EXHIBIT 10.4
***Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
TECHNOLOGY LICENSING AGREEMENT
This TECHNOLOGY LICENSING AGREEMENT (this "Agreement") is entered into
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on July 24, 1998, but intended to be effective as of January 1, 1998, by and
between WorldSpace Management Corporation, a corporation organized under the
laws of the State of Delaware ("WorldSpace"), American Mobile Radio Corporation,
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a corporation organized under the laws of the State of Delaware ("AMRC"), AMRC
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Holdings, a corporation organized under the laws of the State of Delaware ("AMRC
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Holdings") and American Mobile Satellite Corporation, a corporation organized
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under the laws of the State of Delaware ("AMSC") (each a "Party" and together
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the "Parties").
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WHEREAS, AMRC is taking steps to commence the establishment of a
Digital Audio Radio Service ("DARS") satellite system in the United States (the
----
"AMRC System") under the license granted to AMRC in October 1997 by the U.S.
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Federal Communications Commission, as such license may from time to time be
modified or amended;
WHEREAS, WorldSpace recognizes that in connection with the
establishment of the AMRC System it will be necessary and/or desirable for AMRC
to have the use of certain technology comprised of patents, patent applications,
software, databases, know-how and the intellectual property rights therein owned
by, licensed to or developed from time to time by WorldSpace or any corporation,
partnership or other entity controlled by, controlling or under common ownership
or control with WorldSpace (a "WorldSpace Affiliate" and together with
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WorldSpace, the "WorldSpace Group") and to be used in any digital radio
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broadcasting system being implemented outside the United States by the
WorldSpace Group or in which the WorldSpace Group participates (such system, the
"WorldSpace System"); and
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WHEREAS, AMSC recognizes that in connection with the establishment of
the AMRC System it will be necessary and/or desirable for AMRC to have the use
of certain technology comprised of patents, patent applications, software,
databases, know-how and the intellectual property rights therein owned by,
licensed to or developed from time to time by AMSC and used by AMSC in its
mobile satellite business in the United States (the "AMSC System");
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NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Licensed Technology. (a) The technologies set forth below in
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this Section 1(a) are collectively referred to herein as "WorldSpace Licensed
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Technology:"
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[***** Pages 1-2]
(b) The technologies set forth below in this Section 1(b) are
collectively referred to herein as "AMSC Licensed Technology:"
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***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
(i) the technologies described in that certain document entitled
"Final MT Performance Specification", which sets forth
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functional and performance specifications for mobile terminals
for AMSC's MSAT system;
(ii) [*****]
(iii) technology owned by AMSC or licensable by AMSC relating to the
▇▇▇▇▇▇ low-profile omnidirectional L-band antenna developed by
AMSC as part of its low-rate codec project;
(iv) all other technologies now or from time to time used in the AMSC
System and which have practical application to the AMRC System
and which AMSC owns, acquires or licenses and is permitted to
sublicense to AMRC, subject to the provisions of Section 7
hereof; and
(v) all improvements made from time to time by AMSC to any of the
items set forth in Subsections (i) through (iv) above.
(c) The WorldSpace Licensed Technology and the AMSC Licensed
Technology are collectively referred to herein as the "Licensed Technology".
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2. Grant of License. (a) WorldSpace hereby grants to AMRC a
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license to use the WorldSpace Licensed Technology for the development,
implementation and commercialization of the AMRC System for transmission in and
over the geographic area of the United States and its territories.
(b) AMSC hereby grants to AMRC a license to use the AMSC Licensed
Technology for the development, implementation and commercialization of the AMRC
System for transmission in and over the geographic area of the United States and
its territories.
(c) The licenses granted under Subsections (a) and (b) of this
Section shall include the right for AMRC to incorporate the WorldSpace Licensed
Technology or the AMSC Licensed Technology, as the case may be, in AMRC's own
technology and exploit all such rights granted to AMRC herein with respect to
the Licensed Technology without obligation to make any payment of any kind to
WorldSpace, AMSC or any third party except to the extent expressly set forth in
Section 4 of this Agreement.
3. Sublicensing; Reservation of Certain Rights. (a) Under the
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licenses set forth in Section 2, AMRC shall have the non-exclusive right
(subject to the provisions of this Section 3) to use the Licensed Technology for
the development, implementation and commercialization of a DARS satellite
system. Subject to the terms and conditions set forth herein, each of
WorldSpace and AMSC shall retain all rights not expressly granted hereunder,
including the right to use the WorldSpace Licensed Technology and the AMSC
Licensed Technology, respectively, for any purpose whatsoever.
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
(b) AMRC shall have the right to sublicense the WorldSpace Licensed
Technology to any third party, in connection with the development,
implementation and commercialization of the AMRC System, including, for example,
chipset manufacturers, terrestrial repeater manufacturers and receiver
manufacturers, provided, however, that (i) AMRC shall pay to WorldSpace [*****]
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of the fees received from AMRC's sublicensee with respect to any WorldSpace
Licensed Technology so sublicensed that are in excess of the minimum payments,
if any, to be made to WorldSpace for such sublicensed technology under Section 4
hereof; and (ii) AMRC shall not permit any such sublicensee to further
sublicense the WorldSpace Licensed Technology without the prior written consent
of WorldSpace, which consent shall not be unreasonably withheld.
(c) WorldSpace reserves the right to license the WorldSpace Licensed
Technology to any third party for use in a DARS satellite system other than the
AMRC System for transmission in and over the geographic area of the United
States or its territories; provided, however, that any such license negotiated
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by WorldSpace shall be subject to the consent of AMRC, which consent shall not
be unreasonably withheld; and provided further, that (i) if such third party is
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CD Radio, Inc. or any affiliate thereof, all payments made by such third party
with respect to such license shall be for the benefit of WorldSpace and (ii) if
such third party is neither CD Radio Inc. nor an affiliate thereof, WorldSpace
and AMRC shall determine the proper allocation of the receipt of such payments
at the time of the execution of such license.
(d) AMRC shall have the right to sublicense the AMSC Licensed
Technology to any third party, in connection with the development,
implementation and commercialization of the AMRC System, including, for example,
chipset manufacturers, terrestrial repeater manufacturers and receiver
manufacturers, without obligation to pay any sublicensing fees to AMSC;
provided, however, that (i) AMRC shall pay to AMSC [*****] of the fees received
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from AMRC's sublicensee with respect to any AMSC Licensed Technology so
sublicensed that are in excess of the minimum payments, if any, to be made to
AMSC for such sublicensed technology and (ii) AMRC shall not permit any
sublicensee to further sublicense the AMSC Licensed Technology without the prior
written consent of AMSC, which consent shall not be unreasonably withheld.
(e) AMSC reserves the right to license the AMSC Licensed Technology to
any third party for use in a DARS Satellite System other than the AMSC System or
the AMRC System for transmission in and over the geographic area of the United
States or its territories, provided, however, that any such license for use
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outside the AMSC System or the AMRC System in the United States or its
territories negotiated by AMSC shall be subject to the consent of AMRC, which
consent shall not be unreasonably withheld.
4. Royalty Payments. In the event that AMRC uses the Licensed
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Technology or any portion thereof, except the MCM Technology discussed in
Subsection 4(c), in connection with a DARS satellite system, AMRC shall make
royalty payments to WorldSpace or AMSC, as the case may be, as follows.
(a) [*****] In connection with the use of the [*****] AMRC shall make
the following payments to WorldSpace, on and after the date, if any, that AMRC
declares its intention to use the [*****]; (ii) an ongoing quarterly payment
equal to one and two-tenths percent (1.2%) of AMRC's quarterly net revenues
determined in accordance with GAAP, payable 45 days after the end of each fiscal
quarter with respect to the previous fiscal quarter; and (iii) $0.30 per chipset
manufactured employing the MPEG 1,2, and 2.5 Layer 3 Technology, payable 45 days
after the end of each fiscal quarter with respect to such chipsets manufactured
in the previous fiscal quarter.
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
In the event that WorldSpace shall be required to pay to Thomson any
additional fees relating to AMRC's use of the WorldSpace Licensed Technology,
then WorldSpace shall promptly give notice of such fees to AMRC and AMRC shall
be liable for and pay such fees.
Any such royalties payable to WorldSpace that are not paid when due as
aforesaid shall accrue interest from the date on which payment becomes due at
nine percent (9%) per annum, compounded quarterly, with any payments received
being applied first to the oldest quarterly installments and accumulated
interest thereon.
In the event that the WorldSpace Group should negotiate a reduction in
the royalty payments payable to the owners of certain components of the [*****],
then the royalty payments specified in this Subsection 4(a) shall be reduced
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dollar for dollar (or on an appropriate percentage basis) to reflect any such
reduction.
(b) [*****] In connection with the use of the [*****], AMRC shall
make the following payments to WorldSpace: [*****] per year, payable on January
1 of each year, with the payment for 1998 payable upon signing of this
Agreement.
Any such royalties payable to WorldSpace that are not paid when due as
aforesaid shall accrue interest from the date on which payment becomes due at
nine percent (9%) per annum, compounded quarterly, with any payments received
being applied first to the oldest annual installments and accrued interest
thereon.
(c) [*****] In connection with the development of the [*****], AMRC
shall make the following payments to WorldSpace, regardless of the success or
failure of the development of the [*****], as follows:
(i) [*****], payable upon delivery of such portion of the [*****] as
shall be embodied in the [*****] to be supplied to AMRC at or
around September 30, 1998
(ii) [*****] per fiscal quarter beginning with the first quarter
following such delivery until such time that the sum of such
quarterly royalty fees equals [*****]; and
(iii) [*****] of such costs as may be incurred by WorldSpace relating
to the further development of the [*****] beyond the [*****]
mentioned above, up to a maximum additional amount payable by
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AMRC under this Subsection (iii) equal to [*****];
provided, however, that (x) each of the quarterly royalty fees contemplated by
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Subsection (c)(ii) shall accrue interest from the first day of the related
fiscal quarter at nine percent (9%) per annum, compounded quarterly, (y) no
payments with respect to the quarterly royalty fees contemplated by Subsection
(c)(ii) need be made prior to the time that AMRC records quarterly gross
revenues in excess of [*****], determined in accordance with GAAP, and (z) any
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
payments made with respect to the quarterly royalty fees contemplated by
Subsection (c)(ii) shall be allocated first to the oldest quarterly royalty
payments and accrued interest thereon (an illustrative schedule of such
quarterly royalty payments contemplated under Subsection (c)(ii) is attached
hereto as Annex 1); provided, further, that any such royalty fees contemplated
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by Subsection (c)(iii) payable to WorldSpace that are not paid when due as
aforesaid shall accrue interest from the date on which payment becomes due at
nine percent (9%) per annum, compounded quarterly, with any payments received
being applied first to the oldest annual installments and accrued interest
thereon.
In the event that the additional costs to be incurred by WorldSpace
relating to the further development of the [*****] beyond the [*****] mentioned
in Subsection (iii) above are anticipated by WorldSpace to exceed [*****], then
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AMRC and WorldSpace shall jointly determine whether costs in excess of [*****]
relating to the further development of the [*****] should be incurred and, if
so, the manner of payment and financing, if any, of such costs.
(d) Other Licensed Technology. Licensed Technology other than that
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described in Subsections 4(a) through 4(c) above shall be made available to AMRC
on a royalty-free basis except for such Licensed Technology (i) that is
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sublicensed to AMRC and for which WorldSpace or AMSC, as the case may be, must
pay a royalty, in which case AMRC shall pay an incremental royalty to WorldSpace
or AMSC, as the case may be, based on the royalty paid by WorldSpace or AMSC,
respectively, or (ii) with respect to which the relevant parties agree
otherwise.
5. Improvements to Licensed Technology. (a) AMRC grants to the
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WorldSpace Group a royalty-free, non-exclusive and irrevocable license to use
and sublicense, world-wide, any and all improvements made by or for AMRC to the
WorldSpace Licensed Technology; provided, however, that any sublicense granted
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by WorldSpace shall be subject to the consent of AMRC, which consent shall not
be unreasonably withheld.
(b) AMRC grants to AMSC a royalty-free, non-exclusive and irrevocable
license to use and sublicense, world-wide, any and all improvements made by or
for AMRC to the AMSC Licensed Technology; provided, however, that any sublicense
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granted by AMSC shall be subject to the consent of AMRC, which consent shall not
be unreasonably withheld.
6. AMRC Technology. (a) AMRC grants to the WorldSpace Group and to
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AMSC a royalty-free, non-exclusive and irrevocable license to any and all
technology (and all improvements thereto) hereafter developed by AMRC relating
to the AMRC System (the "AMRC-Developed Technology"), which AMRC-Developed
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Technology may be used and sublicensed (i) worldwide outside the United States
and its territories or (ii) inside the United States and its territories only
(A) in the case of the WorldSpace Group, in connection with the WorldSpace
System, or (B) in the case of AMSC, in connection with the AMSC System (other
than in connection with any DARS satellite system).
(b) WorldSpace hereby grants to AMRC a royalty-free, non-exclusive and
irrevocable license to use and sublicense all improvements made by the
WorldSpace Group to
such AMRC-Developed Technology for the development, implementation and
commercialization of the AMRC System.
(c) AMSC hereby grants to AMRC a royalty-free, non-exclusive and
irrevocable license to use and sublicense all improvements made by AMSC to such
AMRC-Developed Technology for the development, implementation and
commercialization of the AMRC System.
7. Third Party Technology. (a) In the event that AMRC obtains from
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any third party the right to use any technology which could be used in
connection with the development, implementation and commercialization of the
DARS satellite system for transmission in and over the geographic area of the
United States or its territories, AMRC shall make all reasonable efforts to
obtain for the WorldSpace Group and AMSC the right to use such technology in
connection with the development, implementation and commercialization (i)
outside the United States, of the WorldSpace System and the AMSC System,
respectively and (ii) inside the United States and its territories, of the AMSC
System (other than in connection with any DARS satellite system).
(b) In the event that WorldSpace or AMSC obtains from any third party
the right to use any technology which could be used in connection with the
development, implementation and commercialization of a DARS satellite system for
transmission in and over the geographic area of the United States or its
territories, WorldSpace or AMSC, as the case may be, shall make all reasonable
efforts to obtain for AMRC the right to use such technology in the United States
and its territories in connection with the development, implementation and
commercialization of the AMRC System.
8. Representations and Warranties. (a) Each Party hereby represents
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and warrants to each of the other Parties as follows:
(i) it is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(ii) it has the corporate power and authority to own its assets,
carry on its business and execute and deliver this Agreement and
to perform its obligations hereunder, including without
limitation to grant to the other Parties the rights granted
hereunder in accordance with the terms hereof;
(iii) it has taken all appropriate and necessary action to authorize
the execution, delivery and performance of this Agreement;
(iv) all consents, approvals, licenses and authorizations of, and all
filings and registrations with, any governmental or regulatory
authority or other third party necessary for the due execution,
delivery, performance and enforceability of this Agreement, have
been obtained and are in full force and effect; and
(v) this Agreement constitutes a legal, valid and binding
obligation, enforceable in accordance with its terms; the
execution, delivery and performance of this Agreement will not
violate any provision of any laws or regulations applicable to
it.
(b) WorldSpace hereby represents and warrants that:
(i) it has valid and enforceable ownership rights in and to, or has
the rights from the appropriate third parties to license rights
in and to, the WorldSpace Licensed Technology, including but not
limited to any and all patents, copyrights, trade secrets,
designs, software, and any and all other technology therein;
(ii) it has not previously assigned, pledged or otherwise encumbered
any rights to the WorldSpace Licensed Technology in a manner
that conflicts with the rights granted herein;
(iii) to the best knowledge of WorldSpace, no element of the
WorldSpace Licensed Technology violates or infringes any patent,
copyright, trademark, trade secret or other proprietary right of
any third party; and
(iv) there are no judgments, orders, injunctions, decrees, awards or
settlements outstanding (whether rendered by a court, tribunal,
administrative agency or arbitral tribunal) against WorldSpace
or referencing WorldSpace by name or by which WorldSpace is
bound which affects the WorldSpace Licensed Technology or the
use of the WorldSpace Licensed Technology in any manner material
to the transactions contemplated hereby; and there is no
litigation, judicial or arbitral action, or claim involving the
WorldSpace Licensed Technology or the transaction contemplated
by this Agreement which is pending or, to the knowledge of
WorldSpace, threatened against WorldSpace.
(c) AMSC hereby represents and warrants that:
(i) it has valid and enforceable ownership rights in and to, the
AMSC Licensed Technology, including but not limited to any and
all patents, copyrights, trade secrets, designs, software, and
any and all other technology therein;
(ii) it has not previously assigned, pledged or otherwise encumbered
any rights to the AMSC Licensed Technology in a manner that
conflicts with the rights granted herein;
(iii) to the best knowledge of AMSC, no element of the AMSC Licensed
Technology violates or infringes any patent, copyright,
trademark, trade secret or other proprietary right of any third
party; and
(iv) there are no judgments, orders, injunctions, decrees, awards or
settlements outstanding (whether rendered by a court, tribunal,
administrative agency or arbitral tribunal) against AMSC or
referencing AMSC by name or by which AMSC is bound which affects
the AMSC Licensed Technology or the use of the AMSC Licensed
Technology in any manner material to the transactions
contemplated hereby; and there is no litigation, judicial or
arbitral action, or claim involving the AMSC Licensed Technology
or the
transaction contemplated by this Agreement which is pending or,
to the knowledge of AMSC, threatened against AMSC.
(d) THE PARTIES ACKNOWLEDGE THAT THE WARRANTIES EXPRESSED HEREIN ARE
THE SOLE WARRANTIES AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WHICH ARE HEREBY EXPRESSLY DISCLAIMED.
9. Certain Covenants. (a) Each Party agrees to use reasonable
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efforts to inform the other Parties promptly of the existence of any technology
or improvement referred to in Sections 5, 6 and 7 of which it becomes aware
which could be used in connection with the development, implementation and
commercialization of a DARS satellite system.
(b) Each Party agrees to make available to the other Parties any
detailed specifications required for such other Party to make use of the
technology licensed hereunder.
(c) WorldSpace agrees not to sell, assign or transfer to any third-
party any element of, or interest in, the WorldSpace Licensed Technology for
transmission in and over the geographic area of the United States and its
territories in a manner inconsistent with the licenses granted under this
Agreement.
(d) AMSC agrees not to sell, assign or transfer to any third-party any
element of, or interest in, the AMSC Licensed Technology for transmission in and
over the geographic area of the United States and its territories in a manner
inconsistent with the licenses granted under this Agreement.
(e) AMRC agrees not to sell, assign or transfer to any third-party any
element of, or interest in, the AMRC-Developed Technology in a manner
inconsistent with the licenses granted under this Agreement.
(f) Until such time as may otherwise be agreed by the Parties hereto,
WorldSpace shall provide to AMRC, promptly after the end of each fiscal quarter,
information regarding the costs incurred for, and the status of, any and all
technologies developed in connection with the MCM Technology.
10. Confidentiality. (a) The Parties recognize that in the course
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of performance of this Agreement, either of them may disclose to the other
information about the disclosing Party's business or activities which such Party
considers proprietary and confidential including, without limitation, trade
secrets, marketing and business plans, customer lists, and information
concerning the operations of the Parties (all of such proprietary and
confidential information is hereinafter referred to as the "Confidential
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Information"). The Party who receives any Confidential Information (the
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"Receiving Party") agrees to maintain a confidential status for such
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Confidential Information, to treat such Confidential Information in the same
manner as it treats its own Confidential Information, not to use any such
Confidential Information for any purpose other than the purpose for which it was
originally disclosed to the Receiving Party, and not to disclose any of such
Confidential Information to any third party, except to such vendors, consultants
and other parties necessary for such Party to conduct its business, or unless
such information: (i) is or has become available to the public from a source
other than the Receiving Party; (ii) was already known to the Receiving Party
from sources other than the other Party at
the time it was disclosed to the Receiving Party; (iii) is disclosed to the
Receiving Party by a third party who is not under any legal obligation
prohibiting such disclosure; or (iv) is required to be disclosed by law.
(b) The Parties acknowledge that they may be required to disclose
Confidential Information to governmental agencies or authorities by law or in
connection with the obtaining of approvals for the Company, and each shall
endeavor to limit disclosure to that purpose. If either Party is required to
disclose Confidential Information pursuant to this Section, such Party will
immediately give the other Party written notice of any such disclosure, which
notice shall specify the substance of the disclosure. The Party making such a
disclosure shall take all reasonable steps to prevent further disclosure of such
Confidential Information.
(c) The provisions of this Section 10 shall survive the termination of
this Agreement for any reason whatsoever. Upon such termination, the Parties
shall return or destroy any Confidential Information which may have been
transmitted by the other Party, as well as any copy or other reproduction,
including without limitation, electronic data reproductions or representations.
1. 11. Termination and Default. (a) The term of this Agreement
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shall commence on the date first written above and shall be automatically
renewed yearly thereafter, unless sooner terminated in accordance with this
Section 11.
(b) If any of WorldSpace or AMSC, on the one hand, or AMRC on the
other hand, shall:
(i) breach any of the terms and conditions of this Agreement, and
shall fail to remedy such breach within ninety (90) days after
an arbitrator duly appointed in accordance with Section 13
hereof determines that any of WorldSpace or AMSC, on the one
hand, or AMRC, on the other hand, has breached or violated any
of its material obligations hereunder, unless such breach is so
remedied; or
(ii) become insolvent or go into liquidation or receivership or be
admitted to the benefits of any procedures for the settlement or
postponement of debts or be declared bankrupt; or
(iii) become a party to dissolution proceedings;
then (except as otherwise expressly provided herein), by providing written
notice, (A) AMRC may terminate this Agreement (1) with respect to WorldSpace to
the extent WorldSpace is the subject of any matter covered by Subsection (i),
(ii) or (iii) above or (2) with respect to AMSC to the extent AMSC is the
subject of any matter covered by Subsection (i), (ii) or (iii) above; (B)
WorldSpace may terminate its obligations under this Agreement, to the extent
AMRC is the subject of any matter covered by Subsection (i), (ii) or (iii) above
or (C) AMSC may terminate its obligations under this Agreement, to the extent
AMRC is the subject of any matter covered by Subsection (i), (ii) or (iii)
above.
(c) After termination of this Agreement, AMRC shall return all
documents (and copies thereof) and other embodiments of the Licensed Technology
to WorldSpace or AMSC, as appropriate, or shall certify that such documents have
been destroyed.
12. GOVERNING LAW. THIS AGREEMENT, INCLUDING ALL ANNEXES, SHALL BE
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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICTS OR CHOICE OF LAWS PROVISIONS THEREOF.
13. Arbitration. (a) Any controversy or claim arising out of or
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relating to this Agreement or the breach hereof shall be settled by arbitration
in Washington, D.C. in accordance with the Expedited Arbitration Rules of
JAMS/Endispute. The award of the arbitrator, JAMS/Endispute, shall be binding
upon the parties hereto.
(b) Each Party hereby submits to the jurisdiction of any arbitral
tribunal referred to above, agrees that any award rendered by the arbitrators
against it may be executed against its assets in any jurisdiction and submits to
the jurisdiction of the courts in such jurisdiction in any legal proceedings
relating to the execution of such award.
14. LIMITATION OF LIABILITY. (a) NO PARTY HERETO NOR ITS DIRECTORS,
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OFFICERS, EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS, PARTNERS OR STOCKHOLDERS
SHALL BE LIABLE TO ANY OTHER PARTY HERETO FOR ANY LOSS OR DAMAGE WHATSOEVER
(INCLUDING ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE)
ARISING FROM THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, UNLESS
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(1) ARISING FROM THE WILLFUL MISCONDUCT OF SUCH PARTY, OR
(2) ARISING FROM THE GROSS NEGLIGENCE OF SUCH PARTY, IN WHICH CASE
SUCH LIABILITY SHALL BE LIMITED TO LOSSES OR DAMAGES OTHER THAN
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SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES
IN AN AMOUNT NOT TO EXCEED THE ROYALTY PAYMENT, IF ANY, RECEIVED
BY SUCH PARTY WITH RESPECT TO THE RELEVANT TECHNOLOGY LICENSED BY
SUCH PARTY HEREUNDER.
(b) In the event of a claim of infringement of a third party's
intellectual property rights arising from the WorldSpace Licensed Technology,
WorldSpace will, to the extent consistent with its contractual, fiduciary,
regulatory and other obligations, cooperate with AMRC as may be reasonably
requested in the defense of such claim.
(c) In the event of a claim of infringement of a third party's
intellectual property rights arising from the AMSC Licensed Technology, AMSC
will, to the extent consistent with its contractual, fiduciary, regulatory and
other obligations, cooperate with AMRC as may be reasonably requested in the
defense of such claim.
(d) In the event of a claim of infringement of a third Party's
intellectual property rights arising for the AMRC Developed Technology, AMRC
will, to the extent consistent with its contractual, fiduciary, regulatory and
other obligations, cooperate with WorldSpace and/or AMSC, as the case may be, as
may be reasonably requested in the defense of such claim.
15. Notices. Any and all notices or other communications or
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deliveries required or permitted to be given pursuant to any of the provisions
of this Agreement shall be deemed to have been duly given for all purposes if
sent by certified or registered mail, return receipt requested and postage
prepaid, hand delivered or sent by a nationally recognized overnight courier to
the address listed below or at such other address as any Party may specify by
notice given to the other Party in accordance with this Section 15.
Notices to AMRC shall be sent to:
AMRC Holdings, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices to AMSC should be sent to:
American Mobile Satellite Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Notices to WorldSpace shall be sent to:
WorldSpace Management Corporation
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Assistant General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The date of giving of any such notice shall be the date of delivery when
delivered by hand or by overnight courier, or three days following the posting
of the mail.
16. Waiver. No failure or delay by any Party at any time to enforce
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one or more of the terms, conditions or obligations of this Agreement shall
constitute a waiver of such terms, conditions or obligations or shall preclude
such Party from requiring performance by the other Party at any time. No waiver
of the provisions hereof shall be effective unless in writing and signed by the
Party to be charged with such waiver. No waiver shall be deemed a continuing
waiver or waiver in respect of any subsequent breach or default, either of
similar or different nature, unless expressly so stated in writing.
17. Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties hereto with respect to the subject matter contained
herein. This Agreement supersedes all prior agreements and understanding
between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized directors,
officers or representatives as of the date and year first above written.
WORLDSPACE MANAGEMENT CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman & CEO
AMERICAN MOBILE SATELLITE CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
AMRC HOLDINGS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President & CEO
AMERICAN MOBILE RADIO CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President & CEO
Attachments:
Annex 1 - Illustration of Royalty Payments contemplated under Section 4(c)
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
Annex 1
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Illustration of Royalty Payments Contemplated under Section 4(c)
----------------------------------------------------------------
[*****]
AMENDMENT NO. 1 TO TECHNOLOGY LICENSING AGREEMENT
This AMENDMENT NO. 1 TO TECHNOLOGY LICENSING AGREEMENT (this
"Amendment") is entered into as of June 7, 1999, and amends that certain
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TECHNOLOGY LICENSING AGREEMENT (the "Technology Agreement") entered into on July
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30, 1998, but intended to be effective as of January 1, 1998, by and between
WorldSpace Management Corporation, a corporation organized under the laws of the
State of Delaware ("WorldSpace"), XM Satellite Radio Inc. (formerly known as
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American Mobile Radio Corporation ("AMRC")), a corporation organized under the
----
laws of the State of Delaware ("XM"), XM Satellite Radio Holdings Inc. (formerly
--
known as AMRC Holdings), a corporation organized under the laws of the State of
Delaware ("XM Holdings") and American Mobile Satellite Corporation, a
-----------
corporation organized under the laws of the State of Delaware ("American
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Mobile") (each a "Party" and together the "Parties").
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WHEREAS, XM is employing various technologies developed by WorldSpace
(and its affiliates) and AMSC in connection with the development and
implementation of XM's satellite digital audio radio system pursuant to a
license granted in October 1997 by the U.S. Federal Communications Commission
and
WHEREAS, XM is taking steps to commence the establishment of a Digital
Audio Radio Service ("DARS") satellite system in the United States and other
nations in North America in the footprint of XM's satellites under the license
granted to XM in October 1997 by the U.S. Federal Communications Commission (the
"XM System"), as such license may from time to time be modified or amended and
such other licenses as may be required by appropriate governmental agencies in
such other nations in North America in the footprint of XM's satellites; and
WHEREAS, WorldSpace recognizes that in connection with the
establishment of the XM System it will be necessary and/or desirable for XM to
have the use of certain technology comprised of patents, patent applications,
software, databases, know-how and the intellectual property rights therein owned
by, licensed to or developed from time to time by WorldSpace or any corporation,
partnership or other entity controlled by, controlling or under common ownership
or control with WorldSpace (a "WorldSpace Affiliate" and together with
WorldSpace, the "WorldSpace Group"; for purposes of this agreement WorldSpace
----------------
Inc., a minority shareholder in WorldSpace International Network Inc., the
parent company of WorldSpace , is recognized as a member of the WorldSpace
Group) and to be used in any digital radio broadcasting system being implemented
outside the United States by the WorldSpace Group or in which the WorldSpace
Group participates (such system, the "WorldSpace System"); and
-----------------
WHEREAS, the Parties have determined that it is desirable and
appropriate to clarify and amend certain provisions of the Technology Agreement
in connection with the
1
entering into of the Exchange Agreement by American Mobile, WorldSpace, Inc. and
the other parties thereto;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. Technology Transfer. (a) It was and remains the intent of XM,
-------------------
American Mobile and WorldSpace that no transfer of equipment or technology from
XM to WorldSpace (or any of its affiliates) or to American Mobile will be made
pursuant to the Technology Agreement or otherwise unless the transfer is
consistent with the requirements of the U.S. export control laws, including the
Export Administration Regulations and the International Traffic in Arms
Regulations.
(b) For the avoidance of doubt, the Technology Agreement is hereby
amended by the addition of new Section 18 thereto as follows:
18. Export Control. No transfer of equipment or technology (x) from
--------------
AMRC to WorldSpace or any WorldSpace Affiliate or to AMSC, (y) from
WorldSpace or any WorldSpace Affiliate to AMRC or AMSC or (z) from
AMSC to WorldSpace or any WorldSpace Affiliate or AMRC, will be made
pursuant to this Agreement or otherwise unless the transfer is
consistent with the requirements of the U.S. export control laws,
including the Export Administration Regulations and the International
Traffic in Arms Regulations.
(c) XM hereby confirms that it understands that it may be required to
enter into technical assistance agreements that meet the requirements of the
U.S. export control laws, including the Export Administration Regulations and
the International Traffic in Arms Regulations, in connection with access by
foreign nationals to data subject to U.S. export control regulations. XM
further understands that the export of certain information required for (i) the
development of its payload by Alcatel S.A. in France and (ii) the export of its
satellites for launch on the Sea Launch System are subject to the export control
licensing requirements imposed by applicable U.S. law and regulation, including
the Export Administration Regulations and the International Traffic in Arms
Regulations. In this connection, XM agrees to obtain, and will enable the
appropriate third parties to obtain, all necessary U.S. governmental approvals
for such technical assistance agreements and export licenses in a time frame
consistent with the scheduled launch of the XM Satellite Radio system.
(d) XM hereby covenants that any technical information it has in its
possession which is subject to the requirements of the U.S. export control laws,
including the Export Administration Regulations and the International Traffic in
Arms Regulations, will be retained in accordance with the XM Satellite Radio
Inc. Export Control Management Policy.
2
2. Use of Technology. (a) The parties hereby confirm that it was
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and remains the intent of XM, American Mobile and WorldSpace that (i) XM be
permitted to use the WorldSpace Licensed Technology and AMSC Licensed Technology
for commercialization of the XM System anywhere in the footprint of XM's
satellites launched for the XM system, and (ii) any use by WorldSpace (or any of
its licensees or affiliates) of any XM-developed (or XM improved) technology
licensed to WorldSpace under the Technology Agreement be limited to U.S. use by
the WorldSpace Group at its U.S.-based facilities for the WorldSpace Group's
satellite DARS systems outside the United States. XM, American Mobile and
WorldSpace hereby agree to confirm their intent and to amend the Technology
Agreement as set forth in Section 2(b)-(g) hereof.
(b) The phrase "and other nations in North America in the footprint of
AMRC's satellites launched for the XM System (as defined in Amendment No. 1
hereto)" is hereby inserted after the words "United States" in the second line
of the first recital on page one of the Technology Agreement and the phrase "and
such other licenses as may be required by appropriate governmental agencies in
such other nations in North America in the footprint of AMRC's satellites
launched for the XM System " is hereby inserted after the word "amended" in the
fourth line of the first recital on page one of the Technology Agreement.
(c) The phrase "and other nations in North America in the footprint of
AMRC's satellites launched for the XM System" is hereby inserted after the word
"territories" appearing the fourth line of Section 2(a) of the Technology
Agreement.
(d) The phrase "and other nations in North America in the footprint of
AMRC's satellites launched for the XM System" is hereby inserted after the word
"territories" appearing the fourth line of Section 2(b) of the Technology
Agreement.
(e) The following proviso is hereby added to the end of Section 5(a)
of the Technology Agreement:
provided, further, that the license of the WorldSpace Group to use
-----------------
such improvements in the United States shall be limited to the use of
such improvements at the U.S.-based facilities for the WorldSpace
Group's satellite DARS systems outside the United States.
(f) The following parenthetical phrase is hereby added following the
words "AMSC Licensed Technology" in Section 5(b) of the Technology Agreement:
(other than in connection with any DARS satellite system)
3
(g) The following parenthetical phrase is hereby added following the
words "WorldSpace System" in clause (ii)(A) of Section 6(a) of the Technology
Agreement :
(solely to the extent such technology (and improvements) is used in
the U.S.-based facilities for the WorldSpace Group's satellite DARS
systems outside the United States.)
3. Irrevocable License. The Parties hereby agree to amend the
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Technology Agreement by (i) deleting the phrase "grants to AMRC a license" in
the first line of Section 2(a) thereof, and inserts in its stead the phrase
"grants to AMRC an irrevocable license" and (ii) deleting the phrase "grants to
AMRC a license" in the first line of Section 2(b) thereof, and inserts in its
stead the phrase "grants to AMRC an irrevocable license".
4. Subsequently-Developed Technologies. The Parties hereby agree to
-----------------------------------
amend the Technology Agreement to exclude the licensing of certain technologies
developed after the fifth anniversary of the effective date of the Technology
Agreement as follows:
(a) Section 6(a) of the Technology Agreement is hereby amended by
striking the word "hereafter" and inserting in its place "within five years
after the date of this Agreement"
(b) The following phrase is hereby added following the phrase "AMRC
System" in the second line of Section 1(a)(iv)
(which technologies shall have been developed within five years after
the effective date of this Agreement)
(c) The Technology Agreement is hereby amended by the addition of new
Section 19 thereto as follows:
19. AMRC and the WorldSpace Group shall, to the extent mutually
desirable, enter into licensing arrangements on commercially
reasonable terms with respect to AMRC-Developed Technology and
technology developed by the WorldSpace Group, in each case developed
after the fifth anniversary of the effective date of this Agreement.
5. Rights on Termination. The Parties hereby agree to amend the
----------------------
Technology Agreement by deleting Section 11(c) therefrom.
6. Limitation on Damages. The Parties hereby confirm that in the
---------------------
event of any breach of the Technology Agreement by XM, the damages payable by XM
shall be limited
4
to money damages only; accordingly equitable relief shall not be available and
XM's irrevocable right to use the technology licensed thereunder shall not be
terminated; provided however that this restriction on the application of
equitable relief as a remedy shall not apply to any breach relating to XM's
obligations to license technology or improvements to WorldSpace and AMSC
7. Effective Time. This Amendment shall be effective upon the
--------------
Closing under that certain Exchange Agreement dated as of June 6, 1999 between
American Mobile, XM Holdings and WorldSpace, Inc.
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to be duly executed and delivered by their proper and duly authorized
directors, officers or representatives as of the date and year first above
written.
WORLDSPACE MANAGEMENT CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
AMERICAN MOBILE SATELLITE CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
XM SATELLITE RADIO HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: SVP General Counsel and Secretary
XM SATELLITE RADIO INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: SVP General Counsel and Secretary
6
