EXHIBIT 10.8
MARKETING AGREEMENT
This Marketing Agreement (this "Marketing Agreement") is made and entered
into as of April 13, 1999 by and between DIRECTV, Inc., a California corporation
("DIRECTV"), and TIVO Inc., a Delaware corporation ("TIVO") (each a "Party" and,
collectively, the "Parties").
Whereas, DIRECTV is a leading digital satellite broadcaster and service
operator in the United States;
Whereas, TIVO has developed and plans to provide customized television
programming services;
Whereas, the Parties desire to establish a strategic business relationship
whereby DIRECTV will provide marketing access to its United States subscribers
and offer promotional support for TIVO's customized television programming
services and TIVO products; and
Whereas, to further their strategic business relationship, (i) concurrently
with entering into this Marketing Agreement, TIVO and DIRECTV are entering into
a Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which
DIRECTV is making an equity investment in TIVO, and (ii) pursuant to this
Marketing Agreement, DIRECTV will receive additional equity in TIVO.
Now, Therefore, in consideration of the foregoing and covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:
1. CERTAIN DEFINITIONS
Defined terms used but not defined in the Marketing Agreement will be as
defined in Appendix I attached hereto.
2. MARKETING OBLIGATIONS
2.1 DIRECTV Marketing Support. On the terms and subject to TIVO's
compliance with Section 2.8 below, for a period of [*] from and including [*]
(the "Marketing Period"), DIRECTV shall provide to TIVO the following marketing
and sales support:
2.1.1 Sales Force and Distribution Channel Support. At such time as
TIVO, or a third party authorized by TIVO, begins distributing the TIVO Products
in retail sales channels and the TIVO Products are available in sufficient
quantity to satisfy a successful product introduction in such channels to
DIRECTV's reasonable satisfaction, DIRECTV shall use its commercially reasonable
efforts to encourage retailers to distribute the TIVO Products (including the
TIVO Stand-Alone Receiver and the DIRECTV/TIVO Combo Receiver) and the TIVO
Service to the extent set forth below [*]:
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1.
(a) TIVO Stand-Alone Receiver. In connection with marketing and
sales of the TIVO Stand-Alone Receiver, (i) DIRECTV shall provide training
regarding the use of the TIVO Products and the TIVO Service to DIRECTV's sales
employees (other than telemarketing sales employees) located within the United
States (the "DIRECTV Sales Force") for the purpose of encouraging the DIRECTV
Sales Force to promote the TIVO Products and the TIVO Service in retail sales
channels; (ii) [*], DIRECTV shall include references to the TIVO Products and/or
the TIVO Service in DIRECTV [*] which are offered by DIRECTV and/or included in
the DIRECTV Service, including DIRECTV's [*], and (iii) DIRECTV shall include
TIVO promotional materials (provided to DIRECTV at TIVO's expense) in [*]
DIRECTV new subscriber welcome kits provided to new DIRECTV Subscribers [*].
DIRECTV and TIVO shall mutually agree on the placement, size and content of all
references to the TIVO Products and the TIVO Service in DIRECTV [*] and the size
and content of all TIVO promotional materials included in DIRECTV new subscriber
welcome kits.
(b) DIRECTV/TIVO Combo Receiver. In connection with marketing and
sales of the DIRECTV/TIVO Combo Receiver, (i) DIRECTV shall perform [*](a); and
(ii) DIRECTV and TIVO shall [*].
(c) Cooperation. TIVO shall cooperate with DIRECTV to provide
reasonable assistance to DIRECTV in its training of the DIRECTV Sales Force,
which shall include TIVO causing one or more of its employees or representatives
to attend and/or conduct all such training sessions and TIVO providing all
materials for such sessions and demo TIVO Products for DIRECTV sales offices.
The Parties agree to cooperate reasonably and in good faith to develop and offer
joint sales promotions of DIRECTV and TIVO products and services.
2.1.2 Commercial and Infomercial Avails. DIRECTV shall broadcast via
the DIRECTV Service comercials and infomercials promoting the TIVO Service
and/or the TIVO Products ("TIVO Television Advertising"). The TIVO Television
Advertising which DIRECTV shall be obligated to broadcast is described in more
detail on Schedule 2.1.2, but shall include the obligation of DIRECTV to provide
[*] on the DIRECTV Service [*] promoting the TIVO Service and/or the TIVO
Products [*] beginning as soon as practicable following the Launch Date (the
"TIVO infomercials"). DIRECTV shall insert TIVO Television Advertising only in
the positions and at the times which DIRECTV designates therefor and without
interruption of any program of the DIRECTV Service. The availability of any
period of time during which TIVO Television Advertising can be inserted shall be
subject to limitations imposed upon DIRECTV by program suppliers for
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
programming which DIRECTV, in its sole discretion, considers to be of
extraordinary merit or of special importance to the DIRECTV Service as a whole.
In the event that any period of time and/or particular network or group of
networks previously allocated to TIVO pursuant to the terms of this Marketing
Agreement is or becomes unavailable to TIVO, DIRECTV shall designate or cause to
be designated, as soon as practicable, a comparable period of time and/or
particular network or group of networks for broadcasting TIVO Television
Advertising. In addition, if and when DIRECTV becomes contractually able to
insert TIVO Television Advertising on networks which are not currently available
for such insertion, DIRECTV will work with TIVO to insert TIVO Television
Advertising on such networks; provide that DIRECTV's overall obligations under
this Section 2.1.2 shall not be increased by inserting TIVO Television
Advertising on any networks not currently available for commercial insertion.
TIVO shall be solely responsible for all costs related to developing and
producing the TIVO Television Advertising. DIRECTV shall broadcast the TIVO
Television Advertising via the DIRECTV Service at no additional cost to TIVO.
2.1.3 Mailings to DIRECTV Subscribers. Subject to subparagraph (d)
below DIRECTV will provide TIVO with access to DIRECTV Subscribers for the
purpose of mailing promotional materials relating solely to the TIVO Service
and/or the TIVO Products ("TIVO Promotional Materials") as follows:
(a) Direct Mail. TIVO shall have the right to distribute TIVO
Promotional Materials to DIRECTV Subscribers via direct mail in [*] mailings
during [*] of the Marketing Period; provided that, unless otherwise agreed to in
writing by DIRECTV and TIVO, no DIRECTV Subscriber shall receive more than [*]
per [*]. DIRECTV shall provide TIVO such access to DIRECTV Subscribers [*];
provided that TIVO shall pay [*]. DIRECTV shall provide TIVO access to the names
and addresses of DIRECTV Subscribers only through an independent third party
designated by DIRECTV (such that TIVO does not gain access to such list of names
and addresses). The Parties shall mutually agree (such agreement not to be
unreasonably withheld) on the specific timing of each such mailing.
(b) Subscriber Xxxx Mailings. TIVO shall have the right to
include a TIVO Promotional Materials insert in at least [*] outgoing bills
mailed by DIRECTV to DIRECTV Subscribers (the "Subscriber Xxxx Mailings") [*] of
the Marketing Period. TIVO and DIRECTV shall cooperate reasonably and in good
faith to mutually determine an implementation schedule for including TIVO's
inserts in the Subscriber Xxxx Mailings. The Parties shall coordinate reasonably
and in good faith with respect to the specifications of each such insert,
including, but not limited to, weight, size and paper thickness, in order to
enable DIRECTV's equipment (or its billing venders) to handle a particular
insert and to minimize incremental postage costs. The Parties shall cooperate
reasonably and in good faith to schedule, as promptly as practicable after the
date of this Marketing Agreement, the testing of a proposed TIVO Promotional
Material insert with DIRECTV's operations. DIRECTV shall be responsible for
placing the TIVO Promotional Material inserts into each Subscriber Xxxx Mailing,
but TIVO shall be responsible for [*] costs incurred by TIVO and DIRECTV related
to including
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
3.
the TIVO Promotional Materials in the Subscriber Xxxx Mailings including,
without limitation, [*]. DIRECTV shall use commercially reasonable
efforts to work with TIVO to minimize all such costs. DIRECTV and TIVO also
agree to work together in good faith to discuss and identify additional means of
marketing the TIVO Products and the TIVO Service in the Subscriber Xxxx
Mailings; provided that each party shall decide in its sole discretion whether
to take any actions in addition to those expressly set forth in this Section
2.1.3(b).
(c) Delivery of TIVO Promotional Materials for Subscriber Xxxx
Mailings. TIVO shall deliver to DIRECTV (at a location designated by DIRECTV),
[*] a sufficient quantity of TIVO Promotional Materials inserts
in completed form as approved by DIRECTV no later than the Cut-Off Date (as
defined in Section 2.1.5(d)) for the relevant Subscriber Xxxx Mailing.
(d) Contractual Limitations on DIRECTV's Obligations.
Notwithstanding anything to the contrary in this Section 2.1.3, DIRECTV shall
have no obligation to allow TIVO to distribute TIVO Promotional Materials
through direct mail, or include TIVO Promotional Materials in any Subscriber
Xxxx Mailing, sent to DIRECTV Subscribers that are or become DIRECTV Subscribers
pursuant to DIRECTV's contractual relationships with NRTC or telephone operating
companies. [*].
(e) Access to Primestar and USSB Subscribers. At such time that
the subscribers currently using the direct-to-home satellite services offered by
Primestar and USSB become DIRECTV Subscribers, TIVO shall have the same rights
with respect to such subscribers under this Marketing Agreement as TIVO has with
respect to the DIRECTV Subscribers currently existing on the date hereof,
provided that nothing in this Section 2.1.3(e) shall be construed to extend
DIRECTV's obligations under this Section 2 beyond the end of the Marketing
Period.
(f) Access to Commercial Subscribers to the DIRECTV Service.
DIRECTV and TIVO shall work together in good faith to develop a strategy for
marketing the TIVO Products and/or the TIVO Service to commercial subscribers to
the DIRECTV Service and develop procedures to allow TIVO to mail such commercial
subscribers TIVO Promotional Materials; provided that each party shall decide in
its sole discretion whether and on what terms it will agree to take any specific
actions with respect to such commercial subscribers.
2.1.4 DIRECTV Website and Magazine Advertising. DIRECTV shall include
advertising relating to the TIVO Service and/or the TIVO Products (i) on the
homepage or other webpage in close proximity to the homepage on DIRECTV's
website at "xxx.xxxxxxx.xxx" or such other internet address that is used by
DIRECTV as its primary website for promoting DIRECTV services to its existing
DIRECTV Subscribers and prospective subscribers, and (ii) in DIRECTV's On and
See magazines. The specific size, frequency and placement of such advertising
shall be consistent with the terms set forth in Schedule 2.1.4.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
4.
TIVO shall be solely responsible for all costs related to designing and creating
such advertising and for delivering to DIRECTV camera ready artwork at such
times in advance of the dates such advertising will appear on DIRECTV's website
or be published as DIRECTV shall designate.
2.1.5 Content of TIVO Marketing Materials. TIVO generally shall have
the right to determine the creative content, look and feel of all TIVO-produced
point-of-sale materials promoting the TIVO Products and the TIVO Service, TIVO
Television Advertising, TIVO Promotional Materials and advertising relating to
the TIVO Service and/or the TIVO Products on DIRECTV's website or in On and See
Magazines (collectively, the "TIVO Marketing Materials"), subject to the
following limitations:
(a) References to DIRECTV or its Products or Services. DIRECTV
shall have the right to review and approve in its sole discretion the factual
accuracy and the creative content, look and feel of any portion of the TIVO
Marketing Materials which refers or relates to DIRECTV or the DIRECTV Service,
or any products, services or programming that could compete with the DIRECTV
Service or programming offered via the DIRECTV Service. DIRECTV also shall have
the right to review and approve in its sole discretion the creative content,
look and feel of any advertising relating to the TIVO Service and/or the TIVO
Products that is displayed on DIRECTV's website.
(b) Minimum Standards. All TIVO Marketing Materials shall comply
with applicable governmental codes, comport with reasonable standards of good
taste (consistent with the broadcast standards utilized by major broadcast
television networks), and comply with DIRECTV's reasonable policies and
practices of which TIVO has actual knowledge at the time such TIVO Marketing
Materials are proposed, including, without limitation, those relating to
advertisements of X-rated material, drug-related paraphernalia, cigarettes and
liquor.
(c) Telephone Numbers. If TIVO desires to include a telephone
number in any TIVO Marketing Materials which references DIRECTV in any respect,
the Parties shall consult, reasonably and in good faith, in order to determine
how to present the telephone number in such TIVO Marketing Materials so as not
to result in customer confusion.
(d) Compliance with Copyright and Trademark Laws. TIVO shall take
all actions necessary to ensure that the content of all TIVO Marketing Materials
does not violate any law or, to its best knowledge, infringe the copyright or
trademark rights of any person.
(e) Procedures for DIRECTV Review. TIVO shall deliver to DIRECTV
for its approval all proposed TIVO Marketing Materials not less than [*] prior
to the Cut-Off Date with respect to the type of TIVO Marketing Materials
proposed to be used. The "Cut-Off Date" shall mean (i) the date on which DIRECTV
must receive TIVO Marketing Materials in order to ensure that such materials are
aired (in the case of TIVO Television Advertising), included in a Subscriber
Xxxx Mailing (in the case of TIVO Promotional Materials) or displayed (in the
case of website or magazine advertising); (ii) in the case of TIVO-produced
point-of-sale materials, the date TIVO intends to print such materials; or (iii)
in the case of TIVO Promotional Materials to be disseminated by direct mail, [*]
prior to
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
5.
the proposed mailing date. The Cut-Off Date for each type of TIVO Marketing
Material is set forth on Schedule 2.1.5(e). DIRECTV shall have [*] to approve or
disapprove such TIVO Marketing Materials from the date TIVO confirms via
telephone call that the appropriate person at DIRECTV has received such TIVO
Marketing Materials. If DIRECTV does not notify TIVO of any objections to the
proposed TIVO Marketing Materials within such [*] period, such TIVO Marketing
Materials shall be deemed accepted for all purposes of this Marketing Agreement.
2.2 Fulfillment of the TIVO Service and the TIVO Products. In
connection with the promotion of the TIVO Service and/or the TIVO Products by
DIRECTV, TIVO shall use commercially reasonable efforts to fulfill or cause to
be fulfilled any and all orders received for the TIVO Products and/or orders for
the TIVO Service and/or provide any required hardware or self-installation
materials related to the TIVO Service and/or the TIVO Products in accordance
with the terms set forth on Schedule 2.2. Notwithstanding the specific terms set
forth on Schedule 2.2, TIVO shall provide adequate staff to support all account
set-up and order transmission activities in a timely manner, and TIVO shall use
commercially reasonable efforts to ensure that the people receiving orders
maintain a high quality of professionalism.
2.3 Billing System. As between DIRECTV and TIVO, TIVO shall be
responsible for billing and remittance processing activities relating to the
sale of the TIVO Service to DIRECTV/TIVO Subscribers. DIRECTV shall be
responsible for billing and remittance processing activities relating to the
sale of the DIRECTV Service to DIRECTV/TIVO Subscribers. The Parties shall work
together in good faith to determine whether joint billing of DIRECTV/TIVO
Subscribers for the TIVO Service and the DIRECTV Service is desired and feasible
and, if so, to coordinate such billing activities.
2.4 Customer Service. TIVO shall provide all customer service related
to the TIVO Service and the TIVO Products in a manner that meets or exceeds the
customer service standards set forth in Schedule 2.4 hereto. TIVO shall make
available one or more toll-free numbers, staffed with such level of customer
service representatives as is reasonably necessary to promptly service customer
calls related to the TIVO Service and/or the TIVO Products. The toll-free
line(s) shall be operational on the Launch Date and thereafter be available at
times sufficient to satisfy customer demand; provided that TIVO shall reimburse
DIRECTV for its out-of-pocket costs of answering and responding to any customer
service calls relating to the TIVO Service and/or the TIVO Products made to
DIRECTV's customer service center during hours in which TIVO customer service is
not answering customer calls; provided further that, from and after the date
DIRECTV begins airing the TIVO infomercials on the DIRECTV Service, TIVO shall
provide such customer service twenty-four (24) hours per day, seven (7) days per
week. TIVO shall forward all inquiries relating to the DIRECTV Service to the
DIRECTV customer service line designated by DIRECTV. DIRECTV shall forward all
inquiries relating to the TIVO Service and/or the TIVO Products to the TIVO
customer service line designated by TIVO.
2.5 Joint Logo and Trademark Guidelines. Both DIRECTV and TIVO
acknowledge the value of the brand of each respective Party and their associated
goodwill. In order to preserve such value, TIVO shall not use any DIRECTV
trademark, service name or logo (the "DIRECTV Trademarks") (including, without
limitation, "DIRECTV/(R)/" and "Total Choice/(TM)/"), without the prior written
approval of DIRECTV, and such usage by TIVO of the
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
6.
DIRECTV Trademarks shall be in accordance with the DIRECTV Xxxx License
Agreement (together with the attached logo guidelines, which may be amended from
time to time) as set forth in Schedule 2.5(a). Any breach by TIVO of the DIRECTV
Xxxx License Agreement shall be deemed to be a material breach of this Marketing
Agreement. TIVO shall not use any logo, trademark, service xxxx or name of any
supplier of DIRECTV (including, without limitation, entities providing
programming to DIRECTV) in connection with the promotion of the TIVO Service
and/or the TIVO Products without the prior written approval of DIRECTV or a
separate agreement between TIVO and such supplier. Similarly, DIRECTV shall not
use any TIVO trademark, service name or logo (the "TIVO Trademarks") without the
prior written approval of TIVO, and such usage by DIRECTV of the TIVO Trademarks
shall be in accordance with the TIVO Xxxx License Agreement as set forth in
Schedule 2.5(b). Any breach by DIRECTV of the TIVO Xxxx License Agreement shall
be deemed to be a material breach of this Marketing Agreement. Neither Party
shall adopt, use, register, or seek to register any trade name, trademark or
service xxxx anywhere in the world which is identical to, or confusingly similar
to, any trademark or logo of the other Party, the use of which is governed by
this Marketing Agreement, the TIVO Xxxx License Agreement and the DIRECTV Xxxx
License Agreement. Upon termination or expiration of this Marketing Agreement,
neither party may use the trademarks of the other party and any rights to such
trademarks shall cease and otherwise terminate; provided, however, that each
party may continue to use such trademarks in connection with the reduction of
inventory existing as of the date of termination. Upon termination or expiration
of this Marketing Agreement, each Party shall cooperate in transitioning their
marketing efforts.
2.6 Quarterly Operational Review. DIRECTV and TIVO shall meet once
each quarter to review and agree on reasonable measures to attempt to reduce the
cost and/or increase the effectiveness of customer service, customer billing,
technical assistance and other services related to the support, activation or
fulfillment of orders for the TIVO Service and/or the TIVO Products by DIRECTV
Subscribers that also subscribe to the TIVO Service. As frequently as reasonably
practicable, TIVO shall provide to DIRECTV summaries of data which TIVO collects
or receives regarding the effectiveness of DIRECTV's marketing and sales support
provided pursuant to Section 2.1 (including without limitation data regarding
the volume of calls made in response to TIVO Marketing Materials and the rates
at which persons making such calls purchased TIVO Products and/or subscribed to
the TIVO Service).
2.7 Option to Extend the Marketing Period. [*] shall have the
option to extend the Marketing Period for [*] periods, during which periods [*]
would be obligated to [*]. [*] may exercise its option for the [*] period by
providing written notice to [*] at least [*] prior to the expiration of the
initial Marketing Period. [*] may exercise its option for the [*] period by
providing written notice to [*] at least [*] prior to the expiration of the [*]
extended period.
2.8 Minimum TIVO Service/Product Obligations. DIRECTV's obligation to
provide the marketing and sales support specified in this Section 2 is
conditioned upon TIVO continuing to provide the following minimum services to
TIVO Subscribers and DIRECTV/TIVO Subscribers (the "Minimum TIVO Services"):
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
7.
2.8.1 TIVO Service. The TIVO Service shall [*] at a monthly
subscription charge not greater than [*]. TIVO shall notify DIRECTV of all
material problems or interruptions in the TIVO Service as soon as practicable
but in no event later than [*] from the time TIVO discovers such problem or
interruption, and TIVO shall use commercially reasonable efforts cure any such
material problem or interruption within [*] of providing such notice to DIRECTV.
2.8.2 TIVO Products. A TIVO Stand-Alone Receiver which [*] at a
retail price (for at least one model) not greater than [*]. TIVO shall ensure
that each category and model of the TIVO Stand-Alone receiver and the
DIRECTV/TIVO Combo Receiver is designed so as to not diminish or degrade the
performance of the DIRECTV receiver or the quality of the DIRECTV video, audio
or data broadcast viewed by DIRECTV Subscribers, as determined by DIRECTV in its
reasonable discretion, and TIVO shall make commercially reasonable efforts to
ensure that such TIVO Products are manufactured in accordance with such design.
No category or model of the TIVO Stand-Alone Receiver or the DIRECTV/TIVO Combo
Receiver shall have been recalled for any reason (other than a reason related to
the provision of the DIRECTV Service using the DIRECTV/TIVO Combo Receiver or
the specific hardware in the DIRECTV/TIVO Combo Receiver used to provide the
DIRECTV Service) by an order of a judicial or consumer regulatory body, or a
federal, state or municipal government agency. TIVO shall notify DIRECTV of all
Recurring Customer Complaints or material defects concerning any TIVO Products
as soon as practicable but in no event later than [*] from the time TIVO
discovers such Recurring Customer Complaint or material defect. TIVO shall use
commercially reasonable efforts to cure all defects or problems related to a
Recurring Customer Complaint within [*] of providing such notice to DIRECTV.
2.8.3 Back Office Support. TIVO shall continue to provide, or
cause third parties authorized by TIVO to provide, product fulfillment, billing
services and customer service to TIVO Subscribers in a manner that is consistent
with the standards set forth in Sections 2.2, 2.3 and 2.4, respectively.
2.8.4 Suspension of DIRECTV's Marketing Obligations. DIRECTV
shall have the right to suspend any portion or all of its marketing obligations
under Section 2 during any period in which DIRECTV reasonably determines in good
faith that TIVO has failed to provide the Minimum TIVO Services; provided that
no act or omission on the part of DIRECTV, including any act authorized under
this Marketing Agreement, is the cause or result of TIVO's non-compliance with
this Section 2.8. DIRECTV also shall have the right to suspend any portion or
all of its marketing obligations under Section 2 upon the occurrence of an
Intellectual Property Event (as defined in Section 11.6). DIRECTV shall resume
its marketing obligations under Section 2 at such time as DIRECTV determines in
good faith that TIVO has resumed the Minimum TIVO Services or, if applicable and
if DIRECTV has not already terminated this Marketing Agreement pursuant to
Section 11.6, that TIVO has cured the Intellectual Property
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
8.
Event or otherwise indemnified DIRECTV in accordance with Section 11.6; provided
that, if DIRECTV resumes its marketing obligations, the Marketing Period may be
extended, at DIRECTV's sole option, by the length of time during which TIVO
failed to provide the Minimum TIVO Services or, if applicable, such Intellectual
Property Event was pending.
2.8.5 Minimum DIRECTV Service. DIRECTV shall [*]; provided that
DIRECTV shall have no obligation to maintain any particular programming or
networks offered on the DIRECTV Service currently or in the future. DIRECTV
shall use commercially reasonable efforts to notify TIVO of all material
problems or interruptions in the DIRECTV Service as soon as practicable in
accordance with DIRECTV's standard operating procedures, and DIRECTV shall use
commercially reasonable efforts to cure any such material problem or
interruption in the DIRECTV Service within [*] of providing such notice to TIVO.
2.9 TIVO Customer Data. DIRECTV shall have the right to purchase from
TIVO any available data that TIVO makes available or offers to sell to any third
party which is related to or derived from DIRECTV/TIVO Subscribers at a cost not
to exceed [*]; provided that DIRECTV shall not sell or distribute any such
customer data to any third party other than for use solely by or on behalf of
DIRECTV to promote DIRECTV programming. In addition, TIVO shall provide access
to all such customer data to all persons or entities that provide programming to
DIRECTV [*].
3. BANDWIDTH ALLOCATION
Subject to the terms of this Marketing Agreement, beginning on a date
to be mutually agreed to by the Parties and in any event no later than [*] after
[*] (the "Bandwidth Commencement Date"), and continuing for as long as [*],
DIRECTV shall make available to TIVO at least [*] of bandwidth capacity (the
"Bandwidth Capacity") via a DIRECTV satellite (or any other high power Ku-band
satellite that provides the DIRECTV Service (as determined by DIRECTV in its
sole and absolute discretion)) in order to deliver enhanced personalized
television services to TIVO Subscribers. The Parties shall mutually determine
the specific transmission times and rates associated with such delivery. TIVO
shall be responsible for transmitting, at TIVO's expense, a high quality signal
to one or more DIRECTV broadcast centers designated by DIRECTV containing the
data and/or video/audio used to provide such enhanced services in a format
specified by DIRECTV. DIRECTV shall use its commercially reasonable efforts to
maintain, in accordance with its technical standards and procedures, a high
quality signal transmission from DIRECTV's broadcast centers to the end user.
Notwithstanding the foregoing, (i) DIRECTV shall have the right to preempt or
interrupt any transmission of TIVO data and/or video/audio that DIRECTV
determines, in its sole discretion, is necessary in order to protect DIRECTV's
business, (ii) DIRECTV shall have the right to suspend its obligation to provide
the Bandwidth Capacity at any time after [*] if there are fewer than [*]
DIRECTV/TIVO Subscribers using such Bandwidth Capacity, and (iii) DIRECTV also
shall have the right to suspend its obligation to provide the
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
9.
Bandwidth Capacity upon the occurrence and during the continuation of an
Intellectual Property Event (as defined in Section 11.6). Without limiting the
foregoing, DIRECTV agrees to work with TIVO to experiment, prior to the
Bandwidth Commencement Date, with utilizing the Bandwidth Capacity to deliver
video and audio to TIVO Stand-Alone Receivers as soon as practicable following
the Launch Date.
4. PAYMENT AND RELATED TERMS
4.1 Revenue Sharing. In exchange for the marketing and advertising
obligations provided above, for a period of [*] beginning on [*] DIRECTV shall
receive a percentage of TIVO's Gross Revenue as follows:
4.1.1 Initial Revenue Share. Prior to the date that is [*], TIVO shall
pay DIRECTV [*] of TIVO's Gross Revenue (determined as of the last day of each
month, the "Calculation Date"), with a [*] per DIRECTV/TIVO Subscriber per month
minimum (the "Initial Revenue Share"). TIVO shall pay to DIRECTV the Initial
Revenue Share within thirty (30) days of the Calculation Date.
4.1.2 Permanent Revenue Share. Following the date that is [*], TIVO
shall pay DIRECTV, in lieu of the Initial Revenue Share described in Section 4.1
above, [*] of TIVO's Gross Revenue (determined as of the Calculation Date), with
a [*] per DIRECTV/TIVO Subscriber per month minimum (the "Permanent Revenue
Share"). TIVO shall pay DIRECTV the Permanent Revenue Share within thirty (30)
days of the Calculation Date.
4.1.3 Additional Revenue Share. Following the date that is [*] TIVO
also shall pay DIRECTV [*], with a [*] per subscriber per month minimum (the
"Additional Revenue Share"). The amount of the Additional Revenue Share shall be
calculated for each month in the same manner as the Final Revenue Share is
calculated pursuant to Section 4.1.6 below.
4.1.4 Promotional Revenue Share. In the event the Parties mutually
agree (with each Party determining in its sole discretion) that a promotional
discount on the TIVO Service or other promotional package combining the products
and services of the Parties is required or advisable to gain market share or to
ensure the market acceptance of the TIVO Stand-Alone Receiver and DIRECTV/TIVO
Combo Receiver, the minimum Initial Revenue Share, minimum Final Revenue Share
and minimum Additional Revenue Share shall be reduced by the same percentage
that the TIVO Service is discounted in connection with such promotions. Such
reductions to the minimum Initial Revenue Share, minimum Final Revenue Share and
minimum Additional Revenue Share shall only apply to and during the existence of
any promotional activity undertaken pursuant to this Section 4.1.5.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
10.
4.1.5 TIVO's Gross Revenue. For purposes of this Section 4.1,
TIVO's Gross Revenue for any particular month shall be an amount equal to
[*]. For the avoidance of doubt, TIVO's Gross Revenue shall not include [*]. To
the extent that TIVO sells and receives advance payment of subscription fees for
the TIVO Service for a subscription period covering more than [*], the aggregate
amount of TIVO's Gross Revenue for any particular subscriber for any particular
month shall be reduced by an amount equal to [*]. Tivo Gross Revenue for any
particular month also shall be [*] during such month to customers and third
parties in connection with the foregoing.
4.2 TIVO Promotional Activities. DIRECTV and TIVO agree to work
together in good faith to jointly explore and, if appropriate, implement
programs beyond those set forth in this Marketing Agreement to generate
additional revenue from DIRECTV Subscribers who also subscribe to TIVO, along
with the terms by which TIVO would be compensated under such programs; provided
that each Party shall decide in its sole discretion whether to take any actions
in addition to those expressly set forth in this Marketing Agreement.
4.3 Calculation of DIRECTV/TIVO Subscribers. TIVO and DIRECTV
shall cooperate and provide to a third party designated by DIRECTV all customer
activation and billing information and other information contained in their
respective customer and billing databases which is necessary for such third
party to calculate the number of DIRECTV/TIVO Subscribers on each Calculation
Date and on such other dates as requested by the Parties. The cost of third
party's services under this Section 4.3 shall be shared equally by the Parties.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
11.
4.4 Audit Rights. For the sole purpose of ensuring compliance with this
Section 4, DIRECTV shall have the right to direct an independent certified
public accounting firm subject to strict confidentiality restrictions to conduct
a reasonable and necessary copying and inspection of portions of the records of
TIVO. Any such audit may be conducted after DIRECTV provides [*] prior written
notice to TIVO and shall be conducted during normal business hours in a manner
designed to prevent disruption to TIVO's business and operations. TIVO shall
have the right, at its sole and absolute discretion, to require the execution of
standard, reasonable confidentiality or similar agreements in connection with
such audits. Such audits shall not be made more frequently than once every [*].
Any such audit shall be at DIRECTV's expense unless an audit discloses that TIVO
underpaid DIRECTV by at least five percent (5%) for the period of the audit, in
which case TIVO shall reimburse DIRECTV for the cost of the audit. TIVO shall
have the right, at its election and expense, to copy and inspect the final
report delivered to DIRECTV at the conclusion of such audit, which report shall
specify with reasonable detail the methodologies, basis calculations, time
periods and assumptions used in preparing such report. TIVO shall be responsible
for paying in full to DIRECTV any and all amounts determined to be underpaid by
TIVO within [*] of such determination. Similarly, DIRECTV shall be responsible
for paying in full to TIVO amounts determined to be overpaid by TIVO within [*]
of such determination; provided that DIRECTV may instead offset any such amounts
against amounts which DIRECTV reasonably anticipates that TIVO will owe to
DIRECTV within the next [*]. All payments made under this Marketing Agreement
shall be subject to final adjustment as determined by the Parties' review of
supporting documentation or audit of TIVO's records in accordance with this
Section 4.3. In the event of any dispute or disagreement regarding such
payments, either Party may refer the matter to Dispute Resolution or Arbitration
as set forth in Section 12.3.
5. EQUITY CONSIDERATION
The form of documents to be executed in connection with this Section 5.1
shall be mutually agreed to by the parties, and shall include any and all
documentation necessary to comply with state and federal securities laws.
5.1 Common Stock Grants.
5.1.1 Initial Shares. In consideration of the obligations to be
performed by DIRECTV under this Marketing Agreement, and, in particular, the
obligations to be performed under Section 2 of this Marketing Agreement, TIVO
hereby grants to DIRECTV 1,852,329 shares (the "Initial Shares") of Common
Stock, par value $.001 per share, of TIVO ("Common Stock"), which number of
shares is equal to eight percent (9.1 %) of the total number of outstanding
shares of Common Stock on a fully diluted basis assuming the conversion of all
options, warrants, convertible securities and shares reserved for future
issuance under any and all of TIVO's stock option or equity incentive plans, as
of the time immediately prior to the execution of this Marketing Agreement (the
"TIVO Diluted Shares"), but after giving effect to the issuance of the Initial
Shares.
5.1.2 Additional Shares. In consideration of DIRECTV's delivery of a
promissory note for $2,822,168.00 in the form set forth on Schedule 5.1.2, TIVO
hereby grants to DIRECTV 1,128,867 shares of Common Stock (the "Additional
Shares," and together with
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
12.
the Initial Shares, the "Shares"), which number of shares is equal to five
percent (5.0%) of the TIVO Diluted Shares before giving effect to the issuance
of the Additional Shares.
5.2 Right of Repurchase.
5.2.1 At the end of [*] following the [*] ([*]the "Repurchase Trigger
Date"), TIVO shall have the right to repurchase from DIRECTV, at a price of
$0.001 per share (the "Repurchase Price"), the number of Additional Shares equal
to [*] (the "Right of Repurchase"). TIVO's Right of Repurchase may be exercised
by delivery of a written notice to DIRECTV which is received by DIRECTV on or
before the [*] following the Repurchase Trigger Date. If TIVO fails to deliver
such notice to DIRECTV, then TIVO shall have no further right to exercise such
Right of Repurchase. Notwithstanding the foregoing, TIVO shall not be entitled
to exercise its Right of Repurchase at any time that TIVO is in default in the
performance or observance of any material covenant, agreement or condition set
forth in this Marketing Agreement or if, prior to the date TIVO delivers to
DIRECTV written notice of TIVO's exercise of the Right of Repurchase, DIRECTV
terminates the Marketing Agreement pursuant to Section 11.
5.2.2 If, prior to TIVO's exercise of its Right of Repurchase, there
is any change affecting TIVO's outstanding Common Stock as a class that is
effected without the receipt of consideration by TIVO (through merger,
consolidation, reorganization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating, dividend, combination of
shares, change in corporation structure or other transaction not involving the
receipt of consideration by TIVO), then any and all new, substituted or
additional securities or other property to which DIRECTV is entitled by reason
of DIRECTV's ownership of Additional Shares shall be immediately subject to the
Right of Repurchase and be included in the definition of "Additional Shares" for
all purposes of the Right of Repurchase with the same force and effect as the
shares of Additional Shares presently subject to the Right of Repurchase, but
only to the extent such Additional Shares are, at the time, covered by such
Right of Repurchase. While the total Repurchase Price shall remain the same
after each such event, the Repurchase Price per Additional Share upon exercise
of the Right of Repurchase shall be appropriately adjusted.
5.3 Legend. All certificates representing the Shares shall have endorsed
thereon legends in substantially the following forms (in addition to any other
legend which may be required by other agreements between the parties hereto):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT OR AN
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
13.
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY AND/OR ITS
ASSIGNEE(S) AS PROVIDED IN THE BYLAWS OF THE COMPANY."
All certificates representing the Additional Shares also shall have
endorsed thereon a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF REPURCHASE SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER, OR SUCH HOLDER'S PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES
SUBJECT TO SUCH RIGHT OF REPURCHASE IS VOID WITHOUT THE PRIOR
EXPRESS WRITTEN CONSENT OF THE COMPANY."
5.4 DIRECTV Investment Representations. In connection with the grant of
the Shares under this Section 5, DIRECTV makes the investment representations
set forth on Schedule 5.4.
5.5 Anti-Dilution Protection. TIVO shall afford to all holders of the
Shares the "anti-dilution" protections set forth on Schedule 5.5.
6. COMBO RECEIVER
The Parties agree to cooperate and work with Philips Business Electronics
B.V. ("Philips") (or such other manufacturer(s) that the Parties mutually agree
upon) to develop a combination DIRECTV/TIVO receiver (the "DIRECTV/TIVO Combo
Receiver") capable of receiving both the DIRECTV Service and the TIVO Service in
a single set-top box. The Parties shall work together in good faith to mutually
(i) negotiate any agreements necessary to define the rights of DIRECTV, TIVO and
third party manufacturers with respect to the DIRECTV/TIVO Combo Receiver and
(ii) define the features and functionality of the DIRECTV/TIVO Combo Receiver;
provided, however, the DIRECTV/TIVO Combo Receiver shall satisfy the minimum
criteria set forth on Schedule 6 (which will be superseded by final technical
specifications agreed to by the parties). TIVO acknowledges that it shall not be
permitted to make any changes to the DIRECTV/TIVO Combo Receiver (through
software upgrades or otherwise) after the DIRECTV/TIVO Combo Receiver is
commercially introduced without the prior written consent of DIRECTV. The
Parties shall mutually agree upon the date on which to launch the DIRECTV/TIVO
Combo Receiver, which the Parties tentatively expect will be commercially
available [*]. Any DIRECTV promotional activity or advertising relating
specifically and solely to the DIRECTV/TIVO Combo Receiver shall also promote
the TIVO Service. Likewise, any TIVO promotional activity or advertising
relating specifically and solely to the DIRECTV/TIVO Combo Receiver shall also
promote the DIRECTV Service. The
* Material has been omitted pursuant to a request for confidential treatment.
Such matirla has been filed separately with the Securities and Exchange
Commission.
14.
relative prominence of each Party's brand, products or services shall be
mutually determined in good faith between the Parties prior to any such
promotional activity or advertising.
7. CONTENT PROTECTION MEASURES
Both TIVO and DIRECTV acknowledge that content protection within the
broadcast television and motion picture entertainment community is a high
priority. Accordingly, TIVO shall include in all TIVO Products any content
protection measures, including copyright protection technology (e.g.,
Macrovision), which major television and motion picture studios request to be
included in new digital television devices as determined by DIRECTV in its
reasonable discretion.
8. CONFIDENTIALITY
8.1 Confidentiality. Each of the Parties agrees that, except as otherwise
provided for in this Marketing Agreement, such Party and its employees will
maintain in confidence the terms and provisions of this Marketing Agreement, as
well as all of the information provided to it by the other Party which the
receiving Party knows or reasonably should know is confidential information of
the other Party (including all of the written data, summaries, reports, other
proprietary information, trade secrets and information of all kinds, acquired,
devised or developed in any manner from the other Party's personnel or files or
pursuant to this Marketing Agreement) (the "Confidential Information"), and such
Party will not use the Confidential Information of the other Party, except as
required for performance of this Marketing Agreement and will not reveal the
same to any persons not employed by the other Party except: (i) (a) at the
written direction of the other Party; (b) to the extent necessary to comply with
the law or the valid order of a court of competent jurisdiction or in connection
with any arbitration proceeding, in which event the disclosing Party shall so
notify the other Party as promptly as practicable (and, if possible, prior to
making any disclosure) and shall seek confidential treatment of such
information; (c) as part of its normal reporting or review procedure to any of
its Affiliated Companies, its auditors and its attorneys, if such Affiliated
Companies, auditors and attorneys agree to be bound by the provisions of this
Section 7.1; (d) in order to enforce any of its rights pursuant to this
Marketing Agreement; and (e) to potential investors, insurers and financing
entities, if any such person agrees to be bound by the provisions of this
Section 7.1; or (ii) (a) if, prior to the time of disclosure to the recipient,
the Confidential Information is in the public domain, or is otherwise validly
known to the recipient, as evidenced by written record or (b) if, after
disclosure to the recipient the Confidential Information becomes part of the
public domain by written publication through no fault of the recipient. The
Parties further agree to maintain any oral information which would be
Confidential Information if reduced to writing as confidential in accordance
with standard industry practice (subject to the foregoing exceptions for
Confidential Information). Each Party agrees to use the same degree of care to
protect the other Party's Confidential Information as it uses with its own
proprietary Information, but in no event with less than reasonable care.
Immediately upon the written request of the Party providing the other Party with
Confidential Information (which request the providing Party may make, as a
specific or general request, in its sole discretion at any time up to one year
after the termination or expiration of this Marketing Agreement), the receiving
Party shall provide to the providing Party (or destroy if the providing Party so
requests) all requested Confidential Information provided by the providing
Party. Notwithstanding the foregoing, (i) DIRECTV shall not be
15.
required to provide to TIVO or destroy any records or information pertaining to
DIRECTV Subscribers or which is needed to provide customer service and technical
assistance to DIRECTV Subscribers that receive the DIRECTV Service via a
DIRECTV/TIVO Combo Receiver and (ii) TIVO shall not be required to return or
destroy any records or information needed to xxxx then-current DIRECTV/TIVO
Subscribers.
8.2 Press Release. During the term of this Marketing Agreement, neither
Party shall issue an independent press release with respect to this Marketing
Agreement or the transactions contemplated hereby without the prior consent of
the other Party.
9. ADDITIONAL REPRESENTATION AND WARRANTIES
9.1 Power and Authority; No Breach. Each of the Parties represents and
warrants that all corporate action on the part of its officers, directors and
shareholders necessary for the authorization of this Marketing Agreement has
been completed and that each Party has full power and authority to enter into
this Marketing Agreement and perform its obligations hereunder and that its
execution of this Marketing Agreement and performance of its obligations
hereunder does not and will not violate any law or result in a breach of or
default under the terms of any contract or agreement by which such Party is
bound. The enforcement and enjoyment by either Party of its rights and benefits
hereunder do not and will not violate, and are not and will not be subject to
restraint or curtailment under, the terms of any contract or agreement by which
the other Party is bound.
9.2 Compliance with Law. Each Party is in compliance with all applicable
governmental statutes, laws, rules, regulations, ordinances, codes, directives,
and orders (whether federal, state municipal or otherwise) and is solely
responsible for the compliance with all such laws (including, without
limitation, consumer disclosure and privacy laws) arising out of or relating to
its obligations under this Marketing Agreement.
9.3 TIVO Intellectual Property Rights. TIVO represents and warrants that,
to the best of its knowledge, the TIVO Service and the TIVO Stand-Alone Receiver
(and any underlying technology related thereto) do not infringe any [*] patent,
copyright, trade secret or other proprietary right of any third party or
otherwise conflict with the rights of any third party. TIVO represents and
warrants that, to the best of its knowledge, it has or will have obtained all
necessary licenses for the TIVO Service and for patents covering the
manufacture, sale and use of the TIVO Stand-Alone Receiver related to the TIVO
Service (including without limitation for any electronic program guide and
related display, navigation, filtering, selection and recording applications
utilized in connection with providing the TIVO Service).
9.4 Additional TIVO Representations and Warranties. Except as set forth
in schedules to the Stock Purchase Agreement, TIVO represents and warrants to
DIRECTV that all of the representations and warranties made by TIVO in Section 3
of the Stock Purchase Agreement are true and correct as of the date of this
Marketing Agreement as if made on such date and, as to representations and
warranties regarding the transactions contemplated under the Stock Purchase
Agreement or the shares of Series F Preferred Stock issuable thereunder, as if
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Secutities and Exchange
Commission.
16.
made with respect to the transactions contemplated under this Marketing
Agreement and the Shares issuable pursuant to Section 5 hereof, respectively.
10. INDEMNIFICATION AND LIMITATION OF LIABILITY
10.1 Indemnification. Each Party (the "Indemnifying Party") shall
indemnify and hold the other Party and its Affiliated Companies and their
respective employees, officers, agents, attorneys, stockholders and directors,
and their respective successors, licensees and assigns (the "Indemnified
Party(ies)") harmless from and against (and shall pay as incurred) any and all
third party claims, proceedings, actions, damages, costs, settlements, expenses
and other liabilities and losses (whether under a theory of strict liability, or
otherwise) of any kind or nature incurred by or threatened, imposed or filed
against, any Indemnified Party (including, without limitation, (a) reasonable
costs of defense, which shall include, without limitation, court costs and
reasonable attorney and other reasonable expert and reasonable third party fees
and (b) to the extent permitted by law, any fines, penalties and forfeitures in
connection with any proceedings against an Indemnified Party) caused by any
breach (or, with respect to third party claims only, alleged breach) by the
Indemnifying Party of any representation, warranty or agreement hereunder.
Without limiting the generality of the foregoing, TIVO shall indemnify, defend
and hold harmless DIRECTV and its Affiliated Companies from and against any and
all damages, costs, expenses, liabilities and losses which arise out of or are a
result of any claim, demand, action, suit or proceeding in which it is alleged
that the TIVO Service and/or the TIVO Products (excluding the components of the
DIRECTV/TIVO Combo Receiver which relate specifically and solely to the DIRECTV
Service and any DIRECTV technology incorporated into the DIRECTV/TIVO Combo
Receiver), or the TIVO Promotional Materials or other marketing materials
provided by TIVO to DIRECTV (excluding changes to such TIVO Promotional
Materials required by DIRECTV), or any part thereof, violates or infringes any
patent, copyright, trademark or other proprietary right of any third party or
constitutes a misappropriation of any third party's trade secrets.
10.2 Notification and Control. If any claim for indemnification arises
under Section 10.1, the Indemnified Party shall notify the Indemnifying Party
(the "Indemnity Notification"); provided that the failure to so notify the
Indemnifying Party will not release the Indemnifying Party from its obligation
to indemnify the Indemnified Party unless the Indemnifying Party is materially
prejudiced by the failure to receive such notice. The Indemnifying Party shall
assume the defense of any such claim, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses of such counsel, and shall consult with and keep the Indemnified Party
reasonably informed with respect to the defense, compromise, settlement,
resolution or other disposition of any such claim. The Indemnified Party shall
have the right to employ separate counsel in the defense of any such claim and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
Indemnifying Party, (ii) the Indemnifying Party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
Indemnified Party or (iii) representation of the Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between such Indemnified Party and any other
Party represented by such counsel to such proceeding (in which case the
Indemnifying Party shall not have the right to assume the defense of such action
17.
on behalf of the Indemnified Party). The Indemnifying Party shall promptly
inform the Indemnified Party of all material aspects of such defense,
compromise, any proposed settlement, resolution or other disposition of any such
claim. Neither Party shall admit any liability with respect to, or settle,
compromise, resolve or discharge any such claim without the other Party's prior
written consent, which consent shall not be unreasonably withheld in the case of
any settlement, resolution, compromise or discharge involving only the payment
of money.
10.3 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS MARKETING AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OF THE OTHER PARTY OR ANY THIRD
PARTY, WHETHER FORESEEABLE OR NOT AND REGARDLESS OF THE FORM, LEGAL, THEORY OR
BASIS OF RECOVERY OF ANY SUCH CLAIM. IN NO EVENT SHALL ANY PROJECTIONS OR
FORECASTS BY EITHER PARTY BE BINDING AS COMMITMENTS OR, IN ANY WAY, PROMISES BY
SUCH PARTY, AND ANY FAILURE BY EITHER PARTY TO ACHIEVE ANY MINIMUM NUMBER OF
SUBSCRIBERS SHALL NOT CONSTITUTE A BREACH OR OTHER CAUSE OF ACTION OR ENTITLE
THE OTHER PARTY TO REMEDIES EXCEPT AS EXPRESSLY PROVIDED IN THIS MARKETING
AGREEMENT.
11. TERMINATION
11.1 Initial Term. The initial term of this Marketing Agreement (the
"Initial Term") shall be seven (7) years from the Launch Date.
11.2 Termination for Material Default. Either Party may terminate this
Marketing Agreement immediately in the event that the other Party materially
defaults in the performance or observance of any material covenant, agreement or
condition set forth in this Marketing Agreement, which default remains uncured
for a period of [*] from the date that the notifying Party provides notice to
the defaulting Party.
11.3 Termination for Insolvency. Either Party may terminate this Marketing
Agreement effective immediately upon giving notice to the other Party, (i) upon
the institution by or against the other Party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of its debts
and such proceeding is not dismissed within [*] of its being filed; (ii) upon
the other Party making an assignment for the benefit of creditors; or (iii) upon
the other Party's dissolution or liquidation.
11.4 Termination for Launch Date Delay. DIRECTV shall have the right to
terminate this Marketing Agreement if the Launch Date does not occur before
[*]. DIRECTV's right to terminate this Marketing Agreement pursuant to this
Section 11.4 shall be exercisable by delivery of written notice to TIVO which is
received by TIVO on or before [*]. If DIRECTV fails to timely deliver such
notice to TIVO, then DIRECTV shall have no further right to terminate this
Marketing Agreement pursuant to this Section 11.4.
11.5 Termination for Insufficient DIRECTV/TIVO Subscribers. DIRECTV shall
have the right to terminate this Marketing Agreement on or after [*], if, on
such date, there are fewer than [*] DIRECTV/TIVO Subscribers.
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
18.
DIRECTV's right to terminate this Marketing Agreement pursuant to this Section
11.5 shall be exercisable by delivery of written notice to TIVO which is
received by TIVO on or before [*] following the third anniversary of the Launch
Date. If DIRECTV fails to timely deliver such notice to TIVO, then DIRECTV shall
have no further right to terminate this Marketing Agreement pursuant to this
Section 11.5.
11.6 Termination for an Intellectual Property Event. If (i) any legal
action alleging patent, copyright or other proprietary rights infringement is
commenced against TIVO or DIRECTV or any of their respective Affiliated
Companies with respect to any intellectual property rights utilized by TIVO in
connection with providing the TIVO Service, the TIVO Products or any hardware or
software related thereto, including, without limitation, intellectual property
rights related to the content of TIVO Marketing Materials provided to DIRECTV
pursuant to Section 2 of this Marketing Agreement (an "Intellectual Property
Event"), and (ii) TIVO does not indemnify DIRECTV for all damages which may
arise from such legal action in amounts and upon terms and conditions acceptable
to DIRECTV in its sole discretion within [*] of DIRECTV's written request
therefor, then DIRECTV shall have the right to terminate this Marketing
Agreement upon written notice to TIVO effective as of the date set forth in such
notice.
11.7 Effect of Termination. Termination of this Marketing Agreement shall
not affect (i) any orders for the TIVO Products, the TIVO Service and/or the
DIRECTV Service placed by any DIRECTV/TIVO Subscribers, (ii) any third party, or
(iii) any license granted to TIVO or DIRECTV, except that the Bandwidth Capacity
shall no longer be provided by DIRECTV. Termination shall not prejudice the
rights or liabilities of the Parties with respect to the TIVO Products, the
DIRECTV/TIVO Combo Receiver, the TIVO Service and the DIRECTV Service previously
sold, or any indebtedness then owing by any Party to the other Party. Any
termination of this Marketing Agreement by TIVO or DIRECTV as specifically
provided for under the terms of this Marketing Agreement shall be without any
charge, obligation, or liability whatsoever to TIVO or DIRECTV, as the case may
be, except as otherwise expressly provided in this Marketing Agreement.
Notwithstanding the foregoing, unless TIVO terminates this Marketing Agreement
pursuant to Section 11.2, no termination of this Marketing Agreement shall
eliminate or reduce the obligation of TIVO to pay the full amount of the Revenue
Share Payments for DIRECTV/TIVO Subscribers acquired before the date of
termination which are otherwise payable to DIRECTV when due under Section 4.
12. MISCELLANEOUS PROVISIONS
12.1 Rights of Transfer. Neither Party shall transfer any of its rights
or obligations under this Marketing Agreement (including by means of an
assignment or transfer of substantially all of its assets to, or consolidation
or merger with, another entity, whether or not the transferring Party is the
surviving entity), except that DIRECTV shall have the right to transfer its
rights or obligations under this Marketing Agreement to any Affiliated Company,
(i) in connection with or to facilitate an initial public offering of its common
stock or (ii) in connection with any consolidation, merger or sale of assets
involving the transfer of substantially all the assets or stock of DIRECTV;
provided that the entity surviving such transaction assumes all of these
obligations hereunder. Subject to the foregoing, this Marketing Agreement shall
be binding on and shall inure to the benefit of the permitted successors and
assigns of the Parties.
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
19.
12.2 Taxes. Any taxes (including, without limitation, any property,
employee, service, franchise, customs, import/export duties, excise and any
other related taxes) asserted against TIVO or DIRECTV by any local, state,
national or international entity, as a result of or arising under the
performance of its obligations under this Marketing Agreement shall be the
responsibility of the Party against which such taxes are asserted. Each Party
shall be responsible for any taxes related to its income hereunder.
12.3 Dispute Resolution/Arbitration.
12.3.1 Disputes. Any dispute or disagreement arising between DIRECTV
and TIVO shall be resolved according to the following dispute resolution
procedure: First, such dispute shall be addressed to each Party's project
manager for discussion and attempted resolution. If any such dispute cannot be
mutually resolved by such project managers within [*], then such dispute shall
be immediately referred to the senior management of both Parties for discussion
and attempted resolution. If such dispute cannot be mutually resolved by such
management representatives within [*], then such dispute or disagreement may be
referred by either Party to arbitration in Los Angeles, California before one
arbitrator and arbitrated in accordance with the Commercial Arbitration Rules
(the "Arbitration Rules") of the American Arbitration Association (the "AAA"),
in effect on the date that such notice is given. Once appointed, the arbitrator
shall appoint a time and place for a pre-hearing status conference not more than
[*] from the date of his or her appointment, and shall appoint a time and place
for a final hearing not more than [*] from the date of the status conference.
The final hearing shall, if at all possible as determined by such arbitrator,
conclude no later than [*] after its commencement. The Parties shall also
specifically have the right to seek injunctive relief as part of any
arbitration.
12.3.2 Arbitrator. The Party that demands arbitration of the
unresolved dispute or disagreement shall specify in writing the matter to be
submitted to arbitration. The dispute or disagreement shall be referred for
resolution by a single arbitrator appointed in accordance with the Arbitration
Rules of the AAA.
12.3.3 Award. The arbitrator shall render a written decision
stating with reasonable detail the reasons for the decision rendered. Any
monetary award shall be payable in immediately available funds and in United
States dollars through a bank in the United States.
12.3.4 Costs. Each Party shall bear its own cost of preparing for
and presenting its case; and the cost of arbitration, including the fees, and
expenses of the arbitrator, will be shared equally by DIRECTV and TIVO.
12.3.5 Enforcement. The arbitration award shall be final and
binding upon the Parties and may be confirmed by the judgment of any court
having appropriate jurisdiction, including but not limited to any court located
in California.
12.4 Independent Contractor, No Agents, Relationship, No-Third Party
Beneficiaries. Each Party is an independent contractor in performing the
services described in this Marketing Agreement Except as otherwise expressly
provided in this Marketing Agreement, no Party (nor any of its officers,
directors, agents or employees) shall act or hold itself out as an
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
20.
agent of the other Party hereto. The Parties do not intend this Marketing
Agreement or the relationship hereunder to constitute a joint venture or
partnership. The provisions of this Marketing Agreement are for the benefit only
of the Parties hereto, and no third party may seek to enforce, or benefit from,
these provisions.
12.5 Applicable Law, Entire Agreement, Modification. This Marketing
Agreement shall be construed in accordance with and be governed by the laws of
the State of California, without regard to otherwise applicable conflict of law
principles, except that issues relating to the arbitrability of claims under
Section 12.3 shall be governed by the Federal Arbitration Act, not California
law. This Marketing Agreement (together with all Schedules hereto) constitutes
the entire agreement between the parties and supersedes all previous
understandings, commitments or representations concerning the subject matter.
Each Party acknowledges that the other Party has not made any representations on
which it intends to rely upon in entering into this Marketing Agreement other
than those representations that are contained herein. This Marketing Agreement
may not be amended or modified, and none of its provisions may be waived, except
by a writing signed by an authorized officer of the Party against whom the
amendment, modification or waiver is sought to be enforced.
12.6 Notices. All notices and other communications from either Party to
the other hereunder shall be in writing and shall be deemed received upon actual
receipt when personally delivered, upon acknowledgment of receipt if sent by
facsimile, or upon the expiration of the third business day after being
deposited in the United States mails, postage prepaid, certified or registered
mail, addressed to the other Party at a location specified in writing by such
Party. Until notice in accordance with this Section 12.6 is given to the
contrary, the addresses, phone numbers and facsimile number for purposes of
giving notice are as follows:
TIVO
TIVO Inc.
000 Xxxx Xxxxx
Xxxxx 000 Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
cc: General Counsel
DIRECTV
DIRECTV, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, XX 00000
Attn: Vice President, Advanced Products
Fax: (000) 000-0000
cc: Senior Vice President, Business Affairs and General Counsel
12.7 Severability. Nothing contained in this Marketing Agreement shall be
construed to require commission of any act contrary to law, and wherever there
is any conflict between any provision of this Marketing Agreement and any law,
such law shall prevail, provided, however,
21.
that in such event, the affected provisions of this Marketing Agreement shall be
modified to the minimum extent necessary to permit compliance with such law and
all other provisions shall continue in full force and effect.
12.8 Survival of Provisions. The rights and obligations pursuant to
Sections 8.1, 10, 11.7 and 12 of this Marketing Agreement shall survive any
expiration or termination of this Marketing Agreement. In addition, any
obligations which expressly or by their nature are to continue after
termination, cancellation or expiration of this Marketing Agreement shall
survive and remain in effect. All other rights and obligations of DIRECTV and
TIVO under this Marketing Agreement shall cease upon termination.
12.9 Force Majeure. The duties and obligations of the TIVO and DIRECTV
hereunder may be suspended upon the occurrence and continuation of any Event of
Force Majeure and for a reasonable start-up period thereafter. If an Event of
Force Majeure is in effect for [*], then, at any time after such 180th
consecutive day at which the Event of Force Majeure continues in effect, either
Party may terminate this Marketing Agreement effective upon written notice to
the other Party. An "Event of Force Majeure" shall mean any act, cause,
contingency or circumstance beyond the reasonable control of such Party (whether
or not reasonably foreseeable), including, without limitation, to the extent
beyond the reasonable control of such Party, any governmental action,
nationalization, expropriation, confiscation, seizure, allocation, embargo,
prohibition of import or export of goods or products, regulation, order or
restriction (whether foreign, federal or state), war (whether or not declared),
civil commotion, disobedience or unrest, insurrection, public strike, riot or
revolution, lack or shortage of, or inability to obtain, any labor, machinery,
materials, fuel, supplies or equipment from normal sources of supply, strike,
work stoppage or slowdown, lockout or other labor dispute, fire, flood, drought
or other natural calamity, weather, sun spots, or other electronic, electro-
magnetic, atmospheric or other condition affecting transmission, damage or
destruction to plant and/or equipment, satellite transmission failures, loss or
degradation of any satellite capacity (whether related to a satellite which
provides the DIRECTV Service or any other satellite in the DBS Distribution
System), commandeering of vessels or other carriers resulting from acts of God,
or any other accident, condition, cause, contingency or circumstances including
(without limitation, acts of God) within or without the United States. Neither
TIVO nor DIRECTV shall, in any manner whatsoever, be liable or otherwise
responsible for any delay or default in, or failure of, performance resulting
from or arising out of or in connection with any Event of Force Majeure and no
such delay, default in, or failure of, performance shall constitute a breach by
either Party hereunder; provided, however, to the extent that the Event of Force
Majeure materially affects DIRECTV's or TIVO's ability to meet any time bounded
commitments set forth in this Marketing Agreement, the dates in this Marketing
Agreement shall be extended by the number of days that such Party is precluded
from performing all of its material obligations set forth in this Marketing
Agreement due to the Event of Force Majeure.
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
22.
In Witness Whereof, the Parties have caused this Marketing Agreement to be
executed as of the date first above written.
TIVO Inc.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
-------------------------
Title: President, CEO
------------------------
DIRECTV, Inc.
By: /s/ Xxxx X. Hartensten
-----------------------------
Name: Xxxx X. Hartensten
---------------------------
Title: President
--------------------------
23.
APPENDIX I
1. "AAA" shall have the meaning set forth in Section 12.3.1.
2. "Additional Revenue Share" shall have the meaning set forth in Section
4.1.3.
3. "Additional Shares" shall have the meaning set forth in Section 5.1.2.
4. "Affiliated Company(ies)" means with respect to any person or entity, any
other person or entity directly or indirectly controlling, controlled by or
under common control (i.e., the power to direct affairs by reason of ownership
of voting stock by contract or otherwise) with such person or entity.
5. "Applicable Percentage" shall have the meaning set forth in Section
5.1.2(a).
6. "Arbitration Rules" shall have the meaning set forth in Section 12.3.1.
7. "Bandwidth Capacity" shall have the meaning set forth in Section 3.
8. "Bandwidth Commencement Date" shall have the meaning set forth in Section
3.
9. "Calculation Date" shall have the meaning set forth in Section 4.1.1.
10. "Common Stock" shall have the meaning set forth in Section 5.1.1.
11. "Confidential Information" shall have the meaning set forth in Section 7.1.
12. "Cut-Off Date" shall have the meaning set forth in Section 2.1.5(e).
13. "DBS Distribution System" means the distribution system for video, audio,
data and other programming services whereby the programming satellite signal or
feed is received from the transmission source by a DIRECTV turnaround earth-
station facility which compresses the signal and then uplinks it at one of the
DIRECTV Frequencies on a DIRECTV Satellite for transmission to DIRECTV
Subscribers.
14. "DIRECTV" shall have the meaning, set forth in the initial paragraph.
15. "DIRECTV Frequencies" means the DBS operating frequencies associated with
the 101. West Longitude orbital location, for which an Affiliated Company of
DIRECTV is the FCC-authorized permittee.
16. "DIRECTV Sales Force" shall have the meaning set forth in Section 2.1.1(a).
17. "DIRECTV Satellite" means a DBS communications satellite located at or
about the 101. West Longitude orbital location.
18. "DIRECTV Service" means the video, audio, data or other programming
services distributed from time to time by DIRECTV via the DBS Distribution
System, as edited, selected,
1.
packaged, scheduled and priced in DIRECTV's sole discretion. The DIRECTV Service
does not include the TIVO Service.
19. "DIRECTV Subscribers" means those residential customers authorized by
DIRECTV to receive the DIRECTV Service via the DBS Distribution System.
20. "DIRECTV Trademarks" shall have the meaning set forth in Section 2.5.
21. "DIRECTV/TIVO Combo Receiver" shall have the meaning set forth in Section
6.
22. "DIRECTV/TIVO Subscriber" means any person that (i) subscribes to both the
DIRECTV Service and the TIVO Service using a DIRECTV/TIVO Combo Receiver; or
(ii) (A) subscribes to both the DIRECTV Service and the TIVO Service using a
separate DIRECTV receiver and a TIVO Stand-Alone Receiver, and (B) such person
purchased a DIRECTV receiver prior to a TIVO Stand-Alone Receiver.
23. "Event of Force Majeure" shall have the meaning set forth in Section 12.9.
24. "Final Revenue Share" shall have the meaning set forth in Section 4.1.2.
25. "Indemnified Party(ies)" shall have the meaning set forth in Section 10.1.
26. "Indemnifying Party" shall have the meaning set forth in Section 10.1.
27. "Indemnity Notification" shall have the meaning set forth in Section 10.2.
28. "Initial Revenue Share" shall have the meaning set forth in Section 4.1.1.
29. "Initial Shares" shall have the meaning set forth in Section 5.1.1.
30. "Initial Term" shall have the meaning set forth in Section 11.1.
31. "Intellectual Property Event" shall have the meaning set forth in Section
11.6.
32. "Launch Date" means the first date on which: (i) the TIVO Service is
operational and commercially available within the United States at a monthly
subscription charge not greater than [*] to consumers purchasing the TIVO
Stand-Alone Receiver and/or the DIRECTV/TIVO Combo Receiver; (ii) the TIVO
Stand-Alone Receiver is (A) compatible (either directly or through an infrared
blaster) with at least [*] of DIRECTV's receivers currently in
use by DIRECTV Subscribers such that use of the TIVO Stand-Alone Receiver does
not diminish or degrade the performance of the DIRECTV Receiver or the quality
of the DIRECTV video, audio or data broadcast viewed by DIRECTV Subscribers or
otherwise to DIRECTV's reasonable satisfaction and (B) available for commercial
distribution to consumers via direct sales, wholesale and/or retail channels
within the United States to DIRECTV's reasonable satisfaction determined in good
faith, at a retail price (for at least one model) not greater than [*]; and
(iii) TIVO is capable of providing customer service, product fulfillment and
billing services to TIVO Subscribers to DIRECTV's reasonable satisfaction.
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities Exchange Commission.
2.
33. "Marketing Agreement" shall have the meaning set forth in the initial
paragraph.
34. "Marketing Period" shall have the meaning set forth in Section 2.1.
35. "Minimum TIVO Services" shall have the meaning set forth in Section 2.8.
36. "NRTC" means the National Rural Telecommunications Cooperative.
37. "Party(ies)" shall have the meaning in the initial paragraph.
38. "Philips" shall have the meaning set forth in Section 6.
39. "Recurring Customer Complaint" shall mean a problem or defect concerning a
TIVO Product reported to TIVO's customer service staff or any other employee of
TIVO by more than fifty (50) customers who own or frequently use a TIVO Product.
40. "Repurchase Price" shall have the meaning set forth in Section 5.2.1.
41. "Repurchase Trigger Date" shall have the meaning set forth in Section
5.2.1.
42. "Revenue Share Payments" shall mean payments of the Initial Revenue Share,
the Final Revenue Share and/or the Additional Revenue Share made in accordance
with Section 4.1.
43. "Right of Repurchase" shall have the meaning set forth in Section 5.1.2(a).
44. "Shares" shall have the meaning set forth in Section 5.1.2.
45. "Stock Purchase Agreement" shall have the meaning set forth in the
Recitals.
46. "Subscriber Xxxx Mailings" shall have the meaning set forth in Section
2.1.3(b).
47. "TIVO" shall have the meaning set forth in the initial paragraph.
48. "TIVO Diluted Shares" shall have the meaning set forth in Section 5.1.1.
49. "TIVO Infomercial" shall have the meaning set forth in Section 2.1.2.
50. "TIVO Marketing Materials" shall have the meaning set forth in Section
2.1.5.
51. "TIVO Products" shall mean any and all hardware or equipment used by
consumers to activate or receive the TIVO Services, including without limitation
the TIVO Stand-Alone Receiver and any TIVO technology incorporated in the
DIRECTV/TIVO Combo Receiver. TIVO Products may include hardware or equipment
manufactured, distributed and sold by third parties including Philips
Electronics B.V. and its Affiliated Companies.
52. "TIVO Promotional Materials" shall have the meaning set forth in Section
2.1.3.
53. "TIVO Service" means any and all of the personalized television services
offered by TIVO to consumers.
3.
54. "TIVO Stand-Alone Receiver" shall mean a set-top box which allows consumers
to receive the TIVO Service, other than the DIRECTV/TIVO Combo Receiver.
55. "TIVO Subscribers" means those residential or commercial customers
authorized by TIVO to receive the TIVO Service.
56. "TIVO Television Advertising" shall have the meaning set forth in Section
2.1.2.
57. "TIVO Trademarks" shall have the meaning set forth in Section 2.5.
4.
Schedule 2.1.2.
TIVO Television Advertising Specifications
DIRECTV agrees to provide TIVO with advertising spots (avails) and
infomercials on the programming networks and sports services broadcast via the
DIRECTV Service for the purpose of promoting and marketing the TIVO Service
capable of generating a minimum of [*] impressions during the Marketing Period.
As an example, [*] during the Marketing Period translates to approximately [*].
Such number of gross impressions also would include infomercials broadcast via
the DIRECTV Service.
TIVO Television Advertising Specifications - Avails
Based on the current scheduling capabilities of DIRECTV's tape-based
insertion system, all TIVO avails will be scheduled on a run-of-schedule (ROS)
basis, with no scheduling of specific marquee events on any of the networks. If
DIRECTV upgrades its insertion system to a video server-based architecture,
DIRECTV will make good faith efforts to insert avails with a level of accuracy
and specificity consistent with commercial broadcast practices.
At a minimum and subject to contractual obligations which may change from
time to time, DIRECTV agrees to insert TIVO avails on the networks listed below:
[*]
DIRECTV reserves the right to remove and/or substitute the advertising
time on certain cable networks to the extent DIRECTV's rights change with
respect to such ability to sell such advertising time, and DIRECTV cannot
guarantee time on any specific network(s) and/or event.
DIRECTV will make good faith efforts to provide TIVO with affidavits
certifying telecast and number of plays of TIVO avails. Reconciliation of the
schedule will occur on a monthly basis. DIRECTV will also make best efforts to
notify TIVO of a change in schedule of sports events. DIRECTV and TIVO shall
meet quarterly to provide feedback to one another
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1.
regarding TIVO avail placement and to coordinate, to the extent feasible,
upcoming TIVO avail scheduling with TIVO promotional activities; provide,
however, that all such placement and scheduling shall be determined by DIRECTV
in accordance with this Marketing Agreement.
TIVO Television Advertising Specifications - Infomercials
DIRECTV agrees to provide TIVO with infomercials spots (including the TIVO
infomercials) on the DIRECTV Service for the purpose of promoting and marketing
the TIVO Products and the TIVO Service during the Marketing Period. The
duration, timing and placement of such infomercials will be determined by
DIRECTV in its sole discretion. TIVO agrees to provide TIVO infomercials to
DIRECTV at any length necessary to make use of infomercials broadcast
opportunities offered by DIRECTV, which may change from time to time.
2.
Schedule 2.1.4.
DIRECTV Website and Magazine Advertising Specifications
Website Advertising Specifications
At a minimum, DIRECTV will provide TIVO with a presence on DIRECTV's website as
described below. Any TIVO banner on DIRECTV's website shall be equal in size to
468 X 60 pixels. The size of such banner may change over the course of the
Marketing Period. Currently, xxxxxxx.xxx receives [*] visits per
month, resulting in an average of [*] page views per month./1/
Location in Content Frequency Avg. Visits per
xxxxxxx.xxx month/1/
-------------------- ---------------------- -------------------------- ------------------
Home Page [*] [*] [*]
On-Line Programming [*] [*] [*]
Q&A Page [*] [*] [*]
DIRECTV System [*] [*] [*]
Products Page
--------------------------------
[*]
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed with the Securities and Exchange Commission.
1.
On Magazine Advertising Specifications
Starting with the first published edition of On Magazine following the
Launch Date, DIRECTV will provide prominent placement of a full-page
(approximately 8" x 10.5"), four-color TIVO advertisement [*] of On Magazine.
Prominent locations in On include cover locations (back cover, inside back
cover, inside front cover) or within the first [*] of the magazine's inside
pages. DIRECTV will place the TIVO advertisement in a cover location in at least
[*] editions.
See Guide Advertising Specifications
Starting with the first published edition of the See Guide following the
Launch Date, DIRECTV will provide prominent placement of a full-page
(approximately 9" x 10.75"), four-color TIVO advertisement in [*] the See Guide.
Prominent locations in See include cover locations (back cover, inside back
cover, inside front cover) or within the first [*]of the guide's inside pages.
DIRECTV will place the TIVO advertisement in a cover location in at least [*]
editions.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
Schedule 2.1.5(e)
Cut-Off Dates for TIVO Marketing Materials
Materials Approved and Finalized Materials Needed
--------------------------- -----------------------------------------
Avails [*]days prior to first air date
Infomercials [*]days prior to first air date
Xxxx Stuffer Content [*]days prior to insertion
On Magazine Advertisements [*]days prior to publication
See Guide Advertisements [*]days prior to publication
Website Content [*]days prior to insertion
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed with the Securities and Exchange Commission.
1.
Schedule 2.2
Fulfillment Specifications
for the TIVO Service and the TIVO Products
TIVO shall take orders for TIVO Service and/or the TIVO Products:
(i) over the telephone via a toll-free number (with such telephone
number staffed from at least [*] in all applicable
time zones);
(ii) via fax (from either a customer directly or a third party); and
(iii) via electronic data interface.
TIVO shall accept payments for the TIVO Service and/or the TIVO via check,
money order and credit cards (Visa, Mastercard and American Express).
TIVO, or a third party authorized by TIVO, shall drop ship the applicable
TIVO Product within [*] of receipt of the order. The shipping carrier utilized
shall provide shipment of the TIVO Products in [*] days. TIVO may charge a
shipping and handling fee that is no greater than [*] % of TIVO's actual
shipping costs charged by the shipping carrier.
TIVO shall utilize an order management system in which customer orders and
records (for the TIVO Service and/or the TIVO Products) shall be established and
maintained. Such order management system shall support all customers
transactions and inquiries regarding the TIVO Service and/or the TIVO Products.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1.
Schedule 2.4
Customer Service Standards
Metrics: Standards
--------------------------------------------- -----------------------
Service level (percentage of calls answered [*]
within 30 seconds)
Attendance [*]
Call abandon rate [*]
Call busy rate [*]
% calls handled [*]
Average speed of answer [*]
Average call handle time [*]
Average call hold time [*]
Longest call waiting [*]
% calls transferred [*]
Quality:
EC calls are rated at meets or exceeds [*]
% of calls where EC is polite and respectful [*]
% of calls that have one call resolution [*]
Legal compliance [*]
Call monitoring per EC per month [*]
Systems:
Telemarketing - available [*]
Telecom - available [*]
Networks - available [*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1.
Schedule 2.5(a)
DIRECTV Xxxx License Agreement
This DIRECTV MARKS LICENSE AGREEMENT (the "License") is made effective as
of the ______ day of April 1999 (the "Execution Date"), by and between DIRECTV,
Inc., a California corporation ("DIRECT "), and TIVO Inc., a Delaware
corporation ("Licensee").
WHEREAS, Licensee and DIRECTV are entering into concurrently herewith a
Marketing Agreement (the "Marketing Agreement");
WHEREAS, DIRECTV desires to grant Licensee certain limited rights to
utilize certain trademarks (the "Marks" as hereinafter defined);
WHEREAS, DIRECTV and Licensee have agreed to establish a strategic business
relationship whereby DIRECTV will provide marketing access to its United States
subscribers and offer promotional support for Licensee's personalized television
programming services (collectively, the "TIVO Service") and the products related
thereto pursuant to the Marketing Agreement. In addition, DIRECTV and Licensee
shall work to develop a set top box that is capable of receiving the TIVO
Service and the DIRECTV Service (as defined below) without the need of a cable,
wire or other interconnect (the "DIRECTV/TIVO Combo Receiver");
WHEREAS, TIVO desires to use the Marks in accordance with the terms set
forth in this License (the "Licensed Use") as hereinafter defined; and
WHEREAS, the parties desire to establish a relationship and set forth in
writing the terms and conditions for Licensee's use of the Marks.
NOW THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
In consideration of the mutual covenants contained herein, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
As used in this License with initial capital letters, the following words
and phrases shall have the definitions set forth below.
1.1 Affiliate. "Affiliate" shall mean, when referring to two (2)
companies, that there is a direct or indirect commonality of ownership between
the two (2) companies of at least fifty percent (50%).
1.2 DIRECTV/TIVO Materials. "DIRECTV/TIVO Materials" shall mean any and
all materials (including, but not limited to, advertising and point-of-sale
marketing materials), whether printed, audio or visual (including video), or any
combination thereof, used to (i)
1.
promote the DIRECTV/TIVO Combo Receiver and the features related thereto and/or
(ii) accurately state, describe or explain that the TIVO Service, through the
use of the TIVO Stand-Alone Receiver, is compatible with the DIRECTV Service
and/or the DIRECTV System Product.
1.3 DIRECTV Service. "DIRECTV Service" shall mean the video, audio, data
or other programming services distributed from time to time by DIRECTV via the
DBS Distribution System (as defined in the Marketing Agreement), as edited,
selected, packaged, scheduled and priced in DIRECTV's sole discretion.
1.4 DIRECTV System Product. "DIRECTV System Product" shall mean the set-
top subscriber equipment necessary to receive the DIRECTV Services for viewing
on a television monitor.
1.5 Licensed Use. "Licensed Use" shall mean use of the Marks to produce
and distribute the DIRECTV/TIVO Materials.
1.6 Marks. "Marks" shall mean the trademarks and/or logos described and
depicted in Exhibit A hereto, as amended by DIRECTV from time to time, of which
Licensee is entitled to make a Licensed Use pursuant to the terms of this
License.
1.7 Term. "Term" shall mean the period of this License as set forth in
Section 2.6.
1.8 Territory. "Territory" shall mean the [*]
1.9 TIVO Stand-Alone Receiver. "TIVO Stand-Alone Receiver" shall mean a
set top box which allows consumers to receive the TIVO Service, other than the
DlRECTV/TIVO Combo Receiver.
2. LICENSE
2.1 Grant. Subject to the full performance by Licensee of all of its
obligations under this License and the Marketing Agreement, DIRECTV hereby
grants to Licensee, and Licensee hereby accepts, a [*] license to make Licensed
Use of the Marks during the Term in the Territory.
2.2 Right to Authorize Others. Licensee shall have the full and complete
right and authority to authorize one or more Affiliates by agreement to make
Licensed Use of the Marks; provided, however, that such agreement is in a form
reasonably acceptable to DIRECTV. In the event that Licensee authorizes an
Affiliate to make Licensed Use of the Marks, Licensee shall be fully responsible
under this License for such person's activities or inactivities to the same
extent as though done or omitted by Licensee. Notwithstanding any such
authorization, DIRECTV shall look solely to Licensee to perform all obligations
undertaken by Licensee.
2.3 Restrictions. In each instance where the Marks are used, Licensee
shall conform its use as set forth in the DIRECTV Logo Guidelines attached
hereto as Exhibit B. Nothing contained in the DIRECTV Logo Guidelines shall be
interpreted to expand Licensee's rights to use any trademarks or logos other
than those set forth in Exhibit A. Licensee shall conduct all
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
activities hereunder so as to not knowingly violate any applicable laws in the
Territory or other relevant geographic area, and shall cause each person
authorized by Licensee, or acting by authority given another by or through
Licensee, to make Licensed Use of the Marks strictly and solely in accordance
with the terms of this License.
2.4 Reserved Right. All rights in and to the Marks not expressly granted
in this License to Licensee are reserved to DIRECTV. Licensee acknowledges and
agrees that DIRECTV reserves the right to use or authorize or license another to
use the Marks. DIRECTV shall have and retains the sole and exclusive right to
utilize itself or license parties to utilize the Marks in any manner not
inconsistent with the terms of this License.
2.5 Conditions. The license granted hereunder is expressly conditioned
upon Licensee's full and complete compliance with the applicable provisions of
the trademark laws of the United States and all other applicable laws which
affect the Licensed Use.
2.6 Duration of License. The Term of this License shall begin as of the
Execution Date and shall continue concurrently with the term of the Marketing
Agreement, unless earlier terminated. This License will automatically terminate
upon the termination of, for any reason, the Marketing Agreement.
2.7 Seconds. Licensee shall not offer for sale, sell, ship, advertise,
promote, market, distribute or use for any purpose whatsoever any DIRECTV/TIVO
Materials bearing the Marks which fails to meet any requirement of this License
or the Marketing Agreement. Further, Licensee shall not permit any third party
authorized by Licensee to make Licensed Use of the Marks to offer for sale,
sell, ship, advertise, promote, market, distribute or use for any purpose
whatsoever any DIRECTV/TIVO Materials bearing the Marks which fails to meet any
requirement of this License or the Marketing Agreement.
3. REVIEW OF DIRECTV/TIVO MATERIALS
Licensee shall provide to DIRECTV a representative sample of its
DIRECTV/TIVO Materials for DIRECTV's review and written approval prior to the
initial printing or publishing of such DIRECTV/TIVO Materials. DIRECTV shall
provide its approval or rejection of such DIRECTV/TIVO Materials within 10
business days. After Licensee has provided DIRECTV with such a representative
sample and obtained DIRECTV's written approval of such DIRECTV/TIVO Materials,
Licensee shall only be obligated to provide additional samples of such
DIRECTV/TIVO Materials in the event such DIRECTV/TIVO Materials substantially
differs from DIRECTV/TIVO Materials previously provided to DIRECTV or upon the
request of DIRECTV.
4. OWNERSHIP OF PROPRIETARY RIGHTS AND GOODWILL
4.1 Ownership. Licensee acknowledges that each Xxxx is a valuable asset
of DIRECTV. Licensee will at no time acquire or assert any claim of ownership
of, or any claim to, any goodwill or reputation associated with the Marks, or in
any derivation, adaptation or variation of any Xxxx. All use of each Xxxx by
Licensee shall inure to the benefit of DIRECTV. Licensee agrees that during the
Term and thereafter it will not attack the title or any rights of DIRECTV in and
to any Xxxx or the validity of this License.
3.
4.2 Use by Licensee. Licensee agrees that in using any Xxxx, it will not
in any way represent that it has any right, title or interest in the Marks other
than those expressly granted under this License. Licensee further agrees that it
will not use or authorize the use, either during or after the Term, of any
configuration, trademark, trade name or other designation confusingly similar to
the name of DIRECTV or any Xxxx. Licensee will not directly or indirectly
register or attempt to register, in any country or territory, any Xxxx or any
derivation or adaptation of any Xxxx, or any word, symbol or design which is so
similar to any Xxxx as to be likely to cause confusion as to any association
with, sponsorship by or approval of DIRECTV.
4.3 Modifications of Marks. Licensee shall not depart from the form of
the Marks set forth in Exhibit A. Licensee acknowledges that, from time to time,
it may be necessary or desirable for DIRECTV to modify or discontinue use of
certain elements of a Xxxx and correspondingly amend Exhibit A. Accordingly,
DIRECTV does not represent or warrant that any Xxxx or any element thereof will
be maintained or used by DIRECTV in any particular fashion.
5. INFRINGEMENT
DIRECTV, at its expense and at its sole and absolute discretion, may
commence or prosecute any claims or suits in its own name to protect any of its
rights in and to any Xxxx against infringement or appropriation by others not a
party to this License. Licensee shall promptly notify DIRECTV of any known or
suspected infringements or imitations by other persons of any Xxxx and shall
provide, to the extent reasonably obtainable by Licensee, information regarding
the identity of such persons and their activities and a sample or facsimile of
the product and/or any material which is suspected to infringe upon or imitate
the Xxxx. Licensee agrees to cooperate fully with and to assist DIRECTV in the
commencement and prosecution of such claims or suits with respect to Licensee's
use of the Marks, to the extent reasonably deemed necessary or desirable by
DIRECTV, provided, however, that DIRECTV shall reimburse Licensee for all
reasonable costs incurred in connection therewith. If such costs may include
Licensee's costs for its employees or other agents, Licensee shall notify
DIRECTV in advance and the parties shall negotiate in good faith a reasonable
apportionment of the costs for Licensee's employees and other agents. With
respect to all claims and suits initiated by DIRECTV to protect its proprietary
rights in any Xxxx, including suits in which Licensee is joined as a party,
DIRECTV shall have the sole right to employ counsel of its own choosing and to
direct the conduct and any settlement of the litigation. DIRECTV shall be
entitled to receive and retain all amounts awarded as damages, settlements,
profits or otherwise in connection with such claims or suits. Licensee agrees
not to contact any third party alleged infringer or imitator in order to make
any demands or claims, institute any suit, or take any other action in response
to such alleged infringement or imitation without first obtaining the prior
written permission of DIRECTV.
6. INDEMNIFICATION
6.1 Indemnification by License. Licensee hereby indemnifies and agrees
to defend and hold DIRECTV, and each and all of its respective parent,
Affiliates, and each and all of its officers, directors, employees, agents,
successors and assigns harmless from any claim or suit, liability, judgment,
damage, penalty, fee or litigation costs arising out of Licensee's breach under
4.
this License. DIRECTV agrees to reasonably cooperate with Licensee in the
defense of such action, provided that Licensee shall reimburse DIRECTV for its
reasonable out-of-pocket costs incurred in connection therewith. DIRECTV shall
have the right at its option to defend against any such claim with attorneys of
its selection at the expense of Licensee.
6.2 Indemnification by DIRECTV. DIRECTV hereby indemnifies and agrees to
defend and hold Licensee, and each and all of its respective parent, Affiliates,
and each and all of its officers, directors, employees, agents, successors and
assigns harmless from any claim or suit, liability, judgment, damage, penalty,
fee or litigation costs arising out of any claims of trademark infringement by
any third party based on Licensed Use of the Marks by Licensee. Licensee agrees
to promptly notify DIRECTV of any claim of trademark infringement by any third
party and DIRECTV shall defend Licensee, through attorneys of DIRECTV's
choosing, at no cost to Licensee. Licensee agrees to reasonably cooperate with
DIRECTV in the defense of such action, provided that DIRECTV shall reimburse
Licensee for its reasonable out-of-pocket costs incurred in connection
therewith. Licensee agrees to take no actions of any kind regarding such claim
without the express prior written approval of DIRECTV. DIRECTV shall have the
sole and absolute right to settle any such action and to negotiate and determine
settlement terms. Licensee shall take all steps reasonably necessary to mitigate
its damages incurred, including the removal of any Xxxx from any DIRECTV/TIVO
Materials involved. The remedy provided in this Section 6.2 shall be the sole
and entire remedy of Licensee, and DIRECTV shall not be responsible for any
other damages of any kind, including special or consequential damages or
projected lost sales or profit of Licensee or other expenditures of Licensee. If
less than all of the DIRECTV/TIVO Materials are affected by the action of the
third party, or activities in a specific geographic location are curtailed, then
this License shall be modified to the extent necessary to reflect the reduction
of products or the restriction as to geographic location.
7. DEFAULT AND TERMINATION
7.1 Default. Licensee's failure to observe the material provisions of
this License, including but not limited to Sections 2 and 3, shall constitute a
material breach. Upon any material breach, DIRECTV may give Licensee notice of
such breach and, in addition to any other legal or equitable remedies which it
may have, shall have the right to terminate this Agreement. Licensee shall have
[*] after the receipt of notice in which to cure any breach and shall notify
DIRECTV within [*] that Licensee intends to attempt a cure.
7.2 Termination. In the event this License is terminated, Licensee shall
immediately discontinue all use of the Marks and within [*] (a) deliver to
DIRECTV an inventory report indicating the number, location and description of
any remaining DIRECTV/TIVO Materials authorized hereunder, and (b) destroy all
DIRECTV/TIVO Materials at its sole cost; provided, however, that if such
termination is a result of DIRECTV's breaching its obligations hereunder, then
such destruction shall be at DIRECTV's sole cost. Licensee shall certify in
writing to DIRECTV that it has discontinued all use of the Marks and has so
destroyed all DIRECTV/TIVO Materials.
7.3 Expiration. Upon expiration of this Agreement, Licensee shall
immediately discontinue all use of the Marks and within [*] (a) deliver to
DIRECTV an inventory
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
5.
report indicating the number, location and description of any remaining
DIRECTV/TIVO Materials authorized hereunder, and (b) destroy all DER.ECTV/TIVO
Materials. Licensee shall certify in writing to DIRECTV that it has discontinued
all use of the Marks and has destroyed all DIRECTV/TIVO Materials.
8. INJUNCTIVE RELIEF
Licensee recognizes and acknowledges the great amount of goodwill and
secondary meaning associated with each Xxxx licensed under this License and
further acknowledges and admits that in the event Licensee violates any of the
terms of this License concerning or related to the use of any Xxxx; (a) D]RECTV
could not be adequately compensated for injury resulting therefrom by payment of
money damages; (b) DIRECTV would be irreparably injured by such violation; (c)
it would be difficult if not impossible to determine the resulting monetary
damages suffered by DIRECTV; and (d) injunctive relief would be appropriate to
prevent Licensee from performing any act constituting such a violation or
performing any other act tending to injure in any way the goodwill or secondary
meaning associated with any Xxxx.
9. INTERPRETATION
9.1 Applicable Law; Entire Agreement; Modification. The existence,
validity, construction, operation and effect of this License and the Exhibits
hereto shall be determined in accordance with, and be governed by, the laws of
the State of California (without reference to the choice of law provisions of
California). This License and the Exhibits hereto constitute the entire
agreement, whether written or oral, between the parties, and supersede all
previous understandings, commitments or representations concerning the subject
matter. Reference to "License," unless specifically set forth otherwise, shall
include this License and all Exhibits hereto. Each party acknowledges that the
other party has not made any representations other than those which are
specifically set forth herein. This License may not be amended or modified in
any way, and none of its provisions may be waived, except by a writing signed by
an authorized officer of the party against whom the amendment, modification or
waiver is sought to be enforced.
9.2 Benefit. This Agreement shall be binding on and shall inure to the
benefit of any and all Successors and permitted assigns of the parties.. Any
purported assignment by either party not in compliance with the provisions of
this Agreement shall be null and void and of no force and effect.
9.3 Illegality. If any provision of this License or any application
thereof, should be held by a court of competent jurisdiction to be illegal,
invalid, void or unenforceable, all provisions of this License and all
applications thereof not held illegal, invalid, void or unenforceable, shall
continue in full force and effect and shall in no way be affected, impaired or
invalidated by such holding. The parties intend that if any provision of this
License is capable of two constructions one of which would render the provision
void and the other of which would render the provision valid, then the provision
shall have the meaning which renders it valid.
9.4 Relationship of Parties. This License does not constitute and shall
not be construed as constituting a partnership or agency relationship between
DIRECTV and Licensee.
6.
Licensee shall have no right to obligate or bind DIRECTV in any manner
whatsoever and shall not hold itself out as having any such right. Nothing
contained in this License shall or is intended to give any rights of any kind to
any third person.
9.5 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT,
OCCASIONED BY ANY BREACH OF ANY OBLIGATION UNDER THIS AGREEMENT FOR ANY CAUSE
WHATSOEVER, WHETHER ARISING IN NEGLIGENCE OR OTHERWISE.
9.6 Counterparts. This License may be executed in several counterparts,
each of which shall be deemed an original, and all such counterparts together
shall constitute but one and the same instrument. The parties also agree that
this License shall be binding upon the faxing by each party of a signed
signature page thereof to the other party. If such a faxing occurs, the parties
agree that they will each also immediately post, by express or overnight
courier, a fully executed original counterpart of the Agreement to the other
party.
10. MISCELLANEOUS
10.1 Assignability and Sublicensing. This License is personal to Licensee
and none of the rights of Licensee hereunder shall be sold, transferred,
assigned or sublicensed by Licensee except as provided by this License and no
rights hereunder shall devolve by operation of law or otherwise upon any
assignee, receiver, liquidator, trustee, or other party. DIRECTV shall have the
right to assign any or all of its rights and obligations under this License
without the approval of Licensee, so long as the obligations of DIRECTV are
discharged by any such assignee and the assignment causes no additional
obligations to Licensee.
10.2 Waiver. The failure or delay of either party in enforcing any of its
rights under this License shall not be deemed a continuing waiver or
modification of this License, nor shall a waiver by either party of a breach or
default hereunder be deemed a waiver by such party of a subsequent breach or
default of like or similar nature. No waiver shall be effective against either
party unless it is in writing and signed by a duly authorized officer of such
party. Resort by either party to any remedies referred to in this License or
arising by reason of a breach of this License by either party shall not be
construed as a waiver by the acting party of its rights to any other legal or
equitable remedies available to it.
10.3 Survival of Rights. Notwithstanding anything to the contrary in this
License, the rights and obligations of DIRECTV and Licensee pursuant to Sections
4.1, 4.2, 6, 9 and 10 of this License shall survive any termination of this
License.
10.4 Dispute Resolution and Arbitration.
10.4.1 Initial Dispute Resolution. Any dispute or disagreement
between DIRECTV and Licensee arising out of this Agreement shall be resolved
according to the following dispute resolution procedure:
7.
(a) such dispute shall first be addressed to each party's
project manager (or other appropriate person as identified by the particular
party) for discussion and attempted resolution;
(b) if any such dispute is not resolved by such project
managers within five (5) business days from the date that either party gives
written notice that such dispute or disagreement exists, then such dispute shall
be immediately referred to the Vice President of Advanced Products, in the case
of DIRECTV, and to the Chief Executive Officer, in the case of Licensee, for
discussion and attempted resolution; and
(c) if the dispute is not resolved within five (5) business
days after such second-tier referral, it shall be referred to the Executive Vice
President, in the case of DIRECTV, and to the Chief Executive Officer, in the
case of Licensee.
10.4.2 Arbitration Procedures.
(a) Selection of Arbitrator. If a dispute is not resolved
to the mutual satisfaction of DIRECTV and Licensee, each in their respective
sole discretion, within five (5) business days (or such longer period as may be
mutually agreed upon) after the third-tier referral described in Section 10.4.1
(c), such dispute may be referred by either party to arbitration in Los Angeles,
California before one arbitrator in accordance with the Commercial Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association in
effect on the date that notice of such dispute was originally given. Unless
otherwise mutually agreed to in advance, the arbitrator shall be selected from a
panel of qualified arbitrators in accordance with the procedures of the
Arbitration Rules.
Hearing Procedures. Once appointed, the arbitrator shall designate a time
and place for a pre-hearing status conference not more than fourteen (14) days
from the date of their appointment, and shall appoint a time and place for a
final hearing not more than thirty (30) days from the date of the status
conference. The final hearing shall conclude no later than thirty (30) days
after its commencement. The party that demands arbitration of the unresolved
dispute or disagreement shall specify in writing the matter to be submitted to
arbitration. The arbitrator shall render a written decision setting forth an
award and stating with reasonable detail the reasons for the decision reached.
Any cash component of the award shall be payable in United States dollars
through a bank in the United States. Each party shall bear its own cost of
preparing for and presenting its case; and the cost of arbitration, including
the fees, and expenses of the arbitrator will be shared equally by DIRECTV and
Licensee.
(b) Enforcement. The arbitration award shall be final and
binding upon the parties and may be confirmed by the judgment of any court
having appropriate jurisdiction, including without limitation, California
courts. Notwithstanding the above, DIRECTV shall have the right to seek
injunctive relief, as provided in Section 8, in California or any other state or
federal court of competent jurisdiction to enforce its rights under this
License.
10.5 Notices. All notices and other communications from either party to
the other hereunder shall be in writing and shall be deemed received upon actual
receipt when personally delivered, upon acknowledgment of receipt if sent by
facsimile, or upon the expiration of the
8.
fifth business day after being deposited in the United States mails, postage
prepaid, certified or registered mail, addressed to the other party as follows:
To TIVO:
TIVO Inc.
000 Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
cc: General Counsel
To DIRECTV:
DIRECTV, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, XX 00000
Attn: Vice President, Advanced Products
Fax: (000) 000-0000
cc: Senior Vice President, Business Affairs
and General Counsel
Fax: (000) 000-0000
Witness Whereof, each of the parties hereto has duly executed and delivered
this Agreement as of the day and year first written above.
DIRECTV, INC. TIVO INC.
By:__________________________________ By:________________________________
Name:________________________________ Name:______________________________
Title:_______________________________ Title:_____________________________
9.
EXHIBIT A
MARKS APPROVED FOR USE IN DIRECTV/TIVO MATERIALS
A. Licensed Marks: The following trademarks are licensed for use by the above
Licensee pursuant to the Agreement with the Execution Date shown above:
1. DIRECTV
2. [LOGO HERE]
B. Prescribed Style: The Marks, when used in the approved medium, shall
conform to the following guidelines:
1. In text, the term "DIRECTV" shall be shown as typed capital letters.
2. In addition to the foregoing provisions, the DIRECTV Trademark Style and
Use Guidelines including those contained in Exhibit B (as may be amended by
DIRECTV), shall also govern the use of the Marks in DIRECTV/TIVO Materials.
1.
EXHIBIT B
DIRECTV LOGO GUIDELINES
1.
Schedule 2.5(b)
TIVO Xxxx License Agreement
1.
Schedule 5.1.2
Form of Promissory Note
PROMISSORY NOTE
$2,822,168.00 Los Angeles, California
April -, 1999
For valued received, DIRECTV, Inc., a California corporation ("DIRECT"),
whose address is 0000 Xxxx Xxxxxxxx Xxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000,
promises to pay to TIVO, INC., a Delaware corporation ("TIVO"), the principal
amount of Two Million Eight Hundred Twenty-Two Thousand One-Hundred Sixty-Eight
Dollars ($2,822,168.00), without interest on the date (the "Maturity Date") that
is 36 months after the Bandwidth Commencement Date (as defined in that certain
Marketing Agreement dated April _, 1999 by and between DIRECTV and TIVO (the
"Marketing Agreement")). The Maturity Date shall be extended from time to time,
automatically and without any action by DIRECTV or TIVO, by any amount of time
(i) during which DIRECTV preempts or interrupts the Bandwidth Capacity or
DIRECTV's obligation to provide the Bandwidth Capacity is suspended, in each
case pursuant to the last sentence of Section 3 of the Marketing Agreement, and
(ii) during the occurrence of any Event of Force Majeure (as defined in the
Marketing Agreement).
All payments under this Note shall be made to the TIVO or its order, in
lawful money of the United States of America at the offices of TIVO at its then
principal place of business or at such other place as TIVO shall designate in
writing for such purpose from time to time. Notwithstanding the foregoing, (i)
the principal amount of this Note shall be reduced, automatically and without
any action by DIRECTV and TIVO, by 1/36th of the original principal amount for
each full month of Bandwidth Capacity that is made available by DIRECTV to TIVO
as contemplated by Section 3 of the Marketing Agreement (whether or not such
Bandwidth Capacity is actually used by TIVO) between the date of this Note and
the Maturity Date; and (ii) in the event the Marketing Agreement is terminated
by DIRECTV pursuant to Section II of the Marketing Agreement, DIRECTV shall be
permitted, at its option, to repay the principal amount of this Note (A) in
cash; (B) using shares of Common Stock, par value $.01 per share, of TIVO
("Common Stock"), provided that the value of any such shares, determined as of
the date the Note is repaid, shall be (1) equal to the trading price per share
of Common Stock on the primary national securities exchange or automated
quotation system on which such Common Stock then is listed or trades, if any,
(2) if the Common Stock is not then so listed or traded, based on a valuation of
the Common Stock performed by an investment banking firm of nationally
recognized standing selected jointly by TIVO and DIRECTV, or (3) determined by
mutual agreement of DIRECTV and TIVO; (C) by making available for use by TIVO
commercial slots broadcast via the DIRECTV Service, which may be used by TIVO to
promote the TIVO Products and/or the TIVO Service (but without making reference
to DIRECTV or the DIRECTV Service) and shall be valued at the then-current
advertising rate card utilized by DIRECTV for its third party advertisers; or
(D) any combination of the above.
1.
This Note may be prepaid by DIRECTV in whole or in part at any time, after
two days' written notice of DIRECTV's intention to make any such prepayment,
which notice shall specify the date and amount of such prepayment. Any
prepayment shall be without penalty.
No waiver or modification of any of the terms of this Note shall be valid
or binding unless set forth in a writing specifically referring to this Note and
signed by duly authorized officers of DIRECTV and TIVO, and then only to the
extent specifically set forth therein.
The rights of DIRECTV and TIVO to assign their respective obligations under
this Note shall be the same as their respective rights under Section 12.1 of the
Marketing Agreement.
In the event that any one or more provisions of this Note shall be held to
be illegal, invalid or otherwise unenforceable, the same shall not affect any
other provision of this Note and the remaining provisions of this Note shall
remain in full force and effect.
This Note shall be governed by and construed in accordance with the laws of
the State of California, without giving effect to the principles thereof
relating to conflicts of law.
In Witness Whereof, DIRECTV has caused this Note to be duly executed the
day and year first above written.
DIRECTV, INC.
By:__________________________________________
Name:________________________________________
Title:_______________________________________
2.
Schedule 5.4
DIRECTV Investment Representations
1.1 Investment Representations. DIRECTV understands that the Shares have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"). DIRECTV also understands that the Shares are being offered
and sold pursuant to an exemption from registration contained in the Securities
Act, based in part upon DIRECTV's representations contained in this Marketing
Agreement. DIRECTV hereby represents and warrants as follows:
(a) DIRECTV Bears Economic Risk. DIRECTV has substantial experience
in evaluating and investing in private placement transactions of securities
in companies similar to TIVO so that it is capable of evaluating the merits
and risks of its investment in TIVO and has the capacity to protect its own
interests. DIRECTV must bear the economic risk of this investment
indefinitely unless the Shares are registered pursuant to the Securities
Act, or an exemption from registration is available. DIRECTV understands
that TIVO has no present intention of registering the Shares. DIRECTV also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available,
such exemption may not allow DIRECTV to transfer all or any portion of the
Shares under the circumstances, in the amounts or at the times DIRECTV
might propose.
(b) Acquisition for Own Account. DIRECTV is acquiring the Shares for
DIRECTV's own account for investment only, and not with a view towards
their distribution.
(c) DIRECTV Can Protect Its Interest. DIRECTV represents that by
reason of its, or of its management's, business or financial experience,
DIRECTV has the capacity to protect its own interests in connection with
the transactions contemplated in this Marketing Agreement. Further,
DIRECTV is aware of no publication of any advertisement in connection with
the transactions contemplated in this Marketing Agreement.
(d) Accredited Investor. DIRECTV represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.
(e) TIVO Information. DIRECTV has had an opportunity to discuss
TIVO's business, management and financial affairs with directors, officers
and management of TIVO. DIRECTV has also had the opportunity to ask
questions of and receive answers from, TIVO and its management regarding
the terms and conditions of this investment.
(f) Rule 144. DIRECTV acknowledges and agrees that the Shares must be
held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. DIRECTV
has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act, as in effect from time to time, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about TIVO, the resale
occurring following the
1.
required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.
(g) Residence. The office or offices of DIRECTV in which its
investment decision was made is located at the address or addresses of
DIRECTV set forth in Section 12.6 of this Marketing Agreement.
2.
Schedule 5.5
Anti-Dilution Protection
1. Adjustment for Preferred Stock Splits and Combinations.
If TIVO shall at any time or from time to time prior to a Qualified Public
Offering (as defined below) effect a subdivision of any outstanding series of
preferred stock of TIVO which is convertible into shares of Common Stock
("Preferred Stock") without a corresponding subdivision of the Common Stock, or
if TIVO shall at any time or from time to time prior to a Qualified Public
Offering combine the outstanding shares of Preferred Stock into a smaller number
of shares without a corresponding combination of the Common Stock, TIVO shall
take action to cause each Share then outstanding to be proportionately
subdivided or combined. Any adjustment under this Paragraph I shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
2. Adjustment for Dividends and Distributions Payable in Common Stock.
If TIVO at any time or from time to time prior to a Qualified Public
Offering makes, or fixes a record date for the determination of holders of
Preferred Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, TIVO shall take action to cause the holders
of the Shares to receive on account of each Share then outstanding as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, an additional number of shares of Common
Stock that is equal to the number of shares of Common Stock payable on account
of each share of Common Stock into which such Preferred Stock is convertible;
provide , however, that if such record date is fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor,
such additional shares of Common Stock shall not be issued and instead the
number of shares of Common Stock payable shall be adjusted pursuant to this
Paragraph 2 to reflect the actual payment of such dividend or distribution.
3. Adjustments for Other Dividends and Distributions Payable in Other
Securities of TIVO.
If TIVO at any time or from time to time prior to a Qualified Public
Offering makes, or fixes a record date for the determination of holders of
Preferred Stock entitled to receive, a dividend or other distribution payable in
securities of TIVO other than shares of Common Stock, TIVO shall take action to
cause the holders of the Shares to receive on account of each Share the amount
of other securities of TIVO that is equal to the amount of other securities of
TIVO payable to holders of Preferred Stock on account of each share of Common
Stock into which such Preferred Stock is convertible; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, such other securities
of TIVO shall not be issued and instead the number of other securities of TIVO
payable shall be adjusted pursuant to this Paragraph 3 to reflect the actual
payment of such dividend or distribution.
4. Additional Issuances of Common Stock.
1.
If TIVO shall at any time or from time to time prior to a Qualified Public
Offering issue Additional Shares of Common Stock (as defined below) at an
Effective Price (as defined below) less than the then Current Market Value (as
defined below) of the Common Stock, TIVO shall cause the holders of the Shares
to receive a number of additional shares of Common Stock determined in
accordance with the formula:
A
N=( C x ( --------------- ))- C
P
O +=( ---)
M
where:
N = Number of additional shares of Common Stock to be issued under
this Paragraph 4.
C = Number of shares of Common Stock issued to DIRECTV on the date of
this Agreement.
A = the number of Fully Diluted Shares (as defined below) outstanding
immediately after the issuance of such Additional Shares of
Common Stock.
O = the number of Fully Diluted Shares outstanding immediately prior
to the issuance of such Additional Shares of Common Stock.
P = the aggregate consideration received for the issuance of such
Additional Shares of Common Stock.
M = the Current Market Value (as defined below) per share of Common
Stock.
5. Definitions.
(a) "Additional Shares of Common Stock" shall mean shares of Common Stock
or Preferred Stock, or securities convertible into or with rights to purchase
Common Stock or Preferred Stock, issued by TIVO, whether or not subsequently
reacquired or retired by TIVO other than (A) shares of Common Stock issued upon
conversion of outstanding shares of TIVO's Preferred Stock; (B) up to 6,500,000
shares of Common Stock and/or options, warrants or other Common Stock purchase
rights, and the Common Stock issued pursuant to such options, warrants or other
rights (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like) to employees, officers or directors of, or
consultants or advisors to TIVO pursuant to stock purchase or stock option plans
or other arrangements that are approved by TIVO's Board of Directors; (C) shares
of Common Stock or Preferred Stock, or securities convertible into or with
rights to purchase Common Stock or Preferred Stock, issued in connection with
acquisition transactions, where such transactions have been approved by the
Board of Directors of TIVO (D) shares of Common Stock or Preferred Stock, or
other securities
2.
convertible into or with rights to purchase shares of Common Stock or Preferred
Stock, issued to financial and other institutions, lessors or vendors of TIVO in
connection with the provision of credit to TIVO; and (E) any shares of, or
securities convertible into, TIVO's Common Stock or Preferred Stock issued in
connection with strategic transactions involving TIVO and other entities,
including (i) joint ventures, manufacturing, marketing or distribution
arrangements or (ii) technology transfer or development arrangements (provided
that such strategic transactions and the issuance of shares therein, has been
approved by the Board of Directors of TIVO).
(b) "Current Market Value" per share of Common Stock at any date shall be
the value of the Common Stock determined in good faith by the Board of Directors
of TIVO and certified in a board resolution, after giving due consideration to
the valuation and pricing in TIVO's most recently completed arm's length equity
financing transactions, TIVO's financial position and progress in developing its
products and services, the exercise price as approved by the Board of Directors
of TIVO for the most recent option grants pursuant to TIVO's stock purchase or
stock option plans or other arrangements, the existence and strength of
competitors to TIVO's products and services, TIVO's progress in achieving
milestones in developing its products and services, TIVO's progress in
establishing strategic partnerships for the manufacturing, development and
marketing of its products and services, and the lack of a public market for
TIVO's securities; provide that, if DIRECTV disputes the valuation determined by
the Board of Directors of TIVO, such valuation shall be conclusively determined
by an investment banking firm of nationally recognized standing selected jointly
by DIRECTV and TIVO and compensated by TIVO.
(c) The "Effective Price" of Additional Shares of Common Stock shall mean
the quotient determined by dividing (i) the aggregate consideration received, or
deemed to have been received by TIVO for such issuance under this Section, for
such Additional Shares of Common Stock by (ii) total number of Additional Shares
of Common Stock issued or sold, or deemed to have been issued or sold by TIVO
under this Section.
(d) "Fully Diluted Shares" shall mean (i) shares of TIVO Common Stock
outstanding as of a specified date, and (ii) shares of TIVO Common Stock into or
for which rights, options, warrants or other securities outstanding as of such
date are exercisable or convertible.
(e) "Qualified Public Offering" shall mean a firmly underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of TIVO in which (i) the per share price is at least Five Dollars
($5.00) per share (as adjusted for stock splits, combinations and similar
events) and (ii) the gross cash proceeds to TIVO (before underwriting discounts,
commissions and fees) are not less than $15,000,000.
3.
Schedule 6
DIRECTV/TIVO Combo Receiver Minimum Criteria
1. Joint Development of User Interface
. The parties agree to work together in good faith to define a common
user interface design for the DIRECTV/TIVO Combo Receiver.
. The parties agree to work together in good faith to ensure software
and service compatibility between the TIVO Service and DIRECTV
Service.
. TIVO agrees that DIRECTV/TIVO Combo Receiver will be enabled such that
the DIRECTV Service (and related user interface) appears first to the
consumer.
. The TIVO Service (and related user interface) will be enabled as an
option to the DIRECTV Service.
. The parties agree to work together in good faith to develop
appropriate branding and attribution in each of the DIRECTV Service
and TIVO Service; provide that TIVO agrees that (1) DIRECTV may, at
its option, use "Personal TV" or "Personal TV Service" when referring
to the optional TIVO Service, and (2) the initial user interface for
the TIVO Service will incorporate a DIRECTV on-screen appearance in a
manner that is acceptable to DIRECTV.
. DIRECTV will retain complete control of the content, services,
features, look and feel of the DIRECTV Service, including the
functionality necessary to operate all facets of the DIRECTV Service.
. Subject to Section 2 below, TIVO will retain complete control of the
content, services, features, look and feel of the TIVO Service,
including the functionality necessary to operate all facets of the
TIVO Service.
. Any changes in the overall user interface will involve the
participation of both parties.
2. Promotional Showcases
. As part of the TIVO Service, TIVO currently intends to promote and
deliver 64 promotional showcases" on the TIVO Service. "Promotional
showcases" consist of short-duration, promotional spots or
advertisements offered on the TIVO Service highlighting selected
programming offered on premium and other networks.
. TIVO shall have exclusive control over the timing, duration, placement
and content of promotional showcases which are not delivered using the
Bandwidth Capacity provided pursuant to Section 3 of the Marketing
Agreement, subject to the standards set forth in Sections 2.1.5(a),
(b), (c) and (d) of the Marketing Agreement.
1.
. If TIVO uses the bandwidth provided pursuant to Section 3 of the
Marketing Agreement to deliver such promotional showcases:
- TIVO shall have the right to control the timing, duration,
placement and content of all such promotional showcases
subject to (i) DIRECTV's right to require TIVO to make any
change in the timing, duration, placement or content which
DIRECTV determines to be necessary in its sole discretion
and (ii) the standards set forth in Sections 2.1.5(a), (b),
(c) and (d) of the Marketing Agreement.
- DIRECTV shall have the right to prohibit or restrict any
such promotional showcases which DIRECTV determines in its
sole discretion may be detrimental to DIRECTV's business.
. TIVO will provide to DIRECTV [*] promotional showcase on the showcase
portion of the joint user interface (with links to multiple
promotional showcases promoting DIRECTV programming), which may be
used by DIRECTV to promote DIRECTV programming. DIRECTV will use
additional bandwidth capacity on a DIRECTV Satellite (and not the
Bandwidth Capacity made available to TIVO pursuant to Section 3 of the
Marketing Agreement) to provide the programming content for such
promotional showcases. DIRECTV shall not pay for [*] but shall pay for
[*].
. TIVO shall keep DIRECTV reasonably informed of upcoming promotional
showcases in order to allow DIRECTV to manage its promotional
programming and avoid conflicting or competitive promotional product
. DIRECTV shall have the right to have any networks designated by
DIRECTV promoted via TIVO showcases at rates paid to TIVO that are
equal or better than rates actually charged to any of TIVO's third
party customers.
3. Functionality
. The DIRECTV/TIVO Combo Receiver shall be developed in a manner that
will allow a customer who owns a DIRECTV/TIVO Combo Receiver to (i)
receive high quality uninterrupted DIRECTV Service and (ii) use the
"live pause," "fast-forward" and "rewind" features of the DIRECTV/TIVO
Combo Receiver, in each case whether or not such customer subscribes
to the TIVO Service.
4. Technical Specifications
. The DIRECTV/TIVO Combo Receiver shall conform to DIRECTV technical
specifications, as such specifications may be amended by DIRECTV from
time to time.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
