Radio License Agreement - CD Radio inc. and Bloomberg Communications Inc.
RADIO LICENSE AGREEMENT
Agreement made this __ day of January, 1998 between CD Radio Inc., a Delaware
corporation currently located at 2175 K Street, N.W., Washington, DC ("CD
Radio"), and Bloomberg Communications Inc., a Delaware corporation currently
located at 499 Park Avenue, New York, NY ("BCI"), for the distribution by CD
Radio of Bloomberg News Radio. For good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. DEFINITIONS.
"Bloomberg News Radio" or "the Service" means the
current standard twenty-four (24) hour Bloomberg
News Radio programming service, currently including
program segments such as World and National News;
Financial Market Updates; Business Features;
Lifestyles; Agricultural Reports; Top Business
Stories; Market Minutes; Sports; Headline Minutes;
but subject to modification at any time in BCI's
sole discretion.
"Platform" means CD Radio's digital audio radio
delivery system, consisting of the appropriate
digital satellite delivery technology and equipment
configured to provide Subscribers with digital
audio radio service via a consumer reception
device.
"Subscriber" means any person in the Territory
receiving any form of service from CD Radio via the
Platform.
"Territory" means the United States, its territories and possessions.
2. LIMITED LICENSE. Subject to the terms and conditions of this Agreement, BCI
hereby grants to CD Radio a non-transferable, non-exclusive license to transmit
Bloomberg News Radio to Subscribers via the Platform. CD Radio acknowledges and
agrees that the copyright, patent, trade secret, and all other intellectual
property rights of whatever nature that are now existing or may accrue in the
Service (and any promotional materials created and provided exclusively by BCI
related thereto) are and shall remain the property of BCI and nothing in this
Agreement shall be construed as transferring any aspects of such rights to CD
Radio or any third party other than as expressly set forth in this Agreement. No
other rights are granted to CD Radio and CD Radio is specifically prohibited
from copying, editing, modifying, transmitting, distributing, publicly
performing or publicly displaying the Service other than as expressly permitted
in this Agreement. All rights not expressly granted to CD Radio in this
Agreement are expressly reserved by BCI for its exclusive use.
<PAGE>
2
3. TERM. The term of this Agreement shall commence on the date hereof and shall
extend for five (5) years from the date the Platform begins offering service to
the public (the "Launch Date") and shall automatically renew for successive two
(2) year terms unless either party notifies the other in writing of its
intention not to renew no less than one hundred twenty (120) days before the
expiration of the initial term or any renewal term (collectively, the "Term").
Notwithstanding the foregoing, BCI shall have the right to terminate this
Agreement immediately in its entirety at any time without notice and without
incurring any liability if (a) BCI ceases to produce or offer the Service, or
(b) BCI does not receive any necessary licenses or approvals required in
connection with the performance of its obligations and duties under this
Agreement. CD Radio shall have the right to terminate this Agreement immediately
in its entirety at any time without notice and without incurring any liability
if (x) CD Radio permanently ceases to offer service via the Platform, (y) CD
Radio does not receive any necessary licenses or approvals required in
connection with the performance of its obligations and duties under this
Agreement, or (z) BCI, on other than a temporary basis, materially alters the
format of the Service from that defined herein without the prior consent of CD
Radio.
4. REMEDY. Either party may terminate this Agreement prior to the normal
expiration of the Term if: (a) the other party fails to cure (or provide
evidence, to the other party's satisfaction, that it is working diligently
towards curing) a material breach or violation within fifteen (15) days of
receipt of written notice from the other party; or (b) the representations and
warranties made by the other party in this Agreement are no longer true. Such
termination (in addition to the indemnifications provided hereunder) shall be CD
Radio's sole and exclusive remedy for any breach on the part of BCI.
5. DISTRIBUTION. From the Launch Date of the Service until the end of the Term,
CD Radio shall make the Service available to Subscribers on a full-time basis
(twenty-four hours a day, seven days per week) via the Platform. The Service
shall be offered via the Platform on a channel dedicated solely to Bloomberg
News Radio. CD Radio shall only distribute the Service in the United States of
America in accordance with all applicable local, state and federal laws at the
times and in the manner specified above, without modification, material delay,
or alteration other than advertising and promotional insertions as provided for
under this agreement. BCI will be responsible for delivery of the Service to CD
Radio's uplink facility. CD Radio shall be responsible for all other costs of
making the Service available to Subscribers. BCI shall make its feed available
to CD Radio for test purposes beginning September 1, 1999.
<PAGE>
3
6. COMMERCIAL TIME.*/
7. REPORTS AND RECORDS. Promptly following the last day of each standard
broadcast month in which the Service or segments thereof are scheduled for
broadcast by CD Radio and in no event more than fifteen (15) days following the
last day of such month, CD Radio will deliver to BCI in a form deemed acceptable
to BCI, a complete and accurate report and certificate verifying that the
Service was broadcast and cleared in accordance with this Agreement without any
material alteration, modification, delay or interruption.
8. PROMOTION.
(a) Without limiting any other related obligations contained in this
Agreement, from the date hereof and throughout the Term, CD Radio will
promote the Service to its Subscribers and prospective subscribers in a
manner consistent with its promotion of other similar services on the
Platform. Any marketing and promotional matter which features BCI alone
or in a group (including BCI) of not more than three (3) information
channels shall require the prior written approval of BCI, which consent
shall not be unreasonably withheld.
(b) **/
(c) Throughout the Term, BCI shall have the right to promote its
availability on the Platform through any of its media outlets. CD Radio
shall provide BCI with any promotional materials CD Radio has made
generally available to services on the Platform for such promotional
purposes. Any promotional material used by BCI to promote BCI's
availability on the Platform which is not provided by CD Radio shall be
subject to CD Radio's reasonable approval.
(d) No party shall make any public announcement regarding this Agreement or
any of the contents contained herein without the consent and cooperation
of the other party, except and unless required by applicable law.
9. ADDITIONAL SERVICE. CD Radio and BCI agree to work together in good faith to
develop a second full-time radio service for delivery over an additional
--------
*/ The following confidential material has been omitted from this Form 10-Q and
has been filed separately with the Commission as provided pursuant to 17 CFR
ss. 200.83(c).
**/ The following confidential material has been omitted from this Form 10-Q and
has been filed separately with the Commission as provided pursuant to 17 CFR
ss. 200.83(c).
<PAGE>
4
channel on the Platform. CD Radio shall keep channel capacity available on the
Platform for the purpose of carrying the second service; provided, however, that
such service is ready (in a mutually agreeable form) for launch on the Platform
before April 1, 1999. The new service will be specifically created for CD
Radio's exclusive use and will be made available to CD Radio on terms and
conditions to be mutually agreed upon between the parties.
10. REPRESENTATIONS AND WARRANTIES.
(a) Power and Authority. Each party warrants to the other that it has the
power and authority to enter into this Agreement and to perform all of
its obligations hereunder.
(b) Quality and Nature of the Transmission. CD Radio warrants that its
transmissions of the Service shall be of a technical quality that is at
all times equal to the quality of other information services provided on
the Platform.
(c) Noninfringement. BCI warrants that it has the right to grant the license
to the Service granted in this Agreement and that CD Radio's
distribution of the Service in accordance with the terms and conditions
of this Agreement will not infringe the proprietary rights of any third
party or any right of personality or publicity, will not be libelous or
defamatory, and will not otherwise result in injury or damage to any
third party.
(d) No Conflict. Each party represents and warrants that neither the
execution and delivery of this Agreement, nor the performance of its
obligations hereunder, will violate any federal, state, or local law or
regulation to which it is subject.
(e) Performance Guarantee. CD Radio represents, warrants, and covenants that
it will provide the services required by this Agreement to all persons
in the Territory who become Subscribers during the term of this
Agreement.
11. INDEMNITY. CD Radio shall defend, indemnify, and hold BCI harmless from any
loss, expense, or claim that arises from an action brought against BCI by a
third party alleging facts based on CD Radio's breach of its warranties or
obligations under this Agreement. BCI shall defend, indemnify, and hold CD Radio
harmless from any loss, expense, or claim that arises from an action brought
against CD Radio by a third party alleging facts based on BCI's breach of its
warranties or obligations under this Agreement.
<PAGE>
5
12. PIRACY. CD Radio shall safeguard and protect the Service from theft, piracy,
or unauthorized access in a manner consistent with the protections CD Radio uses
to protect any other services carried on the Platform.
13. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT:
(a) IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY INCIDENTAL, SPECULATIVE OR
CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT (INCLUDING, WITHOUT
LIMITATION, THOSE ARISING FROM NEGLIGENCE), OCCASIONED BY ANY FAILURE TO
PERFORM OR THE BREACH OF ANY OBLIGATION UNDER THIS AGREEMENT FOR ANY
CAUSE WHATSOEVER.
(b) NEITHER CD RADIO NOR BCI MAKE ANY WARRANTIES EXCEPT FOR THE WARRANTIES
SPECIFIED IN THIS AGREEMENT. CD RADIO AND BCI DISCLAIM ALL OTHER EXPRESS
WARRANTIES AND ALL IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE.
14. ASSIGNMENT. The rights and obligations of CD Radio under this Agreement may
only be assigned or transferred without the consent of BCI in the event CD Radio
transfers its entire control and/or ownership of the Platform to a third party;
provided, however, that such third party will agree to accept and abide by all
of the terms and conditions of this Agreement. Notwithstanding the foregoing, CD
Radio may assign this Agreement to any entity which, as of the date of this
Agreement, controls, is controlled by, or is under common control with CD Radio.
15. MISCELLANEOUS. Neither party will be liable to the other under the terms of
this Agreement for any delays, preemptions or other failure to perform when such
delays, preemption or failures are due to any cause beyond the control of the
party whose performance is so affected. Neither CD Radio nor BCI shall disclose
to any third party (other than their respective employees and agents, in their
capacity as such) any confidential business information concerning the other or
any of the terms or conditions of this Agreement. This Agreement, and all
collateral matters relating thereto, will be governed and construed under the
laws of the State of New York (without regard to conflict of laws or choice of
law principles in the governing jurisdiction), applicable to agreements fully
made and performed therein, subject to applicable provisions of the
Communications Act of 1994, as amended, and the applicable rules, regulations
and orders of the FCC. In addition to the rights and remedies provided herein,
the parties may seek all rights and remedies available at law and/or equity.
Nothing contained herein will be deemed to create, and the parties do not intend
to create, any relationship as partners or joint venturers between CD
<PAGE>
6
Radio and BCI with respect to this Agreement. The invalidity or unenforceability
of any provision of this Agreement will not affect the validity of any other
provision of this Agreement, and in the event that any provisions are determined
to be invalid or otherwise illegal, this Agreement will remain in effect and
will be construed in accordance with its terms as if the invalid or illegal
provision were not contained herein. This Agreement constitutes the entire
agreement and understanding between the parties with regard to the subject
matter hereof, and supersedes all prior or contemporaneous oral or written
agreements and representations between the parties. Any amendment, modification
or alteration of this Agreement must be in writing and signed by the duly
authorized representatives of the parties. BCI will not be liable for, and CD
Radio will pay and hold harmless BCI from, any federal, state or local taxes,
including any fees payable to local franchising authorities which were based
upon revenues derived from operations of CD Radio. No term or condition of this
Agreement will be deemed waived, and no breach will be excused, unless such
waiver or excuse is in writing and signed by the party against whom such waiver
or excuse is claimed. The captions and headings in this Agreement are intended
only for conveniences, and will in no event be construed to define, limit or
describe the scope or intent of this Agreement, or of any provision of this
Agreement, nor in any way affect the interpretation of this Agreement. This
Agreement may be executed in several counterparts, each of which shall be deemed
as original and all such counterparts together shall constitute but one and the
same instrument. The parties also agree that this Agreement shall be binding
upon the facsimile transmission by each party of a signed signature page thereof
to the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of the ___
day of January 1998.
CD RADIO INC.: BLOOMBERG COMMUNICATIONS INC.:
-------------------------- -------------------------------
By:_______________________ By:____________________________
(Authorized Signature) (Authorized Signature)