EXHIBIT 10.5
*** 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.
TECHNICAL SERVICES AGREEMENT
----------------------------
THIS TECHNICAL SERVICES AGREEMENT ("Agreement") is entered into on July 24,
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1998, but intended to be effective as of January 1, 1998, between AMRC Holdings,
Inc., a cor
poration duly organized and existing under the laws of the State of
Delaware (the "Company"), and American Mobile Satellite Corporation, a
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corporation duly organized and existing under the laws of the State of Delaware
(the "Service Provider"), each of which may be referred to individually as a
----------------
"Party" or collectively as the "Parties." This Agreement and all addenda
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contemplated hereby are collectively referred to as the "Agreement" unless
---------
indicated otherwise.
WHEREAS, the Federal Communications Commission ("FCC" or "Commission") has
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issued to the Company one of two digital audio radio satellite ("DARS") licenses
----
to provide audio programming via satellite to the United States (the
"Business");
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WHEREAS, the Service Provider possesses, inter alia, technical expertise
and know-how in the areas of engineering, satellite system design and
development, ground segment infrastructure design and development, and similar
areas related to the development of a DARS system;
WHEREAS, the Company has selected the Service Provider, and the Service
Provider is willing, to perform the Services specified herein on the terms and
conditions set forth herein; and
WHEREAS, on or about the date hereof the Company has entered into a
substantially identical agreement with WorldSpace Management Corporation
("WorldSpace"), acting as service provider thereunder, as represented in Section
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5.2 hereof.
NOW, THEREFORE, in consideration of the mutual obligations a
nd benefits set
forth in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Service Provider agree to the following terms
and conditions:
1. Services
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1.1 (a) The Service Provider shall, at the request of the Company, provide
certain technical, engineering, marketing and strategic planning, or
any other services as may be requested by the Company in connection
with the establishment or operation of the Business (the "Services").
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The Services may be provided to the Company, or to its subsidiary,
American Mobile Radio Corporation. Nothing in this Agreement shall
obligate the Company to purchase a minimum or specific amount of
Services.
(b) The Board of Directors of the Company or one or more of its authorized
designees shall meet no later than the 30th day before the beginnin
g
of each calendar quarter in order to determine the goals which the
Company must achieve in the following quarter, including the Company's
support needs in achieving those goals. No later than the 15th day
before the beginning of each calendar quarter, the Company shall
inform the Service Provider of the Services to be provided by the
Service Provider in the furtherance of achieving those goals. No
later than the 10th day before the beginning of each calendar quarter,
the Service Provider shall submit to the Company an itemization (each,
an "Itemization")
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confirming the Service Provider will provide the Services specified by
the Company for the coming quarter, broken down by employee, rate per
hour and total cost estimates.
(c) The Company and the Service Provider shall agree upon the amount of
compensation for the Services in accordance with Section 2.1, in a
written addendum to this Agreement, which shall attach the related
Itemization (the "Addendum," and collectively the "Addenda").
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(d) The Service Provider shall monitor the actual costs of the Services
provided on a monthly basis (and may, if it elects do so, on a more
frequent basis) and shall provide a written notice (the "Initial Cost
------------
Notice") to the Company during any quarter prior to the incurrence or
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expenditure of one hundred percent (100%) of the cost estimates for
such quarter, as set forth in the Itemization to the Addendum for such
quarter, or as promptly thereafter as may be practicable.
Notwithstanding the foregoing, no failure or delay in providing any
such notice shall relieve the Company of the obligation to make
payment for services as provided herein. In addition, in the event
that the actual cost of the Services provided by the Service Provider
during any quarter exceeds or is expected to exceed one hundred twenty
percent (120%) of the cost estimates for such Services as set forth in
the Itemization attached to the related Addendum, the Service Provider
shall provide notice to the Company of any such excess (the "Excess
------
Cost Notice") as promptly as practicable after the Service Provider
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determines that the actual cost is expected to exceed one hundred
twenty percent (120%) of the cost estimates.
At the Company's request, the Service Provider shall modify the
Services to be provided in any calendar quarter, subject to the
Service Provider's ability to provide the Services effectively and
efficiently; the Service Provider shall then provide Services as if
such modification had appeared on the Itemization attached to the
related Addendum; and such modification shall in due course be
reflected in an amendment of such Addendum in accordance with Section
12.5.
(e) The Parties agree that Addendum No. 1 entered into simultaneously
herewith sets forth the Services rendered and to be rendered during
the first quarter of 1998.
1.2 The Service Provider shall use its best efforts to ensure that the Services
provided hereunder are consistent with accepted industry standards. Such
Services shall be provided by the Service Provider as described in this
Agreement when and where required by the Company, in a timely and
professionally competent manner.
1.3 The Service Provider shall render Services in compliance with all
applicable federal, state and local requirements, including, without
limitation, all equal employment opportunity, compensation, benefit plan,
disability, workers' compensation, anti-discrimination, and safety and
health laws.
1.4 In order for the Service Provider to provide the Services hereunder,
the Company shall disclose to the Service Provider such information and
data which is reasonably requested by the Service Provider. The Service
Provider shall use such information and data exclusively in the performance
of its obligations hereunder, and such disclosure shall be subject to the
terms and conditions of this Agreement, including Section 7, if such
disclosure is of Confidential Information as defined herein.
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1.5 Technology and the intellectual property rights therein owned by the
Service Provider and provided to the Company in connection with the
provision of Services herewith shall be subject to a Technology Licensing
Agreement between and among the Parties.
2. Payment Terms
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2.1 Costs for Services Rendered:
---------------------------
(a) Unless agreed otherwise, the Service Provider shall be compensated at
the rates set forth in Annex I for Services performed, plus
reimbursement of reasonable out-of-pocket expenses. Such rates shall
be determined by the Service Provider and shall not be changed without
the prior written consent of the Company. The Company shall pay the
Service Provider for such Services as set forth below:
(i) In the event that the actual cost of the Services provided by the
Service Provider during any quarter are equal to or less than one
hundred twenty percent (120%) of the cost estimates for such Services
as set forth in the Itemization attached to the related Addendum, then
----
the Company shall be obligated to pay the actual costs for such
Services;
(ii) in the event that (x) the actual cost of the Services provided
by the Service Provider during any quarter exceeds one hundred twenty
percent (120%) of the cost estimates for such Services as set forth in
the Itemization attached to the related Addendum and (y) the Service
Provider fails to provide the Company with either the Initial Cost
Notice or the Excess Cost Notice, then the Company shall be obligated
----
to pay no more than one hundred twenty percent (120%) of the cost
estimates for such Services as originally set forth in the Itemization
attached to the related Addendum; and
(iii) in the event that (x) the actual cost of the Services provided
by the Service Provider during any quarter is expected to exceed one
hundred twenty percent (120%) of the cost estimates for such Services
as set forth in the Itemization attached to the related Addendum and
(y) the Service Provider has provided
(A) the Initial Cost Notice, the Company shall be authorized to
modify the Services being provided during such quarter, in
consultation with the Service Provider, in order to reduce the
cost of Services for such quarter, or
(B) the Excess Cost Notice, the Company shall be authorized to
direct the Service Provider to modify or suspend providing
Services for the remainder of such quarter after the incurrence
or expenditure of one hundred twenty percent (120%) of such cost
estimates;
in the event the Company does not provide to the Service Provider
notice of modification or suspension of Services as provided above,
the Service Provider shall continue to perform the Services for the
duration of such quarter and the Company shall be obligated to pay for
the actual cost of the Services, which cost shall in due course be
reflected in an amendment of such Addendum in accordance with Section
12.5.
(b) Unless agreed otherwise, all properly documented reasonable out-of-
pocket expenses shall be charged by the Service Provider to the
Company at actual cost; provided,
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3
however, that without the Company's prior written approval the Company
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shall not be obligated to reimburse out-of-pocket expenses in excess
of $20,000 per month.
(c) The Company shall be under no obligation to make any payments other
than those contemplated by this Agreement.
2.2 Right to Inspect: Upon the Company's reasonable request, the Service
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Provider shall provide the Company with copies of all documents reasonably
necessary for the Company's independent determination of the Service
Provider's costs invoiced for Services rendered. The Company or its agent
shall also have the right to inspect during normal business hours any item,
including, without limitation, meters, invoices, contracts, records or such
additional documents reasonably necessary for the Company or its agent to
audit the Service Provider's out-of-pocket expenses, provided, however that
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the Company shall give the Service Provider at least 24 hours advance
notice of its intention to inspect any item in accordance with this Section
2.2.
2.3 Quarterly Invoice: Within thirty (30) days following the end of each
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calendar quarter, the Service Provider shall submit to the Company an
invoice setting forth a description of the Services rendered during the
preceding calendar quarter, plus out-of-pocket expenses incurred during
such period. A proper invoice shall set forth the amount charged for each
separate Service rendered on a separate line, and the total sum due for all
Services for the relevant period. Each invoice shall be payable upon
receipt by the Company and unpaid amounts relating thereto shall accrue
interest at nine percent (9%) per annum, from and after the thirtieth day
following the date of issuance of the such invoice, provided that such
invoice is promptly delivered following issuance to the Company.
2.4 Disputes:
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(a) The Company shall have the right to dispute all or a portion of any
invoice rendered by the Service Provider for which the Company has
reasonable cause. The Company shall inform the Service Provider in
writing of the basis for such dispute and the amount withheld within
thirty (30) days of the Company's receipt of the relevant invoice.
(b) In the event it is determined, either by agreement of the Parties or
by dispute resolution pursuant to Section 8 hereof, that the disputed
amount is properly due and payable, the Service Provider shall be
entitled to the interest earned on such disputed amount for each day
after payment of the invoice was due until the day the disputed
portion is paid by the Company. Interest shall be calculated at the
rate equal to nine percent (9%) per annum.
(c) Any payment made by the Company, or failure of the Company to provide
written notice of the dispute within the above thirty (30) day period,
shall not prejudice the Company's right to contest its liability for
any payment under this Agreement, unless such failure to give notice
materially prejudices the Service Provider.
2.5 Right of Set-off: If the Service Provider fails fully and satisfactorily
----------------
to provide any of the Services for which the Company has made payment, the
Company shall have the right to set-off such payments against future
payments to be made by the Company to the Service Provider under this
Section 2. Such set-off rights shall be in addition to, and not in
substitution for, any and all other rights and remedies available to the
Company under this Agreement or applicable law.
4
3. Schedule and Availability
-------------------------
With effect from January 1, 1998, the Service Provider shall perform the
Services as instructed by the Company and as from time to time agreed in
the Addenda. However, the Service Provider shall not be obligated to
devote its full-time efforts to the performance of the Services.
4. Termination
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4.1. On or after the date of the commencement of commercial operation of the
Business following the launch of the Company's first satellite, either
Party may, at any time, for its convenience and at its sole option, after
giving the other Party thirty (30) days written notice, terminate this
Agreement. The termination of this Agreement, or of any renewal thereof,
shall discharge any further obligation of either Party hereto with respect
to this Agreement, or any renewal thereof, provided however that the
obligations set forth in Section 12.6 shall survive.
4.2. Upon termination, the Service Provider shall be entitled to compensation
and disbursements for Services rendered up to the date of termination and
the Company shall be entitled to receive any work product for which full
payment has been made, or in the alternative (at the sole discretion of the
Company) to be reimbursed the amount paid for such Services and/or work
product not returned or not completed.
5. Representations and Warranties
------------------------------
5.1 Each Party hereby represents and warrants to the other Party as
follows:
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) 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;
(c) It has taken all appropriate and necessary action to authorize the
execution, delivery and performance of this Agreement;
(d) All consents, approvals, licenses and authorizations of, and all
filings and registrations with, any governmental authority necessary
for the due execution, delivery, performance and enforceability of
this Agreement, have been obtained and are in full force and effect;
and
(e) 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
applicable laws or regulations.
5.2 The Company hereby represents and warrants that, but for the description of
services to be provided, it has entered into a substantially identical
agreement with WorldSpace.
5.3 The Service Provider hereby represents and warrants that it has, or has
unfettered access to, the technical, engineering, marketing and strategic
planning and other necessary knowledge and skills necessary to render
satisfactorily the Services as provided herein.
6. Independent Contractor
----------------------
5
This Agreement does not constitute or create a joint venture, pooling
arrangement, partnership, or formal business organization of any kind
between and among any of the Parties and the rights and obligations of the
Parties shall be only those expressly set forth herein. The Service
Provider will perform the Services as an independent contractor and shall
not be considered, for any purpose, to be an employee, agent or servant of
the Company or its affiliated companies. Neither the Service Provider nor
the Service Provider's personnel shall be entitled to workers'
compensation, medical coverage or similar benefits, or any life, disability
or other insurance protection provided by the Company or any of its
affiliated companies for their respective employees. The Service Provider
shall be solely responsible for the payment of social security benefits,
unemployment insurance, pension benefits, withholding any required amounts
for income and other employment-related taxes and benefits of its
employees, for providing its own transportation, and shall make its own
arrangements for injury, illness or other insurance coverage to protect
itself, its affiliated companies, its subcontractors and personnel from any
costs, expenses, damages, loss and/or liability arising out of performance
of the Services, or any transportation associated therewith. The Service
Provider has no power or authority to act for, represent, or bind the
Company or its affiliated companies in any manner. Any attempt by the
Service Provider to act on behalf of or to bind the Company shall be void
and grounds for immediate termination of this Agreement.
7. Confidentiality
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7.1 (a) The Parties recognize that in the course of performance of the
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 Information"). The Party who receives any
Confidential Information (the "Receiving Party") agrees to maintain a
confidential status for such 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, 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 paragraph, such Party will immediately give the other Party
written notice of any such disclosure,
6
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.
7.2 Survival of Confidentiality: The provisions of this Section 7 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.
8. Dispute Resolution
------------------
8.1. In the event of any dispute between the Parties arising out of or in
connection with this Agreement or the interpretation hereof, the Parties
shall, in the first instance, make a good faith effort to settle such
dispute amicably.
8.2. If amicable settlement cannot be reached within thirty (30) days following
written notice by one Party to the other Party of the existence of any such
dispute, the matter will be referred to binding 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.
8.3. 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.
9. Notices
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All notices and other communications required or permitted hereunder shall
be given in writing by hand delivery, by facsimile, or by registered or
certified mail, return receipt requested, postage prepaid, addressed to the
Party to receive the same at its respective address set forth below, or at
such other address as may from time to time be designated by either Party
to the other Party hereunder in accordance with this Section 9:
7
To the Service Provider:
American Mobile Satellite Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attn: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
To the Company:
AMRC Holdings, Inc.
0000 00xx Xxxxxx, X.X.
Xxxxx 00
Xxxxxxxxxx, X.X. 00000
Attn: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
All notices shall be effective when received. A notice is considered
received if a written confirmation of receipt appears thereon or there
exists a written fax confirmation. Either Party may by notice to the other
Party designate a new address for notices, such new address to be effective
ten (10) days after receipt of designation.
10. Taxation
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All customs, duties, taxes of any kind, charges, fees and assessments of
any nature whatsoever ("Assessments") which may be imposed by any local or
other governmental body with respect to the Services (other than taxes on
the income of the Service Provider or employment-related taxes paid by the
Service Provider pursuant to Section 6) shall be borne by the Company. The
Company shall indemnify and hold harmless the Service Provider against any
Assessments made against it and any costs incurred by the Service Provider
in defending against such Assessments. Any Assessments incurred in the
performance of this Agreement shall be treated as an out-of-pocket expense
under Section 2.1.
11. Indemnity
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11.1 Each Party hereby agrees to indemnify and hold the other Party harmless
against any and all costs, losses, claims, actions, demands, damages and
liabilities (including attorneys' fees) incurred by the indemnifying Party
arising out of or in respect of (i) any act, failure to act, or any
assumption of any obligation or responsibility by the indemnifying Party,
or by any of its directors, officers or employees, which is in
contravention or violation of or in conflict with any of the terms or
provisions of this Agreement, or (ii) any breach of any of the
representations or warranties made by the indemnifying Party under this
Agreement. The Service Provider further agrees to indemnify and hold
harmless the Company against any and all costs, losses, claims, actions,
demands, damages and liabilities (including attorneys' fees) arising out of
or in respect of the gross negligence or willful misconduct of the Service
Provider in providing the Services.
11.2 THE SERVICE PROVIDER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE AGREEMENT OR THE PERFORMANCE OF THE SERVICES
8
PROVIDED HEREUNDER OR THE WORK FURNISHED HEREUNDER, WHETHER ARISING UNDER
LAW OR AT EQUITY.
11.3 IN NO EVENT SHALL EITHER PARTY OR A PARTY'S AFFILIATES AND ITS OR THEIR
SUBCONTRACTORS AND ITS OR THEIR OFFICERS, EMPLOYEES AND AGENTS, BE LIABLE,
IN CONTRACT, IN TORT, OR OTHERWISE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY NATURE ARISING AT ANY TIME OR FROM ANY CAUSE WHATSOEVER,
INCLUDING SPECIFICALLY, BUT WITHOUT LIMITATION, LOSS OF PROFITS OR REVENUE,
LOSS OF FULL OR PARTIAL USE OF ANY EQUIPMENT, DELAYS, COST OF REPLACEMENTS,
COST OF CAPITAL, LOSS OF GOODWILL, OR OTHER SUCH DAMAGES.
12. Miscellaneous
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12.1 Entire Agreement. This Agreement, together with the Annexes and Addenda
----------------
hereto, constitute the entire agreement of the Parties hereto with respect
to the performance of Services by the Service Provider for the Company and
supersedes and terminates all prior arrangements and agreements between the
Service Provider and the Company or any of its affiliates with respect to
the subject matter hereof.
12.2 No Waiver. No failure by either Party hereto to exercise, and no delay
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in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder by either Party
preclude any other or future exercise of that right or any other right
hereunder by that Party.
12.3 Severability. In case any one or more of the provisions of this
------------
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.4 Assignment. Neither Party may assign or transfer, in whole or in part,
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its rights or interests in this Agreement, nor may either Party delegate
responsibilities hereunder without the prior written consent of the other
Party, which consent may be withheld for any reason whatsoever, provided,
--------
however, that the Service Provider may assign or transfer this Agreement or
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the right and duties hereunder, in whole or in part, to any division,
subsidiary or affiliate or successor entity, or to any corporation under
common control of such Party or with which such Party may merge or to which
such Party may sell all or substantially all of its assets.
12.5 Amendment. This Agreement may not be amended, terminated or superseded
---------
except by an agreement in writing between the Company and the Service
Provider.
12.6 Survival: Any provision of this Agreement which can reasonably be
--------
construed as surviving the expiration or termination of the Agreement,
including but not necessarily limited to the indemnification and
confidentiality provisions, shall so survive.
12.7 Governing Law: This Agreement, including all Addenda and 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 thereof.
12.8 Agreement to Execute Documents: The Parties agree in good faith to execute
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any and all documents required for the performance of this Agreement.
9
12.9 Counterparts: This Agreement may be executed in any number of separate
------------
counterparts, each of which, when so executed, shall be deemed an original,
and all of said counterparts taken together shall be deemed to constitute
but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties,
effective as of the date above indicated.
AMRC HOLDINGS, INC. AMERICAN MOBILE SATELLITE
CORPORATION
By /s/ Xxxx Xxxxxx By /s/ Xxxx Xxxxxxx
----------------- ------------------
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: President & CEO Title: Chairman & CEO
Attachments:
Annex 1 - Rates for Services
Addendum No. 1 to the Technical Services Agreement
10
****** 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
Rates for Services
The billable rates for the Service Provider are as follows:
Hourly
Rate
------
[*****]
ADDENDUM NO. 1 TO
TECHNICAL SERVICES AGREEMENT
This Addendum No. 1 to the Technical Services Agreement (the "Agreement")
dated as of January 1, 1998, is entered into by and among AMRC Holdings, Inc.
(the "Company") and American Mobile Satellite Corporation (the "Service
Provider"), each of which may be referred to individually as a "Party" or
collectively as the "Parties."
Capitalized terms used herein without definition shall have the respective
meanings set forth in the Agreement.
1. Services Provided. The Company and the Service Provider hereby agree that
-----------------
the Services requested by the Company and to be provided by the Service
Provider during the First Quarter of 1998 are:
1) Amendment to FCC Application: Assist in preparing American Mobile
----------------------------
Radio Corporation's amended filing with the Federal Communications
Commission, including the technical and business specifications.
2) Technical Evaluation: Evaluation of alternative technologies and
--------------------
system architecture, including support in discussions with potential
third party manufacturers.
3) Business Evaluation: Evaluation of potential marketing and
-------------------
business plan activities, including through third party proposals.
4) Other Services: Other Services as requested from time to time by the
--------------
Company.
2. Payment for Services. The Service Provider shall be compensated for
--------------------
providing the Services described in Section 1.1 in accordance with the
Itemization attached hereto.
IN WITNESS WHEREOF, this Addendum No. 1 to the Agreement has been executed
by the Parties, on the date above first written.
AMRC HOLDINGS, INC. AMERICAN MOBILE SATELLITE
CORPORATION
By /s/ Xxxx Xxxxxx By /s/ Xxxx Xxxxxxx
----------------- ------------------
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxxx
Title: President & CEO Title: Chairman & CEO
****** 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.
Form of Itemization
(AMSC - AMRC)
Hourly Total
Rate Jan. Feb. March Xxxxx Xxxxxxxx
------ ----- ----- ----- ----- --------
[*****]
2
AMENDMENT NO. 1 TO TECHNICAL SERVICES AGREEMENT
This AMENDMENT NO. 1 TO TECHNICAL SERVICES AGREEMENT (this
"Amendment") is entered into as of June 7, 1999, and amends that certain
---------
TECHNICAL SERVICES AGREEMENT (the "AMSC TSA") entered into on July 24, 1998, but
--------
intended to be effective as of January 1, 1998, by and between XM Satellite
Radio Holdings Inc. (formerly known as AMRC Holdings), a corporation organized
under the laws of the State of Delaware ("XM") and American Mobile Satellite
--
Corporation, a corporation organized under the laws of the State of Delaware
("American Mobile") (each a "Party" and together the "Parties");
----------------- ----- -------
WHEREAS, XM is receiving technical and business assistance from
American Mobile in connection with the development and implementation of XM's
satellite digital audio radio system pursuant to a license granted by the U.S.
Federal Communications Commission (the "XM System");
---------
WHEREAS, the Parties have determined that it is desirable and
appropriate to clarify and amend certain provisions of the AMSC TSA in
connection with the entering into of the Exchange Agreement by American Mobile
and the other parties thereto;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
(a) It was and remains the intent of XM and American Mobile that no
transfer of equipment or technology from XM to American Mobile will be made
pursuant to the AMSC TSA 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 AMSC TSA is hereby amended by the
addition of new Section 12.10 thereto as follows:
12.10 Technology Transfer. No transfer of equipment or technology
-------------------
from AMRC to AMSC 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
1
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 technica
l 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.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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.
AMERICAN MOBILE SATELLITE CORPORATION
By /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
XM SATELLITE RADIO HOLDINGS, INC.
By /s/ Xxxxxx
X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: SVP General Counsel and Secretary
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