Services Agreement - TiVo Inc. and DIRECTV Inc.
Services Agreement
THIS SERVICES AGREEMENT (the "Agreement") is made and entered into as of
February 15, 2002 (the "Effective Date"), by and between TiVo Inc., a Delaware
corporation ("TiVo"), and DIRECTV, Inc., a California corporation ("DIRECTV").
Recitals
Whereas, TiVo has developed and commercially launched a stand alone set-top
receiver (the "Stand Alone Receiver") that allows consumers to receive the
personalized television services provided by TiVo;
Whereas, the parties have developed and commercially launched a
DIRECTV-TiVo combination receiver referred to as the "Reno Receiver", and have
entered into a Development Agreement dated February 15, 2002 (the "Development
Agreement") relating to the development, production and marketing of another
DIRECTV-TiVo combination receiver referred to as the "Provo Receiver" and, at
DIRECTV's option, a third DIRECTV-TiVo combination receiver referred to as the
"Two-Chip Receiver" (the Reno Receiver, Provo Receiver and Two-Chip Receivers
are collectively referred to herein as the "DIRECTV DVR Receivers"); and
Whereas, the parties mutually desire that TiVo license the i-Preview Tools
and the TiVoVision Tools to DIRECTV for use in conjunction with the DIRECTV
Service, as well as provide certain value-added services to DIRECTV.
Now, Therefore, in consideration of the foregoing and the mutual covenants,
promises and undertakings set forth in this Agreement, the parties hereby agree
as follows:
Agreement
1. DEFINITIONS. The capitalized terms in this Agreement shall have the following
meaning:
1.1 "Authoring Tools" shall be the tools set forth in Exhibit A.
1.2 "i-Preview" shall mean the software functionality that utilizes tags
inserted into line 21 of the Vertical Blanking Interval (VBI) of broadcast and
cable television video signals to enable viewers to request recording and
storage of specified video streams for promotional and advertising purposes.
Promotional spots that contain i-Preview tags enable viewers to schedule
recordings of upcoming programs or link to promotional content stored on the
hard disk of a TiVo Receiver.
1.3 "Shared Revenue" shall mean any revenue generated by TiVo under this
Agreement that is attributable to DIRECTV DVR Receivers. In cases where TiVo
receives aggregate revenues across DIRECTV DVR Receivers and TiVo Stand Alone
Receivers, Shared Revenue shall be measured by multiplying all revenue generated
by TiVo's use of iPreview, TiVoVision and User Data by the ratio of active
DIRECTV DVR Receivers to active TiVo Receivers.
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1.4 "TiVo Receiver" shall mean the Standalone Receiver of the DIRECTV DVR
Receiver.
1.5 "TiVoVision" shall mean the software functionality that enables the
delivery, recording, parsing (on a near-frame accurate basis) and playback of
full resolution MPEG-2 video clips. Such video content may be accessed through
various places in the user interface, such as Showcases, or via user responses
to i-Preview tags. The two (2) primary uses of TiVoVision currently anticipated
on the Stand Alone Receiver and the DIRECTV DVR Receivers are: (i) to create
advertising and promotion opportunities using video stored on the hard disk and
(ii) to deliver content to the hard disk such as subscription or push video.
TiVoVision also includes text based Showcases as currently implemented on the
TiVo Receivers.
Unless otherwise defined herein, capitalized terms shall have the
respective meanings as defined in the Development Agreement.
2. License Grants; Commercial Use.
2.1 License Grant. Subject to the terms and conditions of this Agreement
(including, but not limited to payment by DIRECTV of the fees as set forth in
Section 6.1 (Fees; Technical Support)), TiVo shall grant to DIRECTV a
nontransferable (except as set forth in Section 13.4 (Successors; Assigns))
license to internally use, perform, display and reproduce, or engage a third
party to do any of the foregoing on behalf of DIRECTV, the Authoring Tools to
exercise its rights set forth herein.
2.2 i-Preview.
(a) DIRECTV's Commercial Use. DIRECTV shall have the exclusive right
to use the i-Preview functionality solely and exclusively in conjunction with
any video content that is inserted or originated at the DIRECTV head-end via
DIRECTV broadcast centers ("DIRECTV's i-Preview Use"). By way of example (but
not limitation), such video content may include pay-per-view movies and events,
barker channel content and local avails (i.e., advertising time allocated to
DIRECTV on cable networks) for third party advertising, and DIRECTV product and
service advertising. Any revenues actually received by DIRECTV resulting from
DIRECTV's i-Preview Use[*].
(b) TiVo's Commercial Use. Except for the rights granted to DIRECTV as
set forth in Section 2.2(a) (DIRECTV's Commercial Use), TiVo shall have the
right to use, display, perform, market, sell, distribute and make available the
i-Preview functionality to end users of the Stand Alone Receiver and the DIRECTV
DVR Receivers and any other third parties (including, without limitation, any
other pay television or cable network operators) ("TiVo's i-Preview Use"). Any
Shared Revenue resulting from TiVo's i-Preview Use[*]. Any revenues actually
received by TiVo resulting from TiVo's i-Preview Use other than as set forth in
the
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preceding sentence shall be retained by TiVo solely and shall not be subject to
a revenue share with DIRECTV.
(c) DIRECTV i-Preview Pass Through Obligation. Subject to DIRECTV's
editorial review rights as set forth in Section 6.3 (DIRECTV Editorial Review
Rights), DIRECTV agrees to allow the pass through of the i-Preview software tags
via line 21 of the VBI, without any restriction, modification, alteration or
other interference by DIRECTV, provided no action is required by DIRECTV to pass
through such tags.
2.3 TiVoVision.
(a) DIRECTV's Commercial Use. DIRECTV shall have the exclusive right
to use the TiVoVision functionality solely and exclusively on DIRECTV DVR
Receivers (and Stand Alone Receivers to the extent they receive such
functionality as a result of such functionality being provided to the DIRECTV
DVR Receivers) in conjunction with DIRECTV product and service offerings
("DIRECTV's TiVoVision Use"). [*]any revenue actually received by DIRECTV
resulting from DIRECTV's TiVoVision Use[*].
(b) TiVo's Commercial Use. Except for the rights granted to DIRECTV as
set forth in Section 2.3(a) (DIRECTV's Commercial Use), TiVo shall have the
right to use, display, perform, market, sell, distribute and make available the
TiVoVision functionality to end users of the Stand Alone Receiver and the
DIRECTV DVR Receivers and any other third parties (including, without
limitation, any other pay television or cable network operators ("TiVo's
TiVoVision Use"). [*] any Shared Revenue actually received by TiVo resulting
from TiVo's TiVoVision Use[*]. DIRECTV agrees that any revenue actually received
by TiVo resulting from TiVo's TiVoVision Use other than as set forth in the
preceding sentence shall be retained by TiVo solely, and shall not be subject to
a revenue share with DIRECTV.
(c) TiVo's Hard Disk Allocation. DIRECTV shall allocate [*] of hard
disk capacity (equal to approximately [*] of video recording capacity) in each
DIRECTV DVR Receiver for TiVo's TiVoVision Use when the total hard disk capacity
of each such receiver is less than[*]. In DIRECTV DVR Receivers that have a hard
disk capacity greater than or equal to[*], DIRECTV shall allocate [*]of hard
disk capacity for TiVo's TiVoVision Use. Notwithstanding the foregoing, from the
Effective Date through [*], DIRECTV shall allocate [*] of hard disk capacity in
each Reno Receiver and Provo Receiver for TiVo's TiVoVision use. Following[*],
DIRECTV and TiVo agree to negotiate in good faith regarding the expansion of
hard disk capacity for TiVo's TiVoVision use from [*] to [*] in DIRECTV DVR
Receivers with less than [*] of hard disk capacity.
(d) Satellite Bandwidth. DIRECTV shall allocate on a daily basis
bandwidth, net of standard DIRECTV error correction as actually applied, equal
to TiVo's hard disk allocation set forth above, for use in connection with the
TiVo's rights under this Agreement (e.g., for TiVo's [*]hard drive allocation,
DIRECTV shall allocate a net of [*]per calendar day). The use of such bandwidth
shall include daily update capability.
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2.4 License Restrictions. DIRECTV acknowledges and agrees that the
Authoring Tools contain valuable trade secrets of TiVo, and, except as otherwise
expressly provided herein, DIRECTV shall not, and shall not provide permission
to any third party, to: (a) translate, reverse engineer, decompile, disassemble,
or attempt to derive the source code of the Authoring Tools; (b) sublicense,
rent, lease, loan, timeshare, sell, distribute, assign or transfer any rights
in, grant a security interest in, or transfer possession of any Authoring Tools;
or (c) obfuscate, alter or remove any of TiVo's copyright or other proprietary
rights notices or legends appearing on or in the Authoring Tools.
2.5 Reservation of Rights; Ownership. Without limiting the rights granted
to DIRECTV in Section 2.1 (License Grant), TiVo has and shall retain exclusive
ownership of all of its right, title and interest in and to the Authoring Tools,
and, other than the rights granted in Section 2.1, no other license, right, or
interest is granted to DIRECTV by implication, estoppel, or otherwise, for any
purpose.
3. USER DATA.
3.1 DIRECTV's Use of User Data. Following the transition of any current
TiVo Service subscribers to DIRECTV pursuant to the Development Agreement,
DIRECTV shall own and control all future customer data received, derived or
otherwise collected from the DIRECTV DVR Receivers (the "User Data").
Notwithstanding the foregoing, TiVo shall have the right to use such User Data
in accordance with this Section 3 (User Data). At DIRECTV's sole discretion,
DIRECTV may elect to either: (i) provide such User Data to TiVo, provided, that
in such event, DIRECTV shall provide the User Data in a form and manner
reasonably specified by TiVo and agreed to by DIRECTV, with such agreement not
to be unreasonably withheld or delayed; or (ii) allow TiVo to collect User Data
directly from the DIRECTV DVR Receivers. In either case, TiVo [*]its receipt or
collection of the User Data. In the event any User Data resides with, is
controlled by or is in the possession of TiVo, TiVo agrees to transfer, provide
and otherwise make available such User Data to DIRECTV in accordance with
Section 6.2. DIRECTV [*]its receipt or collection of the User Data.
3.2 TiVo's Use of User Data. Following the Manufacturing Release of the
Provo Receiver (with Version Software), and subject to DIRECTV's exclusive
ownership of the User Data as set forth in Section [*](DIRECTV's Use of User
Data), TiVo shall have full access and use rights to any User Data, and shall be
entitled to receive or collect, store, and otherwise sort such User Data in
accordance with Section 3.1; provided, however, TiVo can not segregate out
solely DIRECTV customers, uses, viewing patterns, programming or other data, or
other data regarding services available exclusively to DIRECTV subscribers (e.g.
NFL Sunday Ticket) and the DIRECTV DVR Receivers (collectively, the "DIRECTV
Sort Restriction"), in each case subject to Laws (as defined below) and the
then-current DIRECTV privacy policy. Notwithstanding the foregoing, DIRECTV
acknowledges and agrees that, during the first year of the Term (as defined in
Section 12.1 (Term), TiVo shall have the right to negotiate and enter into
agreements (with such agreements to last no longer than the first year of the
Term) with the [*]with respect to [*]programming on DIRECTV DVR Receivers,
including [*], subject to the
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following conditions and the approval of such conditions by the [*](i) any
Shared Revenue resulting from the[*]; (ii) DIRECTV shall [*]the terms the[*];
(iii) DIRECTV shall [*]any [*] or [*] delivered to the [*] under the[*]; (iv)
DIRECTV shall [*]in any [*] between [*] and the [*] in conjunction with the[*];
and (v) DIRECTV shall [*]and [*]any renewal or expansion of the[*]. In the event
that the [*] does not approve such conditions, TiVo may only enter into the [*].
For the avoidance of doubt, this Section 3.2 shall in no way limit TiVo's
ability to enter into agreements with the [*] with respect to activities that
are unrelated to [*]or the DIRECTV Service or that do not otherwise violate the
DIRECTV Sort Restriction.
3.3 DIRECTV Sale of User Data to Third Parties. DIRECTV shall have the
right to sell User Data to third parties subject to applicable Laws. Any
revenues actually received by DIRECTV resulting from the sale of such User Data
[*]except for revenues actually received from sales of User Data collected and
processed [*]TiVo Server Technology (as defined in the Intellectual Property and
Technology License Agreement (the "Technology License Agreement")), [*] TiVo
under Section 6.2, or other [*] TiVo, all of which[*].
3.4 TiVo's Sale of User Data to Third Parties. Subject to DIRECTV's
exclusive ownership of the User Data, TiVo shall have the right to sell such
User Data, subject to applicable Laws and DIRECTV's privacy policy (a current
copy of which is attached hereto as Exhibit B, as amended from time to time),
subject to the DIRECTV Sort Restriction. [*]any Shared Revenue actually received
by TiVo resulting from TiVo's use of User Data[*]. DIRECTV agrees that any
revenue actually received by TiVo resulting from TiVo's use of User Data other
than as set forth in the preceding sentence shall be retained by TiVo solely,
and shall not be subject to a revenue share with DIRECTV.
4. New Services. TiVo and DIRECTV agree to discuss in good faith new service
opportunities expected to be developed in the future.
5. Use of Existing Services and Functionalities.
5.1 Existing Marketing Agreement. With respect to the Marketing Agreement,
dated April 13, 1999 (the "Marketing Agreement") DIRECTV and TiVo acknowledge
that (i) DIRECTV's bandwidth obligations under this agreement shall supersede
DIRECTV's bandwidth obligations under the Marketing Agreement; and (ii) TiVo's
obligation to provide a Showcase to DIRECTV shall be superseded by the terms of
this Agreement. Bandwidth made available under this Agreement by DIRECTV shall
serve to satisfy DIRECTV's obligations under the Promissory Note referenced in
the Marketing Agreement.
5.2 TiVo's Use of Network Showcases and TiVolution Magazine. The parties
acknowledge and agree that TiVo's current implementation of "Showcases" and
"TiVolution Magazine" (solely on the Reno Receiver) shall continue only until
the download of Version[*] Software to the Reno Receivers.
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5.3 DIRECTV's Exclusive Use of Pre-Recorded Content Capability. DIRECTV
shall have full rights to the insertion of subscriber deletable video content on
the hard disk prior to shipment of Provo Receivers and Two-Chip Receivers for
the promotion of DIRECTV products and services ("DIRECTV's Pre-Recorded Content
Use"). TiVo agrees to consult with DIRECTV regarding procedures for inserting
such video content to the hard disk. [*]any revenue actually received by DIRECTV
resulting from DIRECTV's Pre-Recorded Content Use[*].
5.4 TiVo's Use of Pre-Recorded Content Capability. Except for the rights of
DIRECTV set forth in Section 5.3 (DIRECTV's Exclusive Use of Pre-Recorded
Content Capability) above, TiVo shall be permitted to insert subscriber
deletable video content on the hard disk prior to shipment of Provo Receivers
and Two-Chip Receivers, for the promotion of third party products and services
(herein, "TiVo's Pre-Recorded Content Use"), provided such use [*]video capacity
per receiver. [*]any revenues actually received by TiVo resulting from TiVo's
Pre-Recorded Content Use on Provo and Two-Chip Receivers[*].
6. Other Considerations.
6.1 Fees; Technical Support.
(a) Fees. At any time during the Term (as defined in Section 12.1
(Term)), DIRECTV may elect to exercise the license rights set forth in Section
2.1 (License Grants) and receive the related services from TiVo as described in
Section 6.1(c) (Technical Support). In such event, DIRECTV shall notify TiVo of
its election in writing, and shall pay to TiVo [*]for use of the Authoring Tools
(and receipt of the related services) for one (1) year (the "Initial Period")
except as otherwise provided in Section 6.1(b) (License Renewal; Prorated
Fees)). Upon receipt of such fee from DIRECTV, TiVo shall deliver the Authoring
Tools to DIRECTV in a form reasonably requested by DIRECTV.
(b) License Renewal; Prorated Fees. For so long as the Development
Agreement is in effect, DIRECTV shall have the option to renew the license in
Section 2.1 on an annual basis for up to [*] additional years following the
Initial Period (each, a "Renewal Period"), by paying to TiVo an annual renewal
fee of[*]. The parties acknowledge and agree that the licenses granted in this
Agreement, and TiVo's obligation to provide the services described herein, will
immediately terminate upon the expiration or early termination of the
Development Agreement for any reason, except in the event of a termination by
DIRECTV due to a TiVo breach. Accordingly, if the anticipated expiration date of
the Development Agreement and the anticipated expiration date of the Initial
Period or any Renewal Period do not coincide, DIRECTV's fee payable for the
applicable period will be prorated on a monthly basis. For the avoidance of
doubt, in no event will Sections 2.3(c), 2.3(d) and TiVo's rights to use the
User Data set forth in Sections 3.1, 3.2 and 3.3(a) survive the initial 3 year
term set forth in Section 12.1 unless the parties have agreed to extend it as
provided for therein.
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(c) Technical Support. In the event DIRECTV makes the fee payments
made in Section 6.1(a) or (b), (a) TiVo agrees to provide to DIRECTV
commercially reasonable training, technical assistance and, if applicable, use
of TiVo's server infrastructure in the use of the Authoring Tools by DIRECTV in
accordance with this Agreement, and (b) TiVo shall provide upgrades to the
Authoring Tools which TiVo creates, if any, during the Term.
6.2 Technical Support by TiVo for DIRECTV's Use of User Data. At DIRECTV's
option, TiVo agrees to provide to DIRECTV commercially reasonable training,
technical assistance and use of TiVo's data collection and reports,
infrastructure and tools in accessing User Data. Such support and access shall
be provided by TiVo upon payment by DIRECTV to TiVo of an additional fee of
[*]per year, which [*] is subject to set-off for revenues shared by DIRECTV with
TiVo in accordance with Section 3.3 (DIRECTV Sale of User Data to Third
Parties). By way of example, if in a given year DIRECTV received revenues of
[*]resulting from the sale of User Data ([*]of which would be payable to TiVo in
accordance with Section 3.3 (DIRECTV Sale of User Data to Third Parties)),
DIRECTV's fee payment for that year would be[*].
6.3 DIRECTV Editorial Review Rights. DIRECTV shall have the right to
reasonably review and approve the factual accuracy and the creative content
generated by TiVo or any third party providing content to TiVo for use under
this Agreement, when such content refers or relates to DIRECTV, the DIRECTV
Service, or is distributed to the DIRECTV DVR Receivers (including but not
limited to Showcases, TiVolution Magazine and pre-recorded promotional video on
the hard disk drive) (collectively, the "Content"). All Content shall comply
with applicable Laws and comport with reasonable standards of good taste
(consistent with the broadcast standards utilized by major broadcast television
networks), including without limitation, those relating to advertisements of
X-rated material, drug-related paraphernalia, cigarettes and liquor. DIRECTV and
TiVo will cooperate to establish mutually agreeable editorial review procedures
so as to enable TiVo's i-Preview Use and TiVo's TiVoVision Use as contemplated
by this Agreement.
6.4 User-Interface Modifications and Control. DIRECTV shall have the sole
control over modifications to the user interface in the application of the
TiVoVision functionality on the DIRECTV DVR Receivers for DIRECTV TiVoVision
Use, and TiVo agrees to implement and manage such user interface modifications
at TiVo's then-current rates for such services; provided that, prior to DIRECTV
exercising its license option pursuant to Section 4.6 (Technology License) of
the Development Agreement, any such modification does not require an upgrade to
the then-current software version on any of the DIRECTV DVR Receivers. The user
interface presentation for the TiVoVision functionality on the DIRECTV DVR
Receivers for TiVo's TiVoVision Use shall be substantially similar in nature and
quality as that of DIRECTV use for similar content.
7. Representations and Warranties of TiVo. TiVo represents and warrants to
DIRECTV and agrees that:
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7.1 Organization, Good Standing and Qualification. TiVo is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware and has all requisite corporate power and authority to carry
on its business as now conducted. TiVo is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure so to qualify
would have a material adverse effect on its business or properties.
7.2 Authorization; Binding Obligation. All corporate action on the part of
TiVo, its officers, directors and stockholders necessary for the authorization,
execution, and delivery of this Agreement has been taken. The performance of all
obligations of TiVo hereunder constitute valid and legally binding obligations
of TiVo, enforceable against TiVo in accordance with its respective terms.
7.3 No Consents. The execution and delivery of this Agreement in accordance
with the terms thereof and the compliance by TiVo with the provisions hereof or
thereof (i) are not and will not be inconsistent with TiVo's Charter or Bylaws,
(ii) do not and will not contravene any Laws (as defined below) applicable to
TiVo, and (iii) do not and will not contravene any material provision of, or
constitute a default under, any indenture, mortgage, contract, license,
agreement or other instrument of which TiVo is a party or by which it is bound
or requires the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any federal,
state or local government authority or agency or other person.
7.4 Laws. TiVo has complied and shall comply with any and all Laws
regarding TiVo's development of the Authoring Tools, the Provo Receiver and
Two-Chip Receiver and TiVo's deployment, if applicable, of the Authoring Tools
and TiVo's other obligations hereunder. As used herein, "Laws" shall mean FCC
and all other governmental (whether international, federal, state, municipal, or
otherwise) statutes, laws, rules, regulations, ordinances, codes, directives,
and orders.
7.5 Ability to Perform. TiVo possesses the technical and other knowledge
and other abilities required to timely and fully meet its obligations under this
Agreement.
7.6 Warranty Disclaimer. Except AS SET FORTH IN THIS Section 7, TiVo MAKES
NO WARRANTIES AS TO THE PERFORMANCE OF THIS Agreement OR THE DELIVERABLES OR THE
SERVICES TO BE PROVIDED HEREUNDER, AND TiVo EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES 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.
8. Representations And Warranties Of DIRECTV. DIRECTV represents and warrants to
TiVo and agrees that:
8.1 Organization, Good Standing and Qualification. DIRECTV is a corporation
duly organized, validly existing and in good standing under the laws of the
state of California and has all requisite corporate power and authority to carry
on its business as now conducted. DIRECTV is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure so to qualify
would have a material adverse effect on its business or properties.
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8.2 Authorization; Binding Obligation. All corporate action on the part of
DIRECTV, its officers, directors and stockholders necessary for the
authorization, execution, and delivery of this Agreement has been taken. The
performance of all obligations of DIRECTV hereunder constitute valid and legally
binding obligations of DIRECTV, enforceable against DIRECTV in accordance with
its respective terms.
8.3 No Consents. The execution and delivery of this Agreement in accordance
with the terms thereof and the compliance by DIRECTV with the provisions hereof
or thereof (i) are not and will not be inconsistent with DIRECTV's Charter or
Bylaws, (ii) do not and will not contravene any Laws applicable to DIRECTV, and
(iii) do not and will not contravene any material provision of, or constitute a
default under, any indenture, mortgage, contract, license, agreement or other
instrument of which DIRECTV is a party or by which it is bound or requires the
consent or approval of, the giving of notice to, the registration with or the
taking of any action in respect of or by, any federal, state or local government
authority or agency or other person.
8.4 Laws. DIRECTV has complied and shall comply with any and all Laws
regarding DIRECTV's obligations hereunder.
8.5 Ability to Perform. DIRECTV possesses the technical and other knowledge
and other abilities required to timely and fully meet its obligations under this
Agreement.
8.6 Warranty Disclaimer. Except as set forth in this Section 8, DIRECTV
makes no warranties as to the performance of this Agreement or the deliverables
or services to be provided hereunder and DIRECTV expressly disclaims any and all
warranties 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.
9. Confidentiality.
9.1 Confidential Information. Each party (the "Disclosing Party") may, from
time to time during the term of this Agreement, disclose or make available to
the other party (the "Receiving Party") certain proprietary or non-public
information including, without limitation, trade secrets, know-how, formulas,
flow charts, diagnostic routines, business information, forecasts, financial
plans and data, customer information, marketing plans, and unannounced product
information (collectively, "Confidential Information"). If provided in tangible
form, such information shall be marked as "confidential" or "proprietary" or
with a similar legend and, if disclosed orally or visually, shall be identified
as confidential at the time of disclosure. Confidential Information shall
exclude information the Receiving Party can demonstrate by reasonably detailed
written documentation: (a) was independently developed by the Receiving Party's
employees, consultants or contractors without access to or use of the Disclosing
Party's Confidential Information; (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; or (d) was rightfully known by the
Receiving Party, without restriction, at the time of disclosure. For purposes of
this
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Agreement, the Authoring Tools shall be deemed the Confidential Information of
TiVo, regardless of whether they are marked as such.
9.2 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 and shall not
disclose the Confidential Information of the Disclosing Party, except as
expressly authorized in this Agreement or in writing by the Disclosing Party.
Notwithstanding the foregoing, the Receiving Party may disclose any Confidential
Information that must be disclosed pursuant to applicable federal, state, or
local law, regulation, court order, or other legal process or pursuant to the
rules and regulations of any stock exchange or stock association in which
securities of the Receiving Party may be traded from time to time; provided,
that the Receiving Party gives the Disclosing Party prompt written notice
thereof and the Receiving Party obtains prior to any such disclosure 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.
9.3 Disclosure Restrictions. The Receiving Party may disclose Confidential
Information only to its employees, consultants and contractors when such
disclosure is necessary for the Receiving Party 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 9 (Confidentiality).
10. Indemnification.
10.1 TiVo Indemnification Obligation.
(a) Indemnity. TiVo, at its own expense, shall (i) defend, or at its
option, settle, any claims, suits, and actions brought by a third party
(collectively "Claims") against DIRECTV and its affiliated companies and their
respective employees, officers, agents, attorneys, stockholders and directors,
and their respective successors and assigns (the "DIRECTV Indemnified
Party(ies)") based on (1) allegations that the Content and/or Authoring Tools
(in the form initially provided to DIRECTV) infringes any patent, copyright,
moral rights or trademark, or misappropriates any trade secret issued or in
effect in United States or (2) allegations that any use by TiVo or use expressly
authorized by TiVo of the User Data violates any Law or the DIRECTV Privacy
Policy or the other restrictions set forth herein, except, to the extent caused
by DIRECTV in the case of violations of the Privacy Policy, or (3) allegations
that any Content violates any Law; and (ii) pay any award, damages, or costs
(including, without limitation, reasonable attorneys' fees) as incurred or
finally awarded by a court of competent jurisdiction or agreed on in a
settlement of any such Claim; provided that DIRECTV: (A) promptly notifies TiVo,
in writing, of all such Claims; (B) cooperates reasonably with TiVo (at TiVo's
expense) in defending such Claims; and (C) allows TiVo the primary right to
control the defense (including the selection of counsel), or at TiVo's sole
option, to settle, all such Claims; provided such settlement provides a full
unconditional release of DIRECTV and does not impose any liability on DIRECTV.
At its discretion, DIRECTV shall be entitled to jointly participate in
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the defense of such Claim with counsel of its own selection and DIRECTV shall be
obligated to pay the fees and expenses of such counsel of its own selection.
(b) Mitigation. If TiVo receives written notice of an alleged
infringement or believes that a Claim of infringement is likely, or if DIRECTV's
use of the Authoring Tools is prevented by a permanent injunction, TiVo may, at
its sole option and expense, (i) procure for DIRECTV the right to continue use
of the Authoring Tools at TiVo's sole expense; (ii) modify the Authoring Tools;
or (iii) replace the infringing portion of the Authoring Tools with technology
that does not infringe, provided that, in the case of subsections (ii) and
(iii), the modified and/or replaced technology contains substantially similar
functionality and otherwise complies with the requirements of this Agreement
(the "Replacement Technology").
(c) Exceptions. TiVo shall have no liability for any such Claims based
on (i) any use of the Authoring Tools in combination with products, services or
technology not required by TiVo or not otherwise required to use the Authoring
Tools in a standalone form, if such infringement would not occur except for such
combination; or ( ii) any use of an infringing version of the Authoring Tools
once a non-infringing version of Replacement Technology has been made available
to DIRECTV.
(d) Entire Obligation. The foregoing states TiVo's entire liability
and DIRECTV's sole and exclusive remedy with respect to any infringement by the
Authoring Tools of any patents, copyrights, trademarks, trade secrets or other
proprietary rights of any third party whether direct or contributory.
10.2 DIRECTV Indemnity.
(a) Indemnity. DIRECTV, at its own expense, shall (i) defend, or at
its option, settle, any claims, suits, and actions brought by a third party
(collectively "Claims") against TiVo and its affiliated companies and their
respective employees, officers, agents, attorneys, stockholders and directors,
and their respective successors and assigns (the "TiVo Indemnified Party(ies)")
based on allegations that (1) any use by DIRECTV or use expressly authorized by
DIRECTV of the Authoring Tools, violates any Law, other than Claims for which
TiVo is obligated to defend DIRECTV pursuant to Section 10.1(a)(i)(1), or (2)
allegations that any use by DIRECTV or use expressly authorized by DIRECTV of
the User Data violates any Law or the DIRECTV Privacy Policy or the other
restrictions set forth herein, except, to the extent caused by TiVo in the case
of violations of the Privacy Policy; and (ii) pay any award, damages, or costs
(including, without limitation, reasonable attorneys' fees) as incurred or
finally awarded in a court of competent jurisdiction or agreed on in a
settlement of any such Claim; provided that TiVo (A) promptly notifies DIRECTV,
in writing, of all such Claims; (B) cooperates reasonably with DIRECTV (at
DIRECTV's expense) in defending such Claims; and (C) allows DIRECTV the primary
right to control the defense (including the selection of counsel), or at
DIRECTV's sole option, to settle, all such Claims; provided such settlement
provides a full unconditional release of TiVo and does not impose any liability
on TiVo. At its discretion, TiVo shall be entitled to jointly participate in the
defense of such Claim with counsel of its own selection and TiVo shall be
obligated to pay the fees and expenses of such counsel of its own selection.
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(b) Exceptions. DIRECTV shall have no liability for any such Claims
based on (i) a combination of the Authoring Tools with the DIRECTV DVR Receiver;
or (ii) the TiVo Authoring Tools.
11. Limitation of Liability. EXCEPT IN THE EVENT OF A BREACH OF THE LICENSE
GRANTED IN SECTION 2 (LICENSE GRANTS; COMMERCIAL USE), A KNOWING OR GROSSLY
NEGLIGENT BREACH OF THE RESTRICTIONS HEREIN ON THE USE OF USER DATA, UNDER LAWS
AND DIRECTV PRIVACY POLICY, , OOR A BREACH OF SECTION 9 (CONFIDENTIALITY) AND
EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10
(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 THE OTHER 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. EXCEPT IN
THE EVENT OF A BREACH OF THE LICENSES GRANTED IN SECTION 2 (LICENSE GRANTS;
COMMERCIAL USE), A KNOWING OR GROSSLY NEGLIGENT BREACH OF THE RESTRICTIONS
HEREIN ON THE USE OF USER DATA, UNDER LAWS AND DIRECTV PRIVACY POLICY, , OOR A
BREACH OF SECTION 9 (CONFIDENTIALITY) AND EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS SET FORTH IN SECTION 10 (INDEMNIFICATION), IN NO EVENT SHALL EITHER
PARTY'S CUMULATIVE LIABILITY UNDER OR IN CONNECTION WITH THIS AGREEMENT EXCEED
AN AMOUNT EQUAL TO THE AGGREGATE AMOUNT OF ALL FEES PAID BY, OR DUE FROM,
DIRECTV TO TIVO HEREUNDER. 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 UNDER
THIS AGREEMENT WILL NOT ENLARGE THE LIMIT.
12. Term and Termination.
12.1 Term. The term (the "Term") of this Agreement shall begin on the
Effective Date and continue for a period of three (3) years, unless sooner
terminated pursuant to this Section 12 (Term and Termination). Notwithstanding
the foregoing, prior to the expiration of the Term, DIRECTV and TiVo agree to
negotiate in good faith regarding an extension of the Term for a maximum two (2)
additional years.
12.2 Termination.
(a) For Cause. Either party may terminate this Agreement if the other
party materially breaches this Agreement and fails to cure such breach within
sixty (60) days after receipt of written notice thereof from the non-breaching
party.
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(b) Termination or Expiration of Development Agreement. This Agreement
will immediately terminate upon the expiration or early termination of the
Development Agreement, except in the event of a termination by DIRECTV due to a
TiVo breach.
12.3 Survival. Sections 1 (Definitions); 2.5 (Reservation of Rights;
Ownership); 3 (User Data) (but only as related to DIRECTV's ownership and
control of the User Data); 5.1 (Existing Marketing Agreement); 5.2 (TiVo's Use
of Network Showcases and TiVolution Magazine); 7 (Representations and Warranties
of TiVo); 8 (Representations and Warranties of DIRECTV); 9 (Confidentiality); 10
(Indemnification); 11 (Limitation of Liability); 12.3 (Survival); 12.4 (No
Liability for Termination); and 13 (Miscellaneous) shall survive the termination
or expiration of this Agreement. Notwithstanding the foregoing, provided DIRECTV
has exercised the option in Section 6.1(b) and this Agreement is not terminated
by TiVo for DIRECTV's material breach, DIRECTV shall continue to have the rights
set forth in Section 6.1(b) subject to all rights and restrictions set forth
herein.
12.4 No Liability for Termination. Each party understands that the rights
of termination hereunder are absolute. The terminating party shall not 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
limiting the foregoing, the terminated party shall not be entitled to any
damages on account of prospective profits or anticipated sales related to such
exercise of termination rights.
13. Miscellaneous.
13.1 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.
13.2 Taxes. All payments made by each party hereunder shall be paid without
deduction for and net of any sales, use, excise, import or export, value-added
or similar tax or duty, government permit or license fees, customs and similar
fees, penalties and interest and any costs associated with the collection or
withholding of any of the foregoing (except for taxes based on the receiving
party's net income) (collectively, "Taxes"). If any deduction is legally
required on any fees payable by one party to the other party hereunder, the
party making such payment shall pay in the manner and at the same time such
additional amounts as will result in the receiving party receiving the amounts
such party would have received absent such required deduction. The paying party
shall promptly pay or reimburse all federal, state, and local Taxes, if any,
due, arising from, or measured by amounts payable to the receiving party under
this Agreement.
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13.3 Amendment, Modification or Waiver. This Agreement shall not be altered
or otherwise amended except pursuant to an instrument in writing signed by each
of the parties hereto.
13.4 Successors; Assigns. All the terms of this Agreement shall be binding
upon and shall inure to the benefit of the permitted successors and assigns of
the respective parties hereto. Anything contained herein to the contrary
notwithstanding, neither party may assign this Agreement without the written
consent of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, following written notice to the other party,
either party may transfer and assign this Agreement, by operation of law or
otherwise, to the surviving entity in the event of a sale to, merger with, or
acquisition of all or substantially all of such party's assets by such entity,
and the other party hereby consents to such assignment in advance.
13.5 Governing Law. 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 principles of conflicts of law, as such laws would apply to
contracts entered into by California residents and performed entirely in
California. The parties agree that all disputes and litigation regarding this
Agreement and matters connected with its performance shall be brought in a
federal court in the Northern District or Central District of California or in
state court in Los Angeles County or Santa Clara County, California, and each
party irrevocably submits to the jurisdiction and venue of any such court in any
such action or proceeding.
13.6 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
13.7 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 (i) on the date received, if delivered by hand; (ii) on the
date sent if sent by facsimile with confirmation, (ii) on the next business day
following delivery thereof to an air courier for overnight delivery, and (iii)
on the fifth business day after deposit into either the United States mail
service (as applicable), postage prepaid, return receipt requested.
To: TiVo Inc. To: DIRECTV, Inc.
Chief Executive Officer Larry Chapman, Executive Vice President
2160 Gold Street 2230 East Imperial Highway
Alviso, CA 95002 El Segundo, California 90245
Fax: (408) 519-5330 Fax: (310) 535-5422
With a copy to: With a copy to:
TiVo Inc. DIRECTV, Inc.
General Counsel: Matthew Zinn General Counsel
2160 Gold Street 2230 East Imperial Highway
Alviso, CA 95002 El Segundo, California 90245
Fax: (408) 519-5330 Fax: (310) 964-4991
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13.8 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 (other than strikes of a party's own
employees), shortages, riots, insurrection, fires, flood, storm, explosions,
acts of God, war, governmental action, labor conditions (other than with respect
to a party's own employees), earthquakes, material shortages or any other causes
that are beyond the reasonable control of such party; provided, however, that
the parties will use commercially reasonable efforts, including the
implementation of business continuity measures, to mitigate the effects of such
force majeure.
13.9 Section 365(n) of the Bankruptcy Code. All rights and licenses granted
under or pursuant to this Agreement by TiVo to DIRECTV are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy
Code, licenses of rights to "intellectual property" as defined under Section
101(56) of the United States Bankruptcy Code. The Parties agree that DIRECTV, as
licensee of such rights and licenses, shall retain and may fully exercise all of
its rights and elections under the Bankruptcy Code, provided that DIRECTV abides
by the terms of this Agreement.
13.10 Injunctive Relief. It is understood and agreed that, notwithstanding
any other provision of this Agreement, any breach of Section 9 (Confidentiality)
or the licenses granted in Section 2 (License Grants; Commercial Use) and any
restrictions related thereto 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.
13.11 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.
13.12 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
13.13 Counterparts. The Agreement may be executed in counterparts, each of
which shall be an original, but all of which together shall constitute one
agreement.
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13.14 Entire Agreement. This Agreement, including any exhibits and
schedules attached hereto, in conjunction with the Development Agreement and,
upon exercise of DIRECTV's option, the Technology License Agreement, constitute
the entire agreement between DIRECTV and TiVo with respect to the subject matter
specifically set forth herein.
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In Witness Whereof, the parties hereto have duly executed this Agreement by
their respective duly authorized officers.
TiVo Inc. DIRECTV, Inc.
By: /s/ Morgan Guenther By: /s/ Lawrence N. Chapman
------------------------------ ---------------------------------
Name:Morgan Guenther Name:Lawrence N. Chapman
Title:President Title:Executive Vice President
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