LICENSING AGREEMENT
This Licensing Agreement (the "Agreement") is entered into between
ImagicTV Inc. (hereinafter "ImagicTV"), a
Canadian corporation with its principal
place of business at One Brunswick Square,
Suite 1400, Saint John, New Brunswick,
Canada
and
NBTel Inc., a Canadian corporation with its
principal place of business at One
Brunswick Square, Saint John, New
Brunswick, Canada, (hereinafter "NBTel")
WHEREAS ImagicTV has developed a "telco-ready" business application
software ("DTV Manager System"), enabling NBTel to deliver digital television
and high speed internet access to subscribers over existing copper telephone
wires on a managed high speed internet protocol network to a TV with a set top
box;
AND WHEREAS ImagicTV is willing to license its delivery of its DTV
Manager System to NBTel on the terms and conditions stated below;
NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
1.1 "DTV Manager System" shall mean collectively the object code version
of the software, the functionality of which is described in the
Product Description attached as Schedule "A" hereto, as may be amended
by the parties from time to time, as well as the accompanying user
guides and manuals for use of the software, and all Updates thereto.
1.2 "Data-base Software" shall mean the third party software described in
Schedule "A.1" hereto, as may be amended from time to time, which is
necessary for the operation of the DTV Manager System and is licensed
directly by NBTel from the third party licensor, and forms part of
the Designated System, but not part of the DTV Manager System.
1.3 "Designated System" shall mean NBTel's network components, computer
hardware, computer operating system, Set Top Box, Data-base Software,
and program data providers which are recommended by ImagicTV and which
support the operations of the DTV Manager System.
1.4 "Effective Date" shall mean the date on which this Agreement comes
into effect.
1.5 "Intellectual Property Rights" means all intellectual property rights
worldwide arising under statutory or common law, and whether or not
perfected, including, without limitation, all (i) patents, patent
applications and patent rights; (ii) rights associated with works of
authorship including copyrights, design rights (whether or not
registered or capable of registration), copyright applications,
copyright registrations, mask work rights, mask work applications,
mask work registrations; (iii) rights relating to the protection of
trade secrets and confidential information; (iv) trademarks, logos;
(v) any right analogous to those set forth in this definition and any
other proprietary rights relating to intangible property; and (vi)
divisions, continuations, renewals, re-issues and extensions of the
foregoing (as and to the extent applicable) now existing, hereafter
filed, issued or acquired.
1.6 "Maintenance Releases" shall mean subsequent object code versions of
the DTV Manager System which provide a fix or repair to the current
version of the DTV Manager System being used by NBTel. These releases
will be designated with a numbering system as follows: Release 1.X or
Release 2.X, where "X" signifies the maintenance update to the
release.
1.7 "Major Releases" shall mean subsequent object code versions of the DTV
Manager System which provide enhanced functionality to the previous
most current release of the DTV Manager System. These releases will
be designated with a numbering system as follows: Release 3.0,
Release 4.0, Release 5.0, Release X.0, etc.
1.8 "NBTel Activation File" shall mean the file generated by the DTV
Manager System which records subscriber activation/deactivation and
from which the number of Total Active Subscribers are calculated.
1.9 "Object Code Patches" shall mean an object code change which provides
a fix or repair to the release of the current version of the DTV
Manager System being used by NBTel. These patches will not change the
numbering designation.
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1.10 "On-Site Expenses" shall mean all subsistence and travel expenses
incurred in effecting on-site services including, but not limited to
technical support and maintenance, training, engineering and
consulting services.
1.11 "Program Errors" shall mean one or more reproducible deviations in
the DTV Manager System from the applicable functions set forth in the
Product Description.
1.12 "Set Top Box" shall mean the hardware device units that will decode
MPEG 1 or MPEG 2 audio and video that is delivered over a managed high
speed Internet Protocol ("IP") network and recommended by ImagicTV as
part of the Designated System. For the avoidance of doubt, the Set
Top Box does not form any part of the DTV Manager System is supplied
to the Subscriber under an independent contract with NBTel.
1.13 "Subscriber" shall mean an end user customer of NBTel located within
the Territory who is bound by the Minimum Terms and Conditions set out
in Schedule "B" hereto.
1.14 "Territory" shall mean the Province of New Brunswick.
1.15 "Total Active Subscribers" shall mean the net number of activated
Subscribers for each Quarter as calculated by the number of total
active Subscribers at the beginning of a Quarter plus the number of
newly activated Subscribers during that Quarter less the number of
deactivated Subscribers during that Quarter.
1.16 "Updates" shall mean collectively Major Releases, Maintenance
Releases, and Object Code Patches.
2. LICENSE GRANT
2.1 Grant of License -- DTV Manager System
Subject to the terms and conditions of this Agreement and in
consideration of the fees specified in Schedule "D" ("Fees and
Payments"), ImagicTV hereby grants to NBTel a nonexclusive,
nonassignable perpetual license in the Territory to use the DTV
Manager System as follows:
(i) to copy for archival or backup purposes; no other copies shall be
made without ImagicTV's prior written consent. All title,
trademarks, and copyright and restricted rights notices shall be
reproduced in such copies. All archival and backup copies of the
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DTV Manager System are subject to the terms of this Agreement;
and
(ii) to copy, install, store, communicate, transmit, and use the DTV
Manager System solely for the following purposes:
(a) to market and demonstrate the DTV Manager System in
conjunction with the Designated System and its own services
to potential Subscribers;
(b) to grant access to the DTV Manager System in conjunction
with the Designated System and its own services solely to
Subscribers, and;
(c) to provide technical support services to Subscribers
2.2 Beta License
ImagicTV may, at its discretion, deliver to NBTel experimental
versions of the DTV Manager System in the form of beta or pre-release
versions ("Betas") subject to the following terms:
(i) Subject to all restrictions set forth in this Agreement, ImagicTV
grants solely to NBTel a limited, non-exclusive and non-
transferable license to use the Betas solely at the address set
forth above and only for the purpose of evaluating and testing
such Betas. Except as expressly set forth herein, the license
granted to NBTel in this Section 2.3 ("Beta License") shall not
be for any other purpose, and any other use by NBTel shall
constitute a material breach of this Agreement.
(ii) NBTel will supply ImagicTV with an evaluation report every two
(2) weeks, with the first evaluation report due two (2) weeks
after ImagicTV delivers the applicable Beta (collectively, the
"Evaluation Reports"). The Evaluation Reports shall set forth in
reasonable detail the tests performed, the results of those
tests, problems or deficiencies encountered in the testing
process, suggested solutions to the problems and recommended
action for modification of the Betas based on NBTel's test
results. The Evaluation Reports shall be delivered via
electronic mail to the following email address:
customerservices@imagictv.com or as otherwise agreed to by the
-----------------------------
parties.
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(iii) NBTel shall cease using and destroy all copies of any Betas
provided hereunder upon the earlier of (a) ImagicTV's delivery
of the production version of such software; (b) ImagicTV's
written notice to NBTel; (c) any date mutually agreed upon in
writing by the parties, and (d) termination of this Agreement.
2.3 Enforcement
NBTel shall use best efforts to protect the Intellectual Property
Rights of ImagicTV in the DTV Manager System. NBTel will cooperate
with ImagicTV in any legal action to prevent or stop unauthorized use,
reproduction or distribution of the DTV Manager System and NBTel shall
fully indemnify ImagicTV in respect of any loss or damage suffered by
ImagicTV as a result of any of its Subscribers infringing the
Intellectual Property Rights of ImagicTV or of its licensors.
2.4 Title
ImagicTV shall retain all Intellectual Property Rights in the DTV
Manager System and the Betas and any modifications or translations
thereof. NBTel does not acquire any rights in the DTV Manager System
or the Betas other than those specified in this Agreement.
2.5 Limitations on Use
NBTel shall not use or duplicate the DTV Manager System or the Betas
for any purpose other than as specified in this Agreement or make the
DTV Manager System or the Betas available to unauthorized third
parties. NBTel shall not, and shall prevent others from, reverse
engineering, disassembling, decompiling, copying, translating,
modifying, creating derivative works, encumbering, or otherwise using
the DTV Manager System or the Betas except as specifically authorized
pursuant to this Agreement.
2.6 Third Party License Restrictions
All licenses granted by ImagicTV under this Agreement are subject to
compliance by NBTel with any applicable third party license
restrictions, and receipt by ImagicTV of any required consents with
respect to the third party code. A current list of third party
license restrictions is set forth on Schedule "E" hereto.
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ImagicTV reserves the right to substitute any third party software in
the DTV Manager System so long as the new third party software does
not materially affect the functionality of the DTV Manager System.
2.7 Delivery of Master Copies
ImagicTV shall deliver to NBTel's address following execution of this
Agreement, a master copy of the DTV Manager System. The delivery will
follow NBTel's acceptance procedure.
2.7 Systems Dependency
System dependency for the operation of the DTV Manager System includes
a Set Top Box and a server, which are necessary components of the
Designated System.
3. MARKETING
3.1 Publicity
ImagicTV and NBTel shall cooperate with each other so that each party
may issue a public announcement concerning this Agreement within
thirty (30) days following the Effective Date of this Agreement
provided that both parties approve any such public announcement in
writing prior to its release. Such public announcement may include a
quote attributable to an executive officer of each party.
3.2 Marketing Efforts
Each party may mutually agree from time to time to feature the DTV
Manager System and references to each other's product at trade shows,
marketing and promotional materials, websites and other prospective
NBTel materials. All use by one party of the other party's
trademarks, logos, or service marks shall be in accordance with each
party's usage guidelines in effect at the time. ImagicTV and NBTel
shall mutually agree on all joint marketing efforts related to the DTV
Manager System.
3.3 Marketing Practices
In marketing the DTV Manager System, NBTel shall:
1. Not engage in any deceptive, misleading, illegal, or unethical
practices that may be detrimental to ImagicTV or the DTV Manager
System;
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2. Not make any representations, warranties, or guarantees concerning
the DTV Manager System that are inconsistent with or in addition
to those made in this Agreement or by ImagicTV; and
3. Comply with all applicable federal, state/provincial, and local
laws and regulations in performing its duties with respect to the
DTV Manager System.
4. MAINTENANCE AND SUPPORT SERVICES
4.1 Major Releases
NBTel will receive Major Releases and related documentation for the
first twelve months following the Effective Date, and thereafter, upon
payment of the Maintenance Fees prescribed in paragraph "C" of
Schedule "D" hereto. Updates shall be kept current unless provided
otherwise herein.
The installation of the initial version of the DTV Manager System and
each installation of Updates is to be done by NBTel. ImagicTV will
support such installations.
4.2 Technical Support Services
NBTel will receive Technical Support Services (which includes
Maintenance Releases and Object Code Patches) for the first twelve
months following the Effective Date, and thereafter, upon payment of
the Maintenance Fees prescribed in paragraph "2" of Schedule "D"
hereto in accordance with the terms and conditions in effect, the
current version of which is set forth in Schedule "C", and subject to
availability of the appropriate ImagicTV personnel.
ImagicTV shall not be responsible for providing any technical support
directly to Subscribers.
4.3 Training Services
NBTel will receive training services for its employees for Release
1.0, Release 2.0, and Release 3.0 of the DTV Manager System, subject
to ImagicTV's terms and conditions in effect at the time and subject
to availability of the appropriate ImagicTV personnel. For any
training services to be provided by ImagicTV at any location other
than ImagicTV facilities, NBTel shall reimburse ImagicTV for all On-
Site Expenses.
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For Release 4.0 of the DTV Manager System, and subsequent releases,
ImagicTV will provide training services to NBTel's employees at
ImagicTV's then-current standard rates, subject to ImagicTV's terms
and conditions in effect at the time and subject to availability of
the appropriate ImagicTV personnel. For any training services to be
provided by ImagicTV at any location other than ImagicTV facilities,
NBTel shall reimburse ImagicTV for all On-Site Expenses.
4.4 Consulting Services
ImagicTV will provide consulting services to NBTel's employees at
ImagicTV's then-current standard rates, subject to ImagicTV's terms
and conditions in effect when ordered by NBTel and subject to
availability of the appropriate ImagicTV personnel. For any
consulting services to be provided by ImagicTV at any location other
than ImagicTV facilities, NBTel shall reimburse ImagicTV for all On-
Site Expenses
5. FEES AND PAYMENTS
5.1 Generally
In consideration of the rights granted by ImagicTV to NBTel under this
Agreement, NBTel shall pay to ImagicTV the non-cancelable, non-
refundable fees, as set forth in Schedule "D" hereto.
NBTel shall not be relieved of its obligation to pay fees owed to
ImagicTV by the nonpayment of any fees by Subscribers. The parties
acknowledge and agree that NBTel is free to determine unilaterally its
own fees to its Subscribers.
For the avoidance of doubt, all license and related fees for the Data-
base Software are paid for by NBTel directly to the third party Data-
base Software licensor and are not included in the DTV Manager fees
set out in Schedule "D" of this Agreement.
5.2 General Payment Terms
Except as otherwise provided herein, all fees, royalties and any
applicable taxes shall be due and payable within thirty (30) days from
the invoice date. Fees and royalties owing by NBTel shall not be
subject to set off for any claims against ImagicTV. Except as
otherwise specifically provided in this Agreement, all payments shall
be made by cheque in Canadian currency payable to ImagicTV Inc. Any
amounts payable by NBTel hereunder
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which remains unpaid after the due date shall be subject to a late
charge equal to the lower of (i) 1.25% or (ii) the maximum rate
allowed by law, per month from the due date until such amount is paid.
All invoices shall be sent to NBTel at the address stated above.
5.3 Taxes
The fees and charges levied by ImagicTV to NBTel are net of any taxes.
If ImagicTV is at any time required to charge any sales, use, value
added or other taxes (other than income taxes) based on the fees or
charges levied hereunder, such taxes shall be billed to and paid by
NBTel.
6. RECORDS
6.1 Remote Access
NBTel shall provide to ImagicTV remote access by modem to its NBTel
Activation File for the purpose of allowing ImagicTV access to NBTel's
Subscriber data and to allow ImagicTV to determine the number of Total
Active Subscribers for the purpose of preparing the Quarterly
Subscriber Report as defined herein.
6.2 Reports
ImagicTV shall send to NBTel a quarterly report detailing (a) the
number of new Subscribers; (b) the number of Total Active Subscribers;
and (c) the total fees due according to the types of fees set out in
Schedule "D" (the "Quarterly Subscriber Report").
At the time ImagicTV provides this report, it shall also provide its
invoice for that particular quarter and NBTel shall pay all fees due
under such Quarterly Subscriber Report in accordance with the payment
terms set out in Clause 5 herein.
6.3 Records Inspection
Each party shall maintain adequate books and records in connection
with activity under this Agreement. Such records shall include,
without limitation, information contained in and related to the
Quarterly Reports. Each party may audit the relevant books and
records of the other party. Any such audit shall be conducted during
regular business hours at the audited party's offices and shall not
interfere unreasonably with the audited party's normal business
activities.
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6.4 Notice of Claim
NBTel will notify ImagicTV promptly in writing of: (a) any claim or
proceeding involving the DTV Manager System that comes to its
attention; and (b) any material change in the management or control of
NBTel such as bankruptcy, acquisition, merger, or sale of all or
substantially all of NBTel's assets.
7. TERM AND TERMINATION
7.1 Term
This Agreement shall commence on the Effective Date and shall continue
until terminated pursuant to clause 7.2 herein.
7.2 Termination
(a) Without prejudice to any right or remedy either party may have
against the other for breach or non-performance of the Agreement
either party shall have the right to summarily terminate this
Agreement, by notice in writing to the other party, if the other
has committed a material breach of this Agreement providing (if
the breach is incapable of remedy), that the party in breach has
been advised in writing of the breach and has not rectified the
breach in within twenty eight (28) days of receipt of such
advice.
(b) Each party may summarily terminate this Agreement by notice in
writing to the other if it becomes insolvent, or admits in
writing its insolvency or inability to pay its debts, or makes an
assignment for the benefit of its creditors, or makes an
arrangement or composition with its creditors, or goes or is put
into liquidation, or is wound up, or if a receiver is appointed
over any part of that party's property.
(c) ImagicTV may summarily terminate this Agreement, by providing 60
days written notice to NBTel, should NBTel fail to make any
payment required by this Agreement on (or before) its due date.
7.3 Effect of Termination
The termination of this Agreement shall not limit either party from
pursuing any other remedies available to it, including injunctive
relief, nor shall such termination relieve NBTel's obligation to pay
all fees that are owed by NBTel up and including the effective date of
termination of this Agreement.
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For the avoidance of doubt, all rights to use the DTV Manager System
will cease on termination and ImagicTV will have the right to
deactivate the DTV Manager System.
7.4 Survival
The parties' rights and obligations under Section 2.6 ("Limitations on
Use"), and Section 5 ("Fees and Payments") with respect to any fees
that are owed by NBTel as of the date of termination or expiration of
this Agreement, 6 ("Records"), 7 ("Term and Termination"), 8
("Intellectual Property Rights"), 9 ("Indemnification and
Warranties"), and 10 ("General Terms") shall survive termination of
this Agreement.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 General
ImagicTV retains all ownership and Intellectual Property Rights to the
DTV Manager System, Betas, the ImagicTV Technical Support policies and
documents, the ImagicTV business model, and all other ImagicTV-labeled
marketing and technical collateral related to the ImagicTV products
and services. NBTel retains all ownership and rights to its software
and its independently developed intellectual property. NBTel also
retains all ownership and rights to NBTel's Logos, and all other NBTel
labeled marketing and technical collateral.
NBTel shall have no ownership interest in and, other than the license
specified in this Agreement, shall acquire no rights in the DTV
Manager System or the Betas and NBTel shall hold these items in trust
for ImagicTV
8.2 Copyrights
The DTV Manager System and Betas are copyrighted by ImagicTV. NBTel
shall be required to (i) retain all ImagicTV copyright notices on the
DTV Manager System and Betas used by NBTel under the licenses granted
hereunder, and (ii) comply with all third party licensor restrictions,
a current list of which is set forth on Schedule "E" hereto. NBTel
shall be required to include a reproduction of ImagicTV's copyright
notice on all copies of the DTV Manager System and Betas deployed by
NBTel in whatever form.
Notwithstanding any copyright notice by NBTel to the contrary, the
copyright to the DTV Manager System and Betas shall remain in
ImagicTV.
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8.3 Logos
Each party may mutually agree to use each other's logos in its
marketing and promotional materials with prior written consent and
under terms and conditions as agreed in each instance.
9. INDEMNFICATION AND WARRANTIES
9.1 ImagicTV Indemnification
ImagicTV will defend and indemnify NBTel against a claim that the DTV
Manager System infringes a U.S. or Canadian copyright, provided that:
(a) NBTel notifies ImagicTV in writing within thirty (30) days of the
claim; (b) ImagicTV has sole control of the defense and all related
settlement negotiations; and (c) NBTel provides ImagicTV with the
assistance, information and authority necessary to perform ImagicTV's
obligations under this Section. Reasonable out-of-pocket expenses
incurred by NBTel in providing such assistance will be reimbursed by
ImagicTV.
ImagicTV shall have no liability for any claim of infringement based
on (i) use of a superseded or altered release of the DTV Manager
System if the infringement would have been avoided by the use of a
current unaltered release of the DTV Manager System which ImagicTV
provides to NBTel; (ii) the DTV Manager System in combination with
software, hardware or other materials other than those provided for
according to this Agreement, if such infringement would have been
avoided by the use of the DTV Manager System without such software,
hardware or other materials; or (iii) related to the Betas in any way.
In the event that the DTV Manager System is held or is believed by
ImagicTV to infringe, ImagicTV shall have the option, at its expense,
to (i) modify the DTV Manager System to be noninfringing; or (ii)
obtain for NBTel a license to continue using the DTV Manager System.
This Section states ImagicTV's entire liability and NBTel's exclusive
remedy for infringement.
9.2 NBTel Indemnification
NBTel will defend and indemnify ImagicTV against (a) all claims and
damages to ImagicTV arising from any use by NBTel, and/or Subscribers
of any product or service not provided by ImagicTV but used in
combination with the DTV Manager System if such claim would have been
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avoided by the exclusive use of the DTV Manager System; and (b) all
claims and damages to ImagicTV caused by a Subscriber's breach of any
of the applicable provisions of the Minimum Terms and Conditions set
out in Schedule "B"; provided that (i) ImagicTV notifies NBTel in
writing within thirty (30) days of the claim; (ii) NBTel has sole
control of the defense and all related settlement negotiations; and
(iii) ImagicTV provides NBTel with the assistance, information and
authority necessary to perform NBTel's obligations under this Section.
Reasonable out-of-pocket expenses incurred by ImagicTV in providing
such assistance will be reimbursed by NBTel.
9.3 Warranties and Disclaimers
A. DTV Manager System
ImagicTV warrants for a period of ninety (90) days from the
installation date of the DTV Manager System on NBTel's server,
that the unmodified DTV Manager System will perform the functions
substantially as described in the Product Description when
operated as described therein.
B. Media Warranty
ImagicTV warrants the tapes, diskettes or other media to be free
of defects in materials and workmanship under normal use for
ninety (90) days from the Effective Date.
C. Disclaimers
THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE.
IMAGICTV DOES NOT WARRANT THAT THE DTV MANAGER SYSTEM WILL
OPERATE IN COMBINATIONS OTHER THAN AS SPECIFIED IN THE PRODUCT
DESCRIPTION OR THAT THE OPERATION OF THE DTV MANAGER SYSTEM WILL
BE UNINTERRUPTED OR ERROR-FREE. THE BETAS ARE PROVIDED "AS IS."
NBTel shall not make any warranty on ImagicTV's behalf.
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9.4 Exclusive Remedies
For any breach of the warranties contained in Section 9.3 ("Warranties
and Disclaimers"), NBTel's exclusive remedy, and ImagicTV's entire
liability, shall be:
1. For the DTV Manager System
Correction of Program Errors that cause breach of the warranty.
2. For Media
The replacement of defective media returned within ninety (90)
days of the Effective Date.
9.5 Limitation Of Liability
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA OR
USE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION
IN CONTRACT OR TORT, EVEN IF THE OTHER PARTY OR ANY OTHER PERSON HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IMAGICTV'S
CUMULATIVE LIABILITY FOR DAMAGES HEREUNDER SHALL IN NO EVENT EXCEED
THE AMOUNT OF THE LICENSE FEE AS DEFINED HEREIN.
The provisions of this Agreement allocate the risks between ImagicTV
and NBTel. ImagicTV's pricing reflects this allocation and the
limitation of liability specified herein.
9.6 Milennium Compliance Warranty
ImagicTV warrants that the DTV Manager System, and all Major Releases
and Maintenance Releases, will meet the "Year 2000 Conformity"
standards as set out in the document published with reference number
DISC PD2000-1 by the part of the British Standards Institution called
DISC entitled "A Definition of Year 2000 Conformity Requirements"
including the Amplification of the Definition and Rules set out in the
same document as attached hereto as Schedule "G".
10. GENERAL TERMS
10.1 Nondisclosure
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The parties agree that all disclosures of Confidential Information
shall be governed by the terms of the Mutual Non-Disclosure Agreement
executed by the parties on April 11th, 1998 and attached hereto as
Schedule "F", modified only to the extent necessary to be in
accordance with the terms of this Agreement.
10.2 Relationship between Parties
The legal relationship between ImagicTV and NBTel is that of
licensor/licensee. Neither party will represent that it has any
authority to assume or create any obligation, express or implied, on
behalf of the other, nor to represent the other as agent, employee,
franchisee, or in any other capacity.
10.3 Assignment
Neither party shall have the right to assign its rights under this
Agreement, whether expressly or by operation of law, without the
written consent of the other party. This Agreement and the
obligations hereunder shall be binding on any successors and
permitted assigns.
10.4 Force Majeure
Neither party shall be liable to the other for failure or delay in
the performance of a required obligation, other than payment of
money, if such failure or delay is caused by strike, riot, fire,
flood, natural disaster, or other similar cause beyond such party's
control, provided that such party gives prompt written notice of such
condition and resumes its performance as soon as possible, and
provided further that the other party may terminate this Agreement if
such condition continues for a period of 180 days.
10.5 Notice
All notices, including notices of address change, required to be sent
hereunder shall be in writing and shall be deemed to have been given
when deposited in first class mail to the address of the applicable
party listed above. To expedite order processing, NBTel agrees that
ImagicTV may treat documents faxed by NBTel to ImagicTV as original
documents; nevertheless, either party may require the other to
exchange original signed documents.
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10.6 Severability, Waiver
In the event any provision of this Agreement is held to be invalid or
unenforceable, the remaining provisions of this Agreement will remain
in full force and effect. The waiver by either party of any default
or breach of this Agreement shall not constitute a waiver of any
other or subsequent default or breach.
10.7 Export
NBTel agrees to comply fully with all relevant export laws and
regulations of the Province of New Brunswick and any other applicable
jurisdiction, as promulgated from time to time ("Export Laws") to
assure that neither the DTV Manager System, nor any direct product
thereof, are (a) exported, directly or indirectly, in violation of
Export Laws; or (b) are intended to be used for any purposes
prohibited by the Export Laws, including, without limitation,
nuclear, chemical, or biological weapons proliferation.
10.8 Territory
NBTel may not expand the Territory without the written consent of
ImagicTV.
10.9 Governing Law
This Agreement, and all matters arising out of or relating to this
Agreement, shall be governed by the substantive and procedural laws
of the Province of New Brunswick without regard to the conflicts of
laws provisions thereof and shall be deemed to be executed in Saint
John, New Brunswick. The parties agree that any legal action or
proceeding relating to this Agreement shall be instituted in the
Court of Queen's Bench in the City of Saint John, County of Saint
John, Province of New Brunswick. ImagicTV and NBTel agree to submit
to the jurisdiction of, and agree that venue is proper in, these
courts in any such legal action or proceeding.
10.10 Escalation/Arbitration
In the event a dispute arises between the parties which cannot,
through good faith efforts be resolved, the parties agree to submit
such dispute to binding arbitration. All aspects of the arbitration
shall be treated as confidential. Neither the parties nor the
arbitrator may disclose the existence, content or results of the
arbitration, except as necessary to comply with legal or regulatory
requirements. Before making any such disclosure, a party shall
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give written notice to the other party and shall afford such other
party a reasonable opportunity to protect its interests. Nothing
herein shall limit either party from seeking injunctive relief or
other equitable remedy from any competent court at any time.
10.11 Entire Agreement
This Agreement constitutes the complete agreement between the parties
and supersedes all prior or contemporaneous agreements or
representations, written or oral, concerning the subject matter of
this Agreement. This Agreement may not be modified or amended except
in a writing signed by an authorized representative of each party; no
other act, document, usage or custom shall be deemed to amend or
modify this Agreement.
The Schedules attached hereto form part of this Agreement. To the
extent that there are any conflicts, the specific terms of the
Schedules shall supercede the general terms of this Agreement.
DATED this ____ day of ____________, 1999.
"NBTel" ) "ImagicTV"
)
NBTel Inc. ) ImagicTV Inc.
)
By:___________________________ ) By:___________________________
)
Name:_________________________ ) Name:_________________________
)
Title:________________________ ) Title:________________________
17
Schedule A
----------
(Release 1.0)
Product Description Addendum
All terms in the Agreement are applicable and any capitalized terms
that are not defined herein have the same meaning as in the Agreement. The
acronyms and symbols used in this addendum and not defined in the Agreement are
defined as follows:
1. Definitions
1.1 "EPG" shall mean the interactive Electronic Program Guide developed
by ImagicTV and accessed by the Subscriber through the Set Top Box
which contains days of channel line up information.
1.2 "MPEG" shall mean the Moving Pictures Expert Group 1 and/or Moving
Pictures Expert Group 2.
2. Services Supported by the DTV Manager System
The ImagicTV DTV Manager System software will offer the essential services
necessary to support MPEG IP multicast video services over NBTel's internet
protocol infrastructure. These services include processes that will run on
NBTel's servers and the Set Top Boxes. The client side services involve the
deployment of Set Top Boxes, which are MPEG capable, IP multicast ready and
directly connected to the network, and a basic EPG. The backend has the
capability to retrieve EPO data, as well as multicast data and software to
the Set Top Box. Administration features include the ability to register
Subscribers.
3. Subscriber Viewing and Client Features
3.1 EPG
The client features operating on the Set Top Box will allow the
Subscriber to use the EPG, which contains up to seven (7) days worth
of channel line-up information presented in a grid format. The EPG is
refreshed automatically when new program data is created on the
server. The EPG is automatically redrawn on the half-hour.
The DTV Manager System Software enables automated import of EPG data.
It is the responsibility of NBTel to acquire such EPG data and
deliver this data to the DTV Manager System in the format specified
by ImagicTV.
18
3.2 Channel Changing
The Subscriber will be able to change channels by "scrolling" through
the channel lineup using the (Channel Up) and (Channel Down) or by
directly inputting the channel number on the remote control. The
Subscriber may also access channels from the EPG. The Set Top Box
tunes into the channels by joining and leaving IP multicast
addresses. Channel content may include television broadcast video,
audio or Internet "web" content.
3.3 Program Information Overlays
An information overlay will appear briefly when changing channels.
This information contains the program description for the channel
currently selected as contained in the EPG data. The DTV Manager
System enables presentation in two different formats; brief and
detailed. Pressing the <Info> key on the remote control accesses the
detailed program information overlay.
3.4 Integrated Access to Multimedia Content
The DTV Manager System Software brings together a variety of media
types in a seamless fashion allowing Subscribers to effortlessly move
between television broadcast video, audio and Internet "web" content.
3.5 Updating Data and Software on the Set Top Box
Set Top Box core software and EPG related data is automatically
updated from the server during the power up process or when the Set
Top Box detects changes to the software and data.
4. Powers Up Premises Equipment
When a new Set Top Box is connected to the DTV Manager System and turned on
for the first time, the Set Top Box automatically registers itself with the
DTV Manager System server. If the Subscriber's account information has
already been established through "Registers Subscriber" feature, the Set
Top Box will receive the necessary software and data to allow it to begin
viewing the appropriate TV audio and video channels.
5. Registers Subscriber
The DTV Manager System provides basic Subscriber provisioning of accounts,
subscribers, and activated Set Top Boxes. This feature would normally be
used by
19
NBTel's service administrators and must be used to enable the "Powers Up
Premises Equipment" feature to operate.
6. Operations Features
6.1 Create Application Events
Certain system events and Subscriber activities on the Set Top Box
will be captured and forwarded to NBTel's server. On the server,
similar administrative user and system events will be captured,
stored and available for manual retrieval and analysis by NBTel.
6.2 Internet Web Access
The Subscriber has the ability to "surf" the World Wide Web through
the Set Top Box (via the Set Top Box browser) and its remote control,
or with a keyboard selected by NBTel, if this option is provided by
NBTel and incorporated as part of the Designated System.
6.3 Web Email Access
The Subscriber has the ability to send and receive electronic mail
(email) through the Set Top Box using a Web-based email product if
NBTel licenses a web-based e-mail product from any third party and
includes it as part of the Designated System.
20
Schedule "B"
-----------
Minimum Terms and Conditions for Sublicense Agreement
In addition to the terms and conditions set forth in the Agreement, NBTel shall
include with the supply of each Set Top Box to a Subscriber a sublicense
agreement, which contains, at a minimum, contractual provisions that:
1) Prohibit title to the DTV Manager System from passing to the Subscriber or
any other party;
2) Disclaim, to the extent permitted by applicable law, any liability of
ImagicTV, or its licensors for any damages, whether direct, indirect,
incidental or consequential, arising from the use of the DTV Manager
System;
3) Prohibit the reverse engineering, disassembly or decompilation of the DTV
Manager System, by either the Subscriber or any other party;
4) Specify ImagicTV as a third party beneficiary of each Sublicense Agreement
to the extent that its interest applies.
21
Schedule "C"
-----------
TECHNICAL SUPPORT SERVICES
DTV MANAGER SYSTEM
The following sets out the terms under which ImagicTV will provide
Technical Support services to NBTel. Any capitalized terms that are not defined
herein have the same meaning as in the Agreement and, for the avoidance of
doubt, all terms in the Agreement are applicable and to the extent that there is
any conflict, the terms of this schedule shall supercede any terms of the
Agreement.
1. Technical Liaisons
NBTel shall designate five of its employees and a sixth alternate employee,
to act as the primary technical liaisons responsible for all communications
with ImagicTV's Technical Support representatives ("Technical Liasons").
Technical Liasons will have suflicient technical expertise, training and/or
experience (as from time to time defined by ImagicTV and acquired at
NBTel's expense) to diagnose and resolve system software malfunctions with
direction by ImagicTV.
Within one week from the Effective Date, NBTel will provide ImagicTV with
written notification of the identity of the Technical Liasons and their
address for notice, including fax, direct telephone line, and e-mail.
2. Remote Access
NBTel shall grant to ImagicTV remote dial-in access to NBTel's systems
("Remote Access"). NBTel will make all reasonable efforts to facilitate
Remote Access and shall provide an appropriate gateway for ImagicTV to gain
Remote Access. All outbound telecommunications charges related to the
outbound services which are incurred by either ImagicTV or NBTel shall be
the responsibility of NBTel.
In the event that NBTel does not grant Remote Access to ImagicTV, or does
not facilitate Remote Access, and, as a consequence, ImagicTV is required
to effect on-site inspections and maintenance of NBTel's systems,
additional fees will be payable, as set out in Schedule "D" of this
Agreement.
3. On-Site Access
The Customer must provide ImagicTV support personnel with reasonable and
safe access to NBTel's systems; adequate working space and facilities at
the
22
installation site necessary to service systems; and cooperating and
facilitating support services.
4. NBTel Responsibilities
4.1 NBTel shall use the DTV Manager System in accordance with the terms
of the Agreement;
4.2 NBTel is responsible for ensuring that only properly trained
employees operate or use the DTV Manager System in accordance with
the terms of this Agreement;
4.3 NBTel shall maintain a site activity log which shall be made readily
accessable to ImagicTV support personnel who are undertaking on-site
support;
NBTel is solely responsible for carrying out all necessary back-up
procedures for its own benefit to ensure that data integrity can be
maintained in the event of loss of data for any reason and ImagicTV
shall not be liable under any circumstances for any losses arising
from lost or corrupted data, files or programs;
4.5 NBTel is responsible for controlling the environmental conditions of
the Designated System and site in accordance with any environmental
operating ranges specified by ImagicTV or other manufacturer;
4.6 NBTel is responsible for regularly performing the various routine and
preventative maintenance operations described in any applicable user
guides or as advised by ImagicTV.
4.7 NBTel shall be responsible to operate on the current or most recent
previous release of the DTV Manager System.
5. Technical Support
NBTel will receive the following support services from ImagicTV:
5.1 7 x 24 Telephone and e-mail Assistance:
Unlimited telephone (toll-free if available) and e-mail assistance
for the DTV Manager System is available 24 hours per day, 7 days per
week, including holidays.
23
5.2 SITE ACTIVITY LOG: On-site service performed will be recorded in a
site activity log.
5.3 REMOTE DIAL-IN ACCESS: Remote examination and diagnosis of systems
through NBTel provided gateway.
5.4 PATCHES AND MAINTENANCE RELEASES: Unless otherwise specified by
ImagicTV, NBTel will receive Object Code Patches and Maintenance
Releases for the DTV Manager System.
6. Classification
NBTel will classify Program Errors according to the following fault
diagnosis guidelines:
- --------------------------------------------------------------------------------
Priority Program Error Description Initial Response Time (by
Remote Access)
- --------------------------------------------------------------------------------
Critical Production system is down and NBTel is Thirty minutes
unable to do production work.
- --------------------------------------------------------------------------------
Major A major function and/or component is Two hours
either unusable or degraded. No work
around is available but NBTel is able
to do some production work.
- --------------------------------------------------------------------------------
Minor A minor function and/or component is Within 1 Week
either unusable or degraded and a work
around is available.
- --------------------------------------------------------------------------------
Enhancement Enhancement requests for new Ongoing
Request functionality and features
- --------------------------------------------------------------------------------
7. Notice of Fault Diagnosis
Prior to requesting support from ImagicTV, NBTel must comply with all
published operating and troubleshooting procedures for the DTV Manager
System.
The Technical Liaison will identify and classify Program Errors and provide
ImagicTV with notice of the Program Error identity and classification
(electronically or otherwise). ImagicTV will respond to the Notice in
accordance with the appropriate Response Time.
8. Rectification
24
Confirmation of fault classification and diagnosis, and rectification of
Program Errors will be carried out remotely from ImagicTV's site. If it is
necessary to carry out the support services at NBTel's site, NBTel shall be
fully responsible to pay all On-Site Expenses and all of these amounts
shall be payable to ImagicTV immediately upon receipt of an invoice for
same;
- --------------------------------------------------------------------------------
Priority Rectification Efforts & Relief Provided Permanent Fix
- --------------------------------------------------------------------------------
Critical ImagicTV will work continuously to Install an Immediate
generate a fix by providing either a Patch until the next
reasonable workaround, an object code available release.
patch, or, at minimum a specification
plan detailing how ImagicTV will address
the problem together with an estimate of
the length of time for rectification.
- --------------------------------------------------------------------------------
Major ImagicTV will use commercially reasonable Install an Immediate
efforts to provide either a reasonable Patch until the next
workaround, an object code patch, or, at available release.
minimum a specification plan detailing
how ImagicTV will address the problem
together with an estimate of the length
of time for rectification.
- --------------------------------------------------------------------------------
Minor ImagicTV will determine what action, it Next Object Code
proposes to take, based on, among other Patch or
things, the importance of the problem to Maintenance
NBTel, and the likely general benefit of Release
any solution.
- --------------------------------------------------------------------------------
Enhancement Ongoing discussions of the application Possible future release
Request for DTV Manager System.
- --------------------------------------------------------------------------------
9. Exclusions
ImagicTV is not obliged to support the DTV Manager System if Program Errors
are due to use of the DTV Manager System outside the scope of the Agreement
or for any reason external to the DTV Manager System including, but not
limited to, failure or fluctuation of electrical supplies, hardware
failures, accidents, or natural disasters.
ImagicTV is not obliged to support the DTV Manager System if NBTel is not
using the versions of the operating systems software as specified by
ImagicTV
25
from time to time, or if NBTel fails to maintain the DTV Manager System at
ImagicTV's current release, or the most recent previous release, unless
specifically agreed to in advance by ImagicTV.
Technical Support services do not include support in respect of defects or
errors resulting from any modifications or enhancements to the DTV Manager
System either not made by ImagicTV or made without ImagicTV's prior written
consent, or resulting from incorrect use of the DTV Manager System.
10. Additional Fees
ImagicTV reserves the right to charge NBTel additional fees at its then-
current standard rates for services performed in connection with reported
Program Errors which are later determined to have been due to a cause as
set out in the Exclusions clause above.
11. Disclaimer of Warranty and Limitation of Liability
ImagicTV will use its reasonable endeavours to provide Technical Support
services promptly within the guidelines set out above in Paragraphs 6, 7, 8
and 9, but no warranty is given in respect of any times for response or
rectification by ImagicTV and time will not be of the essence.
ImagicTV is not liable for any delay arising from any industrial dispute or
any cause outside its reasonable control and the Response Time will be
subject to reasonable extension in the event of such delay.
ImagicTV will not be responsible to assist NBTel in achieving any results
from the DTV Manager System which are not set out in the Product
Description, however, as such services are outside the scope of this
Agreement and will, at NBTel's request and at ImagicTV's option, be
provided at ImagicTV's then current rates for such services.
Provision of Technical Support services does not imply any guarantee that
ImagicTV will be successful in rectifying Program Errors and ImagicTV will
not be liable for any damages arising out of contract, or tort, including
direct, indirect, special and consequential damages.
12. Term
Technical Support Services will commence upon the Effective Date for a
period of twelve months and thereafter upon payment of the Maintenance Fees
as set out in Schedule "D".
26
13. Termination
ImagicTV reserves the right to terminate Technical Support at any time
without refunding any sums paid by NBTel:
a) If any attempt is made, other than by ImagicTV or without ImagicTV's
prior written consent, to enhance, develop, vary, rectify, program or
otherwise alter the DTV Manager System, or
b) If NBTel has failed to pay ImagicTV in accordance with the provisions
of this Agreement, or
c) Where, in the reasonable opinion of ImagicTV, NBTel's system does not
meet the minimum requirements of the Designated System, or
d) Where, the Designated System requires maintenance in order to
facilitate the proper functioning and performance of the DTV Manager
System.
27
Schedule "D"
-----------
Fees and Payments
1. License Fees
NBTel shall pay the Initial License Fee and the Subscriber-based License
Fee (the "License Fees") as follows:
A. Initial License Fee.
In consideration for the grant of License of the DTV Manager System,
NBTel shall pay to ImagicTV a non-refundable, non-cancelable fee in
the amount of $500,000 (the "Initial License Fee") upon execution of
this Agreement payable to ImagicTV as follows:
(a) 50% of the Initial License Fee due on the earlier of the
completion of the installation of Release 1.0 of the DTV Manager
System or March 31st, 1999; and
(b) 50% of the Initial License Fee due on the earlier of the
completion of the installation of Release 2.0 of the DTV Manager
System or December 31st, 1999.
B. Subscriber-based License Fees.
NBTel shall pay to ImagicTV subscription fees in accordance with the
schedule set out below ("Subscriber-based License Fees"). Subscriber-
based License Fees are a one time charge invoiced as part of the
Quarterly Subscriber Report and will commence the earlier of the date
on which NBTel charges its Subscribers for the NBTel service, or on
December 31st, 1999.
-------------------------------------------------------------------
Total Active Subscribers One-Time Fee Per Subscriber
-------------------------------------------------------------------
1-4000 $150.00
-------------------------------------------------------------------
4001-8000 $135.00
-------------------------------------------------------------------
8001-20,000 $120.00
-------------------------------------------------------------------
20,001-50,000 $105.00
-------------------------------------------------------------------
50,001 - 100,000 $ 90.00
-------------------------------------------------------------------
100,001+ $ 80.00
-------------------------------------------------------------------
2. Maintenance Fees
Payment of an annual Maintenance Fee due one year after the Effective Date
(and thereafter on an annual basis) representing 20% of the License Fees
will entitle
28
NBTel to receive Major Releases and Technical Support Services (which
includes Maintenance Releases and Object Code Patches).
3. Consulting Fees
Consulting Services can be provided by ImagicTV to NBTel at ImagicTV's
then-current fees in effect at the time.
4. Training Fees
Training Services can be provided by ImagicTV to NBTel at ImagicTV's then-
current fees in effect at the time.
29
Schedule "E"
-----------
Third Party License Restrictions
The following third party restrictions apply to the extent that the DTV Manager
System incorporates any of the third party software listed below. Any
capitalized terms that are not defined herein have the same definition as in the
Agreement:
Regarding Acorn Software - In the event that the DTV Manager System includes
software licensed from Acorn Computers Limited ("Acorn") (which software is
defined below as the "Software"), NBTel must comply with the following
restrictions and obligations:
1. NBTel's use of the Software is restricted to object code format and in
accordance with the terms of this Agreement;
2. NBTel shall not distribute any Software other than in object code format;
3. NBTel shall not, except as expressly permitted in this Agreement, have any
right to sublicense or transfer any of the rights or licences granted in
this Agreement;
4. NBTel shall use the Software only in a manner designed to avoid
jeopardizing or prejudicing Acorn's Intellectual Property Rights;
5. NBTel shall not reverse engineer, decompile and/or disassemble the
Software;
6. NBTel hereby disclaims Acorn's liability for any damages, whether direct,
indirect, incidental or consequential, arising from the use of the
Programs; and,
7. NBTel shall incorporate in every copy of the Software all relevant
copyrights, notices, marks and other proprietary legends of Acorn and its
licensors as they appear in the Software.
Regarding Distinct Software - In the event that the DTV Manager System includes
software licensed from Distinct Corporation ("Distinct") (which software is
defined below as the "Software"), NBTel must comply with the following
restrictions and obligations:
1. NBTel's use of the Software is restricted to object code format and in
accordance with the terms of this Agreement;
2. NBTel shall not copy the Software, except for backup purposes only;
3. NBTel shall not sublicense, sell or otherwise transfer the Software to any
third party;
4. The DTV Manager System remains the proprietary property of ImagicTV or its
suppliers and shall not be reverse engineered, dissembled or decompiled;
and,
5. NBTel shall comply with all United States export or technology transfer
restrictions at all times in connection with the Software.
30
Schedule "F"
-----------
MUTUAL NON-DISCLOSURE AGREEMENT
THIS AGREEMENT made as of the this day of , 1999
BETWEEN
ImagicTV Inc., a corporation incorporated under
the laws of Canada and having a place of business
in the City of Saint John, in the County of Saint
John, Province of New Brunswick, ("ImagicTV").
AND
NBTel Inc., a Canadian corporation with its
principal place of business at One
Brunswick Square, Saint John, New
Brunswick, Canada, (hereinafter "NBTel")
WHEREAS both ImagicTV and NBTel1 possesses certain confidential
proprietary information and intellectual property;
AND WHEREAS, ImagicTV and NBTel intend to participate in a program of
discussions, correspondence, and/or planning sessions in connection with the
pursuit, evaluation and/or feasibility of a business relationship, and/or
consummation of a transaction (the "Program") which may result in the mutual
exchange of certain confidential information and intellectual property as herein
defined;
AND WHEREAS, ImagicTV and NBTel have agreed to enter into this
agreement (the "Agreement") to prevent the unauthorized use and disclosure of
ImagicTV's confidential proprietary information and intellectual property;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants and conditions hereinafter contained, the parties hereto agree
as follows:
I. Confidential Information
For purposes of this Agreement, "Confidential Information" shall mean
the information, data, know-how, trade secrets, strategic and
development plans, business plans, co-developer identities, data,
business records,
31
customer lists, any and all versions of software and related
documentation, and all other information and documentation which is
related to ImagicTV's DTV Manager System and NBTel's systems and
operations which may be disclosed between each party or to which
either party may be provided access by the other party or others in
accordance with this Agreement, or which is generated as a result of
or in connection with the Program, which is not generally available to
the public.
II. Exceptions
"Confidential Information" will not include information which the
receiving party can establish (a) was, on the date of this Agreement,
generally known to the public; or (b) became generally known to the
public after the date of this Agreement other than as a result of the
act or omission of the receiving party; or (c) was rightfully known to
the receiving party prior to that party's leaming or receiving the
same from the other party; or (d) is or was disclosed by the
disclosing party to third parties generally without restrictions; or
(e) the receiving party lawfully received from a third party without
the third party's breach of agreement or obligation of trust; or (f)
was independently developed by the receiving party; or (g) was
disclosed pursuant to the order of a court or other government body,
or as required by law.
III. Intellectual Property
For the purposes of this Agreement, "Intellectual Property" shall mean
any and all intellectual property to which the disclosing party has
proprietary rights and may include "Confidential Information" which is
related to ImagicTV's DTV Manager System and NBTel's operations and
systems, which may be disclosed between each party or to which either
party may be provided access by the other party or others in
accordance with this Agreement, or which is generated as a result of
or in connection with the Program.
IV. Nondisclosure Obligations
Each party considers all of its Confidential Information and
Intellectual Property to be propriety. All of the disclosing party's
Confidential Information and Intellectual Property shall at all times,
and throughout the world, remain the property of the disclosing party
exclusively, and all applicable rights in patents, copyrights and
trade secrets shall remain in the disclosing party exclusively. The
receiving party promises and agrees to
32
receive and hold the Confidential Information and Intellectual
Property in confidence.
Without limiting the generality of the foregoing, the receiving party
further promises and agrees: (a) to protect and safeguard the
Confidential Information and Intellectual Property against
unauthorized use, publication or disclosure; (b) not to use any of the
Confidential Information and Intellectual Property except for the
Program; (c) not to, directly or indirectly, in any way, reveal,
report, publish, disclose, transfer or otherwise use any of the
Confidential Information and Intellectual Property except as
specifically authorized by disclosing party in accordance with this
Agreement. (d) not to use any Confidential Information and
Intellectual Property to compete or obtain advantage vis a vis
disclosing party in any commercial activity contemplated by the
parties in connection with the Program; (e) to restrict access to the
Confidential Information and Intellectual Property to those of its
officers, directors, and employees who clearly need such access to
carry out the Program; (f) to advise each of the persons to whom it
provides access to any of the Confidential Information and
Intellectual Property, that such persons are strictly prohibited from
making any use, publishing or otherwise disclosing to others, or
permitting others to use for their benefit or to the detriment of
disclosing party, any of the Confidential Information and Intellectual
Property, and, upon request of disclosing party, to provide disclosing
party with a copy of a written agreement to that effect signed by such
persons; and (g) to comply with any reasonable security measures
requested in writing by disclosing party.
V. No Right to Confidential Information and Intellectual Property
Each party hereby agrees and acknowledges that no license, either
express or implied, is hereby granted with respect to any of the
Confidential Information and Intellectual Property. Each party
further agrees that all inventions, improvements, copyrightable works
and designs relating to machines, methods, compositions, or products
of disclosing party directly resulting from or relating to the
Confidential Information and Intellectual Property and the right to
market, use, license and franchise the Confidential Information and
Intellectual Property or the ideas, concepts, methods or practices
embodied therein shall be the exclusive property of the disclosing
party, and the receiving party has no right or title thereto.
VI. No Solicitation of Employees
33
Each party agrees that it will not, for a period of three (3) years
from the date of this Agreement, initiate contact with the other
party's employees in order to solicit, entice or induce any such
employee to terminate their employment effective during the term of
this Agreement for the purpose of accepting employment with the other
party.
VII. Enforcement
Each party acknowledges and agrees that damages may not be an
adequate remedy to compensate the other party for any breach of the
obligations contained in this Agreement and, accordingly, agrees,
that in addition to any other remedies available, the disclosing
party shall be entitled to obtain relief by way of temporary or
permanent injunction to enforce the obligations contained in this
Agreement.
VIII. Indemnity
Each party agrees to indemnify and save harmless the other party
against any and all losses, damages, claims, or expenses incurred or
suffered as a result of the other party's breach of this Agreement.
IX. Term and Termination.
This Agreement shall commence on the date first written above and
shall automatically terminate three (3) years thereafter; however,
either party may terminate this Agreement at any time prior thereto
upon thirty (30) days prior written notice to the other party. Each
party's obligations with respect to each item of the Confidential
Information and Intellectual Property which it learns or receives
from the other prior to the date of termination of the Agreement
shall terminate three (3) years after the date of disclosure of such
time of Confidential Information and Intellectual Property.
Immediately after termination of this Agreement, each party shall
return to the other party all of the other party's Confidential
Information and Intellectual Property which was disclosed in, or is
then represented in, tangible form.
X. Severability
Each clause in this Agreement is severable from the others and should
any of the clauses be unenforceable, then the remainder of the
Agreement shall continue in full force and effect notwithstanding the
unenforceability of any clause. If any part of this Agreement shall
be declared invalid or
34
unenforceable by a court of competent jurisdiction, it shall not
affect the validity of the balance of this Agreement.
XI. Successors and Assigns.
Neither party shall have the right to assign its rights under this
Agreement, whether expressly or by operation of law, without the
written consent of the other party. This Agreement and the
obligations hereunder shall be binding on any successors and
permitted assigns.
XII. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Province of New Brunswick.
XIII. Entire Agreement
The terms and conditions herein constitute the entire agreement and
understanding of the parties and shall supersede all communications,
negotiations, arrangements and agreements, either oral or written,
with respect to the subject matter hereof. No amendments to or
modifications of this Agreement shall be effective unless reduced to
writing and executed by the Parties hereto. The failure of either
party to enforce any term hereof shall not be deemed a waiver of any
rights contained herein.
IN WITNESS WHEREOF the parties hereto have executed these presents as
of the day and year first hereinbefore written.
SIGNED, SEALED and DELIVERED )
in the presence of ) ImagicTV Inc.
)
) per_______________________
)
) NBTel Inc.
)
) per_______________________
)
35
Schedule "G"
------------
A DEFINITION OF YEAR 2000 CONFORMITY
REQUIREMENTS
Preamble to the Summer 1998 amendment
BSI DISC originally published PD2000-1 in January 1997 and it has been widely
adopted. A review of the document was conducted by the responsible committee
(BDD/1/3) in the spring of 1998 taking into account comments received. The
committee considered that amendments to the fundamental conformity requirements
were neither necessary nor desirable. The Definition and the four Rules are
unchanged but, to add value to the document and aid its interpretation, the
Amplification sections have been amended. This document, PD2000-1:1998, replaces
the previous version of PD2000-1 but does not change its requirements. An
additional document PD2000-4, entitled "PD2000-1 in Action" will provide further
information on PD2000-1:1998 together with information on its use.
Paragraph numbers have been enhanced in the Amplification section to aid
referencing and substantial revisions to the document are indicated by side
lines against the changed text.
Introduction
This document addresses what is commonly known as Year 2000 conformity (also
sometimes known as century or millennium compliance). It provides a definition
of this expression and requirements that must be satisfied in equipment and
products which use dates and times.
It has been prepared by British Standards Institution committee BDD/l/3 in
response to demand from UK industry, commerce and the public sector. It is the
result of work from the following bodies whose contributions are gratefully
acknowledged: BT, Cap Gemini, CCTA, PricewaterhouseCoopers, Halberstam Elias,
ICL, National Health Service, National Westminster Bank. Additionally, BSI DISC
acknowledges the support of the Electronics and Information Industries Forum
(EIIF), Action 2000, Taskforce 2000 and Digital Equipment as well as the
original bodies for their participation in the review of this document.
BSI DISC would also like to thank the following organizations for their support
and encouragement in the development of this definition: Barclays Bank, British
Airways, Cambridgeshire County Council, Computer Software Services Association,
Department of Health, Ernst & Young, Federation of Small Businesses, IBM, ICI,
National Power, Paymaster Agency, Prudential Assurance, Reuters, Tesco Stores.
While every care has been taken in developing this document, the contributing
organizations accept no liability for any loss or damage caused, arising
directly or indirectly, in connection with reliance on its contents except to
the extent that such
36
liability may not be excluded at law. Independent legal advice should be sought
by any person or organization intending to enter into a contractual commitment
relating to Year 2000 conformity requirements.
This entire document or the Definition section (including the four Rules) may be
freely copied provided that the text is reproduced in full, the source
acknowledged and the reference number of this document is quoted. It is
recommended that the Amplification section be included. References to "PD2000-
1:1998" shall be interpreted as meaning the entire document.
THE DEFINITION
Year 2000 conformity shall mean that neither performance nor functionality is
affected by dates prior to, during and after the year 2000.
In particular:
Rule 1 No value for current date will cause any interruption in operation.
Rule 2 Date-based functionality must behave consistently for dates prior to,
during and after year 2000.
Rule 3 In all interfaces and data storage, the century in any date must be
specified either explicitly or by unambiguous algorithms or inferencing
rules.
Rule 4 Year 2000 must be recognized as a leap year.
37
AMPLIFICATION OF THE DEFINITION AND RULES
1. General Explanation
1.1 Problems can arise from some means of representing dates in computer
equipment and products and from date-logic embedded in purchased goods or
services, as the year 2000 approaches and during and after that year. As a
result, equipment or products, including embedded control logic, may fail
completely, malfunction or cause data to be corrupted.
1.2 To avoid such problems, organizations must check, and modify if
necessary, internally produced equipment and products and similarly check
externally supplied equipment and products with their suppliers. The purpose of
this document is to allow such checks to be made on a basis of common
understanding.
1.3 Where checks are made with external suppliers, care should be taken to
distinguish between claims of conformity and the ability to demonstrate
conformity.
2 Amplification of the definition
2.1 PD2000- 1 (all editions) is solely concerned with the performance and
functionality of a single version, release or system. It does not address
differences in performance or functionality between different versions, releases
or systems.
4.3 Variations in performance immeasurably small in the context of use do not
make a version, release or system non-conformant.
3 Amplification of the Rules
3.1 Rule 1
3.1.1 This rule is sometimes known as general integrity.
3.1.2 If this requirement is satisfied, roll-over between all significant time
demarcations (e.g. days, months, years, centuries) will be performed correctly.
3.1.3 Current date means today's date as known to the equipment or product,
i.e. the actual date of operation.
[NOTE - this refers to normal operation and does not prevent testing.]
3.2 Rule 2
3.2.1 This rule is sometimes known as date integrity.
3.2.2 This rule means that all equipment and products must calculate,
manipulate and represent dates correctly for the purposes for which they were
intended.
3.2.3 The meaning of functionality includes both processes and the results of
those processes.
3.2.4 If desired, a reference point for date values and calculations may be
added by organizations; e.g. as defined by the Gregorian calendar.
3.2.5 No equipment or product shall use particular date values for special
meanings; e.g. "99" to signify "no end value" or "end of file" or "00" to mean
"not applicable" or "beginning of file" unless the values in question lie
outside its possible date range.
38
3.3 Rule 3
3.3.1 This rule is sometimes known as explicit/implicit century.
3.3.2 It covers two general approaches:
(a) explicit representation of the year in dates: e.g. by using four
digits or by including a century indicator. In this case, a reference may be
inserted (e.g. 4-digit years as allowed by ISO 8601:1988) and it may be
necessary to allow for exceptions where domain-specific standards (e.g.
standards relating to Electronic Data Interchange, Automatic Teller Machines or
Bankers Automated Clearing Services) should have precedence.
(b) the use of inferencing rules: e.g. two-digit years with a value
greater than 50 imply l9xx, those with a value equal to or less than 50 imply
20xx. Rules for century inferencing as a whole must apply to all contexts in
which the date is used, although different inferencing rules may apply to
different date sets. Where any date element is represented without a century,
the correct century shall be unambiguous for all manipulations involving that
element.
3.4 Rule 4
3.4.1 A leap year is defined in ISO 8601:1988 (amended in 1991) as follows:
"year, leap: In the Gregorian calendar, a year which has 366 days. A leap year
is a year whose number is divisible by four an integral number of times, except
that if it is a centennial year it shall be divisible by four hundred an
integral number of times."
3.4.2 Thus, for example, 2000 is a leap year but 1900 is not.
4 General Notes
4.1 For Rules 1 and 2 in particular, it is recommended that the allowable
ranges for values of current date and dates to be manipulated be documented,
recognizing that all systems have some limitation on the valid date ranges. The
ranges may relate to one or more of the feasible life-spans of equipment or
products or the span of dates required to be represented by the organization's
business processes.
4.2 Tests for specifically critical dates may also be added (e.g. for leap
years, end of year, etc.). Organizations may wish to append additional material
in support of local requirements.
4.3 Where the term "century" is used, clear distinction should be made between
the "value" denoting the century (e.g. 20th) and its representation in
dates (e.g. l9xx); similarly, 21st and 20xx.
39
NOVATION AND AMENDMENT
TO
LICENSING AGREEMENT
AND
SET TOP BOX SUPPLY AND SOFTWARE LICENSING AGREEMENT
This Novation and Amendment to a Licensing Agreement and Set Top Box Supply
and Software Licensing Agreement (the "Novation") is entered into between
ImagicTV Inc. (hereinafter "ImagicTV"), a
Canadian corporation with its principal place of
business at One Brunswick Square, Suite 1400,
Saint John, New Brunswick, Canada
- and -
NBTel Inc. (hereinafter "NBTel"), a Canadian
corporation with its principal place of business
at One Brunswick Square, Saint John, New
Brunswick, Canada
- and -
Aliant Telecom Inc. (hereinafter "Aliant") a
Canadian corporation having an office at One
Brunswick Square, Saint John, New Brunswick,
Canada
WHEREAS ImagicTV and NBTel have entered into a Licensing Agreement for the
use of ImagicTV's DTV Manager System software dated the 19/th/ day of April,
1999 (the "Software License") a copy of which is attached hereto as Schedule
"A";
AND WHEREAS ImagicTV and NBTel have entered into a Set Top Box Supply and
Software Licensing Agreement relating to the supply and use of set top boxes
which run in conjunction with the ImagicTV DTV Manager System software, such
agreement dated the 19/th/ day of April, 1999 (the "PSA") a copy of which is
attached hereto as Schedule "B";
AND WHEREAS NBTel wishes to assign all its rights and obligations under
both the Software License and the PSA (hereinafter collectively referred to as
the
"Agreements") to its parent company, Aliant, and NBTel wishes to be released
from its obligations under the Agreements and is willing to release any and all
rights it may have under the Agreements;
AND WHEREAS ImagicTV has agreed to release NBTel from all its obligations
under the Agreements on the condition that Aliant undertakes to assume all
obligations under such Agreements and to be bound by their terms and conditions;
AND WHEREAS ImagicTV is willing to provide an additional functionality to
the DTV Manager Software and to expand the geographic territory for both the
Software License and the PSA in favour of Aliant upon payment of the fees
prescribed herein;
NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Novation
1.1 Aliant hereby agrees to assume all obligations under the Agreements and to
be bound by their terms and conditions in all respects as if it were an original
party to the Agreements in place of NBTel.
1.2 ImagicTV hereby releases NBTel from all claims and demands against NBTel in
respect of the Agreements, and accepts Aliant in place of NBTel as the
substituted party to the Agreements, and agrees with Aliant to be bound by the
terms and conditions of the Agreements in all respects as if Aliant had been
originally named in the Agreements as a party to the Agreements in place of
NBTel.
2. Amendments to the Software License
In consideration for the mutual covenants as set out herein, the parties
hereby agree to amend the terms and conditions of the Software License as
follows:
2.1 The definition of "DTV Manager System" in paragraph 1.1 will be amended as
follows:
1.1 "DTV Manager System" shall mean collectively the object code version
of the software, the functionality of which is described in the
Product Description attached as Schedule "A" hereto, as may be amended
by the parties from time to time, and includes SoftTV as defined here,
as well as the accompanying user guides and manuals for use of the
software, and any Updates thereto.
2.2 The Product Description for the DTV Manager System as set out in Schedule
"A" to the Software License will be amended accordingly.
-2-
2.3 The definition of "SoftTV" will be added to the Definition section as
section 1.17 as follows:
1.17 "SoftTV" shall mean the object code version of the software, the
functionality of which is described in the Product Description attached as
Schedule "A" hereto, as may be amended by the parties from time to time, as
well as the accompanying user guides and manuals for use of the software,
and any Updates thereto.
2.4 The definition of "Territory" in paragraph 1.14 will be amended as follows:
1.14 "Territory" shall mean New Brunswick, Nova Scotia, Prince Edward
Island and Newfoundland.
2.5 The commensurate paragraph in paragraph 2.1 will be amended to reflect an
exclusive use of DTV Manager System in the expanded Territory.
2.1 Subject to the terms and conditions of this Agreement and in
consideration of the fees specified in Schedule "D" ("Fees and
Payments"), ImagicTV hereby grants to Aliant an exclusive, non-
assignable perpetual license in the Territory to use the DTV Manager
System as follows: ...
2.6 Section 9 entitled "Indemnification and Warranties", paragraph 9.1 will be
amended as follows:
9.1 ImagicTV will defend and indemnify Aliant against a claim that the DTV
Manager System infringes a U.S. or Canadian copyright or patent, ...
2.7 Schedule "D" entitled "Fees and Payments" will be amended to reflect the
additional consideration being paid by Aliant for the grant of license to the
expanded and exclusive territory and for the use of SoftTV. Such amendments to
Schedule "D" will appear as paragraph five (5) as follows:
5. Territory Expansion and Exclusivity Fee and SoftTV License Fee
In addition to the License Fees set out in paragraph 1 and 2 herein,
and in consideration for expanding the Territory, providing
exclusivity, and expanding the grant of license to DTV Manager System
to include SoftTV, Aliant shall pay to ImagicTV the non-refundable,
non-cancelable fees as described in paragraphs 5.A and 5.B below and
the SoftTV subscription fees in accordance with paragraph 5.C
("Subscription Fees"). These Subscription Fees are a one time charge
invoiced as part of the Quarterly
-3-
Subscriber Report and will commence the earlier of the date on which
Aliant charges its Subscribers for the Aliant service, or on December
31/st/, 1999.
a) $500,000 January 31, 2000
$200,000 January 31, 2001
$200,000 January 31, 2002
b) Payment due on January 31, 2000 of $500,000 is based on ImagicTV
having delivered Release 2.0.10 of DTVManager and Release 1.0 of
SoftTV.
c) Subscription Fees for SoftTV are estimated to be $60.00 per
Subscriber, final pricing paid by Aliant will be no lower than
$48 per Subscriber and no higher than $72 per Subscriber.
ImagicTV will provide final Subscriber fees to Aliant by May 15,
2000.
2.8 The Mutual Non-Disclosure Agreement attached to the Software License as
Schedule "F" ("NDA") shall be amended to reflect that the document was executed
by the parties on April 11, 1998 and the parties acknowledge and accept that
such is the date of execution of the said NDA.
3. Amendments to the PSA
3.1 The definition of "Territory" in paragraph 1(g) will be amended as follows:
1.(g) "Territory" shall mean the provinces of New Brunswick, Nova Scotia,
Prince Edward Island and Newfoundland.
4. Survival of Original Agreements
All other terms of the Software License and the PSA shall remain in force
and effect modified only to the extent to be in accordance with this Novation
Agreement.
This Agreement shall be binding on each party's successors and assigns.
This Agreement shall be effective as of the 16/th/ December, 1999.
-4-
"NBTel" ) "ImagicTV"
)
NBTel Inc. ) ImagicTV Inc.
)
By:__________________________ ) By:_____________________
)
Name:________________________ ) Name:___________________
)
Title:_______________________ ) Title:__________________
Aliant.
By:__________________________
Name:________________________
Title:_______________________
-5-