Document:

Exhibit
10.19

 

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR
WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “**”.
AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED TO THE SECURITIES
AND EXCHANGE COMMISSION.

 

CONTRACT FOR SERVICES

 

THIS AGREEMENT, dated as of June 1, 2008
(together with the schedules, appendices, attachments and exhibits, if any
(“Agreement”), between KyLinTV, Inc., having its principal office at 1600
Old Country Road, Plainview, New York 11803 (“Company”) and NeuLion, Inc.,
having its principal place of business at 1600 Old Country Road, Suite 101,
Plainview, New York 11803, United States (“NeuLion”), each of Company and
NeuLion being a “Party”.

 

W I T N E S S E T H:

 

WHEREAS, Company desires to hire NeuLion to
build and deliver an Internet Protocol Television (“IPTV”) service as described
in this Agreement; and

 

WHEREAS, NeuLion desires to build and deliver
an IPTV service as described in this Agreement.

 

NOW, THEREFORE, in consideration of the premises
and mutual covenants contained in this Agreement, the Parties agree as follows:

 

1.             Term.  This Agreement shall be for a period of three
(3) years commencing on June 1, 2008 (“Initial Term”) and shall
automatically renew thereafter for subsequent one (1) year period, unless
terminated as otherwise provided for herein. 
Either party may terminate this Agreement at the end of the Initial Term
by sending prior written notice to the other Party no later than ninety (90)
days before the end of the Initial Term.

 

2.             Services.  The services to be provided by NeuLion under
this Agreement shall consist of the setup and back office operation of an IPTV
television service (the “Service”) for the worldwide marketplace (the
“Territory”), as more fully described in Exhibit
A hereto.  The services to
be provided by Company under this Agreement shall consist of the provision of
all content (“Content”) for the Service and the advertising and marketing
thereof, as more fully described, and with the restrictions set forth in Exhibit A hereto.

 

3.             Consideration.  Company shall pay to NeuLion the fees set
forth in Exhibit B hereto
as consideration for the Services provided pursuant to Section 2 above.  In the event *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.

 

4.             Independent Contractor.  NeuLion is an independent contractor of
Company.  Accordingly, no Party shall,
nor shall any officer, director, employee, servant, agent or

 

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independent contractor of either Party (i) be deemed an employee of the
other Party, (ii) commit the other Party to any obligation, or (iii) hold
itself, himself, or herself out as an employee of the other Party or a Person
with the authority to commit the other Party to any obligation.  As used in this Agreement the word “Person”
means any individual person, entity (including partnerships, corporations and
limited liability companies), and government or political subdivision thereof
(including agencies, bureaus, offices and departments thereof).

 

5.             Compliance With Law.  Both Company and NeuLion shall comply with
any and all applicable Federal, State and local Laws in connection with their
respective performance under this Agreement.

 

6.             Deliverables and Intellectual Property
Rights.  Company understands and
agrees that NeuLion shall utilize its (and/or its affiliates’) proprietary
intellectual property in the development and delivery of the Service provided
for herein.  Accordingly, NeuLion shall
be the owner of the Service and any and all intellectual property rights
therein contained (including but not limited to all patents, trademarks, know
how, business models and subscriber lists), and, in further consideration for
the rights granted herein to Company, Company hereby assigns to the NeuLion any
and all rights, title and interest, including, without limitation, copyrights,
trade secrets and proprietary rights, to the materials created or developed by
NeuLion hereunder and required to he delivered to Company by virtue of their
description or specification as a deliverable in Exhibit A (the “Deliverables”), excluding the Content
provided by Company thereunder.  The
Deliverables shall not be deemed to be “works made for hire” under the federal
copyright laws.  Company agrees to give
NeuLion reasonable assistance to perfect such assignment of such rights, title
and interest.

 

7.             Infringement.  NeuLion warrants and represents that the
Deliverables do not, and Company warrants that the Content does not, infringe
upon or constitute a misappropriation of any U.S. copyright, trademark, patent,
trade secret or other proprietary right of any third party.  Each Party will indemnify, defend and hold
harmless the other Party from and against all third party claims against, and
any related damages, claims, expenses (including reasonable attorney’s fees),
judgments, liabilities and costs (“Losses”), which such Party may suffer or
incur relating to any claim or action alleging that the Deliverables or the
Content infringe any U.S. copyright, trade secret, patent right of design, or
other third party intellectual property right. 
In the event of any third party claim against Company in respect of the
Deliverables, NeuLion, at its option, may (i) obtain the right to use the
Deliverables without obligation on the part of Company to the owner of the
allegedly infringed intellectual property, (ii) modify the Deliverables,
without materially diminishing the functionality or performance, thereof, to
become non-infringing at NeuLion’s sole expense or (iii) discontinue the use of
infringing Deliverables.  In the event of
any third party claim against NeuLion in respect of the Content, Company, at
its option, may (i) obtain the right to use the Content without obligation on
the part of NeuLion to the owner of the allegedly infringed intellectual
property, or (ii) discontinue the use of infringing Content.

 

8.             Limited Service Warranty.  NeuLion warrants that the Service will
operate according to the specifications published by NeuLion.  If it is determined that the Service does not
operate according to such specifications, NeuLion’s only responsibility will be
to use its best efforts, consistent with industry standards, to cure the
defect.  EXCEPT AS SET FORTH HEREIN, NO
OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING

 

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WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILTY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY NEULION.  IN NO EVENT WILL NEULION BE LIABLE TO COMPANY
OR ANY OTHER PARTY FOR ANY LOSS, INCLUDING TIME, MONEY, GOODWILL, LOST PROFITS
AND CONSEQUENTIAL DAMAGES BASED ON CONTRACT, TORT OR OTHER LEGAL THEORY, WHICH MAY
ARISE HEREUNDER OR FROM THE USE OR OPERATION OF THE SERVICE.

 

9.             Indemnification; Defense; Cooperation.  (a) Each Party shall be responsible for and
shall indemnify and hold harmless the other Party and its officers, employees,
and agents (the “Indemnified Parties”) from and against any and all
liabilities, losses, costs, expenses (including, without limitation, attorneys’
fees and disbursements) and damages (“Losses”), arising out of or in
connection with any acts or omissions of the Party, regardless of whether due
to negligence, fault, or default, including Losses in connection with any
threatened investigation, litigation or other proceeding or preparing a defense
to or prosecuting the same; provided, however, that the Party shall not be
responsible for that portion, if any, of a Loss that is caused by the
negligence, fault or default of the other Party.

 

(b)           Each Party shall, upon the other Party’s
demand, promptly and diligently defend, at the Party’s own risk and expense,
any and all suits, actions, or proceedings which may he brought or instituted
against one or more Indemnified Parties for which the Party is responsible
under this Section, and, further to the Party’s indemnification obligations,
the Party shall pay and satisfy any judgment, decree, loss or settlement in
connection therewith.

 

(c)           Each Party shall cooperate with the other
Party in connection with the investigation, defense or prosecution of any
action, suit or proceeding in connection with this Agreement.

 

(d)           The provisions of this Section shall survive
the termination of this Agreement.

 

10.           Assignment; Amendment; Waiver;
Subcontracting.  (a) Company may not
assign this Agreement nor any of its rights and obligations under this
Agreement, without the prior written consent of NeuLion.  However, NeuLion may assign this Agreement to
any third party, provided that such party assumes the obligations of NeuLion
under this Agreement.  Notwithstanding
the foregoing, the public offering of a Party, a sale of a controlling interest
in a Party, or a sale of substantially all of the assets of a Party shall not
constitute an assignment for purposes of this Section.

 

(b)           This Agreement and the rights and
obligations hereunder may not be in whole or part (i) amended, (ii) waived, or (iii)
subcontracted, without the prior written consent of the Party against whom
enforcement of such action is sought. 
Any purported modification without such prior written consent shall he
null and void.  The failure of a Party to
assert any of its rights under this Agreement, including the right to demand
strict performance, shall not constitute a waiver of such rights.

 

11.           Termination.  This Agreement may be terminated (i) in the
event of a breach of this Agreement that has gone uncured for a period thirty
(30) days after written notice of such breach has been given, (ii) immediately
upon the insolvency of or the filing of a petition of bankruptcy by a Party,
(iii) upon mutual written Agreement of the Parties, and (iv) in accordance with
any other provisions of this Agreement expressly addressing termination.

 

3

 

12.           Confidentiality.  “Confidential Information” shall include: (i)
all prices, rates and other financial information related to the Services, (ii)
all information relating to the customers of either Party, including customer
lists, and (iii) all information one Party provides to the other which is
clearly identified as confidential or proprietary.  Confidential Information disclosed by either
Party to the other shall be held by the recipient in confidence and not: (a) used
by the recipient for personal advantage of any kind, or (b) made available for
third parties to use.  Each Party will
direct its employees, contractors, consultants and representatives who have
access to any Confidential Information to comply with all of the terms of this
Section.  The following information shall
not be Confidential Information if: (i) it is or becomes available to the
public through no wrongful act of the receiving Party; (ii) it is already in
the possession of the receiving Party and not subject to any agreement of confidence
between the Parties; (iii) it is received from a third Party without
restriction for the benefit of the disclosing Party and without breach of this
Agreement; (iv) it is independently developed by the receiving Party; (v) it is
disclosed pursuant to a requirement of a duly empowered government agency or a
court of competent jurisdiction after due notice and an adequate opportunity to
intervene is given to the disclosing Party unless such notice is
prohibited.  Upon termination or
expiration of this Agreement, the receiving Party shall at the disclosing
Party’s direction, either return or destroy all of the disclosing Party’s
Confidential information and so certify in writing.  The obligations of this provision will
survive for five (5) years after any termination or expiration of this
Agreement.

 

13.           Audit.  During the Term of this Agreement, each Party
may audit the books and records of the other Party relevant to this Agreement
no more than once each year thereof.  All
such audits shall be performed by an independent accounting firm at the sole
expense of the auditing Party and must take place on reasonable notice and
during normal business hours.  Such
audits will be conducted to determine that all accounting, billing, cash
collection and cash distribution is done in accordance with the terms of the
Agreement.  Any accounting discrepancies
will be resolved within thirty (30) days from the last day of the audit and in
the event those discrepancies are *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.  The audited books and records as well as the
results of any such audit shall be considered Confidential Information as set
forth in this Agreement; provided, however, nothing in this provision shall he
construed to preclude the use of such materials in the course of litigation
between the Parties regarding this litigation if necessary.

 

14.           No Third Party Beneficiaries.  This Agreement is entered solely by and
between the Parties and shall not be deemed to create any rights in or
obligations to any third parties.

 

15.           Force Majeure.  Neither Party shall be liable for failure to
fulfill its obligations under this Agreement if that failure is caused,
directly or indirectly, by flood, communications failure, extreme weather,
fire, mud slide, earthquake, or other natural calamity or act of God,
interruption in water, electricity, riots, civil disorders, rebellions or
revolutions, acts of governmental agencies, quarantines, embargoes, malicious
acts of third parties, acts of terrorism, labor disputes affecting vendors or
subcontractors and for which the party claiming force majeure is not
responsible, or any other similar cause beyond the reasonable control of that
Party.

 

4

 

16.           Consent to Jurisdiction and Venue;
Governing Law.  Unless otherwise
specified in this Agreement or required by Law, exclusive original jurisdiction
for all claims or actions with respect to this Agreement shall be in a State or
Federal Court in Nassau County in New York State and the Parties expressly
waive any objections to the same on any grounds, including venue and forum non
conveniens.  This Agreement is intended
as a contract under, and shall be governed and construed in accordance with,
the Laws of New York State, without regard to the conflict of laws provisions
thereof.

 

17.           Notices.  Any notice, request, demand or other
communication required to be given or made in connection with this Agreement
shall be (a) in writing, (b) delivered or sent (i) by hand delivery, evidenced
by a signed, dated receipt, (ii) postage prepaid via certified mail, return
receipt requested, or (iii) overnight delivery via a nationally recognized
courier service, (c) deemed given or made on the date three (3) business days
after it is mailed or one (1) business day after it is released to a courier
service, as applicable, if addressed to the President or Chief Executive
Officer of the Party at the address specified above for the Party, or in each
case to such other persons or addresses as shall be designated by written
notice.

 

18.           All Legal Provisions Deemed Included;
Severability; Supremacy.  (a) Every
provision required by Law to be inserted into or referenced by this Agreement
is intended to be a part of this Agreement. 
If any such provision is not inserted or referenced or is not inserted
or referenced in correct form then (i) such provision shall be deemed inserted
into or referenced by this Agreement for purposes of interpretation and (ii) upon
the application of either Party this Agreement shall be formally amended to
comply strictly with the Law, without prejudice to the rights of either Party.

 

(b)           In the event that any provision of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

(c)           Unless the application of this subsection
will cause a provision required by Law to be excluded from this Agreement, in
the event of an actual conflict between the terms and conditions set forth
above the signature page to this Agreement and those contained in any schedule,
exhibit, appendix, or attachment to this Agreement, the terms and conditions
set forth above the signature page shall control.  To the extent possible, all the terms of this
Agreement should be read together as not conflicting.

 

19.           Section and Other Headings.  The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

 

20.           Entire Agreement.  This Agreement represents the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and supersedes all prior agreements (whether written or oral) of
the parties relating to the subject matter of this Agreement.

 

IN WITNESS WHEREOF, the Parties have executed
this Agreement as of the date first above written.

 

5

 

	
  NeuLion, Inc.

  	
   

  	
  Company:

  	
  KyLinTV, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ronald
  M.E. Nunn

  	
   

  	
  By:

  	
  /s/ Roy E.
  Reichbach

  
	
  (Authorized Signature)

  	
   

  	
  (Authorized Signature)

  
	
   

  	
   

  	
   

  
	
             
  Ronald M.E. Nunn

  	
   

  	
                Roy E. Reichbach

  
	
  Type or Print Name of Person Signing

  	
   

  	
  Type or Print Name of Person Signing

  
	
   

  	
   

  	
   

  
	
  EVP,
  Business Operations

  	
   

  	
  Secretary

  	
   

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  6/3/2008

  	
   

  	
   

  	
  6/2/2008

  	
   

  
	
  Date

  	
   

  	
  Date

  
								

 

6

 

EXHIBIT A

 

NEULION PROVIDED
SERVICES

 

NeuLion shall provide the following services and Deliverables for the
setup and back office operations of the Service, within the Territory, provided
that Company obtains all requisite legal and regulatory approvals for any
locality.  These Deliverables and
services shall include the utilization of NeuLion owned and licensed
technologies and proprietary processes, including the NeuLion iPTV Service
Support described in Exhibit C
hereto.  The specific Deliverables to be
provided by NeuLion are:

 

·                                          Content Encoding and Management — NeuLion
shall provide the process, technology and ongoing personnel services to encode
Company provided Content for subsequent transmission over the internet to the
Service’s customers.  Services include:

 

1.                     The installation,
implementation, support, maintenance and remote management of the transcoding
software as required for linear broadcast channel Content encoding;

 

2.                     The
publishing of daily broadcast channel play lists for subsequent scheduling of
Content broadcast; and,

 

3.                     The storage,
backup and maintenance of the encoded Content to support forty-eight (48) hours
of broadcast Content and agreed upon Video on Demand (“VOD”) library Content.

 

·                                          Content Delivery — NeuLion shall provide
the process, technology and ongoing personnel services to deliver broadcast
Content to the Service’s customers. 
Services include:

 

1.                     Implementation,
support, maintenance and management of software and the NeuLion iPTV Platform
to support customer access control and selection management of broadcast
channel and VOD library Content;

 

2.                     Implementation,
support, maintenance and management of software and the NeuLion iPTV Platform
to concurrently stream broadcast channel and VOD Content as required to support
the Service’s customers Content viewing demand; and,

 

3.                     Implementation,
support, maintenance and management of software and the NeuLion iPTV Platform
to provision and manage IP network bandwidth resources as required supporting
Service’s customers’ Content broadcast demand.

 

·                                          Support of Company’s Sales and Customer Service
Support Requests — NeuLion shall provide the process, technology and
ongoing personnel services to

 

7

 

accept Company’s new customer orders and
support Company’s Customer Service requests for second level support.  Services include:

 

1.                     Implementation,
support, maintenance and management of hardware, software and the NeuLion iPTV
Platform to support customer order management and administration to be utilized
by both NeuLion and Company personnel, with support for direct order entry
capture from Company’s Service web site;

 

2.                     Implementation
and maintenance of hardware, software and NeuLion technology to log and
subsequent track activity by NeuLion personnel of Company’s Customer Services
personnel’s requests for second level support; and,

 

3.                     The ongoing
analysis, response and resolution of Company’s Customer Services personnel’s
requests for second level support of customer’s technical issues.

 

·                                          Customer Provisioning, Maintenance and Billing
- NeuLion shall provide the process, technology and ongoing personnel services
to setup and provision new customers, maintain existing customer account
information and provide monthly customer billing.  Services include:

 

1.                     Implementation,
support, maintenance and management of hardware, software and the NeuLion iPTV
Platform to support Service’s customer account definition and maintenance to
include a internet-based customer self-service facility; and,

 

2.                     The ongoing
monthly billing of customer accounts to include pre-approved, recurring
customer credit card charge processing, monthly customer billing statement
creation and statement posting for customer access via the supplied
internet-based customer self-service facility.

 

·                                          Set Top Box (STB) Inventory Management -
NeuLion shall provide the process, technology and ongoing personnel services to
receive, store, manage and ship Set Top Boxes for the Service’s customers.  Services include:

 

1.                     Implement and
maintain STB storage facility;

 

2.                     Receive and
manage STB inventory;

 

3.                     Assign,
provision and ship individual STBs for each customer order; and,

 

4.                     Test and
refurbish STB return.

 

8

 

COMPANY PROVIDED
SERVICES

 

Company shall provide the following services and Deliverables for the
sales, marketing, and direct customer support of the Service.  The specific Deliverables to be provided by
Company are:

 

·                                          Supplying of Content - Company shall
provide the Content required for VOD library and daily broadcast to the
Service’s customers.  Services include:

 

1.                     The daily
acquisition and aggregation of Content in an agreed upon format to be delivered
in an agreed upon timeframe as required for daily broadcast to the Service’s
customers;

 

2.                     The creation
and delivery of Content meta data (to include Content title and description,
high resolution Content promotional images and broadcast Content programming
schedules) in an agreed upon quality and in a timely manner;

 

3.                     The
provisioning of server hardware and systems software as required for the
transcoding of Company’s linear broadcast channel Content;

 

4.                     The
implementation, maintenance and management of hardware, software and network
services to transmit daily transcoded broadcast and VOD library Content to
NeuLion; and,

 

5.                     Daily
broadcast and VOD library Content shall be delivered at a quality level
required for subsequent broadcast to the Service’s customers.

 

·                                          Sales and Marketing of the Service -
Company shall provide the marketing, promotions, advertising and direct
customer sales for the Service.  Services
include:

 

1.                     The creation
and maintenance of the Service’s external web site to include promotional materials,
Service description and interface to the NeuLion supplied order management
facility for direct capture of new customer orders;

 

2.                     The ability
to receive new customer orders via telephone and/or fax, and the subsequent
entry of these new orders into the NeuLion supplied order management facility;
and,

 

3.                     The
compilation and offering to Subscribers monthly service packages of linear
broadcast channels,.

 

·                                          Direct Customer Support - Company shall
provide direct customer communication, support and management of the Service’s
customers.  Services include:

 

9

 

1.                     The ability
to receive (both electronically and via telephone), log and track support
requests from the Service’s customers; and,

 

2.                     The
maintenance of trained support personnel at a reasonable level as required to
respond to the Service’s customers’ support requests in a timely fashion.

 

10

 

EXHIBIT B

 

NEULION SERVICE FEES

 

In consideration for services provided to Company, NeuLion shall
receive the following fees from Company:

 

·                                          Extended Operations Services Fee — For
NeuLion’s personnel services outside the services described below as the normal
back office operations (“Extended Operations Services”), such services to be
agreed upon by both Parties, Company shall:

 

1.                     Pay NeuLion a
fee derived *
*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.  Upon *  *  *  *  *  *  *
written notice to NeuLion, Company may terminate Extended Operations Services
and have no further payment obligation therefore other than for work performed
through the effective date of termination of these Services.

 

·                                          Operations Fee — For ongoing back office
operations of the Services of this Agreement, NeuLion shall retain the
following:

 

1.                     A Basic
Channel Package Fee *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *;

 

2.                     A Web
Subscription Fee *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *;

 

3.                     A Secondary
STB Subscription Fee *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *; and,

 

4.                     A STB
Inventory and Handling Fee *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.

 

11

 

EXHIBIT C

 

Support
and Maintenance Services

 

NeuLion’s support and maintenance services provide for logging,
categorization, analysis and creation of resolutions to all support requests
made by Licensee.  Request resolutions
can consist of answers to questions, creating of procedures to resolve and/or
circumvent a problem, and coding changes to the Licensed Programs to correct a
problem.

 

NeuLion’s web-based support request tracking system allows Licensee to
log requests, provide updates and review the status of the request logs, 24
hours per day, 7 days per week, and 365 days per year.  For opened requests, there are two types of
technical support performed by NeuLion.

 

“Primary Support Services” address all the requests opened on the
support tracking system.  Primary Support
Services personnel will work on requests *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.

 

“Emergency Support Services” are provided after Primary Support
Services hours for High severity requests only. 
When a High severity request is opened outside of Primary Support
Services hours, a NeuLion support technician will be automatically notified of
the new request so that it can be addressed as quickly as possible.  Within *  *  *  *  of entering a High severity
request a NeuLion support technician will update the request.  Additionally, NeuLion has an Emergency
Support Escalation telephone number, which is available 24 hours a day, 7 days
a week, that can be used for *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.

 

NeuLion provides web support services within the following timeframes.

 

	
  Request Severity Description

  	
   

  	
  Fix Plan Response

  
	
   

  	
   

  	
   

  
	
  High Severity Requests
  - A “system down” or production operations halted condition and a manual work
  around is not practical.

  	
   

  	
  ****

  
	
   

  	
   

  	
   

  
	
  Medium-High Severity Requests
  - A suspected high impact condition associated with the Licensed Programs
  causing significant problems.

  	
   

  	
  ****

  
	
   

  	
   

  	
   

  
	
  Medium-Low Severity Requests
  - An intermittent or low-impact condition associated with the Licensed
  Programs.

  	
   

  	
  ****

  
	
   

  	
   

  	
   

  
	
  Low Severity Requests
  - Questions concerning performance, use, or implementation of the Licensed
  Programs.

  	
   

  	
  ****

  

 

NeuLion uses best efforts to correct High severity requests by
continually working with Licensee to provide a fix or work around that
eliminates a “system down” condition.

 

12Exhibit
10.20

 

CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS
OMITTED AND MARKED WITH “**”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO
BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION.

 

SOFTWARE LICENSE AND PRODUCT DISTRIBUTION

 

AGREEMENT

 

THIS AGREEMENT, is entered into as of September 29,
2006 by and between NeuLion, Inc. (“NeuLion”), having a place of business
at 1600 Old Country Road, Suite 101, Plainview, New York 11803, USA and
TransVideo International Ltd. (“TransVideo”) having a place of business at 11th Floor, Building A, #3 Danling Street, Haidian
District, Beijing, China 100080.

 

W I T N E S S E T H:

 

WHEREAS, NeuLion wishes to acquire certain rights to
computer software programs and documentation (“Software”) owned by TransVideo
and to become a distributor of TransVideo’s Set Top Box Product; and

 

WHEREAS, TransVideo is willing to grant such rights
and licenses and to perform duties with respect to the Software and the Set Top
Box Product on the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants contained in this Agreement, the Parties agree as follows:

 

1.             APPOINTMENT AND
GRANT OF LICENSES

 

1.1           TransVideo
hereby grants to NeuLion a non-exclusive, non-transferable, non-sublicensable,
non-assignable, world-wide, perpetual source code license to TransVideo’s V1
release of its IPTV Server Software (further defined as the OSS, Program
Manager, MPlayer and Nodelink applications) to use, modify and enhance the IPTV
Server Software source code in the development and delivery of any NeuLion
product or service (“Derivative Works”).

 

1.2           TransVideo
hereby grants to NeuLion a non-exclusive, non-transferable, non-sublicensable,
non-assignable, world-wide, source code license to TransVideo’s Set Top Box
Software defined as the Driver (containing drivers for infrared, Wi-Fi, USB,
DSP interface, network and OSD), the Browser and the Player components, with
both Parties agreeing that for purposes of the source code license granted
herein such further definition specifically excludes the DSP component in
TransVideo’s Set Top Box Product, currently as of execution of this agreement
at release 2.1.12, to only use as internal reference for NeuLion’s ongoing
support of its customers’ use of TransVideo’s Set Top Box Product.  The source code license granted to the Set
Top Box Software does not grant NeuLion the right to: (i) modify or
enhance the Set Top Box Software; or, (ii) distribute the Set Top Box
Software independent of the Set Top Box Product.

 

1

 

1.3           TransVideo
hereby grants to NeuLion a non-exclusive, non-transferable, non-sublicensable,
non-assignable, world-wide, source code license to the P3 component of
TransVideo’s Transcoder/Encoder Software (with both Parties agreeing that for
purposes of the source code license granted herein the P1 and P2 components in
TransVideo’s Transcoder/Encoder Software are specifically excluded) to only use
as internal reference for NeuLion’s ongoing support of its customers’ use of
TransVideo’s Set Top Box Product.  The
source code license granted to the P3 component of TransVideo’s
Transcoder/Encoder Software does not grant NeuLion the right to modify, enhance
or distribute the Transcoder/Encoder Software.

 

1.4           TransVideo
appoints NeuLion as its world-wide, non-exclusive distributor with rights to
market, distribute, and resell of TransVideo’s Set Top Box Product under
TransVideo’s trademark in accordance with the terms and conditions of this
Agreement.

 

1.5           TransVideo
grants NeuLion the right to appoint distributors who shall have all the rights
of NeuLion hereunder related to the marketing, distributing, and reselling of
the Set Top Box Product.

 

1.6           TransVideo
grants NeuLion a special license to use the current (as of execution of this
Agreement) version of the Transcoder/Encoder Software only in connection with
NeuLion’s services to NeuLion’s customers using the Set Top Box Products
hereunder.  TransVideo does not grant
NeuLion the right to market, resell, or distribute the Transcoder/Encoder
Software.

 

2.             INTELLECTUAL
PROPERTY RIGHTS

 

2.1           TransVideo
shall retain all intellectual property rights to the IPTV Server Software, Set
Top Box Software and Transcoder/Encoder Software, except as specifically
provided for herein.

 

2.2           NeuLion
shall retain all intellectual property rights to any Derivative Works made by
NeuLion based on the IPTV Server Software source code including the right to
freely distribute, sublicense, transfer, assign or otherwise dispose of
unencumbered by any restriction imposed by sub-section 1.1.

 

2.3           NeuLion
shall retain all intellectual property rights to any STB Add-On developed by
NeuLion for the Set Top Box that utilizes the Set Top Box SDK as described in
sub-section 3.3 of this Agreement.  Furthermore,
TransVideo agrees that any NeuLion customer of the Set Top Box Product,
distributed by NeuLion, shall retain all intellectual property rights to any
STB Add-On the customer develops utilizing the Set Top Box SDK.

 

3.             TRANSVIDEO’S
RESPONSIBILITIES

 

3.1           Upon
execution of this Agreement TransVideo shall provide NeuLion the current source
code for: (i) V1 release of the IPTV Server Software; (ii) 2.1.12
release of the Set Top Box Software; and, (iii) the P3 component of the
Transcoder/Encoder Software.

 

3.2           TransVideo
shall produce a new release of the IPTV Server Software (release V1.2.1) that
contains all source code changes to the V1 release produced by both TransVideo 

 

2

 

and NeuLion.  For clarification, the V1.2.1 release would
be a production V1 release.  TransVideo
shall deliver the updated source code that includes the OSS, Program Manager,
MPlayer and Nodelink application for release V1.2.1 to NeuLion.  Upon full production implementation use by
NeuLion for all KyLinTV subscribers, of the IPTV Server Software based on the
release V1.2.1 source code, TransVideo shall have no further obligation to
provide NeuLion: (i) any updates, upgrades or enhancements to the IPTV
Server Software or (ii) any support for the IPTV Server Software.

 

3.3           TransVideo
shall produce a new release of the Set Top Box Software that includes a
software development kit (“Set Top Box SDK”) that allows NeuLion and NeuLion’s
customers to develop software that operates on and interacts with the Set Top
Box Software without changes to the Set Top Box Software itself (“STB Add-On”).  However, this obligation of TransVideo shall
not be a condition precedent to any payment obligation of NeuLion under this
Agreement.

 

3.4           TransVideo
shall provide NeuLion the source code for each new version of the Set Top Box
Software and the P3 component of the Transcoder/Encoder Software it produces as
long as NeuLion has any active customer using TransVideo’s Set Top Box Product.  TransVideo further agrees that each new
release of its Set Top Box Software and Transcoder/Encoder Software will maintain
compatibility with the V1 release of its IPTV Server Software in streaming file
format (ASF) and streaming protocol (proprietary push Protocol).

 

3.5           TransVideo
shall provide NeuLion support and maintenance for the Set Top Box Software and
the Transcoder/Encoder Software as long as NeuLion has any active customer
using the Set Top Box Product.

 

4.             LICENSE FEE AND
PAYMENTS

 

4.1           NeuLion  shall  pay  TransVideo  a  license  fee  in  the  amount  of  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  .

 

4.2           Before
the end of year 2007, NeuLion shall pay TransVideo *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  .  Thereafter NeuLion and TransVideo agree to
establish a new unit price *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  .

 

4.3           Orders
for Set Top Box Products by NeuLion to TransVideo shall be made in *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *.

 

4.4           Set Top Box Products’ price is FOB Shenzhen, which means
that TransVideo is only responsible for delivery of the Set Top Box Products to
the port of Shenzhen.  NeuLion is
responsible for all the freight and insurance fees thereafter, applicable
tariffs, duties and taxes other than franchise and income taxes for which
TransVideo is responsible.

 

3

 

4.5           Notwithstanding
the foregoing, no moneys shall be payable to TransVideo for evaluation copies,
beta copies, support or marketing copies, or for replacement of defective
copies of the Set Top Box Product.

 

4.6           Before
the end of year 2007, for each linear channel delivered by NeuLion using the
Transcoder/Encoder Software as provided in sub-section 1.6 above, NeuLion shall
pay TransVideo *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  .  At the end of year 2007, TransVideo will
release a new version of the Transcoder/Encoder Box (containing the
Transcoder/Encoder Software).  The
business terms for NeuLion to use the new product will be determined by the
Parties at a later time.

 

5.             REPRESENTATIONS,
WARRANTIES AND INDEMNIFICATION

 

5.1           TransVideo
warrants that it has the right to grant the licenses and rights granted in this
Agreement and that it is under no obligation or restriction, nor will it assume
any obligation or restriction, which would in any way interfere with, be
inconsistent with or present a conflict of interest concerning TransVideo’s
obligations under this Agreement.

 

5.2           TransVideo
warrants to NeuLion, NeuLion’s customers, and NeuLion’s customers’ end user of
the Set Top Box Product (“Set Top Box Consumer”) that the Set Top Box Product
will be free from defects in workmanship and materials, under normal use and
service, for one year from the date of resell to the Set Top Box Consumer.  TransVideo’s sole obligation under this
express warranty shall be, at TransVideo’s option and expense, to repair the
defective Set Top Box Product or part, deliver to NeuLion for subsequent
delivery to the Set Top Box Consumer an equivalent Set Top Box Product or part
to replace the defective item, or if neither of the two foregoing options are
reasonably available, TransVideo may, on its sole discretion, refund to NeuLion
the fee NeuLion paid for the defective Set Top Box Product.

 

5.3           TransVideo
shall fully indemnify NeuLion against any and all loss, costs, expenses and
liability in a lawsuit or other judicial action in connection with, and defend
NeuLion against any claims (i) that the Software and Set Top Box Product
infringe any copyright, patents, trademarks, trade secrets or other
intellectual property right of third parties; (ii) which result from a
breach of the warranties set forth herein; or (iii) which is based on a
failure of TransVideo to perform its maintenance and support obligations set
forth herein.

 

6.             CONFIDENTIALITY

 

6.1           Confidential
Information: for the Purpose of this Agreement, “Confidential Information”
means:

 

(a)           Any
business or technical information of TransVideo or NeuLion, including by not
limited to any information relating to the Software, the Set Top Box Product,
TransVideo or NeuLion’s product plans, designs, costs, product prices and
names, finances, marketing plans, business opportunities, personnel, research,
development or know-how;

 

4

 

(b)           Any
information that is designated by the disclosing Party as “confidential” or “proprietary”
or, if orally disclosed, reduced to writing by the disclosing Party within
thirty (30) days of the disclosure; and

 

(c)           The
terms and conditions of this Agreement.

 

6.2           Exclusions.  Confidential Information does not include
information that:

 

(a)           Is
developed by the receiving Party independently and without use of or concerning
the disclosing Party’s Confidential Information;

 

(b)           Is
obtained by the receiving Party from a third Party without restriction on
disclosure and without breach of a nondisclosure obligation;

 

(c)           Is
in or enters the public domain other than through the fault or negligence of
the receiving Party and without breach of this Agreement;

 

(d)           The
receiving Party possesses before first receiving it from the disclosing Party;
or

 

(e)           Is
legally required to be disclosed by law, at which point the disclosing Party
will notify the other Party.

 

6.3           Obligation:
each Party will maintain Confidential Information in strict confidence, and
will not use or disclose, except only to the receiving Party’s employees
required to have the information for the purposes of this Agreement.  Each Party further agrees to use the same
degree of care to maintain the confidentiality of all Confidential Information
received from the other Party that it uses to maintain the confidentiality of
its own information of similar importance, but in no event will it use less
than reasonable care.  Each Party will
take steps that are necessary, by instruction or agreement, to ensure that
those of its employees accessing the Confidential Information treat the
Confidential Information in a manner consistent with this Agreement.

 

7.             TERM AND
TERMINATION

 

7.1           This
Agreement shall commence upon its execution and shall continue indefinitely
unless otherwise terminated as follows:

 

(a)           At
any time by mutual written agreement of the Parties;

 

(b)           By
either Party if the other Party commits any material breach of its obligations
hereunder and fails within 30 days of written notice to cure the same.  Any such termination shall be without
prejudice to any other rights which may have accrued to it hereunder; or,

 

(c)           By
either Party immediately by written notice if the other Party files a petition
in bankruptcy, goes into liquidation, admits that it is insolvent, makes an
assignment for the benefit of creditors, or has a petition in bankruptcy or
receivership filed against it and such petition is not dismissed within 30 days
following filing.

 

7.2           All
source code licenses granted by TransVideo to NeuLion under section 1 of this
Agreement shall survive termination provided NeuLion has not breached its
payment obligations under sub-section 4.1 of this Agreement.

 

5

 

7.3           All
rights to use the Set Top Box Product properly granted by NeuLion to its
customers hereunder shall survive termination of this Agreement.

 

8.             GENERAL

 

8.1           Neither
Party may assign this Agreement without the prior written consent of the other
Party, such consent not to be unreasonably withheld; provided however,
TransVideo agrees that this Agreement is assignable or transferable to a
successor in interest to NeuLion, and such assignment and transfer shall not be
deemed a violation of the restrictions on transferability set forth in section
1.

 

8.2           If
any provision of this Agreement is held by a court of competent jurisdiction to
be illegal, invalid, or unenforceable, the validity or enforceability of the
remainder of this Agreement shall not be affected.

 

8.3           This
Agreement shall be governed by the laws of the State of New York and in the
event of any dispute the Parties hereto shall submit to the jurisdiction of the
State and Federal courts of New York, New York.

 

8.4           This
Agreement represents the entire agreement between the Parties with respect to the
subject matter contained herein and supersedes any and all written
communications, representations and arrangements whether written or oral
(whether given or made before or after the date hereof).  No alteration, modification, waiver or
addition to this Agreement shall be valid unless made in writing and signed by
both Parties’ duly authorized representatives.

 

IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first above written.

 

	
  NeuLion, Inc.  

  	
   

  	
  TransVideo
  International Ltd.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Nancy Li 

  	
   

  	
  By:

  	
   /s/ Wang Yun Chuan 

  
	
   

  	
    (Authorized
  Signature)

  	
   

  	
   

  	
   (Authorized
  Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
  Nancy Li  

  	
   

  	
  Wang Yun Chuan 

  
	
  Type or Print Name of
  Person Signing

  	
   

  	
  Type or Print Name of
  Person Signing

  
	
   

  	
   

  	
   

  
	
   

  	
  CEO 

  	
   

  	
   

  	
  CEO

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
  10-31-06

  	
   

  	
   

  	
  11-5-06

  
	
  Date

  	
   

  	
  Date

  
							

 

6

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