Document:

ex10-21

 

EXHIBIT 10.21

Amendment to the Agreement dated December 14, 1999 by and between CTV

Television Inc. and Blue Zone Productions Ltd. dated September 26, 2001.

September 26, 2001

Mr. Mark Devereux

Blue Zone Productions Ltd

Delivered by FAX and  

EMAIL with original to

follow by mail                

Re: Agreement dated
December 14, 1999 (“Agreement”) by and between CTV
Television Inc. (“CTV”) and
Blue Zone Productions Ltd. (“Blue Zone”)

Further to several conversations between our respective organizations with
respect to the above referenced Agreement, I wish to confirm our agreement:

LICENSE TO BLUE ZONE INTELLECTUAL PROPERTY

1.     Blue Zone hereby grants, effective as of September 21, 2001, to CTV a
non-exclusive, worldwide license (the “License”) to use the Blue Zone
Intellectual Property for the purposes described in Section 5(d)(1) of the
Agreement for the period commencing on September 21, 2001 and continuing until
September 20, 2002 (the “License Period”). For certainty, all representations,
warranties and indemnities of Blue Zone set out in the Agreement and which are
applicable to the license of the Blue Zone Intellectual Property shall continue
to apply to the License granted herein, notwithstanding the termination or
expiration of such Agreement.

For purposes of this letter agreement, it is acknowledged and agreed that the
permitted uses of the License granted as described above shall include all
current uses by CTV of the Blue Zone Intellectual Property.

2.     Section 13 of the Agreement is deleted in its entirety.

Unless earlier terminated in accordance with this Item 2 or unless renewed by
mutual written agreement of the parties, the Agreement will terminate on
December 31, 2001 without obligation for either party to give notice. Either
party may terminate the Agreement, the License and this letter agreement
immediately by written notice to the other party if:

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(a)   the other party becomes insolvent or makes an assignment for the benefit of
creditors generally, or a petition in bankruptcy is filed against the other
party, or proceedings are taken to wind up the other party or if a receiver or
receiver-manager is appointed for the other party or any of its assets; or

(b)   the other party defaults in the performance of any of its material
obligations under this letter agreement or the Agreement, and fails to remedy
that default within 30 days after receipt from the non-defaulting party of
written notice specifying the default.

(c)   the parties have not agreed upon a form of Escrow Agreement, made CTV a
beneficiary under the Escrow Agreement and deposited the Deposited Material
with the Agent as provided in Item 7 below before October 28, 2001, except
where the reason for the failure was outside of the control of CTV.

Notwithstanding the foregoing, the fact that CTV terminates the Agreement or
the Letter Agreement as a result of Blue Zone becoming insolvent, making an
assignment for the benefit of creditors generally, having a petition in
bankruptcy filed against it, taking proceedings to wind up, or having a
receiver or receiver-manager appointed for it, will not terminate the License
or relieve Blue Zone or its successors from its obligations pursuant to
Sections 7, 8 and 9.

The License and this letter agreement will automatically terminate without
obligation of either party to give notice on September 20, 2002 unless
terminated earlier according to the provisions herein or extended by mutual
agreement of the parties. Sections 5 (a), (c)(1) and c(2), (e), (g), (h), 6,
10, 15 of the Agreement shall survive termination of the Agreement. Items 2,
3, 4 (other than Section 4(b), 8, 9 and 10 of this letter agreement will
survive termination of the letter agreement.

3.     The License shall not be subject to CTV acquiring or retaining any Web
management or hosting services from Blue Zone. In this regard the provisions
related to the management and hosting of the CTV Web Site set out in the
Agreement (including for certainty Section 4 of the Agreement) shall,
notwithstanding anything to the contrary in the Agreement, be terminated
effective as of October 1, 2001 and, as of such date, neither party shall have
any further obligations or rights under the Agreement with respect to same.

4.     In consideration for the License for the License Period as described in Item
1, CTV shall pay to Blue Zone an amount equal to one hundred and twenty
thousand dollars ($120,000) Cdn. funds, (the “License Fee”) payable as follows:

		
	 	(a)   $60,000 Cdn funds payable immediately upon execution of this letter
agreement, by wire transfer to a Blue Zone bank account, the details of which
will be provided to CTV by Blue Zone in writing; and

		
	 	(b)   the remaining $60,000 Cdn. funds payable immediately upon execution of
the Escrow Agreement (as described below) and written confirmation of deposit
of the Deposited Materials with the Agent.

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The License fees payable under this Item 4 are non-refundable, notwithstanding
termination of this letter agreement.

SUPPORT SERVICES

5.     For the month of October, Blue Zone will continue to provide to CTV the
support as contemplated in the Maintenance and Service Level Agreement by and
between the parties dated June 1, 2001 (the “SLA”). CTV will pay to Blue Zone
on October 1, 2001: (a) 50% of the Monthly Fee owing under the SLA less the
accumulated credits calculated pursuant to Section 3 of the SLA for
unavailability in the month of September; and (b) by no later than November 5,
2001, the balance of the amount owing for the support provided by Blue Zone
during the month of October, less any additional credits to which CTV may be
entitled pursuant to Section 3 of the SLA for unavailability in the month of
October.

CTV hereby notifies Blue Zone, and Blue Zone hereby acknowledges and agrees,
that CTV does not wish to renew the SLA for the period after October 31, 2001
and that accordingly the SLA will be terminated effective October 31, 2001.

CTV shall pay to Blue Zone an amount equal to twenty four thousand, four
hundred and eighty-nine dollars and twenty cents ($24,489.20) Cdn. funds, as
net payment for the fees owing under the SLA for the period between September
1, 2001 and September 30, 2001 after deducting all credits which CTV may be
entitled to pursuant to Section 3 of the SLA for any unavailability which may
have arisen prior to September 1, 2001. Such funds will be payable immediately
upon execution of this letter agreement, by wire transfer to a Blue Zone bank
account, the details of which will be provided to CTV by Blue Zone in writing.

6.     Commencing on November 1, 2001, Blue Zone agrees to provide to CTV technical
and operational support (the “Support”) related to the Blue Zone Intellectual
Property to CTV on a monthly basis. The Support shall consist of: (i) the
provision of upgrades, bug fixes and patches for the Blue Zone Intellectual
Property (excluding labour); (ii) on-call support availability with maximum 1
hour call-back response time each day during the hours of 07:00 (EST) to 24:00
(EST); (iii) on-call support availability with maximum 2 hour call-back
response time each day during the hours of 24:00 (EST) to 07:00 (EST); and (iv)
such other details and support levels as mutually agreed to by the parties,
acting reasonably and negotiating in good faith. Blue Zone will make
reasonable commercial efforts to promptly resolve material problems and errors
with the Blue Zone Intellectual Property which are within its control provided
that it receives all necessary assistance from CTV. For clarity, the response
times referred to above are not guarantees of resolution times of any problem
or error with the Blue Zone Intellectual Property. In
consideration for such Support, CTV agrees to pay to Blue Zone a fee (the
“Support Fee”) of four thousand dollars ($4,000) Cdn. funds per month plus all
applicable taxes.

Blue Zone acknowledges and agrees that CTV may terminate such Support
arrangements upon thirty (30) days written notice to Blue Zone.

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ESCROW ARRANGEMENT

7.     The parties agree to use best efforts and to negotiate in good faith to
conclude a source code escrow agreement (the “Escrow Agreement”) for the Blue
Zone Intellectual Property by September 28, 2001 or as soon as possible
thereafter.

The Escrow Agreement will include terms which: (a) require Blue Zone to deposit
with an industry recognized escrow agent (the “Agent”), to be held in escrow,
the source code (in human readable form) for all of the Blue Zone Intellectual
Property (the “Deposited Material”); (b) require Blue Zone to update the
Deposited Material each and every instance where there is a material change to
the Deposited Material made by Blue Zone or its designate (including all
material bug fixes, any updates, any upgrade or any other enhancements); and
(c) authorize and require the Agent to transfer and make available the
Deposited Material to CTV for use by CTV only for the purpose of continuing the
benefits afforded to CTV pursuant to the License and support related to the
Blue Zone Intellectual Property as contemplated by this letter agreement in the
event of, and only for such period of time as, any of the following conditions
exist, including: (i) Blue Zone filing for bankruptcy or seeking similar relief
under any applicable law; (ii) a receiver, trustee or similar officer being
appointed for the business or property of Blue Zone; or (iii) any involuntary
petition or proceeding under bankruptcy or insolvency laws being instituted
against Blue Zone and not stayed, enjoined, contested or discharged within
thirty (30) days; or (iv) Blue Zone failing to carry on business in the
ordinary course (collectively, the “Release Conditions”), provided that CTV
provide the Agent and Blue Zone with an acknowledgement that it will only use
the Deposited Material in accordance with this Item 7 and the License.

Upon the discontinuance or removal of any of the Release Conditions, CTV will
destroy or return to the Agent all of the Deposited Materials and any copies
thereof and provide Blue Zone with an officer’s certificate to that effect and
CTV will thereafter have no right to use any of the Deposited Materials.

The fees and expenses for the foregoing escrow arrangement described in this
Item 7 shall be borne by Blue Zone. The Escrow Agreement will provide that in
the event that the Agent will not act where Blue Zone does not pay any fees and
expenses due to the Agent under the Escrow Agreement, CTV may pay such fees and
expenses and Blue Zone will immediately reimburse CTV.

8.     The parties agree that the arrangement contemplated herein is binding on the
parties, shall be governed by the laws of the Province of Ontario and shall
enure to the benefit of their respective successors and permitted assigns.

9.     In connection with the planned migration of hardware associated with the CTV
Web Site, Blue Zone hereby agrees to provide to CTV all necessary passwords and
other reasonable assistance to effect an orderly and seamless migration at Blue
Zone standard hourly rates.

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10.     For clarity, unless the context otherwise requires, all capitalized terms
used herein shall have the meaning set out in the Agreement. Further, in the
event of a conflict between the terms and conditions of this letter agreement
and the terms and conditions set out in the Agreement, the terms and conditions
of this letter agreement shall prevail and apply.

This letter agreement is a written, binding amendment to the Agreement as
contemplated by Section 15(g) of the Agreement.

I trust the foregoing accurately reflect our discussions and would appreciate
you confirming your agreement with same by signing below and returning to me by
facsimile at (416) 815-4543 with an original to follow by mail.

Yours truly,

/s/ Kevin Assaff

Kevin Assaff

                    Acknowledged and Agreed to by Blue Zone Productions Ltd.

                    By: /s/ Bruce Warren

                    Name: Bruce Warren

                    Title: President and Chief Executive Officer

                    Date: September 27, 2001

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EXHIBIT 10.22

SECURED CONVERTIBLE DEBENTURE #____

$____________________                                                                                                     Dated____________________

FOR VALUE RECEIVED, the undersigned, BLUE ZONE, INC., a Nevada corporation (the
“Company”), HEREBY PROMISES TO PAY to the order of F. MICHAEL P. WARREN (the
“Lender”) under the Secured Loan Agreement, dated as of April 27, 2001, among
the Company and the Lender (as amended, the “Loan Agreement”), the principal
sum of _________________________ dollars ($____________________) pursuant to the Loan
Agreement, together with interest at the rate of ___________percent (_________%) per
annum on any and all principal amounts remaining unpaid hereunder from time to time
outstanding from the date hereof until said principal amounts are paid in full or this Debenture is converted into Common
Stock of the Company as provided in the Loan Agreement. Interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be, for
the actual number of days (including the first day but excluding the last day)
elapsed. The Company may repay all principal and accrued but unpaid interest
under any Lender’s Debenture at any time from ____________________ until April 27, 2003. On April
27, 2003, the Company shall repay all of the principal and accrued but unpaid
interest on all then outstanding Debentures, to the extent the same have not
been converted into Common Stock of the Company as provided in the Loan
Agreement.

     Both principal and interest are due and payable in lawful money of the
United States of America to the Lender, at the Lender’s address included on the
signature page of the Loan Agreement or another address specified by the
Lender, on April 27, 2003. The Company may repay all principal hereof and
accrued and unpaid interest hereunder at any time from ____________________ until April 27, 2003.

     This Debenture is entitled to the benefits of and is subject to the
provisions of the Loan Agreement, including but not limited to, provisions
ensuring that the Indebtedness represented by this Debenture shall be senior to
or pari passu with all other Indebtedness of the Company as therein provided
except only for provisions set forth therein, for the subordination of the
Indebtedness represented hereby to Senior Indebtedness; the conversion of the
Indebtedness represented by this Debenture into equity securities of the
Company; acceleration of the maturity of this Debenture upon the happening of
certain stated events upon the terms and conditions therein specified. The
Loan Agreement, as amended and modified from time to time, is incorporated by
reference as if fully set forth herein.

     The price for conversion of this Debenture into Common Stock of the
Company, as provided in the Loan Agreement, is $_______________ per share.

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     Payment of the Indebtedness represented by this Debenture is secured by a
security interest in substantially all of the assets of the Company as more
specifically described in that certain Security Agreement dated April 27, 2001
and the holder of this Debenture is entitled to all the rights and benefits
conferred by such Security Agreement, as amended and modified from time to
time, as if fully set forth herein.

     Notwithstanding any other provisions of this Debenture, interest, fees,
and other charges payable by reason of the Indebtedness evidenced hereby shall
not exceed the maximum, if any, permitted by any governing law.

     This Debenture is governed by and will be construed according to the laws
of the State of Washington.

     In the event of any litigation, arbitration or court proceeding between
the Company and the Lender concerning this Debenture, the prevailing party will
be entitled to reasonable attorneys’ fees and expenses. The Company hereby
waives notice, presentment, protest and notice of dishonor.

     THE SECURITIES EVIDENCED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO
INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION INVOLVING SAID SECURITIES OR (ii) THE COMPANY RECEIVES AN OPINION
OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION OR THE COMPANY OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

     ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

                                                                              
 BLUE ZONE, INC.

                                                                                By: ______________________________

                                                                                Bruce Warren, President and

                                                                                Chief Executive Officer

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