Video-On-Demand Purchase Agreement - SeaChange International Inc. and Comcast Cable Communications of Pennsylvania Inc.
VIDEO-ON-DEMAND PURCHASE AGREEMENT
This Video-On-Demand Purchase Agreement ("this Agreement") is made this 1st day
of December, 2000, by and between SeaChange International, Inc., 124 Acton
Street, Maynard, Massachusetts 01754 ("SeaChange"), and Comcast Cable
Communications of Pennsylvania, Inc., 1500 Market Street, Philadelphia, PA 19102
("Comcast") setting forth the terms and conditions governing the sale and
licensing from time to time by SeaChange to Comcast of SeaChange's video-on-
demand equipment (the "Equipment") and software (the "Software") and related
documentation and services. The Equipment and Software are collectively
referred to as "Product" or the "Products".
1. ORDERING PROCESS AND PROCEDURE
All purchases by Comcast hereunder shall be pursuant to a purchase order
issued by Comcast and accepted by SeaChange ("Order"). SeaChange shall
accept an Order by written acknowledgment or by commencement of
performance. Comcast may issue Orders in writing, by facsimile, or, if
available, by means of Electronic Data Interchange (EDI). All Orders shall
be subject to the terms this Agreement, whether or not this Agreement is
referenced in such Order. No other terms shall apply to an Order, unless
agreed upon by both parties in writing.
2. PRICES
2.1 The list prices and license fees applicable to the Products shall be
SeaChange's then current prices and fees, including SeaChange's then
standard discounts and allowances, set forth in SeaChange's published Price
List in effect on the date of order. A copy of SeaChange's Price List in
effect on the date of this Agreement is set forth in Attachment A. All
prices and license fees are for delivery FOB Maynard, Massachusetts and are
net of all taxes, duties and other governmental charges. All
transportation, rigging and draying charges shall be paid by Comcast.
There shall be added to the prices and license fees all taxes, and other
governmental charges, however designated, levied or based on the sale or
license of the Products or their use, including, without limitation, state
and local privilege or excise taxes based on gross revenue and import or
export duties, and any taxes or amounts in lieu thereof paid or payable by
SeaChange in respect of the foregoing, exclusive, however, of taxes based
on SeaChange's income. Any personal property taxes assessable on the
Products after delivery to the carrier shall be borne by Comcast. Freight
charges for shipments outside the continental United States shall be on a
prepaid or collect basis only.
2.2 Service prices for integration of Comcast-owned equipment will be quoted on
a case-by-case basis and will assume that such equipment meets SeaChange's
specifications and that it is available and ready to install at time of
system integration. Service charges for labor required to integrate or
repair Comcast-
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owned equipment or to dismantle and make such equipment ready for
integration will be billed separately plus expenses.
2.3 In addition to SeaChange's standard discounts applicable to the Products,
all Product prices and fees (other than fees for services of any kind)
shall be subject to the additional discounts set forth in Attachment A
during the term of this Agreement, including any renewals thereof.
2.4 Notwithstanding anything herein to the contrary, the prices and fees for
Products hereunder shall be no greater than those offered to other
SeaChange commercial customers under substantially similar terms and
conditions for substantially similar volume purchases at the time of
purchase, pursuant to the terms more fully set forth in Section 18 below.
3. PAYMENT TERMS
3.1 Payment for all Products and services ordered shall be made in United
States Dollars in two installments as follows:
(a) 50% with Comcast's Order;
(b) 50% within thirty (30) days after the date of delivery as evidenced by
SeaChange's notice of delivery and invoice.
3.2 All payments are to be paid to SeaChange at the address set forth in
SeaChange's invoice.
4. TITLE AND RISK OF LOSS
Title to the Equipment shall pass to Comcast upon delivery at the FOB
point. Title to Software shall not pass to Comcast at any time, but shall
remain with SeaChange or its licensor. The Products will be packaged in
accordance with standard commercial practices for domestic shipment and
will be shipped by means deemed most appropriate by SeaChange unless
shipping instructions are otherwise specified in writing by Comcast.
Comcast shall be responsible for all risk of loss or damage or destruction
to the Products from and after delivery of the Products by SeaChange to the
carrier at the FOB point.
5. SECURITY INTEREST
SeaChange reserves a purchase money security interest in all of the
Products until the price and license fees shall have been paid in full.
Comcast agrees to execute any documents requested by SeaChange to protect
SeaChange's security interest.
6. INSTALLATION
SeaChange shall install the Products in accordance with its standard
installation and testing procedures, which are set forth in Attachment B,
and shall notify
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Comcast of the successful completion of installation. Comcast shall provide
a suitable installation environment with all necessary facilities, as
specified by SeaChange, on or before the scheduled date of delivery of the
Products and shall furnish all labor required for unpacking and placing the
Products in the desired location in accordance with SeaChange's standard
procedures. SeaChange shall be given reasonable access to the Products upon
arrival of the Products at Comcast's installation site for the purpose of
installation and testing of the Products. The "Installation Date" shall be
the (a) date SeaChange furnishes Comcast with its certificate of successful
completion of installation and testing procedures, or (b) if Comcast has
not provided SeaChange with a suitable installation environment or
installation support as required herein which results in a delay in
commencement of installation, on the thirtieth (30/th/) day following
delivery of the Products.
7. DOCUMENTATION
Two (2) sets of manuals for each Product will be provided by SeaChange on
or before the Installation Date at no cost to Comcast. Additional copies
of such manuals are available from SeaChange at prevailing prices.
8. MAINTENANCE SERVICE
SeaChange shall provide to Comcast maintenance service and technical
support on all Products through December 31, 2002 in accordance with the
terms set forth in Attachments A and C. Thereafter, pursuant to its
standard maintenance agreement, a form of which is attached hereto as
Attachment C, SeaChange will offer Comcast maintenance service for the
Products at SeaChange's then current prices and fees in accordance with its
then current published Price List.
9. LICENSE OF SOFTWARE
9.1 The Software provided hereunder is furnished to Comcast under a
nontransferable, nonexclusive license for use solely on the Equipment on
which first installed for the sole purpose of operating the Equipment. In
the event SeaChange furnishes to Comcast media containing additional
software programs or routines not specified as Software licensed hereunder,
Comcast shall make no attempt to copy or otherwise use or disclose any such
additional software program or routines for any purpose.
9.2 Comcast shall NOT remove any copyright, trademark, proprietary rights,
legal or warning notice included on or embedded in any part of the
Software.
9.3 Comcast will not sell, license, sublicense, rent, lease or otherwise
transfer or assign the Software, whether by operation of law or otherwise,
without the written permission of SeaChange, except that Comcast may
transfer the Software to an affiliate of Comcast provided that the
Equipment on which such Software is used is also transferred to such
affiliate and such affiliate agrees in writing to be bound by the Software
license terms set forth in this Agreement.
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9.4 No reproduction rights in or to the Software or related documentation are
granted hereunder to Comcast. Comcast agrees that it will not, except for
archival purposes, copy, reproduce, duplicate by any means, or translate
into a machine language the Software or any portion thereof without the
prior written approval of SeaChange. Further, Comcast shall not, nor shall
Comcast permit any other person to, compile, decompile, or reverse engineer
the Software (except and only to the extent that such activity is expressly
permitted by applicable law notwithstanding this limitation), or otherwise
permit the unauthorized use of the Software, and any attempt to do so shall
be a material breach of this Agreement.
9.5 The license granted hereunder to the Software shall be effective from the
date of delivery of the Software and shall remain in force until terminated
as provided herein. SeaChange reserves the right to terminate any license
of the Software upon written notice in the event that Comcast shall fail to
pay any portion of the purchase price or license fee for the Products when
due, or Comcast shall make any improper use, transfer, duplication or
disclosure of the Software or in any other way breach this Agreement,
provided that Comcast shall have thirty (30) days from the date of such
notice to cure such breach. If the breach is not cured within the
applicable cure period, the applicable license shall terminate immediately
and Comcast shall immediately return the applicable Software, documentation
and any copies thereof to SeaChange. The opportunity to cure, however,
shall not affect SeaChange's right to obtain injunctive relief immediately.
10. WARRANTY
10.1 SeaChange warrants that the Equipment shall be fully functional and free
from defects in material and workmanship, and shall materially conform to
the functional specifications set forth in Attachment D, for a period of
two (2) years from the Installation Date. The foregoing warranty shall not
apply unless the Products are operated in strict conformance with
SeaChange's manuals furnished with the Products. Written notice of any
claimed defect must be given within thirty (30) days after such defect is
first discovered. SeaChange's obligation under this warranty is limited,
at its option, to the repair or replacement of the Equipment, components,
or parts thereof which prove to be other than as warranted above. Such
repair or replacement will be made at SeaChange's designated plant or
repair facility, and shall be at SeaChange's expense; however,
transportation or inspection charges covering any Equipment, component or
part returned that proves not to be defective in accordance with the terms
of this warranty shall be paid by Comcast. No Equipment is to be returned
to SeaChange without first receiving instructions regarding return
procedures. This warranty does not extend to any labor charges for
physical removal and/or replacement of defective Equipment or components or
parts thereof.
10.2 SeaChange warrants that the Software furnished hereunder will perform in
material conformance with its published specifications for a period of two
(2) years from the Installation Date. In the event of any failure to so
perform,
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SeaChange will use all reasonable commercial efforts to repair or
circumvent the defect, which shall be Comcast's sole remedy. It is
understood that SeaChange does not warrant that the Software will be error-
free.
10.3 Notwithstanding anything herein to the contrary, Products that are not
manufactured or developed by SeaChange, but are supplied or sublicensed by
SeaChange, and which are wholly or partially integrated into a system are
warranted only to the extent, and subject to the terms, of the original
warranty given by the manufacturer to SeaChange. Comcast must give prompt
written notice to SeaChange of any defect or failure of such Products and
provide satisfactory proof thereof.
10.4 The warranties set forth herein shall not apply to Products requiring
adjustments, correction, repair, or replacement, or increase in service
time, caused by:
(a) electrical work external to the Products(discuss with Comcast &
SeaChange), or the attachment or use of accessories or other devices,
including networking devices, not furnished, approved or recommended
by SeaChange; or failure to properly maintain the same;
(b) accident, transportation, neglect or misuse;
(c) alterations, including, but not limited to, any deviation from circuit
or network designs or structural equipment recommended by SeaChange,
installation or removal of Product features not recommended by
SeaChange, and all other modifications not recommended by SeaChange,
whenever any of the foregoing is performed by any person other than
those authorized by SeaChange;
(d) failure to provide and maintain a suitable installation environment
with all facilities specified by SeaChange (including, but not limited
to, failure of, or failure to provide, adequate electrical power, air-
conditioning, humidity control) or from use of supplies or materials
not meeting SeaChange's specifications;
(e) repair or replacement of consumable supplies or parts which have
reached the end of their useful life; or
(f) the use of a Product for other than the purposes for which designed.
10.5 SEACHANGE MAKES NO REPRESENTATION OR WARRANTY OTHER THAN THOSE SET FORTH
IN THIS AGREEMENT. THE WARRANTY STATED HEREIN IS EXPRESSLY IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
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11. Infringement Indemnity
SeaChange shall, at its expense, defend, indemnify and hold harmless
Comcast from and against any claim of infringement of any United States
patents or copyrights by any Products manufactured or developed by
SeaChange, provided that (i) SeaChange is promptly informed in writing of
such claim and furnished a copy of each communication, notice or other
action relating to the alleged infringement, (ii) SeaChange shall have
control over the defense and negotiations for a settlement or compromise,
(iii) SeaChange is given all reasonable authority, information and
assistance from Comcast (at SeaChange's expense) necessary to defend or
settle such suit or proceeding, and (iv) Comcast incurs no obligation or
liability without the prior written consent of SeaChange. The foregoing
obligation of SeaChange does not apply to Products or portions or
components thereof (a) which are modified by persons or entities other than
SeaChange (or persons or entities employed or contracted by SeaChange) if
the alleged infringement relates to such modification unless such
modification was recommended or approved by SeaChange or (b) combined with
other products, processes or materials not supplied or recommended by
SeaChange where the alleged infringement relates to such combination. If
any claim that SeaChange is obligated to defend has occurred or, in
SeaChange's opinion, is likely to occur, SeaChange may, at its option,
either (i) procure for Comcast the right to continue to use the applicable
Product, (ii) replace or modify the Product so it becomes non-infringing,
or (iii) refund the undepreciated portion of the price paid by Comcast for
such Product, assuming a 60-month straight-line depreciation schedule.
This Section states the entire liability of SeaChange with respect to
infringement of any copyrights, patents, or other intellectual property
rights by the Products.
12. LIMITATION OF LIABILITY
Except with respect to SeaChange's obligations under Section 11 above, and
except for personal injury or tangible property damage caused by the gross
negligence or willful misconduct of SeaChange in the performance of
services hereunder, SeaChange's liability in contract, tort or otherwise
arising out of or in connection with the sale, license or use of the
Product, shall not exceed the purchase price or license fee paid by Comcast
with respect to the Product that is the subject of the claim. IN NO EVENT
SHALL SEACHANGE OR ITS DEVELOPERS, DIRECTORS, OFFICERS, EMPLOYEES OR
AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL,
MULTIPLE, CONSEQUENTIAL, OR TORT DAMAGES (INCLUDING ANY DAMAGES RESULTING
FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS, LOSS OF SAVINGS, LOSS OF
BUSINESS OR OTHER ECONOMIC LOSS) ARISING OUT OF OR IN CONNECTION WITH THE
PERFORMANCE OF THE PRODUCT, CUSTOMER'S INABILITY TO USE THE PRODUCT OR
SEACHANGE'S PERFORMANCE OF SERVICES, EVEN
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IF SEACHANGE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
13. CONFIDENTIALITY
13.1 It is anticipated that the parties may be required to exchange certain
confidential information ("Information") to the other in the course of
performing this Agreement. From the date of disclosure, and until two (2)
years following such date, the recipient of Information ("Recipient") shall
maintain the Information in confidence and limit its use to the performance
of this Agreement, using at least the same degree of care as it employs to
protect its own confidential information of a similar nature, but not less
than a reasonable standard of care, provided the Information is identified
in writing as confidential at the time of disclosure, or if orally
disclosed is identified as confidential at the time of disclosure and
confirmed in writing within 20 days after the oral disclosure. Recipient
shall have no obligation hereunder with respect to any Information that is:
(a) generally known to the public at the time of disclosure, or becomes
known to the public without breach of this Agreement; or
(b) known to the Recipient prior to the disclosure, or is independently
developed by the Recipient without reference to or use of any other
portion of the Information; or
(c) obtained by the Recipient in good faith from a third party not under
obligation of secrecy to the disclosing party (hereafter called
"Discloser");
(d) the subject of a court or government agency order to disclose,
provided the Recipient gives prompt notice to the Discloser to allow
the Discloser to contest such order.
The Recipient shall have the burden of proving that any of the above
exceptions apply by means of documentary evidence available at the time
Recipient claims the exception first became applicable.
13.2 Title to all tangible forms of the Information, and all copies thereof,
shall be and remain with Discloser. Recipient shall not copy or otherwise
reproduce, in whole or in part, any Information without the prior written
authorization of Discloser, except as may be reasonably necessary to
fulfill the purpose of this Agreement. Recipient shall not disclose any
Information to any third party other than employees and contractors having
a need to know to support performance of this Agreement and who are subject
to written confidentiality agreements whose terms are substantially similar
to this Section. Recipient shall promptly return or destroy all tangible
forms of the Information, and copies thereof, upon Discloser's request or
termination of this Agreement.
13.3 It is understood, however, that SeaChange has performed substantial
development relating to the design and manufacture of digital video and
other products, and that SeaChange has relationships with other companies
which may be competitors
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of Comcast. It is further understood that Comcast has relationships with
other companies that may be competitors of SeaChange. Neither this
Agreement, nor receipt of Information hereunder, shall limit either party's
independent development, manufacture, or marketing of products or systems
involving technology or ideas similar to those disclosed, nor will this
Agreement or receipt of Information hereunder prevent either party from
undertaking similar efforts or discussions with third parties, including
competitors of the other party.
14. TERM AND TERMINATION
14.1 This Agreement will become effective as of the date first above written
and will continue for an initial term of four (4) years. This Agreement
may be renewed by Comcast for an additional two (2) year period with
written notice to SeaChange at least ninety (90) days prior to the
expiration of the initial term. If Comcast renews this Agreement pursuant
to the previous sentence, this Agreement shall be automatically renewed
thereafter for successive one (1) year periods until terminated at the end
of the then current renewal period by either party with at least ninety
(90) days prior written notice.
14.2 Either party shall be in default of this Agreement if such party:
(a) substantially fails to perform any material provision of this
Agreement;
(b) assigns this Agreement, or any obligation or right under this
Agreement to a third party that is not an affiliate of such party; or
(c) becomes insolvent or makes an assignment for the benefit of creditors,
or a receiver or similar officer is appointed to take charge of all or
part of that party's assets.
In the event of a default, the non-defaulting party may terminate the
Agreement and any outstanding Orders if the other party has failed to cure
such default within thirty (30) calendar days after its receipt of a notice
of default and intent to terminate. Notwithstanding the previous sentence
(except with respect to non-payment), if a cure is not possible within such
thirty (30) days, and if the defaulting party diligently pursues a cure of
such default during such thirty (30) day period and thereafter, then the
cure period shall extend up to a total of sixty (60) calendar days.
14.3 Termination or expiration of this Agreement shall not relieve either party
of any of its then-accrued obligations, including without limitation
payment obligations for delivered Products or for any then applicable
cancellation charges pursuant to this Agreement.
14.4 Notwithstanding any other provision of this Agreement, in the event that
SeaChange and Comcast SC Investment, Inc. (the "Investor"), an affiliate of
Comcast, terminate that certain Common Stock and Warrant Purchase Agreement
of even date herewith prior to the consummation of the investment by the
Investor in SeaChange as described therein, either SeaChange or Comcast may
terminate
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this Agreement upon fifteen (15) days prior written notice to the other
party within ten (10) days of the date on which such Common Stock and
Warrant Purchase Agreement is terminated, whereupon this Agreement shall
become null and void and of no further force or effect and neither party
shall have any further obligations to the other hereunder.
15. CANCELLATION OF AN ORDER AND RETURN OF PRODUCTS
15.1 Comcast may not cancel any Order within thirty (30) days of the scheduled
delivery date. To the extent that SeaChange can not use the products to
fulfill another Order from Comcast or another third party within a
reasonable time frame, cancellation of any Order by Comcast, other than as
provided in Section 14.2 above, shall obligate Comcast to pay all expenses
incurred in commitments made by SeaChange and all unrecoverable costs
incurred by SeaChange. In the event of any such cancellation, SeaChange
shall use reasonable commercial efforts to mitigate such costs and
expenses.
15.2 Acceptance of goods for return shall be made only with prior written
authorization by SeaChange and in accordance with SeaChange's standard
policy relevant to restocking charges.
16. CHANGES
SeaChange reserves the right, at its option, to modify or change the
Equipment in whole or in part, at any time prior to delivery thereof in
order to include electrical or mechanical improvements deemed appropriate
without incurring any liability to modify or change the Equipment
previously delivered.
17. INSURANCE
SeaChange will provide the following insurance coverage at its own expense
throughout the term of this Agreement:
(a) Workers' compensation insurance, as required by law, and employer's
liability insurance with at least a $100,000.00 limit.
(b) Personal injury, bodily injury, and property damage liability
insurance, including automobile coverage, with personal injury and
bodily injury of not less than $1,000,000.00 combined single limit,
and property damage of at least $500,000.00 for any one occurrence.
SeaChange will also furnish upon request a certificate of insurance to
Comcast for the required coverage's, which certificate shall name Comcast
as an additional insured.
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18. MOST FAVORED CUSTOMER PROVISION
18.1 Most Favored Customer Provision. Notwithstanding any other provision in
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any other agreement entered into between SeaChange or any of its affiliates
and Comcast or any of its affiliates, Comcast and each of its affiliates
are hereby accorded the right to receive "most favored customer" terms and
conditions from SeaChange and any of its affiliates, meaning that each of
Comcast and its affiliates shall be entitled to such terms and conditions,
including, but not limited to, price and any and all kinds of incentives
(including any equity incentives awarded), with respect to the purchase of
SeaChange's or any of its affiliates' Products and services hereunder, that
are no less favorable than each of those terms and conditions offered by
SeaChange or any of its affiliates to any other party, individually or
collectively, at any time and from time to time, without regard to the size
(through volume discounts or otherwise) or identity of such other parties
or their ownership interests in SeaChange or any of its affiliates;
provided that such "most favored customer" terms and conditions shall not
apply to any existing customer agreements that were disclosed to Comcast
prior to the date first above written in a written document referring
specifically to this Section 18. Without limiting the generality of the
foregoing, in the event that SeaChange enters into any agreement with any
other party, which agreement contains a "most favored customer" provision
that is superior to the provisions of this Section 18, Comcast and each of
its affiliates shall be entitled to the benefit of such superior "most
favored customer" provision. The "most favored customer" status afforded
Comcast and its affiliates hereunder shall apply by comparison of complete
offerings of Products and services offered Comcast and its affiliates on
the one hand and a third party on the other, such that the overall
contractual relationship between Comcast or any of its affiliates and
SeaChange or any of its affiliates shall be on no less favorable terms than
SeaChange's or its affiliates' contractual relationship with such third
party, taken in its entirety. Comcast acknowledges that a third party may
have more favorable terms with regard to a specific line item, and such
shall not in and of itself constitute a violation or breach of this Section
18.
18.2 Audit Right. Comcast may, upon reasonable notice to SeaChange, instruct
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an external independent auditor to audit the relevant books and records of
SeaChange to ensure compliance with Section 18.1. In the event that
SeaChange is found to be in violation of Section 18.1, SeaChange agrees to
(i) pay the reasonable expenses of the independent auditor, (ii) refund or
credit overpaid amounts to Comcast or its Affiliates, as the case may be,
against future license fees (at the election of Comcast or the Affiliate)
and (iii) to the extent possible, give retroactive and prospective effect
to non-economic terms and conditions as required by Section 18.1.
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19. HARDWARE AND SOFTWARE INTEGRATION
SeaChange shall provide to Comcast, at no additional charge, from the
signing of this Agreement until December 31, 2002, all reasonable hardware
and software integration services required to provide a fully functional
SeaChange VOD system, as described in Attachment D, to Comcast including,
but not limited to, the following integration:
. Motorola headend controller and set top platform including DAC controller
and DCT 2000 and DCT 5000 class set tops.
. Scientific Atlanta headend controller and set top platform including DNCS
controller and Explorer 2000 and Explorer 6000 class set tops.
. PACE Genesis class set top.
. Integrated QAM modulation equipment internal to the SeaChange Product.
. Integrated Up-Conversion equipment internal to the Seachange Product.
. Comcast VOD Navigator and User Interface.
. Comcast Interactive Programming Guide.
. Set top operating system software or Comcast chosen middleware software,
including VRTX, Power TV, Liberate Technologies, Microsoft and WorldGate.
. Comcast billing system, including Cable Data and Convergys.
. Content encoding, encryption, distribution (digital linear tape and
satellite), loading, tracking and auditing including requirements by
content providers In Demand, Intertainer, TVN or an industry standard.
20. APPLICATION INTEGRATION
SeaChange shall make available to Comcast an application integration
laboratory for Comcast and SeaChange to jointly develop new products such
as User Interface design, interactive advertising with streaming media,
Internet Protocol media storage and streaming, time shifted programming and
personal video recording/streaming to a television through a set top box.
21. DEPLOYMENT COMMITMENT
21.1 Comcast shall commit to deploy SeaChange Equipment on two-way capable
digital headends that serve 1 million basic subscribers by December 31,
2002 (the "Deployment Commitment"), subject to SeaChange's obligation to
fulfill the conditions precedent set forth in Section 21.2. Should
SeaChange fail to fulfill the conditions set forth in Section 21.2 by
December 31, 2000, then the terms of the
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Deployment Commitment and related provisions of this Agreement shall shift
out in time, from December 31, 2002, proportionally to the time
differential between December 31,2000 and the date that SeaChange fulfills
the conditions set forth in Section 21.2.
21.2 The Deployment Commitment shall not activate until SeaChange has provided
to Comcast a fully functional VOD Product, as described in Attachment D,
and met the following conditions precedent:
(a) SeaChange VOD Product is integrated, with respect to all material
functions, with the Motorola headend DAC controller and DCT 2000 set
top platform.
(b) SeaChange VOD Product is integrated, with respect to all material
functions, with the Scientific Atlanta headend DNCS controller and
Explorer 2000 set top platform.
(c) SeaChange VOD Product has internal integrated QAM modulation equipment
or an option for Comcast to accept an external High Density Integrated
QAM/Up-Conversion solution at no additional cost to Comcast.
(d) SeaChange VOD Product is integrated, with respect to all material
functions, with the Power TV set top operating system software for the
Scientific Atlanta Explorer 2000 set top platform, WorldGate
Communications middleware software for the Motorola DCT 2000 set top
platform, and Liberate Technologies middleware software for the
Motorola DCT 2000 set top platform.
(e) SeaChange VOD Product is integrated, with respect to all material
functions, with the Cable Data Comcast billing system.
22. WARRANT ISSUANCE
22.1 On the terms set forth in this Section 22, and without any additional
consideration therefor, SeaChange shall issue to Comcast Cable SC
Investment, Inc. (the "Holder"), an affiliate of Comcast, warrants (each,
an "Incentive Warrant," and collectively, the "Incentive Warrants") to
purchase shares of SeaChange's common stock, par value $0.01 per share (the
"Common Stock"), at a per share exercise price equal to the average of the
Current Market Prices (as defined below) of the Common Stock for the
fifteen consecutive Trading Days (as defined below) ending on the
Determination Date (as defined below) with respect to which such Incentive
Warrant is issued, or, if such Determination Date is not a Trading Day,
then ending on the last Trading Day immediately prior to such Determination
Date. Each Incentive Warrant shall be exercisable by the Holder for a
period of five years from the date of issuance, and shall have such other
rights, preferences, privileges and restrictions as are set forth in the
form of Incentive Warrant attached hereto as Attachment E. The shares of
Common
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Stock purchasable upon exercise of each Incentive Warrant (the "Warrant
Shares") shall have those registration rights set forth in that certain
Registration Rights Agreement dated as of the date hereof among SeaChange,
Comcast SC Investment, Inc. and the Holder, substantially in the form
attached hereto as Attachment F.
22.2 Prior to the end of the calendar month immediately following each
Determination Date, Comcast shall provide to SeaChange a certification
signed by an officer of Comcast on behalf of Comcast of the number of
Committed Subscribers (as defined below) as of such Determination Date and
the applicable Warrant Number (as defined below) for the Incentive Warrant
to be issued by SeaChange in respect thereof, if any. Promptly upon
receipt of such certification, but in no event more than five Business Days
(as defined below) thereafter, SeaChange shall issue to the Holder an
Incentive Warrant to purchase a number of Warrant Shares equal to such
Warrant Number.
22.3 The Warrant Factors (as defined below) shall be subject to adjustment from
time to time as described in this Section 22.3.
(a) In case SeaChange shall pay or make a dividend or other distribution
on the Common Stock of SeaChange in Common Stock or any other security
convertible into or exchangeable for shares of Common Stock (other
than any rights, options or warrants described in subsection (b) of
this Section 22.3), the Warrant Factors shall each be adjusted by
multiplying such Warrant Factor by a fraction of which (i) the
numerator shall be the sum of (A) the number of shares of Common Stock
outstanding at the close of business on the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution and (B) the total number of shares of Common Stock
constituting such dividend or distribution (or, in the case of a
dividend or distribution of securities convertible into or
exchangeable for shares of Common Stock, the total number of shares of
Common Stock underlying such securities), and (ii) the denominator
shall be such number of shares referred to in clause (i)(A) above,
such adjustment to become effective immediately prior to the opening
of business on the next Business Day following the date fixed for such
determination. For the purposes of this subsection (a), the number of
shares of Common Stock at any time outstanding shall include shares
issuable in respect of scrip certificates issued in lieu of fractions
of shares of Common Stock.
(b) In case SeaChange shall hereafter issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock or any other security convertible into
or exchangeable for shares of Common Stock at a price per share less
than the Current Market Price of the Common Stock on the date fixed
for the determination of stockholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend reinvestment
plan), (i) the
<PAGE>
Warrant Factors shall each be adjusted by multiplying such Warrant
Factor by a fraction of which (A) the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase (or such number of
shares of Common Stock underlying any convertible securities so
offered for subscription or purchase), and (B) the denominator shall
be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock that the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price, such reduction
to become effective immediately prior to the opening of business on
the next Business Day following the date fixed for such determination
(for the purposes of this subsection (b), the number of shares of
Common Stock at any time outstanding shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of
Common Stock), and (ii) if any such rights, options or warrants expire
or terminate without having been exercised or are exercised for a
consideration different from that utilized in the computation of any
adjustment or adjustments on account of such rights, options or
warrants, the Warrant Factors shall be readjusted such that each
Warrant Factor would be the same as would have resulted had such
adjustment been made without regard to the issuance of such expired or
terminated rights, options or warrants or based upon the actual
consideration received upon exercise thereof, as the case may be,
which readjustment shall become effective upon such expiration,
termination or exercise, as applicable; provided, however, that all
readjustments in the Warrant Factors based upon any expiration,
termination or exercise for a different consideration of any such
right, option or warrant, in the aggregate, shall not cause the
Warrant Factors to be less than the Warrant Factors immediately prior
to the time such rights, options or warrants were initially issued
(without regard to any other adjustments of such number under this
subsection (b) that may have been made since the date of the issuance
of such rights, options or warrants).
(c) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Warrant Factors
shall each be proportionately increased, such increase to become
effective immediately prior to the opening of business on the next
Business Day following the day upon which such subdivision occurs,
and, conversely, in case the outstanding shares of Common Stock shall
each be combined into a smaller number of shares of Common Stock, the
Warrant Factors shall each be proportionately decreased, such
reduction to become effective immediately prior to the opening of
business on the next Business Day following the day upon which such
combination occurs.
<PAGE>
(d) In case SeaChange shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights, options or warrants
referred to in subsection (b) of this Section 22.3, any dividend or
distribution paid exclusively in cash and any dividend referred to in
subsection (a) of this Section 22.3), the Warrant Factors shall each
be adjusted by multiplying such Warrant Factor by a fraction of which
(i) the numerator shall be the Current Market Price at the close of
business on the date fixed for such determination and (ii) the
denominator shall be such Current Market Price less the then fair
market value of the portion of the assets or evidences of indebtedness
so distributed applicable to one share of Common Stock, such
adjustment to become effective immediately prior to the opening of
business on the next Business Day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(e) In case of any reclassification, recapitalization or other change in
the outstanding securities of any class issuable upon exercise of the
Incentive Warrants thereafter issuable hereunder (including any such
reclassification, recapitalization or other change upon a
consolidation or merger in which SeaChange is the continuing
corporation, but not including any transactions for which an
adjustment is provided in subsection (c), (d) or (f) of this Section
22.3), the provisions of this Section 22 shall be immediately and
automatically amended, without any further action on the part of
SeaChange, Comcast or the Holder, to the extent necessary to provide
that any Incentive Warrant issued thereafter shall entitle the Holder
to exercise such Incentive Warrant into the kind and amount (if any)
of securities, cash and other property receivable upon such
reclassification, recapitalization or other change by a holder of the
number of shares of Common Stock that would have otherwise been
issuable upon exercise of such Incentive Warrant had it been issued
and exercised immediately prior to such reclassification,
recapitalization or other change, subject to any further adjustment as
provided herein, at an exercise price equal to the fair market value
of such securities, cash and other property on the date such Incentive
Warrant is actually issued (calculated as described in Section 22.1
above). The above provisions of this subsection (e) shall similarly
apply to successive reclassifications, recapitalizations and other
changes in the outstanding securities of the class issuable upon
exercise of the Incentive Warrants thereafter issuable hereunder.
(f) In case of any consolidation of SeaChange with, or merger of SeaChange
into, any other person, any merger of another person into SeaChange
(other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the
Common Stock) or any sale or transfer of all or substantially all of
the assets of SeaChange, in each case in which this Agreement remains
in full force and effect, the provisions of this Section 22.3 shall be
immediately
<PAGE>
and automatically amended, without any further action on the part of
SeaChange, Comcast or the Holder, to the extent necessary to provide
that any Incentive Warrant issued thereafter shall entitle the Holder
to exercise such Incentive Warrant into the kind and amount (if any)
of securities, cash and other property receivable upon such
consolidation, merger, sale of transfer by a holder of the number of
shares of Common Stock that would have otherwise been issuable upon
exercise of such Incentive Warrant had it been issued and exercised
immediately prior to such consolidation, merger, sale or transfer,
subject to any further adjustment as provided herein, at an exercise
price equal to the fair market value of such securities, cash and
other property on the date such Incentive Warrant is actually issued
(calculated as described in Section 22.1 above). If the holders of the
Common Stock may elect from choices the kind or amount of securities,
cash and other property receivable upon such consolidation, merger,
sale or transfer, then for the purpose of this Section 22.3 the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer shall be deemed to be the
choice specified by the Holder, which specification shall be made by
the Holder by the later of (i) ten Business Days after the Holder is
provided with a final version of all information required by law or
regulation to be furnished to holders of Common Stock concerning such
choice, or, if no such information is required, ten Business Days
after the Holder is provided with a final version of all information
that was otherwise furnished to the holders of Common Stock concerning
such choice, and (ii) the last time at which holders of Common Stock
are permitted to make their specification known to SeaChange. If the
Holder fails to make any specification, the Holder's choice shall be
deemed to be whatever choice is made by a plurality of holders of
Common Stock not affiliated with SeaChange or the other person to the
merger or consolidation. The above provisions of this subsection (f)
shall similarly apply to successive consolidations, mergers, sales or
transfers.
(g) All calculations under this Section 22.3 shall be made to the fifth
decimal place, and no adjustment to any Warrant Factor shall be
required unless such adjustment (plus any adjustments not previously
made by reason of this subsection (g)) would require an adjustment of
at least 0.00001 to such Warrant Factor; provided, however, that any
adjustments that by reason of this subsection (g) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment.
(h) Whenever the Warrant Factors are adjusted as herein provided,
SeaChange shall (i) compute the adjusted Warrant Factors in accordance
with the provisions of this Section 22.3, and (ii) mail to Comcast a
notice stating that the Warrant Factors have been adjusted and setting
forth the adjusted Warrant Factors.
<PAGE>
22.4 SeaChange shall not, by amendment of its Certificate of Incorporation,
through reorganization, consolidation, merger, dissolution or sale of
assets, or any other voluntary act, avoid or seek to avoid the observance
or performance of any of its obligations under this Section 22.
22.5 Once per 12 month period, SeaChange may, upon reasonable notice to
Comcast, instruct an external independent auditor to audit the relevant
books and records of Comcast to ensure the accuracy of the number of
Committed Subscribers set forth in the certifications provided by Comcast
pursuant to Section 22.2. In the event that any such Comcast certification
is found to be incorrect as of the date with respect to which it was made,
such that warrants covering a greater number of Warrant Shares were issued
to Comcast than were actually earned, Comcast agrees to (i) pay the
reasonable expenses of the independent auditor, and, at SeaChange's option,
(ii) return to SeaChange for cancellation any such warrants to the extent
of any unearned Warrant Shares, and, to the extent such warrants have been
exercised with respect to such unearned Warrant Shares, sell to SeaChange
at the exercise price, adjusted for any stock dividends or other
distribution on the Common Stock of SeaChange, the number of Warrant Shares
received by Comcast, adjusted for any such stock dividends or other
distribution on the Common Stock of SeaChange and including any rights,
options or warrants issued in respect thereof, as a result of the exercise
of such warrants with respect to such unearned Warrant Shares.
22.6 In addition, at Comcast's option and to the extent that Comcast has not
earned the maximum number of Warrant Shares underlying all Incentive
Warrants issuable hereunder, Comcast may elect to (a) place on or before
January 31, 2004 one or more noncancelable Orders for Equipment to be
deployed (or in the process of being deployed) by it on or before June 30,
2004, (b) make a nonrefundable payment of 100% of the amount payable with
respect to such Order(s) on or before January 31, 2004 and (c) submit to
SeaChange on or before January 31, 2004 a good faith estimate of the number
of Committed Subscribers with respect to which such Equipment so ordered
will be deployed (or in the process of being deployed) on or before June
30, 2004, in which event SeaChange shall promptly, but in no event more
than five Business Days after January 31, 2004, issue to the Holder an
additional Incentive Warrant to purchase a number of Warrant Shares equal
to the Warrant Number calculated in the manner described in the succeeding
sentence, which additional Incentive Warrant shall have a per share
exercise price equal to the average of the Current Market Prices of the
Common Stock for the fifteen consecutive Trading Days ending on January 31,
2004, or, if such date is not a Trading Day, then ending on the last
Trading Day immediately prior to such date. For purposes of this Section
22.6, the Warrant Number shall be calculated assuming that December 31,
2003 is the applicable Determination Date and the number of Committed
Subscribers as of such Determination Date shall include the number of
Committed Subscribers estimated in good faith by Comcast with respect to
which the Equipment so ordered will be deployed (or in the process of being
deployed).
<PAGE>
22.7 For the purpose of this Section 22, the following terms shall have the
following meanings:
(a) "Business Day" shall mean any day except a Saturday, Sunday or any day
on which banking institutions are authorized or required to close in
the city of New York, New York.
(b) "Committed Subscriber" shall mean a basic Comcast subscriber served by
a two-way digital headend on which SeaChange's VOD Equipment is
deployed, including any such subscriber who was served by a two-way
digital headend on which SeaChange's VOD Equipment was deployed by
Comcast as of the date on which such headend (and, therefore, such
subscriber) was sold, traded or otherwise transferred by Comcast to
another entity, but excluding any such subscriber who was served by a
two-way digital headend on which SeaChange's VOD Equipment was
deployed by another entity as of the date on which such headend (and,
therefore, such subscriber) was sold, traded or otherwise transferred
by such other entity to Comcast. "First Tier Committed Subscriber"
shall mean each Committed Subscriber in excess of 1,000,000 but less
than 2,000,001. "Second Tier Committed Subscriber" shall mean each
Committed Subscriber in excess of 2,000,000 but less than 3,000,001.
"Third Tier Committed Subscriber" shall mean each Committed Subscriber
in excess of 3,000,000 but less than 4,000,001.
(c) "Current Market Price" shall mean the closing price per share of
Common Stock on the earlier of the day in question or the Ex Date (as
defined below) with respect to the issuance, payment or distribution,
where the closing price for each day shall be the reported last sale
price regular way or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the Common Stock
is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the Nasdaq National
Market System or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the Nasdaq
National Market System, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm reasonably selected from time to time by
the Board of Directors of SeaChange for that purpose.
(d) The "Determination Dates" shall be June 30, 2001, December 31, 2001,
June 30, 2002, December 31, 2002, June 30, 2003 and December 31, 2003.
(e) "Ex Date" shall mean, with respect to any issuance or distribution,
the first date on which the Common Stock trades regular way on the
applicable
<PAGE>
securities exchange or in the applicable securities market without the
right to receive such issuance or distribution.
(f) "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday other than any day on which the Common Stock is not traded on
the applicable securities exchange or in the applicable securities
market.
(g) "Warrant Factors" shall mean the First Tier Warrant Factor, the Second
Tier Warrant Factor and the Third Tier Warrant Factor. The "First
Tier Warrant Factor" shall equal 0.1, the "Second Tier Warrant Factor"
shall equal 0.15 and the "Third Tier Warrant Factor" shall equal 0.2,
each subject to adjustment as described in Section 22.3.
(h) The "Warrant Number" for each Determination Date shall equal the sum
of (i) the product obtained by multiplying the First Tier Warrant
Factor by the difference between (A) the total number of First Tier
Committed Subscribers as of such Determination Date minus (B) the
highest number (as adjusted based upon the results of any audit
conducted pursuant to Section 22.5) of First Tier Committed
Subscribers counted on any previous Determination Date (provided that
in no event shall the difference between (A) and (B) be less than
zero), plus (ii) the product obtained by multiplying the Second Tier
Warrant Factor by the difference between (A) the total number of
Second Tier Committed Subscribers as of such Determination Date minus
(B) the highest number (as adjusted based upon the results of any
audit conducted pursuant to Section 22.5) of Second Tier Committed
Subscribers counted on any previous Determination Date (provided that
in no event shall the difference between (A) and (B) be less than
zero), plus (iii) the product obtained by multiplying the Third Tier
Warrant Factor by the difference between (A) the total number of Third
Tier Committed Subscribers as of such Determination Date minus (B) the
highest number (as adjusted based upon the results of any audit
conducted pursuant to Section 22.5) of Third Tier Committed
Subscribers counted on any previous Determination Date (provided that
in no event shall the difference between (A) and (B) be less than
zero); provided, however, that in the event that the Warrant Number
for any Determination Date (other than the last Determination Date)
would not be a whole number, the Warrant Number shall be rounded down
to the nearest whole number and the number of Committed Subscribers,
or portions thereof, not counted towards the Warrant Number as a
result of such rounding shall be counted on the next Determination
Date. Applying the foregoing formula and based upon the initial
Warrant Factors, which are subject to adjustment as described in
Section 22.3, the maximum number of Warrant Shares underlying all
Incentive Warrants issuable hereunder is 450,000 shares (100,000
shares with respect to the First Tier Committed Subscribers, 150,000
shares with respect to the Second Tier
<PAGE>
Committed Subscribers and 200,000 shares with respect to the Third
Tier Committed Subscribers).
23. PUBLIC ANNOUNCEMENT
SeaChange and Comcast shall agree on the form and content of any public
announcement that shall be made concerning this Agreement and the
transactions contemplated hereby, and neither SeaChange nor Comcast shall
make any such public announcement without the consent of the other, except
as required by law.
24. GENERAL
24.1 Force Majeure. Neither party shall be liable for delays in performance
-------------
arising out of or resulting from causes beyond such party's control. Such
causes include, but are not restricted to, acts of God, any government
authority, or the public enemy, fires, floods, epidemics, quarantine
restrictions, strike, freight embargoes, shortages of materials, unusually
severe weather, and default or delay of suppliers. In the event of such
delay, the shipping date shall be extended for a period equal to the time
lost by reason of the delay.
24.2 Governing Law. This Agreement shall be governed by the laws of the
-------------
Commonwealth of Massachusetts, without regard to its conflict of laws
rules, except that the United Nations Convention on the International Sale
of Goods shall not apply to this Agreement.
24.3 Survival. In addition to any provision of this Agreement which by its
--------
nature is intended to survive expiration or termination of this Agreement,
Sections 4, 5, 9, 10, 11, 12, 13, 14 and 15 shall survive the termination
or expiration of this Agreement.
24.4 Assignment. This Agreement and the rights, duties and obligations under
----------
this Agreement may not be assigned in whole or in part without the prior
written consent of the other party, which shall not be unreasonably
withheld, provided, however, that either party may assign, without the
written consent of the other party, all or any part of this Agreement to
any subsidiary or affiliate of such party or a purchaser of substantially
all of the assets of the such party and such subsidiary, affiliate or
purchaser agrees in writing to be bound by all the terms and provisions of
this Agreement. Any attempted assignments of any rights, duties or
obligations under this Agreement without such required consent shall be
null and void. This Agreement shall be binding on each party's respective
successors and permitted assigns.
24.5 Independent Contractors. Comcast and SeaChange are independent
-----------------------
contractors and have no power, right or authority to bind the other party
or to assume or to create an obligation or responsibility, express or
implied, on behalf of the other party. Nothing in this Agreement shall be
construed as creating a partnership relationship between Comcast and
SeaChange or as creating the relationships of
<PAGE>
employer and employee, master and servant, or principal and agent between
the parties hereto.
24.6 Waiver and Severability.. Any failure or delay by either party in
-----------------------
exercising any right or remedy provided by or relating to this Agreement in
one or many instances does not constitute a waiver and shall not prohibit
that party from exercising such right or remedy at a later time within
applicable statute of limitations or from exercising any right or remedy
otherwise available. If any provision of this Agreement is deemed invalid
by a court of competent jurisdiction, it shall, to that extent only, be
deemed omitted from this Agreement.
24.7 Notice. Any notice required or permitted by this Agreement shall be in
------
writing and shall be hand delivered, or sent by prepaid registered or
certified mail, return receipt requested (if available), or sent by pre-
paid courier service, in each case addressed to the other party at the
address shown at the beginning of this Agreement or at such address for
which such party gives notice hereunder. Copies of all notices to Comcast
shall be sent to the attention of Comcast's General Counsel at the same
address. Delivery shall be deemed completed upon receipt or refusal to
accept such notice.
24.8 Entire Agreement. This Agreement, including all of its referenced
----------------
Attachments, constitutes the entire agreement between the parties with
respect to its subject matter. It supersedes any terms or conditions
contained on Comcast's purchase order, sales acknowledgment or invoice. It
also supersedes all previous oral or written communications between the
parties regarding the sale or license of the Products. Except as otherwise
provided herein, this Agreement may not be modified except by a written
document signed by an authorized representative of the party against whom
enforcement is sought.
For SeaChange International, Inc.: For Comcast Cable Communications
of Pennsylvania, Inc.:
Signature: /s/ William L. Fiedler Signature: /s/ Mark E. Hess
-------------------------- ---------------------------
Name: William L. Fiedler Name: Mark E. Hess
------------------------------- --------------------------------
Title: Vice President Title: Vice President of Digital
------------------------------ -------------------------------
Television
-----------------------------
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
Attachment A
------------
SeaChange Price List
The pricing specified in this SeaChange Price list includes all reasonable
parameters required to correctly design, install, operate and maintain a highly
reliable commercial SeaChange VOD system including, but not limited to, media
asset loading and management, video storage/pump, DVB/ASI and QAM output, server
interconnect equipment/Ethernet hubs, and all software.
1. *
2. *
Hardware and Software for:
(Detailed Listing in Comcast Product Description)
Video Servers with 456 Mbps Output and (12) - 18 GB Disk Drives
**
ITV Command Center
Asset Manager
Connection Manager
Propagation Services
Streaming Service
Client Application
Directory Service
**
1
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
3. ** Maintenace includes all hardware and software inlcuding 7 by 24 telephone
support (see Purchase Agreement Attachment C, Maintenance Agreement).
4. OTHER CHARGES
Shipping, Taxes and Insurance is not included.
*
3
<PAGE>
Attachment B
------------
SeaChange
Interactive TV
Customer Installation
Certification Guide
Revision 1.0
11/26/00
SEA CHANGE INTERNATIONAL
124 ACTON STREET
MAYNARD, MASSACHUSETTS 01754
PHONE: 978-897-0100
4
<PAGE>
Notice
While SeaChange believes the information included in this publication is correct
as of the publication date, information in this document is subject to change
without notice.
UNLESS EXPRESSLY SET FORTH IN A WRITTEN AGREEMENT SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF SEACHANGE INTERNATIONAL INC., SEACHANGE MAKES NO WARRANTY OR
REPRESENTATION OF ANY KIND WITH RESPECT TO THE INFORMATION CONTAINED HEREIN,
INCLUDING WARRANTY OF MERCHANTABILITY AND FITNESS FOR A PURPOSE.
SeaChange International Inc. assumes no responsibility or obligation of any kind
for any errors contained herein or in connection with the furnishing,
performance, or use of this document.
Software described in SeaChange documents (a) is the property of SeaChange
International Inc. or the third party, (b) is furnished only under license, and
(c) may be copied or used only as expressly permitted under the terms of the
license.
All contents of this manual are copyrighted by SeaChange International Inc. The
information contained herein is the exclusive property of SeaChange
International Inc. and shall not be copied, transferred, photocopied, translated
on paper, film, electronic media, or computer-readable form, or otherwise
reproduced in any way, without the express written permission of SeaChange
International Inc.
Microsoft, MS, MS-DOS, Windows, and Windows NT are trademarks of Microsoft
Corporation.
All other trademarks and registered trademarks are the property of their
respective holders.
Manual Title: SeaChange ITV Customer Certification Guide Rev. 1.0
Printing Date: July 2000
Published by SeaChange International Inc.
124 Acton St.
Maynard, MA 01754 USA
(C)2000 by SeaChange International Inc. All rights reserved.
6
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1. INTRODUCTION............................................................ 8
1.1. Document Objective................................................ 8
2. CONTENT LOADING................................................... 9
2.1. Test Objective.................................................... 9
2.2. Test Action....................................................... 9
2.3. Components Validated.............................................. 9
2.4. Test Verification................................................. 9
3. CONTENT PROPAGATION..................................................... 10
3.1. Test Objective...................................................... 10
3.2. Test Action......................................................... 10
3.3. Components Validated................................................ 10
3.4. Test Verification................................................... 10
4. SEACHANGE MOD CLIENT APPLICATION FUNCTIONALITY.......................... 11
4.1. Test Objective...................................................... 11
4.2. Test Action......................................................... 11
4.3. Components Validated................................................ 11
4.4. Test Verification................................................... 11
5. RESOURCE MANAGEMENT..................................................... 12
5.1. TSID CLIENT APPLICATION........................................... 12
5.1.1 Test Objective................................................... 12
5.1.2 Test Action...................................................... 12
5.1.3 Components Validated............................................. 12
5.1.4 Test Verification................................................ 12
5.2. Delivery Network Path Table......................................... 13
5.2.1 Test Objective................................................... 13
5.2.2 Test Action...................................................... 13
5.2.3 Components Validated............................................. 13
5.2.4 Test Verification................................................ 13
6. FAULT TOLERANCE......................................................... 14
6.1. ITV COMMAND CENTER.................................................. 14
6.1.1 Test Objective................................................... 14
6.1.2 Test Action...................................................... 14
6.1.3 Components Validated............................................. 14
6.1.4 Test Verification................................................ 14
6.2. ITV MediaCluster.................................................... 15
6.2.1 Test Objective................................................... 15
6.2.2 Test Action...................................................... 15
6.2.3 Components Validated............................................. 15
6.2.4 Test Verification................................................ 15
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
6.3. NETWORK............................................................. 16
6.3.1 Test Objective................................................... 16
6.3.2 Test Action...................................................... 16
6.3.3 Components Validated............................................. 16
6.3.4 Test Verification................................................ 16
7. BILLING SYSTEM INTEGRATION.............................................. 17
7.1. Test Objective...................................................... 17
7.2. Test Action......................................................... 17
7.3. Components Validated................................................ 17
7.4. Test Verification................................................... 17
</TABLE>
7
<PAGE>
Introduction
Document Objective
The SeaChange International Interactive Television (ITV) System is configured
and tested at the SeaChange factory prior to shipment. Upon installation and
integration into a customer site, the SeaChange installation team verifies the
correct installation, operation, and functionality of the ITV System. This
document specifies the tests that the SeaChange installation team executes to
validate the installation and integration. While it is intended that this plan
be executed by a qualified SeaChange Installation Engineer, SeaChange welcomes
customer supervision and participation. The following capabilities will be
completed:
1. Content loading
2. Content propagation
3. SeaChange Movies on Demand client application functionality
4. Resource management
5. Fault-tolerance
6. Billing System integration
8
<PAGE>
Content Loading
Test Objective
The objective of this test is to validate that movie content (video and audio)
can be uploaded into the ITV System's Asset Manager and installed into the
Upload MediaCluster and that the movie metadata can be installed to the ITV
System's Directory Service.
Test Action
Automatically import a movie from a Digital Linear Tape (DLT) drive and install
it on the Asset Manager's content installation disk drive. Enter the metadata
for the content (either automatically from a metadata file or manually via the
Asset Manager GUI). Finally, install the movie to the ITV Upload MediaCluster.
Components Validated
Installation of the movie content (video and audio) to the Asset Manager
validates the DLT interface and installation of the movie metadata validates the
Asset Manager software and its Server-to-Server Network interface to the
Directory Service. Metadata importing also validates that the Directory Service
and its SQL database are operational. Installing the movie from the Asset
Manager to the Upload MediaCluster validates the Propagation Network interface
to the Upload MediaCluster and that the Upload MediaCluster is operational and
able to import movie content.
Test Verification
From the Asset Manager Command Center, use the Asset Manager (activated by
clicking on the Asset Manager icon) and select the folder for the genre of the
movie you installed. In the genre folder select the asset and verify that it is
green and in an active state. Once the asset has been propagated in a
subsequent test you will be able to further validate the movie content
installation.
Figure 1 Asset View in the Asset Manager
Textual Description of Graphic: View of computer screen with window divided
into three quadrants. The first quadrant contains a list of movies that may be
selected by the active cursor. The second quadrant provides information
regarding the movie selected by the cursor. The third quadrant provides the
asset identification number of the movie selected by the cursor.
9
<PAGE>
Content Propagation
Test Objective
The objective of this test is to validate that a movie imported to the Upload
MediaCluster can be propagated to another MediaCluster in the ITV system.
Test Action
Propagate the movie imported to the Upload MediaCluster in the previous test.
Verify that the remote MediaCluster you wish to propagate to is in the
propagation cluster list. Check
HKEY_LOCAL_MACHINE\software\seachange\itv\currentversion\services\IPS in the
active Propagation Server for verification. Set the activation time of the movie
to be propagated to be within the configured propagation window based on the
current time.
Components Validated
Initiation of the movie propagation to a remote MediaCluster validates the
Propagation Service's Server-to-Server interface to the Directory Service and to
both the Upload MediaCluster and the remote MediaClusters. The actual movie
propagation validates the Propagation Network between the Upload and remote
MediaClusters. Also verified is the Propagation Service, the MediaCluster
Agent, IP multicasting on the Propagation Network, and the ability of the
MediaClusters to export and import propagating content.
Test Verification
From the Propagation Service Command Center, execute the ctail command on the
IPS.log log file to verify that the asset propagation process has been
initiated. Next issue a remote-command to a node in the remote MediaCluster you
are propagating to and execute a 'scp dir' command to display the contents of
the directory of that MediaCluster. The directory listing should show the Asset
Element ID of the movie being propagated. Finally, execute the Management
Utility (ManUtil). Click on the Connection Manager - ICM symbol, select the
Propagation Service API (IPS API), and verify that the Connection Manager
recognizes the new location for the movie asset. Once the asset is streamed in
a subsequent test you will be able to completely validate the movie content
installation.
Figure 2 Sample ManUtil Window
Textual Description of Graphic: View of computer screen with window divided
into three quadrants. The first quadrant contains icons relating to subscribers
and icons relating to system components. The second quadrant provides a
subdirectory for the sytems component icon titled "IPS API" hilited in the
graphic in the first quadrant. The third quadrant provides asset identification
numbers relating to the hilited graphic in the first quadrant.
10
<PAGE>
SeaChange MOD Client Application Functionality
Test Objective
The objective of this test is to validate that functionality of the SeaChange
Movies-on-Demand (MOD) client and to verify the installation of the movie
installed and propagated in the previous test cases. If the SeaChange MOD
application is not being used then the applicable test from the application
provider should be used in lieu of this test case.
Test Action
Tune to the MOD channel. Navigate through the genres and select the movie that
was installed and propagated in the prior tests. Enable the Purchase PIN
through the EPG. Enter the Purchase PIN. Let the movie stream for a few
minutes. Channel off and then back onto the MOD channel. Verify that the movie
suspended at the proper position. Enable Parental Control. Verify the Parental
Control function. Verify the movie suspend functionality. Verify the trick-
modes by rewinding, fast-forwarding, pausing, and stopping the movie.
Components Validated
Activation of the MOD client and presentation of the movie list validates the
MOD Application Service and the Client-to-Server Network from the Return Data
Channel Network to the ITV Command Center. Purchase of the movie validates the
integration between the MOD Application Service, the Connection Manager Service,
the Streaming Service, and the MediaCluster Agent and the Server-to-Server
Network on which they communicate. Also validated is the integration with the
Resource Manager to allocate bandwidth on the broadband network.
Test Verification
The user should be able to navigate the movie lists and order a movie after
successfully entering the Purchase PIN. The user should be able to resume the
movie and the trick modes should work as requested.
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<PAGE>
Resource Management
TSID CLIENT APPLICATION
Test Objective
The objective of this test is to validate the integration of the ITV System with
the Session and Resource Manager (SRM) and movie streaming through the SRM
specified delivery network path.
Test Action
Tune to the VOD application and order a movie. Verify the purchase of the movie
and use ManUtil utility to verify it is streaming through the specified QAM.
Select the TSID of the QAM that you are trying to stream the movie through.
Repeat for each QAM in the Service Group. (Note that some QAM devices support
multiple channels e.g. Harmonic's VSG QAM provides 8 QAM channels and Scientific
Atlanta's MQAM provides 4 QAM channels.) If Conditional Access is deployed in
the environment one stream should be done with an asset marked for encryption.
Components Validated
This test validates the interface between the Connection Manager Service and the
SRM and the Server-to-Server Network on which they communicate. The Streaming
Service and its communication with the MediaCluster Agent over the Server-to-
Server Network are validated. The MediaCluster's ability to stream movies
through the specified delivery network path and on the proper PID is validated.
The configuration and wiring of the QAMs are also verified.
Test Verification
The user should be able to order a movie and view at the expected QAM frequency.
After test completion, test each pipe in the Service Group and test each Service
Group.
12
<PAGE>
Delivery Network Path Table
Test Objective
The objective of this test is to validate that the Delivery Network Path (DNP)
tables are correctly configured
Test Action
Run the Confedit program (See Figure 3) on the Streaming Server 1 (S1) Command
Center. For every pipe except one in a service group, set the TotalBW to 0.
Order a movie from a settop in the service group. If Conditional Access is
deployed in the environment one stream should be done with an asset marked for
encryption.
Components Validated
This test validates the DNP tables and the proper usage of these tables by the
ITV System.
Test Verification
The user should be able to order a movie and view it at the expected QAM
frequency. After test completion, test each pipe in the Service Group and test
each Service Group.
13
<PAGE>
Fault Tolerance
ITV COMMAND CENTER
Test Objective
This test validates fail over fault tolerance within server pairs in the ITV
Command Center.
Test Action
Purchase a movie from the MOD application. While the movie is streaming, fail
over the primary Connection Manager/Streaming Service to the back up server.
Components Validated
This test validates the proper configuration of the ITV Command Center servers
and their ability to fail over to their back up pairs and continuing to provide
their services to the MOD application.
Test Verification
The Connection Manager/Streaming Service Command Center will fail the services
to its paired machine and the stream will continue to play. Trick modes will be
unavailable during the fail over process, but will become available when the
service starts on the secondary ITV Command Center. The user should test the
trick modes once the failover has completed and verify they are still available
from the MOD application. Once complete, repeat these test on the Propagation
Service, Directory Service, and Application Service Command Center servers.
14
<PAGE>
ITV MediaCluster
Test Objective
This test validates fault tolerance within a MediaCluster in the ITV System.
Test Action
Purchase a movie from the MOD application. While the movie is streaming, fail a
single node in the MediaCluster providing that movie.
Components Validated
This test validates the fail over capabilities of the ITV MediaCluster and its
ability to stream movies while suffering a failure of one of its nodes. When a
node is failed, the remaining nodes in the MediaCluster will continue with the
streaming of the movie using the parity data striped across the MediaCluster.
Test Verification
Monitor the settop receiving and displaying the streaming movie when the node is
failed. If the delivery network path to the QAM for the movie being viewed
originated at the failed MediaCluster node then the movie will be briefly
suspended while another delivery network path is established to the settop. If
the delivery network path to the QAM for the movie being viewed originated from
a node other than the one that was failed then there will be no sign of the
failure. In either case, the movie will be available to the subscriber and all
trick modes will continue to operate as expected.
15
<PAGE>
NETWORK
Test Objective
This test validates that the individual components of the ITV system will fail
over from one network to another when a network is failed.
Test Action
Purchase a movie from the MOD application. While the movie is streaming, fail
the ITV Client-to-Server Network.
Components Validated
This test will validate the network configuration of the ITV system and the
ability of the individual components in the ITV System to fail over to the
configured failover network upon a loss of network service.
Test Verification
When the network is failed the ITV System components using the Client-to-Server
Network will fail over to the Server-to-Server Network and ITV System operations
will continue unaffected. Once complete; validate the configured network
failover capabilities of the Server-to-Server and Propagation Networks. (Note
that in most cases the operator does not with to have a Propagation Network
failover option.)
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<PAGE>
Billing System Integration
Test Objective
This test validates the integration of the ITV System to the Billing System and
verifies that movie purchase transactions are provided to the Billing System and
recorded appropriately.
Test Action
Purchase a movie from the MOD application. Allow the movie to run past its
Preview Time or set the Preview Time to 0 minutes prior to ordering the movie.
Components Validated
This test validates the MOD Application Service and its providing of the
billable transaction to the MOD Billing Service over the Server-to-Server
Network. This test also validates that the MOD Billing Service provides the
transaction information to the Billing System over the Server-to-Server Network.
Test Verification
The user should successfully order a movie and the SeaChange ITV System should
provide the billing transaction to the Billing System. To verify the
transaction within the ITV System, execute "Mbtester.exe -e c:\temp\billing.txt"
from the \itv\exe directory. Enter the name of the machine on which the active
Interactive Application Directory (IAD) is running. Select Option 1, which is
Initialize VOD Upload, then select Option 3, which is get VOD Records. Verify
the event was recorded properly. Finally, verify that the Operator's Billing
System has the appropriate record of the movie purchase. The steps to verify
this will vary depending on the Billing System.
17
<PAGE>
Attachment C
------------
SeaChange International, Inc.
124 Acton Street
Maynard, MA 01754
Maintenance Service Agreement for Hardware and Software
("MAINTENANCE SERVICE AGREEMENT")
This Maintenance Service Agreement dated as of this 1/st/ day of December , 2000
is entered into between SeaChange International, Inc., a Delaware Corporation
having a principal place of business at 124 Acton Street, Maynard, MA 01754
("Vendor") and
Comcast Cable Communications of Pennsylvania, Inc., a Pennsylvania corporation
having a principal place of business at 1500 Market Street, Philadelphia PA
19102 ("Customer").
1. Hardware and Software Maintenance. Vendor agrees to furnish to Customer, and
----------------------------------
Customer agrees to accept from Vendor technical support and maintenance
service on the computer hardware and computer software listed in Exhibit A
---------
hereto (the "Hardware" and the "Software"; together the "System"), all in
accordance with the terms and conditions herein contained.
2. Term and Termination. This Agreement shall commence on the date the Hardware
--------------------
and Software is installed and shall continue unless terminated in accordance
with the terms of this Agreement. The services provided under this
Maintenance Service Agreement commence from the date of installation as
referenced in Exhibit B hereto ("Initial Maintenance Term"). Thereafter this
---------
Agreement shall continue in full force and effect as referenced in Exhibit B
---------
hereto ("Subsequent Maintenance Term"). Either party shall have the right
to terminate this Agreement at the end of the Initial Maintenance Term,
during the Subsequent Maintenance Term, or at any subsequent renewal term
thereafter, by giving the other party sixty-(60) days advance written notice
of termination. At any time during the Initial Maintenance Term or any
Subsequent Maintenance Term of this Agreement, Vendor may evaluate the
System, its use and its environment, and may qualify the continuation of this
Agreement based on its environment, or its use, and such other changes as
are, in the opinion of Vendor, reasonably necessary for proper operation and
maintenance of the System.
3. Eligibility for Service Agreement Coverage.
-------------------------------------------
a) In order to establish eligibility for coverage during the Subsequent
Maintenance Term, if any or all of the Hardware or Software was not under the
Vendor's Maintenance Service Agreement for any period of time after the
Initial Maintenance Term, such Hardware and Software shall be subject to
inspection by Vendor, at Vendor's discretion, and the Customer shall pay for
such inspection, labor, materials and other amounts deemed appropriate by
Vendor to place the Hardware and Software in good operating condition. The
Customer shall pay the Vendor's then prevailing service rates plus reasonable
out-of-pocket expenses for travel, hotels and meals.
18
<PAGE>
b) This Maintenance Service Agreement requires that the Customer obtain
coverage under this Agreement for all Hardware and Software listed in the
then current Exhibit A and the Customer may not exclude any Hardware
components or Software from inclusion hereunder.
4. Hardware and Software Maintenance Responsibilities of Vendor. Vendor will
-------------------------------------------------------------
provide maintenance services for the Hardware and Software as follows: a)
Technical Telephone Support. Vendor will provide Customer with technical
support, available by telephone as listed in Exhibit B to assist Customer
---------
with its technical and operational inquiries. The Vendor shall use reasonable
efforts to telephone support requests within two business hours of receipt of
the Customer's call.
b) Remedial Maintenance Service. In response to telephonic notification from
the Customer and on the Vendor's determination that the System or the
Software is not operating in accordance with the specifications described in
the product documentation Vendor agrees to use reasonable efforts to provide
the necessary remedial maintenance services which may include the correction
or work-around of errors in the Software. Vendor will provide the diagnosis
and repair process from a remote location. Vendor will use all reasonable
efforts to correct or work around material Software errors, provided that the
error can be recreated with an unmodified release of the Software. Vendor
will provide programming services without additional charge to correct
verified errors and issue corrections to the Software to the extent deemed
reasonably practicable by Vendor, provided that if Vendor determines that
product documentation is in error, and such error does not affect the general
functioning of the Software, Vendor shall correct such documentation. If the
source of the stated problem can be demonstrated to be due to customer
modifications of the Hardware and/or Software, Customer agrees to compensate
Vendor, at Vendor's prevailing rates, for all time and expenses incurred in
accordance with Section 8 of this Agreement.
c) Maintenance Releases. Vendor agrees to provide Customer, at Vendor's
expense, with engineering changes to correct operational deficiencies and
errors to the Software, and such enhancements and improvements to existing
Software functionality as Vendor may furnish to its end users generally at no
additional charge, that are developed during the term of this Agreement
("Maintenance Releases") at such time as such Maintenance Releases are made
available for general release to end-users by Vendor. After the installation
of any Maintenance Releases of the Software, the Customer herewith relieves
Vendor of any liability or continued responsibility for any prior Software
release. The term "Maintenance Releases" does not include any software deemed
by Vendor to be a new version or product, or providing a new function or
feature, for which Vendor may charge a separate fee. All Maintenance Releases
shall remain the sole and exclusive proprietary technology and trade secrets
of Vendor.
From time to time, Vendor may release new versions of the Software,
incorporating new functions or features for the System for which Vendor will
charge a separate fee ("New Version"). Customer shall not be required to use
or install any New Version. If, however, the Customer elects not to receive
and install any New Version of the Software, Vendor may elect to terminate
this Agreement one (1) year after such New Version becomes available. Vendor
cannot warrant that a New Version will be compatible with Customer's version
of the System; however, any New Version which in the opinion of Vendor has
been successfully installed in
19
<PAGE>
such System shall be eligible for the Software maintenance services provided
for herein. After the installation of any New Version of the Software, Vendor
shall be relieved of any liability or continued responsibility for any prior
Software release. The delivery of any New Version does not include new
charges, installation or training fees or expenses related to such New
Version.
5. In the event that the Vendor determines (using remote diagnosis) that a
Hardware component is not performing in accordance with the specifications
described in the product documentation, the Vendor will, at its option,
repair or replace the Hardware component as soon as reasonably practicable.
If necessary, the Vendor will send a new or refurbished replacement Hardware
component to the Customer, subject to Section 7 (a) of this Agreement. This
Contract does not cover battery cells. Vendor agrees to provide technical
telephone support to remotely assist the Customer in replacing the new or
refurbished Hardware component at a pre-arranged point in time.
6. Exclusion from Contract. Vendor may at any time exclude from this Agreement
-----------------------
any Hardware or Software which (1) has been modified, repaired or serviced by
anyone other than Vendor's Service staff without the prior written approval
of Vendor, (2) has been subjected to unusual physical or electrical stress,
whether such stress results from accident, neglect, misuse, failure of
electrical power, air conditioning, humidity control, transportation, the
making of specification or configuration changes requested by Customer, or
any other cause other than ordinary use, and whether or not such stress is
the fault of the Customer, (3) has been purchased from another supplier and
is networked, linked, attached or otherwise intended to work with the System
or (4) has been moved from the place of installation. When Hardware or
Software has been improperly modified, repaired, stressed, used or moved as
described above, Vendor may, at its option and subject to the approval of the
Customer, perform such corrective work, including any repairs, replacements
and adjustments, as are in Vendor's opinion necessary to restore the System
to the condition it would have been in if subjected only to normal wear and
tear.
Vendor's maintenance service as described in Section 4 hereto is intended to
maintain the Hardware and Software in good operating condition when such
service is required because of normal wear and tear when used by Customer in
the application for which it was intended. If Vendor service is requested due
to causes other than normal wear and tear in such use and for reasons other
than those provided pursuant to Section 4 of this Agreement, the service will
be provided at the then prevailing Vendor daily rates for its service staff
and its then prevailing prices for replacement parts, components and
assemblies. Vendor maintenance service is limited to the Hardware and
Software listed in Exhibit A hereof, unless Hardware or Software is added to
---------
this Agreement in accordance with Sections 4 and 9 hereto. If Customer
modifies the Hardware or Software or adds foreign devices to the Hardware or
Software, Vendor, at its option, may terminate this Agreement or install,
support and service such modifications and foreign devices at its then
prevailing rates.
7. Responsibilities of Customer. Customer shall have the following obligations
-----------------------------
under this Agreement.
20
<PAGE>
a) The Customer shall return to Vendor any Hardware component original of
any Hardware component which the Vendor has replaced pursuant to Section 5
hereof of this Agreement. The Vendor will provide the Customer with
instructions on how to tag and return the original Hardware component. If the
Customer has not returned the Hardware component to the Vendor in accordance
with Vendor's packaging and shipping instructions within ten (10) business
days of receipt of the replacement part, the Customer will be billed and the
Customer will pay the then prevailing price for the Hardware component. If
the Customer fails to make the requisite payment within thirty (30) days of
invoicing and the Customer still has not returned the Hardware Component(s)
pursuant to this Section 7, Vendor shall have the right to suspend
Maintenance coverage.
b) Customer shall provide Vendor access to the System for any on-site
repairs.
c) Customer shall ensure that a Customer employee is on-site during any
periods of time the Vendor is on-site.
d) Customer shall provide adequate working space and facilities, including
light, heat, ventilation, electric current and outlets, and the like, for use
by Vendor maintenance personnel, and adequate storage space if required, for
spare parts. All such facilities shall be reasonably close to the System to
be serviced and shall be provided at no charge to Vendor.
e) Customer shall at all times maintain, for the benefit of Vendor, separate
telephone access to the System through a Remote-Access Service (RAS) at each
individual system installation location.
f) Customer shall provide Vendor, at no charge, access to and use of any
machines, attachments, features, communications facilities or other equipment
and materials normally at Customer's site which, in the opinion of Vendor's
service staff, are necessary to facilitate the performance of the maintenance
services described herein.
g) Customer shall maintain and control site environmental standards and
conditions as prescribed in Vendor's equipment manuals.
h) Customer shall not perform, nor attempt to perform, nor cause to be
performed, maintenance or repair of the System, except with the prior written
approval of Vendor.
i) Customer shall provide the names of up to four (4) individuals with
access to the Vendor technical telephone support. The names of these
individuals will be provided by the Customer to the Vendor upon commencement
of the Initial Maintenance Term.
8. Service Charges. In return for the maintenance services provided under this
----------------
Agreement, Customer shall pay Vendor the service charges ("Service Charges").
The Service Charges are due and payable to Vendor at the above address at the
beginning of each Subsequent Maintenance Term. The Service Charges are
subject to change by Vendor effective at any time, on commencement of each
Subsequent Maintenance Term, after thirty (30) days' advance written notice.
If the Customer fails to make the requisite payment pursuant to this Section
8 within sixty (60) days of the Initial Maintenance Term or Subsequent
Maintenance Term, as the case may be, Vendor shall have the right to
terminate this Agreement upon ten (10) days prior written notice ("Notice of
Termination"). If Customer remits the total amount due within ten (10) days
of the receipt of Vendor's Notice of Termination, this Agreement shall remain
in full force and effect.
21
<PAGE>
The Vendor may elect, at its sole discretion, to combine all Service Charges
to the Customer such that the Customer will be invoiced on an annual basis
for all Maintenance Services in order to facilitate one annual billing for
all Hardware and Software subject to Service Charges. At the end of the
Initial Maintenance Term the Vendor will pro rate the Service Charges for
any subsequent Hardware or Software purchases to the commencement of the
main maintenance term.
Charges for services other than those specifically provided by this
Agreement will be billed at Vendor's then prevailing service rates plus
reasonable out-of-pocket expenses for travel, hotels and meals. Vendor
neither guarantees nor implies the availability of services not specifically
provided under this Maintenance Service Agreement.
Payment not received by the invoice due date will be subject to a late
charge equal to the lesser of (a) 1-1/2% per month, or (b) the highest rate
permitted by law. Vendor may suspend or terminate this Agreement, at its
sole option, in the event Customer has failed to make prompt payment of
Service Charges on or before the invoice due date or otherwise breaches this
Agreement.
The charges hereunder are subject to increases in amounts equal to any tax,
fee or charge which Vendor may be required to collect from Customer, or in
respect of, the services performed, or the materials furnished, by Vendor
hereunder.
9. Additional Hardware and/or Software. Any additional Vendor's Hardware
-----------------------------------
and/or Software acquired and installed during the term of this Agreement
will be added to this Agreement without notification by the Vendor. Service
Charges at Vendor's then prevailing maintenance charges and service rates
will be charged.
10. Notices. All notices provided for in this Agreement shall be given in
-------
writing and shall be effective when either served by personal delivery, or
five (5) days after deposited, postage prepaid, by first class or registered
or certified mail, to the addressed parties at their respective addresses
herein set forth, or to such other address or addresses as either party may
later specify by written notice to the other.
11. Limitation of Liability and Warranty. VENDOR MAKES NO REPRESENTATIONS OR
------------------------------------
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT EXCEPT
AS PROVIDED IN THIS AGREEMENT. IN NO EVENT SHALL VENDOR BE LIABLE FOR ANY
LOSS OF PROFITS, LOSS OF USE OF SYSTEM, OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND, IN CONNECTION WITH OR ARISING OUT OF THE
SERVICES PROVIDED FOR IN THIS AGREEMENT EVEN IF VENDOR HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH LOSS OR DAMAGE.
No obligations or liability shall arise from or flow out of Vendor's
rendering technical or other advice in connection with the System or
services provided hereunder. Vendor's maximum
22
<PAGE>
liability, if any, regardless of the form of action taken, shall in no event
exceed the maintenance charges actually paid to Vendor hereunder. Vendor
shall not be liable to Customer or any other third party for any injury to
any person or property arising out of Customer's use or application of the
System, except for injuries arising out of Vendor's intentional wrong-doing
or gross negligence. Customer shall indemnify and hold Vendor harmless from
and against any and all damages unless occasioned by such gross negligence
or intentional wrong-doing of Vendor. Customer's remedies in this Agreement
are exclusive.
12. Acts of God. Vendor shall not be liable for damages for any delay or failure
------------
to deliver arising out of causes beyond its reasonable control and without
its fault or gross negligence, including, but not limited to, acts of civil
or military authority, fires, riots, wars, catastrophes, embargoes,
revolutions, insurrections, rebellions, national emergencies, strikes,
floods, acts of God, earthquakes, explosions, storms, epidemics, quarantine
restrictions, labor disputes, transportation embargoes or delays in
transportation, or inability to obtain Hardware or parts due to delays from
or backlog of suppliers.
13. General
-------
This Agreement (the "VOD Purchase Agreement"), including all referenced
attachments or exhibits to this Agreement or the VOD Purchase Agreement,
constitute the entire agreement between the parties relative to the subject
matter hereof, and supersede all proposals, written or oral, and all other
communications between the parties relating to the subject matter of this
Agreement.
The Initial Maintenance Term (Warranty) and Subsequent Maintenance Terms are
non-transferable.
No waiver, amendment, modification or cancellation of this Agreement or
provisions hereof shall be effective unless it is in writing and signed by
the parties hereto. Either party's failure at any time to require
performance by the other party of any provision hereof shall not affect in
any way the right of the party who waived enforcement of a performance
obligation to require such performance at any time thereafter.
The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of
any other provision.
Titles or captions in this Agreement are inserted only as a matter of
convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provisions hereof.
This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors, heirs and assigns.
This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the internal laws of the
Commonwealth of Massachusetts, without regard to
23
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
its conflict of laws provisions.IN WITNESS WHEREOF, the parties have executed
this Agreement are duly authorized as of the date first above written.
VENDOR: SeaChange International Inc.
----------------------------
By: _______________________________________
Printed
Name:
Title:
CUSTOMER: Comcast Cable Communications of
-------------------------------
Pennsylvania, Inc.
By: ---------------------------------------
Printed _______________________________________
Name:
Title: _______________________________________
Exhibit A
Hardware and Software as described in Attachment D.
Exhibit B
Initial Maintenance Term (Warranty)
-----------------------------------
*
Subsequent Maintenance Term
---------------------------
The Subsequent Maintenance Term shall commence ____________. The service
charges for subsequent maintenance services are payable annually in
advance.
24
<PAGE>
Attachment D
------------
SeaChange Product Description
SEACHANGE ITV SYSTEM PRODUCT DESCRIPTION
----------------------------------------
The SeaChange ITV system is a comprehensive hardware, software and service
solution that enables cable operators the ability to deliver a complete, cost-
effective interactive product offering to their subscribers. It is a true end-
to-end solution that includes partnerships and integration with your digital
headend set-top box and middleware providers.
The SeaChange solution is comprised of the ITV Command Center Management System
and sets of Video Servers and/or MediaClusters to support the streams required
for many thousands of subscribers. The unique ITV Command Center enables video
serving to be distributed across multiple locations, including headends and
hubs, yet the system is designed to be managed centrally. The solution scales
from small to extremely large number of streams, files stored (video and non-
video), and interactive applications.
The figure below depicts all of the steps required in a Video on Demand (example
used is Movies on Demand) deployment and the corresponding system components
required. Each of these is addressed by the SeaChange ITV solution.
Textual description of graphic: The diagram is a series of boxes with arrows
pointing from one item to the immediately following item. Item 1 is titled
"Obtain Contract for Content." Item 2 is titled "Content Encoding." Item 3 is
titled "(opt) Automated Satellite Delivery." Item 4 is titled "Content
Management and asset info storage (flexible metadata, extensible for many types
of ITV applications)." Item 5 is titled "Automatic Content Loading,
Distribution and Mgmt based on Usage, Time, Day, etc." Item 6 is titled "Mgmt
of Applications, User Interface, EPG, Middle-ware Integration." Item 7 is
titled "Content Availability Mgmt based on Contract Dates." Item 8 is titled
"Support of on Demand, Requests, FF, RW, Pause." Item 9 is titled "Fault
tolerance & Mgmt of Network Infrastructure, Tie in to Conditional Access, System
Resource Mgmt." Item 10 is titled "Interface to Subscriber Biling System."
Item 11 is titled "Troubleshooting, System Usage Reports, Auto-Paging, Usage
Tracking." Item 12 is titled "Automatic content deletion, System Archival of
Activity." Item 13 is titled "Support of Scaling to Large Deployments Fault
Tolerance of Streams and SW Central or Distributed."
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The thirteen steps of a video lifecycle requirement are handled by various
SeaChange offerings as follows:
1. Obtain Contract for Content SeaChange Asset Management System
SeaChange Content Acquisition Services
(optional)
Various Content Acquisition Partners
2. Content Encoding SeaChange Encoding Hardware (optional)
SeaChange MPAA Encoding Facility (opt.)
Various Content Encoding Partners
3. Automated Satellite Delivery SeaChange Pitcher and Catcher System
(optional)
4. Content Management SeaChange Asset Management System
SeaChange Directory Service
5. Automatic Content Loading, SeaChange Asset Management System
Distribution SeaChange Propagation System
6. Application and UI Management SeaChange Application Clients (optional)
Various Set-Top, Internet, and App
Partners
7. Automated Content Availability SeaChange Asset Management System
SeaChange Directory Service
8. Support of On Demand Requests SeaChange Application Clients (optional)
SeaChange Connection Manager
SeaChange Streaming Service
9. Fault Tolerance, Resource and SeaChange Directory Service
Network Service Management, SeaChange Connection Manager
CAS Manager SeaChange Streaming Service
SeaChange Propagation System
SeaChange MediaClusters
10. Interface to Subscriber Billing SeaChange Application Server (opt.)
11. Troubleshooting, Usage, Monitoring, SeaChange Auto-Paging
Auto-Paging SeaChange System Monitor
SeaChange ITV System Logs
SeaChange SeaView
12. Automatic Deletion and System SeaChange Asset Manager
Activity Archive SeaChange Propagation Service
26
<PAGE>
13. Scaling support to large, fault SeaChange MediaClusters
tolerant Deployments SeaChange Connection Manager
SeaChange Streaming Service
The SeaChange ITV system has been designed to support centralized and/or
distributed distribution networks. Configurations are optimized to make the
best use of network bandwidth and concentrations of subscriber populations.
Multiple distribution network types are supported. An extraordinarily high
degree of automation is built into the system to ensure that it will be easy to
use and manage, with minimal operational staff. This capability is proven in
our current video products installed throughout the world. The system offers
standard APIs for the cable operator's choice of interactive applications
(written either by SeaChange or third party developers). It supports full VCR
functionality, including fast-forward, rewind, pause/resume.
A unique differentiation of the SeaChange system design is its high degree of
fault tolerance. Its goal is 100% service availability to the subscriber.
Fault tolerance has been built into the video servers, via the MediaCluster
technology. It is also possible to configure the entire system - ITV Command
Center included - to withstand failures in the network.
The SeaChange ITV system is extremely scalable. It can be expanded to increase
support for interactive set-top boxes or streams in increments of 2,000. The
system can scale up to handle a nearly unlimited number of streams from either a
centralized headend or distributed across multiple headends and hubs. It is
designed to be able to manage tens of thousands of assets, including both MPEG
and non-MPEG content. This system is not designed just for movies on demand -
but for many interactive applications, all of which use the same set of core
services provided by the ITV Command Center.
Scalability spans the following equipment and software:
1. MediaClusters - MediaClusters can scale from very small to very large sets
of servers. The largest size of a MediaCluster should tend to reflect the
maximum storage requirements for the deployment, since one MediaCluster
requires only a single copy of a movie.
2. Connection Management - As simultaneous connections grow, the connection
software must also be highly scalable in order to support the demand. The
SeaChange Connection Manager has been designed to scale upward endlessly in
increments of 2,000 streams.
3. Streaming Services - Video Servers alone are not enough to warrant scaling.
As more streams are requested throughout the system, it is also necessary
increasing numbers of streams that will be placing more and more demand on
system as it
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grows. The SeaChange Streaming Service has been designed to scale upward
endlessly in increments of 2,000 streams.
4. Disk Storage - SeaChange supports storage upgrades while the system is live,
without losing access to current movies stored.
Each of the components and services in the SeaChange ITV system will be
described below, including those features of the system which are unique, namely
its fault tolerance, configuration flexibility, content management, network
management and scalability.
Description and Detailed Listing of Hardware Components:
There are three main server components included with the SeaChange ITV System:
. SeaChange IMC 4000, which can be configured either as standalone or in a
MediaCluster;
. SeaChange ITV Command Center Servers, which are clustered in pairs for fault
tolerance, and include:
- Directory Server, two-server cluster
- Propagation Service, two-server cluster
- Connection Manager/Streaming Server, two-server cluster
- Application Server, two-server cluster
. Asset Manager, which is available as either a rack mount or tower PC.
ITV MEDIACLUSTER(IMC4000)
The ITV MediaCluster 4000(IMC4000) Video Server is an integral part of
SeaChange's ITV system. This compact video server is designed for stand-alone
operation or as part of a MediaCluster, with up to hundreds of IMC4000's
forming a single virtual server providing fault-resilience with SeaChange's
patented single-copy advantages.
The SeaChange IMC4000 -- the newest generation of our Server System -- leaps
forward in delivering a greater number of simultaneous video streams and video
assets in a more compact rack system. With the capability of packaging up to ten
IMC4000 servers in a single rack, the ITV System
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enables cable operators to offer VOD programming to 20,000 subscribers from a
selection of over 1,000 feature-length movies -- from a single rack.
The unsurpassed capacity and scalability of the ITV System is derived from its
patented MediaCluster technology and Command Center Software with propagation
services. The MediaCluster permits the addition of servers to a rack and the
addition of racks to a system. The patented MediaCluster enables a single copy
of video - movie, commercial, TV program - to support thousands of simultaneous
viewers thereby reducing the stream cost for a large video library.
*
Processor/Operating System:
. SeaChange V-Stream System Software
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. SeaChange Service Disk Software for system snapshots, rebuild and status
. *
. *
. *
Configurations:
. Single node or server clusters (minimum size - 3 servers)
. Up to 10 IMC4000 installed in
a standard 19" rack
. UL Certified
Power Requirements:
. 115 VAC or International 220 VAC
. 50/60 Hz over an operational
. . Range of 100-240 VAC
. 48 Volt DC Capable
. 400 Watts per server
Dimensions:
. *
. *
. *
. *
. *
Environmental:
. Temperature: 10(degrees) to 30(degrees) C (operational)
. Humidity: 20% to 80% RH, non-condensing 2000 meters altitude Max
The MediaCluster
----------------
One of the key strengths of SeaChange International is the development of a
fault-tolerant video server cluster. The term fault-tolerance is used loosely
in the industry and thus should be carefully investigated by operators.
However, the patented RAID /2/ /(TM)/ technology inherent in the SeaChange
MediaCluster, described below, delivers complete server-level fault tolerance.
This fault tolerance is available without the need for a 'backup' server, and
without the need or expense of content replication, such as mirroring. The
MediaCluster is the only clustering
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solution available that offers two levels of RAID5 - at both the server and the
cluster levels. Besides fault tolerance, the SeaChange MediaCluster provides a
unique mechanism for load balancing of both disks and server bandwidth, which is
an absolute necessity to be able to effectively scale automatically to hundreds
of thousands of streams and tens of thousands of titles.
MediaClusters are composed of several individual video servers that are
connected together over a high-speed ethernet network, acting like a single
server. Each video or asset is striped across all servers in the MediaCluster.
By sharing assets among all servers, fault tolerance is guaranteed in the case
of hardware component failure as well as in the case of a complete server
failure. This method of RAID /2/ /(TM)/ striping eliminates the expensive option
of mirrored or backup servers. MediaClustering allows a collection of SeaChange
Video Servers to scale gracefully, share resources, and provide an unprecedented
level of resilience to faults. Additional servers can be added as a new member
to an existing MediaCluster without having to bring down the MediaCluster. The
content residing in the MediaCluster will automatically be distributed to the
new member. Multiple MediaClusters can be configured together to form a Video
Store, enabling many thousands of streams from a single site or a single system,
distributed across many sites.
The IMC 4000 members of a MediaCluster act as a single computing system, reading
and writing data objects. A single view is provided of all data objects to each
of the servers in the MediaCluster. The SeaChange MediaCluster architecture
provides access to videos as data objects in the same way a file server provides
"files" to network clients. Since the MediaCluster members manage their own
file systems and export access only to the data objects, each MediaCluster
member can read, write or delete files from its local file system without
disrupting the other servers in the MediaCluster. Data objects are fragmented
and written to the members of a MediaCluster using RAID5 striping and parity
techniques for maximum fault resilience.
Textual Description of Graphic: Pentagon with a picture labeled "VS 100 40GB"
at each corner of the pentagon, arrows connecting each of the points to the
others, and a label on one of the arrows stating "High-speed internal digital
video interconnects."
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MediaCluster members are connected by a private full-duplex 100Mb/second Fast
Ethernet network links, using the highest-speed industry-standard ethernet
connection hardware, coupled with SeaChange device drivers and networking
protocols, for fullest network bandwidth utilization.
This network design enables the delivery of high-resolution MPEG-2 video streams
in real-time, with predictable response times, sub-second error recovery and
excellent price/performance. Sharing of video data resources across the entire
MediaCluster without replication is a vital feature. All members of the
MediaCluster have access to the video files stored on each of the other
MediaCluster members. This provides disk load balancing as well as bandwidth
load balancing.
The workload requests of streams will automatically be balanced and shared among
the members. The impact of automated load balancing is evident in several
areas. There is no need to manually move files from one disk to another or one
server to another, or even one MediaCluster to another for the purpose of
eliminating hot spots. Another benefit of a perfectly balanced system is linear
improvements in performance as streams and servers are added to a MediaCluster.
Each individual video asset is striped across all servers of the MediaCluster
using SeaChange RAID/2/ technology. Each MediaCluster server supports multiple
slices of the ITV system; thus, a single copy of a video on a single
MediaCluster can be used as a source to multiple slices of the system. This
greatly reduces the number of replicas that must be created for each video asset
in order to make the video available to multiple slices, and reduces the amount
of video propagation that must be managed. Since the video is striped across
all disks in the MediaCluster, the total service bandwidth of the MediaCluster
can be applied to a single video.
Integrated QAM Support
*
Integrated upconverters are not part of the first release of the product, but is
being planned for a later release. External QAMs from Motorola, Harmonic or
others can also be used if desired.
ITV Command Center Servers
The SeaChange ITV system includes database server hardware that houses the
software elements of the ITV Command Center, namely, the Directory Services,
Asset Propagation Service, Connection Manager, Streaming Service, and
Application Service. These database servers are one RU high and configured for
extensive fault tolerance and scalability through the utilization of NT-based
clustering. In each system configuration, you will find one instance of a fault-
tolerant pair of servers housing the Directory Service, a 2/nd/ fault-tolerant
pair of servers housing
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the Propagation Service. Then for every 2,000 incremental streams, an additional
pair of servers is included to house the Connection Manager/Streaming Service,
and a final pair of servers containing the Application Service. In this manner,
the ITV Command Servers are designed to scale upward to handle an unlimited
number of streams, assets and applications
The Asset Manager
The final server in the system, of which there is typically a single instance,
is the Asset Manager. This server is available in either a rackmount or
pedestal/desktop offering, depending upon the operations requirement of the
customer. It is the primary interface for the customer to manage content.
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Description and Detailed Listing of Software Components:
ITV Software Architecture
The SeaChange ITV Management System provides all of the required software to
deliver Asset Management, Connection Management, Streaming Services, User
Interface, and Propagation Services to automate the management of streams and
movement of videos across various delivery networks. All of these services are
designed to be fault tolerant, with multiple levels of redundancy implemented at
both the hardware and software levels to maximize subscriber service
availability.
In order to obtain an end-to-end video on demand system, the software to control
and manage all the aspects of video server integration into the digital
broadcast network is mandatory. The figure below shows the various components,
both hardware and software needed to offer a complete end-to-end solution for
video on demand. The shaded boxes represent the software functions, developed by
SeaChange, that are necessary to ensure a complete, working and manageable ITV
system. Descriptions of each of these software components that form the
SeaChange ITV Command Center follows:
SeaChange ITV System
*
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*
Media, Attribute, and Location Management
-----------------------------------------
As television content offerings change and new content becomes available or old
content is discontinued, there must be an automated method of scheduling and
managing the physical content file and database manipulation. It cannot be
expected in a large-scale deployment that video files be copied manually for
each lineup modification. The SeaChange ITV content management system includes
the Asset Management system (to monitor media objects and ensure their timely
installation, modification, and deletion), the Directory Service (to store
extensible metadata about media objects), and the Propagation Service (to
perform intelligent asset replication automatically).
The SeaChange Asset Manager controls the management of assets such as MPEG2
video/audio, configuration files, data, etc., throughout their entire lifecycle.
The Asset Manager allows for manual or automated asset control throughout
various stages of an asset's life, including compression, delivery (tape or
automated transfer), loading, validation, subscriber availability, disabling,
and deletion. The Asset Manager also allows for easy viewing, history, and
auditing of server content.
The Asset Manager provides a consistent method of managing MPEG and non-MPEG
content including video, audio, text, font, graphic files, etc. - all of the
content and data that belongs to the widest variety of interactive applications.
It is designed to minimize operational tasks associated with content management
throughout its lifecycle by automation of those tasks from media readiness to
deletion. It automates content lifecycle state changes by date and time and it
allows advance scheduling of asset lifecycle. It provides a real-time interface
to manage the addition, deletion and modification of content onto MediaClusters.
The Asset Manager provides various methods for input, from an easy-to-use
graphical user interface to automated file downloads (future release). It is the
tool that can be used from a central location to remotely manage a single or
multiple sites, even a national network of systems. It also drives content
manipulation and distribution processes such as the Propagation Service (see
description below).
The SeaChange Directory Service is the underlying database for the system. It
provides high-speed access to the system for content attributes and stores all
content location and those attributes such as metadata, prioritization,
application links, groups, and locations. It is responsible for maintaining the
hierarchical namespace of videos, and for maintaining system object information
and attributes associated with those objects.
The Directory Service stores and maintains the integrity of these system
objects:
. Atomic Elements
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. Assets
. Applications
. Folders and Entries
. Sites
The Directory Service delivers performance scalability, achieved via effective
database and service design, SQL Server tuning, and a high-performance master
database system with multiple read-only systems, with even distribution of the
load between them. A second design goal of the Directory service includes high
availability, which is achieved via running the Master Directory Service on an
NT Cluster and by providing multiple read-only replicas. The underlying metadata
is customizable by application, and completely extensible, which is made
possible by effective database and API design.
Physical placement and control of content is handled by the SeaChange
Propagation Service which performs high speed content placement and manipulation
to allow for proper automated prioritization of content based on configurable
parameters for the system or media types. The Propagation Service loads content
into and deletes content from the ITV Filestore on request from the Asset
Manager. It creates and deletes additional replicas of MPEG assets to meet
anticipated user demand. Only a single copy of a video is required per
MediaCluster, therefore minimizing the cost of disks.
The Propagation Service automatically manages replication across a network from
one MediaCluster to another MediaCluster. It insures that a playable copy of an
asset exists when requested by a subscriber, and it accomplishes this task
economically, by taking account of priorities and values of assets and usage
statistics of assets.
Through these automation techniques, the Propagation Service:
. Optimizes use of bandwidth and storage
. Moves files as needed between servers (including remote/distributed servers)
. Tracks subscriber streaming and plans activities accordingly
. Anticipates asset life-cycle and ensures content is available
. Maintains priorities based on operator business rules
. Prioritizes based on localized viewing trends
Operational staff requirements are minimized because replica management across
the network is completely automated. The Propagation Service supports the
delivery network model defined by the Connection Manager (see details below) in
particular of segmented networks where not all MediaClusters are accessible to
all optical transmitter groups.
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Propagation Service Illustration
Textual Description of Graphic: Square with arrows connecting adjacent corners
and labeled "Fiber Ring." The corners of the square are labeled "5-server
cluster," "Headend," "Hub," and the fourth is unlabeled but contains a series of
rectangles.
Session and Bandwidth Management and Client/Server Communication
----------------------------------------------------------------
In addition to digital broadcast session management, SeaChange provides
interactive session and bandwidth management through the SeaChange Connection
Manager. The Connection Manager maintains control of all network and server
bandwidth. It also manages failover of components in reassigning a new network
path to continue streaming video or other assets.
The three key functions of the Connection Manager are to:
. Allocate and manage network bandwidth
. Perform scaling for large deployments
. Communicate network traffic with set-top clients and network controllers
The Connection Manager presents a highly available "server" interface to the
delivery network and set-top to request the streaming of video and to control
the streaming process. It present a logically abstracted, delivery network
independent interface to the Interactive TV platform. Qualified interactive
requests are communicated to the ITV system via the Connection Manager, and the
best video server output port to deliver the requested stream is then
automatically decided. The Connection Manager selects the best delivery network
path to stream the video to the set-top, and directs the set up of the necessary
network resources to connect the set-top to the stream. It provides a proxy
interface for the set-top to the Streaming Service for stream control, and a
highly available "server" interface to the delivery network and set-top to
request the streaming of video and to control the streaming process. The
Connection Manager then chooses the best server output port to deliver the
requested stream.
Client/Server communication is provided through the SeaChange Streaming Service,
which monitors and manages all MPEG2 streams through the network and supports
flexible business parameters, that allows to optimize bandwidth use and de-
allocation. It provides for client requests such as play, pause, fast forward,
rewind, and skip forward/back.
The Streaming Service provides application-independent stream management, and
interfaces with the Connection Manager and application servers. It is the core
service that drives the delivery of video from the MediaClusters, and abstracts
all aspects of the video servers and the delivery network from the interactive
applications. The Streaming Service is involved in stream creation/tear-down as
well as in driving stream content. As with all the other SeaChange ITV software,
it runs in a fault-tolerant configuration on NT Clusters, and is scalable to
support an arbitrarily large MediaCluster and set-top population, with automatic
load balancing. The Streaming Service also supports the concept of persistent
streams. With stream persistency, whenever a fault occurs in a software
component involved in streaming, all software components "above" the stream will
fail over and the underlying streams will not be lost.
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The VOD Server uses the underlying video delivery platform to allow viewers to
purchase movies and other on-demand videos from the variety of ITV applications
available. The VOD Server talks to your billing system to charge the user for
videos watched. The VOD server also monitors the progress of viewing, including
preview and VCR control. The VOD Server contains viewing/billing mechanics that
minimize denials. It is easily adapted to different billing and credit systems.
The VOD server maintains viewing states in persistent storage, re-attaches to
streams on startup. Its parameters are operator-configurable, and are entered
through configuration interface. The performance is closely associated by
available bandwidth to the client, delivery network and credit system latencies.
SeaChange will supply the VOD client for the Scientific Atlanta environment.
Liberate will supply the Movies-on-Demand Client for the Motorola environment
and it will be integrated with the SeaChange system. SeaChange or other
middleware and IPG vendors can also provide solutions for the Movies-On-Demand
Client for the Motorola environment.
The Movies on Demand application allows subscribers to purchase movies for
viewing on their television. It allows viewers to find and select videos, and it
uses the ITV system to play videos to the set-top. It provides a flexible user
interface and a fast, easy, and effective navigation interface into the system.
It has been designed to use minimum bandwidth and to work well with different
levels of available bandwidth.
The SeaChange MOD Application presents the subscriber with choices of movies to
watch. The available movies are determined by the currently available assets as
managed by the Content Management Components and filtered by the Movies on
Demand Application. Once a movie is selected, the Movies on Demand Application
supports a point to point model, where there is a single subscriber who owns the
video stream. The subscriber is given VCR functionality over the video stream;
that is, the subscriber can pause, fast-forward, rewind, or resume the video at
any point in time. If a video is "paused" for a configurable amount of time,
then it is "suspended" so resources can be reclaimed. The MOD Application
ensures that the video purchaser has the necessary credit and posts a charge to
the billing system if so. A notion of "grace" or "preview" period is supported.
If the subscriber requests a video, but then stops watching the video before the
preview period is complete, the Movies on Demand Application will tear down the
video stream without billing the subscriber. The Movies on Demand Application
enforces a "play window" (i.e., a duration exceeding the duration of the actual
video by some configurable amount) for which the subscriber owns the video
stream. The Movies on Demand Application allows subscribers to control blocking
of videos by movie rating. This blocking is controlled through PINs.
ITV Command Center Servers
--------------------------
The SeaChange ITV system includes database server hardware that houses the asset
management, directory services, asset propagation service, connection
management, streaming control, and application services management. All database
servers and services are built for extensive fault tolerance and scalability
(either by number of simultaneous streams or number of
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titles). The components of the SeaChange ITV system platform and the Movies-on-
Demand application are all designed to be tolerant of faults: software, as well
as hardware. The end result is that these services are highly available.
Recovery from such errors occurs with minimal to no impact on service delivery.
The SeaChange ITV Command Center also does load balancing across its video
servers, delivery networks, system services and application services in order to
ensure an effective use of resources. Based on topology, load, and state
information that the ITV system acquires from the MediaClusters and delivery
network, the ITV Connection Manager selects the desired stream for a video to be
delivered to a set-top. If a path is not available to deliver the requested
video to the subscriber, the ITV Connection Manager generates an event for the
cable operator, and the requesting set-top application is provided a standard
error message. When the operator is notified of a resource shortage, they can
add additional resources of which the Connection Manager will automatically
become aware. Furthermore, the ITV system balances the load across instances of
its services and instances of the ITV application. In other words, as new
sessions are established from set-top applications, they are routed to the least
loaded instance of the ITV Connection Manager and ITV Application. This scheme
ensures that each new session is serviced as quickly as possible.
Detailed Listing of Software Components:
. Asset Manager Software
. Primary Directory Service Software with Database Licenses
. Secondary Directory Service Software with Database Licenses
. Primary Propagation Service Software
. Secondary Propagation Service Software
. Primary Streaming and Connection Software
. Secondary Streaming and Connection Software, Scaling Option Access Database
for Report Generation
. Primary Movies on Demand Application Headend Software
. Secondary MOD Application Headend Software, Scaling Option
. Billing Interface
. Movies-on-Demand Integrated Set-top Box Client Application
. Microsoft SQL Server
. Windows NT Server and Client
. PC Anywhere
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Itemized Bill of Materials (Quantities will vary depending upon System Sizing)
SeaChange reserves the right to replace the itemized list of material as new
more cost-effective technologies become available.
*
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*
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SECURITIES AND EXCHANGE COMMISSIOM. ASTERISKS DENOTE OMISSIONS.
*
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*
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EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
*
* Racks included for SeaChange equipment, quantities dependent upon system
specifications.
** Network equipment to connect SeaChange equipment to Local Area Network.
Connections to customer LAN/WAN
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Attachment E
------------
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE (A) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE
WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (B) IN A TRANSACTION THAT
QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS AND FOR WHICH, SUBJECT TO LIMITED EXCEPTIONS, AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH
EFFECT HAS BEEN PROVIDED.
Warrant No. S-__ Date: [____________], 2000
WARRANT TO PURCHASE COMMON STOCK
OF
SEACHANGE INTERNATIONAL, INC.
Void after 5:00 P.M. (United States Eastern Time)
on [_____________], 2005, as provided herein.
This certifies that, for value received, receipt and sufficiency of which
are hereby acknowledged, Comcast SC Investment, Inc., or its registered assigns
(the "Holder"), is entitled, subject to the terms and conditions set forth
below, to purchase from SeaChange International, Inc., a Delaware corporation
(the "Company"), One Hundred Thousand (100,000) (the "Warrant Number") validly
issued, fully paid and nonassessable shares (the "Warrant Shares") of Common
Stock of the Company, par value $0.01 per share (the "Common Stock"), subject to
adjustment as provided herein, at a purchase price equal to $21.4475 per share
(the "Exercise Price").
The term "Warrant" as used herein shall mean this Warrant, and any warrants
delivered in substitution or exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set forth
---------------
herein, this Warrant shall be exercisable, in whole or in part, during the term
commencing on [__________], 2000 and ending at 5:00 P.M. (United States Eastern
Time) on [_____________], 2005 (subject
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to extension as provided below, the "Exercise Period"); provided, however, that
(a) in the event that the expiration date of this Warrant shall fall on a
Saturday, Sunday or United States federally recognized holiday, the expiration
date for this Warrant shall be extended to 5:00 P.M. (United States Eastern
Time) on the Business Day (as defined in Section 6(i)) following such Saturday,
Sunday or recognized holiday, (b) in the event that, on the expiration date of
this Warrant, the Company is then required, pursuant to an effective demand
therefor under that certain Registration Rights Agreement dated as of December
1, 2000 between the Company, the initial purchaser hereof and an affiliate of
the initial purchaser (the "Registration Rights Agreement") to use its best
efforts to effect, or is in the process of effecting, a registration under the
Securities Act of 1933, as amended (the "Securities Act") for a public offering
in which Warrant Shares are entitled to be included as provided in the
Registration Rights Agreement, or if the Company is in default of any such
obligations to register the sale of such Common Stock, the right to exercise
this Warrant shall continue until the later of 5:00 P.M. (United States Eastern
Time) on the 30th day following the date on which such registration shall have
become effective or the 30th day following the date all such defaults shall have
been cured, and (c) in the event that, on the expiration date of this Warrant,
the Holder and the Company are in the process of complying with the provisions
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), in accordance with the provisions of Section 2(d) below, the right
to exercise this Warrant shall continue until 5:00 P.M. (United States Eastern
Time) on the 30th day following the date on which any waiting period under the
HSR Act applicable to the exercise of the Warrant shall have expired or been
terminated; provided that, in the case of (b), the Holder has requested that the
Company commence the registration of Warrant Shares at least 30 days prior to
the expiration date of the Exercise Period.
2. Exercise of Warrant.
-------------------
(a) This Warrant may be exercised by the Holder, in whole or in
part, by (i) the surrender of this Warrant to the Company, with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder, at
the office of the Company (or such other office or agency of the Company as it
may designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company) during the Exercise Period and (ii) the
delivery of payment to the Company of the Exercise Price for the number of
Warrant Shares specified in the Notice of Exercise in any manner specified in
subsection (c) of this Section 2.
(b) The Company agrees that such Warrant Shares shall be deemed to
be issued to the Holder as the record holder of such Warrant Shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for the Warrant Shares as aforesaid. A stock certificate or
certificates for the Warrant Shares specified in the Notice of Exercise shall be
delivered to the Holder as promptly as practicable, and in any event within ten
days thereafter. If this Warrant shall have been exercised only in part, the
Company shall, at the time of delivery of the stock certificate or certificates,
deliver to the Holder a new Warrant evidencing the rights to purchase the
remaining Warrant Shares, which new Warrant shall in all other respects be
identical with this Warrant. No adjustments shall be made on Warrant Shares
issuable on the exercise of this Warrant for any cash dividends paid or payable
to
49
<PAGE>
holders of record of Common Stock prior to the date as of which the Holder
shall be deemed to be the record holder of such Warrant Shares.
(c) The Exercise Price shall be payable (i) in cash or its
equivalent, payable by wire transfer of immediately available funds to a bank
account specified by the Company or by certified or bank cashiers' check in
lawful money of the United States of America; (ii) by surrendering to the
Company the right to purchase a number of Warrant Shares equal to the product
obtained by multiplying the number of Warrant Shares to be purchased (including
any Warrant Shares to be surrendered) by a fraction, the numerator of which is
the Exercise Price and the denominator of which is the Current Market Price (as
defined in Section 6(i) below) of the Common Stock on the date of exercise of
the Warrant, or (iii) in any combination of (i) or (ii). In the event the
Exercise Price is to be paid, in whole or in part, in accordance with the
payment method described in clause (ii), and compliance with the provisions of
the HSR Act is required in accordance with subsection (d) of this Section 2
prior to the consummation of such exercise, the Current Market Price of the
Common Stock shall be calculated as of the date on which the Holder notifies the
Company of its decision to exercise the Warrant, pending compliance with the
provisions of the HSR Act, rather than the date of the consummation of such
exercise.
(d) The Holder agrees that any exercise of this Warrant is, to the
extent applicable, subject to compliance with the provisions of the HSR Act. The
Company agrees that, in the event that the exercise of this Warrant by the
Holder requires compliance with any provisions of the HSR Act, the Company shall
cooperate with the Holder in connection with any such filings by (i) making all
filings required to be made on the Company's part under the HSR Act and (ii)
promptly furnishing, or causing to be furnished, any information that may be
required by the Federal Trade Commission or the Department of Justice under the
HSR Act.
3. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Current Market
Price multiplied by such fraction or, at the Company's option, round such
fractional share to the nearest whole share.
4. Replacement of Warrant. On receipt of evidence reasonably satisfactory
----------------------
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or, in
the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.
5. Rights of Stockholders. Subject to the provisions of Sections 6(l) and
----------------------
8 hereof, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to
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<PAGE>
give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised as
provided herein.
6. Antidilution Provisions. The Exercise Price and the Warrant Number
-----------------------
shall be subject to adjustment from time to time as provided in this Section 6.
(a) In case the Company shall pay or make a dividend or other
distribution on the Common Stock of the Company in Common Stock or any other
security convertible into or exchangeable for shares of Common Stock (other than
any rights, options or warrants described in subsection (b) of this Section 6),
the Exercise Price in effect immediately prior to the opening of business on the
next Business Day following the date fixed for determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Exercise Price by a fraction of which (i) the numerator shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and (ii) the denominator shall be the sum
of (A) such number of shares referred to in clause (i) and (B) the total number
of shares of Common Stock constituting such dividend or other distribution (or,
in the case of a dividend or distribution of securities convertible into or
exchangeable for shares of Common Stock, the total number of shares of Common
Stock underlying such securities), such reduction to become effective
immediately prior to the opening of business on the next Business Day following
the date fixed for such determination. For the purposes of this subsection (a),
the number of shares of Common Stock at any time outstanding shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.
(b) In case the Company shall hereafter issue rights, options or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock or any other security convertible into or
exchangeable for shares of Common Stock (such rights, options or warrants not
being available on an equivalent basis to Holders of the Warrants upon exercise)
at a price per share less than the Current Market Price of the Common Stock on
the date fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan), (i) the Exercise Price in effect immediately prior to the opening of
business on the next Business Day following the date fixed for such
determination shall be reduced by multiplying the Exercise Price in effect
immediately prior to the close of business on the date fixed for the
determination of holders of Common Stock entitled to receive such rights,
options or warrants by a fraction of which (A) the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock that the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market Price
and (B) the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription or
purchase (or such number of shares of Common Stock underlying any convertible
securities so offered for subscription or purchase), such reduction to become
effective immediately prior to the
51
<PAGE>
opening of business on the next Business Day following the date fixed for such
determination (for the purposes of this subsection (b), the number of shares of
Common Stock at any time outstanding shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock), and
(ii) if any such rights, options or warrants expire or terminate without having
been exercised or are exercised for a consideration different from that utilized
in the computation of any adjustment or adjustments on account of such rights,
options or warrants, the Exercise Price with respect to any Warrant not
theretofore exercised shall be readjusted such that the Exercise Price would be
the same as would have resulted had such adjustment been made without regard to
the issuance of such expired or terminated rights, options or warrants or based
upon the actual consideration received upon exercise thereof, as the case may
be, which readjustment shall become effective upon such expiration, termination
or exercise, as applicable; provided, however, that all readjustments in the
Exercise Price based upon any expiration, termination or exercise for a
different consideration of any such right, option or warrant, in the aggregate,
shall not cause the Exercise Price to exceed the Exercise Price immediately
prior to the time such rights, options or warrants were initially issued
(without regard to any other adjustments of such number under this subsection
(b) that may have been made since the date of the issuance of such rights,
options or warrants).
(c) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Exercise Price
in effect immediately prior to the opening of business on the next Business Day
following the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the Exercise Price in effect immediately prior to the opening of business
on the next Business Day following the day upon which such combination becomes
effective shall be proportionately increased.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights, options or warrants referred to
in subsection (b) of this Section 6, any dividend or distribution paid
exclusively in cash and any dividend referred to in subsection (a) of this
Section 6), the Exercise Price shall be adjusted so that the same shall equal
the price determined by multiplying the Exercise Price in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which (i)
the numerator shall be the Current Market Price at the close of business on the
date fixed for such determination less the then fair market value of the portion
of the assets or evidences of indebtedness so distributed applicable to one
share of Common Stock, and (ii) the denominator shall be such Current Market
Price, such adjustment to become effective immediately prior to the opening of
business on the next Business Day following the date fixed for the determination
of stockholders entitled to receive such distribution.
(e) The Company may make such reductions in the Exercise Price, in
addition to those required by subsections (a), (b), (c) and (d) of this Section
6, as it considers to be advisable in order that any event treated for Federal
income tax purposes as a dividend of stock or stock rights shall not be taxable
to the recipients.
52
<PAGE>
(f) In case of any reclassification, recapitalization or other change
in the outstanding securities of the class issuable upon exercise of this
Warrant (including any such reclassification, recapitalization or other change
upon a consolidation or merger in which the Company is the continuing
corporation, but not including any transactions for which an adjustment is
provided in subsection (c), (d) or (g) of this Section 6), the Company shall
execute and deliver to the Holder a new warrant certificate, satisfactory in
form and substance to the Holder and without payment of any additional
consideration therefor, providing that the Holder shall have the right
thereafter, during the period such Warrant shall be outstanding, to exercise
such Warrant into the kind and amount (if any) of securities, cash and other
property receivable upon such reclassification, recapitalization or other change
by a holder of the number of shares of Common Stock issuable upon exercise of
this Warrant had it been exercised immediately prior to such reclassification,
recapitalization or other change. Such new Warrant shall provide for adjustments
that, for events subsequent to the effective date of such new Warrant, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 6. The above provisions of this subsection (f) shall similarly
apply to successive reclassifications, recapitalizations and other changes in
the outstanding securities of the class issuable upon exercise of this Warrant.
(g) In case of any consolidation of the Company with, or merger of
the Company into, any other person, any merger of another person into the
Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the Common Stock)
or any sale or transfer of all or substantially all of the assets of the
Company, at the election of the Holder of the Warrant represented hereby, the
person formed by such consolidation or resulting from such merger or that
acquires such assets, as the case may be, shall execute and deliver to the
Holder a new warrant certificate, satisfactory in form and substance to the
Holder and without payment of any additional consideration therefor, providing
that the Holder shall have the right thereafter, during the period such Warrant
shall be outstanding, to exercise such Warrant into the kind and amount (if any)
of securities, cash and other property receivable upon such consolidation,
merger, sale of transfer by a holder of the number of shares of Common Stock
issuable upon exercise of this Warrant had it been exercised immediately prior
to such consolidation, merger, sale or transfer. If the holders of the Common
Stock may elect from choices the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer, then for
the purpose of this Section 6 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer shall be
deemed to be the choice specified by the Holder, which specification shall be
made by the Holder by the later of (i) ten Business Days after the Holder is
provided with a final version of all information required by law or regulation
to be furnished to holders of Common Stock concerning such choice, or, if no
such information is required, ten Business Days after the Holder is provided
with a final version of all information that was otherwise furnished to the
holders of Common Stock concerning such choice, and (ii) the last time at which
holders of Common Stock are permitted to make their specification known to the
Company. If the Holder fails to make any specification, the Holder's choice
shall be deemed to be whatever choice is made by a plurality of holders of
Common Stock not affiliated with the Company or the other person to the merger
or consolidation. Such new Warrant shall provide for adjustments that, for
events subsequent to the effective date of such new Warrant, shall be as
53
<PAGE>
nearly equivalent as may be practicable to the adjustments provided for in this
Section 6. The above provisions of this subsection (g) shall similarly apply to
successive consolidations, mergers, sales or transfers.
(h) Whenever there shall be any change in the Exercise Price under
this Section 6, then there shall be an adjustment (to the nearest thousandth of
a share) in the Warrant Number, which adjustment shall become effective at the
time such change in the Exercise Price becomes effective and shall be made by
multiplying the Warrant Number in effect immediately before such change in the
Exercise Price by a fraction the numerator of which is the Exercise Price
immediately before such change and the denominator of which is the Exercise
Price immediately after such change.
(i) For the purpose of any computation under subsection (c) of
Section 2, Section 3 or subsection (b) or (d) of this Section 6, the current
market price per share of Common Stock (the "Current Market Price") on any day
shall be deemed to be the closing price per share on the earlier of the day in
question or the day before the Ex Date (as defined below) with respect to the
issuance, payment or distribution. For this purpose, the term "Ex Date," when
used with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on the applicable securities exchange
or in the applicable securities market without the right to receive such
issuance or distribution. The closing price for each day shall be the reported
last sale price regular way or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange or, if the Common Stock is not
listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange, on
the Nasdaq National Market System or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on the Nasdaq
National Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
reasonably selected from time to time by the Board for that purpose. For
purposes of this Warrant, the term "Business Day" shall mean any day except a
Saturday, Sunday or any day on which banking institutions are authorized or
required to close in the city of New York, New York.
(j) No adjustment in the Exercise Price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
subsection (j)) would require an increase or decrease of at least 1% in such
Exercise Price; provided, however, that any adjustments that by reason of this
subsection (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
subsection (j) shall be made to the nearest cent or to the nearest 1/100 of a
share of Common Stock, as the case may be. Notwithstanding the foregoing, any
adjustment required by this subsection (j) shall be made no later than the
expiration of the right to exercise the Warrant or a portion thereof.
(k) Whenever the Exercise Price is adjusted as herein provided:
54
<PAGE>
(i) the Company shall compute the adjusted Exercise Price in
accordance with Section 6 and shall prepare a certificate signed by the
treasurer of the Company setting forth the adjusted Exercise Price and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with any transfer agent; and
(ii) a notice stating that the Exercise Price has been adjusted
and setting forth the adjusted Exercise Price shall forthwith be required, and
as soon as practicable after it is required, such notice (together with a copy
of the certificate prepared under Section 6(k)(i) hereof) shall be mailed by the
Company to the Holder of the Warrant at its last address as shall appear in the
Warrant Register (as defined in Section 7(a)).
(l) In case:
(i) the Company shall declare a dividend or other distribution
on its Common Stock (other than a dividend payable exclusively in cash that
would not cause an adjustment to the Exercise Price to take place pursuant to
Section 6 above);
(ii) the Company or any of its subsidiaries shall make a tender
offer for the Common Stock;
(iii) the Company shall authorize the granting to all Holders of
its Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class;
(iv) of any reclassification of the Common Stock (other than a
subdivision or combination of its outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(v) of the voluntary of involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with any warrant agent, and shall cause
to be mailed to the Holder of this Warrant at its last address as shall appear
in the Warrant Register, at least ten days prior to the effective date
hereinafter specified, a notice stating (A) the date on which a record has been
taken for the purpose of such dividend, distribution or grant of rights, options
or warrants, or, if record is not to be taken, the date as of which the identity
of the holders of Common Stock of record entitled to such dividend,
distribution, rights, options or warrants is to be determined, or (B) the date
on which such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up. Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(i) through (v) of this
55
<PAGE>
subsection (l).
7. Transfer of Warrant.
-------------------
(a) Warrant Register. The Company will maintain a register (the
----------------
"Warrant Register") containing the names and addresses of the Holder or Holders.
Any Holder of this Warrant or any portion thereof may change his address as
shown on the Warrant Register or transfer this Warrant in accordance with the
terms of this Warrant by written notice to the Company requesting such change.
Any notice or written communication required or permitted to be given to the
Holder may be delivered or given by mail to such Holder as shown on the Warrant
Register and at the address shown on the Warrant Register. Until receipt by the
Company of written notice from the Holder requesting a change of address or the
transfer of this Warrant, the Company may treat the Holder as shown on the
Warrant Register as the absolute owner of this Warrant for all purposes.
(b) Warrant Agent. The Company may, by written notice to the Holder,
-------------
appoint an agent for the purpose of maintaining the Warrant Register referred to
in subsection (a) of this Section 7, issuing the Common Stock or other
securities then issuable upon the exercise of this Warrant, exchanging this
Warrant, replacing this Warrant, or any or all of the foregoing. Thereafter,
any such registration, issuance, exchange, or replacement, as the case may be,
shall be made at the office of such agent.
(c) Transferability. Subject to the restrictions on transfer set forth in
---------------
subsection (d) of this Section 7, title to this Warrant may be transferred, in
whole or in part, by endorsement (by the Holder executing the Assignment Form
annexed hereto) and delivery in the same manner as a negotiable instrument
transferred by endorsement and delivery. Upon surrender of this Warrant for
transfer, properly endorsed on the Assignment Form, the Company at its expense
shall issue, on the order of the Holder, a new warrant or warrants of like
tenor, in such name as the Holder (on payment by the Holder of any applicable
transfer taxes) may direct, for the number of shares issuable upon exercise
hereof. Each holder of this Warrant, by holding it, agrees that this Warrant,
when endorsed in blank, may be deemed negotiable, and that, when this Warrant
shall have been so endorsed, the holder of this Warrant may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner of
this Warrant for any purpose and as the person entitled to exercise the rights
represented by this Warrant, or to the transfer of this Warrant on the books of
the Company, any notice to the contrary notwithstanding.
(d) Compliance with Securities Laws.
-------------------------------
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that the transfer of this Warrant and the Warrant Shares is subject to the
Holder's compliance with the provisions of the Securities Act and any applicable
state securities laws in respect of any such transfer.
(ii) The certificate or certificates representing any Warrant Shares
56
<PAGE>
acquired upon exercise of this Warrant, and any Common Stock or other securities
issued in respect of such Warrant Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be stamped or
otherwise imprinted with the following legend (unless such a legend is no longer
required under the Securities Act):
THE TRANSACTION IN WHICH THE SHARES REPRESENTED BY THIS
CERTIFICATE WERE ACQUIRED WAS NOT REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS
MADE (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, OR (B) IN A TRANSACTION THAT QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS AND FOR WHICH, SUBJECT TO LIMITED
EXCEPTIONS, AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT HAS BEEN
PROVIDED.
(iii) The Company shall not be required to register the transfer
of this Warrant or the Warrant Shares on the books of the Company unless the
Company shall have been provided with an opinion of counsel in form and
substance reasonably satisfactory to the Company that this Warrant or the
Warrant Shares, as applicable, are eligible for transfer without registration
under the Securities Act; provided, however, that no such opinion of counsel
shall be necessary in order to effectuate a transfer of this Warrant or any of
the Warrant Shares (A) in accordance with the provisions of Rule 144(k)
promulgated under the Securities Act or (B) with respect to the Warrant Shares,
in accordance with the intended method of disposition set forth in the
registration statement to be filed by the Company pursuant to that certain
Common Stock and Warrant Purchase Agreement dated as of December 1, 2000 between
the Company and the initial purchaser of this Warrant or any other registration
statement filed by the Company and covering the Warrant Shares pursuant to the
Registration Rights Agreement.
(iv) The conditions precedent imposed by this subsection (d) upon
the transferability of this Warrant and the Warrant Shares shall cease and
terminate as to this Warrant and any of the Warrant Shares (A) when such
securities shall have been registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition by
the seller or sellers thereof set forth in the registration statement covering
such securities, (B) at such time as the Company shall have been provided with
an opinion of counsel in form and substance reasonably satisfactory to the
Company to the effect that the restrictive legend on such securities is no
longer required in order to establish compliance with the provisions of the
Securities Act, or (C) when such securities are transferred pursuant to Rule 144
or become transferable in accordance with the provisions of Rule 144(k)
promulgated under the Securities Act. Whenever the conditions imposed by this
subsection (d) shall terminate as hereinabove provided with respect to any of
the Warrant Shares, the holder of any such securities
57
<PAGE>
bearing the legend set forth in Section 7(d)(ii) shall be entitled to receive
from the Company, without expense (except for the payment of any applicable
transfer taxes) and as expeditiously as possible, new stock certificates not
bearing such legend.
8. Covenants of the Company. The Company hereby covenants and agrees
that:
(a) during the term of this Warrant, the Company will reserve a
sufficient number of shares of authorized and unissued Common Stock to provide
for the issuance of Common Stock, which shares shall be duly authorized, fully
paid and non-assessable, upon the exercise of this Warrant and, from time to
time, will take all steps necessary to amend its Certificate of Incorporation to
provide sufficient reserves of shares of Common Stock issuable upon exercise of
the Warrant;
(b) the Company will not, by amendment of its Certificate of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by the Company;
(c) all shares that may be issued upon the exercise of this Warrant,
upon exercise of this Warrant and payment of the Exercise Price, all as set
forth herein, will be free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein);
(d) issuance of this Warrant by the Company shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the exercise of this Warrant; and
(e) all Warrant Shares will upon issuance be listed on the Nasdaq
National Market System or the principal such other securities exchange or
quotation system on which the Common Stock is then listed or quoted.
9. Notices. Notices under this Warrant to the Company and the Holder
-------
shall be provided in the manner, and to the addresses of the Company and the
Holder, set forth in the Registration Rights Agreement, or to such other address
as any party may have furnished to the others in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
10. Amendments. Neither this Warrant nor any term hereof may be amended,
----------
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought.
11. Governing Law. This Warrant shall be governed in all respects by the
-------------
internal laws of the State of Delaware as applied to contracts entered into
solely between residents of, and to be performed entirely within, such state,
and without reference to principles of conflicts of laws or choice of laws.
58
<PAGE>
12. Successors and Assigns. This Warrant shall be binding upon the
----------------------
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and assigns.
13. Attorney's Fees. In the event of a dispute with regard to the
---------------
interpretation of this Warrant, the prevailing party may collect the cost of
reasonable attorney's fees, litigation expenses or such other expenses as may be
incurred in the enforcement of the prevailing party's rights hereunder.
59
<PAGE>
IN WITNESS WHEREOF, SEACHANGE INTERNATIONAL, INC. has caused this Warrant
to be executed by its authorized officer.
Dated: [______________], 2000
SEACHANGE INTERNATIONAL, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
NOTICE OF EXERCISE
To: SEACHANGE INTERNATIONAL, INC.
(1) The undersigned hereby elects to purchase _______________ shares of
Common Stock of SeaChange International, Inc., pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price for such
shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon exercise are
being acquired solely for the account of the undersigned and not as a nominee
for any other party, or for investment, and that the undersigned will not offer,
sell or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the registration provisions
of the Securities Act of 1933, as amended, or any applicable state securities
laws.
(3) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
________________________________
(Name)
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<PAGE>
________________________________
(Name)
(4) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
________________________________
(Name)
_____________________
(Date) ________________________________
(Signature)
61
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
No of
Name of Assignee Address Shares
---------------- ------- ------
and does hereby irrevocably constitute and appoint as Attorney
__________________ to make such transfer on the books of SEACHANGE
INTERNATIONAL, INC., maintained for the purpose, with full power of substitution
in the premises.
The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment and that the Assignee will not
offer, sell or otherwise dispose of this Warrant or any shares of stock to be
issued upon exercise hereof except under circumstances that will not result in a
violation of the registration provisions of the Securities Act of 1933, as
amended, or any applicable state securities laws.
Dated: _____________________________
_______________________________
Signature of Holder
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<PAGE>
Attachment F
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Form of Registration Rights Agreement
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Incorporated by reference to Exhibit 10.2 of the Registrant's Registration
Statement on Form S-3 filed December 6, 2000 (File No. 333-51386).
63