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Exhibit
10.8
STANDARD WORLDSPACE
RECEIVER
DEVELOPMENT, PRODUCTION,
MARKETING
AND LICENSE
AGREEMENT
This Standard WorldSpace
Receiver Development, Production, Marketing and License Agreement
(this “Agreement”) is made this 1 st
day of
December, 2000 (the “Effective Date”), by and
between:
WorldSpace India Private
Limited, a corporation organized under the laws of India, having
its principal office at Shankarnarayana Towers, 9
th Floor, 25/2 M. G. Road, Bangalore – 560
001, India (“WORLDSPACE”); and
BPL Limited, a Company
incorporated under the Companies Act, 1956 having its Registered
Office at BPL Works, Palakkad—678007, Kerala and marketing
office at BPL Towers, 13 Kasturba Road, Bangalore—560 001,
India (“BPL”) (each, a “Party” and
collectively, the “Parties”).
RECITALS
WHEREAS, WORLDSPACE is a
digital broadcaster of audio and multimedia programs directly from
satellites and the decoding of the WORLDSPACE satellite digital
signals requires specially designed satellite receivers that
WORLDSPACE refers to using its trademark “WORLDSPACE”
(“WORLDSPACE Receivers”) which incorporate specially
designed chipsets that WORLDSPACE refers to using its trademark
“STARMAN” (“STARMAN Chipsets”);
and
WHEREAS, BPL is a developer,
manufacturer and distributor of certain consumer electronics
products; and
WHEREAS, WORLDSPACE has
selected BPL to produce, market, distribute and sell its WORLDSPACE
Receivers pursuant to a license under certain intellectual property
rights owned by WORLDSPACE and pursuant to a sublicense under
certain intellectual property rights owned by Fraunhofer
Gesellschaft zur Förderung der Angewandten Forschung e.V.
(“FhG”) and granted to WORLDSPACE either directly or
pursuant to an agreement between Thomson Consumer Electronics Sales
GmbH (“TCE”) and WORLDSPACE; and
WHEREAS, BPL is interested in
producing, marketing, distributing and selling WORLDSPACE Receivers
and desires to obtain, and WORLDSPACE is willing to grant, a
non-exclusive license and sublicense that will allow BPL to
manufacture a consumer grade satellite receiver utilizing
WORLDSPACE’s intellectual property and to market the same
under BPL’s brand names and WORLDSPACE’s trademarks and
logo.
NOW, THEREFORE, the Parties
have agreed as follows:
1.
DEFINITIONS
For purposes of this
Agreement, the following capitalized terms will have the following
meanings:
1.1 “WORLDSPACE
System” means a satellite-based digital audio, visual
imaging and/or data broadcasting system using time division
multiplex (“TDM”) downlink and
PSK modulation, comprising 3 satellites
with 3 beams per satellite, 2 TDM carriers with opposite circular
polarization per beam, 96 primary rate channels with 16 Kbps per
carrier, equivalent to a maximum of 1728 broadcast channels, which
uses ISO MPEG 1/2 Audio Layer 3 (IS 11172-3, IS 13818-3) and MPEG
2.5 Layer 3 as the source coding scheme and as specified in the
WORLDSPACE Format.
1.2 “WORLDSPACE
Format” means the TDM bitstream structure as defined in
WORLDSPACE DAVB Digital Format Requirements document
WST-PMO-DDS-002-000000 Edition 08 Revision B dated March 26,
1998.
1.3 “WORLDSPACE
Receiver” means a satellite receiver containing a STARMAN
Chipset and designed to receive broadcasts from AfriStar, AsiaStar
and/or AmeriStar in accordance with the WORLDSPACE Format and which
meets or exceeds the Technical Specifications attached as Appendix
2.
1.4 “STARMAN
Chipset” means a chipset, manufactured under license from
WORLDSPACE and having the characteristics set forth in Appendix 3,
that can process data according to the WORLDSPACE Format. A list of
manufacturers qualified and licensed to manufacture STARMAN
Chipsets as of the Effective Date is set forth in Appendix 4, as
periodically updated.
1.5 “FhG Patent
Rights” means the patents and patent applications
anywhere in the world, and all continuations,
continuations-in-part, divisions, reissues, reexaminations,
substitutions, additions and extensions thereof, and all
supplementary protection certificates, relating to ISO MPEG 1/2
Audio Layer 3 and MPEG 2.5 Layer 3 technology used in the
WORLDSPACE Format that FhG owns or will own during the Term. FhG
Patent Rights as of the Effective Date are set forth in Appendix 5,
as periodically updated.
1.6 “WORLDSPACE
Patent Rights” means the patents and patent applications
anywhere in the world, and all continuations,
continuations-in-part, divisions, reissues, reexaminations,
substitutions, additions and extensions thereof, and all
supplementary protection certificates, relating to the WORLDSPACE
System and to the WORLDSPACE Receiver technology that WORLDSPACE
owns or will own during the Term. WORLDSPACE Patent Rights as of
the Effective Date are set forth in Appendix 6, as periodically
updated.
1.7 “WORLDSPACE
Information” means all information and knowledge relating
to the WORLDSPACE System, the WORLDSPACE Format, the WORLDSPACE
Receiver, the STARMAN Chipset, the WORLDSPACE Patent Rights and the
FhG Patent Rights that is not generally known, including, and
whether or not patentable, all trade secrets, know-how, data,
designs, specifications, material lists, drawings, algorithms,
formulas, patterns, compilations, programs, samples, devices,
protocols, methods, techniques, processes, procedures and results
of experimentation and testing.
1.8 “Development
Patent Rights” means the patents and patent applications
anywhere in the world, and all continuations,
continuations-in-part, divisions, reissues, reexaminations,
substitutions, additions and extensions thereof, and all
supplementary protection certificates, relating to the design and
development by BPL of the WORLDSPACE Receiver under Article 2.1.1,
excluding FhG Patent Rights, WORLDSPACE Patent Rights, and any
patents, patent applications or similar rights possessed or
obtained by BPL prior to the execution of this
Agreement.
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1.9 “Development
Information” means all information and knowledge relating
to the design and development by BPL of the WORLDSPACE Receiver
under Article 2.1.1 that is not generally known, including, and
whether or not patentable, all trade secrets, know-how, data,
designs, specifications, material lists, drawings, algorithms,
formulas, patterns, compilations, programs, samples, devices,
protocols, methods, techniques, processes, procedures and results
of experimentation and testing, excluding the WORLDSPACE
Information and any similar information and knowledge possessed or
obtained by BPL prior to the execution of this
Agreement.
1.10 “WORLDSPACE
Marks” means WORLDSPACE’s logo and trademarks as
set forth in Appendix 7.
1.11 “BPL
Marks” means BPL’s logo and trademarks as set forth
in Appendix 10.
1.12
“AfriStar” means the WORLDSPACE satellite
launched on October 28, 1998 that provides service within the
AfriStar Service Area. A contour map indicating generally the
geographic reach of the AfriStar broadcast beams is attached to
Appendix 1.
1.13
“AsiaStar” means the WORLDSPACE satellite
launched on March 21, 2000 that provides service within the
AsiaStar Service Area. A contour map indicating generally the
geographic reach of the AsiaStar broadcast beams is attached to
Appendix 1.
1.14
“AmeriStar” means the WORLDSPACE satellite
currently scheduled for launch in 2001 that will provide service
within the AmeriStar Service Area. A contour map indicating
generally the geographic reach of the AmeriStar broadcast beams is
attached to Appendix 1.
1.15 “AfriStar
Service Area” means the geographic regions within the
WORLDSPACE Service Area where reception of the signal from AfriStar
may be achieved using a WORLDSPACE Receiver.
1.16 “AsiaStar
Service Area” means the geographic regions within the
WORLDSPACE Service Area where reception of the signal from AsiaStar
may be achieved using a WORLDSPACE Receiver .
1.17 “AmeriStar
Service Area” means the geographic regions within the
WORLDSPACE Service Area where reception of the signal from
AmeriStar may be achieved using a WORLDSPACE Receiver
.
1.18 “WORLDSPACE
Service Area” means the geographic regions where
reception of the signal from AfriStar, AsiaStar and/or AmeriStar
may be achieved using a WORLDSPACE Receiver .
1.19
“Work” means the whole of BPL’s
performance under this Agreement, including the development,
production, marketing and sales of the WORLDSPACE Receivers. Where
the context so permits or requires, “Work” includes any
part or parts of the Work.
1.20
“Affiliate” means a corporation, partnership or
other entity controlled by, controlling or under common ownership
or control with a Party.
1.21
“Term” means the term of this Agreement as set
forth in Article 9.1.
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1.22 Forms of the word
“include” mean “including, without
limitation;” references to Articles and Appendices refer to
Articles and Appendices of this Agreement; and references to
“hereunder,” “herein,”
“hereof,” and the like, refer to this Agreement,
including all Appendices hereof.
2. RECEIVER DEVELOPMENT
AND PRODUCTION
2.1 Development of
WORLDSPACE Receivers.
2.1.1 Performance and
Timing. BPL will develop and deliver the WORLDSPACE Receivers
in accordance with the Work Schedule set forth in Appendix 8. Time
is of the essence with respect to the delivery of the WORLDSPACE
Receivers.
2.1.2 Subcontracts.
BPL and its Affiliates may subcontract the performance of all or
part of the Work. Any failure by a subcontractor to meet its
obligations will not relieve BPL of any of its obligations
hereunder.
2.1.3 Access to Work.
WORLDSPACE will have reasonable access to the Work. BPL will, at
WORLDSPACE’s request, deliver to WORLDSPACE by confidential
means copies of designs and data generated in the course of
performing the Work. The Parties will schedule regular meetings to
review the progress of the Work.
2.2 Transfer of WORLDSPACE
Information and Technical Assistance.
2.2.1 WORLDSPACE
Information Transfer. WORLDSPACE will furnish BPL, at
BPL’s request, with such complete WORLDSPACE Information as
is necessary for the production and marketing of WORLDSPACE
Receivers by BPL.
2.2.2 Technical
Assistance. WORLDSPACE will provide BPL, at its cost, such
technical assistance as BPL may reasonably request regarding the
development and production of WORLDSPACE Receivers, including the
dispatch of engineers and other support staff. All technical
assistance will be conducted at such times and at such locations as
may be mutually convenient to WORLDSPACE and BPL.
2.3 Production of
WORLDSPACE Receivers .
2.3.1 Mass Production.
BPL shall mass produce WORLDSPACE Receivers in a quantity of no
less than 100,000 units during the 12-month period following
commencement of production by BPL. BPL shall use its best efforts
to produce WORLDSPACE Receivers that are of high quality and
fulfill the customers’ needs. Both Parties shall work to
reduce the ex factory price of BPL-manufactured WORLDSPACE
Receivers to an amount not to exceed the Indian Rupee equivalent of
Fifty U.S. Dollars (US$50). WORLDSPACE shall cooperate with BPL in
BPL’s production of WORLDSPACE Receivers. Prior to September
30 of each year beginning in 2002, the Parties shall meet and
mutually agree upon the quantities of WORLDSPACE Receivers to be
mass produced by BPL during the following year. If, during the
following year, BPL fails to produce the quantities of WORLDSPACE
Receivers agreed upon, then WORLDSPACE shall have the right, upon
written
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notice to BPL, to terminate
this Agreement pursuant to Article 9.2 below without any further
obligation or liability to WORLDSPACE.
2.4 Approval of WORLDSPACE
Receivers.
2.4.1 Type Approval.
Prior to commencing commercial mass production of any WORLDSPACE
Receivers, BPL will submit to WORLDSPACE for its inspection: (i) a
prototype of each receiver that BPL proposes to manufacture, so
that WORLDSPACE may confirm that such prototype receiver performs
in accordance with the WORLDSPACE Format and the Technical
Specifications; and (ii) the preliminary design specifications for
such receivers, including all circuit diagrams, blueprints (or
equivalents thereof), component specifications (if WORLDSPACE
requests) and overall specifications of such prototype receiver. If
such prototype receiver successfully passes WORLDSPACE’s
test, it will be deemed a “WORLDSPACE Receiver” under
this Agreement. After a receiver has been qualified as a WORLDSPACE
Receiver, no changes may be made to the WORLDSPACE Receiver except
for those which are cosmetic in nature or which do not materially
affect the function or quality of the WORLDSPACE Receiver unless
the receiver is resubmitted to WORLDSPACE for testing and
WORLDSPACE confirms that this modified receiver continues to
qualify as a WORLDSPACE Receiver. All testing will be performed at
WORLDSPACE’s then current testing rates. As of the Effective
Date, WORLDSPACE’s standard rates are as set forth in
Appendix 9, but WORLDSPACE reserves the right to make reasonable
changes to its rates with prior notification to BPL.
2.4.2 Requests for
Testing. All requests for testing will be accompanied by
payment in full of WORLDSPACE’s testing fee, a prototype of
the applicable receiver and all test data and schematics pertaining
thereto. WORLDSPACE will endeavor in good faith to test, or have
its authorized agent test, all prototype receivers submitted for
testing within thirty (30) days from the date WORLDSPACE or such
authorized agent has received such prototype and all test data and
schematics pertaining thereto. Delays in testing will not entitle
BPL to cancel a testing order or to claim damages, provided that
WORLDSPACE immediately notifies BPL of such delays and presents a
plan to complete such testing as soon as possible.
3. RECEIVER
MARKETING
3.1 Marketing the
WORLDSPACE Receivers.
3.1.1 Marketing. BPL
agrees to use its best efforts to market, distribute and sell
WORLDSPACE Receivers within the WORLDSPACE Service Area in
quantities sufficient to meet the minimum quantities specified in
Article 2.3.1. BPL and WORLDSPACE shall meet on a monthly basis to
review the marketing and distribution activities of BPL. If, in the
reasonable judgment of WORLDSPACE, BPL does not effectively market,
distribute and sell the WORLDSPACE Receivers, WORLDSPACE will so
notify BPL in writing. BPL shall have 30 days to demonstrate to
WORLDSPACE’s reasonable satisfaction that BPL shall perform
its obligations pursuant to this Agreement. If BPL fails to market,
distribute and sell the WORLDSPACE Receivers so as to satisfy this
Agreement, WORLDSPACE shall have the right, upon written notice to
BPL, to terminate this Agreement pursuant to Article 9.2 below
without any further obligation or liability to
WORLDSPACE.
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3.1.2 Marketing
Strategy. BPL will market, advertise and promote the WORLDSPACE
Receivers and the WORLDSPACE Marks throughout the WORLDSPACE
Service Area in order to effectively create consumer demand for
BPL-manufactured WORLDSPACE Receivers. WORLDSPACE will advertise
and promote the WORLDSPACE Service and the WORLDSPACE Marks
throughout the WORLDSPACE Service Area. BPL will develop an
effective marketing and distribution strategy for BPL-manufactured
WORLDSPACE Receivers in cooperation with WORLDSPACE.
4. INTELLECTUAL PROPERTY
LICENSES
4.1 WORLDSPACE Information
License, FhG Patent Rights Sublicense, WORLDSPACE Patent Rights
License and WORLDSPACE Marks License.
4.1.1 License and
Sublicense Grant. WORLDSPACE hereby grants to BPL and its
Affiliates a non-exclusive, non-transferable, revocable,
indivisible license under the WORLDSPACE Information, the
WORLDSPACE Patent Rights and the WORLDSPACE Marks and a
non-exclusive, non-transferable, revocable, indivisible sublicense
under the FhG Patent Rights, to perform, and have performed, the
Work. BPL will have no right to sublicense to any third party
without WORLDSPACE’s prior approval.
4.1.2 Licensed and
Sublicensed Territory. Pursuant to Article 4.1.1, BPL and its
Affiliates may design, develop and/or manufacture, and have
designed, developed, and/or manufactured, WORLDSPACE Receivers
anywhere in the world for sale only in the WORLDSPACE Service Area
except for China; provided that BPL will not use or authorize any
public use, direct or indirect, of the WORLDSPACE Marks outside the
WORLDSPACE Service Area and will not knowingly sell any products
covered by this Agreement to persons who intend or are likely to
resell them outside the WORLDSPACE Service Area.
4.1.3 Royalty. In
consideration of the licenses and sublicense granted by WORLDSPACE
under Article 4.1.1, BPL will pay to WORLDSPACE within sixty (60)
days after June 30 and December 31 of each calendar year of the
Term a royalty of Three and One Half U.S. Dollars (U.S. $3.50) net
(except for any required tax withholdings), payable in its
equivalent in Indian Rupees at the exchange rate on such due date
as established by the Reserve Bank of India, for each single
WORLDSPACE Receiver that BPL sells during the previous two calendar
quarters. If BPL sells a WORLDSPACE Receiver, directly or
indirectly, to itself or to any Affiliate, the royalty will be
calculated and due as though such product had been sold to a third
party.
4.2 Development
Rights.
WORLDSPACE and BPL will share
equally in the ownership and the benefits of all Development
Information and Development Patent Rights. To that end, all right,
title and interest in and to such Development Information and
Development Patent Rights will be obtained in the names of and on
behalf of both WORLDSPACE and BPL. Each Party will have the right
to use Development Information and Development Patent Rights for
its own benefit; however, any license of such
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Development Information and
Development Patent Rights to third parties will be subject to the
prior written approval of the other Party, which approval will not
be unreasonably withheld. Any such license to a third party will be
granted on the basis of reasonable compensation therefor and
pursuant to other reasonable terms and conditions; provided,
however, that the Parties may agree to impose restrictions or
prohibitions regarding the granting of such rights to specific
third parties. Any royalties, revenue or other consideration
received as compensation from such third party will be shared
equally by WORLDSPACE and BPL. If either Party sells or otherwise
disposes of products or services that use or incorporate the
Development Information and Development Patent Rights, then such
Party will compensate the other Party in an amount to be mutually
agreed upon. The Parties will cooperate in and equally share the
costs of securing, maintaining and enforcing the Development Patent
Rights.
4.3 Use of the
Marks.
4.3.1 Proper Use. BPL
will mark all WORLDSPACE Receivers with the BPL Marks and the
WORLDSPACE Marks and will use the BPL Marks and the WORLDSPACE
Marks in all packaging, instruction manuals, catalogs and printed
advertising concerning the WORLDSPACE Receivers. The WORLDSPACE
Marks will be affixed to the WORLDSPACE Receivers, and will be used
in any packaging, instruction manuals, catalogs, advertising and
promotional material, and may be used in such other media as the
Parties agree upon, in such a manner as to allow a person with
normal vision to recognize the WORLDSPACE Marks, and as a general
guideline will be at least as prominent in location and size as any
other logo or mark of similarly licensed technology in similar
products or similar advertising. BPL will cause notice of
WORLDSPACE’s ownership of the WORLDSPACE Marks to be used on
each WORLDSPACE Receiver and used in any instruction manuals,
catalogs, advertising and promotional material, and such other
media as the Parties agree upon, and as a general guideline such
use will be in such a manner and at least as frequently as BPL uses
said proprietary notice or equivalent with respect to any other
logo or mark of similarly licensed technology in similar products
or similar advertising. The following notice (or such other notice
as WORLDSPACE may hereafter reasonably require) is an example of an
appropriate notice:
WORLDSPACE is a trademark
of WorldSpace International Network Inc.
4.3.2 Benefit of Use.
BPL’s use of the WORLDSPACE Marks will inure to the benefit
of WORLDSPACE and BPL will not at any time acquire any rights in
such WORLDSPACE Marks or any trademarks or trade dress similar
thereto by virtue of any use it may make of any such WORLDSPACE
Marks. Similarly, the use of BPL marks on the Receivers does not
confer any rights in WORLDSPACE.
4.3.3 Good Will. All
of the good will now or to be associated with the WORLDSPACE Marks
belongs exclusively to WORLDSPACE and all good will associated with
the WORLDSPACE Marks pursuant to BPL’s use thereof will inure
exclusively to WORLDSPACE’s benefit. All of the good will now
or to be associated with the BPL Marks belongs exclusively to BPL
and all good will associated with the BPL Marks pursuant to
WORLDSPACE’s use thereof will inure exclusively to
BPL’s benefit.
4.3.4 Non-Use of
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