hours and to enter into and upon the premises
    where the Equipment may be located for such purpose. The Equipment will at
    all times be used solely for commercial or business purposes and operated in
    a careful and proper manner and in compliance with all applicable laws,
    ordinances, rules and regulations, all conditions and requirements of the
    policy or policies of insurance required to be carried by Debtor under the
    terms of this agreement and all manufacturer's instructions and warranty
    requirements. Any modifications or additions to the Equipment required by
    any such governmental edict or insurance policy will be promptly made by
    Debtor.
   5
9.      ALTERATIONS; SECURITY INTEREST COVERAGE. Without the prior written
        consent of Secured Party, Debtor will not make any alterations,
        additions or improvements to any Item of Equipment which detract from
        its economic value or functional utility, except as may be required
        pursuant to paragraph 8 above. Secured Party's security interest in the
        Equipment will include all modifications and additions thereto and
        replacements and substitutions therefor, in whole or in part. Such
        reference to replacements and substitutions will not grant Debtor
        greater rights to replace or substitute than are provided in paragraph
        11 below or as may be allowed upon the prior written consent of Secured
        Party.

10.     MAINTENANCE. Debtor will maintain the Equipment in good repair,
        condition and working order. Debtor will also cause each Item of
        Equipment for which a service contract is generally available to the
        covered by such a contract which provides coverages typical as to
        property of the type involved and is issued by a competent servicing
        entity.

11.     LOSS AND DAMAGE; CASUALTY VALUE. In the event of the loss of, theft of,
        requisition of, damage to or destruction of an Item of Equipment
        ("Casualty Occurrence") Debtor will give Secured Party prompt notice
        thereof and will thereafter place such Item in good repair, condition
        and working order; provided, however, that if such Item is determined by
        Secured Party to be lost, stolen, destroyed or damaged beyond repair, is
        requisitioned or suffers a constructive total loss as defined in any
        applicable insurance policy carried by Debtor in accordance with
        paragraph 14 below. Debtor, at Secured Party's option, will (a) replace
        such Item with like equipment in good repair, condition and working
        order whereupon such replacement equipment will be deemed such Item for
        all purposes hereof or (b) pay Secured Party the "Casualty Value" of
        such Item which will equal the total of (i) all installment payments and
        other amounts due from Debtor to Secured Party at the time of such
        payment and (ii) each future installment payment due with respect to
        such Item with each such payment other than any final uneven payment
        discounted at eight percent (8%) per annum simple interest from the date
        due to the date of such payment. Any final uneven payment will be due
        without discount. The discounting contemplated in this paragraph will be
        in accordance with the Financial Compound Interest and Annuity Tables,
        Sixth Edition published by the Financial Publishing Company. Upon such
        replacement or payment, as appropriate, this agreement and Secured
        Party's security interest will terminate with, and only with, respect to
        the Item of Equipment so replaced or as to which such payment is made in
        accordance with paragraph 2 above.

12.     TITLING; REGISTRATION. Each Item of Equipment subject to title
        registration laws will at all times be titled and/or registered by
        Debtor as Secured Party's agent and attorney-in-fact with full power and
        authority to register (but without power to affect title to) the
        Equipment in such manner and in such jurisdiction or jurisdictions as
        Secured Party directs. Debtor will promptly notify Secured Party of any
        necessary or advisable retitling and/or reregistration of an Item of
        Equipment in a jurisdiction other than one in which such Item is then
        titled and/or registered. Any and all documents of title will be
        furnished or caused to be furnished Secured Party by Debtor within sixty
        (60) days of the date any titling or registering or retitling or
        reregistering, as appropriate, is directed by Secured Party.

13.     TAXES. Debtor will make all filings as to and pay when due all personal
        property and other ad valorem taxes and all other taxes, fees, charges
        and assessments based on the ownership or use of the Equipment and will
        pay as directed by Secured Party or reimburse Secured Party for all
        other taxes, including, but not limited to, gross receipts taxes
        (exclusive of federal and state taxes based on Secured Party's net
        income, unless such net income taxes are in substitution for or relieve
        Debtor from any taxes which Debtor would otherwise be obligated to pay
        under the terms of this paragraph 13), fees, charges and assessments
        whatsoever, however designated, whether based on the installment
        payments or other amounts due hereunder, levied, assessed or imposed
        upon the Equipment or otherwise related hereto or to the Equipment, now
        or hereafter levied, assessed or imposed under the authority of a
        federal, state or local taxing jurisdiction, regardless of when and by
        whom payable. Filings with respect to such other amounts will, at
        Secured Party's option, be made by Secured Party or by Debtor as
        directed by Secured Party.

14.     INSURANCE. Debtor will procure and continuously maintain all risk
        insurance against loss of or damage to the Equipment from any cause
        whatsoever for not less than the full replacement value thereof naming
        Secured Party as Loss Payee. Such insurance must be in a form and with
        companies approved by Secured Party, much provide at least thirty (30)
        days advance written notice to Secured Party of cancellation, change or
        modification in any term, condition or amount of protection provided
        therein, must provide full breach of warranty protection and must
        provide that the coverage is "primary coverage" (does not require
        contribution from any other applicable coverage). Debtor will provide
        Secured Party with an original policy or certificate evidencing such
        insurance. In the event of an assignment of this agreement of which
        Debtor has notice, Debtor will cause such insurance to provide the same
        protection to the assignee as its interests may appear. The proceeds of
        such insurance, at the option of Secured Party or such assignee, as
        appropriate, will be applied toward (a) repair or replacement of the
        appropriate Item or Items of Equipment, (b) payment of the Casualty
        Value thereof or (c) payment of, or as provision for, satisfaction of
        any other accrued obligations of Debtor hereunder. Debtor hereby
        appoints Secured Party as Debtor's attorney-in-fact with full power and
        authority to do all things, including, but not limited to, making
        claims, receiving payments and endorsing documents, checks or drafts,
        necessary to secure payments due under any policy contemplated hereby on
        account of a Casualty Occurrence. Debtor and Secured Party contemplate
        that the jurisdictions where the Equipment will be located will not
        impose any liability upon Secured Party for personal injury and/or
        property damage resulting out of the possession, use, operation or
        condition of the Equipment. In the event Secured Party determines that
        such is not or may not be the case with respect to a given
        jurisdiction, Debtor will provide Secured Party with public liability
        and property damage coverage applicable to the Equipment in such amounts
        and in such form as Secured Party requires.

15.     SECURED PARTY'S PAYMENT. If Debtor fails to pay any amounts due
        hereunder or to perform any of its other obligations under this
        agreement, Secured Party may, at its option, but without any obligation
        to do so, pay such amounts or perform such obligations, and Debtor will
        reimburse Secured Party the amount of such payment or cost of such
        performance.

16.     INDEMNITY. Debtor does hereby assume liability for and does agree to
        indemnify, defend, protect, save and keep harmless Secured Party from
        and against any and all liabilities, losses, damages, penalties, claims,
        actions, suits, costs, expenses and disbursements, including court costs
        and legal expenses, of whatever kind and nature, imposed on, incurred by
        or asserted against Secured Party (whether or not also indemnified
        against by any other person) in any way relating to or arising out of
        this agreement or the manufacture, financing, ownership, delivery,
        possession, use, operation, condition or disposition of the Equipment by
        Secured Party of Debtor, including, without limitation, any claim
        alleging latent and other defects, whether or not discoverable by
        Secured Party or Debtor, and any other claim arising out of strict
        liability in tort, whether or not in either instance relating to an
        event occurring while Debtor remains obligated under this agreement, and
        any claim for patent, trademark or copyright infringement. Debtor agrees
        to give Secured Party and Secured Party agrees to give Debtor notice of
        any claim or liability hereby indemnified against promptly following
        learning thereof.
   6
INITIAL  /s/
        -----

17. DEFAULT. Any of the following will constitute an event of default hereunder:
    (a) Debtor's failure to pay when due any installment payment or other amount
    due hereunder, which failure continues for ten (10) days after the due date
    thereof; (b) Debtor's default in performing any other obligation, term or
    condition of this agreement or any other agreement between Debtor and
    Secured Party or default under any further agreement providing security for
    the performance by Debtor of its obligations hereunder, provided such
    default has continued for more than twenty (20) days, except as provided in
    (c) and (d) hereinbelow, or, without limiting the generality of subparagraph
    (1) hereinbelow, default under any lease or any mortgage or other instrument
    contemplating the provision of financial accommodation applicable to the
    real estate where an Item of Equipment is located; (c) any writ or order of
    attachment or execution or other legal process being levied on or charged
    against any Item of Equipment and not being released or satisfied within ten
    (10) days; (d) Debtor's failure to comply with its obligations under
    paragraph 14 above or any transfer by Debtor in violation of paragraph 21
    below; (e) a non-appealable judgment for the payment of money in excess of
    $100,000 being rendered by a court of record against Debtor which Debtor
    does not discharge or make provision for discharge in accordance with the
    terms thereof within ninety (90) days from the date of entry thereof; (f)
    death or judicial declaration of incompetency of Debtor, if an individual;
    (g) the filing by Debtor of a petition under the Bankruptcy Act or any
    amendment thereto or under any other insolvency law or law providing for the
    relief of debtors, including, without limitation, a petition for
    reorganization, arrangement or extension, or the commission by Debtor of an
    act of bankruptcy; (h) the filing against Debtor of any such petition not
    dismissed or permanently stayed within thirty (30) days of the filing
    thereof; (i) the voluntary or involuntary making of an assignment of
    substantial portion of its assets by Debtor for the benefit of creditors,
    appointment of a receiver or trustee for Debtor or for any of Debtor's
    assets, institution by or against Debtor or any other type of insolvency
    proceeding (under the Bankruptcy Act or otherwise) or of any formal or
    informal proceeding for dissolution, liquidation, settlement of claims
    against or winding up of the affairs of Debtor, Debtor's cessation of
    business activities or the making by Debtor of a transfer of all or a
    material portion of Debtor's assets or inventory not in the ordinary course
    of business; (j) the occurrence of any event d