Exhibit 10.14
THE MARKED PORTIONS OF THIS AGREEMENT
HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT.
AGREEMENT
This Agreement, dated as of August 12, 1996, is made by and between
SEAVISION, INC., a Delaware corporation (hereinafter referred to as
"SeaVision"), and NORWEGIAN CRUISE LINE LIMITED, a Bermuda corporation
(hereinafter referred to as "NCL").
WHEREAS, NCL is in the business of offering cruise vacations to its
passengers; and
WHEREAS, NCL desires that its passengers have access to interactive
television and video entertainment services on board its vessels; and
WHEREAS, NCL wishes to earn incremental revenue from such interactive
television and video entertainment services; and
WHEREAS, SeaVision desires to provide to NCL, and NCL desires to obtain
from SeaVision, the aforementioned interactive television and video
entertainment services for use aboard the ship M/S Dreamward (the "Initial
Ship") and such other cruise vessels owned or operated by NCL as, from time to
time, may be designated by NCL (all such cruise vessels, collectively, the
"Ships" and, individually, a "Ship"); and
WHEREAS, NCL has requested that SeaVision provide such interactive
television services onboard the Ship S/S Norway; and
WHEREAS, SeaVision heretofore has installed on the Initial Ship the
hardware and software described or listed on Exhibit A attached hereto
(collectively, the "Installed Hardware and Software");
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Responsibilities.
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(a) Subject to the terms and conditions hereof, SeaVision hereby agrees
to:
(i) Provide, for each Ship designated by NCL (including without
limitation the Initial Ship) at no charge to NCL, an
interactive television system (the "System") consisting of the
hardware and software described or listed on Exhibit A attached
hereto (collectively, the "System Hardware and Software") and,
in connection therewith, provide the services (the "Services")
set forth on Exhibit B attached hereto. In addition thereto,
SeaVision shall provide for, and install on, the S/S Norway new
in-cabin televisions which the parties acknowledge will cost
SeaVision approximately [Redacted - confidential treatment
requested] including installation costs. Until such time as
SeaVision shall have received the aggregate amount of
[Redacted -confidential treatment requested] under subsection
3(a) herein, SeaVision shall retain title to all such
televisions. Upon SeaVision's receipt of such aggregate amount
thereunder, title to such televisions shall transfer to and
vest in NCL, free and clear of any liens, claims or
encumbrances arising by or through SeaVision. NCL hereby
acknowledges and agrees that the System Hardware and certain of
the interactive modules of the Software are installed on the
Initial Ship and, as of the date of this Agreement, the
Hardware and such installed modules of the Software are
performing satisfactorily. Notwithstanding anything contained
herein or in any other provision of this Agreement that might
be construed to the contrary (except for the foregoing
provisions regarding ownership of televisions on the S/S
Norway), SeaVision shall at all times retain title to all
components of the System, including all System Hardware and
Software or other hardware or software hereafter installed by
Sea Vision on any Ship hereunder.
(ii) Provide all personnel reasonably necessary and appropriate to
operate the System and provide the Services. One (1) SeaVision
technician (the "Manager") will remain on-board each Ship on
which the System is then installed and operating to operate the
System on an on-going basis and to fulfill the responsibilities
of the on-board television coordinator (as described on Exhibit
C attached hereto) for so long as this Agreement shall be in
effect with respect to that Ship. SeaVision hereby acknowledges
that the Manager shall at all times be an employee of
SeaVision. NCL hereby agrees to serve as SeaVision's paying
agent for payment, at the direction of SeaVision, of all
salary, payroll taxes and fringe benefits costs in connection
with the Manager; provided that SeaVision promptly reimburses
NCL for all such costs
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incurred by NCL. SeaVision understands that, while on-board any
Ship, its personnel will be subject to the authority of the
Master of that Ship and the officer(s) designated to oversee
the operation of the System and the Services. SeaVision agrees
that its employees will be considered seamen and will attend
and participate in boat drills held onboard each of the
respective Ships as requested by the Ship's master and
officers. All such employees shall attend Coast Guard
inspections and, if required by NCL, will earn life boat
efficiency certificates. SeaVision shall employ onboard the
Ships only those persons medically fit for service onboard the
vessels in accordance with standards established by NCL and who
have agreed to abide by the orders of the masters and officers
for service onboard the Ships. It shall be the sole
responsibility of SeaVision to absorb and pay the costs of pre-
employment physical examinations and to employ persons who have
valid passports, visas and all other permits required by any
governmental authority in order that they might enter and leave
the ports of call of the Ship on which they are employed.
Annual physicals shall be required of SeaVision's shipboard
employees.
(iii) Upgrade the hardware and/or software used in the System, at no
cost to NCL, at such times and in such manner as is reasonably
necessary or appropriate, to maintain the System on the Ship,
subject always, in the case of hardware upgrades only, to the
consent of NCL, which consent shall not unreasonably be
withheld, and to the constraints placed thereon by the space
available on-board any Ship for the installation of such
hardware.
(b) Subject to the terms and conditions hereof, NCL hereby agrees to:
(i) Make available to SeaVision in respect of any Ship upon which
the System is then installed or is then to be installed (a)
that Ship to the extent necessary for SeaVision's operation and
maintenance of the System, including but not limited to
granting SeaVision personnel unlimited access to the television
studio and video distribution system on board that Ship, (b)
such personnel as are reasonably necessary or appropriate to
support SeaVision's successful operation and maintenance of the
System, including but not limited to appropriate on-board
support for and oversight of the operation and maintenance of
the System by a designated officer on that Ship, provided,
however, that (i) SeaVision shall at all times be primarily
responsible for the operation and maintenance of the System,
and (ii) NCL shall not be obligated hereunder to make available
NCL's personnel if and to the extent that the result thereof
would be the interference with that personnel's ability to
perform his or her other employment duties owing to NCL, (c)
all necessary systems integration support to allow the System
to communicate with NCL's on-board systems, and (d) appropriate
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accommodations on-board that Ship for SeaVision personnel who
are engaged in operating or maintaining the System on the Ship,
which accommodations shall be comparable to those
accommodations provided by NCL to its cruise staff of similar
rank, such as the Ship's systems manager, casino manager or
shore excursion manager. It is understood that SeaVision
personnel occupying such accommodations will, at all times
while on-board such Ship, be subject to NCL's policies
regarding on-board contractors, including those concerning
dress, decorum and personal behavior.
(ii) Furnish accommodations on-board each Ship upon which the System
is then installed and otherwise respond favorably to reasonable
requests by SeaVision's management for accommodations on-board
such Ship, on mutually-agreeable dates and subject to
availability, to allow SeaVision senior personnel to monitor
the on-going performance of the System and SeaVision's
personnel and for the purpose of determining whether
enhancements and improvements to the System should be
recommended. Requests for such accommodations shall not exceed
one (1) cabin/voyage per month per Ship. NCL shall also provide
the Manager with all other perquisites that it provides to its
employees of similar rank.
(iii) Provide marketing support for the System on-board each Ship on
which the System is then installed, which support shall be
consistent with the type and level of such support being
provided by NCL as of the date hereof on-board the Initial
Ship. In addition thereto, the parties shall engage in such
other activities of a supporting nature as are acceptable to
both parties to this Agreement, and upon terms acceptable to
both parties to this Agreement.
(iv) Work with SeaVision's marketing personnel to develop
appropriate and effective means for testing and gauging
passenger reaction to the System on a regular basis. Such means
shall include but not be limited to on-board questionnaires,
on-board focus groups, one-on-one passenger interviews and
post-cruise questionnaires. SeaVision shall retain the right to
designate the individuals who will conduct these activities,
subject to the approval of such individuals by NCL. If
SeaVision marketing personnel are not available (or cannot
reasonably be accommodated) on a Ship, the Manager on that Ship
may assume these responsibilities.
(v) Provide access to each Ship when such Ship is in port, for
SeaVision personnel to demonstrate the System to potential
advertisers, marketers and clients. In connection with making
such demonstrations, SeaVision
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shall conform to NCL's procedures for approving on-board
visitors, including but not limited to making advance requests
for boarding passes.
(vi) Use commercially reasonable efforts to cause its on-board
concessionaires to work with SeaVision to develop mutually
beneficial applications for the System.
(vii) Provide the Manager with the following data, if available, in
electronic form (i.e., diskettes, tapes or other similar means)
with respect to each passenger on-board any Ship on which the
System is then installed: name, home address and telephone
number, age, cabin assignment, dining assignment and on-board
account number.
(viii) Collect all monies paid or payable by passengers in respect of
Services provided on or through the System and charged to the
respective on-board account of such passengers.
(ix) Provide without change limited and reasonable on-board medical
care as needed for minor illnesses and injuries to the extent
such treatment can be provided on-board the Ship. NCL shall not
be responsible hereunder for on-shore continuing or follow-up
treatment.
2. Term/Extension to Other Ships.
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(a) Unless sooner terminated in accordance with the terms of this
Agreement, the term of this Agreement (the "Term") shall commence on
the date first written above and shall expire on the fifth anniversary
thereof (the "Expiration Date").
(b) NCL hereby grants to SeaVision the exclusive right, for the Term of
this Agreement, to install, operate and maintain all in-cabin
interactive television systems and any kiosk-based interactive
television systems connected to such in-cabin systems on the M/S
Dreamward and the S/S Norway.
(c) (i) If, during the term of this Agreement, NCL wishes to install or
have installed interactive television and video entertainment
services on-board any ship owned or operated by NCL other than
the M/S Dreamward and the S/S Norway, NCL shall, in each such
instance, have the right to solicit third-party offers to
provide such services, but shall be required, in each instance,
to first notify SeaVision, in writing, of its intent to do so.
(ii) If, in respect of any ship, NCL receives from any third-party
an offer to provide onboard that ship interactive television
and video entertainment services during the term of this
Agreement, NCL shall promptly notify
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SeaVision thereof and shall disclose to SeaVision the terms of
such third-party offer. SeaVision shall thereafter have a
period of thirty (30) days to match such third party offer with
its own offer to provide the System on such ship. If SeaVision
matches such third party offer under substantially the same
terms and conditions and in all material respects, NCL shall
thereafter be precluded from accepting such third party offer.
If SeaVision fails to match such third party offer as provided
herein, NCL may, in sole discretion, accept such third party
offer.
(iii) NCL and SeaVision each understands and agrees that the other
party is not required hereunder to agree to any particular
contractual arrangement or proposal regarding the installation
of the System on any additional ship, including without
limitation any such proposal that is similar or identical to
the arrangement hereunder in respect of the M/S Dreamward or
the S/S Norway. Subject to the foregoing provisions of this
Section 2(c), in the event the parties agree that SeaVision
will install, operate and maintain the System on any additional
Ship(s), the references herein made to a or any Ship and/or the
System shall be deemed to include such other Ship(s) and the
System(s) installed thereon, which such modifications as are
reasonably necessary and appropriate to reflect the
individualized System(s) installed on each such Ship and are
consistent with the agreement of the parties in respect
thereto.
3. Revenue-Sharing and Payment Terms.
---------------------------------
(a) In consideration of SeaVision's agreement to provide televisions on
the S/S Norway, SeaVision shall be entitled to receive [Redacted -
confidential treatment requested] of the first [Redacted -
confidential treatment requested] of the Adjusted Gross Revenues (as
defined below) generated by all of the Systems installed onboard the
Ships. If SeaVision has not received under this subsection 3(a) the
aggregate amount of [Redacted - confidential treatment requested] on
or before the second anniversary of the date of this Agreement, NCL
shall pay to SeaVision on such second anniversary date an amount equal
to [Redacted - confidential treatment requested] less the aggregate
amount theretofore received by SeaVision under this section 3(a),
whereupon SeaVision shall not be entitled to receive any further funds
under this subsection 3(a).
(b) If the aggregate of all of the Adjusted Gross Revenues generated by
all of the Systems installed on-board the Ships, from the commencement
of this Agreement, is less than the amount (hereinafter referred to as
the "Investment Recovery") obtained by multiplying the number of Ships
on which a System is then installed by [Redacted - confidential
treatment requested], then NCL shall be entitled to retain [Redacted -
confidential treatment requested] of the Adjusted Gross
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Revenues for the applicable calendar month, as indicated on the
applicable report provided to NCL by SeaVision pursuant to the terms
of subsection 3(e) below, and shall promptly remit the remaining
[Redacted -confidential treatment requested] of such Adjusted Gross
Revenues to SeaVision in accordance with this Section 3. (For purposes
of this subsection 3(b), the relevant Adjusted Gross Revenues are the
cumulative Adjusted Gross Revenues from the date of this Agreement to
the relevant month-ending date of such calculation; such Adjusted
Gross Revenue calculation is not performed on an annual basis.)
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(c) If the aggregate of all of the Adjusted Gross Revenues generated by
all the Systems on board the Ships, from the commencement of this
Agreement, equals or exceeds the Investment Recovery, then, for the
twelve month period commencing on the date Investment Recovery is most
recently achieved and for each succeeding twelve month period (subject
always to any reversion to the allocation set forth in subsection 3(b)
caused by the installation of the System on an additional Ship) the
Adjusted Gross Revenues generated by all of the Systems installed
onboard the Ships shall be allocated between the parties as follows:
(i) NCL shall be entitled to retain [Redacted - confidential
treatment requested] of, and shall pay over to SeaVision the
remaining [Redacted - confidential treatment requested] of the
first [Redacted -confidential treatment requested] of such
Adjusted Gross Revenues;
(ii) NCL shall be entitled to retain [Redacted - confidential
treatment requested] of, and shall pay over to SeaVision the
remaining [Redacted - confidential treatment requested] of,
such Adjusted Gross Revenues from [Redacted - confidential
treatment requested] through [Redacted - confidential treatment
requested]; and
(iii) NCL shall be entitled to retain [Redacted - confidential
treatment requested] of, and shall pay over to SeaVision the
remaining [Redacted - confidential treatment requested] of,
such Adjusted Gross Revenues in excess of [Redacted -
confidential treatment requested].
(d) "Adjusted Gross Revenues", for purposes of this Agreement, shall mean
the aggregate of all amounts paid to NCL in connection with
passengers' use of the Services provided by or on the System and
charged to such passengers' respective on-board accounts by NCL, other
than amounts paid or payable in respect of shore excursions, room
service orders and wine orders purchased or made on the System, the
revenues from which shall be retained exclusively by NCL, less (i)(A)
the cost to SeaVision of goods sold in the case of products and
services sold on the System, (B) the cost to SeaVision of pay-per-view
programming provided on the System, and (C) the commissions paid by
SeaVision to third parties for
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advertising sold on the System, the aggregate amount of which NCL
shall pay over to SeaVision, and (ii) credits paid by NCL to
passengers in the case of gaming on the System.
(e) On or before the twenty-first day of each calendar month during the
Term of this Agreement, SeaVision shall provide NCL with a written
report detailing the Adjusted Gross Revenues generated by the System
on each Ship on which the System is then installed from cruises
completed during the prior calendar month. This report shall govern
the determination of fees to be retained by NCL and the revenues to be
remitted by NCL to SeaVision under the terms of this Agreement.
SeaVision shall provide any and all hardware and/or software
reasonably necessary or appropriate to interface SeaVision's
accounting software with the Ship's property management system in
order for SeaVision to obtain accurate accounting information for such
reports.
(f) Within ten (10) days after NCL's receipt of any monthly report
delivered to NCL by SeaVision pursuant to the terms of subsection 3(e)
herein, NCL shall remit to SeaVision all Adjusted Gross Revenues
generated by the System on the Ship during the calendar month
applicable to such report, less its share of such Adjusted Gross
Revenues as provided in this Section 3.
(g) NCL shall promptly notify SeaVision of any changes, adjustments or
chargebacks (relative to the Adjusted Gross Revenues in respect of any
calendar month) of which NCL receives notice after it has made a
remittance to SeaVision in respect of such calendar month, and
together therewith, provide to SeaVision appropriate documentation
supporting all such changes, adjustments or chargebacks. In the event
properly-supported changes, adjustments or chargebacks result in a
reduction of the Adjusted Gross Revenues generated in respect of such
calendar month, SeaVision shall, within thirty (30) days after its
receipt of the applicable notice and supporting documentation, refund
to NCL SeaVision's percentage of the aggregate of such changes,
adjustments or chargebacks.
4. Confidentiality.
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(a) NCL acknowledges that the System represents and will continue to
represent the valuable, confidential and proprietary property of
SeaVision. SeaVision is not by this Agreement conveying to NCL any
exclusive proprietary or ownership rights in the System, including,
but not limited, to any patent, copyright, trademark, service xxxx,
trade secret, trade name or other intellectual property rights, except
that NCL will have the limited rights expressly set forth in this
Agreement. Accordingly, NCL acknowledges that, except as expressly
provided for in this Agreement, NCL possesses no title to or ownership
of any System or any portion
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thereof. NCL will keep the System free and clear of all claims, liens
and encumbrances resulting from actions or omissions of NCL.
(b) Each party agrees, during the Term of this Agreement and thereafter,
to maintain the confidential nature of the terms and conditions of
this Agreement and of any proprietary information shared by the other
with it. In the case of SeaVision's proprietary information, such
proprietary information shall include, but is not limited to (i) any
knowledge gained by NCL of SeaVision's proprietary application
software or the configuration of the System; (ii) SeaVision's
marketing and sales materials; (iii) the format of any and all
SeaVision reports, including those for data management, revenue
remittance and marketing surveys, to the extent protected by copyright
law; and (iv) SeaVision's marketing and advertising client list. In
the case of NCL's proprietary information, such proprietary
information shall include, but is not limited to, the data provided by
NCL to SeaVision pursuant to the terms of subsection 1(b)(vii) hereof,
except for any such data in respect of; any passenger who purchases
merchandise from SeaVision through the System, which data shall not be
NCL's proprietary information. Notwithstanding anything contained in
this Agreement to the contrary, the terms of this Section 4(b) shall
survive the expiration or termination of this Agreement.
(c) Each party acknowledges that its violation of its confidentiality or
non-disclosure obligations under this Agreement may cause irreparable
damage to the other that cannot be fully remedied by money damages.
Accordingly, in the event of any such violation or threatened
violation, the injured party will be entitled, in addition to pursuing
any other remedy available to it under this Agreement or at law, to
obtain injunctive or other equitable relief from any court of
competent jurisdiction as may be necessary or appropriate to prevent
any further violations thereof.
(d) Each party agrees to notify the other immediately upon the notifying
party's becoming aware of or reasonably suspecting the possession, use
or knowledge of all or part of any of the other party's proprietary
information by any person or entity not authorized by this Agreement
to have such possession, use or knowledge. The notifying party will
promptly furnish the other party with details of such possession, use
or knowledge, will assist in preventing a recurrence thereof and will
cooperate with the other party in protecting the other party's rights
in the other party's proprietary information. A party's compliance
with the terms of this Section 4 will not be construed as any waiver
of the other party's right to recover damages or obtain other relief
against the notifying party for the notifying party's breach of its
confidentiality or non-disclosure obligations under this Agreement or
the negligent or intentional harm to the other party's proprietary
rights.
5. Termination.
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(a) NCL shall have the right to terminate this Agreement prior to the
Expiration Date in the event the System fails to achieve the technical
performance standards set forth in Exhibit D attached hereto. NCL may
not exercise this right (i) if such technical failure occurs as a
result of NCL's failure to perform any or all of its obligations under
the terms of this Agreement; and (ii) without written notice to
SeaVision of its intention to do so and prior to a period of 90 days
following such notice in which SeaVision may effect a cure of such
failure. In respect of any notice hereunder by NCL of its intention
to terminate this Agreement as a result of any System deficiency which
served as the basis for any prior such termination notice, NCL shall
be obligated, in the case of the second such notice, to extend to
SeaVision a thirty-day cure period rather than a ninety-day cure
period and NCL shall not be obligated, in the case of the third or any
subsequent notice, to extend to SeaVision any cure period whatsoever.
SeaVision shall, within fifteen (15) days following NCL's written
notice to SeaVision under such clause (iii), above, provide to NCL
SeaVision's written response regarding such failure, which response
shall set forth SeaVision's assessment of the cause of such failure
and SeaVision's plan to rectify such failure. In any event, SeaVision
shall make a good faith effort to rectify such failure as promptly as
is reasonable under the circumstances and, where appropriate, will
implement temporary "work around" solutions until a permanent solution
can be implemented.
(b) SeaVision shall have the right to terminate this Agreement in whole or
in part prior to the Expiration Date in the event the System fails to
achieve the financial performance standards that SeaVision shall
determine are necessary to warrant its investment in the System. In
the event SeaVision intends to terminate this Agreement pursuant to
this subsection 5(b), it shall do so in writing to NCL no less than
one hundred twenty (120) days prior to ceasing operations hereunder or
thereon, as the case may be.
(c) Either party hereto shall have the right to terminate this Agreement
immediately upon written notice to the other party upon such party
being declared insolvent or bankrupt, or making an assignment for the
benefit of creditors, or in the event that a receiver is appointed, or
any proceeding for appointment of a receiver or to adjudge such party
a bankrupt, or to take advantage of the insolvency laws is demanded
by, for, or against such party under any provision under the laws of
any state or country.
(d) NCL shall have the right to terminate this Agreement prior to the
Expiration Date in the event SeaVision defaults in the performance of
any covenant, warranty or agreement made herein (except a failure by
the System to achieve certain technical performance standards which is
governed by subsection 5(a) herein), and such default has not been
cured within thirty (30) days after receipt of written notice thereof
given by NCL to SeaVision.
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(e) SeaVision shall have the right to terminate this Agreement prior to
the Expiration Date in the event NCL defaults in the performance of
any covenant, warranty or agreement made herein and such default has
not been cured within thirty (30) days after receipt of written notice
thereof given by SeaVision to NCL.
(f) Notwithstanding the termination or expiration of this Agreement as
provided for in this Section 5 and elsewhere in this Agreement, NCL
shall continue to owe, and shall promptly pay to SeaVision in
accordance with the terms of Section 3 hereof, all amounts set forth
in Section 3 that shall have accrued on and prior to the date of such
termination or expiration.
(g) As soon as is practicable after the expiration or any termination of
all or part of this Agreement or any renewal operating term thereof,
SeaVision shall remove the System, including all hardware and
software, and all on-board SeaVision personnel from the Ship. The
parties hereby agree and acknowledge that in accordance with Section 1
hereof, SeaVision will retain title to any and all hardware and
software installed on board the Ship by SeaVision (x) at all times
while this Agreement or any renewal operating term thereof is in
effect as well as (y) in the event SeaVision chooses not to continue
operating the System installed thereon. Notwithstanding the
foregoing, if SeaVision elects to terminate this Agreement for any of
the reasons set forth above, NCL shall have the right to (i) purchase
all SeaVision hardware (but not software) installed by SeaVision on
any Ship, including but not limited to televisions at an aggregate
purchase price equal to the greater of (A) [Redacted - confidential
treatment requested] less the aggregate Adjusted Gross Revenues
theretofore paid to SeaVision in accordance with Section 3 herein in
respect of that Ship and (B) SeaVision's then unamortized cost for
such hardware and (ii) obtain a nontransferable license to use (but
only on the applicable Ship) the SeaVision software installed by
SeaVision on that Ship for an annual license fee of [Redacted -
confidential treatment requested] which annual fee shall include
routine software maintenance provided by SeaVision.
6. Right to Inspect Books & Records. SeaVision and NCL shall keep full
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and accurate accounts, records, books, journals, ledgers and data (collectively,
"Records") with respect to the business done by each party respectively under
this Agreement, which Records shall at all times show truthfully, accurately and
fully the compliance by each party with its respective obligations under this
Agreement. Each party shall have the right, through its designated
representatives, at all reasonable times, upon reasonable advance notice, to
inspect the Records of the other as necessary to verify the sales, revenues
generated and fees collected pursuant to this Agreement. The parties shall
retain all Records at all times during the Term of this Agreement and any and
all extensions or renewals thereof, and for at least three (3) years thereafter,
and shall make the Records available to the other party during regular business
hours, wherever the Records are maintained, within ten (10) days after receipt
of demand for inspection from such
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other party. Both parties shall maintain the confidential nature of any Records
so inspected pursuant to and in accordance with the provisions of Section 4
hereof.
7. Insurance/Waiver of Subrogation.
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(a) So long as their respective insurers so permit, neither party hereto
shall be liable to the other, or to the insurer of the other, claiming
by way of subrogation through or under such other party with respect
to any loss or damage, in whole or in part, to the System on any Ship,
to the extent that such other party shall be reimbursed out of that
party's insurance coverage carried for such other party's protection
with respect to such loss or damage. If so permitted, the parties
shall each obtain any special endorsements required by their
respective insurance carriers to evidence compliance with the waiver
and release set forth herein and shall provide a copy thereof to the
other party.
(b) SeaVision hereby warrants, represents and covenants that, consistently
during the Term and at its sole expense, each Manager and each member
of SeaVision's System installation crews shall be included on
SeaVision's protection and indemnity cover and shall be covered by
general medical insurance maintained by SeaVision, in each case for
such periods of time as the Manager or such crew member is posted to a
Ship.
8. Interruption in Performance. Neither NCL nor SeaVision shall be
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liable to the other for any loss, damage or loss of profits arising out of any
interruption or cessation of the Services to be provided hereunder when such
interruption or cessation is caused by any circumstance beyond the reasonable
control of such party.
9. Indemnification.
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(a) SeaVision shall indemnify, defend and hold harmless NCL and its
successors and assigns from and against any and all liabilities,
claims, suits, damages, judgments, awards, penalties, losses and other
liabilities (including all related reasonable attorneys' fees, costs
and expenses in connection therewith) (collectively referred to
hereinafter as "Losses") suffered or incurred by NCL by reason of,
arising out of or in connection with (i) any negligent, willful or
intentional act or omission of SeaVision (or an employee, agent or
representative of SeaVision) committed or omitted, as the case may be,
in the course of SeaVision's performance of the terms of this
Agreement or (ii) SeaVision's failure to fully perform the terms of
this Agreement.
(b) NCL shall indemnify, defend and hold harmless SeaVision and its
successors and assigns from and against any and all Losses suffered or
incurred by SeaVision by reason of, arising out of or in connection
with (i) any negligent, willful or
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intentional act or omission of NCL (or an employee, agent or
representative of NCL) committed or omitted, as the case may be, in
the course of NCL's performance of the terms of this Agreement or (ii)
NCL's failure to fully perform the terms of this Agreement.
10. Further Assurances of SeaVision's Title.
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(a) NCL hereby agrees to execute and deliver to SeaVision, upon the
request of SeaVision from time to time, such UCC-1 financing
statements and other documents as SeaVision shall reasonably require
for the purpose of evidencing to NCL and any third party SeaVision's
continued ownership of all components (hardware and software) of the
System (such financing statements and other documents to describe all
such components and to be in the form required by applicable law).
(b) SeaVision may affix permanent (to the degree reasonably possible),
legible and visible labels on each component of the System (hardware
only), to the extent that doing so is reasonably possible or
practicable. Each such label may clearly indicate that SeaVision
holds title to the component to which that label is affixed.
11. Limitation of Liability. THE WARRANTIES AND REMEDIES EXPRESSLY SET
-----------------------
FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES
AND REMEDIES, ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE. EXCEPT AS EXPRESSLY PROVIDED HEREIN OR
ELSEWHERE IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF NCL'S USE
OF OR INABILITY TO USE THE SYSTEM OR ANY PORTION THEREOF OR FROM ANY DELAY IN
THE SYSTEM ACHIEVING THE TECHNICAL PERFORMANCE STANDARDS OR FROM ANY DELAY IN
THE SYSTEM MEETING, OR ANY INABILITY OF THE SYSTEM TO MEET, EITHER PARTY'S
EXPECTATIONS WITH RESPECT TO OPERATIONS OR PERFORMANCE, EVEN IF SUCH PARTY IS
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION THERETO, SEAVISIONS'
LIABILITY FOR DIRECT DAMAGES OF NCL ARISING OUT OF ANY OF THE FOREGOING SHALL IN
NO EVENT EXCEED THE AMOUNT OF TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) IN
THE AGGREGATE; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT BE
APPLICABLE TO DAMAGES RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SEAVISION OR ITS EMPLOYEES. IN PARTICULAR, SEAVISION IS NOT RESPONSIBLE FOR
ANY COSTS INCLUDING, BUT NOT LIMITED TO, THOSE INCURRED AS A RESULT OF LOST
PROFITS OR REVENUE, LOSS OF USE OF THE
-13-
SYSTEM, LOSS OF DATA, THE COST OF RECOVERING ANY DATA, THE COST OF SUBSTITUTE
SOFTWARE, OR CLAIMS BY THIRD PARTIES.
12. Sale or Disposal of a Ship. In the event that NCL elects to sell or
--------------------------
otherwise dispose of any Ship upon which the System is then installed, NCL
promptly shall notify SeaVision in writing of its decision. Upon the sale of
any such Ship, the new owner shall have the option of assuming this Agreement
with respect to that Ship. If the new owner of such Ship elects not to assume
this Agreement in respect of that Ship or in the event NCL is disposing of such
Ship other than through a sale or transfer (i.e., decommissioning), SeaVision
promptly shall remove the System therefrom, and NCL shall pay SeaVision an
amount equal to the lesser of (i) the depreciated value of the System at such
time and (ii) the amount of [Redacted - confidential treatment requested] in the
case of the S/S Norway), plus the aggregate of the cost of all new hardware and
software theretofore added to the System by SeaVision pursuant to the terms of
subsection 1(a)(iii), less the aggregate of all Adjusted Gross Revenues
theretofore paid to SeaVision in respect of that Ship pursuant to the terms of
section 3 hereof. For purposes of determining the depreciated value of a System
for clause (i) above, the initial value of the System shall be [Redacted -
confidential treatment requested] in the case of the S/S Norway), which value
shall reduce to zero ratably over [Redacted - confidential treatment requested]
and to which shall be added the cost of new hardware and software theretofore
added to the System annually, which new additional amounts also reduce to zero
ratably over a [Redacted - confidential treatment requested] year period from
the date of each addition thereof to the System.
13. Public Announcements. The parties shall consult with each other and
--------------------
issue a public statement with respect to this Agreement as soon as is practical
after the date hereof. During the term of this Agreement, NCL shall include a
reference to SeaVision in any and all public announcements or marketing
materials referring to interactive television services on-board the Ships.
14. Right to Make Agreement. Each of the parties hereto represents and
-----------------------
warrants to the other that it has all necessary and appropriate power and
authority to execute, deliver and carry out the terms and provisions hereof.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute but one and the same original document.
16. Assignment. Either party hereto may assign this Agreement and its
----------
respective rights, interests and obligations hereunder to any third party
without the consent of the other party hereto; provided, however, that no such
assignment by a party shall relieve that party of any of its liabilities or
obligations hereunder. It is expressly understood and agreed that this
Agreement and all of SeaVision's interests and rights herein and hereunder may
be assigned, pledged, mortgaged and/or hypothecated by SeaVision at its
exclusive discretion to any third party purchasing all or
-14-
substantially all of SeaVision's assets, provided that such assignee agrees in
writing to assume all of SeaVision's obligations under this Agreement.
17. Successors. This Agreement shall inure to the benefit of, and be
----------
binding upon, the respective successors and assigns of the parties hereto.
18. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Florida, without regard to its
principles of conflicts of laws.
19. Severability. If any Section or provision of this Agreement, or any
------------
portion of any Section or provision thereof, shall for any reason be held to be
void, illegal or otherwise unenforceable, all other Sections and portions of
this Agreement shall nevertheless remain in full force and effect as if such
void, illegal or unenforceable portion had never been included herein.
20. Notices. All notices and other communications required or otherwise
-------
provided for in this Agreement shall be in writing and sent by registered or
certified mail to:
If to SeaVision: SeaVision, Inc.
000 Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
-15-
If to NCL: Norwegian Cruise Line Limited
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
or to such other place as SeaVision or NCL, as the case may be, may from time to
time designate in accordance herewith.
21. Entire Agreement; Modification. This Agreement, including the
------------------------------
Exhibits attached hereto, contains the entire agreement of the parties on the
subject matter hereof, and supersedes any and all prior agreements, if any, with
respect to such subject matter. This Agreement may not be changed, modified or
supplemented except by the written agreement of the parties.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
ATTEST: SEAVISION, INC.
By:
-------------------- -------------------------------
Its: Its:
---------------- ------------------------------
ATTEST/WITNESS: NORWEGIAN CRUISE LINE LIMITED
By:
-------------------- -------------------------------
Its: Its:
---------------- ------------------------------
[Signature page to Agreement dated as of August 12, 1996 by and between
SeaVision, Inc. and Norwegian Cruise Line Limited]
-16-
EXHIBIT A
Primary Hardware and Software Components of the System
------------------------------------------------------
to be provided by SeaVision
---------------------------
Components:
. Master Control Processor (MCP) - Pentium based server machine [Redacted
-confidential treatment requested]
. Communications Control Processor (CCP) - [Redacted - confidential
treatment requested]
. Interactive Session Processors (ISPs) - Pentium based computers
controlling [Redacted - confidential treatment requested]
. Video Cassette Players (VCPs) - Standard VCR tape players to play movies
selected on interactive system, available only on VCR tape. Most
first run movies are currently available only in VCR format. Power
and AC requirements are 0.65amps and 225 BTUs for each VCP.
. SeaVision Interactive Allocator - Software for [Redacted - confidential
treatment requested]
. SeaVision Database Engine - Software for [Redacted - confidential
treatment requested]
. Seavision CCP Interface - CCP based software to control the [Redacted -
confidential treatment requested]
. SeaVision SPMS Protocol - Network interface specification to enable
development of the custom interface to the shipboard property
management system.
. [Redacted - confidential treatment requested]
Notes:
. All software will be the latest product version available at time of
installation.
. Software updates will be received by the shipboard operator on 4mm DAT
tape. Updates will be delivered on a periodic basis as problem fixes
and module enhancement are made available.
EXHIBIT B
I. Entertainment and Interactive Services to be Provided by SeaVision
------------------------------------------------------------------
"Basic" SeaVision Package: Services Provided at No Charge
---------------------------------------------------------
. In-Cabin Room Service Ordering: Passengers will be able to order NCL's
standard room service menu, including beverages charged to their cabin
account, through the System. Orders will be printed out in
appropriate pantries and/or galleys for delivery by NCL personnel.
SeaVision shall provide, as part of the System, printers and/or
monitors to be used in such pantries and/or galleys for such purpose.
. Shore Excursion Ordering: Passengers will be able to watch videos of
shore excursions and purchase tickets for shore excursions on and
through the System by using their television remote-control. Orders
will be printed out in the Shore Excursion Office of the Ship, with
tickets in respect thereof to be delivered by NCL personnel. The
System will provide appropriate inventory control.
. Wine Ordering: Passengers will be able to view a wine menu on the
System and order their selection with their television remote-
controls. Orders will be printed out in the Wine Xxxxxxx'x office or
wine cellar, for delivery by NCL personnel at the designated meal.
Cabin accounts will be charged accordingly.
NCL shall be responsible for providing all ticket stock, videos and
photographs for shore excursions and wine ordering. NCL may choose,
at its option, to produce its own videos and photographs, retain
SeaVision for this purpose and reimburse SeaVision for all its costs
incurred in connection with producing the same, or contract with a
third party to produce such videos and/or photographs, provided,
however, that any videos and photographs produced by any such third
party shall in all ways meet SeaVision's technical standards for use
on the System. If NCL elects to have SeaVision produce any such
videos or photographs, SeaVision shall provide NCL with detailed cost
estimates prior to the initiation of video and photograph production.
Such estimates will include the cost of pre-production scripting and
preparation and the cost of sending crews aboard NCL's Ships for
taping, photographing and post-production editing. NCL shall pay
these costs directly to SeaVision as a vendor. Each party shall make
its library of videos and photographs for shore excursions available
to the other for the other's use in connection with the conduct of its
business.
. Interface with NCL's Property Management System: The System will
interface with the Ship's property management system to enable
appropriate charges to be applied to passenger accounts.
. Access Control: The System will be designed to limit access to only
those persons who are adult passengers or who are minors under adult
supervision. Passengers will be able to limit access to various
services, such as gaming and adult programming, by enabling lock-out
codes and using password procedures.
. Report Generation: The System will generate detailed activity reports,
which will be made available to NCL for the purposes of revenue
payments to SeaVision. SeaVision shall also provide, at NCL's
request, reports pertaining to passenger usage of the System.
. Passenger Folio Review-On-board Account: Each passenger will be able
to use the System to review a summary of his or her account.
SeaVision shall provide the interfaces to NCL's on-board systems
necessary to provide such review; provided that NCL shall reasonably
cooperate with the development of such interfaces.
. Transaction Fee: In consideration of SeaVision's provisions of certain
services on the System at no charge, NCL agrees to consider the
implementation of a transaction fee of not more than $1.00 per
transaction initially for passengers utilizing the System for shore
excursions, room service, wine ordering and other non-revenue
generating passenger services. Any such transaction fees will be
included in the Adjusted Gross Revenue generated by the System.
Revenue-Generating and Pay-Per-View Entertainment
-------------------------------------------------
NOTE: NCL will be entitled to a portion of the Adjusted Gross Revenues generated
by the following services, pursuant to and in accordance with the terms of
Section 3 of the Agreement.
. Video-on-Demand: Passengers will be able to purchase movies and other
entertainment options such as taped concerts, on demand, using the
System and their television remote-control. SeaVision shall determine
the fee that will be levied for each such order and charged to such
passengers' respective cabin accounts. Subject to NCL's approval,
adult programming may be offered.
. Gaming Options: Passengers will be able to play video slots, poker and
blackjack on the System. Any additional games that SeaVision may
desire to provide on the System shall be subject to the parties'
mutual agreement. SeaVision will determine the value of each
individual credit that passengers may purchase and charge to their
cabin accounts. Credits may be redeemed at a location designated by
NCL.
. Shopping: SeaVision will offer passengers shopping videos and
interactive video shopping on and through the System. NCL will retain
the right to approve the items offered for sale and the vendors
providing those items. In the event NCL elects to offer its own items
for sale on and through the System, NCL shall pay all related
production costs incurred by SeaVision directly to SeaVision as a
vendor
and SeaVision will be entitled to a share of the Adjusted Gross
Revenues generated therefrom pursuant to and in accordance with the
terms of Section 3 of the Agreement. Access to the System by
concessionaires on board the Ship, including but not limited to the
on-board shops, casino, beauty salon and spa, and photographer, will
be by mutual agreement between SeaVision and those vendors. NCL will
be entitled to a portion of the Adjusted Gross Revenues generated by
any fees paid by such purveyors, pursuant to and in accordance with
the terms of Section 3 of the Agreement.
. Advertising and Promotions: SeaVision shall have the exclusive right to
provide access to the System to third parties for the purposes of
advertising, promotions and marketing of their companies, products or
services.
NCL shall retain the right to approve such third party advertisers as
will be given access to the System and the manner in which any such
advertising is presented. NCL shall designate the individual
responsible for granting such approvals on its behalf, and such
individual shall provide SeaVision with general guidelines for
advertising and marketing activities and the procedure SeaVision shall
follow in submitting advertising and marketing proposals for NCL's
consideration. NCL shall not unreasonably withhold its approval of
advertising and marketing proposals with respect to the System. NCL
shall notify SeaVision of its approval or denial of an advertising or
marketing proposal within 14 days after SeaVision's written submission
thereof. In the event NCL fails to notify SeaVision of its decision
within that period, it shall be deemed to have approved that written
submission. NCL will be entitled to a portion of the Adjusted Gross
Revenues generated by such advertising and marketing promotions on the
System, pursuant to and in accordance with the terms of Section 3 of
the Agreement.
Miscellaneous Optional Services (to be offered only upon mutual agreement of the
-------------------------------
parties)
. Digital Photography: Passengers will be able to view in their cabins
personal photographs taken by the on-board photo concessionaire. The
system will display the photographs allowing the passengers to
purchase a variety of sizes and poses. This service can include,
subject to NCL approval, kiosk-based
applications which will provide an entertaining and easy-to-use
graphical, touch screen interface to purchase "instant" photographs
with a wide variety of backgrounds and in various sizes. Revenues
from photographs purchased over the System, less cost of materials,
will be included in Adjusted Gross Revenues.
EXHIBIT C
On-board Television Coordinator Responsibilities
------------------------------------------------
[to be provided by NCL]
EXHIBIT D
Technical Performance Standards of the System
---------------------------------------------
Server Capacity
---------------
. The system will be sized according to actual usage demand of the ship.
Demand levels change throughout the term of the Agreement. Some of
the factors that effect sizing of the system include the following:
[Redacted - confidential treatment requested]
. During routine operation of the system, the system will meet [Redacted -
confidential treatment requested] of the load demand [Redacted -
confidential treatment requested] of the time. As usage statistics
from the system change, SeaVision will make periodic sizing
adjustments to ensure the capacity of the system supports this load
demand.
RF System
. The SeaVision RF mixing network located in the BCC will support the
ships existing Free to Guest channels. A total of twelve channels
will be allocated for this purpose. The SeaVision RF mixing network
will act as the final launch point for input the ships RF plant.
. The final output of the mixed signals will be +15dBmV flat +/-3dB.
. The ships existing launch amplifier will be set in accordance to the
ships RF design specification but shall not exceed a +45 dBmV output
level. The maximum tilt shall not exceed 6 dB across the amplifiers
entire bandwidth.
. The minimum Carrier to Noise ratio at the end of any RF trunk in the
ships RF plant shall be 41 dB or better.
. Adjacent channel visual carriers shall not differ more than 3 dB.
. All passive devices will have a minimum port to port isolation of 20 dB.
. An RF return module will be added to the ships RF amplifiers, if the
amplifiers will support the device. If the amplifier will not support
the RF return module then the entire amplifier modules will be
removed. Depending on availability, the new
amplifiers will be of the same manufacturer and model series in order to
utilize the existing housings and plant connections.
