News

Imedia, TCI Settle Contract Lawsuit

12/06/1998 7:00 PM Eastern

Anaheim, Calif. -- Imedia Corp. executives were beaming
last week upon word that they had settled their long-standing lawsuit against
Tele-Communications Inc. for breach of contract.

In addition, the manufacturer scored a distribution
agreement with General Instrument Corp. -- which figured in the original lawsuit -- where
GI will sell Imedia's "CherryPicker" technology.

Imedia officials declined to disclose specifics about the
settlement, except to say the suit they filed a year ago has been "dismissed with
prejudice."

At the Western Show three years ago, Imedia was launched
into the media spotlight when John Malone, chairman and CEO of TCI, latched on to Imedia's
statistical multiplexing technology as the next great way to squeeze more bandwidth out of
existing cable plant.

Within days of that, TCI signed a contract with Imedia to
use the gear. In July of 1997, however, TCI quietly decided to use GI's competing
equipment, and Imedia took the matter to court in San Francisco. At the time, Imedia sued
for upwards of $65 million in compensatory damages.

That's all history now, relieved Imedia executives said
last week.

David Beddow, president of TCI's National Digital Center,
said in a statement that "with the dispute behind us, we look forward to testing
Imedia's CherryPicker."

The CherryPicker is widely viewed as a handy tool for cable
operators who pull down digitally compressed and multiplexed digital video tiers from
satellite providers, such as TCI's "HITS" service. The CherryPicker lets those
MSOs pluck off and re-deliver the digital video feeds in a mix-and-match fashion.

In the GI arrangement, GI will sell, perform systems
integration and support the CherryPicker line in North America. For Imedia, the deal is
"extremely attractive" as it gives the company a way to market the device as
part of GI's digital product offering, said Efi Arazi, chairman of Imedia.

Denton Kanouff, vice president of marketing for GI's
Digital Network Systems unit, said the addition of the CherryPicker to GI's digital line
"brings the benefit of customized programming and digital-into-digital program
insertion."

In other Imedia news, Peter van der Gracht joined Imedia as
its president and chief executive officer. Efi Arazi, who formerly held those roles, will
move up to the post of chairman.

Most recently, van der Gracht served as Scientific-Atlanta
Inc.'s vice president and general manager for headend systems.