Exhibit 10.7
Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as [*]. A complete
version of this exhibit has been filed separately with the Securities
and Exchange Commission.
TIVO INC. TECHNOLOGY LICENSE AGREEMENT
This TiVo Inc. Technology License Agreement (the "Agreement") is entered
into as of October 12, 2001 (the "Effective Date") by and between Sony
Corporation, a Japanese corporation having its principal place of business at
0-0-00 Xxxxxxxxxxxxx, Xxxxxxxxx-xx, Xxxxx 000-0000 ("Sony"), and TiVo Inc., a
Delaware corporation having its principal place of business at 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000 ("TiVo").
Recitals
Whereas, TiVo has developed certain technology that enables, among other
functionality, one touch recording, pausing, rewinding and slow-motion viewing
of television programming;
Whereas, Sony desires to (a) license such technology for use in (i) devices
manufactured by or on behalf of Sony and its authorized sublicensees for use
with services offered by or on behalf of Sony or TiVo and (ii) services offered
by or on behalf of Sony, and (b) obtain certain services of TiVo qualified
engineers in order to assimilate such technology into such devices and/or
services; and
Whereas, TiVo is willing to license such technology to Sony and provide
such engineering services on the terms and conditions set forth in this
Agreement.
Now, Therefore, in consideration of the foregoing and the mutual covenants,
promises and undertakings set forth in this Agreement, Sony and TiVo agree as
follows:
Agreement
1. Definitions. The capitalized terms in this Agreement shall have the following
meaning:
1.1 "Acceptance Period" shall mean (a)[ * ] days after the receipt by Sony
of each of the Manufacturing Release of the TiVo Client Interim Release [*]and
TiVo Server Interim Release[ * ] (b)[ * ] days after the receipt by Sony of each
of the TiVo Client [ * ]and TiVo Server[ * ] and (c)[ * ] days after the receipt
by Sony of each TiVo Client Upgrade and TiVo Server Upgrade.
1.2 "Affiliate" shall mean any solvent entity in which either party, either
directly or indirectly, at any time during the term of the licenses in Section 2
(License Grants) (a) holds one hundred percent (100%) of the issued shares of
voting stock (or similar indicia of ownership); or (b) has the power to exercise
one hundred percent (100%) of the voting rights. An Affiliate shall cease to be
an Affiliate on the date that it no longer meets the criteria set forth above.
Each Party acknowledges and agrees that any breach of this Agreement by an
Affiliate of a Party shall be deemed a breach by such Party. Notwithstanding the
foregoing criteria, Sony and TiVo may
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
1
mutually agree that certain of Sony's[*] Affiliates will be treated as and
receive the benefits and rights of "Affiliates" under this Agreement. TiVo
agrees that it will discuss such matter with Sony in good faith. Additionally,
the parties agree that TiVo International shall be considered an Affiliate of
TiVo for all purposes under this Agreement.
1.3 "Authorized Personnel" shall mean any (a) employees of Third Parties,
which employees have agreed in writing to the nondisclosure obligations and
restrictions on use contained in Exhibit B (Secure Procedures for Handling TiVo
Source Code); (b) Sony employees, who have agreed to be bound by nondisclosure
obligations and restrictions no less restrictive than those contained in Exhibit
B (Secure Procedures for Handling TiVo Source Code); or (c) employees of any
Sony Source Code Affiliate, who have agreed to be bound by nondisclosure
obligations and restrictions no less restrictive than those contained in Exhibit
B (Secure Procedures for Handling TiVo Source Code), all of the foregoing in
(a), (b) and (c) that are permitted to receive information related to any Source
Code that TiVo provides to Sony under the terms of this Agreement ("TiVo Source
Code"). Sony agrees that for purposes of this Section 1.3 (Authorized
Personnel), Third Parties located in Japan shall be companies or divisions of
companies whose primary business is providing contract engineering and software
development services for others (e.g., Dr. Design) and shall not include any
companies or divisions of companies who offer or provide products or services
that compete with the TiVo Service or products incorporating TiVo's Personal
Digital Recording Technology. For purposes of this Section 1.3 (Authorized
Personnel), Third Parties located outside Japan shall be companies whose primary
business is providing contract engineering and software development services for
others (e.g., Dr. Design) and shall not include any companies who offer or
provide products or services that compete with the TiVo Service or products
incorporating TiVo's Personal Digital Recording Technology. Sony shall provide
TiVo with written notice of any Third Party to whom Sony or a Sony Source Code
Affiliate provides access to TiVo Source Code and shall, upon TiVo's request,
provide copies of the nondisclosure agreements signed by the individuals of such
Third Party. If Sony wishes to confirm that a Third Party is in this category it
shall provide written notice of such proposed disclosure to TiVo, and if TiVo
fails to object to such disclosure in writing within [ * ] business days of such
notice from Sony, Sony may disclose the TiVo Source Code to such Third Party, as
applicable. Any breach of the confidentiality and use restrictions in Exhibit B
(Secure Procedures for Handling TiVo Source Code) by employees of any Sony
Source Code Affiliates or Third Party provided with access to the TiVo Source
Code hereunder, shall be deemed to be a breach by Sony. The Authorized Personnel
shall use the TiVo Source Code solely on premises owned or leased by or
otherwise under the direct control of Sony or a Sony Source Code Affiliate.
1.4 "ASP Services" shall mean data provisioning, content delivery, and
other backend services that support Sony Products or CE Sublicensee Products
similar in type and scope to the TiVo Service then being provided by TiVo in the
United States.
1.5 "CE Sublicensee" shall mean a Third Party (a) whose headquarters are
located in Japan; (b) whose primary business is that of either (i)
manufacturing, offering and providing consumer electronics products, or (ii)
offering and providing consumer services; (c) who have
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
2
executed a CE Sublicense Agreement; and (d) who is identified in the list of
potential CE Sublicensees is set forth on Exhibit I (CE Sublicensees), which may
be amended by the agreement of both parties (with consent to such amendments not
being unreasonably withheld or delayed by either party).
1.6 "CE Sublicense Agreement" shall mean the executed agreement between
Sony and the CE Sublicensee, which governs such CE Sublicensee's use of the TiVo
Technology. The minimum terms of such CE Sublicense Agreements are set forth in
Exhibit C (Minimum Terms and Conditions for Sublicense Agreements).
1.7 "CE Sublicensee Products" shall mean products developed by a CE
Sublicensee incorporating all or any part of the TiVo Technology and marketed
under either the CE Sublicensee's brand, a MSO's brand or co-branded between the
CE Sublicensee and a MSO. For the avoidance of doubt, CE Sublicensee Products
shall not include products manufactured by or for a CE Sublicensee for
distribution or sale under an original equipment manufacturer (OEM) relationship
but may include products that are manufactured by a CE Sublicensee under the
brand of a MSO.
1.8 "Claim" shall mean any of the following: liabilities, damages,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including reasonable attorney's fees and court costs).
1.9 "Client Technology Documentation" shall mean the documentation that
TiVo provides to Sony related to the TiVo Client Technology.
1.10 "Confidential Information" shall mean any proprietary and/or
non-public information that one party (the "Disclosing Party") discloses or
makes available to the other party (the "Receiving Party"), which the Receiving
Party knows or has reason to know is considered confidential by the Disclosing
Party. Confidential Information includes, without limitation, Source Code,
hardware, trade secrets, know-how, formulas, flow charts, diagnostic routines,
business information, forecasts, financial plans and data, customer information,
marketing plans, the TiVo Technology and unannounced product information. For
purposes of this Agreement, Confidential Information also includes all such
information disclosed between the parties in the course of negotiating this
Agreement, and the letter of intent that preceded this Agreement and the Interim
Services Agreement. Confidential Information shall exclude information the
Receiving Party can demonstrate by reasonably detailed written documentation:
(a) was independently developed by the Receiving Party without any use of the
Disclosing Party's Confidential Information or by the Receiving Party's
employees or other agents (or independent contractors hired by the Receiving
Party) who have not been exposed to the Disclosing Party's Confidential
Information at the time that such development occurred; (b) became known to the
Receiving Party, without restriction, from a source (having a right to disclose
such information) other than the Disclosing Party without breach of this
Agreement; (c) was in the public domain at the time it was disclosed or enters
the public domain through no act or omission of the Receiving Party; (d) was
rightfully known by the Receiving Party, without restriction, at the time of
disclosure; (e) was approved for disclosure by the Disclosing Party beforehand
and in writing; or (f) was disclosed by Disclosing Party to a competitor of
Receiving Party without obligations of confidentiality.
3
1.11 "End User" shall mean an individual consumer who purchases a product
for such consumer's own personal use and not for resale or further distribution.
1.12 "End User License Agreement" shall mean the agreement between Sony,
its Affiliate or a CE Sublicensee (or any of such party's MSOs) and the End
User, which governs such End User's use of the TiVo Technology as incorporated
in a Sony Product or a CE Sublicensee Product. The minimum terms of such End
User License Agreements are set forth in Exhibit D (Minimum Terms and Conditions
for End User Agreements).
1.13 "GAAP" shall mean the then current applicable Generally Accepted
Accounting Principles in the United States consistently applied as recognized or
accepted by the United States Securities and Exchange Commission and the
Financial Accounting Standards Board. As used herein, "GAAP" shall also include
cost accounting principles that are generally accepted in the United States.
1.14 "Improvements" shall mean any and all adaptations, customizations,
modifications, revisions, improvements, enhancements, and any other developments
derived from or based on all or any portion of the TiVo Technology including,
without limitation, any derivative works of any copyrightable material therein,
as defined by the Copyright Law of the United States of America, Title 17 U.S.C.
Section.101 et seq.
(a) "Sony Improvements" shall mean any Improvements that are developed
solely by or for Sony or its Affiliate, without any assistance from TiVo.
(b) "TiVo Improvements" shall mean any Improvements that are developed
solely by or for TiVo or its Affiliate, without any assistance from Sony, and
which do not otherwise meet the definition of Joint Innovations.
[*]
1.15 "Innovations" shall mean any processes, machines, compositions of
matter, improvements, inventions (whether or not protectable under patent laws),
works of authorship, information fixed in any tangible medium of expression
(whether or not protectable under copyright laws), moral rights, mask works,
trademarks, trade names, trade dress, trade secrets, know-how, ideas (whether or
not protectable under trade secret laws), and all other subject matter
protectable under patent, copyright, moral right, mask work, trademark, trade
secret or other laws, and includes without limitation all new or useful art,
combinations, discoveries, formulae, manufacturing techniques, technical
developments, discoveries, artwork, software, and designs.
1.16 "Interim Services Agreement" shall mean the agreement entered into by
Sony and TiVo on August 10, 2001 relating to certain engineering services to be
provided by TiVo for Sony.
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4
1.17 "Joint Innovations" shall mean [*]Innovations [ * ]of the engineering
services to be provided under Section 7 (TiVo Engineering Services) or the
Interim Services Agreement, either [ * ]or[ * ] employ.
1.18 "License Fee" shall mean the [ * ]license fee in the amount of[ * ]
that Sony is to pay to TiVo under the terms of Section 6.1 (License Fee).
1.19 "Majority-Owned Affiliate" shall mean any entity in which a party,
either directly or indirectly, at any time during the Term, controls, is under
common control or is controlled by such party. For the purposes of this
definition, control means ownership or the ability to control, directly or
indirectly, fifty percent (50%) or more of the securities that have the right to
elect the Board of Directors or similar management group of the entity. A
Majority-Owned Affiliate shall cease to be a Majority-Owned Affiliate on the
date that it no longer meets the criteria set forth above. Each Party
acknowledges and agrees that any breach of this Agreement by a Majority-Owned
Affiliate shall be deemed a breach by such Party.
1.20 "Manufacturing Release" shall mean the version of TiVo Technology that
(a) has passed TiVo's quality assurance tests [ * ]to be conducted by TiVo with
respect to such TiVo Technology); (b) performs in all respects in accordance
with the Post Build Test Criteria; (c) has been determined by TiVo to be
suitable for use in and distribution to TiVo's consumer network using Personal
Digital Recording Technology; and (d) would otherwise be available for
distribution by TiVo through a general release as part of the TiVo Service.
1.21 "Material CE Sublicensee Breach" shall mean the following breaches by
a CE Sublicensee of the CE Sublicense Agreement: (a) [ * ]material breach of the
confidentiality obligations; or (b) a Repeated Breach of[ * ] any combination of
the foregoing.
1.22 "Material Sony Breach" shall mean the following breaches of this
Agreement by Sony or its Affiliate: (a) a material breach of the Source Code
license grants or restrictions in Section 2 (License Grants); (b) [ * ]material
breach of the [ * ] (iii) any combination of the foregoing.
1.23 "MSO" shall mean an entity owning or operating one or more wireline,
wireless, or satellite distribution systems providing video programming to
subscribers.
1.24 "Object Code" shall mean computer programming code substantially in
binary form that is directly executable by a computer after processing, but
without compilation or assembly.
1.25 "Personal Digital Recording Technology" shall mean client-based and
server-based technology that enables (a) one touch recording, pausing, rewinding
and slow motion viewing of television programming; (b) the delivery of program
schedule, content and other information to consumer devices; and (c) the
updating and revision management of software installed on consumer devices.
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
5
1.26 "Post Build Test Criteria" shall mean the criteria used by TiVo to
verify that the TiVo Client Technology and the TiVo Server Technology function
properly and meet TiVo's quality assurance metrics for Manufacturing Release.
All Post Build Test Criteria shall be (a) of reasonable detail, and (b)
consistent with the sample attached hereto as Exhibit T (Post Build Test
Criteria).
1.27 "Qualifying Revenue" shall mean the revenue of a given entity from the
sale, license or provision of services relating to video, as consolidated at the
top most parent level, plus a pro rata share of the revenue of subject entities
that are not so consolidated in which the given entity has an "economic
interest" (whether directly or indirectly, including, without limitation,
ownership of the right to receive a share of the revenue, profits, dividends or
capital appreciation of an entity) based on the percentage of "economic
interest" of the given entity in the subject entity.
1.28 "Repeated Breach" shall mean [*]or more
----------------------
material breaches of this Agreement by Sony or its Affiliate, or of a CE
Sublicense Agreement by a CE Sublicensee; within any twelve (12) month period
(without giving effect to cure periods); provided, however, that an allegation
of a material breach that is determined not to be true or substantiated by a
court of competent jurisdiction or arbitral panel (if arbitration is mutually
agreed to by the parties) shall not constitute a material breach for purposes of
determining whether a Repeated Breach has occurred. In order for any breach of
this Agreement by Sony or its Affiliate, or any breach of a CE Sublicense
Agreement by a CE Sublicensee, to constitute a Repeated Breach, TiVo must
provide Sony with a written notice identifying the alleged breach and reasonable
evidence of such breach. [ * ]
1.29 "Royalty[ * ]" shall mean [ * ]or the [ * ] amount as set forth below.
In the event that Sony does not [ * ]of the TiVo Client Technology and [ * ]of
the TiVo Server Technology [ * ]collectively[ * ] on or before [ * ]then the
Royalty [ * ]shall [ * ]for a Royalty [ * ]of [ * ]In the event that Sony does[
* ] but does not [ * ]TiVo Client [ * ]and TiVo Server [ * ]on or before [ *
]then the Royalty [ * ]shall [ * ]for a Royalty [ * ]For purposes of this
Section 1.29 [ * ]Royalty [ * ]an[ * ] is a [ * ]of the applicable [ * ]that
Sony [ * ] pursuant to the [ * ]For clarity, except as provided below, (a) if
Sony [ * ]on or before the dates set forth above, then the Royalty [ * ]or (b)
if Sony [ * ]on or before[ * ] but does [ * ]in the [ * ]on or before[ * ] then
the Royalty [ * ]The [ * ]in the Royalty[ * ] provided herein are Sony's [ * ]in
the event[ * ] as the case may be.
1.30 "Royalty Report" shall mean a report containing (a) a list of all CE
Sublicensees of the TiVo Client Technology and the license fees and/or royalties
Sony receives under each CE Sublicense Agreement; (b) the number of all CE
Sublicensee Products at the time a royalty accrues to Sony but no later than the
time of shipment or transfer to either a Third Party or a retail store owned by
such CE Sublicensee (whichever occurs first) identified by CE Sublicensee and
the CE Sublicensee's product identifier (such as model number); (c) a list of
all CE Sublicensees of the TiVo Server Technology and the license fees and/or
royalties Sony receives for each CE Sublicense Agreement; (d) the number of all
Sony Video Recording Devices
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
6
shipped or otherwise transferred to either a Third Party or a retail store owned
by Sony or its Affiliates (whichever occurs first) for sale and use within a
TiVo Service Area and the Sony product identifier (such as model number); and
(e) the number of all Sony Video Recording Devices shipped or otherwise
transferred to either a Third Party or a retail store owned by Sony or its
Affiliates (whichever occurs first) intended for sale and use outside a TiVo
Service Area and, if reasonably possible at no additional charge to Sony,
whether such product was shipped for sale in Europe, the Americas or Asia, and
Sony's product identifier (such as model number).
1.31 "Server Technology Documentation" shall mean the documentation and
other specifications TiVo provides to Sony related to the TiVo Server
Technology.
1.32 "Sony Primary Affiliates" shall mean the following Affiliates of Sony:
Sony Electronics Inc. and Sony Europe GmbH.
1.33 "Sony Products" shall mean products including, without limitation,
Sony Video Recording Devices, developed by or for Sony or its Affiliates (a)
incorporating all or any portion of the TiVo Client Technology; and (b) either
marketed under the brand of Sony or its Affiliates, under a MSO brand, or
co-branded with any combination of the foregoing. Except with respect to the
sale of Sony Products under a MSO's brand or a co-branded product (as described
above), for the avoidance of doubt, Sony Products shall not include products
manufactured by or for Sony or its Affiliates for distribution or sale under an
original equipment manufacturer (OEM) relationship.
1.34 "Sony Source Code Affiliates" shall mean the following Affiliates of
Sony: [*]
1.35 "Sony Video Recording Device" shall mean a Video Recording Device
developed by or for Sony or its Affiliates (a) incorporating all or any portion
of the TiVo Client Technology; and (b) either marketed under the brand of Sony
or its Affiliates, under a MSO brand, or co-branded with any combination of the
foregoing. Except with respect to sale of Sony Video Recording Devices under
MSO's brand or a co-branded product (as described above), for avoidance of
doubt, Sony Video Recording Devices shall not include products manufactured by
or for Sony or its Affiliates for distribution or sale under an original
equipment manufacturer (OEM) relationship.
1.36 "Source Code" shall mean computer programming code and all associated
header files that may be displayed in a form readable and understandable by a
programmer of ordinary skill including any related source code level system
documentation, comments and procedural code, such as job control language and
which requires further compilation or other processing to be executed by a
computer.
1.37 "Taxes" shall mean any sales, use, excise, import or export,
value-added or similar tax or duty, and any other tax, including any penalties
and interest, and all government permit or license fees and all customs and
similar fees and any costs associated with the collection or withholding of any
of the foregoing items.
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
7
1.38 "Term" shall mean seven (7) years after the Effective Date unless
earlier terminated in accordance with Section 13 (Term and Termination).
1.39 "Third Party" shall mean any entity or individual (including
Majority-Owned Affiliates of each party, unless a Majority-Owned Affiliate of
Sony is deemed an Affiliate pursuant to Section 1.2 (Affiliate)) other than
Sony, TiVo or their respective Affiliates.
1.40 "Third Party Technology" shall mean any software, components, parts,
subassemblies or technology owned or controlled by a party other than TiVo (or
its Affiliates) and specified on Exhibit E (Third Party Technology), as may be
amended from time to time in accordance with the terms of Section 2.3 (Third
Party Technology), which may be incorporated or referenced in, or required for
use of, the TiVo Technology.
1.41 "TiVo Client Technology" shall mean the TiVo Client Initial Release,
TiVo Client Interim Releases, TiVo Client[*] and, if licensed by Sony, TiVo
Client Upgrades, along with any pre-release versions that may be provided by
TiVo from time to time. TiVo shall provide any and all software components of
the TiVo Client Technology to Sony in Source Code form.
(a) "TiVo Client Initial Release" shall mean the software, hardware
reference design, and other TiVo Client Technology components of the Personal
Digital Video Recording Technology owned by TiVo or its Affiliates, as described
in more detail in Exhibit A (TiVo Technology) as it exists on the Effective
Date. As such, the TiVo Client Initial[ * ] Release.
(b) "TiVo Client Interim Releases" shall mean (a) the[ * ] of the
software, hardware reference design, and other TiVo Client Technology components
of the Personal Digital Recording Technology owned by TiVo or its Affiliates, as
described in more detail in Exhibit A (TiVo Technology), and to be delivered to
Sony pursuant to Exhibit A (TiVo Technology); and (b)[ * ] of the[ * ] hardware
reference design and other TiVo Client Technology components of the Personal
Digital Recording Technology owned by TiVo or its Affiliates, as described in
more detail in Exhibit A (TiVo Technology), and to be delivered to Sony pursuant
to Exhibit A (TiVo Technology). [ * ]of the software shall not be a[ * ], but
shall [ * ]In the event that TiVo makes available for general release a version
of the TiVo Client Technology between [ * ]other than those described above,
TiVo shall [ * ]and [ * ]in "[ * ]for all purposes of this Agreement.
(c) "TiVo Client[ * ]" shall mean the [ * ]of [ * ] of the software,
hardware reference design, and other TiVo Client Technology components of the
Personal Digital Recording Technology owned by TiVo or its Affiliates (which
shall include a[ * ]), as described in more detail in Exhibit A (TiVo
Technology), and to be delivered to Sony pursuant to Exhibit A (TiVo
Technology).
(d) "TiVo Client Upgrades" shall mean any TiVo Improvements to TiVo
Client [ * ] owned by TiVo or its Affiliates that are made available by TiVo or
its Affiliates for general
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8
release to its Third Party licensees or distributed by TiVo through a general
release to its network of existing personal digital video recorders.
1.42 "TiVo[ * ]" shall mean a Sony Video Recording Device[*].
1.43 "TiVo International" shall mean a subsidiary of TiVo formed under the
name "TiVo International, Inc."
1.44 "TiVo Marksshall mean the trademarks, service marks, trade names and
logos of TiVo, specifically set forth in Exhibit G (TiVo Marks). This Exhibit G
(TiVo Marks) may be amended upon the written agreement of the parties.
1.45 "TiVo Patent Rights" shall mean all of the following to the extent
claiming, covering or encompassing any invention or other subject matter
applicable to the TiVo Technology, which are owned by TiVo or its Affiliates:
(a) all patents, utility models, certificates of invention and other
governmental grants for the protection of inventions anywhere in the world and
all reissues, renewals, re-examinations and extensions thereof (based on the
patent applications described in Section 1.45(b)); (b) all patent applications
filed within five (5) years of the Effective Date; (c) all applications for any
of the foregoing including without limitation any international, provisional,
divisional, continuation, continuation-in-part, and continuing prosecution
applications; and (d) all rights in, arising out of, or associated with any of
the foregoing anywhere in the world.
1.46 "TiVo Proprietary Rights" shall mean any and all intellectual property
rights, excluding trademark, service xxxx, domain name and TiVo Trade Dress
rights, arising under statutory or common law and whether or not perfected,
owned, in whole or in part, by TiVo or its Affiliates including, without
limitation, all (a) TiVo Patent Rights; (b) rights associated with works of
authorship, including copyrights and moral rights; (c) mask work rights; (d)
trade secrets and Confidential Information; and (e) rights analogous to those
set forth in this definition and any other intellectual property rights.
1.47 "TiVo Service" shall mean the personal video recording services
offered and provided by TiVo at any given time under the xxxx "TiVo," which
includes the use of Personal Digital Recording Technology in Video Recording
Devices installed in End Users' homes.
1.48 "TiVo Service Area" shall mean the geographic regions at any given
time where the TiVo Service is offered by TiVo. A list of the geographic regions
currently in the TiVo Service Area is set forth in Exhibit J (TiVo Service Area)
which TiVo may update from time to time.
1.49 "TiVo Server Technology" shall mean the TiVo Server Initial Release,
TiVo Server Interim Releases, TiVo Server[ * ] and, if licensed by Sony, TiVo
Server Upgrades, along with any pre-release versions that may be provided by
TiVo from time to time. Unless Sony exercises its license option in Section
5.2(a) (Server Source Code License), any and all software
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
9
components of the TiVo Server Technology shall be provided to Sony solely in
Object Code form.
(a) "TiVo Server Initial Release" shall mean the software, hardware
reference design and other components of the TiVo Server Technology components
of the Personal Digital Recording Technology owned by TiVo or its Affiliates, as
described in more detail in Exhibit A (TiVo Technology) as it exists on the
Effective Date. [*]
(b) "TiVo Server Interim Releases" shall mean (a) the [ * ] of [ * ]
of the software, hardware reference design and other TiVo Server Technology
components of the Personal Digital Recording Technology owned by TiVo or its
Affiliates, as described in more detail in Exhibit A (TiVo Technology), and to
be delivered to Sony pursuant to Exhibit A (TiVo Technology); and (b)[ * ] of
the software, hardware reference design and other TiVo Server Technology
components of the Personal Digital Recording Technology owned by TiVo or its
Affiliates, as described in more detail in Exhibit A (TiVo Technology), and to
be delivered to Sony pursuant to Exhibit A (TiVo Technology). [ * ]of the
software shall not be a[ * ], but shall [ * ]In the event that TiVo makes
available for general release a version of the TiVo Server Technology between [
* ]other than those described above, TiVo shall [ * ]and [ * ]in[ * ] for all
purposes of this Agreement.
(c) "TiVo Server [ * ] shall mean the [ * ] of [ * ] of the software,
hardware reference design, and other TiVo Server Technology components of the
Personal Digital Recording Technology owned by TiVo or its Affiliates that
supports TiVo Client[ * ] as described in more detail in Exhibit A (TiVo
Technology), and to be delivered to Sony pursuant to Exhibit A (TiVo
Technology).
(d) "TiVo Server Upgrades" shall mean any TiVo Improvements to TiVo
Server [ * ]owned by TiVo or its Affiliates that are made available by TiVo or
its Affiliates for general release to its Third Party licensees or used by TiVo
to support TiVo Client Upgrades.
1.50 "TiVo Technology" shall mean the TiVo Client Technology and TiVo
Server Technology, collectively, including any Updates that Sony may receive
under TiVo Maintenance (as defined in Section 5.1(b) (TiVo Maintenance)).
1.51 "TiVo Trade Dress" shall mean the unique and inherently distinctive
features of the TiVo Service described in Exhibit O (TiVo Trade Dress).
1.52 "Trigger Event" shall mean the first to occur of any of the following:
(a) if the licenses in this Agreement and the TiVo International, Inc.
Technology License Agreement between TiVo International and Sony Corporation
dated as of the date hereof are[ * ]by a [ * ]of[ * ]; or
(b) after either the [ * ]by another entity or[ * ] if (i) the[ * ]
calculated for the combined entities, including the [ * ]to the date of such [ *
], being or becoming [ * ]for each [ *
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
10
]over any[ * ]; and (ii) such[*] at the time it meets the [ * ]criteria above
after the [ * ]has [ * ]of[ * ] and [ * ]of[ * ] or
(c) when TiVo itself (i) [ * ]for [ * ]over any[ * ]; and (ii) at the
time [ * ]meets the [ * ]criteria above, has [ * ]of[ * ] and [ * ]
1.53 "Video Recording Device" shall mean a component or device, the
principal purpose of which is the recording and playback of a sequence of
images, whether or not accompanied by sounds ("Video"), on any digital media,
whether such media is now in existence or which comes into existence in the
future. The Video signal may be analog or digital and may be delivered to the
Video Recording Device by terrestrial broadcast, satellite, cable[ * ]. A Video
Recording Device may be a standalone product or part of a larger product.
1.54 "Warranty Period" shall mean (a) for TiVo Client Interim Release [ *
]and TiVo Server Interim Release[ * ] days after acceptance; (b) for TiVo Client
Interim Release [ * ]and TiVo Server Interim Release [ * ], until acceptance of
[ * ]or[ * ], whichever occurs first; (c) for TiVo Client [ * ]and TiVo Server[
* ] days after acceptance; and (d) for TiVo Client Upgrades and TiVo Server
Upgrades,[ * ] days after acceptance.
2. License Grants.
2.1 TiVo Technology License (Japan).
(a) TiVo Client Technology. TiVo grants to Sony and its Affiliates a
royalty-free, perpetual, irrevocable (except as set forth in Section 13.3(a)
(Termination for a Material Sony Breach)), non-transferable, non-exclusive
license, under the TiVo Proprietary Rights, to:
(i) Internally use, perform, display, reproduce, modify and
create Improvements to the TiVo Client Technology;
(ii) Make and have made Sony Products, provided that any software
embodying the TiVo Client Technology incorporated in such Sony Products shall be
solely in Object Code form;
(iii) Provide services for End Users located in Japan using Sony
Products, CE Sublicensee Products or products of Third Parties based on TiVo
Technology using the TiVo Client Technology;
(iv) Use, display, distribute, perform, offer to sell, sell and
import Sony Products solely in Japan and[ * ] the TiVo Client Technology to
create such Sony Products solely for use in Japan; and
(v) Sublicense to End Users of Sony Products (either directly or
through MSOs), solely for use in Japan, the right to use, display and perform
any TiVo Client
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
11
Technology incorporated in such Sony Products; provided that all such
sublicenses shall be subject to the restrictions set forth in Section 2.4(d)
(End User Agreements).
(b) TiVo Server Technology License. TiVo grants to Sony and its
Affiliates a royalty-free, perpetual, irrevocable (except as set forth in
Section 13.3(a) (Termination for a Material Sony Breach)), non-transferable,
non-exclusive license, under the TiVo Proprietary Rights, to:
(i) Internally use, perform, display, and reproduce the TiVo
Server Technology solely in Japan;
(ii) Internally [*]of the TiVo Server Technology[ * ]of the TiVo
Server Technology [ * ] TiVo Server Technology") solely in Japan; and
(iii) Use, display, distribute, perform, offer to sell, and sell
services, directly or through a Third-Party hosting service provider, solely to
End Users located in Japan using Sony Products, CE Sublicensee Products or
products of Third Parties based on TiVo Technology and [ * ]the TiVo Server
Technology and[ * ] TiVo Server Technology to create and provide such services
solely to End Users located in Japan using Sony Products, CE Sublicensee
Products or products of Third Parties based on TiVo Technology.
(c) TiVo Client Technology Sublicense. TiVo grants to Sony an
irrevocable (except as set forth in Section 13.3(a) (Termination for a Material
Sony Breach)), non-exclusive license to sublicense to CE Sublicensees a
non-exclusive and non-transferable right, under the TiVo Proprietary Rights
(without the right to grant further sublicenses except as expressly set forth
herein), to:
(i) Internally use the TiVo Client Technology, provided that any
software embodying the TiVo Client Technology shall be provided to and used by
such CE Sublicensee solely in Object Code form;
(ii) Make and have made CE Sublicensee Products, provided that
any software embodying the TiVo Client Technology incorporated in such CE
Sublicensee Products shall be solely in Object Code form;
(iii) Use, display, distribute, perform, offer to sell, sell, and
import CE Sublicensee Products solely in Japan and[ * ] the TiVo Client
Technology to create such CE Sublicensee Products solely for use in Japan; and
(iv) Sublicense to End Users of such CE Sublicensee Products
(either directly or through MSOs), solely for use in Japan, the right to use,
display and perform any TiVo Client Technology incorporated in such CE
Sublicensee Products; provided that all such sublicenses shall be subject to the
restrictions set forth in Section 2.4(d) (End User Agreements).
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
12
(d) TiVo Server Technology Sublicense. TiVo grants to Sony an
irrevocable (except as set forth in Section 13.3(a) (Termination for a Material
Sony Breach)), non-exclusive license to sublicense to CE Sublicensees a
non-exclusive and non-transferable right, under the TiVo Proprietary Rights
(without the right to grant further sublicenses), to:
(i) Internally use, perform, display, and reproduce the TiVo
Server Technology and[ * ] TiVo Server Technology in Object Code form only and
solely in Japan; and
(ii) Use, display, distribute, perform, offer to sell, and sell
services, directly or through a Third-Party hosting service provider, solely to
End Users located in Japan using Sony Products, CE Sublicensee Products or
products of Third Parties based on TiVo Technology located in Japan and [*]the
TiVo Server Technology and Modified TiVo Server Technology to create and provide
such services solely to End Users of Sony Products, CE Sublicensee Products, or
products of Third Parties based on TiVo Technology located in Japan; provided
that any software embodying the TiVo Server Technology shall be used,
reproduced, displayed, distributed, and performed solely in Object Code form.
(e) TiVo Technology Limitations. Sections 2.1(c) (TiVo Client
Technology Sublicense) and 2.1(d) (TiVo Server Technology Sublicense) are the
sole rights of Sony to sublicense the TiVo Technology under this Agreement.
2.2 TiVo Technology License (worldwide).
(a) TiVo Client Technology License. TiVo grants to Sony and its
Affiliates a perpetual, irrevocable (except as set forth in Section 13.3(a)
(Termination for a Material Sony Breach)), non-transferable, non-exclusive
license, under the TiVo Proprietary Rights, to:
(i) Internally use, perform, display and reproduce, modify and
create Sony Improvements to the TiVo Client Technology solely for use in Sony
Video Recording Devices;
(ii) Make and have made Sony Video Recording Devices, provided
that any software embodying the TiVo Client Technology incorporated in such Sony
Video Recording Devices shall be solely in Object Code form;
(iii) Provide services for End Users of Sony Video Recording
Devices located anywhere in the world using the TiVo Client Technology;
(iv) Use, display, distribute, perform, offer to sell, sell, and
import Sony Video Recording Devices for use worldwide and[ * ] the TiVo Client
Technology to create such Sony Video Recording Devices for use worldwide; and
(v) Sublicense to End Users of Sony Video Recording Devices
(either directly or through MSOs), for use worldwide, the right to use, display
and perform any TiVo
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
13
Client Technology incorporated in such Sony Video Recording Devices, provided
that all such sublicenses shall be subject to the restrictions set forth in
Section 2.4(d) (End User Agreements).
(b) TiVo Server Technology License. TiVo grants to Sony and its
Affiliates a perpetual, irrevocable (except as set forth in Section 13.3(a)
(Termination for a Material Sony Breach)), non-transferable, non-exclusive
license, under the TiVo Proprietary Rights, to:
(i) Internally use, perform, display, and reproduce the TiVo
Server Technology; and
(ii) Internally [*]of the TiVo Server Technology and[ * ] of the
TiVo Server Technology; and
(iii) Use, display, distribute, perform, offer to sell, and sell
services, directly or through a Third-Party hosting service provider, to End
Users of Sony Video Recording Devices located anywhere in the world and [ * ]the
TiVo Server Technology and Modified TiVo Server Technology to create and provide
such services to End Users of Sony Video Recording Devices anywhere located in
the world.
2.3 Third Party Technology. Sony acknowledges that the TiVo Technology may
incorporate, reference or require the use of certain Third Party Technology and
that licenses granted pursuant to Section 2.1 (TiVo Technology License (Japan))
and 2.2 (TiVo Technology License (worldwide)) specifically exclude any license
rights in or to such Third Party Technology. For clarification, except as
related to the Third Party Technology specified in Exhibit E (Third Party
Technology), TiVo shall indemnify Sony and its Affiliates from and against any
Claims by Third Parties who claim infringement of their rights by the rights
licensed hereunder, in accordance with Section 12 (Indemnification). Sony
acknowledges that Sony and its Affiliates shall be responsible for obtaining the
necessary rights in the Third Party Technology. TiVo agrees to keep the list of
Third Party Technology current and, except with respect to TiVo Client Upgrades
and TiVo Server Upgrades, will obtain Sony's written consent prior to amending
Exhibit E (Third Party Technology). With respect to TiVo Client Upgrades and
TiVo Server Upgrades, TiVo will, upon Sony's reasonable request, provide Sony
with (a) written notice of any applicable amendment to Exhibit E (Third Party
Technology); (b) a price list of such Third Party Technology; and (c) reasonable
assistance to Sony in any efforts to obtain a license to such Third Party
Technology (other than the payment of money).
2.4 License Restrictions.
(a) Handling of TiVo Source Code. The terms and conditions with
respect to Sony's handling of any TiVo Source Code are set forth in Exhibit B
(Secure Procedures for Handling TiVo Source Code).
(b) TiVo User Interfaces and Related TiVo Trade Dress. Notwithstanding
any other provision of this Agreement, the licenses granted in Section 2
(License Grants) shall not include a license to any intellectual property rights
in or to the TiVo Trade Dress regardless of
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
14
whether such elements or features are included in the TiVo Technology. Sony
shall not, and shall not permit any Affiliate of Sony or a CE Sublicensee to:
(i) use, reproduce, or otherwise replicate in any manner the TiVo Trade Dress;
or (ii) develop or use any user interface features or elements that violates
TiVo's intellectual property rights to the TiVo Trade Dress as defined under
United States law.
(c) Sublicense Agreements. Sony shall protect TiVo's interest in the
TiVo Technology and shall ensure that any sublicenses of the TiVo Technology
under Sections 2.1(c) (TiVo Client Technology Sublicense) or 2.1(d) (TiVo Server
Technology Sublicense) shall be pursuant to a CE Sublicense Agreement containing
the minimum terms and conditions contained in Exhibit C (Minimum Terms and
Conditions for Sublicense Agreements). Sony shall use reasonable diligence to
monitor each CE Sublicensee's compliance with the CE Sublicense Agreement and if
Sony becomes aware of a breach of any minimum terms and conditions contained in
Exhibit C (Minimum Terms and Conditions for Sublicense Agreements) by a CE
Sublicensee, Sony shall (i) promptly notify TiVo in writing of such breach, and
(ii) at TiVo's expense, provide any cooperation and assistance that TiVo may
reasonably require in enforcing TiVo's rights in and to the TiVo Technology. If
a CE Sublicensee breach constitutes a Material CE Sublicensee Breach, then Sony
shall, upon TiVo's written request, promptly provide written notice of
termination of such CE Sublicensee's license rights in or to the TiVo Technology
and enforce such termination in accordance with the terms of such CE Sublicense
Agreement. If Sony is in compliance with the obligations in this Section 2.4(c)
(Sublicense Agreements), TiVo acknowledges that Sony shall have no liability to
TiVo or any Third Party for any (i) breach by a CE Sublicensee of a CE
Sublicense Agreement; or (ii) termination by Sony of any CE Sublicense
Agreement.
(d) End User Agreements. Sony shall protect TiVo's interest in the
TiVo Technology and shall ensure that any sublicenses granted to End Users by
Sony, its Affiliates, MSOs or CE Sublicensees shall be pursuant to an End User
License Agreement containing the minimum terms and conditions contained in
Exhibit D (Minimum Terms and Conditions for End User Agreements).
(e) General Restrictions. Sony and its Affiliates shall not, and shall
not authorize any Third Party to: (i) translate, reverse engineer, decompile,
disassemble, attempt to derive the Source Code of any TiVo Technology provided
to Sony solely in Object Code form; (ii) modify or create any Improvements of
any TiVo Technology except as expressly provided in this Agreement; (iii)
sublicense, rent, lease, loan, timeshare, sell, distribute, assign or transfer
any rights in, grant a security interest in, or transfer possession of any TiVo
Technology, except as expressly provided in this Agreement; or (iv) obfuscate,
alter or remove any of TiVo's copyright or other proprietary rights notices or
legends appearing on or in the TiVo Technology as delivered to Sony, and all
such markings shall be included on or in all copies of any portion of the TiVo
Technology made by Sony, its Affiliates or any CE Sublicensee for their internal
use (all marking required for copies distributed to Third Parties is set forth
in Section 4 (Branding and Use of TiVo Marks)).
15
(f) "Have Made" Rights. The parties confirm that the "have made"
rights granted to Sony and its Affiliates in this Section 2 (License Grants)
include the right [*]of the TiVo Technology to [ * ]solely for purposes of [ *
]on behalf of Sony and its Affiliates[ * ] Sony Products.
2.5 Documentation License.
(a) TiVo Client Technology Documentation. TiVo grants to Sony and its
Affiliates under its copyright and trademark rights a non-exclusive,
non-transferable license to modify, reproduce, and distribute the Client
Technology Documentation for internal purposes and to MSOs and to CE
Sublicensees; provided that such Client Technology Documentation shall only be
used in connection with the TiVo Client Technology licenses granted in this
Agreement or in the applicable CE Sublicense Agreement. For clarification, any
Client Technology Documentation, to the extent it includes Source Code, shall be
subject to the Source Code restrictions in Section 2.4(a) (Handling of TiVo
Source Code) and any disclosure thereof shall be restricted to Sony Source Code
Affiliates. Sony acknowledges and agrees that the disclosure and use of the
Client Technology Documentation shall be in compliance with the confidentiality
restrictions in Section 10 (Confidentiality) and the restrictions in Section 2.4
(License Restrictions).
(b) TiVo Server Technology Documentation. TiVo grants to Sony and its
Affiliates under its copyright and trademark rights a non-exclusive,
non-transferable license to modify, reproduce and distribute the Server
Technology Documentation for internal purposes and to CE Sublicensees; provided
that such Server Technology Documentation shall only be used in connection with
the TiVo Server Technology licenses granted in this Agreement or in the
applicable CE Sublicense Agreement. For clarification, if Sony exercises its
license option in Section 5.2(a) (Server Source Code License), any Server
Technology Documentation, to the extent it includes Source Code, shall be
subject to the Source Code restrictions in Section 2.4(a) (Handling of TiVo
Source Code) and any disclosure thereof shall be restricted to Sony Source Code
Affiliates. Sony acknowledges and agrees that the disclosure and use the Server
Technology Documentation shall be in compliance with the confidentiality
restrictions in Section 10 (Confidentiality) and the restrictions in Section 2.4
(License Restrictions).
(c) TiVo End User Documentation . TiVo shall, from time to time,
provide Sony certain documentation generally made available by TiVo to End Users
of the TiVo Service that is intended to be used with the TiVo Technology
licensed pursuant to this Agreement. TiVo grants to Sony and its Affiliates
under its copyright and trademark rights a non-exclusive, non-transferable
license to modify, reproduce and distribute (through multiple tiers of
sublicensees) such TiVo End User documentation for internal purposes and to
MSOs, CE Sublicensees and End Users of Sony Products and CE Sublicensee
Products. Sony acknowledges and agrees that any modification, reproduction or
distribution of such End User documentation must comply with the TiVo Trade
Dress restrictions in Section 2.4(b) (TiVo User Interfaces and Related TiVo
Trade Dress).
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
16
3. Delivery and Development.
3.1 Delivery of TiVo Technology. With respect to the TiVo Client Initial
Release, the TiVo Server Initial Release and related Client Technology
Documentation and Server Technology Documentation, TiVo shall, within [*]days of
the Effective Date, deliver to Sony a master copy of the TiVo Client Initial
Release, the TiVo Server Initial Release and related Client Technology
Documentation and Server Technology Documentation in the formats specified in
Exhibit A (TiVo Technology). Thereafter, TiVo shall deliver to Sony (a) all TiVo
Client Interim Releases, TiVo Client [ * ]and related Client Technology
Documentation in accordance with the schedule set forth in Exhibit A (TiVo
Technology); and (b) all TiVo Server Interim Releases, TiVo Server[ * ] and
related Server Technology Documentation in accordance with the schedule set
forth in Exhibit A (TiVo Technology).
3.2 Pre-Manufacturing Release. Sony acknowledges that the TiVo Client
Initial Release and TiVo Server Initial Release shall be provided to Sony in the
form as exists on the Effective Date. Such TiVo Client Initial Release and TiVo
Server Initial Release are pre-Manufacturing Release versions of the TiVo
Technology and such versions, along with any other pre-Manufacturing Release
versions that may be provided to Sony by TiVo from time to time are provided to
Sony "As Is," without any warranty of any kind (except as set forth in Section
1.41(b) (TiVo Client Interim Releases) and Section 1.49(b) (TiVo Server Interim
Releases)), which provide that certain releases not contain any Priority 1 or
Priority 2 Errors).
3.3 Acceptance by Sony.
(a) TiVo Client Technology Releases. Upon receipt by Sony of each of
the TiVo Client Interim Releases[ * ], TiVo Client[ * ] and TiVo Client
Upgrades, if Sony purchases such TiVo Client Upgrades, Sony shall run such
release through its standard test procedures to ensure that it operates in
accordance with the Post Build Test Criteria and includes the functions for such
release described in Exhibit A (TiVo Technology) for such release. The TiVo
Client Interim Releases[ * ], TiVo Client[ * ] and TiVo Client Upgrades, if Sony
purchases such TiVo Client Upgrades, will be accepted or rejected by Sony within
the applicable Acceptance Period. Prior to the conclusion of such Acceptance
Period, Sony will provide TiVo with a written notice of (i) acceptance, or (ii)
rejection, with such rejection notice specifying the reasons for rejection. The
release shall be deemed irrevocably accepted by Sony in the event that (i) the
release operates in accordance with the Post Build Test Criteria; (ii) Sony does
not provide TiVo with written rejection of the release within such Acceptance
Period; or (iii) Sony modifies or uses the release for purposes other than
acceptance testing. If the release is rightfully rejected by Sony, TiVo will use
commercially reasonable efforts to modify the release and the acceptance testing
will be repeated as necessary until the release operates in accordance with the
Post Build Test Criteria.
(b) TiVo Server Technology Releases. Upon receipt by Sony of each of
the TiVo Server Interim Releases[ * ], TiVo Server[ * ] and TiVo Server
Upgrades, if Sony purchases such TiVo Server Upgrades, Sony shall run such
release through its standard test
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
17
procedures to ensure that it operates in accordance with the Post Build Test
Criteria and includes the functions for such release described in Exhibit A
(TiVo Technology) for such release. The TiVo Server Interim Releases[*], TiVo
Server[ * ] and TiVo Server Upgrades, if Sony purchases such TiVo Server
Upgrades, will be accepted or rejected by Sony within the applicable Acceptance
Period. Prior to the conclusion of such Acceptance Period, Sony will provide
TiVo with a written notice of (i) acceptance, or (ii) rejection, with such
rejection notice specifying the reasons for rejection. The release shall be
deemed irrevocably accepted by Sony in the event that (i) the release operates
in accordance with the Post Build Test Criteria; (ii) Sony does not provide TiVo
with written rejection of the release within such Acceptance Period; or (iii)
Sony modifies or uses the release for purposes other than acceptance testing. If
the release is rightfully rejected by Sony, TiVo will use commercially
reasonable efforts to modify the release and the acceptance testing will be
repeated as necessary until the release operates in accordance with the Post
Build Test Criteria.
3.4 TiVo Technology Warranties; Warranty Limitation.
(a) TiVo Client Technology Warranty. TiVo warrants to Sony and its
Affiliates that, during the relevant Warranty Period, the relevant release of
the TiVo Client Technology will operate in accordance with both the Post Build
Test Criteria and the specifications described in Exhibit A (TiVo Technology)
(including the attachment thereto) for such release. Sony agrees to report to
TiVo in writing during the Warranty Period any failure to meet the warranty
described in this Section 3.4(a) (TiVo Client Technology Warranty) (a "TiVo
Client Technology Error"). Sony's Affiliates may report TiVo Client Technology
Errors during the Warranty Period and pursue remedies under this warranty only
through Sony or a Sony Primary Affiliate. Such errors will be reported to TiVo
in a form, and with reasonable supporting information and materials reasonably
requested by TiVo, to enable it to verify, diagnose and correct the reported
TiVo Client Technology Error. TiVo shall respond and confirm that the reported
TiVo Client Technology Error is in fact an error attributable to the TiVo Client
Technology within [ * ] business days after Sony's report of the error. TiVo
will then designate the priority of the TiVo Client Technology Error in
accordance with the priority definitions in Exhibit P (TiVo Maintenance), give
written notice of such designation (and the reasons therefor) to Sony and will
use reasonable commercial efforts to correct the TiVo Client Technology Error
within the following time periods after confirmation of the error: [ * ] days
for Priority 1 and 2 errors; [ * ]days for Priority 3 errors; and[ * ] days for
Priority 4 errors. If TiVo is unable to correct the TiVo Client Technology Error
within such specified time periods, TiVo shall either replace the TiVo Client
Technology release with functionally equivalent software or repair the TiVo
Client Technology release so it operates in accordance with the warranty within
such time periods. If TiVo decides the reported TiVo Client Technology Error is
not in fact an error attributable to the TiVo Client Technology, TiVo shall
report such decision to Sony with reasonable explanation and supporting
documentation. So long as TiVo corrects errors, or replaces or repairs the TiVo
Client Technology as required by this Section 3.4(a) (TiVo Client Technology
Warranty) (including the relevant time periods), the foregoing shall represent
Sony's sole and exclusive remedy in the event of a TiVo Client Technology Error.
Otherwise Sony and
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
18
its Affiliates through Sony or Sony Primary Affiliates shall have the other
remedies available to them by law.
(b) TiVo Server Technology Warranty. TiVo warrants to Sony and its
Affiliates that, during the relevant Warranty Period, the relevant release of
the TiVo Server Technology will operate in accordance with both the Post Build
Test Criteria and the specifications described in Exhibit A (TiVo Technology)
(including the attachment thereto) for such release. Sony agrees to report to
TiVo in writing during the Warranty Period any failure to meet the warranty
described in this Section 3.4(b) (TiVo Server Technology Warranty) (a "TiVo
Server Technology Error"). Sony's Affiliates may report TiVo Server Technology
Errors during the Warranty Period and pursue remedies under this warranty only
through Sony or a Sony Primary Affiliate. Such errors will be reported to TiVo
in a form, and with reasonable supporting information and materials reasonably
requested by TiVo, to enable it to verify, diagnose and correct the reported
TiVo Server Technology Error. TiVo shall respond and confirm that the reported
TiVo Server Technology Error is in fact an error attributable to the TiVo Server
Technology within[*] business days after Sony's report of the error. TiVo will
then designate the priority of the TiVo Server Technology Error in accordance
with the priority definitions in Exhibit P (TiVo Maintenance), give written
notice of such designation to Sony (and the reasons therefor) and will use
reasonable commercial efforts to correct the TiVo Server Technology Error within
the following time periods after confirmation of the error: [ * ] days for
Priority 1 and 2 errors; [ * ]days for Priority 3 errors; and[ * ] days for
Priority 4 errors. If TiVo is unable to correct the TiVo Server Technology Error
within such specified time periods, TiVo shall either replace the TiVo Server
Technology release with functionally equivalent software or repair the TiVo
Server Technology release so it operates in accordance with the warranty within
such time periods. If TiVo decides the reported TiVo Server Technology Error is
not in fact an error attributable to the TiVo Server Technology, TiVo shall
report such decision to Sony with reasonable explanation and supporting
documentation. So long as TiVo corrects errors, or replaces or repairs the TiVo
Server Technology as required by this Section 3.4(b) (TiVo Server Technology
Warranty) (including the relevant time period), the foregoing shall represent
Sony's sole and exclusive remedy in the event of a TiVo Server Technology Error.
Otherwise Sony and its Affiliates through Sony and Sony Primary Affiliates shall
have the other remedies available to them by law.
(c) Limitation of Warranties. The foregoing warranties will not apply
if the failure of the TiVo Client Technology and TiVo Server Technology is due
to any modification of the TiVo Client Technology or TiVo Server Technology by
Sony, its Affiliates or a Third Party (other than any modification undertaken at
TiVo's direction).
4. Branding and Use of TiVo Marks.
4.1 Branding Requirements. Sony and its Affiliates shall provide
appropriate credits to TiVo, as mutually agreed to by TiVo and Sony, in the
marketing and distribution of any Sony Video Recording Devices made by Sony or
its Affiliates or other products and services made by Sony or its Affiliates
incorporating or utilizing all or any portion of the TiVo Technology. Any
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
19
branding of Sony Video Recording Devices or other products and services
containing TiVo Technology made by Sony or its Affiliates will be done in
conformance with the branding requirements set forth in Exhibit N (Branding
Requirements). TiVo acknowledges that it may not modify the terms of either this
Section 4.1 (Branding Requirements) or Exhibit N (Branding Requirements) without
the prior written consent of Sony.
4.2 License to TiVo Marks. TiVo grants to Sony and its Affiliates a
royalty-free, worldwide, non-exclusive license to use the TiVo Marks solely for
the purposes set forth in Section 4.1 (Branding Requirements). In addition, Sony
and its Affiliates shall comply with TiVo's trademark usage guidelines and
policies that are set forth in Exhibit K (TiVo Trademark Usage Guidelines), as
may be modified from time to time; provided, however, that in the event that
TiVo does modify its trademark usage guidelines, TiVo and Sony will negotiate in
good faith, a commercially reasonable amount of time for Sony to implement such
changes. Notwithstanding the foregoing, if any modification by TiVo of its
trademark usage guidelines is likely to result in a significant adverse or
detrimental economic impact on Sony, Sony will not be required to implement such
modification. Sony shall use reasonable commercial efforts to minimize any
adverse or detrimental economic impact of such modifications and shall work with
TiVo in good faith to implement such modification once the economic impact has
been reduced. Before making use of any TiVo Marks on a new Sony Product with
substantial design changes, Sony and its Affiliates shall provide TiVo with a
sample of the proposed use for approval by TiVo. Such use shall be deemed
approved unless TiVo rejects such use in writing within [*] of the receipt of
Sony's proposal. The approval or deemed approval of a proposed use will be
deemed to comply with Exhibit K (TiVo Trademark Usage Guidelines) and Exhibit N
(Branding Requirements). If the proposed use of a TiVo Xxxx by Sony or its
Affiliate complies with the terms of Exhibit K (TiVo Trademark Usage Guidelines)
TiVo shall not unreasonably withhold or delay its approval. Once TiVo has
approved any usage of a TiVo Xxxx on a Sony Product in accordance with the
foregoing, neither Sony nor its Affiliates will need to obtain any further
approvals from TiVo with respect to Sony's or its Affiliates' use of the TiVo
Marks on such Sony Product. If TiVo properly rejects the proposed use of the
TiVo Marks in accordance with the foregoing, Sony or its Affiliate will modify
or cancel the proposed use, as reasonably requested by TiVo.
4.3 Ownership of TiVo Marks. All use of the TiVo Marks hereunder shall
inure to the benefit of TiVo. TiVo has and shall retain exclusive ownership of
the TiVo Marks. Neither Sony nor its Affiliates will contest or challenge, or do
anything inconsistent with, TiVo's exclusive ownership of the TiVo Marks.
Without limiting the generality of the foregoing, neither Sony nor its
Affiliates may affix, append, or place any of its trademarks, trade names, or
logos to, or in close proximity to, the TiVo Marks in a manner that results or
could result in the creation of a unitary composite xxxx. TiVo reserves the
right to terminate Sony's and its Affiliates' rights to use the TiVo Marks at
any time and at TiVo's sole discretion ([ * ]of the Agreement in[ * ] shall be
deemed a voluntary termination under this Section 4.3 (Ownership of TiVo
Marks)); provided, that in the event of such termination (a) the branding
requirements set forth in Section 4.1 (Branding Requirements) shall no longer
apply; and (b) Sony shall be
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
20
allowed to continue to use the TiVo Marks for a period of [*] months for the
purpose of selling its inventory of products containing such TiVo Marks.
4.4 Challenge. If a Third Party legitimately challenges Sony's or its
Affiliates' use of any TiVo Xxxx or TiVo becomes aware of a significant risk of
a legitimate challenge in any jurisdiction where Sony and its Affiliates are
licensed to use such TiVo Xxxx, Sony or its Affiliate shall suspend its use of
the affected TiVo Xxxx in such jurisdiction ("Suspended Jurisdiction"). TiVo [ *
]that Sony[ * ] in shipping Sony Products without the TiVo Marks to a single
jurisdiction. Sony shall give notice to TiVo [ * ]that Sony[ * ] as a result of
suspending shipments of Sony Products with TiVo Marks to the Suspended
Jurisdiction. For example, if the Suspended Jurisdiction were France, Sony may [
* ]to separate shipments of Sony Products [ * ]between those going to France
(which would not include TiVo Marks) and those going to other EU countries
(which would include TiVo Marks). Within [ * ] days of TiVo's receipt of Sony's
written notice of [ * ]including the jurisdictions [ * ]TiVo may[ * ]. If TiVo
agrees within such [ * ] day period, Sony [ * ]If [ * ]within such [ * ]day
period[ * ] or after such agreement, [ * ], Sony and its Affiliates [ * ]of the
TiVo Marks on shipments of Sony Products[ * ], which may [ * ]of the TiVo Marks
on shipments of Sony Products[ * ] in addition to the[ * ]. Sony shall
recommence the use of the affected TiVo Xxxx within a commercially reasonable
time once Sony is reasonably satisfied that it will not be challenged in its use
of such TiVo Xxxx. The parties shall promptly notify each other in writing of
any challenge received that relates to Sony or its Affiliates' use of the TiVo
Marks. Notwithstanding the foregoing, and with respect to TiVo's trademark
dispute in Canada, Sony agrees that it will not suspend its use of the TiVo
Marks in the United States as a result of such [ * ]trademark dispute, so long
as the geographic scope of such dispute does not [ * ].
4.5 CE Sublicensees. Sony acknowledges and agrees that Sony and its
Affiliates shall not have the right to sublicense the use of any TiVo Marks. CE
Sublicensees shall enter into a trademark license agreement directly with TiVo,
with terms and conditions substantially as set forth in Appendix 1 to Exhibit C
----------
(Minimum Terms and Conditions for Sublicense Agreements), prior to any use by
such CE Sublicensee of the TiVo Marks. The branding requirements for CE
Sublicensees shall be as set forth in Appendix 1 to Exhibit C (Minimum Terms and
----------
Conditions for Sublicense Agreements) for non-TiVo Service Areas. If TiVo offers
the TiVo Service in Japan, the branding requirements for purposes of the
trademark license agreement between TiVo and the CE Sublicensee will be
determined by Sony and TiVo on a case by case basis in accordance with the
branding requirements of Exhibit N (Branding Requirements).
5. Additional Obligations.
5.1 TiVo Upgrades; TiVo Maintenance.
(a) TiVo Upgrades. Sony may, at its discretion, elect to receive one
or more TiVo Client Upgrades and TiVo Server Upgrades (herein, "TiVo Technology
Upgrades") by payment to TiVo of a fee to be negotiated between the parties for
each such TiVo Technology Upgrade. The parties agree that any such fee
negotiated for TiVo Technology
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
21
Upgrades shall provide that after a voluntary rejection by the TiVo bankruptcy
estate of the Sony/TiVo Technology License Agreement ("Voluntary Rejection")
pursuant to Section 365 of Title 11 of the United States Code or any successor
(the "Bankruptcy Code"), Sony shall pay (i) only TiVo International with respect
to the exercise of rights under the TiVo International Proprietary Rights
licensed to Sony and its Affiliates under the TiVo International Technology
License Agreement and (ii) only TiVo solely with respect to the exercise of
rights under the TiVo Proprietary Rights licensed to Sony and its Affiliates
under this Agreement and solely to the extent that the licenses under this
Agreement are in effect after the Voluntary Rejection. Unless otherwise agreed
to by the Parties, all TiVo Technology Upgrades licensed hereunder shall be
licensed within the scope of Section 2 (License Grants). TiVo shall give Sony
prompt written notice of each TiVo Technology Upgrade. Upon Sony's reasonable
request, TiVo will describe the technology roadmap that includes the features
and functionality that TiVo plans to introduce or add to the TiVo Technology in
the future and the proposed schedule for introduction or addition of such
features and functionality. Any such information disclosed by TiVo to Sony shall
be governed by the confidentiality provisions in Section 10 (Confidentiality).
TiVo Client Upgrades shall be provided to Sony in Source Code form and unless
Sony obtains the license described in Section 5.2(a) (Server Source Code
License), TiVo Server Upgrades shall be provided to Sony solely in Object Code
form.
(b) TiVo Maintenance.
(i) Sony may, at its discretion, elect to receive the maintenance
services described on Exhibit P (TiVo Maintenance) (herein, "TiVo Maintenance")
by payment to TiVo of an annual fee in the amount of [*]
(ii) If the Warranty Period for the relevant release of the TiVo
Technology[ * ] and Sony elects to receive TiVo Maintenance, Sony shall pay to
TiVo the annual maintenance fee[ * ]. If the Warranty Period for the relevant
release of the TiVo Technology [ * ]the annual maintenance fee[ * ] and Sony
shall pay such [ * ]amount[ * ] so that the TiVo Maintenance commences
immediately [ * ]and continues through [ * ](such period referred to as the[ *
])). Thereafter, on an annual basis for each subsequent year during the term of
this Agreement for which Sony elects to receive TiVo Maintenance, Sony shall pay
the annual fee specified in subsection (i) above; provided, however, in the
event that TiVo elects not to provide TiVo Maintenance on such version, TiVo
may, in its sole discretion, elect to [ * ]Sony with a TiVo Technology Upgrade[
* ], and provide TiVo Maintenance on such upgrade upon payment of such annual
fee.
(iii) If Sony elects not to purchase TiVo Maintenance in any
given year, Sony shall have the right to purchase TiVo Maintenance for a later
year during the Term for the version of TiVo Technology then licensed by Sony so
long as TiVo is then providing maintenance services for such same version to a
Third Party. If Sony elects not to purchase TiVo Maintenance in any given year
and TiVo is not providing maintenance services to a Third Party for the version
for which Sony desires to receive TiVo Maintenance at the time that Sony
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
22
elects to receive such TiVo Maintenance, Sony shall have the right to purchase
TiVo Maintenance if Sony purchases a license to the latest TiVo Technology
Upgrade and pays to TiVo the annual fee specified in subsection (i) for TiVo
Maintenance for each year up to and including the year in which Sony is
purchasing TiVo Maintenance.
(iv) In any event, TiVo shall offer to provide TiVo Maintenance
for TiVo Client [*]and TiVo Server[ * ] (or the latest version of the TiVo
Client Technology and TiVo Server Technology that has been accepted by Sony in
accordance with the terms set forth in Section 3.3 (Acceptance by Sony) on or
before [ * ]if Sony has not accepted TiVo Client [ * ]and TiVo Server[ * ] by
such date) until[ * ] for such version, whether or not Sony has elected to
receive TiVo Maintenance at any time.
5.2 TiVo Server Technology Source Code.
(a) Server Source Code License. Sony may, at its discretion, elect to
obtain a royalty-free, perpetual, irrevocable (except as set forth in Section
13.3(a) (Termination for a Material Sony Breach)), non-transferable,
non-exclusive license (without the right to grant sublicenses) to internally
use, perform, display, reproduce, modify and create Improvements to the Source
Code to the TiVo Server Technology (up to and including TiVo Server [ * ] only)
upon payment to TiVo of a non-refundable, [ * ]license fee of[ * ] such license
being subject to the terms and conditions of this Agreement including, without
limitation, the Source Code handling restrictions set forth in Section 2.4(a)
(Handling of TiVo Source Code). Until Sony elects to exercise the license option
described in this Section 5.2(a) (Server Source Code License), TiVo will, within
[ * ] days of the Effective Date, place a copy of the Source Code to the TiVo
Server Technology in an escrow account. The terms governing the escrow of such
Source Code of the TiVo Server Technology will be set forth in the TiVo Server
Source Code Escrow Agreement attached hereto as Exhibit M (TiVo Server Source
Code Escrow Agreement) (the "Server Source Code Escrow Agreement"). In the event
that Sony does exercise its license option under this Section 5.2(a) (Server
Source Code License), TiVo may terminate such Server Source Code Escrow
Agreement. Sony shall be solely responsible for and shall reimburse TiVo for all
costs associated with such Source Code escrow.
(b) TiVo Maintenance Breach. If Sony has paid the applicable
maintenance fee for maintenance services under Section 5.1(b) (TiVo Maintenance)
and TiVo materially breaches its obligation to provide such services in
accordance with Exhibit P (TiVo Maintenance) such that any service provided by
Sony using the TiVo Server Technology would be materially impaired as compared
to the TiVo Service then being provided in the United States (a "Material
Impairment"), Sony shall give notice of such failure to TiVo. If TiVo fails to
provide TiVo Maintenance that cures such Material Impairment within [ * ] days
of receipt of Sony's written notice of the Material Impairment and TiVo is not
diligently pursuing such cure, TiVo shall [ * ]to be mutually agreed to by Sony
and TiVo[ * ] that are reasonably necessary [ * ]Provided TiVo is diligently
pursuing a cure to the Material Impairment, TiVo shall have up to [ * ] days
from TiVo's receipt of Sony's written notice of the Material Impairment to cure
such Material Impairment prior to[ * ]. If TiVo [ * ]in accordance with the
foregoing, all of the [ * ] TiVo
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
23
Server Technology shall[ * ] within [*]days after execution of this Agreement,
pursuant to [ * ]without any[ * ], and such[ * ] shall be used by [ * ]solely in
accordance with this Section 5.2(b) (TiVo Maintenance Breach) and Sections
5.2(c)[ * ], and[ * ] below. The Parties shall negotiate in good faith to [ *
]will have [ * ]and approval [ * ]shall not be unreasonably withheld or delayed.
(c) [ * ]Upon receipt of [ * ]or [ * ]of TiVo Server Technology, TiVo
[ * ]Sony and its Affiliates [ * ]to a[ * ] pursuant to Section 5.2(b) (TiVo
Maintenance Breach) above[ * ], under the TiVo Proprietary Rights, to [ * ]the[
* ] of the TiVo Server Technology solely[ * ], and TiVo [ * ]Sony and its
Affiliates the [ * ]and[ * ] the TiVo Server Technology licenses granted in
Section 2 (License Grants). Any sublicense Sony grants pursuant to this Section
shall be pursuant to a written sublicense agreement containing the minimum terms
and conditions set forth in [ * ]
(d) [ * ]Once the Material Impairment is corrected, such [ * ]of the
TiVo Server Technology to the[ * ] as applicable.
5.3 Expansion of TiVo Service Areas. Upon Sony's reasonable request, TiVo
will review and evaluate in good faith the commercial feasibility of expanding
the TiVo Service Area to new geographical regions. If TiVo determines that
expanding the TiVo Service Area to any such region is commercially feasible and
elects, in TiVo's sole discretion, to expand such TiVo Service Area, TiVo and
Sony will negotiate in good faith reasonable terms and conditions for the
development, [ * ], marketing and other business terms related to providing Sony
Video Recording Devices and the TiVo Service in such new geographical region.
Promptly following any change to the TiVo Service Area, TiVo agrees to amend
Exhibit J (TiVo Service Area) to properly reflect such changes to the TiVo
Service Area.
5.4 Expansion of TiVo Service to Japan. In the event that TiVo plans to
deploy the TiVo Service in Japan, TiVo shall, at least[ * ] months prior to
introduction of the TiVo Service in Japan, disclose to Sony the details of
TiVo's deployment plan for Japan. Upon such disclosure, Sony and TiVo shall
negotiate in good faith to determine the minimum specifications required to make
the Sony Products TiVo Enabled. If the TiVo Service in Japan requires the use of
a TiVo Client Upgrade not licensed to Sony, the parties will discuss in good
faith the feasibility of Sony's incorporation of such TiVo Client Upgrade.
5.5 ASP Service Offering. In the event that Sony or its Affiliate desires
to provide ASP Services to End Users of the Sony Products or CE Sublicensee
Products in Japan, Sony or such Affiliate shall give TiVo written notice of such
intent and TiVo shall have the right to prepare a proposal to provide ASP
Services to Sony or such Affiliate. TiVo shall provide such proposal to Sony or
such Affiliate within [ * ] days of the date of Sony's or its Affiliate's notice
to TiVo. TiVo's proposal must demonstrate that its ASP Services will be of high
quality, responsive, flexible, cost effective and otherwise competitive to ASP
Services that Sony or such Affiliate may receive from any Third Party. Upon
receipt of such proposal from TiVo, the parties shall, for a period of [ * ]
days, negotiate in good faith the terms and conditions pursuant to which
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
24
TiVo would provide such ASP Services. If, upon the conclusion of such [*]day
period, Sony or such Affiliate, in its reasonable discretion, believes that it
could receive ASP Services from a Third Party on terms better than the terms
offered by TiVo, Sony or such Affiliate may enter into an agreement with such
Third Party.
5.6 Sublicense of TiVo Technology and ASP Services Outside of Japan. In
connection with its license of the TiVo Technology hereunder, (a) Sony may from
time to time pursue deployment, distribution or similar business opportunities
outside of Japan pursuant to which Sony may desire to enter into a sublicense of
the TiVo Technology (but as to which Sony does not have sublicense rights under
this Agreement; and (b) TiVo may from time to time desire to provide ASP
Services to Sony and its Affiliates outside of Japan ("Opportunities"). In the
event that an Opportunity arises, Sony or such Affiliate shall give TiVo written
notice of such intent and TiVo shall have the right to prepare a proposal to
provide ASP Services or additional sublicense rights to Sony or such Affiliate.
TiVo shall provide such proposal to Sony or such Affiliate within [ * ] days of
the date of Sony's or its Affiliate's notice to TiVo. TiVo's proposal must
demonstrate that its ASP Services will be of high quality, responsive, flexible,
cost effective and otherwise competitive to ASP Services that Sony or such
Affiliate may receive from any Third Party. Upon receipt of such proposal from
TiVo, the parties shall, for a period of [ * ] days, negotiate in good faith the
terms and conditions pursuant to which TiVo would provide such ASP Services. If,
upon the conclusion of such [ * ] day period, Sony or such Affiliate, in its
reasonable discretion, believes that it could receive ASP Services from a Third
Party on terms better than the terms offered by TiVo, Sony or such Affiliate may
enter into an agreement with such Third Party. Should the parties reach
agreement on the terms and conditions of any such grant of sublicense rights or
other business understandings in connection with any such Opportunities, the
parties will negotiate and enter into a separate agreement governing the same.
5.7 Transfers to TiVo International. TiVo agrees to enter into the
Intellectual Property Assignment Agreement set forth in (Exhibit Q (Assignment
Agreement) (the "Assignment Agreement")) and the Intellectual Property License
and Cooperation Agreement set forth in Exhibit R (License Agreement) (the
"Intercompany License Agreement") between TiVo and TiVo International on or
prior to the Effective Date. TiVo and TiVo International agree that they will
execute all documents necessary to assign to TiVo International sole ownership
of all TiVo Proprietary Rights in the TiVo Technology (excluding TiVo Technology
Upgrades unless such TiVo Technology Upgrade is licensed by Sony) for copyrights
and mask works that arise under laws other than the United States Code and
Patent Rights that arise under laws other than the United States Code ("Foreign
Rights"). So long as there are any Foreign Rights in the TiVo Technology that
remain to be assigned to TiVo International as required by the immediately
preceding sentence, TiVo agrees that it will not rescind, agree to rescind,
reduce or agree to reduce the scope of the Assignment Agreement, except upon the
occurrence of a Trigger Event. Additionally, so long as the licenses granted to
Sony and its Affiliates under this Agreement is in effect, TiVo agrees that it
will not rescind, agree to rescind, reduce or agree to reduce the scope of the
Intercompany License Agreement, except upon the occurrence of a Trigger Event.
Upon Sony's reasonable request, exercisable no more than once every other
calendar quarter, TiVo
----------
[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
25
will provide Sony with written evidence of such Foreign Rights assignments and
ownership to the extent not previously provided. TiVo shall cause TiVo
International to enter into the TiVo International Technology License Agreement
set forth in Exhibit S (TiVo International Technology License Agreement) with
Sony on or prior to the Effective Date. TiVo shall file the necessary documents
with the appropriate authority to commence the assignment of such rights within
[*] days of the Effective Date. This obligation shall terminate upon [*] days'
notice after a Trigger Event.
5.8 Service Availability. During the Term and upon [*] of the TiVo Service
("[*]Date") by an End User using a TiVo [*]product in a TiVo Service Area, TiVo
shall,[*] Sony or its Affiliates, CE Sublicensees or End Users (except for
[*]for the TiVo Services by the End User),[*] the latest version of TiVo's
client-side Personal Digital Recording Technology with the [*]which can be
supported on such hardware for the services subscribed to by the End User, with
such client-side technology being limited to that necessary for the services
subscribed to by the End User on the [*] Date and such additional services for
which he or she may subscribe to in the future. The intention of this Section
5.8 (Service Availability) is to ensure that (a) End Users of TiVo Enabled Sony
Products and CE Sublicensee Products in a TiVo Service Area shall be capable of
receiving the TiVo Service [*]users of products manufactured by or for TiVo or
Third Parties as of such End User's [*]Date, except[*] by the hardware platform
of such End User's product; and (b) TiVo Enabled products manufactured by Sony
and CE Sublicensees are [*]in receiving TiVo Services[*]of the TiVo Client
Technology[*] in such products.
6. License Fees and Royalties.
6.1 License Fee. Within [*] business days after execution of this Agreement
and in consideration of the licenses granted in Section 2 (License Grants), Sony
shall pay to TiVo the License Fee.
6.2 Japan Sublicense Fees. [*], Sony shall pay only the amounts and make
only the reports specified herein only to TiVo solely with respect to the
exercise of rights under the TiVo Proprietary Rights licensed to Sony and its
Affiliates under this Agreement and solely to the extent that the licenses under
this Agreement are in[*]
(a) TiVo Client Technology Sublicense.
(i) Within [*] days after the effective date of a CE Sublicense
Agreement, Sony will pay to TiVo the greater of: (A) [*]of the aggregate amount
of any sublicense fees due to Sony from the CE Sublicensee during such [*] day
period in connection with such CE Sublicense Agreement; or (B)[*] Thereafter,
until Sony has paid to TiVo [*], Sony will pay to TiVo on a quarterly basis the
greater of: (A) [*]for each CE Sublicensee Product shipped or otherwise
transferred to a Third Party during such quarter; or (B[*]) of any royalties or
additional sublicense fees due to Sony from the CE Sublicensee.
(ii) Once Sony has paid to TiVo [*]in connection with a CE
Sublicense Agreement pursuant to subsection (i) above, Sony will make
[*]payments to TiVo
--------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
26
until the earlier of: (A[*] Sony under such CE Sublicense Agreement reaches[*];
or (B)[*] CE Sublicensee Products are shipped or otherwise transferred to a
Third Party. Thereafter, with respect to running royalties or additional
sublicense fees due to Sony from the CE Sublicensee under such CE Sublicense
Agreement, Sony will pay to TiVo on a quarterly basis the greater of: (A) [*]for
each CE Sublicensee Product shipped or otherwise transferred to a Third Party
during such quarter; or (B[*] of any royalties or additional sublicense fees due
to Sony from the CE Sublicensee.
(iii) Royalties due under this Section 6.2 (Japan Sublicense
Fees) are payable quarterly for the quarter prior to the preceding quarter (e.g.
the Royalty Report and the payment made on April 30 for the quarter ending on
March 31 shall be for royalties accrued in the quarter ended December 31) as
specified in the Royalty Report required under Section 6.3(e) (Royalty Reports).
Any royalties due to TiVo under this Section 6.2 (Japan Sublicense Fees) may be
paid by Sony or a Sony Primary Affiliate.
(b) TiVo Server Technology Sublicense. TiVo and Sony shall mutually
agree to the terms of any sublicense that Sony or its Affiliate proposes to
grant with respect to the TiVo Server Technology, and the granting of any such
sublicense shall be conditioned on such agreement.
6.3 Royalties. After a Voluntary Rejection, Sony shall pay only the amounts
and make only the reports specified herein to TiVo solely with respect to the
exercise of rights under the TiVo Proprietary Rights licensed to Sony and its
Affiliates under this Agreement and solely to the extent that the licenses under
this Agreement are in effect after the Voluntary Rejection.
(a) Royalties Within TiVo Service Areas. Except as set forth in
Section 6.3(c) (Royalty Adjustment) and [*], Sony or its applicable Affiliate
shall pay to TiVo[*] per unit for each Sony Video Recording Device manufactured
by or for Sony or its Affiliate that is shipped or otherwise transferred to
either a Third Party or a retail store owned by Sony or its Affiliates
(whichever occurs first) for use within the TiVo Service Area. For the avoidance
of doubt, [*]that are sold by Sony or its Affiliate for use within a TiVo
Service Area. In the event that an area ceases to be a TiVo Service Area, the
payment of royalties on all Sony Video Recording Devices distributed after the
effective termination of such area's status will be pursuant to the terms of
Section 6.3(b) (Royalties Outside TiVo Service Areas)[ * ]
(b) Royalties Outside TiVo Service Areas. Except as otherwise set
forth in Section 6.3(c) (Royalty Adjustment), Sony or its applicable Affiliate
shall pay to TiVo [*]per unit for each Sony Video Recording Device manufactured
by or for Sony or its Affiliate that is shipped or otherwise transferred to a
Third Party or a retail store owned by Sony or its Affiliates (whichever occurs
first) for use outside of the TiVo Service Area. Sony and its Affiliates, may,
in its sole discretion, elect to manufacture Sony Video Recording Devices [*]use
in areas that are outside of the TiVo Service Area. In the event that such areas
[*]TiVo shall[*] with respect to such Sony Video Recording Device[*]
--------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
27
(c) Royalty Adjustment. Subject to the terms of Section 6.4 (License
Fee and Royalty[*]), the royalty amounts specified in Sections 6.3(a) (Royalties
Within TiVo Service Areas) and (b) (Royalties Outside TiVo Service Areas) shall
remain in effect for so long as any claim in any TiVo Patent Right is still in
effect in any jurisdiction in which the Sony Video Recording Device is
manufactured, imported, sold, offered for sale or used. When no claim under TiVo
Patent Rights is any longer in effect, the foregoing royalties[*]
(d) Royalty Payments. Royalties due under this Section 6.3 (Royalties)
shall accrue at the time Sony or its Affiliate ships or otherwise transfers a
Sony Video Recording Device to either a Third Party or a retail store owned by
Sony or its Affiliates (whichever occurs first). Such royalties are payable
quarterly, with payment due commensurate with submission of the Royalty Report
required under Section 6.3(e) (Royalty Reports). Nothing in this Section 6.3
(Royalties) shall be construed to require Sony to pay any royalties for products
sold for use in Japan. Any royalties due to TiVo under this Agreement, may be
paid by Sony or a Sony Primary Affiliate.
(e) Royalty Reports. Within [*] days following the end of each
calendar quarter ending on March 31, June 30, September 30 and December 31, and
within [*] days after any termination of this Agreement for any reason, Sony
shall submit a Royalty Report to TiVo containing royalty information as follows:
(i) for Sony and its Affiliates for such calendar quarter and (ii) for CE
Sublicensees for the calendar quarter prior to the preceding calendar quarter
(e.g. the Royalty Report delivered by April 30 for the quarter ending on March
31 shall contain royalty information for CE Sublicensees for the quarter ended
December 31). If no such sublicenses were granted, no such products were sold,
leased, distributed or transferred, and/or no such Sony Video Recording Devices
were delivered to a Third Party during such calendar quarter, Sony shall provide
TiVo a statement so certifying.
(f) [*] . A Sony Video Recording Device that is [*]may be [*]TiVo;
provided, however, the terms and conditions of [*]or any other[*], if any, are
subject to [*]of the parties.
6.4 License Fee and Royalty [*]. The parties agree that all royalties and
license fees paid by Sony to TiVo and TiVo Affiliates for the TiVo Client [*]
and TiVo Server[*] licensed pursuant to Sections 2.1(a) (TiVo Client
Technology), 2.1(b) (TiVo Server Technology License), 2.2(a) (TiVo Client
Technology License) and 2.2(b) (TiVo Server Technology License) will[*]. For
clarification purposes, any payments made by Sony to TiVo pursuant to Sections 5
(Additional Obligations), 6.2 (Japan Sublicense Fees), 7 (TiVo Engineering
Services), Section 4.2 (Japan Sublicense Fees) of the TiVo International
Technology License Agreement executed pursuant to Section 5.7 (Transfers to TiVo
International) (the "TiVo International Technology License Agreement") and any
royalty payments for Sony Video Recording Devices containing releases of TiVo
Client Technology after TiVo Client[*]
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
28
6.5 Super Favored Status.
(a) Scope.
(i) During the Term and so long as Sony has not paid royalties
and license fees to TiVo or a TiVo Affiliate under this Agreement[*], the
combination of the License Fee and per unit royalties to be paid by Sony to TiVo
under this Section 6 (License Fees and Royalties) shall be [*]the upfront
license fees and per unit royalties to be paid by any other Third Party licensee
for a license to the TiVo Client[*] and TiVo Server [*]on terms and conditions
substantially similar to those set forth herein; provided that (A) in assessing
this clause, the economic impact [*]shall be considered; (B) in the event that
the License Fee and per unit royalties would trigger this provision but for
considering the economic impact[*], Sony shall be entitled to receive upfront
license fees and per unit royalties (when taken in combination) [*]those offered
to such licensee; provided that[*] shall no longer apply to the royalties
payable by Sony; and (C) the foregoing shall not apply to any licenses to the
TiVo Technology granted prior to the Effective Date or granted in connection
with the settlement for any action or litigation against TiVo.
(ii) During the Term [*], the combination of the upfront License
Fee and per unit royalties to be paid by Sony to TiVo under this Section 6
(License Fees and Royalties) (as apportioned below) shall be [*]the upfront
license fees and per unit royalties to be paid by any other Third Party licensee
for a license to only the TiVo Client [*]on terms and conditions substantially
similar to those set forth herein; provided that[*] (B) in the event that the
upfront license fee and per unit royalties would trigger this[*], Sony shall be
entitled to receive upfront license fees and per unit royalties (when taken in
combination) [*]those offered to such licensee; provided that[*] (C) the
foregoing shall not apply to any licenses to the TiVo Client Technology granted
prior to the Effective Date or granted in connection with the settlement for any
action or litigation against TiVo. For purposes of this Section 6.5(a)(ii),[*]
of the License Fee and all of the royalties shall be allocated to the TiVo
Client Technology.
(iii) During the Term[*], the combination of the upfront License
Fee and per unit royalties to be paid by Sony to TiVo under this Section 6
(License Fees and Royalties) (as apportioned below) shall be [*]the upfront
license fees and per unit royalties to be paid by any other Third Party licensee
for a license to only the TiVo Server [*]on terms and conditions substantially
similar to those set forth herein; provided that[*] (B) in the event that the
upfront license fee and per unit royalties would trigger this [*]Sony shall be
entitled to receive upfront license fees and per unit royalties (when taken in
combination) [*]those offered to such licensee; [*]and (C) the foregoing shall
not apply to any licenses to the TiVo Server Technology granted prior to the
Effective Date or granted in connection with the settlement for any action or
litigation against TiVo. For purposes of this Section 6.5(a)(iii),[*] of the
License Fee and no royalties shall be allocated to the TiVo Server Technology.
(b) Adjustment. In the event TiVo provides a licensee with an upfront
license fee and per unit royalties which are less than those set forth in this
Section 6 (License Fees and
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
29
Royalties) and Sony chooses to accept them, TiVo shall, effective as of the date
such fees and royalties were provided to such licensee, adjust Sony's License
Fee and per unit royalties to an amount [*]those provided to such licensee and
credit Sony's account for any overpayments made prior to such adjustment.
(c) Recordkeeping. TiVo shall maintain complete and accurate records,
in accordance with GAAP, to support and document TiVo's compliance with the
terms of this Section 6.5 (Super Favored Status). TiVo shall maintain such
records for a period of at least three (3) years after Term. During the Term and
so long as Sony has not paid royalties and license fees to TiVo under this
Agreement equal to the[ * ], TiVo agrees to provide Sony with a copy of all
press releases issued by TiVo related to license arrangements TiVo enters into
with respect to the TiVo Technology. In addition, upon Sony's request but no
more than once a calendar quarter, TiVo shall provide Sony with the following
Confidential Information: a statement as to the number of license arrangements
entered into with respect to the TiVo Technology, the identity of each licensee
that is a party to any such arrangement (subject to TiVo's confidentiality
obligations) and a written certification that no such license arrangement(s)
triggered the provisions of this Section 6.5 (Super Favored Status), or if no
such arrangements have been entered into, a statement to that effect. At any
time, but no more frequently than once every other calendar quarter, an
independent certified public accountant, which shall be mutually agreed upon by
the parties, shall have the right, upon [ * ] days' notice and during regular
business hours at TiVo's regular location for maintenance of such records, to
conduct an audit of the relevant portions of such license arrangements solely to
verify compliance with this Section 6.5 (Super Favored Status). Such auditor
shall return all information, other than audit results, to TiVo and will only
disclose the results of the audit to Sony.
(d) No Impairment. TiVo covenants that it shall not enter into any
agreement, arrangement or relationship that is intended, or may be reasonably
construed, to effect a circumvention of the super favored pricing requirements
of this Agreement, nor in the event of any review of an agreement, shall TiVo
redact any portion of an agreement, amendment, supplement or addendum that may
bear on the pricing or other economic terms TiVo provides to a licensee. Sony
shall pay the costs of the review of any agreements pursuant to this Section 6.5
(Super Favored Status).
(e) Costs of Review. However, if as a result of any such review it is
determined that a Third Party licensee of the TiVo Server [*]and/or TiVo Client
[*]has paid upfront license fees or royalties that would trigger the provisions
of this Section 6.5 (Super Favored Status) and resulted in the overpayment by
Sony of five percent (5%) or more during the audited period, then TiVo shall pay
the costs of the review and credit Sony the overpayment[*].
6.6 Maintenance Services. In addition to the foregoing, during the Term or
until Sony elects not to purchase such services (whichever occurs first), the
maintenance fees charged to Sony for the Maintenance Services to be provided by
TiVo under Section 5.1(b) (TiVo Maintenance) shall be less than or equal to the
maintenance fees charged to Third Parties purchasing the same maintenance
services on terms and conditions substantially similar to those
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
30
set forth herein. The provisions of Section 6.5(b) (Adjustment), 6.5(c)
(Recordkeeping), 6.5(d) (No Impairment) and 6.5(e) (Costs of Review) shall also
apply to ensure that Sony receives the most favored pricing required by this
Section 6.6 (Maintenance Services).
6.7 Records and Audits. For at least [*] years after any payment, Sony
shall and shall require each Sony Primary Affiliate to maintain complete,
current and accurate records documenting all amounts to be paid to TiVo
hereunder. No more than once every other calendar quarter, an independent
certified public accountant, which shall be mutually agreed upon by the parties,
shall have the right, upon [*] business days' notice and during regular business
hours at Sony's or a Sony Primary Affiliates' regular location for maintenance
of such records, to conduct an audit of the relevant portions of Sony's or a
Sony Primary Affiliates' books of account solely to verify compliance with this
Agreement. Such auditor shall return all information, other than the audit
results, to Sony or the Sony Primary Affiliate and will only disclose the
results of the audit to TiVo. If any such audit should disclose any underpayment
of royalties or other fees, Sony shall promptly pay TiVo such underpaid
amount[*] The audit will be conducted at TiVo's expense, unless the audit
reveals that Sony has underpaid TiVo by five percent (5%) or more in any
calendar quarter, in which case Sony will reimburse TiVo for all reasonable
costs and expenses incurred by TiVo in connection with such audit. Such audits
will be conducted no more than once in any period of [*] consecutive months.
7. Tivo Engineering Services.
7.1 TiVo Engineering Services.
(a) First Year. During the Term commencing on the first day of the
first calendar month after the Effective Date ("First Calendar Date"), TiVo
shall provide to Sony engineering resources equivalent to that of [*]dedicated
engineers to transfer the TiVo Technology to Sony and otherwise assist Sony in
the use, assimilation, customization and exploitation of the TiVo Technology and
to perform projects designated by Sony and pursuant to project schedules as
mutually agreed upon by the parties, all as described in Section 7.4 (Project
Plans). [*]of the engineers will be dedicated full-time to providing such
engineering services to Sony. The remaining engineering services will be
provided by such engineers as TiVo selects to perform such services from time to
time. All such engineers shall be qualified by TiVo in accordance with Exhibit H
(TiVo Engineer Qualifications). Prior to the First Calendar Date, Sony shall
prepay to TiVo an engineering services fee of[*] for the engineering services of
the TiVo engineers to be provided by TiVo for Sony in accordance with the terms
of this section (the "First Year Prepayment Amount"). The First Year Prepayment
Amount shall be refreshed as provided below by Sony on the first day of each
succeeding three (3) calendar month period for the next three (3) calendar
quarters ("First Year Service Period"); provided, however, that (i) to the
extent a balance exists upon the conclusion of a First Year Service Period, such
balance shall be credited over to the next First Year Service Period and Sony
shall only be responsible to pay the difference between the First Year
Prepayment Amount and the amount credited from the previous First Year Service
Period; and (ii) to the extent the costs of services performed during the
previous First Year Service Period exceeds the First Year Prepayment Amount,
Sony shall
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
31
pay to TiVo the Prepayment Amount plus all additional amounts owed to TiVo for
services performed. If Sony elects not to continue to receive the TiVo
engineering services as of the first anniversary of the First Calendar Date, it
will provide notice to TiVo of its intention to terminate such engineering
services at least [*]days prior to such time, and TiVo will promptly refund to
Sony any unused portion of the First Year Prepayment Amount and, if additional
fees are owed by Sony for such services, Sony will promptly pay to TiVo such
amount.
(b) Second and Third Year. During the second and third year after the
First Calendar Date, TiVo shall provide to Sony engineering resources equivalent
to that of two (2) dedicated engineers to transfer the TiVo Technology to Sony
and otherwise assist Sony in the use, assimilation, customization and
exploitation of the TiVo Technology and to perform projects designated by Sony
and pursuant to project schedules as mutually agreed upon by the parties, all as
described in Section 7.4 (Project Plans). One (1) of the engineers will be
dedicated to providing such engineering services full-time to Sony. The
remaining engineering services will be performed by such engineers as TiVo
selects to perform such services from time to time. Prior to the second and
third years after the First Calendar Date, Sony shall prepay to TiVo an
engineering services fee of: ([*]in the second year; and (ii)[*]) in the third
year, for the engineering services of the engineers to be provided by TiVo for
Sony in accordance with the terms of this section (the "Subsequent Year
Prepayment Amount"). The Subsequent Year Prepayment Amount shall be refreshed as
provided below by Sony on the first day of each succeeding three (3) calendar
month period for the next three (3) calendar quarters ("Subsequent Year Service
Period"); provided, however, that (i) to the extent a balance exists upon the
conclusion of a Subsequent Year Service Period, such balance shall be credited
over to the next Subsequent Year Service Period and Sony shall only be
responsible to pay the difference between the Subsequent Year Prepayment Amount
and the amount credited from the previous Subsequent Year Service Period; and
(ii) to the extent the costs of services performed during the previous
Subsequent Year Service Period exceeds the Subsequent Year Prepayment Amount,
Sony shall pay to TiVo the Prepayment Amount plus all additional amounts owed to
TiVo for services performed. If Sony elects not to continue to receive the TiVo
engineering services as of the second anniversary of the First Calendar Date, it
will provide notice to TiVo of its intention to terminate such engineering
services at least [*] days prior to such time, and TiVo will promptly refund to
Sony any unused portion of the Subsequent Year Prepayment Amount and if
additional fees are owed by Sony for such services, Sony will promptly pay to
TiVo such amount.
7.2 Subsequent Years. During the fourth through the seventh years after the
First Calendar Date, the parties will mutually agree upon the terms, if any,
under which TiVo will provide engineering services to Sony.
7.3 Engineering Costs and Expenses. The engineering services provided in
connection with this Section 7 (TiVo Engineering Services) are based on a rate
of [*]for the first year[*] for the second year[*] for the third year (all of
the foregoing excluding travel time). With respect to expenses incurred in
connection with TiVo's performance under this Section 7 (TiVo Engineering
Services), TiVo will only be reimbursed for expenses which are (a) incurred
prior to
--------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
32
termination of this Agreement for any reason, and (b) approved in advance in
writing or via email by the President of Network Terminal Solutions Company,
Home Network Company or other Sony official(s) authorized by the same. In
addition, Sony shall reimburse TiVo for any reasonable travel expenses incurred
by TiVo for any travel made at Sony's request. TiVo will be reimbursed for such
expenses no later than [*] days after Sony's receipt of TiVo's invoice, provided
that reimbursement for expenses may be delayed until such time as TiVo has
furnished such documentation for authorized expenses as Sony may reasonably
request.
7.4 Project Plans. Within [*] days of the Effective Date, designated
representatives of the parties will meet to establish the initial project plans
for the engineering services to be provided by TiVo in accordance with this
Section 7 (TiVo Engineering Services). Sony shall designate project plans within
the scope of work described in Exhibit H (TiVo Engineer Qualifications), which
may be modified from time to time within Sony's discretion, and Sony may
allocate the dedicated TiVo engineers between and among such projects at Sony's
discretion. Notwithstanding the foregoing, the parties shall mutually agree as
to all development schedules pursuant to each Sony-designated project plan.
Prior to the start of any project, the parties shall negotiate in good faith as
to the applicability of the provisions of Section 9.2(b) (Revenue from Joint
Innovations) to such project. Designated representatives of the parties shall
meet no less than quarterly to review the status and priorities of the projects
and to reallocate resources as necessary.
8. Payments and Taxes.
8.1 Payments. All payments made by the Sony or its Affiliates under this
Agreement must be made in United States Dollars and shall be paid without
deduction, set-off, or counter claim, free and clear of any restrictions or
conditions, except with respect to set-offs or credits to be provided by TiVo to
Sony under this Agreement pursuant to Sections 6.3(b) (Royalties Outside TiVo
Service Area), 6.5 (Super Favored Status), 7.1 (TiVo Engineering Services), 7.2
(Subsequent Years) and 9.2(b) (Revenue From Joint Innovations). In the event
that the aggregate fees owed by TiVo to Sony pursuant to this Agreement exceed
the aggregate fees owed by Sony to TiVo at the end of any quarterly payment
period, TiVo shall pay such amount to Sony within [*] days of the end of such
quarterly payment period.
8.2 Taxes. For the License Fee payment under Section 6.1 (License Fee) of
this Agreement in which deductions or withholding for Taxes are required, Sony
shall promptly notify TiVo of any requirement under applicable law to deduct or
withhold an amount on behalf of TiVo on account of any Tax and, if so required
under applicable law, Sony shall: (a) pay to the relevant authorities the full
amount required to be deducted or withheld promptly upon determination by Sony
that such deduction or withholding is required; and (b) promptly forward to TiVo
an official receipt (or certified copy), or other documentation reasonably
acceptable to TiVo, evidencing such payment to such authorities. [*]. [*]If any
deduction is required to be made by law on any other fees to be paid by Sony or
the Sony Primary Affiliates to TiVo hereunder, Sony or such Sony Primary
Affiliate shall pay in the manner and at the same time such additional amounts
as will result in receipt by TiVo of such amount as would have been
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
33
received by TiVo had no such amount been required to be deducted. Other than as
specifically set forth above, Sony shall be responsible for all Taxes incurred
in connection with either party's performance under this Agreement, excluding
any Taxes based on TiVo's net income.
9. Ownership.
9.1 TiVo Technology. Excluding any Third Party Technology therein, TiVo has
and shall retain exclusive ownership of all right, title, and interest in and to
the TiVo Technology, TiVo Service, TiVo Marks, and TiVo Trade Dress.
9.2 Innovations.
(a) Title to Innovations. Title to Sony Improvements and all
Innovations and other intellectual property made solely by Sony personnel other
than Joint Innovations shall be solely owned by Sony. Title to TiVo Improvements
and all Innovations and other intellectual property made solely by TiVo
personnel other than Joint Innovations shall be solely owned by TiVo. All Joint
Innovations shall be jointly owned by Sony and TiVo. For clarification, such
Joint Innovations shall only extend to the modifications or revisions made
pursuant to Section 7 (TiVo Engineering Services) of this Agreement or the
Interim Services Agreement and shall not extend to the underlying technology.
Each party hereby assigns to the other party a fifty percent (50%) undivided
interest in the Joint Innovations including, but not limited to, patents,
copyrights, trade secrets and any other intellectual property right based on the
Joint Innovations, whether in the United States or abroad. It is the intention
of the parties that the intellectual property rights in the Joint Innovations
shall be jointly owned without any duty to account or share any royalties based
on the licensing of the Joint Innovations by the other party.
(b) Revenue from Joint Innovations. Unless the parties otherwise
mutually agree in a project plan contemplated under Section 7.4 (Project Plans),
if TiVo subsequently licenses any such Joint Innovation to a Third Party,[*] In
no event shall [*]The parties acknowledge that any amounts [*]under this Section
9.2(b) (Revenue from Joint Innovations), if any, [*]any amounts[*] under Section
6 (License Fees and Royalties). [*]will maintain complete, current and accurate
records documenting [*]for a period of three (3) years following any expiration
or termination of this Agreement. No more than once every other calendar
quarter, independent certified public accountant, which shall be mutually agreed
upon by the parties, shall have the right, upon [*] business days' notice and
during regular business hours at[*] regular location for maintenance of such
records, to conduct an audit of the relevant portions of [*]books of account
solely to verify compliance with this Section 9.2(b) (Revenue from Joint
Innovations). Such auditor shall return all information, other than the audit
results, to [*]and will only disclose the results of the audit to[*]. If any
such audit should disclose any underpayment of royalties or other fees, [*]shall
promptly pay [*]such underpaid amount,[*] The audit will be conducted at
[*]expense, unless the audit reveals that [*]has underpaid [*]by five percent
(5%) or more in any calendar quarter, in which case [*]will reimburse[*] for all
reasonable costs and expenses incurred by Sony in connection with such audit.
Such audits will be conducted no more than once in any period of [*] consecutive
months.
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
34
9.3 Sony Covenant Not to Xxx. Sony agrees that, solely as related to TiVo
Technology or Improvements developed by or for TiVo or its Affiliate (whether
alone or with a Third Party), Sony and its Affiliates shall not prosecute or
assist in the prosecution of any claim, action, or cause of action based upon
the purported or actual infringement of any patent rights that Sony or its
Affiliate may have or acquire in or to any Sony Improvement against (a) TiVo (or
its successors or assigns); (b) any of TiVo's Affiliate (or its successors or
assigns); and (c) TiVo's (including its successors' or assigns') direct or
indirect licensees or customers; or (iv) any direct or indirect licensees or
customers of TiVo's Affiliates. The foregoing covenant, however, shall only
apply (a) if such technology was independently developed by or for TiVo without
reference to any such Sony patent; and (b) to patents based on such Sony
Improvements that Sony files after it has received the TiVo Client Initial
Release. If Sony assigns ownership of any Sony Improvement to a Third Party,
Sony shall on or before the effective date of such assignment, obtain the
written agreement of such Third Party and its Affiliates (and any subsequent
assignees and such subsequent assignees' Affiliates) to comply with and be bound
by this Section 9.3 (Sony Covenant Not to Xxx).
9.4 Joint Innovations.
(a) Patent Prosecution.
(i) One party (the "Prosecuting Party") shall have the first
right to pursue patent protection for Joint Innovations, and the other party
(the "Non-Prosecuting Party") agrees to take reasonable action to cooperate with
the Prosecuting Party in this regard. The Prosecuting Party for each Joint
Innovation shall be mutually determined in accordance with the factors listed
below in order of priority: (A) if a Joint Innovation is an improvement to, or
is based on or derived from, predominantly one party's patent rights and/or
other intellectual property, then such party shall be the Prosecuting Party; and
(B) except as set forth in (A) above, if one party is prosecuting or has
prosecuted a related patent application which provides a basis for priority for
all or part of a Joint Innovation, then such party shall be the Prosecuting
Party. If the parties cannot agree on the Prosecuting Party based on the
foregoing, then each party shall retain its rights under applicable law to
pursue patent or other intellectual property protection for the subject Joint
Innovation at its sole expense. The Prosecuting Party shall have the first right
to file, prosecute and maintain patent applications and patents for a Joint
Innovation. The Non-Prosecuting Party shall promptly reimburse the Prosecuting
Party for one-half (1/2) of the Prosecuting Party's out-of-pocket expenses in
connection with such activities as they are incurred, provided that if the
Non-Prosecuting Party so notifies the Prosecuting Party in writing that it does
not wish to reimburse the Prosecuting Party for such expenses, then the
Non-Prosecuting Party shall (A) not be responsible for any further costs under
this Section 9.4(a) (Patent Prosecution) related to any patent or patent
application, in which case all right, title and interest in and to such patent
or application (as the case may be) and any patents issuing thereon shall be
solely owned by the Prosecuting Party, and (B) receive a perpetual, irrevocable,
worldwide, royalty-free license in and to such patent.
(ii) In the event the Prosecuting Party fails or declines to take
such actions to pursue patent protection with respect to any Joint Innovation in
accordance with this Section 9.4(a) (Patent Prosecution), then the
Non-Prosecuting Party shall have the right to file, prosecute and maintain such
patent applications or patents at its sole expense, in which case all
35
right, title and interest in and to such patent or application (as the case may
be) and any patents issuing thereon shall be solely owned by the Non-Prosecuting
Party and the Prosecuting Party shall receive a perpetual, irrevocable,
worldwide, royalty-free license in and to such patent. The Prosecuting Party
shall notify the Non-Prosecuting Party at least [*] days (or such shorter period
as is reasonably practicable for deadlines not extendable beyond [ * ] days)
prior to the date the next action or filing is due to be taken with respect to a
Joint Innovation or a patent application or patent for a Joint Innovation, if
the Prosecuting Party does not intend to take any of the foregoing actions with
respect to such Joint Innovation or such patent application or patent.
(b) Enforcement. TiVo and Sony acknowledge that as a joint owner
each could be involuntarily joined as a plaintiff in any litigation based upon
the intellectual property rights in the Joint Innovations. To avoid such a
problem, each party agrees to give notice to the other party of a potential
lawsuit (including a counterclaim) and factual basis of such lawsuit prior to
filing any such lawsuit. Each party agrees not to file the lawsuit after receipt
of notice from the other party without the prior written approval of the party
giving notice. In the event that any legal action is commenced against any Third
Party for claims arising out of or related to any Joint Innovation, the party
participating in such an action agrees to indemnify the non-participating party
against any and all damages, penalties, costs and expenses incurred by the
non-participating party (including reasonable attorney's fees) in connection
with such action.
(c) Cooperation. During the term of this Agreement, and
thereafter with respect to patent rights for Joint Innovations, each of TiVo and
Sony shall keep the other reasonably informed as to the status of patent matters
pertaining to such Joint Innovations, as applicable, including providing to the
other party copies of any significant documents that such party receives from or
sends to patent offices, such as, without limitation, notices of interferences,
re-examinations, oppositions or requests for patent term extensions, all as
reasonably requested by the other party. TiVo and Sony shall each reasonably
cooperate with and assist the other in connection with such activities, at the
other party's request and expense, and shall use good faith efforts to consult
with each other regarding the prosecution and maintenance of Sony's patent
rights and TiVo's patent rights as is reasonably appropriate.
(d) Power of Attorney. In accordance with the foregoing, the
parties agree to execute a limited power of attorney in the form set forth in
Exhibit L (Form of Power of Attorney) to enable each other to execute license
agreements in the Joint Innovations in the names of both joint owners of
intellectual property in jurisdictions which require such signatures to make a
license enforceable.
10. Confidentiality.
10.1 Protection of Confidential Information. The Receiving Party shall not
use the Confidential Information of the Disclosing Party except for the purpose
of carrying out its rights or obligations under this Agreement. The Receiving
Party will not disclose the Confidential Information of the Disclosing Party,
except as expressly authorized in this Agreement (including the sublicense
rights to CE Sublicensees) or in writing by the Disclosing Party. The Receiving
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
36
Party may also disclose any Confidential Information that must be disclosed
pursuant to applicable federal, state, or local law, regulation, court order, or
other legal process; provided, that the Receiving Party gives the Disclosing
Party prompt written notice sufficient to allow the Disclosing Party to seek a
protective order or other appropriate remedy. The Receiving Party will use the
same degree of care to prevent such misuse or disclosure that the Receiving
Party uses with respect to its own proprietary information, but in no event with
less than with reasonable care. Disclosure of Confidential Information does not
constitute a license with respect to such Confidential Information.
10.2 Disclosure Restrictions. The Receiving Party may disclose Confidential
Information only to its employees, consultants and contractors when such
disclosure is reasonably necessary for Sony to exercise its rights in compliance
with, and only for purposes contemplated by, this Agreement, provided such
employees, consultants and contractors are advised of the confidential nature
thereof and bound by nondisclosure obligations and restrictions no less
restrictive than those set forth in this Section 10 (Confidentiality). In
addition, TiVo Confidential Information may be disclosed by Sony to a CE
Sublicensee who enters into a CE Sublicense Agreement, provided such CE
Sublicensee is advised of the confidential nature thereof. Confidential
Information in the form of TiVo Source Code may only be disclosed to Authorized
Personnel in accordance with the terms of Section 2.4(a) (Handling of TiVo
Source Code).
11. Representations and Warranties.
11.1 TiVo Representations and Warranties. TiVo hereby represents and
warrants that:
(a) it is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) this Agreement has been duly authorized by all necessary corporate
action of TiVo;
(c) it has all requisite power and authority to enter into and perform
all of its obligations under this Agreement;
(d) there are no approvals, authorization, or other actions or filings
with any Third Party that are required to be obtained or made by TiVo in
connection with its execution of, and the consummation of the transactions
contemplated under, this Agreement;
(e) except for TiVo Foreign Rights, all TiVo Technology is owned
solely by TiVo and not by its Affiliates; and
(f) on the date of Sony's acceptance of each of the TiVo Client
Interim Releases, TiVo Server Interim Releases, TiVo Client [*]and TiVo Server[
* ], the TiVo Technology provided to Sony under this Agreement, in the form
provided by TiVo, when operated in
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
37
conjunction with the Third Party Technology specified in Exhibit E (Third Party
Technology) and in the environment specified in Exhibit A (TiVo Technology),
shall be sufficient to enable Sony to operate a personal video recording service
equivalent to the version of the TiVo Service embodied by that release.
11.2 Sony Representations and Warranties. Sony hereby represents and
warrants that:
(a) it is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) this Agreement has been duly authorized by all necessary corporate
action of Sony;
(c) it has all requisite power and authority to enter into and perform
all of its obligations under this Agreement; and
(d) there are no approvals, authorization, or other actions or filings
with any Third Party that are required to be obtained or made by Sony in
connection with its execution of, and the consummation of the transactions
contemplated under, this Agreement.
11.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
SECTION 3.4 (TIVO TECHNOLOGY WARRANTIES; WARRANTY LIMITATION) AND THIS SECTION
11 (REPRESENTATIONS AND WARRANTIES), NEITHER PARTY MAKES ANY WARRANTIES AS TO
THE TECHNOLOGY, SERVICES OR SUPPORT PROVIDED HEREUNDER AND EACH PARTY EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS, IMPLIED AND STATUTORY, WHETHER
ARISING FROM COURSE OF DEALING OR USAGE OF TRADE INCLUDING, WITHOUT LIMITATION,
THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS.
12. Indemnification.
12.1 TiVo Indemnification Obligation.
(a) Indemnity. TiVo, at its own expense, shall defend, indemnify and
hold harmless directly, Sony, (including, without limitation, its directors,
officers, and employees), and the Sony Primary Affiliates (including, without
limitation, their directors, officers, and employees) and indirectly, for Claims
brought through Sony or a Sony Primary Affiliate, Sony's Affiliates and CE
Sublicensees (collectively, the "Sony Indemnitees") from and against any Claims
based on allegations that (i) the TiVo Technology provided to Sony (or modified
by Sony or Sony Affiliates at TiVo's direction) (including Claims of
contributory or inducement of infringement (A) of a Third Party's rights (other
than patents) based solely on the use of the TiVo Technology in conjunction with
the TiVo Service or (B) of a Third Party's patents based solely on the use of
the TiVo Technology; provided that in (A) and (B), such TiVo Technology is used
solely in accordance with the reference design(s) (e.g., the set-top box
manufactured by or for Sony Corporation of America under the LOI (as defined in
Section 15.12 (Entire Agreement) as of the Effective Date) and as further
described in Exhibit A (TiVo Technology)
38
without modification to such reference design(s) (such Claims of contributory or
inducement of infringement hereafter referred to as the "Specified Contributory
Claims") or (ii) the TiVo Marks, infringes any Third Party's patents, copyrights
or trademarks or misappropriates any Third Party's trade secrets in any
jurisdiction.
(b) Mitigation. If TiVo receives notice of an alleged infringement or
believes that a Claim based on infringement is likely, or if Sony's use of the
TiVo Technology is prevented by an injunction, TiVo may, at its sole option and
expense, (i) procure for the Sony Indemnitees the right to continue use of the
TiVo Technology or the TiVo Marks at TiVo's sole expense; (ii) modify the TiVo
Technology, without adversely affecting the functionality of the TiVo
Technology, so that it no longer infringes; (iii) replace the infringing portion
of the TiVo Technology or the TiVo Marks with technology that does not diminish
the functionality of the TiVo Technology previously provided to the Sony
Indemnitees; or (iv) if none of the foregoing alternatives is feasible, [*]based
on the amount Sony or the CE Sublicensee must pay to such Third Party; provided
that[ * ] shall only apply to products distributed in the jurisdiction giving
rise to the infringement claim.
(c) Exceptions. TiVo shall have no liability to or for any such Claims
based on (i) any Third Party Technology; (ii) any Improvement of the TiVo
Technology made by Sony to the extent such Claim is directed against such
Improvement (except, however, with respect to any such Improvement undertaken by
Sony at TiVo's direction); (iii) any use of the TiVo Technology in combination
with products, services or technology (A) not supplied by TiVo, or (B) not
required by Sony under the Agreement for use of the TiVo Technology as licensed
hereunder (i.e., this exception does not apply to the combination of the TiVo
Technology and the Third Party Technology or the combination of the TiVo
Technology and any hardware specifically identified by TiVo); or (C) any use of
an infringing version of the TiVo Technology once a non-infringing version has
been made available by TiVo, without additional cost, to Sony.
(d) Entire Obligation. The foregoing states TiVo's entire liability
and Sony's sole and exclusive remedy with respect to any infringement of any
patents, copyrights, trademarks, trade secrets or other proprietary rights of
any Third Party whether direct or contributory. Notwithstanding the foregoing,
in the event that Sony's use of the TiVo Technology is prevented by an
injunction and TiVo is unable to procure a remedy under subsections (i), (ii) or
(iii) in clause (b) above, nothing in this Section 12.1(d) (Entire Obligation)
shall be deemed to prevent Sony from seeking a refund of any license fees Sony
has paid to TiVo for the component of the TiVo Technology related to use in the
jurisdiction giving rise to the Claim of infringement.
12.2 Sony Indemnity. Sony, at its own expense, shall defend, indemnify and
hold harmless, TiVo (including, without limitation, its directors, officers and
employees) and its Affiliates (including, without limitation, their directors,
officers and employees) from and against any Claims (a) based on allegations
that any Sony Improvements to the TiVo Technology made by Sony or its Affiliates
(other than any such Improvement undertaken by Sony at TiVo's direction)
infringe any Third Party's patents, mask works or copyrights or misappropriates
any
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
39
Third Party's trade secrets in any jurisdiction; including, without limitation,
Claims alleging that Sony's or its Affiliates' use of the TiVo Technology
contributed toward or induced infringement of a Third Party's rights (unless
such Claims are Specified Contributory Claims; or (b) based on bodily injury
including death, or damage to real property or tangible personal property or
otherwise resulting from or in connection with the use, manufacture, sale or
distribution of any Sony Product or other product or service offered or provided
by Sony or its Affiliates containing or using all or any portion of the TiVo
Technology (except, to the extent the personal or property damage is shown to
have been caused by such TiVo Technology; in which case, each party shall bear
their proportional responsibility). The foregoing states Sony's entire liability
and TiVo's sole and exclusive remedy with respect to any infringement of any
patents, copyrights, trade secrets or other proprietary rights of any Third
Party whether direct or contributory and any Claims based on Sony product
liability.
12.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Section 12 (Indemnification) shall promptly notify
the other party (the "Indemnitor") in writing of any Claim in respect of which
the Indemnitee (or any other party identified as being eligible for
indemnification under Section 12.1 (TiVo Indemnification Obligation) or 12.2
(Sony Indemnity) above) intend to claim such indemnification, and the Indemnitor
shall have sole control of the defense and/or settlement thereof. The indemnity
agreement in this Section 12 (Indemnification) shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Indemnitor, which consent shall not be withheld or
delayed unreasonably. The failure to deliver written notice to the Indemnitor
within a reasonable time after the commencement of any such Claim, only if
materially prejudicial to its ability to defend such Claim, shall relieve such
Indemnitor of any liability to the Indemnitee (or any other party identified as
being eligible for indemnification under Section 12.1 (TiVo Indemnification
Obligation) or 12.2 (Sony Indemnity) above). The Indemnitor will select legal
counsel with experience in similar actions and from a law firm having at least
fifty (50) attorneys. The Indemnitee under this Section 12.3 (Procedure) (or any
other party identified as being eligible for indemnification under Section 12.1
(TiVo Indemnification Obligation) or 12.2 (Sony Indemnity) above) shall
reasonably cooperate with the Indemnitor and its legal representatives in the
investigation of any Claim covered by this indemnification.
13. Term and Termination.
13.1 Term. The term of this Agreement shall begin on the Effective Date and
continue for a period of seven (7) years, unless sooner terminated pursuant to
this Section 13 (Term and Termination).
13.2 Termination.
(a) Termination for Material Sony Breach. TiVo may terminate this
Agreement if Sony commits a Material Sony Breach, TiVo gives notice to Sony of a
Material Sony Breach and Sony fails to cure such breach within [*] days of
receipt of notice of such breach. For purposes of this Section 13.2(a), prior to
a[*], a Material Sony Breach under the
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
40
TiVo International Technology License Agreement shall constitute a Material Sony
Breach under this Agreement and TiVo shall have the right to terminate this
Agreement as provided herein; provided, however, that any single incident that
constitutes a breach under this Agreement and under the TiVo International
Technology License Agreement shall only be treated as a single breach for
purposes of determining whether Sony has committed a Repeated Breach such that a
Sony Material Breach has occurred under this Agreement. After a[*], if Sony
commits a Material Sony Breach under the TiVo International Technology License
Agreement, TiVo may not terminate this Agreement; provided, however, that to the
extent that Sony has committed breaches but such breaches do not amount to a
Repeated Breach under this Agreement as of the date of the[*], only those
incident(s) that constitute breaches solely under this Agreement (as such
agreement would be in effect after the[*] and not under the TiVo International
Technology License Agreement) shall be treated as breaches for purposes of
determining whether Sony will have committed a Repeated Breach such that a
Material Sony Breach will have occurred under this Agreement.
(b) Termination for Other Sony Breaches. Prior to a[*], TiVo may
terminate this Agreement and the TiVo International Technology License Agreement
if Sony materially breaches its obligations under this Agreement (but such
breach does not meet the definition of a Material Sony Breach hereunder) and
fails to cure such breach within [*] days of receipt of notice of such breach.
After a[*], if Sony materially breaches its obligations under this Agreement
(but such breach does not meet the definition of a Material Sony Breach), TiVo
may terminate only this Agreement and not the TiVo International Technology
License Agreement. For clarification, after a[*], TiVo may not terminate this
Agreement if Sony materially breaches its obligations under the TiVo
International Technology License Agreement. In any event, for Material Sony
Breaches, TiVo may choose to give notice and obtain the remedy under either
Section 13.2(a) (Termination for Material Sony Breach) or 13.2(b) (Termination
for Other Sony Breaches) but not both sections.
(c) Termination for TiVo Material Breach. Sony may terminate this
Agreement and the TiVo International Technology License Agreement if TiVo (or
any of its Affiliates) materially breaches this Agreement and fails to cure such
breach within [*] days of receipt of written notice thereof by Sony.
(d) Termination for TiVo Bankruptcy. Sony may terminate this Agreement
immediately upon written notice if any of the following occurs and is not
rescinded or dismissed within [*] days: if TiVo files for, or has filed against
it, a petition for bankruptcy under the Federal Bankruptcy Code, makes an
assignment for the benefit of creditors, becomes insolvent, becomes unable to
pay its debts as they become due, or if a receiver, liquidating officer or
trustee is appointed for substantially all of the assets of TiVo.
(e) Termination for TiVo Maintenance Breach. Sony may terminate this
Agreement and the TiVo International Technology License Agreement if TiVo (or
any of its Affiliates) materially breaches its maintenance obligations under
Section 5.1(b) (TiVo
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
41
Maintenance) and fails to cure such breach within [*] days of receipt of written
notice thereof by Sony.
13.3 Effect of Termination.
(a) Termination for a Material Sony Breach. In the event this Agreement is
terminated in accordance with the terms of Section 13.2(a) (Termination for
Material Sony Breach) or under Section 9.2(a) (Termination for Material Sony
Breach) of the TiVo International Technology License Agreement, this Agreement
shall terminate and, in particular, all licenses granted under Section 2
(License Grants) and Section 4 (Branding and Use of TiVo Marks) shall
immediately terminate.
(b) Termination for a Sony Breach Other than Sony Material Breach. In the
event of termination of this Agreement in accordance with the terms of Section
13.2(b) (Termination for Other Sony Breaches) or under Section 9.2(b)
(Termination for Other Sony Breaches) of the TiVo International Technology
License Agreement, all licenses granted to Sony and its Affiliates in Section
2.1(a) (TiVo Client Technology), 2.1(b) (TiVo Server Technology License), 2.2
(TiVo Technology License (worldwide)), 2.5 (Documentation License) and Section 4
(Branding and Use of TiVo Marks) shall continue in full force and effect;
provided, that TiVo will no longer be obligated to provide Sony and its
Affiliates with any additional TiVo Technology, engineering services or
maintenance. Further, upon any such termination by TiVo, Sony and its Affiliates
shall continue to otherwise comply with the terms and conditions of this
Agreement and Sony shall continue to pay to TiVo any royalties, fees or
consideration required pursuant to Section 6.3 (Royalties) and any fees or other
consideration required pursuant 6.2 (Japan Sublicense Fees) for any sublicenses
previously granted.
(c) Termination for a TiVo Material Breach. In the event of termination of
this Agreement by Sony in accordance with the terms of Section 13.2(c)
(Termination for TiVo Material Breach) or under Section 9.2(c) (Termination for
TiVo International Material Breach) of the TiVo International Technology License
Agreement, all licenses granted to Sony in Section 2 (License Grants) and
Section 4 (Branding and Use of TiVo Marks) shall continue in full force and
effect; provided, that Sony or its Affiliate does not commit a Material Sony
Breach and that Sony or its Affiliate continues to pay to TiVo any royalties,
fees or consideration required pursuant to Section 6.2 (Japan Sublicense Fees)
and 6.3 (Royalties) and provided further that Sony's right to grant sublicense
rights under Sections 2.1(c) (TiVo Client Technology Sublicense) and (d) (TiVo
Server Technology Sublicense) shall only survive for the remainder of the seven
(7) year term of this Agreement.
(d) Termination for TiVo Bankruptcy. In the event of termination of this
Agreement by Sony in accordance with the terms of Section 13.2(d) (Termination
for TiVo Bankruptcy), all licenses granted to Sony in Section 2 (License Grants)
and Section 4 (Branding and Use of TiVo Marks) shall continue in full force and
effect; provided, that Sony or its Affiliate does not commit a Material Sony
Breach and that Sony continues to pay to TiVo any royalties, fees or
consideration required pursuant to Section 6.2 (Japan Sublicense Fees) and 6.3
----------
[*] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
42
(Royalties) and provided further that Sony's right to grant sublicense rights
under Sections 2.1(c) (TiVo Client Technology Sublicense) and (d) (TiVo Server
Technology Sublicense) shall only survive for the remainder of the seven (7)
year term of this Agreement. Notwithstanding the foregoing, TiVo acknowledges
that Sony's obligations under Section 4 (Branding and Use of TiVo Marks) will
immediately cease if TiVo exercises its rights under Federal Bankruptcy Code
Section 365(n) to reject this Agreement. All licenses granted to Sony under or
pursuant to this Agreement are and shall be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to intellectual
property as defined under Section 101 of the U.S. Bankruptcy Code, as amended.
The parties agree that Sony, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and elections under the
U.S. Bankruptcy Code, as amended.
(e) Expiration. In the event of expiration of this Agreement, all licenses
granted to Sony in Section 2.1(a) (TiVo Client Technology), 2.1(b) (TiVo Server
Technology License), 2.2 (TiVo Technology License (worldwide)) and Section 2.5
(Documentation License) shall continue in full force and effect; provided, that
Sony or its Affiliate does not commit a Material Sony Breach and that Sony
continues to pay to TiVo any royalties required pursuant to Section 6.3
(Royalties) and any fees or other consideration required pursuant to Section 6.2
(Japan Sublicense Fees) for any sublicenses previously granted.
(f) End User Agreements. Any End User licenses granted pursuant to Section
2 (License Grants) shall not be affected by termination of this Agreement and
shall continue in full force and effect; provided, such End User continues to
comply with the terms and conditions of the applicable End User License
Agreement.
(g) Survival.
(i) In the event that this Agreement is terminated due to a Material
Sony Breach, the provisions of Sections 1 (Definitions), 6 (License Fees and
Royalties), 8 (Payments and Taxes), 9 (Ownership), 10 (Confidentiality), 11.3
(Warranty Disclaimer), 12 (Indemnification), 13.3 (Effect of Termination), 13.4
(No Liability for Termination), 14 (Limitation of Liability), and 15 (General
Provisions) shall survive any such termination of this Agreement. The parties
also acknowledge that any CE Sublicense Agreements existing at the time of any
termination of this Agreement shall continue in full force and effect; provided
that the applicable CE Sublicensee continues to comply with the terms and
conditions of the CE Sublicense Agreement and Sony continues to pay to TiVo any
fees or other consideration required pursuant to Section 6.2 (Japan Sublicense
Fees) for such CE Sublicense Agreement. Additionally, TiVo agrees that it will
offer to provide TiVo Maintenance to each CE Sublicensee that has a CE
Sublicensee Agreement in effect with Sony at the time of termination in
accordance with the same terms and conditions offered to Sony under the terms of
this Agreement, and TiVo will provide such TiVo Maintenance to the CE
Sublicensees subject to their payment of the applicable fees for such services
(ii) In the event that this Agreement expires or is terminated due to
any reason other than a Material Sony Breach, the provisions of Sections 1
(Definitions), 2 (License Grants), 4 (Branding and Use of TiVo Marks), 6
(License Fees and Royalties), 8 (Payments and Taxes), 9 (Ownership), 10
(Confidentiality), 11.3 (Warranty Disclaimer), 12 (Indemnification),
43
13.3 (Effect of Termination), 13.4 (No Liability for Termination), 14
(Limitation of Liability), and 15 (General Provisions) shall survive any
expiration or termination of this Agreement. The parties also acknowledge that
any CE Sublicense Agreements existing at the time of any termination of this
Agreement shall continue in full force and effect; provided that the applicable
CE Sublicensee continues to comply with the terms and conditions of the CE
Sublicense Agreement and Sony continues to pay to TiVo any fees or other
consideration required pursuant to Section 6.2 (Japan Sublicense Fees) for such
CE Sublicense Agreement.
13.4 No Liability for Termination. Each party understands that the rights
of termination hereunder are absolute. Neither party shall incur any liability
whatsoever for any damage, loss or expenses of any kind suffered or incurred by
the other arising from or incident to the terminating party's exercise of its
termination rights under this Agreement. In particular, without in any way
limiting the foregoing, neither party shall be entitled to any damages on
account of prospective profits or anticipated sales directly related to such
exercise of termination rights.
14. Limitation of Liability.
14.1 Exclusions. Except for a breach of Sections 2 (License Grants) or 10
(Confidentiality) and each party's indemnity obligations under Section 12
(Indemnification), in no event will either party be liable under this Agreement
under any contract, negligence, strict liability, tort or other legal or
equitable theory for any incidental, special or consequential damages of any
nature whatsoever, (including without limitation, loss of profits, other
commercial loss, or cost of procurement of substitute technology or services),
arising out of or in connection with this Agreement, even if such party has been
advised of the possibility of such damages and even if any exclusive remedy
stated in this Agreement is deemed to fail of its essential purpose.
14.2 Liability Cap. Except for a breach of Sections 2 (License Grants) or
10 (Confidentiality) and each party's indemnity obligations under Section 12
(Indemnification), in no event will either party's cumulative liability under or
in connection with this Agreement and the TiVo International Technology License
Agreement exceed an amount equal to the aggregate amount of all fees paid or due
by Sony or its Affiliates to (a) TiVo under this Agreement and (b) TiVo
International under the TiVo International Technology License Agreement. This
limitation of liability is cumulative, with all payments for Claims in
connection with this Agreement being aggregated to determine satisfaction of the
limit. The existence of one or more Claims will not enlarge the limit.
15. General Provisions.
15.1 No Agency. Each party will in all matters relating to this Agreement
act as an independent contractor. Nothing contained in this Agreement, nor the
execution or performance thereof, shall be construed as creating any agency,
partnership, or other form of joint enterprise between the parties. Neither
party will have authority nor represent that it has any authority to assume or
create any obligation, express or implied, on behalf of the other party, or to
represent the other party as agent, employee or in any other capacity.
44
15.2 Governing Law and Jurisdiction. This Agreement and all matters or
issues related hereto or arising hereunder shall be governed by the laws of the
State of California, without regard to the application of principles of
conflicts of laws that would result in application of laws of jurisdictions
other than the State of California. The parties agree that the United Nations
Convention on Contracts for the International Sale of Goods is specifically
excluded from application to this Agreement. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
California and the courts of the United States for a judicial district within
the territorial limits of the State of California for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of the parties further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above will be effective service of process for any
action, suit or proceeding in California with respect to any matters to which it
has submitted to jurisdiction as set forth above in the immediately preceding
sentence. Each of the parties irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transaction contemplated hereby in the courts of the
State of California and the courts of the United States for a judicial district
within the territorial limits of the State of California, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that (a) any action, suit or proceeding brought in any such court has
been brought in an improper or inconvenient forum; or (b) in connection with any
action, such party is not (or that such party's assets are not) subject to the
jurisdiction of such court.
15.3 Notices. All notices permitted or required under this Agreement shall
be in writing and shall be delivered to the address(es) for notice set forth
below or such other address as either party may specify in writing. Notices
shall be effective (a) on the date received, if delivered by hand or by
facsimile, (b) on the next business day following delivery thereof to an air
courier for overnight delivery, or (c) on the fifth business day after deposit
into either the United States or Japan mail service (as applicable), postage
prepaid, return receipt requested.
To: TiVo Inc. To: Sony Corporation
Chief Executive Officer President
0000 Xxxx Xxxxxx Network Terminal Solutions Company,
Xxxxxx, XX 00000 Home Network Company
0-00-00 Xxxxx, Xxxxxxxxx-xx
Fax (000) 000-0000 Tokyo 141-0032
Fax 000 00 0 0000 0000
With a copy to: With a copy to:
TiVo Inc. Sony Corporation
General Counsel: Xxxxxxx Xxxx Legal Department: Attn General Manager
0000 Xxxx Xxxxxx 0-0-00 Xxxxxxxxxxxxx, Xxxxxxxxx-xx
Xxxxxx, XX 00000 Tokyo 000-0000
Fax (000)000-0000 Fax011 81 3 5448 7466
45
With a copy to: With a copy to:
Xxxx Xxxxx Xxxx X. Xxxxxxxxx, Esq.
Cooley Godward LLP Xxxx Xxxx Xxxx & Freidenrich LLP
Five Palo Alto Square 400 Xxxxxxxx Avenue
0000 Xx Xxxxxx Xxxx Xxxx Xxxx, XX 00000-0000
Xxxx Xxxx, XX 00000 Fax (000) 000-0000
Fax (000) 000-0000
15.4 Injunctive Relief. It is understood and agreed that, notwithstanding
any other provision of this Agreement, any breach of Sections 2 (License
Grants), 9 (Ownership), or 10 (Confidentiality) will cause irreparable damage
for which recovery of money damages would be inadequate, and that both parties
shall therefore be entitled to obtain timely injunctive relief to protect their
respective rights under this Agreement, in addition to any and all remedies
available at law.
15.5 Waiver. The failure of either party to require performance by the
other party of any provision hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
15.6 Severability. In the event that any provision of this Agreement shall
be unenforceable or invalid under any applicable law or be so held by applicable
court decisions, such unenforceability or invalidity shall not render this
Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.
15.7 Headings. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or extent of such section, or in any way affect this
Agreement.
15.8 Confidentiality of Agreement. Neither Party will disclose any terms of
this Agreement except as required by law. Notwithstanding the foregoing, either
party may disclose the terms of this Agreement with (a) its advisors and
counselors so long as such advisors and counselors are bound by obligations of
confidentiality; and (b) any Third Parties bound by written obligations of
confidentiality in order to facilitate the exploration of a business combination
with such Third Parties.
15.9 Export Controls. Each Party agrees that it will comply with all U.S.
export control laws and the applicable regulations thereunder, as well as any
other applicable laws of the U.S. affecting the export of technology.
15.10 Assignment. This Agreement may not be assigned by either party
without the other party's prior written consent, and any such attempted
assignment will be void and of no effect. Notwithstanding the foregoing,
however, (a) Sony may assign this Agreement, without restriction, to a Sony
Source Code Affiliate; and (b) TiVo may assign this Agreement, without
46
restriction, in the event of a sale or other transfer of all or substantially
all the relevant assets or equity (whether by sale of assets or stock or by
merger or other reorganization) (except that in the case of an assignment by
TiVo, TiVo agrees to provide Sony with notice of any transaction giving rise to
the assignment not later than the date that TiVo is required to give notice of
such transaction to its stockholders). Subject to the above restriction on
assignment, this Agreement shall inure to the benefit of and bind the successors
and assigns of the parties.
15.11 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same original.
15.12 Entire Agreement. This Agreement and Exhibits hereto constitute the
entire agreement between the parties with respect to the subject matter hereof.
This Agreement supersedes any prior or collateral agreements with respect to the
subject matter hereof and the terms and conditions of this Agreement shall
govern and control the rights and obligations of Sony and its Affiliates related
to the TiVo Technology licensed hereunder. The parties acknowledge that the
foregoing statement does not modify or terminate the Letter of Intent dated
August 6, 1999 (the "LOI") between TiVo and Sony Corporation of America. This
Agreement may only be changed by written mutual agreement of authorized
representatives of the parties.
15.13 Force Majeure. Neither party shall be liable hereunder by reason of
any failure or delay in the performance of its obligations hereunder (except for
payments of money) on account of strikes, shortages, riots, insurrection, fires,
flood, storm, explosions, acts of God, war, governmental action, labor
conditions, earthquakes, material shortages or any other causes that are beyond
the reasonable control of such party.
[Remainder of this page intentionally left blank]
47
In Witness Whereof, the parties hereto have duly executed this Agreement by
their respective duly authorized officers.
TiVo Inc. Sony Corporation
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxxx Xxxxxxx
------------------------------- ----------------------------
Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx
Title: President, CEO Title: President, Network Terminal
------------------------------- -----------------------------
Solutions Company
-----------------------------
Date: 10/12/01 Date: 10/12/01
------------------------------- -----------------------------
48
