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Exhibit
10.1
Cooperation
Agreement
dated as of
16 July,
2007
between
Fiat Group Automobiles
S.p.A. ,
and
WorldSpace Italia
S.p.A
and
WorldSpace,
Inc
Page 1 of 25
This cooperation agreement (“
Agreement ”) is entered into in Turin, on
July 16th, 2007 (“ Effective Date
”)
BETWEEN
| 1. |
Fiat Group Automobiles S.p.A. , a company incorporated
under the laws of Italy, with registered office in Turin, Corso
Agnelli 200, Italy, hereby represented by Mr. Giuseppe
Bonollo, in his capacity as Senior Vice President Product Portfolio
Management (“ Fiat ”); |
| 2. |
WorldSpace Italia S.p.A. , a company incorporated under
the laws of Italy, with registered office in Milan, Via Burigozzo
5, Italy, hereby represented by Mr. Luca Panerai , in
his capacity as Chief Executive Officer (“ WS Italia
”); |
| 3. |
WorldSpace, Inc., a company incorporated under the laws
of the State of Delaware, with registered office in 8515 Georgia
Avenue, Silver Spring, Maryland, USA, hereby represented by
Mr. Alexander Brown in his capacity as Co-Chief Operating
Officer (“ WorldSpace ”); |
(Fiat, WS Italia and WorldSpace are
hereinafter individually also referred to as “ Party
” and collectively “ Parties ”)
WHEREAS
| (A) |
Fiat is a leading company in the worldwide car manufacturing
industry; |
| (B) |
WS Italia is a joint venture company, operating in the field of
satellite-based digital radio broadcasting, whose corporate capital
is owned by: |
| |
• |
|
WorldSpace
Europe Holdings ApS, organized and existing under the laws of
Denmark, having its registered office at Langelinie Allé 35,
2100 Copenhagen, Denmark, a fully owned subsidiary of WorldSpace,
which is holding 65% of the equity of WS Italia; and
|
| |
• |
|
New Satellite
Radio S.r.l., a company incorporated under Italian law with
registered offices in Via Burigozzo 5, Milan, Italy (“
NSR ”), holding 35% of the equity of WS Italia and
whose corporate capital is owned as follows: 67.66% by Class
Editori S.p.A. (“ Class ”), 19.62% by Luca
Panerai and 12.72% by Telecom Italia S.p.A.;
|
| (C) |
WorldSpace is a global operator of subscription-based satellite
digital radio and data services (“ Service ”)
with regional offices and operations throughout Asia, the Middle
East, and Africa. WorldSpace is the holder of certain proprietary
technology and know-how (“ WorldSpace IP ”, e.g.
chipset, service layer, reference design, etc.) which have to be
incorporated into integrated radio receivers (“ SDARS
Receivers ”) in order to receive the Service and is
willing to license the use of WorldSpace IP, upon terms acceptable
to WorldSpace and the licensees, to manufacturers and/or vendors of
SDARS Receivers designated by automobile manufacturers, including
Fiat. For the avoidance of doubt, it is acknowledged and understood
between the Parties that neither Fiat nor the manufactures/vendors
of SDARS Receivers designated by it are granted with any right,
title or interest in the WorldSpace IP, apart from those rights
customarily included in standard license agreements; |
| |
Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Exchange Act. |
Page 2 of 25
| (D) |
WorldSpace intends to commence operations in Europe completing
the broadcasting of the Service and initiating customer acquisition
and support not later than the end of the Technology Deployment
Phase (as defined below) and has formed WS Italia with NSR to
commence the Service within Italy (“ Italian Service
”) ; |
| (E) |
in May 2006, WS Italia received an authorization from the
Italian Ministry of Communications to launch the Italian Service,
utilizing the frequency band 1479.5-1492 MHz for the operation of
the corresponding hybrid satellite/terrestrial network; |
| (F) |
NSR is a company established in order to cooperate with
WorldSpace in the implementation, operation and management of the
Italian Service through WS Italia; |
| (G) |
Fiat intends to exploit new marketing opportunities involving
the Italian Service and to this end entered into with Class and
acting also on behalf NSR: |
| |
• |
|
a letter of
intent on March 16, 2005 (“ LOI ”) to
explore the opportunity to proceed and negotiate a joint project
involving the Italian Service;
|
| |
• |
|
a Framework
Agreement on May 26, 2005 (“ Framework Agreement
”) which established the general principles of a project
concerning the use of the Italian Service on certain models of Fiat
vehicles sold within Italy (“ Transaction ”)
with a view to further and subsequently agreeing upon the specific
terms and conditions which were to govern such possible Transaction
provided that a final agreement would ultimately be reached between
the Parties;
|
| (H) |
through this Agreement, in performance of the understanding set
forth in the Framework Agreement, the Parties intend to set forth
the terms, conditions and obligations which shall govern the
Transaction; and |
| (I) |
the Parties acknowledge that this Agreement supersedes the LOI
and Framework Agreement. |
NOW, THEREFORE , on the basis of
the above recitals, the Parties hereto agree as follows.
Article 1 –
Object
| 1.1 |
The Transaction encompasses: |
| |
1.1.1 |
the production and broadcasting by WS Italia of the Italian
Service, comprising several radio channels organized in a
bouquet to be subscribed to by the final
customers; |
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1.1.2 |
the installation by Fiat of the SDARS Receivers as original
equipment, standard or optional at Fiat’s sole discretion
(“ OEM ”), in certain models of its vehicles,
chosen by Fiat among those listed in Annex 1.1.2
(“ OEM Vehicles ”) and in accordance with the
terms of Annex 3.2.1 (a) ; |
Page 3 of 25
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1.1.3 |
the co-marketing of the initial subscription of the Italian
Service (“ Initial Subscription ”) for
purchasers of OEM Vehicles; and |
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1.1.4 |
the exploitation by Fiat of automobile distributorship
aftermarket sales opportunities for aftermarket SDARS Receivers as
after sales equipment on certain models of its vehicles as listed
in Annex 1.1.4 (“ Aftermarket Vehicles
” and, collectively with OEM Vehicles, the “ Enabled
Vehicles ”). |
| 1.2 |
In order to execute the Transaction, WS Italia represents and
warrants that it has obtained: |
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1.2.1 |
rights to use at least 40 channels of the west beam of the
AfriStar satellite or of other satellites it will be granted access
to by WorldSpace or its subsidiaries (collectively the “
Satellite ”), for the broadcasting of the Italian
Service bouquet ; and |
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1.2.2 |
the authorization from the Italian Ministry of
Telecommunications to broadcast the Italian Service and to
implement a terrestrial network of repeaters and/or gap fillers to
supplement the satellite signal and render it available throughout
the Italian territory. |
| 1.3 |
In order to execute the Transaction, WorldSpace and WS Italia
represent and warrant that: |
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1.3.1 |
the execution, delivery and performance of this Agreement by
WorldSpace and WS Italia does not conflict with any agreement to
which they are a party or by which they may be bound, nor does it
violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over
it; |
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1.3.2 |
to the knowledge of WorldSpace and WS Italia, the use of the
licensed WorldSpace IP by manufacturers and/or vendors of SDARS
Receivers appointed by Fiat in compliance with this Agreement will
not infringe upon the rights of any third party, and will not
infringe any other rights of WorldSpace and WS Italia;
and |
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1.3.3 |
WorldSpace and WS Italia are not aware of any infringement
claims pending or threatened by any third party with respect to the
licensed WorldSpace IP. |
| 1.4 |
In order to execute the Transaction, WorldSpace represents and
warrants that: |
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1.4.1 |
it has obtained or, by the commencement of the Italian Service
will have obtained and/or installed, as applicable, all rights,
through ownership or license, necessary to utilize the technology
required to commence the Italian Service; and |
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1.4.2. |
by the commencement of the Italian Service, it shall have
granted to WS Italia all rights to use the technology set forth in
paragraph 1.4.1 for the Italian Service, unless WS Italia already
owns or has title to such rights. |
Page 4 of 25
Article 2
Technology Deployment
Phase – Obligations of the Parties
| 2.1 |
The Parties acknowledge that, since the execution of the
Framework Agreement, they have jointly conducted discussions and
negotiations with manufacturers of radio appliances and components
selected by Fiat with the aim to identify the suppliers of SDARS
Receivers to Fiat. Following execution hereof, the Parties,
individually or jointly, as the case may be, agree to undertake the
following activities related to the deployment of the Italian
Service technology (“ Technology Deployment Phase
” ). |
| |
(a) |
designate its representatives to participate with WorldSpace,
WS Italia and the radio manufacturers during the Technology
Deployment Phase; |
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(b) |
select the SDARS Receivers manufacturer/developer who shall be
granted the WorldSpace IP license(s) by WorldSpace. In this
respect, Fiat shall identify an initial non-exclusive
manufacturer/developer of the SDARS Receivers (“ SDARS
Manufacturer ”). Fiat may at any time propose to WS
Italia additional alternative manufacturers/developers of SDARS
Receivers with which to enter into non-exclusive agreements. Fiat
shall pursue negotiations with the SDARS Manufacturer with the
objective of entering, upon terms and conditions satisfactory to
Fiat and subject to WorldSpace licensing WorldSpace IP to them,
into binding agreements with the same; |
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(c) |
use its best endeavors to cooperate with WS Italia and
WorldSpace in the integration of SDARS Receivers into the Enabled
Vehicles, subject to compliance by WorldSpace and WS Italia with
the terms and conditions set forth in Article 2.3; |
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(d) |
use its best endeavors to have its radio receiver suppliers to
assist WS Italia and WorldSpace in the incorporation of WorldSpace
satellite radio technology into the SDARS Receivers; |
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(e) |
provide WS Italia with the production concepts desired by Fiat
to be included within the Fiat Channel (as defined
below); |
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(f) |
determine with WS Italia the processes and procedures to be
followed by Fiat’s distributor network with respect to the
Initial Subscription by purchasers of OEM Vehicles and to the
exploitation of aftermarket opportunities involving Aftermarket
Vehicles; |
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(g) |
determine with WS Italia the methods and modalities according
to which they will co-market and manage the Initial Subscription
and exploit the aftermarket opportunities involving Aftermarket
Vehicles; |
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(h) |
perform all the engineering, design and testing activities that
will be agreed upon among the Parties necessary for the
qualification and application of the SDARS Receivers on the
selected OEM Vehicles; |
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(i) |
use its best endeavors to perform, or cause its employees,
directors and agents to perform, any and all actions required to
facilitate the completion of the Technology Deployment Phase on a
timely basis; |
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(j) |
discuss with WS Italia the contents of the initial commercial
offer (including the bouquet ) of the Italian Service, in
due time prior to any significant modifications in respect to what
is already set forth in Annex 2.2.3 (b) (B), etc.; |
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(k) |
test the quality and service level of the Italian Service
everywhere in Italy at Fiat’s expense; and |
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(l) |
use its best endeavours to agree with WorldSpace upon a
marketing plan for the co-marketing of the Italian Service and of
the Initial Subscription. |
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(a) |
designate its representatives to cooperate with Fiat, WS Italia
and the radio manufacturers during the Technology Deployment
Phase; |
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(b) |
select the manufacturers of chipsets for production of the
chipsets to be used by the SDARS Receivers; |
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(c) |
upon terms and conditions satisfactory to WorldSpace in its
sole discretion, license the WorldSpace IP to, and cooperate with:
(i) the SDARS Manufacturer or other manufacturers of
radio appliances and components selected by Fiat; and
(ii) manufacturers of chipsets selected by WorldSpace
and manufacturers of antennas selected by Fiat, as required for the
manufacturing and integration of SDARS Receivers compatible with
the receipt of the Italian Service signals; |
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(d) |
perform, or cause its employees, directors and agents to
perform, any and all actions required to facilitate the completion
of the Technology Deployment Phase on a timely basis; |
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(e) |
give WS Italia all the necessary support for the implementation
of WS Italia’s obligations under this Agreement and
particularly to those set forth in paragraph 2.2.3 b); |
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(f) |
comply with the quality and service level of the Italian
Service as set forth in Annex 2.2.3 (b) (A); |
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(g) |
certify that the whole system (i.e. receiver, cables and
antenna) was developed by the SDARS Manufacturer according to
WorldSpace specifications; |
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(h) |
certify that on each model of OEM Vehicles, the SDARS Receiver
system installation design qualified by Fiat complies with the
WorldSpace specification; |
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(i) |
instruct an independent research institute, Fraunhofer
Institute for Integrated Circuits IIS, Am Wolfsmantel 33, 91058
Erlangen, Germany, to define and validate the methodology to be
applied in order to certify the Signal Level and QoS on each
installation, on each model of OEM Vehicles. WorldSpace shall use
its best endeavors to have Fraunhofer to assist Fiat in its testing
activities as referred to in paragraph 2.2.1.(k); |
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(j) |
certify that on each model of Aftermarket Vehicles, the SDARS
Receiver system installation complies with Fiat requirements;
and |
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(k) |
provide the minimum signal level and QoS from satellite and
terrestrial repeaters, as set forth in Annex 2.2.3
(b)(A). |
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(a) |
designate its representatives to cooperate with Fiat,
WorldSpace and the radio manufacturers; |
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(b) |
complete all activities necessary for the broadcasting of the
Italian Service, according to the implementation schedule that
shall be agreed as soon as possible among the Parties ,
including: (i) the deployment of terrestrial repeaters
and/or gap fillers which shall have at least the quality levels and
criteria set forth in Annex 2.2.3 (b)(A) ; and
(ii) the design, acquisition, production and
broadcasting of the channels included in the Italian Service
bouquet , intended to be similar in form and contents to the
channels described under Annex 2.2.3 (b)(B). It is
agreed and understood between the Parties that WS Italia shall have
the right to use between 40 and 50 channels of the west beam of the
AfriStar satellite or of other satellites, depending upon the mix
of the broadcast content. The Italian Service bouquet will include
a channel dedicated to Fiat’s customers (“ Fiat
Channel ”). During the Technology Deployment Phase
, Fiat and WS Italia will have to agree upon: (i)
the specific contents and details of the Fiat Channel, it
being understood that, upon initiation of the broadcasting of the
Fiat Channel, Fiat (or an ad-hoc dedicated controlled
subsidiary of same) will be the editor and WS Italia will be the
producer of the Fiat Channel; and (ii) the terms and
conditions of the production of the Fiat Channel by WS Italia,
being provided at no charge to Fiat for a period not exceeding the
duration of this Agreement and unless the agreed upon content of
the Fiat Channel is of such nature , complexity and/or cost
that it requires a contribution by Fiat; |
Page 7 of 25
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(c) |
determine with Fiat the processes and procedures to be followed
by Fiat’s distributor network with respect to the Initial
Subscription by purchasers of OEM Vehicles and to the exploitation
of aftermarket opportunities involving Aftermarket
Vehicles; |
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(d) |
determine with Fiat the methods and modalities according to
which they will co-market and manage the Initial Subscription to
the Italian Service and exploit the aftermarket opportunities
involving Aftermarket Vehicles; |
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(e) |
discuss with Fiat, any significant modifications to the
contents of the initial commercial offer (including the
bouquet ) in respect to what is already set forth in Annex
2.2.3 (b)(B), in due time prior to the implementation of the
same; |
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(f) |
perform, or cause its employees, directors and agents to
perform, any and all actions required to facilitate the completion
of the Technology Deployment Phase on a timely basis;
and |
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(g) |
provide the minimum signal level and QoS from satellite and
terrestrial repeaters, as set forth in Annex 2.2.3
(b) (A). |
| 2.4 |
It is agreed and understood that Fiat shall bear no costs in
relation to the installation test on the Aftermarket
Vehicles. |
|
2.5
|
The Parties shall use their
best endeavors to complete the Technology Deployment Phase by the
end of November 2009 so that the sale of OEM Vehicles in Italy may
proceed in accordance with the timing set forth in this Agreement.
As far as the aftermarket equipment, the same could be available
for sale even before that date subject to product availability. The
Project Committee shall meet by no later than September 30
th
, 2007 with the objective of
accelerating, to any possible extent, the date first above written
and of reviewing the sourcing results according to the different
offers from the SDARS Manufacturers.
|
| 2.6 |
With respect to customers who purchase OEM Vehicles from Fiat,
WorldSpace and WS Italia shall be responsible for any failure in
the Italian Service attributable to any |
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Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under
Rule 24b-2 of the Exchange Act. |
Page 8 of 25
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interruption in
broadcasting or failure of the broadcast signal or whichever other
cause, and Fiat shall be responsible for any failure in the SDARS
Receivers attributable to a defect in its manufacture, installation
or repair according to Fiat warranty terms.
|
| 2.7 |
In performing its obligations hereunder, each Party shall
comply in all material respects with all relevant laws,
governmental and regulatory requirements and standards and shall
hold the other Parties harmless from and against any claim or
contention of third parties regarding its failure to comply with
laws, governmental and regulatory requirements and standards and
will pay all the related costs and any damages allocated to such
third parties. |
Article 3 –
Implementation Phase
| 3.1 |
Upon completion of the Technology Deployment Phase, the Parties
shall meet in order to ascertain the completion of any and all of
the obligations as set forth in Article 2 above, in accordance with
the terms and conditions of this Agreement. |
| 3.2 |
The execution phase (“ Implementation Phase
”) will commence subject to completion of the Technology
Deployment Phase, in accordance with the terms and conditions of
this Agreement. In particular: |
| |
(a) |
use its best endeavors to sell the SDARS Receivers as equipment
of the OEM Vehicles in the minimum quantities set forth in
Annex 3.2.1 (a) ; |
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(b) |
request its distributors to comply with the procedures agreed
in the Technology Deployment Phase; |
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(c) |
co-market the Italian Service in accordance with the modalities
agreed in the Technology Deployment Phase; and |
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(d) |
use its marketing and advertising campaigns relating to OEM
Vehicles, to promote SDARS Receivers and the Italian Service as
agreed in the Technology Deployment Phase. |
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(a) |
broadcast the Fiat Channel; |
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(b) |
establish and manage, directly or through outsourcing, the WS
Italia call center which shall have a service and quality level
comparable with Fiat’s call center service quality
level; |
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(c) |
provide to the Fiat distributor network the support to be
agreed in the Technology Deployment Phase according to the
provisions of paragraph 2.2.3 (e) for the Initial Subscription
by purchasers of OEM Vehicles; and |
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(d) |
manage the subscriptions to the Italian Service. |
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