Summary of the Canada – NDI Agreement for
Marketing and Distribution of Electronic Charts
and Other Digital Nautical Data Products
(the “ Agreement”)

On October 25, 1993, Canadian Hydrographic Services (“CHS”), of the Department of Fisheries and Oceans and Nautical Data International, Inc. (“NDI”) entered into an agreement for the marketing and distribution of electronic charts and other digital nautical products (“1993 Agreement”).  On April 1, 1998, CHS and NDI entered into the Canada – NDI Revised Agreement (“1998 Revised Agreement”), which was later amended and restated by an Amending Agreement dated June 1, 2000 (“2000 Amending Agreement”).

CHS is part of the Science Sector of the Department of Fisheries and Oceans. It has the sole authority in Canada to produce nautical charts for Canadian territorial waters pursuant to the Charts and Nautical Publications Regulations 1995 and of the Canada Shipping Act.  NDI is a corporation incorporated in the Province of Newfoundland with its head office at St. John’s, Newfoundland. 

The Parties entered into the Agreement primarily for the purposes of marketing, distribution and publication of CHS electronic charts and other digital nautical products that contain CHS data (“Products”) for Canadian territorial waters.  NDI was granted a sole world-wide right and licence to (a) use the CHS Data to produce Products and Product Updates; (b) integrate these Products with other products or services; and (c) distribute the same directly or through third parties to whom a sub licence is granted.

Products that are CHS Certified include (a) BSB charts – distributed on CD or individually, including computer-generated images that are replicas of the paper navigation charts (“raster”); and (b) S57 ENCs – this type of vector or “smart” data can be looked at as a database of information whereby each item or object displayed has attributes or information associated with it that can be assessed to describe what that object is.

NDI will provide domestic client services, information and promotional material in both French and English.

A Management Board, currently consisting of three CHS representatives (Dominion Hydrographer, Director of Hydrographic Planning and Applied Research, and Laurentian Regional Director), three NDI representatives (CEO of NDI, Chairman of the NDI Board, and a Director) and an independent member, has been established to ensure the success of the CHS – NDI collaboration.

NDI shall provide quarterly and annual reports to the Minister on such matters as financial statements and royalties.  The Minister may inspect or audit any NDI records related to the Agreement.

NDI will charge licence fees and royalties as approved by the Management Board, which shall establish revenue targets for NDI.  The Management Board will also review the users and prices on an annual basis to ensure that prices that are determined both by market-driven forces and prudent business practices and based on a reasonable return to both Parties.

NDI is to pay Canada royalties based on specific classifications.  CHS shall receive a percentage of gross revenue depending on how the production of particular products has been funded: fully funded by NDI, jointly funded by CHS and NDI or fully funded by CHS.

The Agreement expires on March 31, 2008, unless terminated, extended or renewed.  The Agreement shall automatically be renewed for a further five-year period if NDI meets certain performance criteria.