Technology Licensing Agreement

EXHIBIT 10.4





***Confidential treatment has been requested for portions of this agreement. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission.



TECHNOLOGY LICENSING AGREEMENT





This TECHNOLOGY LICENSING AGREEMENT (this "Agreement") is entered into

--------- on July 24, 1998, but intended to be effective as of January 1, 1998, by and b etween WorldSpace Management Corporation, a corporation organized under the laws of the State of Delaware ("WorldSpace"), American Mobile Radio Corporation,

---------- a corporation organized under the laws of the State of Delaware ("AMRC"), AMRC

---- Holdings, a corporation organized under the laws of the State of Delaware ("AMRC

---- Holdings") and American Mobile Satellite Corporation, a corporation organized - -------- under the laws of the State of Delaware ("AMSC") (each a "Party" and together

---- ----- the "Parties").

-------



WHEREAS, AMRC is taking steps to commence the establishment of a Digital Audio Radio Service ("DARS") sate llite system in the United States (the

---- "AMRC System") under the license granted to AMRC in October 1997 by the U.S.

----------- Federal Communications Commission, as such license may from time to time be modified or amended;



WHEREAS, WorldSpace recognizes that in connection with the establishment of the AMRC System it will be necessary and/or desirable for AMRC to have the use of certain technology comprised of patents, patent applications, software, databases, know-how and the intellectual property rights therein owned by, licensed to or developed from time to time by WorldSpace or any corporation, partnership or other entity controlled by, controlling or under common ownership or control with WorldSpace (a "WorldSpace Affiliate" and together with

-------------------- WorldSpace, the "WorldSpace Group ") and to be used in any digital radio

---------------- broadcasting system being implemented outside the United States by the WorldSpace Group or in which the WorldSpace Group participates (such system, the "WorldSpace System"); and

-----------------



WHEREAS, AMSC recognizes that in connection with the establishment of the AMRC System it will be necessary and/or desirable for AMRC to have the use of certain technology comprised of patents, patent applications, software, databases, know-how and the intellectual property rights therein owned by, licensed to or developed from time to time by AMSC and used by AMSC in its mobile satellite business in the United States (the "AMSC System");

-----------



NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:



1. Licensed Technology. (a)

The technologies set forth below in

------------------- this Section 1(a) are collectively referred to herein as "WorldSpace Licensed

------------------- Technology:" - ----------



[*****] Pages 1-2



(b) The technologies set forth below in this Section 1(b) are collectively referred to herein as "AMSC Licensed Technology:"

------------------------





***** Certain information on this page has been omitted and filed

separately with the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the

omitted portions.



(i) the technologies described in that certain document entitled

"Final MT Performance Specification", which sets forth

----------------------------------

functional and performance specifications for mobile terminals

for AMSC's MSAT system;



(ii) [*****]



(iii) technology owned by AMSC or licensable by AMSC relating to the

Seavey low-profile omnidirectional L-band antenna developed by

AMSC as part of its low-rate codec project;



(iv) all other technologies now or from time to time used in the AMSC

System and which have practical application to the AMRC System

and which AMSC owns, acquires or licenses and is permitted to

sublicense to AMRC, subject to the provisions of Section 7

hereof; and



(v) all improvements made from time to time by AMSC to any of the

items set forth in Subsections (i) through (iv) above.



(c) The WorldSpace Licensed Technology and the AMSC Licensed Technology are collectively referred to herein as the "Licensed Technology".

-------------------



2. Grant of License. (a) WorldSpace hereby grants to AMRC a

---------------- license to use the WorldSpace Licensed Technology for the development, implementation and commercialization of the AMRC System for transmission in and over the geographic area of the United States and its territories.



(b) AMSC hereby grants to AMRC a license to use the AMSC Licensed Technology for the development, implementation and commercialization of the AMRC System for transmission in and over the geographic area of the United States and its territories.



(c) The licenses granted under Subsections (a) and (b) of this Section shall include the right for AMRC to incorporate the WorldSpace Licensed Technology or the AMSC Licensed Technology, as the case may be, in AMRC's own technology and exploit all such rights granted to AMRC herein with respect to the Licensed Technology without obligation to make any payment of any kind to WorldSpace, AMSC or any third party except to the extent expressly set forth in Section 4 of this Agreement.



3. Sublicensing; Reservation of Certain Rights. (a) Under the

------------------------------------------- licenses set forth in Section 2, AMRC shall have the non-exclusive right (subject to the provisions of this Section 3) to use the Licensed Technology for the development, implementation and commercialization of a DARS satellite system. Subject to the terms and conditions set forth herein, each of WorldSpace and AMSC shall retain all rights not expressly granted hereunder, including the right to use the WorldSpace Licensed Technology and the AMSC Licensed Technology, respectively, for any purpose whatsoever.

***** Certain information on this page has been omitted and filed

separately with the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the

omitted portions.



(b) AMRC shall have the right to sublicense the WorldSpace Licensed Technology to any third party, in connection with the development, implementation and commercialization of the AMRC System, including, for example, chipset manufacturers, terrestrial repeater manufacturers and receiver manufacturers, provided, however, that (i) AMRC shall pay to WorldSpace [*****]

-------- ------- of the fees received from AMRC's sublicensee with respect to any WorldSpace Licensed Technology so sublicensed that are in excess of the minimum payments, if any, to be made to WorldSpace for such sublicensed technology under Section 4 hereof; and (ii) AMRC shall not permit any such sublicensee to further sublicense the WorldSpace Licensed Technology without the prior written consent of WorldSpace, which consent shall not be unreasonably withheld.



(c) WorldSpace reserves the right to license the WorldSpace Licensed Technology to any third party for use in a DARS satellite system other than the AMRC System for transmission in and over the geographic area of the United States or its territories; provided, however, that any such license negotiated

-------- ------- by WorldSpace shall be subject to the consent of AMRC, which consent shall not be unreasonably withheld; and provided further, that (i) if such third party is

-------- ------- CD Radio, Inc. or any affiliate thereof, all payments made by such third party with respect to such license shall be for the benefit of WorldSpace and (ii) if such third party is neither CD Radio Inc. nor an affiliate thereof, WorldSpace and AMRC shall determine the proper allocation of the receipt of such payments at the time of the execution of such license.



(d) AMRC shall have the right to sublicense the AMSC Licensed Technology to any third party, in connection with the development, implementation and commercialization of the AMRC System, including, for example, chipset manufacturers, terrestrial repeater manufacturers and receiver manufacturers, without obligation to pay any sublicensing fees to AMSC; provided, however, that (i) AMRC shall pay to AMSC [*****] of the fees received - -------- ------- from AMRC's sublicensee with respect to any AMSC Licensed Technology so sublicensed that are in excess of the minimum payments, if any, to be made to AMSC for such sublicensed technology and (ii) AMRC shall not permit any sublicensee to further sublicense the AMSC Licensed Technology without the prior written consent of AMSC, which consent shall not be unreasonably withheld.



(e) AMSC reserves the right to license the AMSC Licensed Technology to any third party for use in a DARS Satellite System other than the AMSC System or the AMRC System for transmission in and over the geographic area of the United States or its territories, provided, however, that any such license for use

-------- ------- outside the AMSC System or the AMRC System in the United States or its territories negotiated by AMSC shall be subject to the consent of AMRC, which consent shall not be unreasonably withheld.



4. Royalty Payments. In the event that AMRC uses the Licensed

---------------- Technology or any portion thereof, except the MCM Technology discussed in Subsection 4(c), in connection with a DARS satellite system, AMRC shall make royalty payments to WorldSpace or AMSC, as the case may be, as follows.



[*****]

***** Certain information on this page has been omitted and filed

separately with the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the

omitted portions.



In the event that WorldSpace shall be required to pay to Thomson any additional fees relating to AMRC's use of the WorldSpace Licensed Technology, then WorldSpace shall promptly give notice of such fees to AMRC and AMRC shall be liable for and pay such fees.



Any such royalties payable to WorldSpace that are not paid when due as aforesaid shall accrue interest from the date on which payment becomes due at nine percent (9%) per annum, compounded quarterly, with any payments received being applied first to the oldest quarterly installments and accumulated interest thereon.



In the event that the WorldSpace Group should negotiate a reduction in the royalty payments payable to the owners of certain components of the [*****], then the royalty payments specified in this Subsection 4(a) shall be reduced - ---- dollar for dollar (or on an appropriate percentage basis) to reflect any such reduction.



(b) [*****] In connection with the use of the [*****], AMRC shall make the following payments to WorldSpace: [*****] per year, payable on January 1 of each year, with the payment for 1998 payable upon signing of this Agreement.



Any such royalties payable to WorldSpace that are not paid when due as aforesaid shall accrue interest from the date on which payment becomes due at nine percent (9%) per annum, compounded quarterly, with any payments received being applied first to the oldest annual installments and accrued interest thereon.



(c) [*****] In connection with the development of the [*****], AMRC shall make the following payments to WorldSpace, regardless of the success or failure of the development of the [*****], as follows:



(i) [*****], payable upon delivery of such portion of the [*****] as

shall be embodied in the [*****] to be supplied to AMRC at or

around September 30, 1998



(ii) [*****] per fiscal quarter beginning with the first quarter

following such delivery until such time that the sum of such

quarterly royalty fees equals [*****]; and



(iii) [*****] of such costs as may be incurred by WorldSpace relating

to the further development of the [*****] beyond the [*****]

mentioned above, up to a maximum additional amount payable by

-----

AMRC under this Subsection (iii) equal to [*****];



provided, however, that (x) each of the quarterly royalty fees contemplated by - -------- ------- Subsection (c)(ii) shall accrue interest from the first day of the related fiscal quarter at nine percent (9%) per annum, compounded quarterly, (y) no payments with respect to the quarterly royalty fees contemplated by Subsection (c)(ii) need be made prior to the time that AMRC records quarterly gross revenues in excess of [*****], determined in accordance with GAAP, and (z) any

***** Certain information on this page has been omitted and filed

separately with the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the

omitted portions.



payments made with respect to the quarterly royalty fees contemplated by Subsection (c)(ii) shall be allocated first to the oldest quarterly royalty payments and accrued interest thereon (an illustrative schedule of such quarterly royalty payments contemplated under Subsection (c)(ii) is attached hereto as Annex 1); provided, further, that any such royalty fees contemplated

----------------- by Subsection (c)(iii) payable to WorldSpace that are not paid when due as aforesaid shall accrue interest from the date on which payment becomes due at nine percent (9%) per annum, compounded quarterly, with any payments received being applied first to the oldest annual installments and accrued interest thereon.



In the event that the additional costs to be incurred by WorldSpace relating to the further development of the [*****] beyond the [*****] mentioned in Subsection (iii) above are anticipated by WorldSpace to exceed [*****], then

---- AMRC and WorldSpace shall jointly determine whether costs in excess of [*****] relating to the further development of the [*****] should be incurred and, if so, the manner of payment and financing, if any, of such costs.



(d) Other Licensed Technology. Licensed Technology other than that

------------------------- described in Subsections 4(a) through 4(c) above shall be made available to AMRC on a royalty-free basis except for such Licensed Technology (i) that is

------ sublicensed to AMRC and for which WorldSpace or AMSC, as the case may be, must pay a royalty, in which case AMRC shall pay an incremental royalty to WorldSpace or AMSC, as the case may be, based on the royalty paid by WorldSpace or AMSC, respectively, or (ii) with respect to which the relevant parties agree otherwise.



5. Improvements to Licensed Technology. (a) AMRC grants to the

----------------------------------- WorldSpace Group a royalty-free, non-exclusive and irrevocable license to use and sublicense, world-wide, any and all improvements made by or for AMRC to the WorldSpace Licensed Technology; provided, however, that any sublicense granted

-------- ------- by WorldSpace shall be subject to the consent of AMRC, which consent shall not be unreasonably withheld.



(b) AMRC grants to AMSC a royalty-free, non-exclusive and irrevocable license to use and sublicense, world-wide, any and all improvements made by or for AMRC to the AMSC Licensed Technology; provided, however, that any sublicense

-------- ------- granted by AMSC shall be subject to the consent of AMRC, which consent shall not be unreasonably withheld.



6. AMRC Technology. (a) AMRC grants to the WorldSpace Group and to

--------------- AMSC a royalty-free, non-exclusive and irrevocable license to any and all technology (and all improvements thereto) hereafter developed by AMRC relating to the AMRC System (the "AMRC-Developed Technology"), which AMRC-Developed

------------------------- Technology may be used and sublicensed (i) worldwide outside the United States and its territories or (ii) inside the United States and its territories only (A) in the case of the WorldSpace Group, in connection with the WorldSpace System, or (B) in the case of AMSC, in connection with the AMSC System (other than in connection with any DARS satellite system).



(b) WorldSpace hereby grants to AMRC a royalty-free, non-exclusive and irrevocable lice ...