Exhibit 10.5
SUBSCRIBER EQUIPMENT
TECHNOLOGY AGREEMENT
(Manufacturing)
This Subscriber
Equipment Technology Agreement (“AGREEMENT”) is
effective as of September 30, 2002 by and between Motorola Inc., a
Delaware corporation, acting though its Commercial Government
Industrial Solutions Sector, with principal offices located at 1303
East Algonquin Road, Schaumburg, IL 60196 (“MOTOROLA”),
and SE Licensing LLC, a Delaware limited liability company, with
offices located at 1600 Wilson Boulevard, Suite 1000, Arlington, VA
22209 (“SEL”). MOTOROLA and SEL may be referred to
individually as “party” and jointly as the
“parties.”
BACKGROUND
WHEREAS, MOTOROLA has
valuable technology, including but not limited to computer
software, know-how and experience with respect to the design,
manufacture and testing of subscriber equipment that operates on
the Iridium system; and
WHEREAS, MOTOROLA has
been performing certain tasks related to furnishing Iridium
subscriber handset products and accessories to Iridium Satellite
LLC (“ISLLC”) pursuant to Section 5 of the Transition
Services, Products and Asset Agreement (as amended, supplemented or
otherwise modified from time to time, “TRANSITION
AGREEMENT”) dated as of 11 December 2000 and signed by
MOTOROLA, Iridium Holdings LLC and ISLLC; and
WHEREAS, pursuant to
Section 5(N) of the TRANSITION AGREEMENT, MOTOROLA has provided the
required 12 month notice to ISLLC of its intent to discontinue
manufacturing Iridium subscriber products and accessories under the
TRANSITION AGREEMENT; and
WHEREAS, in accordance
with Section 5(N)(1) of the TRANSITION AGREEMENT and Section 2.3 of
the IPR AGREEMENT, ISLLC has designated SEL as the party with which
MOTOROLA shall negotiate a manufacturing license; and
WHEREAS, in
satisfaction of MOTOROLA’s obligations to enter into good
faith negotiations relating to a manufacturing license with an
alternative supplier designated by ISLLC, MOTOROLA and SEL mutually
desire to enter into a non-exclusive license agreement under which
MOTOROLA would grant to SEL certain rights in and to the SUBSCRIBER
EQUIPMENT MANUFACTURING INFORMATION defined herein and based on the
terms and conditions set forth herein;
NOW, THEREFORE, in
consideration of the mutual covenants and undertakings set out
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MOTOROLA and SEL
agree as follows:
AGREEMENT
ARTICLE I. DEFINITIONS
Capitalized terms used
in this AGREEMENT have the meanings set forth in the Background
section of this AGREEMENT or as defined elsewhere in this
AGREEMENT.
Section 1.1
“AFFILIATE”
means, with respect to any PERSON, a PERSON that, directly or
indirectly is controlled by, controls, or is under common control
with such PERSON. As used in the preceding sentence,
“control” shall mean and include, but not necessarily
be limited to, (i) the ownership of 10% or more of the voting
securities or other voting interests of any PERSON, or (ii) the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such PERSON,
whether through the ownership of voting securities, by contract or
otherwise.
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Section 1.2
“AUTHORIZED
TRANSFEROR” means Gary Dindia, Eric Ravn-Hansen, Dan Strong
or any other MOTOROLA employee designated as an AUTHORIZED
TRANSFEROR in writing to SEL by Robert J. McCall.
Section 1.3
“DESIGNED
EQUIPMENT” means SATELLITE SUBSCRIBER EQUIPMENT or DUAL MODE
EQUIPMENT for which engineering prototypes have been demonstrated
and which were designed pursuant to the licenses of Section 2.1.1
and Section 2.1.5, respectively, of that certain Subscriber
Equipment Technology Agreement (Design) dated as of even date
herewith, by and between MOTOROLA and SEL.
Section 1.4
“DUAL MODE
EQUIPMENT” means SUBSCRIBER EQUIPMENT that is operable in
both a satellite communications mode and a terrestrial
communications mode.
Section 1.5
“INTELLECTUAL
PROPERTY CLAIM” means an intellectual property claim against
MOTOROLA or an AFFILIATE of MOTOROLA relating in any way to the
IRIDIUM SYSTEM, the MOTOROLA INTELLECTUAL PROPERTY RIGHTS (as
defined in this AGREEMENT or as defined in the IPR AGREEMENT), the
IRIDIUM TECHNICAL INFORMATION (as defined in the IPR AGREEMENT),
the SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION, or any other
technology, products or information licensed or provided in
accordance with this AGREEMENT or the IPR AGREEMENT.
Section 1.6
“INTELLECTUAL
PROPERTY RIGHTS” means copyrights, patents (other than design
patents), database rights and trade secret rights, including any
registrations and applications with respect to any of the
foregoing. INTELLECTUAL PROPERTY RIGHTS does not include rights in
design patents, trademarks, trade dress or registerable industrial
designs and the like rights involving trade identity.
Section 1.7
“IPR
AGREEMENT” means the Intellectual Property Rights Agreement
dated 11 December, 2000, entered into by MOTOROLA and
ISLLC.
Section 1.8
“IRIDIUM
SUBSCRIBER EQUIPMENT” means only the Satellite Series Model
9505 version of the L-Band Transceiver (LBT), the Satellite Series
Model 9505 portable unit or the Satellite Series Model 9520 mobile
unit, as applicable.
Section 1.9
“IRIDIUM
SYSTEM” means the completely integrated satellite-based
digitally-switched first generation telecommunication system once
owned by Iridium Operating LLC and acquired by ISLLC as of 11
December 2000. This term includes added spare satellites and
repaired or replaced components of the SPACE SEGMENT, SYSTEM
CONTROL SEGMENT and GATEWAY SEGMENT (as each are defined in the IPR
AGREEMENT). IRIDIUM SYSTEM also includes (i) any upgraded,
enhanced, or additional computer software incorporated into the
SPACE SEGMENT, SYSTEM CONTROL SEGMENT, GATEWAY SEGMENT or other
components of the IRIDIUM SYSTEM other than SUBSCRIBER EQUIPMENT;
(ii) any upgraded, enhanced, or additional hardware components of
the GATEWAY SEGMENT; and (iii) those upgraded, enhanced, or
additional hardware components of the SPACE SEGMENT or the SYSTEM
CONTROL SEGMENT that are not significantly modified from their
original form. IRIDIUM SYSTEM does not include and shall in no
event be interpreted to include (i) any SUBSCRIBER EQUIPMENT, (ii)
a SECOND GENERATION IRIDIUM SYSTEM or any other satellite system;
or (iii) any TERRESTRIAL WIRELESS SYSTEM(S) or any SUBSCRIBER
EQUIPMENT or other equipment for use in connection with any
TERRESTRIAL WIRELESS SYSTEM.
Section 1.10
“MOTOROLA
INTELLECTUAL PROPERTY RIGHTS” means the INTELLECTUAL PROPERTY
RIGHTS owned by MOTOROLA arising out of SUBSCRIBER EQUIPMENT
MANUFACTURING INFORMATION. MOTOROLA INTELLECTUAL PROPERTY RIGHTS
includes rights or licenses which MOTOROLA has received from its
AFFILIATES and from
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unaffiliated third
parties, but only to the extent that (i) such rights or licenses
are necessary for the manufacture of IRIDIUM SUBSCRIBER EQUIPMENT,
(ii) MOTOROLA has the right to grant to SEL rights and licenses
under such AFFILIATE’S or third party’s INTELLECTUAL
PROPERTY RIGHTS without cost to MOTOROLA or, if there is a cost,
such cost is paid by SEL, and (iii) SEL has obtained the necessary
consents pursuant to Section 2.7. MOTOROLA INTELLECTUAL PROPERTY
RIGHTS specifically excludes any INTELLECTUAL PROPERTY RIGHTS
relating to TERRESTRIAL WIRELESS SYSTEMS, automotive technologies,
two-way radios and systems, semiconductor manufacturing,
semiconductor structures, or semiconductor manufacturing
processes.
Section 1.11
“NET SALES”
shall mean (x) the total gross revenue or other consideration
received from the sale, lease or other disposition of all SATELLITE
SUBSCRIBER EQUIPMENT and DUAL MODE EQUIPMENT by SEL and its
sublicensees that include or are designed or manufactured using
SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION and all DESIGNED
EQUIPMENT by SEL and its sublicensees less (y) credits or
allowances given or made on account of returns or rejections of
previously delivered SATELLITE SUBSCRIBER EQUIPMENT, DUAL MODE
EQUIPMENT or DESIGNED EQUIPMENT and rebates. Sales or transfers to
ISLLC or any AFFILIATE of ISLLC from SEL, SEL licensees or SEL
manufacturers are sales within the definition of NET SALES; except
however, the subsequent resale or transfer by or on behalf of ISLLC
or its AFFILIATE of SATELLITE SUBSCRIBER EQUIPMENT, DUAL MODE
EQUIPMENT and DESIGNED EQUIPMENT purchased from SEL, SEL licensees
or SEL manufacturers are not sales within the definition of NET
SALES so long as such equipment was previously included in the
computation of NET SALES at the time of initial sale or transfer.
Sales or transfers of SATELLITE SUBSCRIBER EQUIPMENT, DUAL MODE
EQUIPMENT and DESIGNED EQUIPMENT between ISLLC and its AFFILIATES
or between or among its AFFILIATES are not sales within the
definition of NET SALES. NET SALES of SATELLITE SUBSCRIBER
EQUIPMENT, DUAL MODE EQUIPMENT or DESIGNED EQUIPMENT sold, leased
or otherwise disposed of as components of other systems or products
by SEL, SEL licensees or SEL manufacturers, to the extent permitted
under this AGREEMENT or otherwise authorized in a signed writing by
MOTOROLA, shall be calculated based on the fair market value of
such equipment (determined by the selling price for the same or
comparable SATELLITE SUBSCRIBER EQUIPMENT, DUAL MODE EQUIPMENT or
DESIGNED EQUIPMENT, as the case may be, on a stand-alone basis
(i.e., not as a component of other systems or products) in an
arm’s-length transaction between unrelated
parties).
Section 1.12
“PERSON”
means an individual, corporation, partnership, limited liability
company, unincorporated association, trust, joint venture or other
organization or entity, including any nation or government, foreign
or domestic, any state or other political subdivision thereof and
any agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of government,
including, without limitation, all taxing authorities.
Section 1.13
“SATELLITE
SUBSCRIBER EQUIPMENT” means, collectively and individually,
IRIDIUM SUBSCRIBER EQUIPMENT and other SUBSCRIBER EQUIPMENT that is
operable on the IRIDIUM SYSTEM. SATELLITE SUBSCRIBER EQUIPMENT
specifically excludes any SUBSCRIBER EQUIPMENT that is operable on
a TERRESTRIAL WIRELESS SYSTEM.
Section 1.14
“SECOND
GENERATION IRIDIUM SYSTEM” means (i) a complete satellite
system that replaces in full the SPACE SEGMENT (as defined in the
IPR AGREEMENT) of the existing, first generation IRIDIUM SYSTEM or
that uses an air interface different from that described in Air
Interface Specification document, SPC-E-0003.SYS; or (ii) a
satellite system that does not completely replace the SPACE SEGMENT
of the existing, first generation IRIDIUM SYSTEM but comprises a
derivative of the existing, first generation IRIDIUM SYSTEM that
includes upgraded or enhanced hardware components that are
significantly modified from their original form.
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Section 1.15
“SUBSCRIBER
EQUIPMENT” means, collectively and individually, voice
subscriber terminals (whether or not data capable) and paging
equipment.
Section 1.16
“SUBSCRIBER
EQUIPMENT MANUFACTURING INFORMATION” means TECHNICAL
INFORMATION but only to the extent that such TECHNICAL INFORMATION
is: (i) within MOTOROLA’s possession or control and
reasonably available for transfer; (ii) capable of being provided
by MOTOROLA to SEL without violation of any law or contractual
obligation; (iii) capable of being provided by MOTOROLA to SEL
without impeding MOTOROLA’s rights and licenses to continue
to use the same (to the extent MOTOROLA desires to continue to use
the same) and without incurring any cost to MOTOROLA (or if there
is such a cost, such cost is paid by SEL); and (iv) provided by
MOTOROLA to SEL as evidenced by a distribution letter from an
AUTHORIZED TRANSFEROR in substantially the form attached hereto as
Exhibit A-1. Subject to the foregoing, SUBSCRIBER EQUIPMENT
MANUFACTURING INFORMATION shall include the information and
materials identified in Exhibit A-2.
Section 1.17
“TECHNICAL
INFORMATION” means information and material, including
confidential and trade secret information (in whatever form) and
computer software, developed by or on behalf of MOTOROLA’s
Personal Communications Sector or other commercial business units
relating to SATELLITE SUBSCRIBER EQUIPMENT.
Section 1.18
“TERM”
shall have the meaning set forth in Section 7.1.1.
Section 1.19
“TERRESTRIAL
WIRELESS SYSTEM(S)” means any terrestrial wireless
communication system or equipment not incidental to a space-based
commercial satellite communication system and any service provided
using such a system or equipment. For the avoidance of doubt,
TERRESTRIAL WIRELESS SYSTEM(S) specifically includes any equipment
compatible with air interfaces for any of the following terrestrial
wireless communication systems: IS-95 (CDMA), IS-136 (US TDMA),
GSM, W-CDMA, CDMA2000 and iDen and future generations or evolutions
of such systems.
ARTICLE II. GRANTS
Section 2.1
License
.
2.1.1
MOTOROLA grants to SEL
a non-exclusive, non-transferable, worldwide license under MOTOROLA
INTELLECTUAL PROPERTY RIGHTS during the TERM to use and modify the
SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION solely to make and
use SATELLITE SUBSCRIBER EQUIPMENT for use solely in connection
with the IRIDIUM SYSTEM. If ISLLC or Iridium Constellation
LLC (“ICLLC”) deploys a SECOND GENERATION IRIDIUM
SYSTEM that is backwards compatible with the SATELLITE SUBSCRIBER
EQUIPMENT made and used pursuant to the license of this Section
2.1.1, the license of this Section 2.1.1 further includes the use
of such SATELLITE SUBSCRIBER EQUIPMENT solely in connection with
such SECOND GENERATION IRIDIUM SYSTEM.
2.1.2
Effective upon ISLLC
accepting delivery of and paying in full for all subscriber
products manufactured by or on behalf of MOTOROLA for ISLLC
pursuant to the TRANSITION AGREEMENT (the “PURCHASE
COMPLETION DATE”), MOTOROLA grants to SEL a non-exclusive,
non-transferable, worldwide license under MOTOROLA INTELLECTUAL
PROPERTY RIGHTS during the TERM to use and modify the SUBSCRIBER
EQUIPMENT MANUFACTURING INFORMATION solely to sell, import and
otherwise market SATELLITE SUBSCRIBER EQUIPMENT and DESIGNED
EQUIPMENT for use solely in connection with the IRIDIUM SYSTEM. If
ISLLC or ICLLC deploys a SECOND GENERATION IRIDIUM SYSTEM that is
backwards compatible with the SATELLITE
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SUBSCRIBER EQUIPMENT or
DESIGNED EQUIPMENT sold, imported and marketed pursuant to the
license of this Section 2.1.2, the license of this Section 2.1.2
further includes the use of such SATELLITE SUBSCRIBER EQUIPMENT or
DESIGNED EQUIPMENT solely in connection with such SECOND GENERATION
IRIDIUM SYSTEM.
2.1.3
(1)
MOTOROLA grants to SEL
a non-exclusive, non-transferable worldwide license under MOTOROLA
INTELLECTUAL PROPERTY RIGHTS during the TERM to use and modify the
SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION solely to modify the
software and firmware contained in IRIDIUM SUBSCRIBER EQUIPMENT
previously manufactured by or on behalf of MOTOROLA for ISLLC for
use solely in connection with the IRIDIUM SYSTEM and to sell and
otherwise market such modified IRIDIUM SUBSCRIBER
EQUIPMENT.
(b)
SEL acknowledges and
agrees that in the event that SEL modifies or has modified any
IRIDIUM SUBSCRIBER EQUIPMENT or any Satellite Series Model 9500
equipment manufactured by or on behalf of MOTOROLA (whether through
modification of or to SUBSCRIBER EQUIPMENT MANUFACTURING
INFORMATION or otherwise), notwithstanding anything herein or in
any materials delivered with the IRIDIUM SUBSCRIBER EQUIPMENT or
the Satellite Series Model 9500 equipment to the contrary, all
warranties offered by MOTOROLA covering such modified IRIDIUM
SUBSCRIBER EQUIPMENT or Satellite Series Model 9500 equipment shall
terminate immediately upon such modification. In furtherance of the
foregoing, SEL covenants and agrees that it will indemnify, defend,
protect and hold harmless MOTOROLA from and against all losses,
damages, liabilities, actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including reasonable
attorneys’ fees and expenses of investigation) incurred by
MOTOROLA as a result of or arising from any warranty claim asserted
by any PERSON relating to any modified IRIDIUM SUBSCRIBER EQUIPMENT
or modified Satellite Series Model 9500 equipment.
2.1.4
MOTOROLA grants to SEL
a non-exclusive, non-transferable, worldwide license under MOTOROLA
INTELLECTUAL PROPERTY RIGHTS during the TERM and subject to the
confidentiality provisions herein, to reproduce, modify and prepare
derivative works of documents and software constituting part of the
SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION solely in connection
with the exercise of the rights granted in Sections 2.1.1, 2.1.2,
2.1.3 and 2.1.5.
2.1.5
MOTOROLA grants to SEL
a non-exclusive, non-transferable, worldwide license under MOTOROLA
INTELLECTUAL PROPERTY RIGHTS during the TERM and subject to the
conditions set forth below, to use and modify the SUBSCRIBER
EQUIPMENT MANUFACTURING INFORMATION solely to make and use, and,
effective as of the PURCHASE COMPLETION DATE, to sell, import and
otherwise market, DUAL MODE EQUIPMENT and DESIGNED EQUIPMENT for
use solely in connection with the IRIDIUM SYSTEM. If ISLLC or ICLLC
deploys a SECOND GENERATION IRIDIUM SYSTEM that is backwards
compatible with the DUAL MODE EQUIPMENT or DESIGNED EQUIPMENT made,
used, sold, imported and marketed pursuant to the license of this
Section 2.1.5, the license of this Section 2.1.5 further includes
the use of such DUAL MODE EQUIPMENT or DESIGNED EQUIPMENT solely in
connection with such SECOND GENERATION IRIDIUM SYSTEM.
(a)
The license of this
Section 2.1.5 is limited to use of the SUBSCRIBER EQUIPMENT
MANUFACTURING INFORMATION (or permitted modifications thereof)
solely on the satellite portion and common interface portions (such
as the display) of such DUAL MODE EQUIPMENT.
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(b)
Notwithstanding any
other provision of this AGREEMENT, SEL acknowledges and agrees that
it cannot and will not disclose any SUBSCRIBER EQUIPMENT
MANUFACTURING INFORMATION or other MOTOROLA Confidential
Information to any PERSON (or any employees of any PERSON that is
not an individual) it desires to employ, work with, or contract
with for the design, manufacture, use, sale, importation or
marketing of DUAL MODE EQUIPMENT prior to providing MOTOROLA notice
of such PERSON and the information sought to be disclosed and
receiving MOTOROLA’S written approval to disclose the
requested information to the identified PERSON (and any employees
of such PERSON if such PERSON is not an individual). MOTOROLA, in
its sole discretion, has the right to withhold approval to disclose
any or all SUBSCRIBER EQUIPMENT MANUFACTURING INFORMATION or other
MOTOROLA Confidential Information to any PERSON.
(c)
SEL acknowledges that
the license of this Section 2.1.5 is not a license to MOTOROLA
intellectual property or under MOTOROLA proprietary rights relating
to TERRESTRIAL WIRELESS SYSTEMS and that SEL may require additional
licenses from MOTOROLA or others for the design, manufacture, use,
sale, importation or marketing of DUAL MODE EQUIPMENT.
Section 2.2
Subject to
MOTOROLA’s prior written approval reasonably exercised and
subject to MOTOROLA’s rights and SEL’s obligations set
forth in Section 2.3, the licenses of Section 2.1 include the right
for SEL (but not for sublicensees, if any) to have made, have
reproduced and have prepared derivative works and the right to
grant sublicenses (of no greater scope than that which is granted
to SEL under this AGREEMENT and with no right to grant further
sublicenses). MOTOROLA may withhold its approval of a potential
sublicensee if in MOTOROLA’s sole discretion MOTOROLA
believes such potential sublicensee to be a direct competitor (or
an affiliate of a direct competitor) of MOTOROLA or any of its
businesses; provided, however, that if a PERSON is a direct
competitor (or an affiliate of a direct competitor) of MOTOROLA
solely as a result of the license granted to MOTOROLA by SEL
pursuant to Section 2.8 below, such PERSON shall not be deemed a
direct competitor (or an affiliate of a direct competitor) of
MOTOROLA for purposes of this Section 2.2. SEL acknowledges and
agrees that MOTOROLA’s withholding of approval of a potential
sublicensee based on such potential sublicensee being a direct
competitor (or an affiliate of a direct competitor) of MOTOROLA is
a reasonable exercise of MOTOROLA’s discretion under this
Section 2.2.
Section 2.3
MOTOROLA expressly
reserves the right to terminate SEL’s right to have made,
have reproduced and have prepared derivative works and SEL’s
right to grant sublicenses immediately with respect to a PERSON
operating thereunder if such PERSON files a lawsuit or commences an
arbitration or other formal proceeding that asserts an INTELLECTUAL
PROPERTY CLAIM against MOTOROLA or any of its AFFILIATES. If
MOTOROLA receives notice of a potential INTELLECTUAL PROPERTY CLAIM
from an entity operating under SEL’s rights or under an SEL
sublicense in accordance with this AGREEMENT, MOTOROLA will
promptly
