Exhibit 10.28
***** 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.
JOINT DEVELOPMENT AGREEMENT
This JOINT DEVELOPMENT AGREEMENT is entered into between XM Satellite
Radio Inc., a Delaware corporation with its principal location at 0000 00xx
Xxxxxx, X.X., Xxxxxxxxxx, XX ("XM"), and Sirius Satellite Radio Inc., a Delaware
--
corporation with its principal location at 1221 Avenue of the Americas, New
York, New York ("Sirius") as of February 16th, 2000 ("Effective Date").
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RECITALS
WHEREAS, XM is engaged in designing, developing, marketing and licensing
the technology relating to its satellite digital audio radio system ("XM Radio
--------
System") in accordance with the rights under the license issued to XM by the
------
Federal Communications Commission (the "FCC");
---
WHEREAS, Sirius is engaged in designing, developing, marketing and
licensing the technology relating to its satellite digital audio radio system
("Sirius Radio System") in accordance with the rights under the license issued
---------------------
to Sirius by the FCC;
WHEREAS, the FCC has mandated that XM and Sirius deploy a final receiver
design that is interoperable;
WHEREAS, due to the different technical heritage, satellite design and
performance requirements of the XM Radio System and the Sirius Radio System,
such systems currently employ different technologies that impede the design and
development of an interoperable receiver;
WHEREAS, XM and Sirius and their respective radio equipment suppliers
already have expended significant funds in developing Single Mode Radios (as
defined below);
WHEREAS, it will take an extensive and expensive joint program to merge the
technologies employed by the XM Radio System and the Sirius Radio System in
order to design and develop a cost efficient interoperable receiver;
WHEREAS, XM and Sirius are, and will continue to be, competitors in, among
other things, the marketing and sale of the satellite broadcasting of radio
programming to listeners, the acquisition of rights to broadcast such
programming and sale of radio advertising availabilities and other forms of
advertising or promotional opportunities in connection with that programming
(collectively, "Business Opportunities");
----------------------
WHEREAS, nothing in this Agreement is intended to, or will in any way,
restrain or reduce the competitive rivalry between the parties in the pursuit of
Business Opportunities;
WHEREAS, the parties desire to comply with FCC licensing requirements and
to enhance efficiency and consumer welfare by jointly developing and deploying
certain interoperable technology for the purpose of producing radios capable of
receiving broadcasts from both the XM Radio System and the Sirius Radio System;
***** 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.
WHEREAS, in jointly developing such interoperable technology in the most
cost effective manner, the parties believe it necessary and desirable to
integrate some of their economic activities to develop and bring to market
Interoperable Radios (as defined below); and
WHEREAS, the parties wish to set forth the terms and conditions under which
they will jointly develop and deploy such interoperable technology;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
Definitions
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1.01. Defined Terms. Capitalized terms used herein and not otherwise
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defined herein shall have the meaning assigned to such terms below:
"Aftermarket" shall mean the market for radios that are (a) sold to
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a customer for use in a vehicle, aircraft or vessel, after such vehicle,
aircraft or vessel has been manufactured and sold to a customer; or (b)
sold separately as stand alone devices.
"Agreement" shall mean this Joint Development Agreement, including
---------
all Exhibits attached hereto, as amended, supplemented or otherwise
modified from time to time.
"Auditor" shall have the meaning specified in Section 14.10.
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"Business Opportunities" shall have the meaning specified in the
----------------------
recitals to this Agreement.
"Confidential Information" shall have the meaning specified in
------------------------
Section 9.01.
"Consultant" shall have the meaning specified in Section 3.02(b).
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"Consulting Agreement" shall have the meaning specified in Section
--------------------
3.02(b).
"Content Provider" shall have the meaning specified in Section
----------------
6.06.
"Distribution Partners" shall have the meaning specified in Section
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6.01.
"Effective Date" shall have the meaning specified in the
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introductory paragraph of this Agreement.
"[*****] Deals" shall mean the agreements,
-----------------------------
arrangements and understandings in effect as of the Effective Date among
[*****]
***** 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.
3
[*****], as such agreements, arrangements and understandings may be
amended, supplemented or otherwise modified from time to time.
"[*****] Partner" shall mean [*****].
---------------
"[****] Deals" shall mean the agreements, arrangements and
------------
understandings in effect as of the Effective Date among [*****],
or any of their respective subsidiaries or affiliates, as such agreements,
arrangements and understandings may be amended, supplemented or otherwise
modified from time to time.
"[*****] Partner" shall mean [*****] and [*****].
"Expedited Rules" shall have the meaning specified in Section 13.02.
---------------
"FCC" shall have the meaning specified in the recitals to this
---
Agreement, together with any successor agency or agencies.
"FCC License" shall mean the license granted by the FCC to Sirius or
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XM, as the context may require, to launch and operate satellites to provide
a radio communications service in which audio programming is digitally
transmitted by one or more space stations directly to fixed, mobile and/or
portable stations which may involve complementary repeating terrestrial
transmitters and telemetry, tracking and control facilities.
"Interoperable Chipset" shall mean integrated circuits which are
---------------------
capable of receiving, decoding, decompressing and outputting to a user
interface the digital audio radio broadcast, transmitted from both
satellites and terrestrial repeaters, of both the XM Radio System and the
Sirius Radio System.
4
*****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.
"Interoperable Radio" shall mean a radio that, at a minimum, (a)
-------------------
receives and processes the audio portion of both the Sirius Radio System
signal and the XM Radio System signal, either as a result of an
Interoperable Chipset contained in the unit itself or as a result of an
Interoperable Chipset contained in an outboard location which interfaces
directly with the unit, and (b) which is capable of providing the user
interface for both Sirius Radio System broadcasts and XM Radio System
broadcasts, including displaying the artist and title information
transmitted as part of such broadcasts, in each case, without the consumer
purchasing additional hardware or software.
"Interoperability Technology" shall mean the technology, including
---------------------------
the technology which is jointly funded and developed by Sirius and XM
pursuant to this Agreement or owned and/or licensed by either party, which
is required to design, develop and/or manufacture an Interoperable Radio,
as well as any enhancements and modifications jointly funded and developed
for such technology pursuant to this Agreement (including the industry
standards jointly developed by the parties pursuant to Section 3.03), but
shall not include Non-core Technology.
"JV" shall have the meaning specified in Article XI.
--
[*****] shall have the meaning specified in Section 6.02(a).
-----
[*****] shall have the meaning specified in Section 6.04(a).
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"Non-core Technology" shall have the meaning specified in Section
-------------------
5.02.
"Non-owning Party" shall have the meaning specified in Section 8.05.
----------------
"OEM Automobile Partners" shall mean an original equipment
-----------------------
manufacturer of vehicles (including trucks and/or other specialty
vehicles), such as General Motors Corporation, Ford Motor Company,
DaimlerChrysler AG, Honda Motor Company, Toyota, BMW AG and their
respective divisions, affiliates and subsidiaries.
"Owning Party" shall have the meaning specified in Section 8.05.
------------
"Project Leader" shall have the meaning specified in Section
--------------
3.02(d).
"Project Plan" shall have the meaning specified in Section 3.02(b).
------------
"Radio Manufacturing Partners" shall have the meaning specified in
----------------------------
Section 5.04.
"Recipient" shall have the meaning specified in Section 9.01.
---------
"RFP" shall have the meaning specified in Section 3.02(e).
---
"SDARS Xxxx" shall have the meaning specified in Section 4.04(a).
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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.
5
"Single Mode Radio" shall mean a radio that (a) receives and
-----------------
processes the Sirius Radio System signal or the XM Radio System signal, but
not both, and (b) which is capable of providing the user interface for
either Sirius Radio System broadcasts or XM Radio System broadcasts, but
not both.
"Sirius" shall have the meaning specified in the first paragraph of
------
this Agreement.
"Sirius Radio System" shall have the meaning specified in the
-------------------
recitals to this Agreement.
"Specifications" shall have the meaning specified in Section
--------------
3.02(c).
[*****]
"Third Party Technology" shall mean any patents, know-how or other
----------------------
intellectual property rights owned or controlled by any person or entity
other than Sirius, XM and their respective affiliates that may be included
within the XM Radio System or the Sirius Radio System or in
Interoperability Technology from time to time.
"XM" shall have the meaning specified in the first paragraph of this
--
Agreement.
"XM Radio System" shall have the meaning specified in the recitals
---------------
to this Agreement.
1.02. Other Definitional Matters. Definitions in this Agreement apply
--------------------------
equally to the singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the phrase "without
limitation" or "but not limited to" when such phrase does not otherwise appear.
The terms "herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular section, paragraph
or subdivision. All article, section, paragraph, clause, exhibit or schedule
references not attributed to a particular document shall be references to such
parts of this Agreement.
6
ARTICLE II
Term of this Agreement
----------------------
Unless terminated in accordance with Section 12.01, this Agreement shall
commence on the Effective Date and continue until the termination of each of the
parties' respective FCC Licenses, and shall be automatically renewed upon the
renewal or extension of the FCC Licenses.
ARTICLE III
Joint Technology Development.
-----------------------------
3.01. Interoperability Technology Development. XM and Sirius hereby agree
----------------------------------------
to develop Interoperability Technology for the purpose of producing (or having
produced by others) Interoperable Radios.
3.02. Project Plan. Unless otherwise agreed by the parties in writing:
------------
(a) As soon as practicable, the parties shall exchange, on a
mutually agreed date, appropriate technical documentation relating to the
XM Radio System and the Sirius Radio System, as the case may be.
(b) The parties shall use commercially reasonable efforts to
execute, within 90 days following the Effective Date, a consulting
agreement (the "Consulting Agreement") with a third party consultant
--------------------
reasonably acceptable to both parties (the "Consultant") to manage the
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project development activities relating to the Interoperability Technology.
The Consultant shall have responsibility for creating a budget and project
plan for developing the Interoperability Technology (the "Project Plan").
------------
(c) The Consultant shall work with representatives of the parties
to develop the Project Plan, including the development and preparation of a
written document containing agreed upon engineering and other
specifications for the Interoperable Chipset (the "Specifications"). The
--------------
Specifications shall be in form and substance acceptable to both Sirius and
XM.
(d) The parties shall negotiate in good faith to determine the
Project Plan and Specifications. Each party agrees to use commercially
reasonable efforts to meet any deliverables and/or timetables set forth in
the Project Plan. Each party shall provide commercially reasonable support
to facilitate the exchange of information during the development of the
Project Plan and Specifications, as well as during the development of the
Interoperability Technology. In addition, each party shall designate a
project leader (each, a "Project Leader"), who shall be designated in the
--------------
Project Plan, and who shall coordinate such party's development activities.
(e) As part of the Project Plan, upon completion of the
Specifications, the Consultant shall issue to chipset design and
fabrication firms reasonably acceptable
***** 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.
7
to XM and Sirius, a request for (the "RFP") to design, develop and
---
manufacture Interoperable Chipsets. However, the Consultant shall [*****]
Similarly, the Consultant shall [*****]. As soon as practicable after
responses to the RFP have been received by the Consultant and reviewed by
XM and Sirius, the Consultant, with the consent of Sirius and XM (which
shall not be unreasonably withheld, delayed or conditioned), shall use
commercially reasonable efforts to negotiate one or more agreements to
design and develop Interoperable Chipsets.
(f) The parties shall use commercially reasonable efforts to
develop an antenna or series of antennas which function with both the
Sirius Radio System and the XM Radio System for deployment with
Interoperable Radios.
(g) Nothing contained in this Agreement shall be interpreted or
construed to limit in any way Sirius' or XM's ability to continue its
existing integrated circuit development efforts for Single Mode Radios.
(h) XM and Sirius shall each use commercially reasonable efforts to
design and develop Interoperable Radios that are backward compatible with
then existing Single Mode Radios.
(i) XM and Sirius agree that [*****], as the case may be.
3.03. SDARS Industry Standards Publication. In order to direct that the
------------------------------------
development work performed pursuant to this Agreement results in the quality of
reception on Interoperable Radios of either party's programming being comparable
to the quality of reception of such party's programming on a Single Mode Radio,
XM and Sirius shall jointly develop and publish industry standards for
Interoperable Radios. Such standards shall contain parameters relating to
Interoperable Radios, including, but not limited to user-interface and
communication protocols.
3.04. Enhancement and Support of the Interoperability Technologies. Each
------------------------------------------------------------
party agrees to use commercially reasonable efforts to maintain and enhance the
Interoperability Technology to ensure its proper functioning and commercial
usefulness.
3.05. Implementation of Non-core Technologies. Nothing in this Agreement
---------------------------------------
shall prevent the development, manufacturing, marketing, sale and distribution
of Interoperable Radios with respect to which the Non-core Technologies, if any,
used by or relating to customers of one of the parties differ from the Non-core
Technologies, if any, used by or relating to customers of the other party.
8
ARTICLE IV
Intellectual Property Rights and Ownership
------------------------------------------
4.01. XM Radio System. The parties agree that XM owns, or has license
---------------
rights to, the XM Radio System and shall at all times continue to retain full
and exclusive right, title and ownership and/or license, as the case may be, in
and to the XM Radio System, and in any and all intellectual property rights
therein, including, but not limited to, all rights in related patents,
trademarks, copyrights, derivative works and proprietary and trade secret rights
and know-how.
4.02. Sirius Radio System. The parties agree that Sirius owns, or has
-------------------
license rights to, the Sirius Radio System and shall at times continue to retain
full and exclusive right, title and ownership and/or license, as the case may
be, in and to the Sirius Radio System, and in any and all intellectual property
rights therein, including, but not limited to, all rights in related patents,
trademarks, copyrights, derivative works and proprietary and trade secret rights
and know-how.
4.03. Interoperability Technology. (a) Subject to each party's rights
---------------------------
set forth in Sections 4.01 and 4.02, the parties agree that XM and Sirius shall
jointly own the Interoperability Technology jointly developed by the parties and
jointly funded hereunder, and any and all intellectual property rights therein,
including, but not limited to, all rights in related patents, trademarks,
copyrights, derivative works and proprietary and trade secret rights and know-
how. Each party shall give the other party all reasonable assistance and shall,
at the other party's request and expense, execute and deliver all documents and
assignments which may be necessary to establish the joint ownership rights in
the Interoperability Technology.
(b) If any patentable inventions are created as a result of the parties'
joint development activities hereunder, the parties agree to cooperate in the
filing and prosecution of patent applications for such inventions with the costs
to be shared equally by the parties. Any resulting patent shall be jointly
owned by Sirius and XM.
(c) Each party agrees to require each of its employees to assign to such
party all of such employee's right, title and interest in and to
Interoperability Technology and all related intellectual property rights,
including patents, patent applications, copyright, derivative works, trademarks,
trade secrets, know-how and other proprietary rights.
4.04. Logo or Service Xxxx for Interoperability Technology. (a) Sirius
----------------------------------------------------
and XM shall jointly select and file for federal trademark protection a new
name, logo and/or service xxxx (collectively, the "SDARS Xxxx") relating to
----------
digital satellite radios for the purposes of promoting and identifying
Interoperable Radios and Single Mode Radios, and the parties shall share equally
in any profits relating to the SDARS Xxxx. The parties will work cooperatively
to design the SDARS Xxxx(s) so as to minimize consumer confusion regarding
whether a given radio is a Single Mode Radio or Interoperable Radio.
(b) From and after the joint selection thereof, Sirius and XM shall
prominently use and/or display the SDARS Xxxx in all communications that mention
XM or Sirius.
***** 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.
9
(c) Each of the parties agrees not to change its name to, or adopt the use
of a trade name or trademark that is likely to cause confusion with (i) the
corporate name, trade names and trademarks employed by the other party hereto,
or (ii) following the joint selection thereof, the SDARS Xxxx.
(d) Each party shall license the SDARS Xxxx to its Radio Manufacturing
Partners, Distribution Partners and OEM Automobile Partners for use on Single
Mode Radios and Interoperable Radios. Each party shall require, as part of any
agreement, arrangement or understanding entered into with any Radio
Manufacturing Partner, Distribution Partner or OEM Automobile Partner after the
Effective Date, the use of the SDARS Xxxx on the face or another static
component of the user interface of all Single Mode Radios and Interoperable
Radios; provided that such requirement shall not apply to any radio if no logo,
--------
trade name or trademark relating to XM, Sirius or satellite digital audio radio
service is displayed on the face or any other static component of the user
interface thereof. In addition, each party shall use commercially reasonable
efforts to require its [*****] Partners and [*****] Partners to use the SDARS
Xxxx on the face or another static component of the user interface of all Single
Mode Radios and Interoperable Radios; provided that such requirement shall not
--------
apply to any radio if no logo, trade name or trademark relating to XM, Sirius or
satellite digital audio radio service is displayed on the face or any other
static component of the user interface thereof.
(e) Each party acknowledges that the quality of use of the SDARS Xxxx will
have an important effect on goodwill associated with the SDARS Xxxx and on the
resulting value of the SDARS Xxxx and each party agrees that the nature and
quality of all uses of the SDARS Xxxx shall be of high quality, and be
adequately suited to exploitation of the SDARS Xxxx to the best advantage and
enhancement of the SDARS Xxxx and consistent with quality control standards
mutually established by the parties.
ARTICLE V
Licensing Matters
-----------------
5.01. Independent Developments. (a) In the event that either party
------------------------
independently develops technology, including any technology existing on the
Effective Date, that is included in Interoperability Technology, such party
shall retain full right, title and interest in and to such technology, including
any and all intellectual property rights therein; however, each party hereby
grants to the other party, to the fullest extent possible, subject to any Third
Party Technology restrictions as described in Section 5.03, a perpetual, non-
exclusive, royalty-free, worldwide license to use, copy, distribute, sublicense
and allow its Distribution Partners and Radio Manufacturing Partners to
sublicense such technology for the purpose of manufacturing Interoperable Radios
and marketing and distributing Interoperable Radios in North America.
(b) In addition, each party shall retain full right, title and interest in
and to its technology included in the digital satellite radio system of such
party as of the Effective Date, including any and all intellectual property
rights therein; however, each party hereby grants to the other party, to the
fullest extent possible, subject to any Third Party
10
Technology restrictions as described in Section 5.03, a perpetual, non-
exclusive, royalty-free, worldwide license to use, copy, distribute, sublicense
and allow such other party's Distribution Partners and Radio Manufacturing
Partners to sublicense such technology (including any other technology relevant
to a satellite digital audio radio system that such party, or any officer,
employee or affiliate of such party, may own or have a license to use) for the
purpose of manufacturing, marketing and distributing such other party's
satellite digital audio radio system in North America, including any Single Mode
Radios used in connection therewith; provided that the technology covered by
--------
such license shall exclude all Non-core Technology.
5.02. Independent Development of Non-core Technology. In the event that
----------------------------------------------
either party independently develops or licenses technology that is not included
in the definition of Interoperability Technology ("Non-core Technology"), such
-------------------
Non-core Technology shall remain the property of the developing or licensing
party; and all right, title and interest in and to such Non-core Technology,
including any intellectual property rights therein, shall reside with the
developing or licensing party. In such event, the developing or licensing party
shall make available (or, in the case of licensed technology, use commercially
reasonable efforts (which shall not include the payment of additional license
fees) to make available) to the other party, upon written request, a license for
such Non-core Technology on commercially reasonable terms. In the event that
the non-developing party does not accept such commercially reasonable terms, no
license shall be granted. In no event shall either party be entitled to any
equitable relief with regard to Non-core Technology.
5.03. Third Party Technology. Each party shall be responsible, at its
----------------------
cost, for licensing any Third Party Technology to the extent that such Third
Party Technology is used in the digital satellite radio system of such party.
All licenses granted hereunder shall be subject to existing agreements entered
into by the parties for such Third Party Technology. A listing of the Third
Party Technology included within each party's satellite digital audio radio
system as of the Effective Date shall be provided to the other party within 30
days of the Effective Date. Each party shall, within 30 days of the Effective
Date, provide to the other party copies of any agreements executed by such party
relating to Third Party Technology, to the extent such party is legally entitled
to disclose such agreement. Each party shall use commercially reasonable
efforts to obtain all consents necessary to disclose such agreements to the
other party in accordance with the terms of this Agreement.
5.04. Licensing of the Interoperability Technology to Third Parties.
-------------------------------------------------------------
Subject to any restrictions in the Third Party Technology agreements, as joint
owners of the Interoperability Technology, the parties shall each have authority
to license (and permit the sublicense of) the Interoperability Technology to
third parties, including, but not limited to, manufacturers of integrated
circuits and receivers ("Radio Manufacturing Partners"), for the purpose of
----------------------------
manufacturing, marketing, distributing and/or selling Interoperable Radios. The
parties shall share equally in any licensing, technical assistance or other
revenue recognized from such third party licensing of, or technical or other
assistance relating to, Interoperability Technology.
***** 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.
11
ARTICLE VI
Marketing Matters
-----------------
6.01. Distribution Partners. Commencing on the Effective Date, neither
---------------------
party shall enter into any agreement, arrangement or understanding with any
[*****] distribution partner (collectively, "Distribution Partners") for the
---------------------
distribution of either the XM Radio System or Sirius Radio System that [*****].
In addition, commencing on the Effective Date neither party shall enter into any
agreement, arrangement or understanding which [*****].
6.02. [*****] Deals. (a) Notwithstanding anything to the contrary in
-----------------
this Agreement, XM and Sirius each agree that, other than their respective
[*****] Deals, all agreements, arrangements and understandings made by either
party after the Effective Date that [*****] shall specify the [*****]; provided
--------
that, in the period before [*****]; and provided further, that neither party
-------- -------
shall enter into any agreement, arrangement or understanding to [*****].
(b) Neither party shall after the Effective Date enter into any agreement,
arrangement or understanding with [*****] in circumvention of the terms of this
Agreement and neither party shall [*****], other than in accordance with the
terms of this Agreement.
6.03. [*****] Deals. (a) Notwithstanding anything to the contrary in
-------------
Section 6.02, both XM and Sirius shall be free to [*****]. The parties
acknowledge that any [*****] Deals. After the Effective Date, each of the
parties shall work cooperatively with one another and with its [*****], enter
into any agreement relating to Interoperable Radios with any [*****] Deal unless
such agreement (i) is either (A) [*****]
***** 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.
12
[*****] and (ii) shall become effective as soon as practicable after [*****];
provided, that until such an agreement is established with a given [*****] of a
--------
party, the other party shall not [*****].
(b) Notwithstanding Sections 6.02(a) and 6.03(a), in the period [*****].
6.04. [*****] Partners. (a) Notwithstanding anything to the contrary in
----------------
this Agreement, XM and Sirius each agree that all agreements, arrangements and
understandings made by either party after the Effective Date that contemplate
[*****]; provided that, for the avoidance of doubt, it is understood that each
--------
of the parties may [*****].
(b) Notwithstanding Section 6.04(a), in the period [*****].
(c) Neither party shall [*****] Deal in circumvention of the terms of this
Agreement nor shall it [*****] in violation of the terms of Section 6.04(a).
6.05. [*****] Partners. (a) Notwithstanding anything to the contrary in
----------------
Section 6.04, the parties agree that each may [*****]. The parties acknowledge
that [*****]. Nothing in this Agreement shall, or shall be construed to, require
either party to [*****].
(b) XM and Sirius shall each [*****].
6.06. New Content Arrangements. (a) Commencing on the Effective Date,
------------------------
neither party shall enter into any agreement, arrangement or understanding with
any provider of content or programming, including celebrity talent (a "Content
Provider") that (i) [*****]
***** 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.
13
[*****] or (ii) rewards any such Content Provider for [*****]. This Section
6.06(a) shall not apply to contracts between either party and its employees,
other than celebrity talent. To implement this provision, each party agrees,
[*****].
(b) Commencing on the Effective Date, neither party shall enter into any
agreement, arrangement or understanding [*****].
ARTICLE VII
Consideration
-------------
7.01. Resources. Each party agrees to devote its resources to the joint
---------
development of the Interoperability Technology in accordance with the Project
Plan, or as mutually agreed by the parties in writing.
7.02. Existing Technology. Each party shall negotiate in good faith the
-------------------
financial value of the intellectual property licenses granted hereunder for the
technology of such party that is included in (a) the Interoperability
Technology; and/or (b) the satellite digital audio radio system of the other
party. The applicability, validity, value, use, importance and available
alternatives of each party's intellectual property rights with respect to (i)
the Interoperability Technology; and (ii) the other party's satellite digital
audio radio system shall be considered in determining the financial value of
such intellectual property licenses. In the event that the parties fail to
reach agreement regarding the financial value of such intellectual property
licenses within ninety days of the Effective Date, the parties shall resolve the
dispute through binding arbitration in accordance with Section 13.02. The
financial value agreed by the parties or determined by arbitration to be
attributed to each party's existing technology licenses granted hereunder shall
be set forth on a schedule which shall be approved in writing by both parties.
Each party shall receive a credit against its contribution to fees, costs and
expenses that this Agreement may require equal to the value attributed to its
technology pursuant to this Section.
7.03. Fees, Costs and Expenses. Subject to Section 7.02, each party shall
------------------------
share equally in the fee, costs and expenses associated with the following
activities:
(a) contracting with the Consultant pursuant to the Consulting
Agreement, as further described in Section 3.02(b);
(b) publication of the industry standards set forth in Section 3.03;
(c) joint trademark activities set forth in Section 4.04;
14
(d) development, enhancement and support of the Interoperability
Technology as described in Section 3.04.
(e) royalties, if applicable, due after the Effective Date for Third
Party Technology that the parties mutually agree shall be included in
Interoperability Technology;
(f) the parties' activities pursuant to this Agreement to jointly
market the Interoperability Technology;
(g) the parties' activities relating to the filing and prosecution
of patent applications for the jointly owned Interoperability Technology;
and
(h) any other joint activities undertaken in furtherance of this
Agreement as mutually agreed by the parties in writing.
7.04. Stipulation of Dismissal of Patent Litigation. Subject to the terms
----------------------------------------------
of this Agreement, XM and Sirius shall cause to be to filed, within five
business days of the Effective Date, a stipulation substantially in the form set
forth in Exhibit A for dismissal, without prejudice, of the patent litigation
---------
currently pending between XM and Sirius.
ARTICLE VIII
Infringement Action Defense and General Indemnity
-------------------------------------------------
8.01. XM Defense. (a) Subject to Section 8.03 and 8.04, XM shall defend
----------
at its expense any action brought against Sirius, or any of its officers or
directors, to the extent such action is based upon the claim that the XM Radio
System, including the technology contributed pursuant to Section 5.01,
constitutes direct infringement of any duly issued United States patent,
copyright, trademark or trade secret and will pay any reasonable expenses and
settlements or judgments to the extent based thereon, provided that (i) XM has
sole control of any such action or settlement negotiations, (ii) Sirius notifies
XM promptly in writing of such claim, suit or proceeding, and (iii) Sirius uses
commercially reasonable efforts, at XM's expense, to assist in the settlement
and/or defense of any such claim, suit or proceeding. Sirius may, at its option
and expense, elect to participate in such settlement and/or defense with its own
counsel. Neither party shall be liable for any costs or expenses incurred by
the other party without its prior written authorization.
(b) In the event that the XM Radio System is likely to result in, or is
subject to, a claim hereunder, XM shall, at its option, modify the XM Radio
System so that it becomes non-infringing, or procure the right to continue using
the XM Radio System without modification. Notwithstanding the foregoing, XM
shall not be liable for any claim arising from or based upon the combination of
the XM Radio System with another system, including the Sirius Radio System,
unless Sirius establishes that the modifications or combination of the systems
did not contribute to the infringement, except to the extent XM knew, or
reasonably should have known, that such modifications or combination could give
rise to such claim and failed to so inform Sirius.
15
8.02. Sirius Defense. (a) Subject to Section 8.03 and 8.04, Sirius shall
--------------
defend at its expense any action brought against XM, or any of its officers or
directors, to the extent such action is based upon the claim that the Sirius
Radio System, including the technology contributed pursuant to Section 5.01,
constitutes direct infringement of any duly issued United States patent,
copyright, trademark or trade secret and will pay any reasonable expenses and
settlements or judgments to the extent based thereon, provided that (i) Sirius
has sole control of any such action or settlement negotiations, (ii) XM notifies
Sirius promptly in writing of such claims, suit or proceeding, and (iii) XM uses
commercially reasonable efforts, at Sirius' expense, to assist in the settlement
and/or defense of any such claim, suit or proceeding. XM may, at its option and
expense, elect to participate in such settlement, and/or defense with its own
counsel. Neither party shall be liable for any costs or expenses incurred by
the other party without its prior written authorization.
(b) In the event that the Sirius Radio System is likely to result in, or
is subject to, a claim hereunder, Sirius shall, at its option, modify the Sirius
Radio System so that it becomes non-infringing, or procure the right to continue
using the Sirius Radio System without modification. Notwithstanding the
foregoing, Sirius shall not be liable for any claim arising from or based upon
the combination of the Sirius Radio System with another system, including the XM
Radio System, unless XM establishes that the modifications or combination of the
systems did not contribute to the infringement, except to the extent Sirius
knew, or reasonably should have known, that such modification or combination
could give rise to such claim and failed to so inform XM.
8.03. No Indemnification for Interoperability Technology. Except to the
--------------------------------------------------
extent indemnification is available pursuant to Section 8.01 or 8.02, neither
party shall be liable to the other for any intellectual property infringement
claim, action, proceeding or suit brought against such party relating to the
Interoperability Technology.
8.04. Non-Core Technology. In the event that either party licenses Non-
-------------------
core Technology to the other party, any indemnification rights and obligations
shall be as set forth in the licensing agreement between the parties relating to
such Non-core Technology.
8.05. General Indemnity for Third Party Actions Based on Use of the Other
-------------------------------------------------------------------
Party's System. Subject to Section 8.01 through 8.04, each party (in such
--------------
context, the "Owning Party") owns a satellite digital radio system and such
------------
Owning Party shall defend, indemnify and hold harmless the other party (in such
context, the "Non-owning Party") from all damages, liabilities and expenses,
----------------
including reasonable attorney's fees, arising out of, connected with, or
resulting in any way from a claim or action by a third party against the Non-
owning Party due to the performance or use of the satellite digital radio system
of the Owning Party.
ARTICLE IX
Confidential Information.
-------------------------
9.01. General. Each party acknowledges that in the course of performance
-------
of this Agreement, either of them may disclose to the other (such other party,
together with its directors, officers, employees, agents and other
representatives, a "Recipient") information
---------
16
about the disclosing party's technology, products, business or activities which
such party considers proprietary and confidential, including, without
limitation, information regarding the XM Radio System, the Sirius Radio System,
Interoperability Technology, other trade secrets and information concerning the
existence and terms of this Agreement and the joint development arrangements
contemplated hereunder, as well as the characterization and use of any of the
intellectual property rights of the parties described in this Agreement, and any
financial valuations, determinations, or settlements relating to either party's
intellectual property rights in any patent or other disputes between the
parties, in any form, including, without limitation, oral, written, graphic,
demonstrative, machine recognizable or sample form (all of such proprietary and
confidential information, and all summaries, analyses and other material and
data generated by Recipient from any such information, is hereinafter referred
to as "Confidential Information"). Confidential Information shall be retained
------------------------
in confidence and shall not be disclosed or caused or permitted to be disclosed
directly or indirectly to any third party without the prior written approval of
the disclosing party, and shall not be used by Recipient for any reason other
than in accordance with the terms of this Agreement. Notwithstanding the
foregoing, in no event shall either party exchange information on the subjects
as to which the parties compete, and nothing in this Section 9.01 shall be
construed to require the sharing of any information other than information
necessary to effectuate the purposes of this Agreement. The obligation of
Recipient to retain Confidential Information in confidence shall not apply to
Confidential Information which is (a) now in or hereafter enters the public
domain beyond the control of Recipient and without its violation of this
Agreement; (b) rightfully known to Recipient prior to the time of disclosure by
the disclosing party hereunder, or independently developed by Recipient
personnel without access to Confidential Information; (c) disclosed in good
faith to Recipient by a third party legally entitled to disclose the same; or
(d) which Recipient discloses under operation of law, rule or legal process;
provided, that (i) the burden shall be on Recipient to prove the applicability
--------
of one or more of the foregoing exceptions by documentary evidence should the
disclosing party question the applicability of such exceptions; (ii) as to
exception (b), Recipient makes known to the disclosing party within five (5)
days of receipt of information from the disclosing party that such information
was already known to Recipient and (iii) as to exception (d), Recipient provides
the disclosing party with prompt written notice of any request or legal
proceeding through which Recipient may be required to disclose such Confidential
Information.
9.02. Transmission of Confidential Information. Recipient agrees to
----------------------------------------
transmit Confidential Information only to those of its directors, officers,
employees, agents or other representatives who need access to the Confidential
Information for the purposes of this Agreement, and who are informed by
Recipient of the confidential nature of such Confidential Information, and who
agree to be bound by the terms of this Agreement or an agreement containing
substantially similar terms in regards to Confidential Information. Recipient
further agrees to be responsible for any breach of this Agreement by any
director, officer, employee or other representative of Recipient.
9.03. Return or Destruction of Confidential Information. Recipient agrees
-------------------------------------------------
that all Confidential Information disclosed to Recipient hereunder shall be and
remain the property of the disclosing party, unless otherwise agreed hereunder.
Any tangible form of such Confidential Information including, but not limited
to, documents, papers, computer diskettes and electronically transmitted
information shall be destroyed by Recipient or returned, together with all
copies thereof, to the disclosing party upon request. If such tangible
17
form of Confidential Information is destroyed, a certification of such
destruction executed by a duly authorized officer of Recipient shall be
delivered to the disclosing party.
9.04. Survival of Confidentiality Obligations. Recipient's obligations
---------------------------------------
under this Article IX shall survive the termination of this Agreement,
regardless of the manner of such termination, and shall be binding upon its
successors and assigns.
9.05. Publicity. (a) Each party agrees that it shall not make any public
---------
statement concerning the existence of this Agreement, the contemplated joint
development efforts, the intellectual property rights of either party relating
to the development of Interoperable Radios or statements regarding the
settlement of any patent or other disputes between the parties, without the
prior written consent of the other party.
(b) The parties shall promptly issue a press release announcing this
Agreement, in the form attached hereto as Exhibit B.
---------
(c) The parties hereby agree to cooperate with one another with regard to
any disclosures required by the Securities and Exchange Commission ("SEC") and
---
the FCC relating to this Agreement, and each shall afford the other party as
much advance notice as practicable for such party's review and comment prior to
the filing of such SEC or FCC disclosure document.
ARTICLE X
Warranty; Disclaimers; Limitation of Liability
----------------------------------------------
10.01. Warranties. Each party hereby represents and warrants to the other
----------
that (subject to agreements for Third Party Technology as set forth in Section
5.03):
(a) it has the right and power to enter into this Agreement;
(b) to the best of its knowledge, the information which it may
disclose to the other party, and the process of disclosure and the use of
such information in accordance with the provisions of this Agreement, will
not violate any trade secret right, trademark, issued United States patent,
copyright or other proprietary right of any third party; and
(c) it holds good title or right, free and clear of all liens and
encumbrances, to technology or other information which it is providing
under this Agreement.
In addition to the foregoing, each party warrants that its development efforts
relating to the Interoperability Technology shall be performed in accordance
with those standards of care, skill and diligence, and those practices and
procedures, which are commonly accepted in connection with the performance of
the same or similar services, and that any development work performed by such
party pursuant to this Agreement shall substantially conform to the
Specifications.
18
10.02. DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NEITHER PARTY
----------
MAKES ANY OTHER WARRANTY TO THE OTHER PARTY UNDER THIS AGREEMENT, EITHER
EXPRESS, IMPLIED, OR ARISING BY COURSE OF CONDUCT OR PERFORMANCE, CUSTOM OR
USAGE IN THE TRADE, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10.03 LIMITATION OF LIABILITY. EACH PARTY SHALL BE LIABLE TO THE OTHER IN
----- -----------------------
THE EVENT OF A MATERIAL BREACH OF THIS AGREEMENT IN AN AMOUNT EQUAL TO DIRECT
DAMAGES ACTUALLY SUFFERED BY THE OTHER PARTY. EXCEPT FOR WILLFUL MISCONDUCT
AND/OR LACK OF GOOD FAITH, NEITHER PARTY HEREUNDER SHALL BE LIABLE FOR ANY LOST
PROFITS, LOST SAVINGS, OR INCIDENTAL DAMAGES, OR OTHER ECONOMIC CONSEQUENTIAL
DAMAGES RESULTING FROM THIS AGREEMENT. WHERE A PARTY IS LIABLE FOR
CONSEQUENTIAL DAMAGES UNDER THIS PROVISION, SUCH PARTY'S LIABILITY THEREFOR
SHALL NOT EXCEED $100 MILLION.
ARTICLE XI
Establishment of Joint Venture
------------------------------
The parties contemplate that they may form a joint venture or limited
liability corporation ("JV") to pursue the development of the Interoperability
--
Technology. If a JV is established, the parties agree that any agreements
between the parties relating to establishing the JV and/or addressing any of the
terms or conditions included in this Agreement shall supersede the terms of this
Agreement. The parties anticipate that the JV may contract with the Consultant
to undertake the parties' activities pursuant to this Agreement to jointly
develop the Interoperability Technology, including preparing the RFP for third
parties and licensing the Interoperability Technology to third parties,
including, but not limited to, chipset manufacturers, OEM Automobile Partners,
Distribution Partners and Radio Manufacturing Partners. The parties further
anticipate that all development and other costs of such JV will be split equally
between XM and Sirius. In the event that the parties elect not to form such JV,
this Agreement shall continue in full force and effect.
ARTICLE XII
Termination
-----------
12.01. Termination Events. Either party may terminate this Agreement upon
------------------
the occurrence of any of the following events:
(a) the other party becomes the subject of a bankruptcy petition
filed in a court in any jurisdiction, whether voluntary or involuntary,
and, in the case of an involuntary proceeding, is not dismissed within 90
days; or
(b) a receiver or a trustee is appointed for all or a substantial
portion of the other party's assets; or
19
(c) the other party makes an assignment for the benefit of its
creditors; or
(d) Sirius Radio and XM agree in writing that the design and
development of an Interoperable Receiver is technically impracticable; or
(e) the other party fails to begin digital audio broadcasting for
sale to consumers using the XM Radio System or the Sirius Radio System, as
applicable, on or before June 30, 2002 and is not reasonably likely to
commence such broadcasts on or before December 31, 2002; or
(f) the other party or any of its subsidiaries defaults in the
payment of principal of or premium, if any, on any indebtedness aggregating
$25 million or more, when the same becomes due and payable, and such
default or defaults shall have continued after any applicable grace period
and shall not have been cured or waived; or
(g) the other party fails to perform any material covenant or
obligation contained in this Agreement, and such failure continues
unremedied for a period of ninety days following receipt of written notice
describing in reasonable detail such failure.
12.02. Effects of Termination. Upon termination of this Agreement pursuant
----------------------
to Section 12.01, the licenses granted to each party pursuant to Section 5.01
shall survive such termination and each party shall continue to maintain joint
ownership rights in the Interoperability Technology; provided that if this
Agreement is terminated by a party pursuant to Section 12.01(g) prior to the
time that the value of the intellectual property licensed under Section 5.01
shall have been determined, either through negotiated agreement or decision of
an arbitrator, then the licenses granted to the other party under Section 5.01
shall terminate.
12.03. Mutual Covenant Prior to Termination. Other than a party which has
------------------------------------
terminated this Agreement pursuant to Section 12.01(g), neither party shall take
any legal action, including, but not limited to, arbitration, that seeks to
enjoin the other party's use of any intellectual property rights which relate to
or are useful in a digital satellite radio system or any enhancements,
modifications, and derivative works thereof.
ARTICLE XIII
Dispute Resolution and Arbitration
----------------------------------
13.01. Dispute Resolution. The parties shall attempt to settle any
------------------
dispute between them amicably and agree to exercise their commercially
reasonable efforts to resolve such controversy or dispute prior to seeking an
arbitrated resolution. To invoke the dispute resolution process, the invoking
party shall give to the other party written notice of its decision to do so,
including a description of the issues subject to the controversy or dispute and
a proposed resolution thereof. Designated representatives of both parties with
the closest responsibility for this Agreement shall attempt to resolve the
controversy or dispute within five business days after receipt of such notice.
If those designated representatives
20
cannot resolve the controversy or dispute, the parties shall describe their
controversy or dispute and their respective proposals for resolution to their
respective Chief Executive Officers or other designated persons with comparable
authority who shall meet in good faith to resolve the controversy or dispute.
Except as provided in Section 7.02, if any controversy or dispute is not
resolved within ten business days after such meeting, the parties shall seek a
resolution through arbitration as set forth in Section 13.02.
13.02. Arbitration. Any controversy or claim arising out of or relating
-----------
to this Agreement shall be settled by arbitration in Washington, DC, by one or
more arbitrators, as mutually agreed by the parties, and such arbitrator(s) will
be persons with sufficient expertise to evaluate the subject of the dispute. In
the event that the dispute relates to intellectual property, such arbitrators
shall have sufficient technical, engineering and legal knowledge to evaluate the
applicability, validity and value of the intellectual property that is the
subject of the dispute. The arbitration shall be conducted in accordance with
the Expedited Arbitration Rules of JAMS/Endispute ("Expedited Rules"). In the
---------------
event that the parties do not agree on the arbitrators, or other procedures or
standards concerning the arbitration, such choice of arbitrator(s) or other
procedures shall be determined under the Expedited Rules. The award of the
arbitrator shall be binding upon the parties. The arbitrator(s) shall be
entitled to award reasonable attorneys' fees and expenses to the prevailing
party.
ARTICLE XIV
Miscellaneous
-------------
14.01. Non-Solicitation. During the term of this Agreement, and for a
----------------
period of twelve months following termination of this Agreement, neither party
shall, without the prior written consent of the other party, directly or
indirectly solicit for employment, employ or otherwise engage the services of
employees or individual consultants of the other party.
14.02. Catastrophic Loss Backup. XM and Sirius shall negotiate in good
------------------------
faith with respect to an agreement to provide service to the other's subscribers
in the event of a catastrophic failure of the XM Radio System or the Sirius
Radio System.
14.03. Governing Law. This Agreement shall be governed by, and
-------------
interpreted in accordance with, the laws of the State of New York, without
giving effect to any provisions which would require the application of the laws
of another jurisdiction.
14.04. Assignment. Any assignment of this Agreement by either party
----------
(except to an entity controlling, controlled by or in common control with such
party) without the written consent of the other party shall be void. Subject to
the foregoing, this Agreement will be binding upon and will inure to the benefit
of the respective successors and assigns of the parties.
14.05. Entire Agreement. This Agreement and all exhibits hereto shall
----------------
constitute the entire agreement between the parties with regard to the subject
matter of this Agreement and supersede all previous communications, whether oral
or written, between the parties with respect to such subject matter. No
modification of any provision of this Agreement
21
shall be binding unless in writing and signed by duly authorized representatives
of XM and Sirius.
14.06. Severability. Each party agrees that, in the event any court shall
------------
determine that any provision of this Agreement is invalid, such determination
shall not affect the validity of any other provisions of this Agreement, which
shall remain in full force and effect and shall be construed so as to be valid
under applicable law only to the extent that such construction maintains the
economic balance of the parties under this Agreement.
14.07. Waiver. Each party agrees that no failure or delay by any party in
------
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof.
14.08. Notices. Any notice required or permitted to be sent under this
-------
Agreement shall be sent by certified mail, overnight mail with receipt requested
or telefax with written confirmation to the following addresses:
For XM:
XM Satellite Radio Inc.
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Telecopier: 000-000-0000
For Sirius:
Sirius Satellite Radio Inc.
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: 000-000-0000
14.09. Independent Parties. The parties hereto are independent parties, and
-------------------
neither shall be liable for the performance or failure to perform of the other
party.
14.10. Records and Audits. Either party may, up to twice within any
------------------
twelve month period at such party's expense and upon five (5) days written
notice to the other party, hire an independent audit firm or other independent
representative reasonably acceptable to the other party ("Auditor"), to inspect
-------
or audit any or all of the other party's records solely relating to this
Agreement, for the purposes of verifying the other party's compliance with its
obligations hereunder. Such Auditor shall not disclose any information relating
to the business of the other party other than that information required to
determine the other party's compliance, and in such event, only to those
employees, agents or representatives of the other party having a need-to-know
for the purpose of the verification.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date.
Accepted by XM Satellite Radio Inc. Accepted by Sirius Satellite Radio Inc.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------- ---------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. Xxxxxxxx
Title: SVP Sales and Marketing Title: Senior Vice President
and General Counsel
23
EXHIBIT A
STIPULATION OF DISMISSAL
Xxxxx Xxxxx Xxxxxx (JJ 7731)
Xxxxxx X. Xxxxxxxx (RD 7158)
Xxxxxxxx X. Xxxxxx (JC 1039)
XXXXX & XXXXXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Attorneys for Plaintiff
Sirius Radio Inc.
Xxxxxx X. Xxxxxx (RM 0245)
Xxxx X. Xxxxxxxxx (MB 5614)
FISH & NEAVE
1251 Avenue of the Xxxxxxxx, 00xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Attorneys for Defendant
XM Satellite Radio, Inc.
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
SIRIUS RADIO INC., )
)
Plaintiff, ) Civ. No. 99-0230 (LMM)
)
v. )
)
XM SATELLITE RADIO, INC., )
)
Defendant. )
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
STIPULATION OF DISMISSAL
------------------------
24
Pursuant to Rule 41, Fed. R. Civ. P., Plaintiff Sirius Radio Inc. and
Defendant XM Satellite Radio, Inc., by their undersigned attorneys, stipulate
that this action be dismissed, without prejudice, each party bearing its own
costs and attorney fees.
Respectfully submitted, Respectfully submitted,
By_________________________ By_________________________
Xxxxx Xxxxx Xxxxxx (JJ 7731) Xxxxxx X. Xxxxxx (RM 0245)
Xxxxxx X. Xxxxxxxx (RD 7158) Xxxx X. Xxxxxxxxx (MB 5614)
Xxxxxxxx X. Xxxxxx (JC 1039) FISH & NEAVE
XXXXX & XXXXXXXX 1251 Avenue of the Americas
000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000 Tel.: (000) 000-0000
Tel.: (000) 000-0000
Attorneys for Plaintiff, Attorneys for Defendant,
Sirius Radio Inc. XM Satellite Radio Inc.
Dated:_________________________ Dated:_________________________
25
EXHIBIT B
PRESS RELEASE
PRESS RELEASE
For Immediate Release
Sirius Radio and XM Radio Form Alliance to Develop
Unified Standard for Satellite Radios
New York, NY and Washington, DC -- February 16, 2000 -- Sirius
Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR) today
announced an agreement to develop a unified standard for satellite radios.
The standard is expected to accelerate growth of the satellite radio
category by enabling consumers to purchase one radio capable of receiving
both companies' broadcasts. XM Radio and Sirius will jointly fund development
of the technology and work together to proliferate the new standard by
creating a service xxxx for satellite radio. As part of the agreement, each
company will contribute its intellectual property to the initiative and have
agreed to resolve any pending patent litigation.
"This standard is good news both for consumers and for the category," said
Xxxxx Xxxxxxxxx, Sirius Chairman and CEO, and High Panero, XM President and
CEO, in a joint statement. "This will allow for reduced subscriber
acquisition costs, more satellite radios in the marketplace, and a
simplified choice for consumers."
The unified standard will represent a second generation of satellite radios.
At the time of the commercial launches of XM Radio and Sirius, consumers
will be able to purchase radios capable of receiving one of the two
companies' broadcasts. These radios are already being developed by leading
electronics and automotive manufacturers. XM and Sirius will work with their
existing automobile and radio manufacturing partners to integrate the new
standard under the terms of their existing agreements. All future agreements
with automakers and radio partners will specify the new satellite radio
standard.
XM Radio and Sirius are each building a digital satellite radio service for
consumers, offering up to 100 channels of audio entertainment for a monthly
subscription fee of $9.95. For more information about the companies, visit
XM Satellite Radio at xxx.xxxxxxx.xxx and Sirius Satellite Radio at
---------------
xxx.xxxxxxxxxxx.xxx.
-------------------
continues...
Sirius Radio and XM Radio Form Alliance
Page Two
Any statements that express, or involve discussions as to, expectations,
beliefs, plans, objectives, assumptions, future events or performance with
respect to Sirius Satellite Radio Inc. or XM Satellite Radio Inc. are not
historical facts and may be forward-looking and, accordingly, such statements
involve estimates, assumptions and uncertainties which could cause actual
results to differ materially from those expressed in the forward-looking
statements. Accordingly, any such statements are qualified in their entirety by
reference to the factors discussed, as the case may be, in XM Satellite Radio
Inc.'s registration statement on Form S-1 (File No. 333-93529) filed with the
Securities and Exchange Commission or Sirius Satellite Radio Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1998, filed under the
company's former name, CD Radio Inc. Among the key factors that have a direct
bearing on the companies' results of operations are the potential risk of delay
in implementing the companies' business plans; increased costs of construction
and launch of necessary satellites; dependence on satellite construction and
launch contractors; dependence on third-party technology partners; risk of
launch failure; unproven market and unproven applications of existing
technology; unavailability of satellite radio receivers; and the companies' need
for additional financing.
###############
For more information, please call:
Sirius Satellite Radio: XM Satellite Radio:
Xxxxx Xxxxxx Xxxxx Xxxxxx
000-000-0000 000-000-0000
