1
EXHIBIT 10.11
ORBCOMM SERVICE LICENSE AGREEMENT
FOR THE MALAYSIAN REGION
This Service License Agreement (the "Agreement") is entered into this
10th day of October 1996, between ORBCOMM INTERNATIONAL PARTNERS, L.P.
("ORBCOMM"), whose principal place of business is 21700 Atlantic Boulevard,
Dulles, Virginia, 20166, USA, and CELLULAR COMMUNICATIONS NETWORK (MALAYSIA)
SDN. BHD. ("Licensee"), whose principal place of business is 1st Floor Menara
TR, 161B Jalan Ampany, 50450 Kuala Lumpur, Malaysia.
WHEREAS, Orbital Communications Corporation ("OCC") and Teleglobe
Mobile Partners ("Teleglobe Mobile"), through ORBCOMM Global, L.P. ("ORBCOMM
Global"), plan to design, develop, construct and operate a satellite-based,
low-Earth orbit message and data communications and position determination
system (the "ORBCOMM System") that is identified by the International
Telecommunications Union as "LEOTELCOM 1" and is further generally described in
Attachment A, which attachment shall not be deemed to be a representation or
warranty with respect to the ORBCOMM System;
WHEREAS, the initial two satellites for the ORBCOMM System were
launched in April 1995 and are currently commercially available in the United
States for the non real-time transmission of short messages and data;
WHEREAS, ORBCOMM Global has entered into a contract with Orbital
Sciences Corporation ("Orbital") for the construction and launch of an
additional 26 ORBCOMM System satellites, and the construction of an additional
eight satellites;
WHEREAS, OCC has been awarded United States Federal Communications
Commission authority to construct, launch and operate the ORBCOMM System in the
United States;
WHEREAS, ORBCOMM Global plans to market satellite-based, two-way
message and data communication and position determination services using the
ORBCOMM System (the "ORBCOMM Services") in the United States through ORBCOMM
USA, L.P. ("ORBCOMM USA") and elsewhere in the world through ORBCOMM;
WHEREAS, ORBCOMM has been granted the authority to use the "ORBCOMM"
logo, trademark and service mark and other similar intellectual property in
connection with the marketing of ORBCOMM Services internationally; and
WHEREAS, ORBCOMM and Licensee wish to enter into an agreement pursuant
to which, subject to certain terms and conditions, ORBCOMM authorizes Licensee
to access the satellites in the ORBCOMM System and to have use of certain other
related assets for purposes of Licensee offering on an exclusive basis
communication services using the ORBCOMM System in the country or countries and
in any other locations listed in Attachment B (the "Territory").
2
NOW, THEREFORE, the parties agree as follows:
SECTION 1 - DEFINED TERMS
"AAA" shall have the meaning assigned thereto in Section 15(a).
"Affiliate" shall mean, with respect to any person (a) any person that
directly, or indirectly through one or more intermediaries, controls such
person, (b) any person that is controlled by or is under common control with a
controlling person and (c) a shareholder of or other holder of an equity
interest in Licensee or an affiliate of any such shareholder or holder. As
used herein, the term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
"CSC" shall have the meaning assigned thereto in Section 6.
"CSC Software License Agreement" shall have the meaning assigned
thereto in Section 6.
"Controlling Shareholders" shall mean Technology Resources Industries,
Bhd..
"Data Throughput Fee Amount" shall have the meaning assigned thereto
in Section 5(a)(i).
"Effective Date" shall mean the date of execution of this Agreement.
"Gateway Acceptance Test" shall have the meaning assigned thereto in
the Ground Segment Procurement Contract.
"Gateway Facilities and Environmental Specifications" shall have the
meaning assigned thereto in the Ground Segment Procurement Contract.
"Gateway Implementation Plan" shall have the meaning assigned thereto
in the Ground Segment Procurement Contract.
"Governmental Authority" shall have the meaning assigned thereto in
Section 3(a)(ii).
"Ground Segment Procurement Contract" shall have the meaning assigned
therein in Section 3(a)(i).
"Initial Purchase" shall have the meaning assigned thereto in the
Ground Segment Procurement Contract.
"Intermittent Service Problem" shall have the meaning assigned thereto
in Section 13(a).
2
3
"License" shall have the meaning assigned thereto in Section 2(a).
"Licensee System" shall have the meaning assigned thereto in Section
3(a)(i).
"Licensee System Acceptance Specifications" shall have the meaning
assigned thereto in Section 3(a)(i).
"Licensee System Acceptance Test" shall have the meaning assigned
thereto in Section 3(a)(i).
"Licensee System Business Plan" shall have the meaning assigned
thereto in Section 3(a)(xvii).
"License Fee" shall have the meaning assigned thereto in Section 4.
"Operable Satellite" shall mean a Satellite that is being used by any
of ORBCOMM Global, ORBCOMM or ORBCOMM USA, directly or indirectly, for the
provision of revenued service using the ORBCOMM System.
"Option Exercise Notice" shall have the meaning assigned thereto in
Section 9(d).
"ORBCOMM Entities" shall mean OCC, Teleglobe Mobile, ORBCOMM Global,
ORBCOMM USA and ORBCOMM.
"ORBCOMM Gateway" shall mean the facilities consisting of dual
antenna, redundant gateway Earth stations ("GESs"), computers, displays,
control consoles, communications equipment and other hardware that transport
and control the flow of data and message communications and other information
for the ORBCOMM System in the Territory. An ORBCOMM Gateway shall include one
GES and may be expanded through the addition of supplemental GESs.
"ORBCOMM Gateway Software License Agreement" shall have the meaning
assigned thereto in Section 2(a).
"ORBCOMM Identity Manual" shall have the meaning assigned thereto in
Section 3(a)(vi).
"ORBCOMM Licensed Gateway Software" shall have the meaning assigned
thereto in the ORBCOMM Gateway Software License Agreement.
"ORBCOMM System Address" shall mean the unique subscriber communicator
address or addresses assigned to a "Subscriber Communicator."
"ORBCOMM System Purchase Group" shall have the meaning assigned
thereto in Section 9(d).
3
4
"Permits" shall have the meaning assigned thereto in Section 3(a)(ii).
"Quality Inspection" shall have the meaning assigned thereto in
Section 8(a)(i).
"Reseller Agreement" shall have the meaning assigned thereto in
Section 2(d).
"Resellers" shall have the meaning assigned thereto in Section 2(d).
"Revenue Dependent Amount" shall have the meaning assigned thereto in
Section 5(a)(i).
"Revenue Dependent Fee Percentage" shall have the meaning assigned
thereto in Section 5(a)(i).
"Satellites" shall mean any of the low-Earth orbit satellites
comprising the constellation portion of the ORBCOMM System.
"Satellite Usage Fee" shall have the meaning assigned thereto in
Section 5.
"Subscriber" shall mean a customer purchasing ORBCOMM Services from
Licensee or a Reseller (or agent or subagent thereof) of Licensee.
"Subscriber Communicator" shall mean the equipment used by a
Subscriber to provide access to the ORBCOMM System that has been "Type
Approved" by or on behalf of ORBCOMM Global.
"Subscriber Management and Customer Support Software" shall have the
meaning assigned thereto in Section 6.
"System Available Date" shall mean the day after the date hereof on
which ORBCOMM declares that the first plane of eight Satellites have completed
on-orbit testing.
"Territory" shall have the meaning assigned thereto in the whereas
clauses hereof, as such definition may be modified from time to time pursuant
to Section 3(a)(ii).
"Transaction Agreements" shall mean this Agreement, the Ground Segment
Procurement Contract, the ORBCOMM Gateway Software License Agreement and the
CSC Software License Agreement.
"Type Approved" shall mean the approval for use with the ORBCOMM
System granted by ORBCOMM Global for each model or type of subscriber
communicator based on ORBCOMM Global's determination that such type of
subscriber communicator meets the requirements of the specifications and
successfully meets the testing requirements specified in each applicable
subscriber communicator manufacturing agreement.
4
5
SECTION 2 - GRANT OF LICENSE
(a) (i) For purposes of Licensee offering ORBCOMM Services in the
Territory, subject to the terms and conditions set forth herein, ORBCOMM grants
to Licensee an exclusive license in the Territory (the "License") to (A) access
the Satellites while they are within view of any of the Subscriber
Communicators located in the Territory and any of the GESs of the ORBCOMM
Gateway located in the Territory or the GESs of an ORBCOMM Gateway shared by
Licensee to the extent permitted by the Ground Segment Procurement Contract,
(B) use the ORBCOMM Licensed Gateway Software pursuant to and in accordance
with the ORBCOMM Gateway Software License Agreement attached hereto as
Attachment C (the "ORBCOMM Gateway Software License Agreement"), (C) use the
applicable ORBCOMM System operating methods, and (D) if permitted by law, use
the "ORBCOMM" logo, trademark, service mark and name, in accordance with the
terms and conditions set forth in this Agreement; provided that Licensee shall
not be entitled to access the Satellites unless the Licensee System has
successfully passed a Licensee System Acceptance Test. Notwithstanding the
grant of the License, ORBCOMM reserves and shall have the right to access the
ORBCOMM System in the Territory, free of charge, for purposes of conducting
maintenance, testing, operational and other related ORBCOMM System functions,
provided that ORBCOMM shall use all good faith efforts to minimize its
interference with the operation of the Licensee System.
(ii) On the occurrence of an event specified in Section
9(b)(ii)(H), ORBCOMM shall be entitled to terminate Licensee's exclusivity in
the Territory granted pursuant to Section 2(a)(i) and grant another entity, on
a non-exclusive basis, similar rights to those specified in Section 2(a)(i).
(b) (i) ORBCOMM reserves the right to grant to other licensees
the right to use the ORBCOMM System, and the ORBCOMM Licensed Gateway Software,
operating methods, logo, trademark and name in any area outside the Territory.
(ii) To the extent permitted by applicable law, upon the receipt of
all necessary Permits from the applicable Governmental Authorities and without
the prior approval of ORBCOMM, Licensee may provide, on a non-exclusive basis,
ORBCOMM Services to Subscriber Communicators located in international waters.
(c) Notwithstanding the grant of the License, the ORBCOMM System,
the ORBCOMM concept, design, software (including the ORBCOMM Licensed Gateway
Software), operating methods, logos, trademarks, service marks and name, all
copyright, other proprietary and intellectual property rights and all other
tangible and intangible property rights with respect thereto are and shall
remain the sole and exclusive property of OCC, ORBCOMM, ORBCOMM Global, ORBCOMM
USA or its developer, as the case may be.
(d) Subject to the terms of Section 17(b), Licensee may authorize
other entities ("Resellers") to market and sell ORBCOMM Services on a
value-added basis in the Territory and, to the extent permitted by Section
2(b)(ii), in international waters. Licensee shall execute
5
6
an agreement (the "Reseller Agreement") with each Reseller that shall contain,
at a minimum, the terms and conditions shown in Attachment D.
SECTION 3 - SCOPE OF AGREEMENT
(a) Responsibilities of Licensee. Licensee shall:
(i) Procure and install in the Territory a ground
segment that shall consist of (A) the land, buildings, utilities and
facilities consistent with the Gateway Facilities and Environmental
Specifications, (B) one ORBCOMM Gateway incorporating a total of at
least one GES, which shall be purchased pursuant to the Ground Segment
Procurement Contract attached hereto as Attachment E (the "Ground
Segment Procurement Contract"), (C) the telecommunication facilities
required to connect all elements of such ORBCOMM Gateway and connect
such ORBCOMM Gateway with public and/or private data and
telecommunications networks and (D) the Subscriber Management and
Customer Support Software and associated hardware more specifically
described in Section 6 (collectively, the "Licensee System"). The
Licensee System must successfully meet the acceptance criteria and
specifications set forth in the Licensee System Acceptance
Specifications (the "Licensee System Acceptance Specifications")
before it is permitted to access the ORBCOMM System, which criteria
and specifications shall be tested by ORBCOMM in accordance with the
Licensee System Acceptance Test (the "Licensee System Acceptance
Test"); provided however, that if a Gateway Acceptance Test has been
performed within 30 days of such Licensee System Acceptance Test, the
Licensee System Acceptance Test shall not include a Gateway Acceptance
Test. The Licensee System Acceptance Test shall be completed in
accordance with the timetable set forth in the Gateway Implementation
Plan provided pursuant to the Ground Segment Procurement Contract.
The procurement and installation of the Licensee System shall be at
Licensee's sole expense;
(ii) Apply for and use all commercially reasonable
and good faith efforts to obtain promptly, and at all times maintain,
at its sole expense, all approvals, licenses, authorizations and
permits (the "Permits") from any applicable country, federal, state,
local or other governmental agency or authority ("Governmental
Authority") necessary (A) to develop, construct, implement and operate
the Licensee System in the Territory, including any necessary
in-country environmental impact studies, (B) to provide ORBCOMM
Services in the Territory, and (C) to use or operate Subscriber
Communicators with the Licensee System in the Territory. In the event
there is more than one country in the Territory, the Permits shall be
obtained and maintained for each country in the Territory, and if such
Permits are not obtained for any of the countries in the Territory,
ORBCOMM shall have the right to delete such country from the
definition of the Territory; provided, however, that ORBCOMM shall not
be entitled to exercise this right until two years from the Effective
Date. In addition, if any previously granted Permits for a country are
withdrawn for any reason, ORBCOMM shall have the right to delete that
country from the definition of the Territory;
6
7
(iii) Commence operation of the Licensee System in
the Territory no later than four months after the later of (A)
completion of the Licensee System Acceptance Test and (B) the date
when Licensee obtains all the Permits necessary from the Governmental
Authorities in at least one of the countries comprising the Territory;
(iv) Use all commercially reasonable efforts to
advertise, promote and market the Licensee System in the Territory,
which advertising, promotion and marketing shall occur, to the extent
permitted by applicable law, under the name "ORBCOMM Malaysia" in
accordance with Section 3(a)(vi), and provide to ORBCOMM by January 1
and June 1 of each year a copy of its current marketing communications
plan covering the next six months that includes a general description
of the advertising, promotional and marketing efforts for such period;
(v) Operate the Licensee System in a manner so as
not to injure the reputation of any of the ORBCOMM Entities or the
ORBCOMM System or otherwise adversely impact the operations or
commercial viability of any other system that uses the ORBCOMM System
and is operated by or on behalf of any of the ORBCOMM Entities or a
licensee of one of the foregoing;
(vi) (A) To the extent permitted by applicable
law, during the term of this Agreement and only so long as such use is
in accordance with the terms and conditions set forth herein, use the
ORBCOMM logos and all ORBCOMM trademarks and service marks, which
Licensee acknowledges are currently owned by OCC or ORBCOMM Global, as
the case may be, in Licensee's marketing and advertising for the
Licensee System. All such marketing and advertising that contains
references to the ORBCOMM System, ORBCOMM USA, ORBCOMM Global or
ORBCOMM shall be in accordance with the ORBCOMM Identity Manual, the
current version of which is attached hereto as Attachment F and which
may be modified by ORBCOMM after giving Licensee five business days
prior written notice (the "ORBCOMM Identity Manual"), provided that,
for a period of six months from the receipt of such notice, Licensee
shall be entitled to continue to use all existing marketing materials
that previously complied with the ORBCOMM Identify Manual. Licensee
shall be required to obtain the prior written consent of ORBCOMM for
all such marketing or advertising; provided that if Licensee complies
with the ORBCOMM Identity Manual, the advance written approval of
ORBCOMM shall not be required. Licensee shall obtain all Permits from
all applicable Governmental Authorities to use ORBCOMM logos,
trademarks and service marks in the Territory. To the extent not
otherwise previously done so and to the extent permitted by law,
Licensee shall register such logos, trademarks and service marks in
ORBCOMM Global's name in the Territory. Prior to registering such
logos, trademarks and service marks in ORBCOMM Global's name, Licensee
shall advise ORBCOMM of its intent to do so and of the out-of-pocket
costs that it expects to incur. On receipt of ORBCOMM's written
consent, Licensee shall proceed with such registration and, on
completion of the process, shall be reimbursed for the actual
out-of-pocket costs incurred by it up to an amount equal to its
out-of-pocket cost estimate. Any use of the word "ORBCOMM" or the
phrase "ORB" for a logo, trademark, service mark or trade name shall
also require the prior written approval of ORBCOMM;
7
8
(B) Cooperate with ORBCOMM in providing reasonable support
and any information that may be required in the defense in the
Territory of the ORBCOMM logo and all ORBCOMM trademarks and service
marks as a result of their use pursuant to this Agreement; and
(C) During the term of this Agreement and thereafter, not (x)
engage in any activities or commit any acts that may, directly or
indirectly, contest, dispute or otherwise impair OCC's or ORBCOMM
Global's, as the case may be, right, title and interest in such logos,
trademarks and service marks or (y) directly or indirectly, sublicense
use of the ORBCOMM logo or any ORBCOMM trademarks and service marks to
any other person, other than with respect to any Reseller or its
Agents or Subagents, without the express written consent of ORBCOMM;
(vii) Pay to ORBCOMM the fees, costs and other
payments set forth in this Agreement;
(viii) Give ORBCOMM and/or its representatives
reasonable access during normal business hours to Licensee's books,
accounts, records, contracts and documents concerning the Licensee
System or otherwise necessary to demonstrate compliance by Licensee
with the terms and conditions set forth in this Agreement;
(ix) In addition to ORBCOMM's access to the
ORBCOMM System in the Territory permitted by Section 2(a), permit
ORBCOMM or any other ORBCOMM Entity and/or their representatives or
Affiliates, at their expense, to directly and electronically
communicate with all elements of the Licensee System, other than the
Subscriber Management and Customer Support Software, for the purpose
of (A) examining subscriber provisioning parameters, as well as
network element configuration, use of the ORBCOMM System, performance
of the Licensee System and other data as required to ensure the proper
operation of the ORBCOMM System including the Licensee System and (B)
to the extent ORBCOMM is obligated to do so, assisting Licensee in the
maintenance and repair of the Licensee System; provided that, in
either event, ORBCOMM shall use all good faith efforts to minimize its
interference with the operation of the Licensee System;
(x) If it provides ORBCOMM Services directly to
Subscribers, include provisions substantially identical to those set
forth in subsections (f)(i)-(v) of the section entitled "Reseller
Responsibilities" on Attachment D in its contracts or agreements with
each of its Subscribers for the Licensee System;
(xi) Use the ORBCOMM Licensed Gateway Software
only in accordance with the terms and conditions set forth in the
ORBCOMM Gateway Software License Agreement;
(xii) Not discriminate against any Subscriber
because such Subscriber purchased or obtained its Subscriber
Communicator from one source versus another and not offer service to
Subscribers, who buy or lease their Subscriber Communicators from
8
9
Licensee or an Affiliate of Licensee, at a price that is lower than
that at which similar ORBCOMM Services are offered to Subscribers who
obtain their Subscriber Communicators from another source;
(xiii) To the extent permitted by law and except as
permitted in Sections 2(b)(ii) and 7, (A) not register on the Licensee
System Subscriber Communicators the billing address for which is
outside the Territory and (B) not solicit any third party, establish
an office outside the Territory for the purpose of soliciting any
third party or accept unsolicited offers from any third party that
will use the Licensee System, if such use will occur primarily in the
territory of any one other ORBCOMM System service licensee. During
the term of this Agreement, Licensee shall provide ORBCOMM with an
officer's certificate certifying its compliance with the terms of this
Section 3(a)(xiii);
(xiv) To the extent permitted by law, offer to
provide service to any reseller that has been accredited as an
approved ORBCOMM Service reseller by another ORBCOMM service licensee,
at substantially the same rates, terms and conditions as it offers
other, similar resellers of the ORBCOMM Services in the same country
in the Territory, or if there are no similar resellers in such
country, then at rates, terms and conditions that are commercially
reasonable; provided, however, that in the event Licensee does not
desire to provide service to such reseller, Licensee shall provide
ORBCOMM with its reasons therefor and request that ORBCOMM cause
ORBCOMM Global to review such reseller for the purpose of either
approving or disapproving such reseller as an accredited ORBCOMM
Service reseller. In the event such reseller is accredited as an
approved ORBCOMM Service reseller by ORBCOMM Global, Licensee shall be
required to offer to provide service to such reseller in accordance
with this Section 3(a)(xiv). If such reseller is not so accredited by
ORBCOMM Global, Licensee shall be under no obligation to provide
service to such reseller in accordance with this Section 3(a)(xiv);
(xv) Offer to provide in the Territory the full
range of ORBCOMM Services that are described in the ORBCOMM Service
Features Description, as it may be amended from time to time, the
current version of which is set forth in Attachment A;
(xvi) Promptly advise ORBCOMM in writing if
Licensee or any of its Affiliates is a Reseller or acquires any direct
or indirect ownership or other economic interest in a Reseller and
provide to ORBCOMM for its approval, which approval shall not be
unreasonably withheld, all proposed or previously executed Reseller
Agreements, and any amendments or modifications thereto, with such
Reseller, together with an explanation and justification of the terms
and conditions set forth therein;
(xvii) Prior to the commencement of the provision of
ORBCOMM Services in the Territory and within 15 days after the end of
each calendar quarter thereafter, provide to ORBCOMM in writing a full
description of its prices and pricing strategy for the provision of
ORBCOMM Services in the Territory. Such description shall (A) address
the issues of competitive pricing in the Territory, (B) demonstrate
that the pricing strategy and the prices serve the purpose of
maximizing revenues consistent
9
10
with or greater than the financial returns reflected in the mutually
agreed to Licensee System Business Plan, a copy of which is attached
hereto as Attachment G (the "Licensee System Business Plan"), and of
making efficient and appropriate use of the Satellites, and (C)
demonstrate that ORBCOMM Services have been appropriately priced, when
combined with other services or hardware provided by Licensee or its
Resellers, and accounted for in calculating gross operating revenues
pursuant to Section 5(a). Such pricing policies and strategies are
not subject to the approval of ORBCOMM, and Licensee shall be
obligated to disclose to ORBCOMM the identity of its Resellers but
shall not be obligated to disclose to ORBCOMM the identity of its or
its Reseller's Subscribers;
(xviii) Establish a mutually agreeable framework and
reporting scheme with ORBCOMM for the joint exchange of operational
statistics (such as statistical data on message lengths, message
frequencies, time of day, day of week and seasonal usage for each
service offering and market segment served by Licensee) that are
necessary for the Licensee, ORBCOMM and other ORBCOMM System service
licensees to appropriately manage their respective systems and provide
consistent quality services using the ORBCOMM System;
(xix) Participate with ORBCOMM in the preparation
of traffic forecasts;
(xx) Send ORBCOMM written notice of when the
Licensee System commences operation;
(xxi) Pay all country, federal, state, local and
other taxes, including but not limited to sales, use, gross receipts,
and excise taxes and withholding, that arise from the performance of
its duties under this Agreement, including the payment of all fees and
other amounts due and owing hereunder;
(xxii) From three months after the System Available
Date, make available to ORBCOMM operations personnel responsible for
the Licensee System, who collectively shall be available 24 hours a
day, seven days a week;
(xxiii) Operate the ORBCOMM Gateway located in the
Territory using software, firmware and hardware in accordance with the
currently-approved ORBCOMM Global specified configuration therefor,
which may change from time to time; and
(xxiv) Prior to or concurrently with the execution
of this Agreement, execute the Ground Segment Procurement Contract,
the ORBCOMM Gateway Software License Agreement and the CSC Software
License Agreement.
(b) Responsibilities of ORBCOMM. ORBCOMM shall:
(i) Cooperatively work with and encourage the
manufacturers and suppliers of Subscriber Communicators to offer such
Subscriber Communicators within one year
10
11
of the Effective Date for sale or lease in the Territory, either
directly or through distributors, one of which may be Licensee;
(ii) Provide no later than 60 days prior to the
Licensee System Acceptance Test (as set forth in the Gateway
Implementation Plan), the Licensee System Acceptance Specifications
and written acceptance test procedures for performing the Licensee
System Acceptance Test. The Licensee System Acceptance Specifications
shall be sufficient to ensure that all the features and functions of
the Licensee System are operating properly and in a manner compatible
with the ORBCOMM System;
(iii) Assist Licensee in providing data relating to
the ORBCOMM System required by any Governmental Authority in
connection with Licensee obtaining any of the Permits if ORBCOMM
determines that Licensee cannot reasonably provide such data itself;
provided that written data that exists or that ORBCOMM can readily
compile from existing data shall be provided at ORBCOMM's expense and
other written data or any data required to be presented in person or
orally shall be provided at Licensee's expense; and provided further
that ORBCOMM shall not be required to disclose any such data to the
extent prohibited by law and without reasonable assurances that such
data will be maintained by the receiving party on a confidential
basis;
(iv) Use commercially reasonable efforts to
provide, free of charge except as provided below, 24-hour a day, seven
days a week emergency technical advice concerning the operation,
maintenance and repair of the Licensee System. Requests for emergency
technical advice may be made by telephone or facsimile and the advice
may be provided by ORBCOMM using such similar means, with all
communications conducted in the English language; provided that if, in
ORBCOMM's business discretion, the nature of these requests or their
frequency indicate that Licensee's operators or technicians are
technically inadequate for their tasks, ORBCOMM may require that these
employees be retrained (or, at Licensee's option, replaced) at
Licensee's cost, or ORBCOMM may charge for this advice in accordance
with Section 8(b) of the Ground Segment Procurement Contract; and
provided further that, until three months after the System Available
Date, emergency technical advice shall only be available between the
hours of 9:00 a.m. and 5:00 p.m. United States Eastern Standard Time
(or United States Eastern Daylight Time as applicable) on regular
business days;
(v) Implement its own advertising and other
promotional programs for the ORBCOMM System, the scope and timing of
which shall be in ORBCOMM's sole discretion;
(vi) Use all good faith effort to cause ORBCOMM
USA and all other ORBCOMM service licensees to offer to any of
Licensee's Resellers rights substantially similar to those set forth
in Section 3(a)(xiv);
(vii) Establish a mutually agreeable framework and
reporting scheme with Licensee for the joint exchange of operational
statistics (such as statistical data on
11
12
message lengths, message frequencies, time of day, day of week and
seasonal usage for each service offering and market segment served by
Licensee) that are necessary for the Licensee, ORBCOMM and other
ORBCOMM System service licensees to appropriately manage their
respective systems and provide consistent quality services using the
ORBCOMM System;
(viii) To the fullest extent permitted by applicable
law, rule or regulation of any Governmental Authority, include
language substantially similar to Section 3(a)(xiii) in each service
license agreement it executes after the date hereof; and
(ix) Prior to or concurrently with the execution
of this Agreement, execute the Ground Segment Procurement Contract and
the ORBCOMM Gateway Software License Agreement.
SECTION 4 - LICENSE FEE
(a) In addition to any other fees or payments specified herein,
Licensee shall pay to ORBCOMM the sum of [CONFIDENTIAL TREATMENT] (the "License
Fee") ") as consideration for the grant of the License. The License Fee shall
be payable on the Effective Date to a bank account of ORBCOMM specified in
writing.
(b) (i) [CONFIDENTIAL TREATMENT], in recognition of the
early date at which Licensee became a Candidate Licensee for the Territory,
[CONFIDENTIAL TREATMENT] shall be [CONFIDENTIAL TREATMENT] of the Licensee
System as specified in Section [CONFIDENTIAL TREATMENT]. Upon the occurrence
of such a [CONFIDENTIAL TREATMENT], the [CONFIDENTIAL TREATMENT], as
[CONFIDENTIAL TREATMENT] as provided below, shall become [CONFIDENTIAL
TREATMENT] within [CONFIDENTIAL TREATMENT] business days of such [CONFIDENTIAL
TREATMENT]; provided, however, that if such a [CONFIDENTIAL TREATMENT] shall
not have occurred by the [CONFIDENTIAL TREATMENT], the payment of the
[CONFIDENTIAL TREATMENT] shall be [CONFIDENTIAL TREATMENT].
(ii) For purposes of this Agreement, a change of control
with respect to Licensee shall be deemed to have occurred if the Controlling
Shareholders in the aggregate shall (a) cease to own, directly or indirectly,
at least [CONFIDENTIAL TREATMENT] percent of the issued and outstanding shares
of capital stock or other interests of Licensee entitled to vote generally for
the election of directors or persons performing similar functions or (b) not
have the ability to elect a [CONFIDENTIAL TREATMENT] of the directors or
persons performing similar functions of Licensee.
(iii) The [CONFIDENTIAL TREATMENT] shall be [CONFIDENTIAL
TREATMENT] by an amount equal to [CONFIDENTIAL TREATMENT] percent per annum for
each year or portion thereof from the Effective Date until the [CONFIDENTIAL
TREATMENT].
12
13
SECTION 5 - SATELLITE USAGE FEES
In addition to any other fees or payments specified herein, Licensee
shall pay to ORBCOMM a fee for the use of the Satellites (the "Satellite Usage
Fee") in accordance with the following terms and conditions:
(a) Amount of Fee. (i) The Satellite Usage Fee
for a calendar month shall be equal to the greater of (A)
[CONFIDENTIAL TREATMENT] percent (the "Revenue Dependent Fee
Percentage") of Licensee's gross operating revenues for such month
(the "Revenue Dependent Amount") and (B) [CONFIDENTIAL TREATMENT] (the
"Data Throughput Fee Amount") multiplied by the number of KBytes of
data originating from or terminating to Subscriber Communicators
registered on or provided roaming services by the Licensee System at
any time during such month and processed by Licensee's ORBCOMM Gateway
(excluding bytes added to the Subscriber's message by the ORBCOMM
System).
(ii) For purposes of this Agreement, in
calculating the Revenue Dependent Amount gross operating revenues
shall:
(A) be calculated using the amounts
invoiced or that could have been invoiced during a
calendar month by Licensee, whether these amounts are
collected or not;
(B) include all revenue derived,
directly or indirectly, from [CONFIDENTIAL TREATMENT]
and other fees for ORBCOMM Services, including all
revenue derived as a provider of roaming or
multinational account services;
(C) if such a long message surcharge has
not been charged Resellers and Subscribers, in the
event Licensee provides services directly to
Subscribers, be calculated to include a long message
surcharge, equal to at least [CONFIDENTIAL TREATMENT]
(or its equivalent in the applicable currency) for each
message whose length is between [CONFIDENTIAL
TREATMENT] and [CONFIDENTIAL TREATMENT] bytes,
inclusive, or equal to at least [CONFIDENTIAL
TREATMENT] (or its equivalent in the applicable
currency) for each message whose length exceeds
[CONFIDENTIAL TREATMENT] bytes;
(D) be calculated assuming that ORBCOMM
Services combined with other services or hardware
provided by Licensee or its Resellers were priced no
less than similar ORBCOMM Services provided on a stand
alone basis;
(E) exclude those revenues derived from
another third party derived as a provider of roaming or
multinational account services and any surcharge due
and owing to ORBCOMM in connection with roaming or
multinational account services; and
13
14
(F) exclude all value-added or
similar taxes or assessments that Licensee is required
by applicable law to collect from its customers and
remit to Governmental Authorities in the Territory.
(iii) In calculating the Revenue Dependent
Amount or the Data Throughput Fee Amount any data throughput
associated with a Subscriber Communicator registered or used by any of
ORBCOMM Global, ORBCOMM USA, or ORBCOMM for purposes of maintenance
and testing shall be excluded.
(iv) ORBCOMM may, in its discretion, change
the Revenue Dependent Fee Percentage and/or the Data Throughput Fee
Amount; provided that ORBCOMM shall not be entitled to make any such
change (A) before [CONFIDENTIAL TREATMENT], (B) more than
[CONFIDENTIAL TREATMENT] time in any [CONFIDENTIAL TREATMENT] month
period, provided that a change in [CONFIDENTIAL TREATMENT] or the
[CONFIDENTIAL TREATMENT] shall for purposes of this Section be
[CONFIDENTIAL TREATMENT], (C) without giving Licensee [CONFIDENTIAL
TREATMENT] days advance written notice thereof. In addition:
(x) with respect to the Revenue
Dependent Fee Percentage, ORBCOMM shall not be entitled
to make any change thereto in an increment of more than
[CONFIDENTIAL TREATMENT] percent at any one time and
the Revenue Dependent Fee Percentage shall not be more
than [CONFIDENTIAL TREATMENT] percent; and
(y) with respect to the Data
Throughput Fee Amount, ORBCOMM shall not be entitled to
make any change thereto in an increment of more than
[CONFIDENTIAL TREATMENT] percent of the then existing
rate at any one time and the Data Throughput Fee Amount
shall not be more than [CONFIDENTIAL TREATMENT] per
KByte.
(b) Payment of Fee. (i) Within
[CONFIDENTIAL TREATMENT] days of the end of each calendar month,
Licensee shall advise ORBCOMM in writing of Licensee's calculation of
the total gross operating revenues for such calendar month, in the
currencies in which Licensee invoices its customers, and the number of
KBytes of data originating from or terminating to Subscriber
Communicators registered on or provided roaming service by the
Licensee System at any time during such month and processed by the
Licensee's ORBCOMM Gateway (excluding bytes added to the Subscriber's
message by the ORBCOMM System). Within [CONFIDENTIAL TREATMENT]
calendar days of the end of each calendar month, ORBCOMM shall compute
and invoice Licensee for the actual Satellite Usage Fee payment for
such month, in U.S. dollars, using the official exchange rate in
effect at Morgan Guaranty Trust Company of New York at the close of
business in New York on the last business day of such calendar month.
In the event that Licensee does not provide ORBCOMM with any of the
foregoing information, ORBCOMM may make its own estimate thereof,
which estimate shall be conclusive and binding on Licensee, and
compute the amount to be invoiced using such estimate.
14
15
(ii) Within [CONFIDENTIAL TREATMENT] days of
the receipt of the Satellite Usage Fee invoice, Licensee shall pay the
Satellite Usage Fee by electronic fund transfer to the bank account
specified by ORBCOMM. All Satellite Usage Fees remaining unpaid after
such [CONFIDENTIAL TREATMENT] day period shall bear interest until
paid at the rate equal to [CONFIDENTIAL TREATMENT] times the prime
rate or rates announced by Morgan Guaranty Trust Company of New York
during the period of nonpayment.
(iii) If payments due under this Section 5
cannot be made as provided herein due to [CONFIDENTIAL TREATMENT] or
other [CONFIDENTIAL TREATMENT] in each and every country or territory
within the Territory, subject to Section [CONFIDENTIAL TREATMENT],
ORBCOMM shall permit Licensee to [CONFIDENTIAL TREATMENT].
SECTION 6 - SUBSCRIBER MANAGEMENT AND CUSTOMER SUPPORT SYSTEM
To the fullest extent permitted by law, the parties to this Agreement
acknowledge and agree that it is critical that (a) in the universal
commissioning of new applications using the ORBCOMM System, Licensee and other
ORBCOMM System service licensees have a billing and customer support system
that can adequately and appropriately bill and manage Resellers and Subscribers
for such applications, as well as provide associated customer support
functions, and (b) Multinational Accounts be established. It is essential,
therefore, that Licensee obtain a license from CSC Intelicom, Inc. ("CSC") for
the subscriber management and customer support system software (the "Subscriber
Management and Customer Support Software") Licensee will use for ORBCOMM
Services using the Licensee System. Licensee hereby agrees to obtain a license
for the Subscriber Management and Customer Support Software and purchase
certain hardware from CSC on the terms and conditions specified in the Software
License Agreement attached hereto as Attachment H (the "CSC Software License
Agreement").
SECTION 7 - ROAMING ARRANGEMENTS AND MULTINATIONAL ACCOUNTS
ORBCOMM shall establish an International Marketing Council, which
Council shall include all ORBCOMM System service licensees. The International
Marketing Council shall consider, among other things, the terms and conditions
on which roaming arrangements and multinational accounts shall be established
for ORBCOMM System service licensees. Licensee and ORBCOMM agree to be bound by
the determinations of the International Marketing Council with respect to
roaming arrangements and multinational accounts.
SECTION 8 - PROPER OPERATION OF THE LICENSEE SYSTEM
(a) Performance of Tests. (i) Once a calendar year,
Licensee shall permit ORBCOMM and/or its representatives access to the Licensee
System, other than the Subscriber Management and Customer Support Software, for
the purpose of performing a quality inspection (the "Quality Inspection"),
which shall be conducted to determine compliance with
15
16
the provisions of this Agreement. The Quality Inspection (A) may be conducted
only after ORBCOMM has given the Licensee seven days prior written notice
thereof, (B) shall be conducted in a way that minimizes the interference with
Licensee's normal business operations, and (C) may include a Licensee System
Acceptance Test that requires some assistance from Licensee's personnel. All
costs of Quality Inspections, other than the costs, including any out-of-pocket
expenses, associated with the assistance received by ORBCOMM from Licensee's
personnel specified in clause (C) above, shall be borne by ORBCOMM; provided,
however that if the Quality Inspection demonstrates that the Licensee System is
not operating in accordance with the Licensee System Acceptance Specifications,
Licensee shall bear the cost of such Quality Inspection.
(ii) In addition to the foregoing, if, subsequent to the
initial Licensee System Acceptance Test, in ORBCOMM's reasonable opinion, there
are grounds to believe that the Licensee System is not operating in accordance
with the Licensee System Acceptance Specifications, ORBCOMM shall be entitled,
at its option, (A) to require Licensee to perform a Licensee System Acceptance
Test or (B) to perform a Licensee System Acceptance Test itself. If ORBCOMM
elects to require Licensee to take the action specified in (A) above, ORBCOMM
shall advise Licensee in writing of such election and Licensee must perform, or
have performed, the test within ten days thereafter. If ORBCOMM elects to
perform the Licensee System Acceptance Test itself, ORBCOMM shall advise
Licensee in writing of such election and Licensee shall provide ORBCOMM and its
representatives access to Licensee's facilities, including its equipment. The
cost to perform the Licensee System Acceptance Test shall be borne solely by
Licensee and, if performed by ORBCOMM, shall be at the rate for On-Site
Technical Assistance Services set forth in Section 8(a) of the Ground Segment
Procurement Contract; provided that, if after completion of such test, ORBCOMM
reasonably concludes that (x) the reason the Licensee System was not operating
in accordance with the Licensee System Acceptance Specifications was the result
of a defect in the ORBCOMM Gateway covered by the warranty provisions set forth
in Section 6 of the Ground Segment Procurement Contract or (y) the Licensee
System is operating in accordance with the Licensee System Acceptance
Specifications, the cost of the Licensee System Acceptance Test including
Licensee's out-of-pocket costs in connection therewith, shall be borne by
ORBCOMM.
(b) Corrective Action. If ORBCOMM determines from the
Licensee System Acceptance Test that the Licensee System is not operating in
accordance with the Licensee System Acceptance Specifications, or if the
Licensee System is operating in violation of any applicable law, rule or
regulation of any Governmental Authority and such law, rule or regulation
requires immediate cessation of operation, ORBCOMM shall be entitled to require
Licensee immediately to cease operation of the Licensee System and, if Licensee
fails to cease operation of the Licensee System, ORBCOMM shall be entitled to
terminate Licensee's access to the ORBCOMM System until ORBCOMM determines that
all necessary corrections have been made by Licensee; provided however, that,
if only a portion of the Licensee System is not operating in accordance with
the Licensee System Acceptance Specifications, or only a portion of the
Licensee System is operating in violation of any such law, rule or regulation,
and ORBCOMM determines that cessation of the non-conforming portion only of the
Licensee System will not injure the ORBCOMM System, is technically consistent
with the ORBCOMM System architecture and is operationally feasible, ORBCOMM
shall notify Licensee of such
16
17
determination and Licensee shall be entitled to cease operating the
non-conforming portion only of the Licensee System. Notwithstanding the
foregoing proviso, in the event the corrections required by this Section 8 are
not made within three months of receipt by Licensee of written notice thereof,
ORBCOMM shall be entitled to terminate this Agreement.
SECTION 9 - TERM OF AGREEMENT
(a) Term. Subject to the provisions set forth in this
Section 9, this Agreement shall have a term of ten years, commencing on the
Effective Date. Within one year prior to the expiration of the initial term of
this Agreement, Licensee may request that this Agreement be extended for a
further period of up to ten years, which request shall not be unreasonably
denied by ORBCOMM. To the extent such extension is granted, ORBCOMM shall not
charge Licensee a service license fee for such extension.
(b) Termination.
(i) Termination by Licensee. Subject to the provisions of
Section 12, this Agreement may be terminated by Licensee one year after
providing to ORBCOMM written notice of termination. In addition, this
Agreement may be terminated by Licensee at any time after the occurrence of any
of the following events of default:
(A) Any representation or warranty made by
ORBCOMM in this Agreement or any other document delivered pursuant to
this Agreement including the Ground Segment Procurement Contract and
the ORBCOMM Gateway Software License Agreement shall be false or
misleading in any material respect;
(B) ORBCOMM shall fail to observe or perform
any of its obligations under this Agreement, and such failure shall
remain uncured for a period of [CONFIDENTIAL TREATMENT] days after
receipt by ORBCOMM of written notice thereof;
(C) ORBCOMM shall become insolvent, admit in
writing its inability to pay its debts as they become due, make a
general assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets, initiate or
become subject to any proceeding under any bankruptcy or insolvency
law, whether domestic or foreign, or liquidate or wind up, voluntarily
or otherwise;
(D) Licensee shall have exercised its rights
set forth in Section 13(a); or
(E) An event of default by ORBCOMM shall
have occurred under Section 9(a) of the Ground Segment Procurement
Agreement or under Section 7(a) of the ORBCOMM Gateway Software
License Agreement.
(ii) Termination by ORBCOMM. This Agreement may be
terminated by ORBCOMM at any time after the occurrence of any of the following
events of default:
17
18
(A) Licensee shall fail to pay any amount
due under this Agreement, including the Satellite Usage Fee, within
[CONFIDENTIAL TREATMENT] days after receipt of notice from ORBCOMM
that such amount is due;
(B) Any representation or warranty made by
Licensee in this Agreement or any other document delivered pursuant to
this Agreement including the Ground Segment Procurement Contract and
the ORBCOMM Gateway Software License Agreement shall be false or
misleading in any material respect;
(C) Licensee shall fail to observe or
perform any of its obligations under Section 8(b);
(D) Licensee shall fail to observe or
perform any of its obligations under this Agreement (other than
breaches specified in Sections 9(b)(ii)(A), (C), (H), (I) or (J)), and
such failure shall remain uncured for a period of [CONFIDENTIAL
TREATMENT] days after receipt by Licensee of written notice thereof;
(E) Licensee shall become insolvent, admit
in writing its inability to pay its debts as they become due, make a
general assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets, initiate or
become subject to any proceeding under any bankruptcy or insolvency
law, whether domestic or foreign, or liquidate or wind up, voluntarily
or otherwise;
(F) Currency exchange restrictions that
prevent Licensee from making its payments to ORBCOMM in U.S. dollars
shall be imposed by any Governmental Authority and continue in effect
for more than two years;
(G) Any law shall be enacted or exist in any
part of the Territory that imposes any tax or other assessment,
including withholding taxes, on the License Fee, Satellite Usage Fee
or any amounts owed by Licensee under any of the other Transaction
Agreements that is not borne solely by Licensee;
(H) (x) Licensee's actual gross operating
revenues for the provision of ORBCOMM Services in the Territory for
the [CONFIDENTIAL TREATMENT] year period commencing on the date there
are [CONFIDENTIAL TREATMENT] or more [CONFIDENTIAL TREATMENT] is less
than [CONFIDENTIAL TREATMENT] of the gross operating revenues
reflected in the Licensee System Business Plan for the first
[CONFIDENTIAL TREATMENT] years after the assumed date in the Licensee
System Business Plan when there would have been [CONFIDENTIAL
TREATMENT] or more [CONFIDENTIAL TREATMENT], or (y) total Satellite
Usage Fees in the first full calendar year after the expiration of
such [CONFIDENTIAL TREATMENT] year period, shall be less than
[CONFIDENTIAL TREATMENT] percent of the total Satellite Usage Fees for
the previous calendar year; provided that for purposes of this Section
12(b)(ii)(H) only, in calculating the amounts of the Satellite Usage
Fees a constant set of currency exchange rates shall be used; and
provided further that this percentage shall be [CONFIDENTIAL
TREATMENT], if the number of [CONFIDENTIAL TREATMENT] on [CONFIDENTIAL
TREATMENT] of the [CONFIDENTIAL TREATMENT] year is less
18
19
than the number of [CONFIDENTIAL TREATMENT] on [CONFIDENTIAL
TREATMENT] of the previous year, in accordance with the following
formula: [CONFIDENTIAL TREATMENT] (number of [CONFIDENTIAL TREATMENT]
on [CONFIDENTIAL TREATMENT] of the [CONFIDENTIAL TREATMENT]
year/number of [CONFIDENTIAL TREATMENT] on [CONFIDENTIAL TREATMENT] of
the [CONFIDENTIAL TREATMENT] year);
(I) Licensee shall violate the provisions of
Section 12(a);
(J) By [CONFIDENTIAL TREATMENT] after the
System Available Date, Licensee shall not have obtained, or shall
thereafter fail to maintain, the Permits required to operate the
Licensee System in at least one of the countries comprising the
Territory; or
(K) An event of default by Licensee shall
have occurred under Section 9(b) of the Ground Segment Procurement
Agreement, Section 7(b) of the ORBCOMM Gateway Software License
Agreement, or under the CSC Software License Agreement.
(c) Remedies on Termination. (i) Upon termination of this
Agreement by Licensee for convenience pursuant to Section 9(b)(i) or by ORBCOMM
pursuant to Section 9(b)(ii), to the fullest extent permitted by law, ORBCOMM
shall be entitled, in its discretion, to become a sublicensee of Licensee and
operate and manage the Licensee System to ensure that there is as little
interruption as possible in the provision of ORBCOMM Services in the Territory.
Licensee agrees to cooperate in a commercially reasonable manner and actively
participate, including with respect to the transfer of the Permits in the
Territory and providing ORBCOMM information on its Resellers, in ensuring
continued operations until such time that a new entity has been granted the
necessary Permits for the Territory and is ready to start operations.
(ii) Subject to Section 14, termination of this Agreement by
the party not in default in accordance with the terms hereof shall be without
prejudice to any other rights or remedies such party shall have by law.
(d) Abandonment of ORBCOMM System. Nothing contained in
this Agreement shall prevent the ORBCOMM Entities from ceasing to develop,
construct or operate the ORBCOMM System. In the event ORBCOMM or any of the
ORBCOMM Entities abandon the ORBCOMM System by ceasing to develop, construct
and operate all of the ORBCOMM System, ORBCOMM shall be entitled to terminate
this Agreement by giving Licensee 180 days written notice. In such event, to
the fullest extent permitted by applicable law, Licensee shall have the right,
together with all other persons who may have a similar right and a desire to
exercise such right, all of whom shall be obligated to act as a group (the
"ORBCOMM System Purchase Group"), to purchase the tangible assets of the
ORBCOMM System owned by ORBCOMM Global, ORBCOMM USA, or ORBCOMM and to purchase
a non-exclusive, perpetual license to use, solely in connection with the
operation of the tangible assets purchased pursuant to this Section 9(d), the
intangible assets of the ORBCOMM System, other than any operating or regulatory
licenses with respect to the ORBCOMM System, owned by ORBCOMM Global, ORBCOMM
USA, or ORBCOMM at their then fair market value, which right shall be exercised
by the ORBCOMM System Purchase Group within three months of
19
20
receipt of written notice from ORBCOMM of abandonment (the "Option Exercise
Notice"). The fair market value of the tangible assets and such license for the
intangible assets of the ORBCOMM System shall be determined as of the day of
abandonment and on the basis of an arms' length transaction between a willing
buyer and a willing seller. Any determination of fair market value pursuant to
this Section 9(d) shall be final, binding and conclusive on the parties. Fair
market value shall be determined as follows:
(i) Promptly after delivery of the Option
Exercise Notice, ORBCOMM and the ORBCOMM System Purchase Group shall
attempt in good faith to agree on the fair market value. If ORBCOMM
and the ORBCOMM System Purchase Group agree on a value (regardless of
when such agreement is reached, and notwithstanding the pendency of
appraisal efforts pursuant to this Section), such value shall be the
fair market value;
(ii) If ORBCOMM and the ORBCOMM System
Purchase Group fail to reach such an agreement within one month after
the delivery of the Option Exercise Notice, they shall each select an
independent appraiser who is one of the "Big Six" United States
accounting firms. If either ORBCOMM or the ORBCOMM System Purchase
Group shall fail to select an appraiser within twenty (20) days after
the expiration of the one-month period referred to in the preceding
sentence, the fair market value shall be determined by the appraiser
selected by the other. Following such selection, each such appraiser
shall determine the value of the tangible and intangible assets of the
ORBCOMM System to be purchased pursuant to this Section 9(d) as
quickly as practicable, and in any event within forty-five (45) days
after the last appraiser has been selected, and give notice of such
determination to ORBCOMM and the ORBCOMM System Purchase Group. If
either appraiser shall fail to make such a determination of value
within forty-five days after the last appraiser has been selected, the
fair market value shall be the value determined by the other
appraiser. If the greater of the two values determined by such two
appraisers is within 10% of the lesser of such two values, the fair
market value shall be the average of such two values.
(iii) If the greater of the two values
determined by such two appraisers is not within 10% of the lesser of
such two values, such two appraisers shall select a third independent
appraiser who shall be one of the "Big Six" United States accounting
firms and who shall as quickly as practicable, but in no event later
than forty-five days after appointment, select one of the values
determined by the first two appraisers as the value that more closely
approximates the correct fair market value, and such value selected by
the third appraiser shall be fair market value.
(iv) ORBCOMM and the ORBCOMM System Purchase
Group agree to cooperate with one another and with the appraisers in
determining fair market value. ORBCOMM and the ORBCOMM System Purchase
Group shall each bear its own out-of-pocket expenses incurred in
connection with the determination of fair market value, including
without limitation the fees and expenses of the appraiser selected by
each, and one-half of the fees and expenses of the third appraiser, if
any.
20
21
(v) The consummation of the purchase and
sale of the assets specified herein shall occur within 45 days of the
determination of the fair market value therefor.
In the event ORBCOMM ceases to develop, construct or operate the
ORBCOMM System as specified in this Section 9(d), ORBCOMM shall use
all commercially reasonable efforts to cooperate with the ORBCOMM
System Purchase Group in the transfer of the ORBCOMM System; provided
that ORBCOMM shall be reimbursed by the ORBCOMM System Purchase Group
for all of its expenses incurred in providing such cooperation. In
addition, ORBCOMM shall continue to operate the ORBCOMM System until
the expiration of any rights to purchase by the ORBCOMM System
Purchase Group if the ORBCOMM System Purchase Group does not exercise
such rights or, if the ORBCOMM System Purchase Group exercises such
rights, until consummation of the purchase and sale of the assets as
specified herein.
(e) Use of ORBCOMM System After Termination or Expiration.
Except as otherwise provided in Section 9(d), on the effective date of
termination or expiration of this Agreement, Licensee shall cease using the
ORBCOMM System, the ORBCOMM Licensed Gateway Software, the ORBCOMM operating
methods and the "ORBCOMM" logos, trademarks, service marks and name, and shall
return all manuals and related materials to ORBCOMM.
(f) Obligations After Termination. The obligations set
forth in Sections 3(a)(vi), 11(a)(ii), 11(b)(ii), 12(b), 14, 15 and 17(d), (j),
(k) and (n) and those obligations that relate to any amounts due and owing for
any periods prior to termination or expiration of this Agreement shall survive
such termination or expiration.
SECTION 10 - CHANGE OF CONTROL
In the event a change in control as defined in Section 4(b)(ii) occurs
with respect to the Licensee, this Agreement shall be void and of no further
force and effect unless ORBCOMM consents in writing to an assignment of this
Agreement, which consent shall not be unreasonably withheld.
SECTION 11 - REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of Licensee. (i)
Licensee represents and warrants to ORBCOMM that (A) Licensee is a private
limited company duly organized/formed and validly existing under the laws of
Malaysia, (B) a true and accurate list of Licensee's shareholders, with their
percentage ownership interest in Licensee, is set forth on Attachment I, (C)
Licensee has the power, corporate or otherwise, to enter into the Transaction
Agreements and perform its obligations thereunder and the execution, delivery
and performance of the Transaction Agreements by Licensee has been duly
authorized by all necessary action on the part of Licensee, (D) the Transaction
Agreements have been duly executed and delivered by Licensee and each
constitutes a legally valid and binding obligation of Licensee, enforceable
21
22
against Licensee in accordance with its terms, (E) Licensee's operation of the
Licensee System will not violate any copyright, trade secret, trademark,
patent, invention, proprietary information, privacy, non-disclosure or any
other statutory or common law rights of any third party in effect in or
applicable to the Territory or, if found to violate, shall promptly remedy such
violation by modifying any infringing item or by entering into an appropriate
license arrangement with such third party, and (F) Licensee's operation of the
Licensee System will not contravene any country, federal, state, local or
foreign rules, regulations, laws or treaties.
(ii) Licensee agrees to indemnify and hold harmless ORBCOMM
and its Affiliates, officers, directors, employees, agents, contractors and
representatives, including any of the other ORBCOMM Entities, against all
claims, demands or liabilities (including reasonable attorneys' fees) of third
parties arising out of or in connection with Licensee's misuse of the ORBCOMM
logos, trademarks and service marks or any other intellectual property rights
of ORBCOMM or any third parties incorporated into the ORBCOMM System, or
Licensee's breach of any representations, warranties, covenants or agreements
contained herein. This indemnification obligation shall survive the expiration
or termination of this Agreement.
(b) Representations and Warranties of ORBCOMM. (i)
ORBCOMM represents and warrants to Licensee that (A) ORBCOMM is a limited
partnership duly formed and validly existing under the laws of the State of
Delaware, (B) ORBCOMM has the partnership power to enter into the Transaction
Agreements to which it is a party and perform its obligations thereunder and
the execution, delivery and performance by ORBCOMM of the Transaction
Agreements to which it is a party has been duly authorized by all necessary
action on the part of ORBCOMM, (C) the Transaction Agreements to which it is a
party have been duly executed and delivered by ORBCOMM and each constitutes a
legally valid and binding obligation of ORBCOMM, enforceable against ORBCOMM in
accordance with its terms, (D) the ORBCOMM Entities' operation of the ORBCOMM
System will not violate any United States copyright, trade secret, trademark or
patent rights of any third party or, if found to violate, shall promptly remedy
such violation by modifying any infringing item or by entering into an
appropriate license arrangement with such third party, and (E) the ORBCOMM
Entities' use of the ORBCOMM System will not contravene any United States
federal, state or local rules, regulations, laws or treaties, including, but
not limited, to licensing requirements; and
(ii) ORBCOMM agrees to indemnify and hold harmless Licensee
and its Affiliates, officers, directors, employees, agents, contractors and
representatives against all claims, demands or liabilities (including
reasonable attorneys' fees) of third parties arising out of or in connection
with ORBCOMM's breach of any representations, warranties, covenants or
agreements contained herein. This indemnification obligation shall survive the
expiration or termination of this Agreement.
SECTION 12 - NON-COMPETITION
(a) During Term. As long as this Agreement is in effect,
Licensee hereby agrees that it, its shareholders or the equivalent thereof and
its Affiliates shall not engage or participate in, assist or have an interest
in, directly or indirectly, the operation, management or
22
23
conduct of any business or enterprise, other than the Licensee System, that
provides or intends to provide satellite-based, two-way data communications or
position determination services using radio frequencies below 1 GHz for
communications directly between satellite(s) and subscriber communicators.
(b) After Term. In the event Licensee terminates this
Agreement in accordance with Section 9(b)(i) for its convenience, or if ORBCOMM
terminates this Agreement pursuant to Section 9(b)(ii), Licensee hereby agrees
that, for a period of two years from the date of such termination, it, its
shareholders or the equivalent thereof and its Affiliates shall not engage or
participate in, assist or have an interest in, directly or indirectly, the
operation, management or conduct of any business or enterprise that provides or
intends to provide satellite-based, two-way data communications or position
determination services using radio frequencies below 1 GHz for communications
directly between satellite(s) and subscriber communicators.
SECTION 13 - SYSTEM OUTAGES AND FAILURE
(a) In the event ORBCOMM is unable to provide Licensee with
access to the ORBCOMM System due to temporary or intermittent problems (not
including planned periods of satellite unavailability) with the ORBCOMM System
other than those temporary or intermittent problems caused by Licensee, any of
its Subscribers or the Licensee System (an "Intermittent Service Problem") for
an aggregate of more than ten days where no service was available for a 24
consecutive hour period during any one year period commencing on the later to
occur of (i) the System Available Date and (ii) the date the Licensee System
commenced operations, and any anniversary of such date, Licensee's sole and
exclusive remedy shall be to extend the term of this Agreement [CONFIDENTIAL
TREATMENT] day for each day, in excess of such ten days where no service was
available for a 24 consecutive hour period, that ORBCOMM is unable to provide
Licensee with access to the ORBCOMM System; provided, however that if the
ORBCOMM System has Intermittent Service Problems aggregating 180 days where no
service was available for a 24 consecutive hour period in each of three
consecutive years, Licensee shall be entitled to terminate this Agreement upon
written notice to ORBCOMM.
(b) If ORBCOMM determines in its sole discretion that the
ORBCOMM System has permanently and irrevocably failed such that Licensee cannot
access the ORBCOMM System, ORBCOMM shall be entitled to terminate this
Agreement as described in Section 9(d).
SECTION 14 - DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY
(a) Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED
IN SECTION 11(b), TO THE FULLEST EXTENT PERMITTED BY LAW, NONE OF THE ORBCOMM
ENTITIES HAVE MADE AND NONE OF THEM SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE ORBCOMM SYSTEM OR
ANY SERVICES AND/OR PRODUCTS TO BE PROVIDED UNDER THIS AGREEMENT. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH OF THE ORBCOMM ENTITIES EXPRESSLY
DISCLAIMS, AND
23
24
LICENSEE HEREBY EXPRESSLY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES,
OBLIGATIONS AND LIABILITIES OF EACH OF THE ORBCOMM ENTITIES, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO, INCLUDING, BUT NOT
LIMITED TO, (i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE; (ii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (iii) ANY WARRANTIES AS TO
THE ACCURACY, AVAILABILITY OR CONTENT OF THE ORBCOMM SYSTEM OR ANY SERVICES
AND/OR PRODUCTS PROVIDED BY OR THROUGH ANY OF THE ORBCOMM ENTITIES UNDER THIS
AGREEMENT; AND (iv) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY UNDER ANY
THEORY OF LAW, INCLUDING ANY TORT, NEGLIGENCE, STRICT LIABILITY, CONTRACT OR
OTHER LEGAL OR EQUITABLE THEORY. NO REPRESENTATION OR OTHER AFFIRMATION OF
FACT, INCLUDING, BUT NOT LIMITED TO, STATEMENTS REGARDING CAPACITY OR
SUITABILITY FOR USE, THAT IS NOT CONTAINED IN THIS AGREEMENT SHALL BE DEEMED TO
BE A WARRANTY BY ANY OF THE ORBCOMM ENTITIES.
(b) Limitation of Liability. (i) Each of the parties
acknowledges and understands that the ORBCOMM System is a new, untested system
that entails a high degree of risk of (A) delay in or cancellation of
deployment and (B) launch vehicle, satellite and other equipment or software
failure or impaired performance, and that there can be no assurance that the
ORBCOMM System will be an economically viable system even if successfully
deployed. Each party shall bear all responsibility, risk and cost associated
with developing and maintaining its respective business, and none of the
ORBCOMM Entities shall be liable to Licensee for costs or damages caused by any
schedule delays or failure of the ORBCOMM System or any component thereof,
except as specifically provided in Section 13.
(ii) Licensee acknowledges that ORBCOMM shall supply the
service that is the subject of this Agreement on a good faith efforts basis and
that service failures and interruptions may occur and are difficult to assess
as to cause or resulting damages. In such event and except as otherwise
provided in Section 13, the parties agree that the ORBCOMM Entities shall not
be liable to Licensee for any losses or damages arising out of any failure of
performance, error, omission, interruption, deletion, defect, delay in
operation or transmission, communications line failure, theft or destruction or
unauthorized access to, alteration of or use of records, associated with the
ORBCOMM System or ORBCOMM Services whether for breach of contract, tortious
behavior, negligence, or under any other cause of action.
(iii) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, IN NO EVENT SHALL EITHER PARTY HAVE ANY OBLIGATION, LIABILITY, RIGHT,
CLAIM OR REMEDY TO THE OTHER UNDER THIS AGREEMENT FOR LOSS OF USE, REVENUE OR
PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
24
25
(iv) In addition, in no event shall ORBCOMM or any of the
other ORBCOMM Entities have any liability under or resulting from this
Agreement and any other Transaction Agreement:
(A) until the cumulative aggregate amount of any
claims, losses costs, expenses, damages or liabilities incurred by
Licensee for which ORBCOMM would be responsible to Licensee under or
as a result of this Agreement or any other Transaction Agreement
exceeds [CONFIDENTIAL TREATMENT] and then only to the extent of such
excess; and
(B) in the aggregate in excess of [CONFIDENTIAL TREATMENT].
SECTION 15 - DISPUTE RESOLUTION
(a) Subject to the provisions of Section 17(n), in the
event of a claim or controversy regarding any matter covered by this Agreement,
ORBCOMM and Licensee shall use all reasonable efforts to resolve such claim or
controversy within 60 calendar days of receipt by either party of notice of the
existence of any such claim or controversy. In the event the parties are
unable to agree on the resolution of such claim or controversy within such
period of time, either party may remove the claim or controversy for settlement
by final and binding arbitration in New York, NY, in accordance with the then
existing United States domestic rules of the American Arbitration Association
("AAA") (to the extent not modified by this Section). In the event that more
than one claim or controversy arises under this Agreement, such disputes may be
consolidated in a single arbitral proceeding. The arbitral tribunal shall be
composed of three arbitrators. Each of ORBCOMM and Licensee shall appoint one
arbitrator. If any party shall fail to appoint an arbitrator within 30 days
from the date on which the other party's request for arbitration has been
communicated to the first party, such appointment shall be made by the AAA.
The two arbitrators so appointed shall agree upon the third arbitrator who
shall act as chairman of the arbitral tribunal and who have significant
operational expertise in geographically distributed data communications
networks. If the two appointed arbitrators fail to nominate a chairman within
ten days from the date as of which both arbitrators shall have been appointed,
such chairman shall be selected by the AAA. In all cases, the arbitrators
shall be fluent in English. Judgment upon any award rendered by the
arbitrators may be entered in any court having jurisdiction or application may
be made for judicial acceptance of the award and an order of enforcement, as
the case may be. The parties agree that if it becomes necessary for any party
to enforce an arbitral award by a legal action or additional arbitration or
judicial methods, the party against whom enforcement is sought shall pay all
reasonable costs and attorney's fees incurred by the party seeking to enforce
the award.
(b) Pending a final determination by the arbitrators, if
the claim or controversy concerns the payment by Licensee of any fees or
amounts due hereunder (including the right to conduct an audit of such fees or
amounts), ORBCOMM shall have the right to terminate Licensee's access to the
ORBCOMM System and, in the event ORBCOMM elects to exercise such right and
notwithstanding any determination by the arbitrators, Licensee's sole remedy
for such termination by ORBCOMM shall be an extension of the term of this
Agreement equal to the period during which Licensee was denied access to the
ORBCOMM System.
25
26
(c) Except with respect to the application of Section 17(n)
hereof, the rights of the parties under this Section 15 shall be the exclusive
remedy with respect to any claim or controversy regarding any matter covered by
this Agreement.
SECTION 16 - COMPLIANCE WITH LAWS
Each of the parties shall comply in all material respects with all
applicable laws, rules and regulations of any Governmental Authority in the
performance of its obligations hereunder. In particular, Licensee agrees to
comply with all applicable laws of the United States regarding export controls,
international traffic in arms regulations and foreign corrupt practices. In
addition, but not in limitation of the foregoing, summaries of the current
provisions of the United States Federal International Traffic in Arms
Regulations and of the Prohibited Foreign Trade Practices Act are set forth in
Attachment J.
SECTION 17 - MISCELLANEOUS
(a) Notices. All notices given under this Agreement must
be in writing and sent by hand delivery, by overnight courier, by facsimile
transmission (answer back received) or by international registered mail, return
receipt requested and postage prepaid, to:
ORBCOMM:
ORBCOMM International Partners, L.P.
21700 Atlantic Boulevard
Dulles, VA 20166, USA.
Telecopy: +1.703.406.3508
Attention: President
with a copy to:
ORBCOMM Global, L.P.
21700 Atlantic Boulevard
Dulles, VA 20166, USA
Telecopy: +1.703.404.8012
Attention: Vice President and General Counsel
Licensee:
Cellular Communications Network (Malaysia) Sdn. Bhd.
1st Floor Menara TR
161B Jalan Ampany
50450 Kuala Lumpur, Malaysia
26
27
Telecopy: +603.260.5381
Attention: Senior Vice President
or to such other persons or addresses as either party may designate by written
notice to the other. All such notices sent to either Licensee or ORBCOMM shall
be effective the earlier of (i) ten business days after the date of mailing by
sender, or (ii) the date of actual receipt.
(b) Successors and Assigns. This Agreement shall be
binding upon the parties, their successors and permitted assigns. Subject to
Section 10, neither this Agreement nor any interests or duties of Licensee
hereunder may be assigned in whole or in part (by operation of law or
otherwise) by Licensee without the express written consent of ORBCOMM, which
consent shall not be unreasonably withheld.
(c) Entire Agreement. This Agreement and all attachments
(which are hereby made part of this Agreement) contain the entire understanding
between Licensee and ORBCOMM and supersede all prior written and oral
understandings relating to the subject hereof. No representations, agreements,
modifications or understandings not contained herein shall be valid or
effective unless agreed to in writing and signed by both parties. Any
modification or amendment of this Agreement must be in writing and signed by
both parties.
(d) Governing Law and Jurisdiction. (i) The
construction, interpretation and performance of this Agreement, as well as the
legal relations of the parties arising hereunder, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflict or choice of law provisions thereof. The United Nations
Convention on Contracts for the International Sale of Goods (1980) shall not
apply to any provisions of this Agreement. Neither party may bring any action
for a claim under this Agreement later than one year after the termination of
this Agreement; provided that claims under any provision of this Agreement that
survives termination of this Agreement may be brought within one year of the
later of the occurrence of the event giving rise to the claim and actual
knowledge thereof by the party asserting such claim.
(ii) For purposes of Section 17(n), Licensee by its execution hereof
(A) hereby irrevocably submits to the nonexclusive jurisdiction of the state
courts of the State of New York and to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York, for the
purpose of any suit, action or other proceeding arising out of or based on this
Agreement or the subject matter hereof brought by ORBCOMM and (B) hereby waives
to the extent not prohibited by law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such proceeding, any claims that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that any such
proceeding brought in one of the above-named courts is improper, or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
Licensee hereby consents to service of process in any such proceeding in any
manner permitted by the laws of the State of New York and agrees that service
of process by international registered mail, return receipt requested, at the
address specified in or pursuant to Section 17(a)
27
28
hereof is reasonably calculated to give actual notice. Licensee agrees that at
ORBCOMM's request it will appoint an agent for service of process within the
State of New York.
(e) Force Majeure. Neither party shall be held
responsible for failure or delay in performance or delivery if such failure or
delay is the result of an act of God, the public enemy, embargo, governmental
act, fire, accident, war, riot, strikes, inclement weather or other cause of a
similar nature that is beyond the control of the parties. In the event of such
occurrence, this Agreement shall be amended by mutual agreement to reflect an
extension in the period of performance and/or time of delivery. Failure to
agree on an equitable extension shall be considered a claim or controversy and
resolved in accordance with Section 15.
(f) Waiver. It is understood and agreed that no failure
or delay by either ORBCOMM or Licensee in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege hereunder. No waiver of any
terms or conditions of this Agreement shall be deemed to be a waiver of any
subsequent breach of any term or condition. All waivers must be in writing and
signed by the party sought to be bound.
(g) Severability. If any part of this Agreement shall be
held unenforceable, the remainder of this Agreement will nevertheless remain in
full force and effect.
(h) Headings. Headings in this Agreement are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(i) Independent Contractors. Licensee and ORBCOMM are
independent contractors to one another, neither party has the authority to bind
the other in any way or to any third party, and nothing in this Agreement shall
be construed as granting either party the right or authority to act as a
representative, agent, employee or joint venturer of the other.
(j) Non-Disclosure. Each of the parties to this
Agreement acknowledge the execution of the Mutual Non-Disclosure Agreement
dated as of October 10 1996 and each agrees to observe the provisions thereof.
(k) English Language; Communication in English. The
parties recognize and agree that while this Agreement may be translated into
other languages, the English language version of this Agreement shall be the
official version of this Agreement and shall prevail if any dispute in the
interpretation of this Agreement between such languages arises between the
parties. The parties agree that all communications, notices or any written
material to be provided by ORBCOMM to Licensee or by Licensee to ORBCOMM under
this Agreement shall be in the English language or accompanied by an accurate
and complete translation into English.
(l) Calendar. The Gregorian calendar shall be used in
calculating, invoicing and paying all amounts due under this Agreement.
28
29
(m) Payments. All payments due and payable to ORBCOMM
hereunder shall be paid in U.S. Dollars in immediately available funds to the
bank account specified by ORBCOMM in writing. ORBCOMM shall have the right to
require Licensee to make a cash deposit or to provide ORBCOMM with an
irrevocable letter of credit in favor of ORBCOMM issued by a bank reasonable
acceptable to ORBCOMM.
(n) Equitable Relief. Each of the parties acknowledges
that the ORBCOMM System and the ORBCOMM Services provided pursuant to this
Agreement are unique and recognizes and affirms that in the event of any breach
of this Agreement by it, money damages may not be adequate and the other party
may have no adequate remedy at law. Accordingly, each of the parties agrees
that the other party shall have the right, in addition to any other rights and
remedies existing in its favor, to enforce its rights and the other party's
obligations hereunder not only by an action or actions for damages but also an
action or actions for specific performance, injunctive relief and/or other
equitable relief.
(o) Taxes. All payments owed by Licensee hereunder shall
be made free and clear of any deductions or withholding for taxes,
contributions or otherwise and of any liability thereof. In the event Licensee
is required by the laws of any applicable Governmental Authority to withhold
any amount from any payment made hereunder, the relevant amount payable shall
be increased by such amount as is necessary to make the actual amount received
by ORBCOMM after such withholding equal to the amount that would have been
received had no withholding been required, and Licensee shall make such
withholding and pay the amount withheld to the relevant taxation authority.
Licensee shall obtain from the applicable Governmental Authority and forward to
ORBCOMM a certificate of payment of such withholding tax or deduction in such
form as shall be acceptable to the tax authorities having jurisdiction over
ORBCOMM.
29
30
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the day and year first above written.
ORBCOMM INTERNATIONAL PARTNERS, L.P.
By:
-------------------------------
Name: Alan L. Parker
Title: President
CELLULAR COMMUNICATIONS NETWORK
(MALAYSIA) SDN. BHD.
By:
-------------------------------
Name: Noor Kamarul Amor Nuruddin
Title: Senior Vice President
30