Exhibit 10.4
Annex F
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NON-COMPETITION AND CONFIDENTIALITY
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A. Restrictions
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1. Each of ABBA and ABBA-W, on the one hand, and Dylan, on the other,
agrees with respect to itself and with respect to each of its
Controlled Subsidiaries, not to own or operate, or acquire or
increase, except pursuant to existing preemptive rights, any equity
interest in, any entity that owns (or has entered an agreement to
acquire) or operates (or whose affiliate owns (or has entered an
agreement to acquire) or operates) a Mobile Telecommunications
Infrastructure (as defined below) in the other party's home territory.
2. Each of ABBA and ABBA-W, on the one hand, and Dylan, on the other,
agrees with respect to itself and with respect to each of its
Controlled Subsidiaries, that it will not be a Reseller (as defined
below) in the other party's home territory nor will it acquire or
increase, except pursuant to existing preemptive rights, any equity
interest in any entity that is, or has entered an agreement to
acquire, (or whose affiliate is (or has entered an agreement to
acquire)) a Reseller in the other party's territory.
3. Each of ABBA and ABBA-W, on the one hand, and Dylan, on the other,
agrees with respect to itself and with respect to each of its
Controlled Subsidiaries, not to provide any, or provide rights to any,
Mobile Multimedia Contribution (as defined below) to any entity that
is (or whose affiliate is) engaged in any of the businesses described
in sections A.1. and A.2. in the other party's home territory, except
that, Dylan may provide such contribution outside of ABBA-W's home
territory if the recipient thereof is bound by non-exportation
restrictions with respect to ABBA-W's home territory similar to those
imposed upon ABBA-W.
3A. Nothing in sections A.1. or A.2. prohibit any party from entering
into customary commercial roaming agreements.
4. Without limiting sections A.1. through A.3. above, for a period of 48
months from the closing of the investment, each of ABBA and ABBA-W, on
the one hand, and Dylan, on the other, agrees with respect to itself
and with respect to each of its Controlled Subsidiaries, not to
provide Mobile Multimedia Contribution to any entity that engages or
intends, to the party's actual knowledge, to engage (or whose
affiliate engages or intends, to the party's actual knowledge, to
engage) in the other party's home territory in the business of
developing or maintaining a Mobile Portal (as defined below).
After the expiration of the 48-month period, Dylan and ABBA-W will
discuss in good faith appropriate revisions to the restrictions on
competition or the termination of such restrictions with respect to
Mobile Portals in light of the then current state of the mobile
telecommunications markets.
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Unless an alternate agreement is reached, after 48 months, Dylan may
take any of the actions otherwise prohibited under the first paragraph
of this section A.4, but only in accordance with the Release
Conditions (as defined below). After 48 months, ABBA and ABBA-W shall
no longer be subject to the restrictions contained in this Section
A.4.
B. Definitions
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1. An entity "Competes" if (a) it (and/or its affiliate) offers products
and/or services that are substantially substitutable with products
and/or services of the other party's products and/or services by
customers (including resellers) located in substantially similar
geographic locales in each party's home territory such that there is a
reasonable likelihood of customers (including resellers) substituting
the competing product or service, and (b) the competing products
and services, taken together, compete for a substantial portion of the
customers (including resellers) of ABBA-W, the MMS or Dylan, as the
case may be, in the geographic locale where such competition occurs.
2. A "Controlled Subsidiary" of any entity means any entity with
respect to which such first entity directly or indirectly owns or
controls more than 50% of the voting power or the power to nominate
or designate a majority of the board of directors or similar
governing body.
3. "home territory" means (a) North America, with respect to ABBA and
ABBA-W, and (b) the nation of Japan, with respect to Dylan.
4. "Mobile Multimedia Contribution" means the provision of the support,
advice, services, activities, and technology included in Section 28A
of the Term Sheet (including Annex D thereto) by way of any joint
venture agreement, technology and know-how transfer agreement,
services and support agreement that has been reduced to writing or
any similar type of written agreement or in any other manner at a
level that would not be considered to be DE MINIMIS.
5. "Mobile Portal" means the provision of portal functionality by
aggregating content or providing content that includes third party
content to be supplied to consumers through a cell phone browser or
other wireless access device. Without limiting the foregoing, it is
agreed and understood that the portal functionality provided or
enabled by the i-mode services is included within the definition of
Mobile Portal.
6. "Mobile Telecommunications Infrastructure" means a wireless mobile
radio network to provide digital or analog voice and data
transmission services to mobile communications terminals anywhere in
the relevant home territory, unless such network does not have more
than 100,000 subscribers and does not, or when operational would
not, cover more than 10 million POPs.
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7. "MMS" means the Mobile Multimedia Subsidiary created pursuant to the
term sheet.
8. Under the "Release Conditions" actions will be permitted as follows:
(a) if the written consent of ABBA-W has been obtained or (b) if prior
to taking such action all Dylan representatives on the ABBA board, but
not the ABBA-W board, and all other Dylan representatives or designees
appointed to the management or any governance body or committee of the
MMS (including under Sections 10 and 11 of the term sheet) shall have
resigned, and in each case Dylan shall have relinquished its right to
nominate, appoint or designate any such directors, representatives or
designees in the future. In the case of any such resignations, Dylan
shall be released from any and all of its obligations duties relating
any management, directorships or membership or participation in
any such governance body.
9. "Reseller" is an entity that (a) provides mobile telecommunication
services without owning its own infrastructure but by using a third
party's Mobile Telecommunications Infrastructure, (b) has at least
100,000 subscribers and (c) serves, or has the right or licenses to
offer services in, an area or areas covering at least 10 million
POPs.
C. Duration of Restrictions
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1. With respect to Sections A.1, A.2 and A.3 above, Dylan shall be subject
to these restrictions unless and until (i) 90 days after any of the
circumstances described in the second paragraph of Section 30 of the term
sheet (i.e., reduction in interest due to spin put, technology default
repurchase or redemption) or (ii) Dylan's voting and economic interest in
ABBA-W has been less than 10% (or 8% if Dylan still owns 10/16 of its
original shares) for a continuous period of at least 12 months (i.e., test
relates to Dylan's board and management rights).
2. ABBA shall be subject to the Section A restrictions until the earlier
of the Spin-off and the first date that Dylan exercises any put,
liquidation or registration right as a result of the non-occurrence of the
Spin-off.
3. ABBA-W shall be subject to the Section A restrictions until the earlier
of (A) the date Dylan first ceases to be subject to the Restrictions, and
(B) the date Dylan first relinquishes its board and management rights in
accordance with clause (b) of the definition of Release Condition.
4. ABBA's and ABBA-W's investment in JT shall not be subject to the
Section A restrictions and JT shall not be deemed to be a Controlled
Subsidiary of ABBA or ABBA-W, provided that nothing herein shall diminish
or limit Section 17 of the term sheet.
5. Nothing in the restrictions above will prohibit either party from
making any investment if the investing party (i) does not hold a
beneficial interest in the target entity in excess of 5% of any equity or
management class of shares of such target entity and (ii) does
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not exercise control of, or management authority in, or provide any Mobile
Multimedia Contribution to such target entity.
6. If ABBA or ABBA-W, on the one hand, or Dylan, on the other, materially
breaches any of its obligations hereunder and fails to cure such breach
within 30 days of receiving notice from the other party or parties, than
such other party or parties shall immediately be released from all of the
restrictions hereunder.
D. Non-Disclosure Commitment/Dylan Parent and Other.
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1. ABBA-W and Dylan each hereby agree (and each intends to cause the
agreement in this Section D to be set forth in a more complete definitive
agreement) to keep confidential and protect each other's Proprietary
Information. This will include ensuring that directors, secondees and any
other employees with access to Proprietary Information of the other party
remain bound by strict nondisclosure policies and procedures consistent
with this Section D, and only utilize Proprietary Information for purposes
related to the purposes for which such information was disclosed. In
addition, each party further agrees that in no case shall any Proprietary
Information of the other party be transferred in any form (including
orally and visually) outside of the respective home territories.
"Proprietary Information" shall mean any and all information of either
party of a confidential nature, including without limitation non-public
information relating to the disclosing party's technology, technical data,
trade secrets, know how, customers, business plans, marketing activities,
financial data and other business affairs that is disclosed by one party
to the other party or that is otherwise learned by a party in the course
of its discussions or business dealings with, or its physical or
electronic access to the premises of, the other party that, if disclosed
in written form, is conspicuously marked at the time of initial
disclosure, or promptly thereafter, as the disclosing party's Proprietary
Information, and, if in oral or visual form, is promptly followed by a
writing delivered to the receiving party designating the information
considered confidential; PROVIDED, HOWEVER, that "Proprietary Information"
does not include any information that: (i) was in possession of or known
to the receiving party, without any obligation of confidentiality to the
disclosing party, prior to receiving it from the disclosing party; (ii)
is, or subsequently becomes, publicly available without breach of these
confidentiality provisions; (iii) is or becomes known or available to the
receiving party from a source other than the disclosing party that, to the
receiving party's knowledge, is not prohibited from disclosing such
Proprietary Information to the receiving party by a contractual, legal or
fiduciary obligation owed by such other third party to the disclosing
party; (iv) is developed by or for the receiving party without use of the
Proprietary Information; or (v) is or becomes available to the receiving
party by lawful inspection or analysis of products or services offered for
sale; or (vi) is disclosed to the receiving party by the disclosing party
after receiving written notification from the receiving party that does
not desire to receive any further Proprietary Information.
2. The foregoing notwithstanding, the terms of confidentiality hereunder
shall not be construed to in any way limit either party's right to
independently develop or acquire products, services or other information
without use of the other party's Proprietary Information. Each party
acknowledges that the other party has developed and intends to continue to
develop, both internally and with the assistance of third parties,
products,
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services and other information related to Mobile Portals and
data networks, including products, services and other information which
may be similar to Proprietary Information disclosed by the other party.
Accordingly, nothing herein, or any other agreement between the parties,
will be construed as a representation or agreement that the receiving
party will not develop or have developed for it (or deploy) products,
services, concepts, systems or techniques that are similar to or compete
with the products, concepts, systems or techniques contemplated by or
embodied in the Proprietary Information of the other party, provided that
the receiving party does not violate any of its obligations under this
Section D in connection with such development. Further, notwithstanding
any other provision hereof or agreement between the parties, both parties
shall be free to use for any lawful purpose the residuals resulting from
access to or work with any Proprietary Information, provided that such
party shall maintain the confidentiality of the Proprietary Information as
provided herein. The term "residuals" means information in non-tangible
form, which may be retained by persons who have had access to the
Proprietary Information, including ideas, concepts, know-how or techniques
contained therein so long as such "residuals" are not themselves
substantially identical to the Proprietary Information on which any such
residual is based. Neither party shall have any obligation to limit or
restrict the assignment of such persons or to make payment of any kind to
the other party for any work resulting from the use of residuals.
3. In the event that the receiving party is requested or becomes legally
compelled to disclose any Proprietary Information, then before
substantively responding to any such request or requirement, the receiving
party will provide the disclosing party with prompt written notice of any
such request or requirement so that the disclosing party may seek a
protective order or other appropriate remedy, or both, or waive compliance
with the provisions of this Section D or other appropriate remedy, or if
the disclosing party so directs, the receiving party will exercise its own
reasonable best efforts to assist the disclosing party in obtaining a
protective order or other appropriate remedy at the disclosing party's
expense. If, failing the entry of a protective order or other appropriate
remedy or the receipt of a waiver hereunder, disclosure of any Proprietary
Information is, in the opinion of the receiving party's counsel, required,
the receiving party may furnish only that portion of the Proprietary
Information which is in the opinion of the receiving party's counsel
legally required to be furnished. In any event, the receiving party will
cooperate fully with any action by the disclosing party to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Proprietary Information.
4. The obligations and covenants contained in this Section D shall be
subject to and performed in accordance with any applicable U.S. and
Japanese laws and regulations.
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