Exhibit 10.12
THE MARKED PORTIONS OF THIS AGREEMENT
HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT.
FIRST AMENDED AND RESTATED AGREEMENT
THIS FIRST AMENDED AND RESTATED AGREEMENT (this "Agreement"), is made and
entered into as of the 1st day of June, 1996, but is effective as of
September 1, 1995 (the "Effective Date"), by and between SEAVISION, INC., a
Delaware corporation (hereinafter referred to as "SeaVision"), and CELEBRITY
CRUISES INC., a Liberian corporation (hereinafter referred to as "Celebrity").
WHEREAS, Celebrity is in the business of offering cruise vacations to its
passengers; and
WHEREAS, Celebrity desires that its passengers have access to interactive
television services on board its vessels; and
WHEREAS, Celebrity wishes to earn incremental revenue from such interactive
television services; and
WHEREAS, the parties previously agreed, pursuant to that certain Agreement
dated as of September 1, 1995 (the "Original Agreement"), that SeaVision would
provide the aforementioned interactive television services for installation and
use aboard the ship m.v. Century (the "Initial Ship") operated by Celebrity; and
WHEREAS, since the parties entered into the Original Agreement, SeaVision
has installed and commenced operation of the interactive television services on
the Initial Ship; and
WHEREAS, Celebrity has requested that SeaVision install and operate the
interactive television services onboard the ships m.v. Galaxy, m.v. Mercury,
m.v. Horizon and m.v. Zenith (collectively, the "Additional Ships"); and
WHEREAS, the parties now desire to amend and restate the Original Agreement
to provide for their agreements with respect to the Additional Ships; and
WHEREAS, for purposes of this Agreement, the Initial Ship and the
Additional Ships are sometimes referred to hereinafter collectively as the
"Ships" and individually as a "Ship".
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 and, in the case of the Additional Ships, install, at no
charge to Celebrity except as otherwise expressly provided in
this Agreement, an interactive television system (the "System")
on each of the Ships and, in connection therewith, provide the
services (the "Services") set forth on Exhibit A attached hereto.
SeaVision shall install the System on the Additional Ships
pursuant to the implementation schedule set forth on Exhibit B
attached hereto. The System installed on the Initial Ship and to
be installed by SeaVision on the Additional Ships shall consist
of such hardware and software (a listing of which hardware and
software shall also be included on Exhibit C attached hereto) as
shall be determined and mutually agreed upon by the parties. The
applications displays on the television screens will have a
unique design available only on Systems provided to Celebrity,
and the television screens will be subject to Celebrity's
approval which shall not unreasonably be withheld, delayed or
conditioned. Except as otherwise expressly provided in this
Agreement, SeaVision shall at all times retain title to all
components of the System, including all hardware and software
installed or to be installed by SeaVision on any of the Ships
hereunder, unless and until, in respect of any Ship, Celebrity
purchases the System pursuant to Section 5 of this Agreement.
Notwithstanding the foregoing, (i) Celebrity shall, at its own
cost and expense, purchase the components listed on Exhibit D for
the Ships m.v. Galaxy and m.v. Mercury; and (ii) upon SeaVision's
provision of the components listed on Exhibit D for the Ships
m.v. Horizon and m.v. Zenith, Celebrity shall either (A)
reimburse SeaVision for the cost of such components (which cost
hereby is agreed to be [Redacted - confidential treatment
requested] per Ship) or (B) provide SeaVision with transferable
cruise credits in an aggregate amount such that, upon SeaVision's
transfer of such cruise credits to third parties approved by
Celebrity, SeaVision shall receive funds in the aggregate amount
of [Redacted - confidential treatment requested] per Ship, with
the choice of subclause (A) or (B) to be at Celebrity's option.
Exhibit H outlines the terms under which Celebrity has agreed to
transfer such cruise credits. All such components listed on
Exhibit D shall be the property of Celebrity. In connection with
SeaVision's performance under this Subsection 1(a)(i), SeaVision
shall provide to Celebrity weekly progress reports relating to
the
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delivery of hardware to be provided by SeaVision and, if
applicable, the development of System screens. In connection
with Celebrity's performance under this Subsection 1(a)(i),
Celebrity shall provide to SeaVision weekly progress reports
relating to hardware to be provided by Celebrity. The parties
hereby agree that, if SeaVision fails to complete the
implementation of the System on any Additional Ship on or before
the applicable completion date therefor (as set forth hereinbelow
or, in respect of the m.v. Meridian, as may hereafter be mutually
agreed by the parties), and during the period between the date
hereof and such completion date, fails to diligently and
consistently prosecute such implementation, then SeaVision shall
pay to Celebrity in respect of that Additional Ship, as
Celebrity's sole and exclusive remedy therefor, an amount equal
to [Redacted - confidential treatment requested] per week for
each week after the applicable completion date and until such
implementation is complete; provided that SeaVision's maximum
aggregate liability hereunder shall be [Redacted - confidential
treatment requested] per Ship, and SeaVision shall not incur
liability hereunder for any installation delays caused by events
or circumstances beyond the reasonable control of SeaVision or
resulting from Celebrity's failure to timely deliver hardware or
other support services or systems to be delivered by Celebrity.
For purposes hereof, the following are the applicable completion
dates for the Additional Ships:
m.v. Horizon - September 10, 1996
m.v. Galaxy - October 30, 1996
m.v. Zenith - November 30, 1996
m.v. Mercury - September 15, 1997
(ii) Provide all personnel reasonably necessary and appropriate to
install and operate the System and provide the Services onboard
the Ships. One (1) SeaVision technician (the "Operator") shall
be posted to each Ship following such installation on that Ship
to run the System on an on-going basis for so long as this
Agreement shall be in effect in respect of that Ship. SeaVision
hereby acknowledges that the Operators shall at all times be
employees of SeaVision, and Celebrity shall serve as SeaVision's
paying agent for payment of all salary, payroll taxes and fringe
benefits costs in connection with the Operators, and SeaVision
shall promptly reimburse Celebrity for all such costs incurred by
Celebrity in respect of the Operators; provided, however, that
(i) SeaVision shall not be obligated hereunder to reimburse
Celebrity for the cost of protection and indemnity insurance
provided by Celebrity pursuant to Section 10 of this Agreement
and (ii) SeaVision shall [Redacted - confidential treatment
requested]. SeaVision understands that, while on board any
Ship, its personnel will be
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subject to the authority of the Master of that Ship and the
officer(s) designated thereon to oversee the installation and
operation of the System and the Services. SeaVision shall use
its best efforts to ensure that the Operators will at all times
while on board any Ship comply with the operations manual of
Celebrity, a copy of which is attached hereto as Exhibit E.
(iii) Upgrade the hardware and/or software used in the System, at no
cost to Celebrity, at such times and in such manner as is
reasonably necessary or appropriate to maintain the System on the
Ships and to achieve the mutually agreed technical performance
standards set forth on Exhibit F attached hereto; provided,
however, that any such upgrade shall be subject to Celebrity's
prior approval, which approval shall not unreasonably be
withheld, delayed or conditioned by Celebrity. Furthermore,
Celebrity shall be entitled from time to time to request upgrades
to the hardware and/or software used in the System in respect of
any Ship in order to keep the System "state-of-the-art"
throughout the Operating Term applicable to that Ship. In
respect of any such requested upgrade, SeaVision shall be
obligated to undertake such requested upgrade only if and to the
extent SeaVision and Celebrity agree such requested upgrade, and
the terms upon which it is to be undertaken by SeaVision, are
technologically and economically feasible for SeaVision.
(iv) Furnish certain entertainment programming for passengers' viewing
on "free" entertainment channels on and through the System on
each Ship for which passengers shall not be charged, all as more
fully set forth on Exhibit A attached hereto.
(v) Allow Celebrity programming control of twenty (20) free
television and music channels provided by Celebrity to passengers
and crew on each Ship.
(vi) Operate the System on each Additional Ship for a period of at
least 120 days from the date of the commencement of the initial
voyage of that Additional Ship with passengers following the
completion of the installation of the System thereon. For
purposes of this Agreement, such 120-day period in respect of any
Additional Ship is sometimes referred to as the "Initial 120-Day
Period".
(b) Subject to the terms and conditions hereof, Celebrity hereby agrees
to:
(i) Grant SeaVision the exclusive right, for so long as this
Agreement is in effect, to develop, install, operate, maintain
and improve interactive
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television services similar in nature or intent to the System and
Services located or installed anywhere on any Ship.
(ii) Make available (v) each Ship to SeaVision personnel for
SeaVision's installation and operation of the System thereon,
including but not limited to granting SeaVision personnel (A)
unlimited access to the television studio and radio frequency
distribution system installed or to be installed by Celebrity on
board that Ship which television studio and radio frequency
distribution system shall include the "central studio equipment,"
the "distribution plant" and a portion of the "head-end",
designated as such in Exhibit G attached hereto and (B) limited
access to passenger cabins, (w) all storage and work space
necessary on board each Ship for the installation and operation
of the System, (x) such personnel as are reasonably necessary or
appropriate to assist in the successful installation and
operation of the System, including but not limited to appropriate
on-board support for and oversight of the installation and
operation of the System by a designated officer on each Ship, (y)
all necessary systems integration support to allow the System to
communicate with other on-board systems, and (z) when any Ship is
not under construction, appropriate accommodations on board that
Ship for SeaVision personnel who are engaged in installing and/or
operating the System on that Ship. It is understood that
SeaVision personnel occupying such accommodations will, at all
times while on board that Ship, be subject to Celebrity's
policies regarding on-board contractors, including those
concerning dress, decorum and personal behavior.
(iii) Provide SeaVision with copies of the detailed plans,
specifications, blueprints and designs which relate to the
television studio, video distribution system, radio frequency
plant, shipboard information systems and passenger cabin
television on each Ship.
(iv) Furnish accommodations on board each Ship and otherwise respond
favorably to reasonable requests by SeaVision's management for
accommodations on board each Ship, on mutually-agreeable dates,
for the purpose of evaluating the System and its performance
during a "start-up" period of not less than 120 days and not more
than 180 days from the date of the commencement of the initial
voyage of the Ship with passengers after the installation thereon
of the System. Thereafter, in respect of each Ship, Celebrity
shall provide SeaVision management with accommodations aboard
that Ship, on mutually-agreeable dates, to allow SeaVision senior
personnel to monitor the on-going performance of the System and
SeaVision's personnel, for the purpose of determining whether
such enhancements and improvements to the System should be
recommended as
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they shall, in their sole discretion, deem appropriate. Requests
for such accommodations shall not exceed one (1) cabin/voyage per
month per Ship once the aforementioned "start-up" period has
passed. Celebrity will endeavor to provide to each Operator
accommodations comparable to those provided by Celebrity to its
employees of similar rank, such as Celebrity's MIS director and
Celebrity's shore excursion managers. Celebrity will provide each
Operator with all other on-board privileges that it provides to
its employees of similar rank.
(v) Provide any and all reasonable marketing support for the System
on-board each Ship. Such marketing support shall include but not
be limited to in-cabin collateral material, mention by the Cruise
Director during his introductory remarks to passengers on that
Ship, prominent coverage in the daily program circulated on that
Ship, insertion of promotional materials in passenger
documentation, and such other activities of a supporting nature
as are acceptable to both parties to this Agreement. All such
marketing support activities and material shall be subject to
Celebrity's prior approval which shall not unreasonably be
withheld, delayed or conditioned. To the extent such marketing
materials are produced by Celebrity and do not result in
additional cost to Celebrity, there shall be no cost or charge to
SeaVision in respect of such marketing materials. Any other
marketing materials produced shall be subject to SeaVision's
prior written approval, which shall not unreasonably be withheld,
delayed or conditioned, and the cost thereof shall be for the
account of SeaVision.
(vi) Work with SeaVision's marketing personnel to develop appropriate
and effective means acceptable to Celebrity for testing and
gauging passenger reaction to the System on a regular basis
during and after the installation of the System on any Ship.
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. Such activities will
be conducted by individuals mutually acceptable to Celebrity and
SeaVision, and the results of all such activities shall be made
available to Celebrity and SeaVision. The results of all such
activities shall constitute Celebrity's proprietary information
for purposes of this Agreement.
(vii) Use its best efforts in respect of each Ship to cause its on-
board concessionaires to work with SeaVision to develop mutually
beneficial applications for the System.
(viii) Consider requests by SeaVision to provide access to any Ship
when that Ship is in port for SeaVision personnel to demonstrate
the System to potential advertisers, marketers and clients. In
connection with making
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such demonstrations, SeaVision shall conform to Celebrity's
procedures for approving on-board visitors, including but not
limited to making advance requests for boarding passes.
(ix) Provide each Operator with the following data in electronic form
(i.e., diskettes, tapes, or other similar means) with respect to
each passenger on-board the applicable Ship, either directly or
through that Ship's property management system: name, age, cabin
assignment, dining assignment, and on-board account number. In
addition thereto, Celebrity shall provide such Operator with the
home address and telephone number of each passenger who requests
that SeaVision make or arrange for the delivery of any item to
that passenger's home. In respect of dining assignment
information, the parties understand that such information, as
provided by Celebrity to SeaVision, may not be completely
accurate, but that SeaVision will be entitled to rely on such
information, as provided by Celebrity, in connection with
SeaVision's operation of the System. If such data cannot be
available prior to the time of departure of each cruise,
Celebrity and SeaVision agree to jointly develop an efficient and
effective method for collecting such information in the manner
prescribed. Such data is only to be used for such purposes and
activities as are expressly authorized by Celebrity.
(x) Collect all monies paid by passengers in respect of Services
provided on or through the System and charged to the respective
on-board account of such passengers.
(c) Celebrity also has requested that SeaVision install and operate the
System on-board the m.v. Meridian. However, because of the advanced
age of that ship, the parties have agreed to further evaluate the
economic feasibility of that proposed installation and operation.
Accordingly, the parties, by mutual agreement, may add the m.v.
Meridian to this Agreement as an Additional Ship, whereupon SeaVision
shall install and operate the System on-board the m.v. Meridian
pursuant to an implementation schedule mutually agreeable to the
parties. If the parties mutually agree to add the m.v. Meridian to
this Agreement, the m.v. Meridian shall thereafter be an "Additional
Ship" for purposes of this Agreement, and, upon SeaVision's provision
therefor of the components listed on Exhibit D, Celebrity shall either
(A) reimburse SeaVision for the cost of such components (which cost
hereby is agreed to be [Redacted - confidential treatment requested]
or (B) provide SeaVision with transferable cruise credits in an
aggregate amount such that, upon SeaVision's transfer of such cruise
credits to third parties approved by Celebrity, SeaVision shall
receive funds in the aggregate amount of [Redacted -confidential
treatment requested]. Exhibit H outlines the terms under which
Celebrity has agreed to transfer such cruise credits.
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2. Operating Term/Renewal/Option. Unless sooner terminated in accordance
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with the terms of this Agreement, the term of this Agreement in
respect of any Ship (the "Operating Term") shall commence on the date
first written above and expire on the fifth anniversary of the
installation of the System on-board that Ship (in respect of any Ship,
the "Expiration Date"). In the event SeaVision desires to renew this
Agreement in respect of the applicable Ship upon any Expiration Date
or upon the expiration of any subsequent renewal term, if any,
SeaVision will notify Celebrity in writing no less than one hundred
twenty (120) days prior to the Expiration Date or the expiration of
such subsequent renewal term, as the case may be, of the terms and
conditions which it proposes for the subsequent renewal term.
Celebrity may, within sixty (60) days after its receipt of the
proposed terms and conditions, accept the proposal by notifying
SeaVision in writing of Celebrity's intention to renew this Agreement
in respect of the applicable Ship for a subsequent renewal term upon
the terms and conditions proposed by SeaVision. In the event
Celebrity agrees to any such renewal proposal, each successive renewal
term shall be designed as a "Renewal Term" and shall become a part of
the Operating Term in respect of the applicable Ship, each such
Renewal Term shall be for a period of two (2) calendar years, and the
"Expiration Date" in respect of the applicable Ship shall thereafter
be the date upon which such Renewal Term expires. In the event
Celebrity does not agree to any such renewal proposal, this Agreement
shall terminate in respect of the applicable Ship on the Expiration
Date or at the end of the then-current Renewal Term, as the case may
be.
3. Revenue-Sharing and Payment Terms.
---------------------------------
(a) For each calendar month of any Operating Term of this Agreement, the
Adjusted Gross Revenues (as defined below) for all cruises completed
during that calendar month will be allocated between Celebrity and
SeaVision as follows:
(i) If the aggregate of all of the Adjusted Gross Revenues generated
by all of the Systems then or theretofore installed on-board the
Ships, from the Effective Date of this Agreement, is less than
the Investment Recovery (as hereinafter defined), then Celebrity
shall be entitled to retain [Redacted - confidential treatment
requested] of the Adjusted Gross Revenues for cruises completed
during that calendar month and shall promptly remit the remaining
[Redacted - confidential treatment requested] of such Adjusted
Gross Revenues to SeaVision in accordance with this Section 3; or
(ii) If the aggregate of all of the Adjusted Gross Revenues generated
by all of the Systems then or theretofore installed on-board the
Ships, from the Effective Date, equals or exceeds the Investment
Recovery but is less than the Revenue Allocation Shift Amount (as
hereinafter defined) applicable at
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the beginning of the then-current annual period commencing on the
later of the Effective Date or the most recent anniversary
thereof, then Celebrity shall be entitled to retain [Redacted -
confidential treatment requested] of the Adjusted Gross Revenues
for cruises completed during that calendar month and shall
promptly remit the remaining [Redacted - confidential treatment
requested] of such Adjusted Gross Revenues to SeaVision in
accordance with this Section 3; or
(iii) If the aggregate of all of the Adjusted Gross Revenues
generated by all of the Systems then or theretofore installed on-
board the Ships, from the Effective Date, equals or exceeds the
Investment Recovery and is equal to or exceeds the Revenue
Allocation Shift Amount applicable at the beginning of the then-
current annual period commencing on the later of the Effective
Date or the most recent anniversary thereof, then Celebrity shall
be entitled to retain [Redacted - confidential treatment
requested] of the Adjusted Gross Revenues for cruises completed
during that calendar month and shall promptly remit the remaining
[Redacted - confidential treatment requested] of such Adjusted
Gross Revenues to SeaVision in accordance with this Section 3.
(b) "Investment Recovery", for purposes of this Agreement, shall mean the
aggregate of SeaVision's cost of all hardware and software components
of the System ordered for or installed on-board any Ship, SeaVision's
costs to install the System on-board the Ships and SeaVision's cost of
System video production, which aggregate amount shall in no event
exceed [Redacted -confidential treatment requested] per Ship, and
which aggregate amount shall not include more than the aggregate of
[Redacted - confidential treatment requested] for the development of
screens. For purposes of this Agreement, Investment Recovery costs
shall be supported by invoices and other documentation delivered by
SeaVision to Celebrity.
(c) "Revenue Allocation Shift Amount", for purposes of this Agreement,
shall be an amount equal to the total number of passenger cabin rooms
on all of the Ships on which the System is then installed, multiplied
by [Redacted -confidential treatment requested].
(d) "Adjusted Gross Revenues", for purposes of this Agreement, shall mean
the aggregate of (i) all monies paid to Celebrity in connection with
passengers' use of the Services provided by or on the System on-board
the Ships and charged to such passengers' respective on-board accounts
by Celebrity, other than monies 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
Celebrity, and (ii) certain other revenues as described in Exhibit A
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attached hereto, whether collected by Celebrity or SeaVision, less, in
respect of each Ship, (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, (C) the
commissions paid by SeaVision for advertising sold on the System, and
(D) the cost to SeaVision of marketing support materials produced for
the account of SeaVision pursuant to the terms of Subsection 1(b)(v)
hereof, the aggregate amount of which Celebrity shall pay over to
SeaVision, and less credits paid by Celebrity to passengers in the
case of gaming on the System and [Redacted - confidential treatment
requested] in respect of transactions on the System.
(e) On or before the twenty-first day of each calendar month during any
Operating Term of this Agreement, SeaVision shall provide Celebrity
with a written report (the form of which shall be mutually agreed upon
by the parties) 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 Celebrity and the revenues
to be remitted by Celebrity 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 applicable Ship's property management
system in order for SeaVision to obtain accurate accounting
information for such reports.
(f) Celebrity shall remit to SeaVision all Adjusted Gross Revenues
generated by the System less Celebrity's share of such Adjusted Gross
Revenues as provided in Section 3(a) of this Agreement, and all other
amounts due SeaVision as provided in Section 3(d) of this Agreement no
more than fifteen (15) days following its receipt of the applicable
monthly report from SeaVision.
(g) Celebrity shall promptly notify SeaVision of any changes, adjustments
or chargebacks (relative to the Adjusted Gross Revenues in respect of
any calendar month) of which Celebrity 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 of its
receipt of the applicable notice and supporting documentation, refund
to Celebrity SeaVision's percentage of the aggregate of such changes,
adjustments or chargebacks.
(h) All advertising and promotional revenues generated by the System on-
board any Ship and received by SeaVision, less any amounts payable by
SeaVision to any
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third party in respect thereof, shall be allocated between SeaVision
and Celebrity in the same manner and on the same percentages as the
Adjusted Gross Revenues are then being allocated between them pursuant
to the terms of Section 3(a) of this Agreement. SeaVision shall remit
to Celebrity Celebrity's portion of such net advertising and
promotional revenues on a calendar month basis not more than fifteen
(15) days following the end of each calendar month.
4. Termination.
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(a) Celebrity shall have the right to terminate this Agreement in respect
of any Ship prior to the Expiration Date applicable to that Ship in
the event the System on-board that Ship fails to achieve the technical
performance standards set forth in Exhibit F attached hereto.
Celebrity may not exercise this right (i) if such technical failure
occurs as a result of Celebrity's failure to perform any or all of its
obligations under the terms of this Agreement in respect of that Ship;
(ii) if such failure is a result of problems encountered with systems
and/or operations on-board that Ship other than the System; (iii)
prior to the expiration of the applicable Initial 120-Day Period (in
respect of any Additional Ship); and (iv) 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. Notwithstanding the provisions of the preceding clause (iv),
Celebrity shall not be obligated to provide the cure period provided
therein more than twice for separate occurrences of the same failure
by the System on-board that Ship. In any event in which SeaVision is
entitled to or is otherwise granted the cure period provided for in
the preceding clause (iv), Seavision shall, within fifteen (15) days
following Celebrity's written notice to SeaVision under such clause
(iv), provide to Celebrity 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 respect
of any Ship prior to the Expiration Date applicable to that Ship in
the event the System fails to achieve the technical performance
standards set forth in Exhibit F attached hereto and such failure is
the result of problems encountered with systems and/or operations on-
board that Ship other than the System or is the result of Celebrity's
addition to or replacement of systems and/or operations (whether
software, hardware or both) on-board that Ship other than the System
and/or the System on-board that Ship fails to achieve the financial
performance standards that SeaVision in its sole and absolute
discretion shall determine are necessary to warrant its investment in,
and its continued operation of, the System on-board that Ship. In
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the event SeaVision intends to terminate this Agreement in respect of
any Ship pursuant to this subsection 4(b), it shall do so in writing
to Celebrity no less than thirty (30) days prior to ceasing operations
hereunder, which termination notice shall set forth in reasonable
detail the reason for SeaVision's election to terminate this Agreement
in respect of that Ship. Representatives of SeaVision shall offer to
meet with representatives of Celebrity prior to the effectiveness of
any such termination.
(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) Celebrity shall have the right to terminate this Agreement in the
event SeaVision defaults in the performance of any material covenant,
warranty or agreement made herein (except a failure by the System to
achieve certain technical performance standards which is governed by
Section 4(a) herein), and such default has not been cured within sixty
(60) days after receipt of written notice thereof given by Celebrity
to SeaVision.
(e) SeaVision shall have the right to terminate this Agreement in the
event Celebrity defaults in the performance of any material covenant,
warranty or agreement made herein and such default has not been cured
within sixty (60) days after receipt of written notice thereof given
by SeaVision to Celebrity.
(f) Notwithstanding the termination or expiration of this Agreement as
provided for in this Section 4 and elsewhere in this Agreement,
Celebrity 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) Subject to the provisions of Section 5, as soon as is practicable
after the expiration of this Agreement or any termination of this
Agreement in respect of any Ship, SeaVision shall remove the System,
including all related hardware and software, and all on-board
SeaVision personnel, including without limitation the Operator, from
the Ship or Ships affected by the expiration or termination. The
parties hereby agree and acknowledge that in accordance with Section 1
hereof, SeaVision will retain title to all components of the System,
including all hardware and software installed on board the Ships by
SeaVision at any time while this Agreement is in effect, except as
otherwise expressly provided in Section 1 hereof. In the event of any
such removal, SeaVision shall assure that the television system
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on the applicable Ship is in operable condition, normal wear and tear
of the components thereof excepted. For purposes of the immediately
foregoing sentence, SeaVision's obligations are limited to the RF
plant, the television sets and the broadcast center of or on the
applicable Ship.
5. Celebrity's Right to Purchase.
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(a) Anything herein to the contrary notwithstanding, in the event
SeaVision elects to terminate this Agreement in respect of any Ship pursuant to
Section 4(b), Celebrity shall purchase the hardware furnished by SeaVision for
the System on-board that Ship and a non-transferrable license to use the
software components of the System (but only on-board that Ship) for an amount
equal to the lesser of (i) [Redacted - confidential treatment requested] and
(ii) the portion of the Investment Recovery applicable to that Ship less the
aggregate of all Adjusted Gross Revenues theretofore paid to SeaVision pursuant
to the terms of Section 3(a) hereof in respect of that Ship and less the
aggregate of net advertising and promotional revenues allocated to SeaVision
pursuant to the terms of Section 3(d) hereof in respect of that Ship. SeaVision
will provide support services for such hardware and software upon terms and
conditions to be mutually agreed by the parties. Notwithstanding the foregoing,
Celebrity's obligations under this Section 5(a) shall be conditioned upon the
System then being operational on-board the applicable Ship.
(b) At the relevant Expiration Date, Celebrity shall have the right in
respect of each Ship to purchase the hardware furnished by SeaVision for the
System on-board that Ship and a non-transferrable license to use the software
components of the System (but only on-board that Ship) for an amount then
mutually agreeable to the parties. Celebrity acknowledges and agrees that its
rights under this Section 5(b) shall not be exercisable if, prior to the
relevant Expiration Date, SeaVision shall have notified Celebrity of proposed
terms for a renewal or extension of this Agreement in respect of such Ship and
the parties shall have subsequently been unable to agree on terms for such
renewal or extension.
6. Sale or Disposal of the Ship. In the event that Celebrity elects to
----------------------------
sell or otherwise dispose of any Ship, Celebrity promptly shall notify SeaVision
in writing of its decision. Upon the sale of any Ship, the new owner shall have
the option of assuming this Agreement in respect of that Ship. If the new owner
of the Ship elects not to assume this Agreement or in the event Celebrity is
disposing of the Ship other than through a sale or transfer (i.e.,
decommissioning), SeaVision promptly shall remove the System from that Ship, and
Celebrity shall pay SeaVision in respect of that Ship an amount equal to the
lesser of (i) the depreciated value of the System in respect of such Ship at
such time and (ii) the amount of [Redacted - confidential treatment requested],
plus the aggregate of the cost of all new hardware and software theretofore
added to the System annually on-board that Ship, less the aggregate of all
Adjusted Gross Revenues theretofore paid to SeaVision pursuant to the terms of
Section 3(a) hereof in respect of that Ship and less the aggregate of net
advertising and promotional revenues allocated to SeaVision pursuant to the
terms of Section 3(d) hereof in respect of that Ship. For purposes of
determining
-13-
the depreciated value of the System for clause (i) above, the initial value of
the System on-board any Ship shall be [Redacted - confidential treatment
requested], which value shall reduce to zero ratably over [Redacted -
confidential treatment requested] following the installation thereof on-board
that Ship, and to which shall be added the cost of new hardware and software
theretofore added to the System annually on-board that Ship, which new
additional amounts also shall reduce to zero over a [Redacted - confidential
treatment requested] period from the date of each such addition thereof to the
System. In the event of any such removal, SeaVision shall assure that the
television system on the applicable Ship is in operable condition, normal wear
and tear of the components thereof excepted. For purposes of the immediately
foregoing sentence, SeaVision's obligations are limited to the RF plant, the
television sets and the broadcast center of or on the applicable Ship.
7. Confidentiality.
---------------
(a) Celebrity 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 Celebrity
any exclusive proprietary or other rights in the System, including,
but not limited to, any patent, copyright, trademark, service ▇▇▇▇,
trade secret, trade name or other intellectual property rights, except
that Celebrity will have the limited rights expressly set forth in
this Agreement. Accordingly, Celebrity acknowledges that, except as
expressly provided for in this Agreement, Celebrity possesses no title
or ownership of any System or any portion thereof. Celebrity will
keep the System free and clear of all claims, liens and encumbrances.
(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 with it by
the other party. The proprietary information shared with Celebrity by
SeaVision shall include, but is not limited to (a) any knowledge
gained by Celebrity of the System, including but not limited to
knowledge of the type, identity, operation or other characteristics of
the System's hardware, operating system software and applications
software; (b) SeaVision's marketing and sales strategy; (c) the format
and context of any and all SeaVision reports, including those for data
management, revenue remittance and marketing surveys; and (d)
SeaVision's marketing and advertising client list. Celebrity agrees
that it will not create or attempt to create, or permit any third
party to create or attempt to create, by reverse engineering or
otherwise, the source code for the System(s) or any portion thereof.
The provisions of this Section 7 apply to the System as delivered to
Celebrity by SeaVision for any Ship or as modified or otherwise
enhanced by SeaVision and to any proprietary material and information
regarding the System that is given to Celebrity prior to, on or after
the date of this Agreement. The proprietary information shared with
SeaVision by Celebrity shall include, but is not limited to (a) any
knowledge gained by SeaVision of Celebrity's
-14-
other information systems or operating strategies in respect of any
Ship; (b) Celebrity's marketing and sales strategy; (c) Celebrity's
marketing and advertising client list, including but not limited to
the information provided to SeaVision by Celebrity pursuant to the
terms of Subsection 1(b)(ix) hereof; and (d) the results of the
activities contemplated in Subsection 1(b)(vi) hereof. Notwithstanding
the foregoing, each party may use the other's proprietary information
in the internal conduct of its business, subject always to the
prohibition herein of disclosure. For example (but not in limitation
of the foregoing), (i) Celebrity may hereafter work with a third party
to design screens and reports functionally similar to the screens and
reports included in the System so long as Celebrity does not copy such
System screens or reports or disclose such System screens or reports
to any third party, and (ii) SeaVision may use the information it
gains regarding Celebrity's operations in connection with the
enhancement and marketing of SeaVision's products so long as SeaVision
does not disclose such information to any third party. Notwithstanding
anything contained in this Agreement to the contrary, the terms of
this Section 7(b) shall survive the expiration or termination of this
Agreement and remain in full force and effect for a period of one (1)
year following such expiration or termination.
(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) During any Operating Term and for a period of three (3) years
thereafter, neither party shall induce or attempt to induce any
employee or consultant of the other to terminate his or her employment
or consulting relationship with such other party and shall not solicit
any such employee or consultant for employment or consulting services.
Notwithstanding anything contained in this
-15-
Agreement to the contrary, the terms of this Section 7(d) shall
survive the expiration or termination of this Agreement and remain in
full force and effect for a period of three (3) years following such
expiration or termination.
(e) 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 7 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.
8. Right to Inspect Books and Records. SeaVision and Celebrity shall
----------------------------------
keep full 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 any Operating Term of this
Agreement, 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 other party. Both parties shall maintain the confidential
nature of any Records so inspected pursuant to and in accordance with the
provisions of Section 7 hereof.
9. Insurance/Waiver of Subrogation.
-------------------------------
(a) Celebrity hereby warrants, represents and covenants that it has, and
shall maintain for the Operating Term of this Agreement, at its sole
expense, all insurance coverages necessary and appropriate to fully
and adequately insure the System on-board each Ship for one hundred
percent (100%) of the insurable value of that System against any loss
or damage whatsoever which may occur while that System is present
and/or installed on that Ship. The insurance policy(ies) with respect
to such coverage shall each name SeaVision as an additional insured,
as its interests may appear. SeaVision shall, from time to time at
the request of Celebrity or on SeaVision's own initiative, provide to
Celebrity then current replacement cost information for insurable
components of the System. Celebrity shall not be in
-16-
breach of this Section 9(a) so long as, within thirty (30) days after
the delivery of any such cost information, the insurance then
maintained by Celebrity is consistent with such cost information. In
the event that SeaVision receives the proceeds of any such insurance
as a result of a casualty affecting the System or any portion thereof
on-board any Ship, SeaVision shall apply such proceeds to the repair
and restoration of the System on-board that Ship to its pre-casualty
functionality; provided, however, that SeaVision shall not be
obligated to so apply such proceeds or to repair and restore the
System if (i) such proceeds cannot reasonably be expected to fund the
full and complete repair and restoration of the System on-board that
Ship and Celebrity does not agree to fund the shortfall or (ii) the
affected Ship suffers damage as a result of the casualty and Celebrity
does not, at the request of SeaVision, deliver to SeaVision
Celebrity's written assurance that that Ship likewise will be fully
repaired and restored and used to provide passenger service
substantially equivalent to the service being provided immediately
prior to the casualty. The limitations on SeaVision's liability set
forth in Section 13 herein shall not apply to a breach by SeaVision of
its obligations hereunder to apply insurance proceeds to the repair
and restoration of the System.
(b) 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, 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.
10. Protection and Indemnity Cover. Each Operator and each member of
------------------------------
SeaVision's System installation crews shall be included as crewmembers on
Celebrity's protection and indemnity cover for such periods of time as the
Operator or crewmember, as the case may be, is posted to a Ship. For the sole
purpose of establishing liability for any sickness, personal injury or death
incurred or suffered by any Operator or any such crewmember which engaged on, or
in the service of any Ship Celebrity shall be considered the employer of that
Operator or crewmember.
11. Interruption in Performance. Neither Celebrity nor SeaVision shall be
---------------------------
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.
-17-
12. Indemnification.
---------------
(a) SeaVision shall indemnify, defend and hold harmless Celebrity 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 Celebrity by reason
of, arising out of or in connection with (x) 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 (y) SeaVision's failure to fully perform the terms of
this Agreement.
(b) At Celebrity's request, SeaVision will defend, at its own expense, any
action brought against Celebrity to the extent that such action is
based solely on a claim that the System on-board any Ship infringes
any patent or copyright or the trade secret or other proprietary right
of a third party ("Infringement"), and SeaVision will hold Celebrity
harmless from any resulting losses, liabilities, damages, costs and
expenses, including, without limitation, reasonable attorneys' fees,
provided that Celebrity provides SeaVision with prompt written notice
of such actions and SeaVision is given an opportunity to defend and/or
settle such action. If an infringement covered by the indemnity
provisions set forth herein is established by a court of competent
jurisdiction in a final decision from which no appeal is or can be
taken or if, in the opinion of SeaVision, any such System or any
portion thereof is likely to become the subject of such an
infringement claim, then SeaVision, at its option, may:
(i) modify the infringing or potentially infringing System to
make that System noninfringing while maintaining, in
SeaVision's reasonable opinion, the equivalent or better
functionality;
(ii) obtain, on Celebrity's behalf, the right for Celebrity to
continue to use the infringing System in accordance with the
terms of this Agreement; or
(iii) terminate this Agreement in respect of the infringing
System(s).
(c) Celebrity 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 (x) any negligent, willful or intentional act or omission of
Celebrity (or an employee, agent or representative of Celebrity)
committed or omitted, as the case may be, in the course of Celebrity's
-18-
performance of the terms of this Agreement or (y) Celebrity's failure
to fully perform the terms of this Agreement.
13. 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 SEAVISION BE LIABLE FOR ANY
DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
CELEBRITY'S USE OF OR INABILITY TO USE THE SYSTEM ON-BOARD ANY SHIP OR ANY
PORTION THEREOF OR FROM ANY DELAY IN THE SYSTEM ON-BOARD ANY SHIP ACHIEVING THE
TECHNICAL PERFORMANCE STANDARDS SET FORTH ON EXHIBIT F ATTACHED HERETO OR FROM
ANY DELAY IN THE SYSTEM ON-BOARD ANY SHIP MEETING, OR ANY INABILITY OF THE
SYSTEM ON-BOARD ANY SHIP TO MEET, CELEBRITY'S EXPECTATIONS WITH RESPECT TO
OPERATIONS OR PERFORMANCE, EVEN IF SEAVISION IS ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES. 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 SYSTEM, LOSS OF DATA, THE COST OF RECOVERING ANY
DATA, THE COST OF SUBSTITUTE SOFTWARE, OR CLAIMS BY THIRD PARTIES. IF CELEBRITY
TERMINATES THIS AGREEMENT PURSUANT TO THE TERMS OF SECTION 4(A) OR SECTION 4(D)
HEREIN, SEAVISION SHALL NOT BE LIABLE FOR ANY OF CELEBRITY'S INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING THEREFROM, BUT SHALL BE LIABLE FOR
CELEBRITY'S DIRECT DAMAGES ARISING THEREFROM; PROVIDED HOWEVER, THAT SEAVISION'S
LIABILITY FOR SUCH DIRECT DAMAGES SHALL BE LIMITED TO THE AGGREGATE OF (i) THREE
HUNDRED THOUSAND UNITED STATES DOLLARS (US$300,000) IN RESPECT OF EACH SHIP THAT
IS THEN THREE (3) YEARS OLD OR LESS AND (ii) TWO HUNDRED THOUSAND UNITED STATES
DOLLARS (US$200,000) IN RESPECT OF EACH SHIP THAT IS THEN MORE THAN THREE (3)
YEARS OLD. NOTWITHSTANDING THE FOREGOING, UPON THE FIRST SUCH TERMINATION BY
CELEBRITY, SEAVISION SHALL BE LIABLE FOR THE GREATER OF (i) CELEBRITY'S DIRECT
DAMAGES RESULTING THEREFROM, SUBJECT TO THE FOREGOING LIMITATION THEREON, OR
(ii) AS CELEBRITY'S SOLE AND EXCLUSIVE REMEDY THEREFOR, THE SUM OF THREE HUNDRED
THOUSAND UNITED STATES DOLLARS (US $300,000), REDUCED BY THE AGGREGATE OF ANY
PAYMENTS THERETOFORE PAID BY SEAVISION TO CELEBRITY UNDER SECTION 1(a)(i)
HEREIN.
-19-
14. Further Assurances of SeaVision's Title.
---------------------------------------
(a) Celebrity hereby agrees to execute and deliver to SeaVision, prior to
the date that installation of any System on any Ship commences, such
UCC-1 financing statements and other documents as SeaVision shall
reasonably require for the purpose of evidencing to Celebrity 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).
(b) SeaVision shall 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, prior to the date that installation of the System on-
board the applicable Ship commences. Each such label shall clearly
indicate that SeaVision holds title to the component to which that
label is affixed.
15. No Grant of Intellectual Property Rights. This Agreement does not and
----------------------------------------
shall not grant to Celebrity any patent, copyright, trademark, trade secret or,
except as expressly provided in this Agreement, other intellectual property
right or license, express or implied.
16. Public Announcements. The parties shall consult with each other and
--------------------
issue a public statement with respect to this Agreement and the System as soon
as is practical after the date hereof. During any Operating Term, Celebrity
shall include a reference to SeaVision in any and all public announcements or
marketing materials referring to interactive television or video entertainment
services on-board any Ship.
17. Arbitration. In the event of any dispute or controversy arising out
-----------
of or related to this Agreement, the parties will seek to resolve any such
controversy first by negotiating with each other in good faith in face-to-face
negotiations between the respective principals of each. In the event a
resolution is not reached in such manner within thirty (30) days after such
negotiations, if any, commence, any remaining dispute or controversy shall be
submitted to and settled by arbitration as hereinafter provided. Such
arbitration shall be conducted in London in accordance with the Arbitration Acts
1950 and 1989 or any re-enactment or statutory modification thereof then in
effect. The party desiring such arbitration shall serve upon the other party
written notice of its desire, specifying the issues to be arbitrated and the
name of the arbitrator whom it appoints. Within fourteen (14) days after notice
of such demand for arbitration, the other party shall in turn appoint an
arbitrator and give notice in writing of such appointment to the party demanding
arbitration. The two arbitrators so appointed shall select a third arbitrator,
or if the two arbitrators are unable to agree upon the third arbitrator within
fourteen (14) days after the appointment of the second arbitrator, either of the
said two arbitrators may apply to the President of the London Maritime
Arbitrators Association to appoint the third arbitrator, and the three
arbitrators shall constitute the Arbitration Tribunal. If a party fails to
appoint an arbitrator as aforementioned within fourteen (14) days following
notice of demand for arbitration by the other party, the party failing to
appoint an arbitrator shall be deemed to have
-20-
accepted as its own arbitrator the arbitrator appointed by the party demanding
arbitration and the arbitration shall proceed before this sole arbitrator who
alone in such event shall constitute the Arbitration Tribunal. The decision
rendered by the Arbitration Tribunal shall be final and binding and the appeal
by either party to a court in respect of the arbitration award shall be
excluded. The arbitration award shall include which party shall bear the
expenses of the arbitration or the proportion of such expenses each party shall
bear.
18. 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.
19. 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.
20. Assignment. Except as set forth herein, 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
from 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; provided, however, that
in no event will the rights hereunder of any pledgee or mortgagee of SeaVision
be any greater than the rights of SeaVision hereunder.
21. Successors. This Agreement shall inure to the benefit of, and be
----------
binding upon, the respective successors and assigns of the parties hereto upon
its execution by SeaVision and Celebrity, which execution, for purposes of
determining the effectiveness of this Agreement, may be evidenced by facsimile
transmission of the signature page of this Agreement.
22. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of England.
23. 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.
24. 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.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
-21-
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Celebrity: Celebrity Cruises Inc.
c/o ▇▇▇. ▇. ▇▇▇▇▇ GmbH & Co.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
or to such other place as SeaVision or Celebrity, as the case may be, may from
time to time designate in accordance herewith.
25. 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, including,
without limitation, the Original Agreement, 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: CELEBRITY CRUISES INC.
By:
------------------------ --------------------------------------
Its: Its:
-------------------- -------------------------------------
[Signature page to First Amended and Restated Agreement by and between
SeaVision, Inc. and Celebrity Cruises, Inc. dated as of
June 1, 1996, but effective as of September 1, 1995]
-22-
EXHIBIT A
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
Celebrity's full or partial 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
Celebrity 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 a preview
video 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 Celebrity
personnel. The System will provide appropriate inventory control.
Celebrity shall be responsible for providing all ticket stock and
videos in respect of such shore excursions. Celebrity may choose, at
its option, to produce its own videos, 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, provided, however, that any videos produced by
any such third party shall in all ways meet SeaVision's technical
standards for use on the System. Should Celebrity elect to have
SeaVision produce the shore excursion videos, SeaVision shall provide
Celebrity with detailed cost estimates prior to the initiation of
video production. Such estimates will include the cost of pre-
production scripting and preparation and the cost of sending crews
aboard Celebrity's Ships for taping and post-production editing.
. Wine Ordering: Passengers will be able to view a video on the
System of all wines in inventory and order their selections with their
television remote-controls. Orders will be printed out in the Wine
▇▇▇▇▇▇▇'▇ office or wine cellar, for delivery by Celebrity personnel
at the designated meal or to the designated cabin. The video review
will include the Chef's or Wine ▇▇▇▇▇▇▇'▇ "Tip of the Day." Cabin
accounts will be charged accordingly.
. Interface with Celebrity'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.
A-1
. Access Control: The System will be designed to provide access via
the use of a PIN based upon Celebrity's passenger tracking system.
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 Celebrity for the purposes of
revenue payments to SeaVision. SeaVision shall also provide, at
Celebrity's request, reports pertaining to passenger usage of the
System.
. Emergency Broadcast System: In the event of an emergency, the System
can be directly controlled either by the Master or the Operator to
notify passengers and to provide them with instructions.
. Passenger Folio Review - Onboard Account: Each passenger will be able
to use the System to review a summary of his onboard account.
. Spa Service Ordering: Passengers will be able to view a video for the
on-board spa services, obtain information with respect to the hours of
operation of the spa and make reservations for spa usage.
. Language Options: The various preview, ordering and information
services provided on the System will be available in English, French,
Spanish, Italian and German.
. Passenger Questionnaires: Passengers will be able to access an
interactive passenger questionnaire on the System to provide input and
reactions to the System.
. Television Programming: At a time to be mutually agreed upon by
SeaVision and Celebrity, but after the maiden voyage of the Ship,
SeaVision will provide Celebrity two (2) channels of programming on
and through the System for which Celebrity and its passengers will not
be charged. SeaVision will provide two (2) channels of programming on
and through the System for the crew of the Ship at no charge to
Celebrity or the crew. The content of these channels shall be by
mutual agreement, but they may include movies, documentaries, original
programming and selections from leading cable television vendors.
SeaVision reserves the right to market high-quality advertisements,
program-length product videos and corporate endorsements on these
channels, subject to mutual agreement with Celebrity. A portion of
the Adjusted Gross Revenues generated from any such advertisements,
program-length product videos and corporate endorsements will be paid
to Celebrity pursuant to and in accordance with the terms of Section 3
of the Agreement.
A-2
Revenue-Generating and Pay-Per-View Entertainment
-------------------------------------------------
NOTE: Celebrity 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 Celebrity's
approval, adult programming may be offered.
. Gaming Options: Passengers will be able to view a casino channel
which will promote the on-board casino operations and provide
instructions for various casino games and the hours of operation for
the on-board casino, as well as the opportunity to play video
blackjack and poker on the System. Video slots may be offered on the
System at a later date. 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. A limit of $200.00 per passenger will be imposed unless the
passenger requests an additional credit line. Credits may be redeemed
at a location designated by Celebrity. SeaVision shall establish and
maintain an on-board cash account on the Ship in an amount up to, but
not to exceed, $5,000, such amount to be used for the purpose of
allowing passengers to redeem gaming credits they may have. The gaming
options will be activated only with the prior approval of Celebrity
and subject to reasonable terms and conditions set forth by Celebrity.
SeaVision will cooperate with Celebrity to conduct limited tests of
the gaming options so long as Celebrity reimburses SeaVision for the
costs of any modifications which may result from such tests, provided
that SeaVision provides written estimates for the costs of any such
modifications for Celebrity's prior approval.
. Shopping: SeaVision will offer passengers shopping videos and
interactive video shopping on and through the System for SeaVision
exclusive stores, Celebrity Logo shop and other shopping vendors and
suppliers; provided, however, that (i) without Celebrity's consent,
SeaVision cannot offer for sale on any Ship any item in a product
category then being offered for sale on that Ship by the gift shop
concessionaire or any other concessionaire thereon and (ii) SeaVision
and Celebrity will work together in good faith to provide to the gift
shop concessionaire or any other concessionaire thereon an appropriate
amount of advertising on the System upon terms mutually acceptable to
the parties. Celebrity will retain the right to approve the items
offered for sale and the vendors providing those items, such approval
not to be unreasonably withheld. In the event Celebrity
A-3
elects to offer its own items for sale on and through the System,
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. Celebrity 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. SeaVision will provide fulfillment services for
products sold through the System which are not offered by Celebrity or
concessionaires on board the Ship. The shopping options will be
activated only with the prior approval of Celebrity and subject to
reasonable terms and conditions set forth by Celebrity. SeaVision will
cooperate with Celebrity to conduct limited tests of the shopping
options so long as Celebrity reimburses SeaVision for the costs of any
modifications which may result from such tests, provided that
SeaVision provides written estimates for the costs of any such
modifications for Celebrity's prior approval.
. 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 which are suitable and consistent with
Celebrity's image. However, SeaVision agrees to work with Celebrity
and within existing agreements and SeaVision will not provide such
access to island vendors unless such advertising is first requested by
Celebrity or an on-board concessionaire on the Ship. Celebrity will
have the right to review and approve all such advertising and
promotional programs in advance.
Additional Services (to be provided after the initial implementation of the
-------------------
System on the Ship and upon the mutual agreement of the parties)
. Live Cable Television Programming: SeaVision will use its best
efforts to provide Celebrity, if Celebrity so elects, live cable
television programming such as CNN and ESPN, at Celebrity's expense.
. Video-on-Demand to Crew: SeaVision shall have the option to offer to
the crew the same video-on-demand services which are offered to the
passengers on the same terms and conditions set forth in the Agreement
for such services to passengers or on such other terms and conditions
as are mutually agreed to by the parties.
. Ship Location Data: Passengers will be able to access a passive
application (to be provided by others) which will provide a graphic
display of the global position of the Ship, its speed, distance
traveled, time remaining to next destination, wind speed, water
temperature, time of day, etc. SeaVision will consult with Celebrity
A-4
regarding the integration of this passive application with the ship's
navigational instruments and television distribution system.
. Kiosks: SeaVision will cooperate with third party vendors to
integrate the System and its applications into on-board common area
touch screen kiosks.
. Shipboard Directions Module: Passengers will be able to access an
interactive application provided by SeaVision which will provide
passengers with directions how to locate and move from one shipboard
location to another.
. Other Options: The parties will work together to develop and make
available other potential revenue-generating services and options on
the System.
. Additional Non-revenue-Generating Services: To the extent that
channels on the System are not then being utilized by SeaVision,
Celebrity may use such channels to provide additional non-revenue-
generating services to its passengers and/or crew; provided, however,
in each instance:
(i) such services are approved to SeaVision, which approval shall
not unreasonably be withheld, delayed or conditioned;
(ii) such services are terminable at any time that SeaVision may
elect to utilize the applicable channel in connection with its
operation of the System;
(iii) Celebrity shall provide an operator and any hardware, software
and operations staff required for such services; and
(iv) Celebrity shall reimburse SeaVision for any additional cost to
SeaVision as a result of such services.
In addition thereto, the parties will consider the implementation on
the System of services providing daily activities information, cabin
maintenance and menu viewing.
. Additional Language Modules: SeaVision will develop and install
additional language modules for German, French, Spanish and Italian.
A-5
EXHIBIT B
Implementation Schedule
-----------------------
The following is subject to and conditioned upon (i) a definitive Agreement
being executed and delivered by SeaVision and Celebrity no later than May
29, 1996, (ii) the availability of Celebrity personnel to review and
approve certain content for the navigation screens and video shopping
modules in a timely fashion and (iii) delivery of all Celebrity supplied
equipment in a timely fashion.
Task Horizon Galaxy Zenith Mercury
Content - revise existing Celebrity 6/12/96 7/31/96 8/30/96 6/16/97
navigation documents for all modules, ITV
screens, voice prompting, motion video and
animation production.
Hardware - engineer, procure, assemble,
test and integrate.
Interfaces - design interfaces for reservation
system, transaction posting via PMS and
POS systems.
Operations - integrate all ITV related
transactions and activities into existing
shipboard departmental and operating
procedures.
Deliver by SeaVision of final content for all 7/31/96 9/18/96 10/18/96 8/4/97
ITV services.
Delivery by SeaVision of ITV hardware
components on-board the Ship.
Complete installation and testing of ITV 8/20/96 10/9/96 11/8/96 8/25/97
server, applications and system interfaces.
Complete secondary language module 8/27/96 10/16/96 11/15/96 9/1/97
installation.
Complete orientation of on board staff and 9/10/96 10/30/96 11/30/96 9/15/97
crew and complete integration of ITV
operating and fulfillment procedures with on
board departmental procedures.
B-1
EXHIBIT C
Hardware and Software Components of the System to be provided by SeaVision
--------------------------------------------------------------------------
Primary Components:
. Digital File Server - Pentium based server machine [Redacted -
confidential treatment requested].
. SeaVision Interactive Allocator - Version 1.0 software for [Redacted -
confidential treatment requested].
. SeaVision ISP Session - Version 1.0 software for [Redacted -
confidential treatment requested].
. SeaVision Database Engine - Version 1.0 software [Redacted -
confidential treatment requested].
. SeaVision CCP Interface - Version 1.0 software for [Redacted -
confidential treatment requested].
Support
. SeaVision PMS Protocol - A network interface specification to enable
third party PMS vendors to interface with the SeaVision ITV server.
. Ancillary Components - Keyboards, monitors, switches, cabling, network
hubs for the installation of the ITV server in the ships broadcast
control center.
. Uninterruptible Power Supply - For emergency backup power and line
conditioning to the SeaVision digital file server.
C-1
EXHIBIT D
m.v. Galaxy and m.v. Mercury
----------------------------
television control modules
necessary modifications of in-cabin televisions (if any)
two-way radio frequency distribution plant
equipment racks
communication control processor (CCP) [Redacted - confidential treatment
requested]
[Redacted - confidential treatment requested] video cassette players
[Redacted - confidential treatment requested] random dynamic modulators
m.v. Horizon and m.v. Zenith
----------------------------
in-cabin televisions
television control modules
necessary modifications of in-cabin televisions (if any)
two-way radio frequency distribution plant
equipment racks
communication control processor (CCP) [Redacted - confidential treatment
requested]
[Redacted - confidential treatment requested] video cassette players
[Redacted - confidential treatment requested] random dynamic modulators
D-1
EXHIBIT E
---------
Operations Manual of Celebrity
------------------------------
Confidential treatment requested
E-1
EXHIBIT F
Technical Performance Standards for the System
----------------------------------------------
RF System
. The SeaVision RF mixing network located in the BCC will support the
ships existing Free to Guest channels. A total of twenty 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.
Response Time
. The average user response time shall not exceed [Redacted -
confidential treatment requested].
. The maximum response time shall not exceed [Redacted - confidential
treatment requested].
F-1
EXHIBIT G
Installations to be Provided by Celebrity
-----------------------------------------
Distribution Plant
------------------
. 2-way RF distribution system as specified under the ship building
contract for the Ship, [Redacted - confidential treatment requested]
that originate from the TV broadcast center
. installation of all necessary network cabling at designated remote
peripheral locations
. AC power at all necessary locations including the peripherals, the
main ITV server and cabin TCM's
. cabin televisions including installed Guest Serve television control
modules and infra-red remote controls with batteries
. a spare inventory equal to seven percent (7%) of the infrared remotes
and batteries in use
Head-End Equipment
------------------
. a maximum of four (4) 22" equipment racks and three (3) 19" equipment
racks, one of which will be shared with SONY for UPS Power Systems
. one (1) Guestserve server PC with RF cards for communication with
cabin TCM's
. [Redacted - confidential treatment requested] ITV RF modulators
G-1
EXHIBIT H
Cruise Credit Barter Guidelines
-------------------------------
1. Cost of Cruises will be based on our preferred pricing sheets (Our
C.P.A. Rates/Five Star Rates) by the Category selected.
2. Port Taxes always paid in cash (Not barter).
3. Cabins on space available basis with confirmation 30 days in advance.
4. Holidays and February, July, August voyages excluded.
5. Barter cannot be sold to general public or Travel Agents.
6. Barter cannot be advertised.
7. Barter credit valid for two years.
8. Celebrity reserves the right to approve any transfer of barter credit
to third parties.
9. 70% of barter available for: Horizon/Zenith/Meridian
30% of barter available for: Century/Galaxy
10. No more than 10 cabins on any one voyage.
(Exceptions will be evaluated on an individual request basis)
H-1
