Master Agreement - Philips Business Electronics BV and TiVo Inc.
Confidential
PHILIPS BUSINESS ELECTRONICS B.V. - TIVO INC.
MASTER AGREEMENT
This Master Agreement is between Philips Business Electronics B.V.,
Business Unit Digital Video Systems, having its principal place of business at
Building OAN-4, 5600 JB Eindhoven, The Netherlands ("Philips") and Tivo Inc.,
having its principal place of business at 894 Ross Drive, Sunnyvale California,
USA 94089 ("TiVo") and is effective as of March 31, 1999 (the "Effective Date")
and consists of this Master Agreement and following attached Addenda, which are
incorporated in full by this reference:
Addendum A: Purchase Addendum
Addendum B: Marketing Addendum
This Master Agreement and its Addenda are collectively referred to as the
"Agreement".
Recitals
Whereas, TiVo has designed and developed a Personal TV System based on
the TiVo Enabling Technology which enables the TiVo Service;
Whereas, TiVo has informed Philips that it is sufficiently advanced in
the development of a Personal TV System and the TiVo Service, that a TiVo Stand-
alone Box will meet consumer quality expectations so as to be available for
Commercial Release prior to July 1, 1999;
Whereas, assuming the foregoing is true, Philips intends to launch a
Philips-branded TiVo Stand-alone Box into the Territory through retail
distribution in the second half of calendar year 1999 and support such launch
with an appropriate marketing campaign;
Whereas, Philips and TiVo desire to enter into a commercial
relationship regarding the development, manufacture, marketing and distribution
of Philips-branded Personal TV System Boxes, incorporating the TiVo Enabling
Technology, which will enable the TiVo Service;
Whereas, Philips and TiVo acknowledge that Philips-branded Personal TV
Systems may include Philips Personal TV System Technology or Third Party
Technology and may enable: (i) Philips Personal TV Services and/or Third Party
Personal TV Services; and/or (ii) Value-added Services provided by Philips
and/or third parties;
Whereas, Philips and TiVo desire to additionally enter into a
commercial relationship with DIRECTV regarding the development, manufacture,
marketing and distribution of DTV Combination Boxes;
Whereas, Philips and TiVo desire to additionally enter into commercial
relationships with other Network Operators regarding the development,
manufacture, marketing and distribution of Philips-branded Combination Boxes
which will incorporate the TiVo Enabling Technology and enable the TiVo Service;
and
1.
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Whereas, Philips intends to market and sell Philips-branded systems
and services throughout the world and TiVo intends to market and sell TiVo-
branded services throughout the world;
Now, Therefore, in consideration of the foregoing and the mutual
covenants, promises and undertakings set forth in the Agreement, Philips and
TiVo agree as follows:
Master Agreement
1. Scope. This Master Agreement sets forth the basic terms and conditions
applicable to the relationship between Philips and TiVo. Additional and
different terms and conditions applicable to the manufacturing and marketing
aspects of Philips' and TiVo's relationship are set forth in the attached
addenda. Additional addenda may be added from time to time upon mutual
agreement of the parties. The capitalized terms in the Agreement shall have the
meanings set forth in Exhibit A ("Definitions") to this Master Agreement.
2. Business Relationship.
2.1 Implementation of Commercial Relationship. In order to achieve time
to market advantages for Philips-branded Personal TV System Boxes and to
establish the TiVo Service, the parties will initially focus their efforts on
the manufacture and distribution of Philips-branded TiVo Stand-alone Boxes and
Philips-branded DTV Combination Boxes; provided, however, except as otherwise
specifically provided in the Agreement, nothing shall preclude Philips from
developing, manufacturing or distributing Stand-alone Boxes, Combination Boxes,
Personal TV Systems, or Personal TV Services, either alone or together with any
other person, at any time. In addition, nothing shall preclude Philips from
offering other services in conjunction with Personal TV Services or by means of
Personal TV Systems. At all times and subject to Sections 3.2 and 5, Philips
shall have the flexibility to introduce Personal TV Systems and Personal TV
Services which may or may not incorporate TiVo Technology or enable the TiVo
Service. The parties' participation with one another in any development of any
Combination Boxes shall be pursuant to joint development agreements to be
negotiated in good faith between the parties at the time such development
efforts are contemplated.
3. Exclusivity.
3.1 Business Development Exclusivity.
(a) Territory Activities. From [*] until [*], the parties shall
jointly identify and pursue business development activities with Network
Operators to provide Personal TV Systems and Personal TV Services in the
Territory which would result in the manufacture and distribution of Philips-
branded Personal TV System Boxes which would enable the TiVo Service. During
such period, neither party shall pursue such development activities without the
participation of the other. Notwithstanding the foregoing:
(i) TiVo may separately pursue such business development
activities and execute agreements with Network Operators only if Philips and
TiVo agree, in good faith,
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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that Philips is: [a] legally prohibited from participating in such development
activities; (b) unable to fulfill the Network Operator's reasonable technical
requirements; (c) unwilling after due inquiry to participate in such business
development activity or (d) after introduction and due consideration of Philips'
participation, rejected by the Network Operator, in writing, as a participant in
such business development activity. Upon notification by TiVo of a proposed
business development activity subject to this provision, Philips shall have
sixty (60) days to respond to TiVo in writing confirming Philips' ability and
willingness to participate in the proposed activity. If Philips does not provide
such confirmation within such sixty (60) day period, TiVo may separately pursue
such activity.
(ii) TiVo may separately pursue such business development
activities within the Territory with the third party consumer electronics
manufacturer referred to in Section 3.2. TiVo shall keep Philips reasonably
informed of such business development activities except where TiVo is prevented
from doing so by requirement of such third party.
(iii) Philips may separately pursue such business development
activities and execute agreements with Network Operators only if Philips and
TiVo agree, in good faith, that TiVo is: (a) legally prohibited from
participating in such development activities; (b) unable to fulfill the Network
Operator's reasonable technical requirements; (c) unwilling after due inquiry to
participant in such business development activity; (d) after introduction and
due consideration of TiVo's participation, rejected by the Network Operator, in
writing, as a participant in such business development activity. Upon
notification by Philips of a proposed business development activity subject to
this provision, TiVo shall have sixty (60) days to respond to Philips in writing
confirming TiVo's ability and willingness to participate in the proposed
activity. If TiVo does not provide such confirmation within such sixty (60) day
period, Philips may separately pursue such activity.
(b) [*] Activities. From [*] until [*], the parties shall jointly
identify and pursue business development activities with Network Operators to
provide Personal TV Systems and Personal TV Services [*] which would result in
the manufacture and distribution of Philips-branded Personal TV System Boxes
which would enable the TiVo Service. During such period, neither party shall
pursue such development activities without the participation of the other. The
provisions of this Section 3.1.b do not apply to the business development
activities of the parties within the Territory. Notwithstanding the foregoing,
(i) TiVo may separately pursue such business development
activities [*] with the third party consumer electronics manufacturer referred
to in Section 3.2. TiVo shall keep Philips reasonably informed of such business
development activities except where TiVo is prevented from doing so by
requirement of such third party.
(ii) TiVo may separately pursue such business development
activities and execute agreements with Network Operators if: (a) Philips is
legally prohibited from participating in such development activities; (b)
Philips is unable to fulfill the Network Operator's reasonable technical
requirements; (c) Philip is unwilling after due inquiry to participate in such
business development activity; (d) after introduction and due consideration of
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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Philips' participation, Philips is rejected by the Network Operator, in writing,
as a participant in such business development activity;or (e) within ninety (90)
days from the Effective Date of this Master Agreement, Philips fails to commit
in writing to the terms and conditions under which it will develop and market a
[*] (provided, however, that such terms and conditions shall provide for the
Commercial Release and launch of a [*] within such [*] exclusivity period).
Philips' written terms and conditions shall include a description of the
engineering resources Philips is willing to commit to such development effort
(including, without limitation, funding, staffing and overhead). Philips
acknowledges that such description shall include development funding for TiVo as
agreed by the parties. Upon notification by TiVo of a proposed business
development activity, Philips shall have [*] days to respond to TiVo in writing
confirming Philips' ability and willingness to participate in the proposed
activity. If Philips does not provide such confirmation within such [*] period,
TiVo may separately pursue such activity.
In the event that Philips so commits pursuant to 3.1.b.(ii)(e), TiVo shall
commit, in writing, to making the TiVo Services available in [*] within such [*]
exclusivity period and the terms and conditions under which such TiVo Services
will be provided. In the event that Philips does not so commit, Philips shall
have a right of first refusal to participate with any Network Operator contacted
by TiVo, in the same manner as specified in Section 3.1.c, below. In the event
that TiVo does not provide a TiVo Service in [*] within the [*] period
referenced in this Section 3.1.b, Philips' exclusive right to participate with
TiVo in [*] business development activities shall be extended until such time as
TiVo makes the TiVo Services available in [*].
(iii) Philips may separately pursue such business development
activities and execute agreements with Network Operators if: (a) TiVo is
legally prohibited from participating in such development activities; (b) TiVo
is unable to fulfill the Network Operator's reasonable technical requirements;
(c) TiVo is unwilling after due inquiry to participate in such business
development activity (d) after introduction and due consideration of TiVo's
participation, TiVo is rejected by the Network Operator, in writing, as a
participant in such business development activity; or (e) within ninety (90)
days from the Effective Date of this Master Agreement, TiVo fails to commit in
writing to make TiVo Services available in [*] sufficient to support a
Commercial Release of a [*] and to provide technical support to Philips in the
development of a [*]. Upon notification by Philips of a proposed business
development activity, TiVo shall have [*] days to respond to Philips in
writing confirming TiVo's ability and willingness to participate in the
proposed activity. If TiVo does not provide such confirmation within such [*]
day period, Philips may separately pursue such activity.
(c) Right of First Refusal. For a period of [*] each party, in
approaching any Network Operator within [*] (but subject to the same exceptions
set forth above), will identify the other party as its preferred supplier for
the providing of Personal TV System Boxes or Personal TV Services, as applicable
and shall give such other party the first right to participate in any
development activities with any such Network Operator. Prior to executing an
agreement with a third party for such business development activity, the party
proposing such activity (the
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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"Proposing Party"), shall offer to the other party (the "Non-Proposing Party")
the right to enter into such agreement on substantially the same terms and
conditions. Such offer will be contained in a notice that has attached to it a
copy of the proposed agreement with such third party and that contains the name
and address of such third party (the "Proposed Development Notice"). The Non-
Proposing Party may accept such offer (with such nonmaterial changes therein as
are appropriate) by written notice to the Proposing Party within [*] days of
receipt of the Proposed Development Notice. If the Non-Proposing Party does not
provide such a written acceptance notice within [*] days, the Proposing Party
shall be free to enter into such agreement, only with the named third party, on
terms no more favorable to such third party than those contained in the Proposed
Development Notice.
3.2 Product Exclusivity.
(a) TiVo Stand-alone Boxes. From the Effective Date of this Master
Agreement until [*], Philips shall have the exclusive right, even as to TiVo, to
market and sell TiVo Stand-alone Boxes in the Territory. Notwithstanding the
foregoing, unless TiVo otherwise allows, in the event that, prior to [*],
Philips releases a Stand-alone Personal TV System Box with a third party, with
which it has an existing business relationship, which is a Competitive Device
for sale to end-users within the Territory, TiVo shall have the right to market
and sell Stand-alone Personal TV System Boxes with an equal number of third
parties; provided that the release of such Stand-alone Personal TV System Boxes
for sale to end-users shall not occur less than [*] from the date of Philip's
release of such Competitive Device. Prior to [*], Philips shall not release such
a Personal TV System Box which is a Competitive Device with a third party with
which it does not have an existing business relationship. Notwithstanding the
provisions of this Section 3.2.a, TiVo shall have the right to manufacture, have
manufactured, market, distribute and sell third-party branded TiVo Stand-alone
Boxes with [*].
Unless sales of Philips-branded TiVo Stand-alone Boxes are less than [*]
units in the month immediately preceding the date on which Philips' TiVo Stand-
alone Box exclusivity expires or terminates (including pursuant to this
Section), TiVo shall not manufacture, have manufactured, market, distribute and
sell a TiVo-branded Personal TV System Box sooner than [*] after the date on
which such exclusivity expires or terminates. TiVo may manufacture, have
manufactured, market, distribute and sell a TiVo-branded Personal TV System Box
after [*].
(b) Combination Boxes. From the Effective Date of this Master
Agreement until [*] the first Philips-branded DTV Combination Box, Philips shall
have the exclusive right, even as to TiVo, to market and sell DTV Combination
Boxes in the Territory; provided, however (i) Philips must have a development
plan (including without limitation staffing, schedule, milestones and resources)
and be ready to begin implementation of such plan by September 1, 1999 unless
Philips proposes a more favorable deal which is acceptable to Tivo.
Notwithstanding the foregoing, unless TiVo otherwise allows, in the event that
[*], TiVo shall have the right to market and sell a DTV Combination Box with an
equal number of third parties;
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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provided that the release of such DTV Combination Boxes for sale to end-users
shall not occur less than [*] from the date of Philip's release of such
Competitive Device. During this exclusivity period, Philips shall not release
such Philips-branded DTV Combination Box which is a Competitive Device with a
third party with which it does not have an existing business relationship.
Notwithstanding the provisions of this Section 3.2.b, TiVo shall have the right
to manufacture, have manufactured, market, distribute and sell a third-party
branded DTV Combination Box with [*]; provided however, that TiVo shall not
authorize [*] to announce the availability of any [*] DTV Combination Box prior
to [*], and TiVo shall not authorize [*] to commence [*] of any [*] DTV
Combination Box prior to [*].
(c) [*]. Provided that Philips has the right to business development
exclusivity for [*] activities [*], as provided in Section 3.1.b above, from
[*] until [*], Philips shall have the exclusive right to manufacture, have
manufactured, market, distribute and sell [*] in [*]. Notwithstanding the
provisions of this Section 3.2.c, TiVo shall have the right to manufacture, have
manufactured, market, distribute and sell a third-party branded [*] with [*].
(d) Existing Business Relationships. Notwithstanding any provision
of Section 3.2, Philips shall have the right to release a Competitive Device
with any third party having an existing business relationship with Philips as of
the Effective Date of this Master Agreement. As of the Effective Date, Philips
represents and warrants that it does not have an existing business relationship
with Replay Networks, or any other company whose primary business is the
delivery of Personal TV Services.
(e) Additional Consumer Electronics Manufacturer. It is agreed by the
parties that in all cases, the third party consumer electronics manufacturer
referenced in Sections 3.2.(a), (b), and (c) is the same third party consumer
electronics manufacturer.
3.3 Additional Obligations. The parties shall have the following
additional obligations during the respective exclusivity periods for the TiVo
Stand-alone Box and the DTV Combination Box:
(a) Sales Calls. TiVo shall, at its own expense and upon reasonable
request by Philips, participate in sales calls with potential Philips
distributors and dealers.
4. TiVo Deliverables.
4.1 Stand-alone Box. No later than May 15, 1999, TiVo shall provide
commercially reasonable training and technical support, and all technical
documentation necessary to enable Philips to modify the user interface of the
TiVo Stand-alone Box. TiVo shall bear the cost of such training, technical
support, and technical documentation for the first generation of the TiVo Stand-
alone Box. Such training, technical support and documentation shall enable
Philips: (i) to
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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make reasonable modifications of the look and feel and the user interactive
model, (ii) to [*]; and (iii) to [*]; provided, however, that all such
modifications shall meet TiVo minimum requirements, when specified, or be
subject to the written approval of TiVo, which shall not be unreasonably
withheld or delayed.
Notwithstanding the foregoing, TiVo shall, prior to Commercial Release,
modify the user interface of the TiVo Stand-alone Box to comply with the
requirements of Exhibit C (Commercial Release Branding Requirements). Philips
shall pay TiVo's internal engineering costs (not to exceed $[*] cumulative)
and for all third party costs actually incurred and properly documented by
TiVo in connection with such modification, subject to Philips prior written
approval, which approval shall not be unreasonably withheld or delayed.
This Section 4.1 is subject to the provisions of Section 9.2.
4.2 Combination Boxes. No later than [*], TiVo and Philips shall work
together in good faith and jointly develop an interface, comprising both
hardware and software components, to enable communications between the DIRECTV
components and the TiVo Stand-alone Box components of a Philips-branded DTV
Combination Box (hereinafter the "Interface"). Such Interface shall be
[*](subject to TiVo's and Philips' applicable and respectively owned
Proprietary Rights in the Interface which do not directly result from the
joint development and TiVo and Philips shall be entitled to use such Interface
with no obligation to account to the other party, and either party may license
such jointly-held Proprietary Rights in the Interface without accounting to
the other party. In any event each party retains exclusive ownership of any
Technology such party independently develops.
(a) Patents. In the case where the Interface is or comprises an
invention jointly-made by Philips and TiVo that will be protected by one or more
patents, the parties agree that each party will be listed as the joint assignees
on each patent application filed.
(b) Copyrights. In the case where the Interface is or comprises a
copyrighted work jointly created or authored by Philips and TiVo, the parties
agree that the work was intended to be jointly owned and that each party
intended its contributions to such work to be merged into inseparable or
interdependent parts or a unitary whole.
(c) Procedures Relating to Proprietary Rights. Exhibit F sets forth
the procedures relating solely to the parties' jointly held Proprietary Rights
in the Interface.
4.3 [*]. Tivo shall provide, allocate, and make available [*] the
Philips-branded Personal TV System Boxes for [*].
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
7.
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4.4 Modifications and Upgrades. For so long as this Master Agreement is
in effect:
(a) TiVo Software Specification Upgrades. Subject to the payment
provision in Section 4.4.c, TiVo shall deliver all modifications and upgrades to
the Software Specification (excluding modifications and upgrades subject to
third party Proprietary Rights to the extent TiVo has no license under such
right to deliver such modifications and upgrades) and for use in or for Philips-
branded Personal TV System Boxes that enable the TiVo Service to Service
Subscribers and to Philips. TiVo shall deliver such modifications and upgrades
no later than it delivers such modifications and upgrades to any other person or
incorporates such modifications or upgrades into its own products or services.
To the extent that such modifications and upgrades are intended for end-users
who have already purchased Philips-branded Personal TV System Boxes, TiVo shall
provide such modifications and upgrades directly to such end-users over the TiVo
Service.
(b) TiVo Hardware Specification Upgrades. Subject to the payment
provision in Section 4.4.c, TiVo shall deliver all modifications and upgrades to
the Hardware Specification (excluding modifications and upgrades subject to
third party Proprietary Rights to the extent TiVo has no license under such
right to deliver such modifications and upgrades) and for use in or for Philips-
branded Personal TV System Boxes that enable the TiVo Service to Philips. TiVo
shall deliver such modifications and upgrades no later than it delivers such
modifications and upgrades to any other person or incorporates such
modifications or upgrades into its own products or services.
(c) Payment for Upgrades. Modifications and upgrades to the Software
Specification and the Hardware Specification shall be paid as follows: [*].
5. Manufacturing and Distribution License.
5.1 Patent License. Subject to the terms and conditions of the Agreement,
TiVo hereby grants to Philips a [*] right and license under its patents and
patent rights in the TiVo Enabling Technology (including modifications and
upgrades developed by TiVo and available for release) solely to [*] Philips-
branded Personal TV System Boxes which enable the TiVo Service. Philips shall
not attempt to reverse engineer, disassemble, decompile or similarly manipulate
all or any portion of the TiVo Technology for any purpose.
5.2 Copyright License. Subject to the terms and conditions of the
Agreement, TiVo hereby grants to Philips a [*] right and license under its
copyrights in the TiVo Enabling Technology (including modifications and upgrades
developed by TiVo and available for release, and developed by or for Philips
(pursuant to Section 4.1 and Section 5.3)) solely to [*] in the Philips-branded
Personal TV System Boxes which enable the TiVo Service manufactured by, or for,
or marketed, distributed, or sold by Philips. Philips shall not attempt to
reverse engineer,
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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disassemble, decompile or similarly manipulate all or any portion of the TiVo
Technology for any purpose.
5.3 User Interface License. Subject to the terms and conditions of the
Agreement, TiVo hereby grants to Philips a [*] right and license under its
copyrights in and to the user interface of the TiVo Service to [*] the TiVo
background screens and images and user navigation displays, delivered to Philips
pursuant to Sections 4.1 and 9.2 of this Master Agreement, solely for the
purpose of manufacturing, having manufactured, marketing, distributing or
selling Philips-branded Personal TV System Boxes which enable the TiVo Service.
5.4 Exclusive License. Notwithstanding the foregoing, during the
exclusivity periods specified in Sections 3.1 and 3.2 above, and subject to any
restrictions or conditions contained therein, TiVo shall not grant a right or
license to any person, except the third party consumer electronics manufacturer
referenced in Section 3.2.e, which allows for the marketing, distribution or
sale of TiVo Stand-alone Boxes or DTV Combination Boxes prior to the expiration
or termination of the applicable exclusivity period.
5.5 Source Code License Option.
(a) Subject to the terms and conditions of the Agreement, TiVo hereby
grants Philips an option to obtain a [*] right and license [*] to [*] those
components of TiVo's Source Code implemented in the Philips-branded Personal TV
System Boxes that enable the TiVo Service, solely as necessary to [*], and to
[*]; provided such Personal TV System Boxes: (i) enable the TiVo Service; and
(ii) do not enable the Personal TV Services of any third party, except as
allowed by TiVo. The parties hereby agree to negotiate in good faith additional
terms and conditions [*] pursuant to which TiVo shall grant such a license to
Philips in the event Philips chooses to execute its option under this Section
5.5(a). The terms and conditions shall be reflected in a separate licensing
agreement to be entered into by the parties.
(b) In the event the parties cannot agree in good faith to additional
terms and conditions for a license to be granted pursuant to Section 5.5(a),
TiVo shall grant pursuant to a license agreement to Philips a [*] right and
license [*] to [*] those components of TiVo's Source Code embedded in the
Philips-branded Personal TV System Boxes that enable the TiVo Service solely as
necessary to [*], and to [*]; provided that:
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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(i) [*];
(ii) [*];
(iii) [*];
(iv) [*];
(v) [*]; and
(vi) Philips shall be liable (up to a cumulative total of One
Hundred and Fifty Million Dollars (US $150,000,000)) for consequential,
special and incidental damages for any Philips' breach of any license,
confidentiality or ownership provisions of the license agreement referred to
in this Section 5.5(b).
5.6 New Technology License Option. Subject to the terms and conditions of
the Agreement, TiVo hereby grants Philips an option to a [*] right and license
to new technology relating to Personal TV System Boxes [*].
6. TiVo Manufacturing. Until such time as Philips commences manufacturing of
the Philips-branded TiVo Stand-alone Box under the licenses granted in the
Agreement or Commercial Release of the Philips-branded TiVo Stand-alone Box,
whichever is earlier, TiVo shall sell to Philips, and Philips shall purchase
from TiVo, such Boxes on the terms and conditions set forth in that certain
Purchase Addendum entered into by the parties on March 31, 1999. Beginning no
later than Commercial Release of the Philips-branded TiVo Stand-alone Box, TiVo
shall sell to Philips and Philips shall purchase from TiVo, Philips-branded TiVo
Stand-alone Boxes pursuant to a more comprehensive OEM Purchase Agreement which
shall replace the Purchase Addendum in its entirety. Such OEM Purchase Agreement
shall be negotiated by the parties in good faith.
7. Tivo Continuing Development Activities. No later than September 1, 1999 TiVo
and Philips shall [*] which will [*] from Commercial Release, with such [*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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[*] targeted for Commercial Release no later than [*].
8. Philips Manufacturing.
8.1 Commencement of Philips Manufacturing. Philips shall commence
manufacturing the Philips-branded TiVo Stand-alone Box as soon as commercially
practicable.
8.2 TiVo Deliverables. Prior to commencement of manufacturing by Philips,
TiVo shall provide Philips with all reasonably necessary documentation in TiVo's
possession relating to the manufacture and servicing of the TiVo Stand-alone Box
for the purpose of enabling Philips to manufacture and service, or have
manufactured and serviced, a Philips-branded TiVo Stand-alone Box which allows
end-users to access all functionality and features of the TiVo Service which are
available to end-users. Such documentation provided by TiVo shall include, but
shall not be limited to, the applicable bill of materials; material, component,
and sub-assembly suppliers; product specifications; schematics; manufacturing
processes; test routines; vendor contacts; authorizations; software in Object
Code form only; rights and licenses (to the extent commercially reasonable);
and/or such other materials reasonable and necessary to purchase materials,
component parts and subassemblies and to manufacture, assemble, market, and
service the Philips-branded TiVo Stand-alone Box. (Hereinafter, these materials
shall be referred to collectively as the "Manufacturing Package").
Notwithstanding the foregoing, the parties agree to work together in good faith
to make reasonable modifications to finalize the Specifications of the TiVo
Stand-alone Box prior to Commercial Release.
TiVo shall provide Philips with notice of all upgrades and modifications to
such Manufacturing Package not less than thirty (30) days prior to completion
and shall provide Philips with any such upgrade or modification no later than
it: (i) provides the Manufacturing Package or upgrades and modifications to the
Manufacturing Package (excluding modifications and upgrades subject to third
party Proprietary Rights) to any other person; or (ii) implements the
Manufacturing Package or upgrades and modifications to the Manufacturing Package
(excluding modifications and upgrades subject to third party Proprietary Rights)
for its own use. Philips may make a reasonable number of copies of the
Manufacturing Package or upgrades and modifications to the Manufacturing Package
(excluding modifications and upgrades subject to third party Proprietary
Rights), but shall not distribute or disclose the Manufacturing Package, or any
portion thereof, to any third party except as necessary to make or have made
Personal TV System Boxes or to incorporate brief excerpts, if necessary, into
Philips' user guides and technical documentation.
8.3 Third Party Components. The parties acknowledge that the
Specifications for the TiVo Stand-alone Box provide for certain TiVo and third
party components, parts, and/or subassemblies. Philips shall enter into its own
agreements with the suppliers of those parts; provided, however, Philips shall
have the right to purchase such components, parts, and/or subassemblies subject
to availability [*] from TiVo at cash prices which are no less favorable than
those now or hereafter offered to TiVo. In the event that TiVo controls the
supply of any such components, parts, and/or subassemblies, TiVo shall take
reasonable steps necessary to ensure an adequate supply of such parts to
Philips, including, without limitation, the purchase and resale to Philips
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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[*] of any such components, parts, and/or subassemblies. In the event that
TiVo controls the pricing of any such components, parts, and/or subassemblies,
TiVo shall arrange for pricing [*].
8.4 Transition and Technical Support. TiVo shall provide, [*] technical
support sufficient: (i) to enable Philips to transition the manufacturing
process from TiVo to itself and to ensure proper functioning of Philips-branded
Personal TV System Boxes which enable the TiVo Service; and (ii) to enable
Philips to manufacture products in conformance with any Quality Plans. TiVo and
Philips have each designated initial Coordinators regarding such transition and
Philips' ramp-up of its manufacturing process.
8.5 Philips Design Changes. Subject to Section 4.4.c, Philips reserves
the right to request reasonable changes and modifications to the Specifications
of the Philips-branded Personal TV System Boxes enabling the TiVo Service
manufactured by or on behalf of Philips at any time and from time to time;
provided, however, that any such changes and modifications: (i) shall not affect
the ability of such Boxes to receive and provide Service Subscribers with all
functionality and features of the TiVo Service; and (ii) shall meet or exceed
all requirements of the original Specifications. Upon written approval by TiVo,
which shall not be unreasonably withheld or delayed, TiVo shall provide such
requested changes and modifications in a timely manner, and in conformance with
the procedures agreed to between the parties from time to time. In the event
that such design change results in an increase to the Cost of Goods Sold and
Philips requests an associated increase in Manufacturing Subsidy, TiVo will not
be liable for the associated increase in Manufacturing Subsidy, or TiVo may
reject such change.
8.6 TiVo Design Changes. Subject to Section 4.4.c, TiVo reserves the
right to request reasonable changes and modifications to the Specifications of
the Philips-branded Personal TV System Boxes enabling the TiVo Service at any
time and from time to time; provided, however, that any such changes and
modifications: (i) shall not result in an increase in the cost of manufacturing;
and (ii) shall meet or exceed all requirements of the original Specifications.
Upon written approval by Philips, which shall not be unreasonably withheld or
delayed, Philips shall provide such requested changes and modifications in a
timely manner, and in conformance with the procedures agreed to by the parties
from time to time. In the event that such design change results in an increase
to the Cost of Goods Sold and Philips requests an associated increase in
Manufacturing Subsidy. If TiVo refuses to increase such Manufacturing Subsidy,
Philips may reject such change.
8.7 Testing and Certification. Prior to shipping any configuration of
Philips-branded Personal TV System Boxes, Philips will provide such
configuration to TiVo solely for testing and certification. Within two (2) weeks
of receipt, TiVo shall test the configuration to verify that it conforms to the
Specifications and properly enables the TiVo Service. If TiVo determines that
such configuration does not so conform or enable, TiVo shall deliver prompt
notice to Philips, in writing, setting forth the discovered nonconformities.
TiVo shall provide all technical support, at no cost to Phillips, as necessary,
to correct (or enable Philips to correct) such nonconformities. The process
shall continue until such time as TiVo certifies that the configuration so
conforms and enables.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
12.
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8.8 Philips End User License. Philips shall take all commercially
reasonable steps necessary to protect TiVo's interest in the TiVo Software and
to ensure that each copy of the TiVo Software distributed by Philips is
accompanied by a copy of an applicable TiVo or Philips' software license
agreement. Such license shall include terms and conditions substantially
equivalent to those set forth in Exhibit D.
9. Branding.
9.1 Box Branding.
(a) Subject to Section 9.1.b., Philips shall have the right to
determine branding on all Philips-branded Personal TV System Boxes; provided,
however, Philips shall place one designated TiVo Mark (as agreed by the parties)
on the front bezel of all Philips-branded Personal TV System Boxes that enable
the TiVo Service manufactured, and distributed by Philips. Philips shall also
place no fewer than one TiVo Mark on all external packaging for such Boxes. In
all cases, the Philips Marks shall have overall prominence over all other
trademarks, service marks, trade names, and logos of other persons. Philips
shall collaborate with TiVo on the relative appearance and placement of the
Philips Marks and TiVo Marks; provided, however, final determination as to the
appearance and placement of such Marks on all Philips-branded Personal TV System
Boxes shall be made by Philips, which shall not be unreasonably withheld or
delayed.
(b) Philips shall not brand TiVo Stand-alone Boxes or the DTV
Combination Boxes with any trademarks, service marks, trade names or logos other
than those of Philips, TiVo, Quantum, or DIRECTV, except as mutually agreed by
the parties, in writing.
9.2 User Interface Branding. For all Philips-branded Personal TV System
Boxes which enable the TiVo Service, the following user interface branding
provisions shall apply:
(a) Philips Exclusive Screens. Philips shall have the exclusive right
to determine the branding, including without limitation, the look and feel and
creative content, of screens relating to Philips Value-added Services.
(b) TiVo Exclusive Screens. TiVo shall have the exclusive right to
determine the branding, including without limitation, the look and feel and
creative content, of the following classes of screens: (i) TiVolution; (ii)
Showcases; (iii) non-Philips' Shopping Malls; and (iv) non-Philips intermissions
and interstitials.
(c) TiVo/Philips [*]. Philips shall [*] on the following classes of
screens: (i) [*]; (ii) [*] (the parties acknowledge that the [*]); and (iii)
[*]. For the [*] shall be [*]. On the [*]. For all of the foregoing, Philips
[*], or any other [*] shall be subject to the approval of TiVo, which approval
shall not be unreasonably withheld or delayed.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
13.
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(d) Other Screens. For screens not specified above, the parties will
work together, in good faith, to agree upon the presence of designated Philips
Marks, determined by Philips, on [*] the TiVo Service. In the event that the
parties cannot agree on the presence of designated Philips Marks, determined by
Philips, on [*] the TiVo Service, Philips shall have the right to place, on its
own behalf, designated Philips' Marks, determined by Philips, on [*] from
screens referred to in this Section 9.2.d. On [*] screens for which [*], Philips
shall have a [*]. For all of the foregoing, Philips placement of the Philips
Marks on all such screens, or any other overlay or modification of such
sequences or screens shall be subject to the approval of TiVo, which approval
shall not be unreasonably withheld or delayed.
(e) Commonality and Control. The parties will work together with the
goal to achieve a commonality in the creative look, feel, operation,
functionality, features and content of their respective Personal TV Services;
provided, however, each party shall retain exclusive control over such creative
look, feel, functionality, features and content of their respective Personal TV
Services, however delivered or provided.
(f) Interference with Functionality. Neither party shall denigrate
nor disable the Personal TV Services, Value-added Services, other services, or
functionality of the other party.
(g) Prominence. In determining prominence and branding presence, the
size, luster, color, relative placement, etc., of such Marks shall be
considered.
(h) Corporate Identity Policies. Use of each party's Marks shall at
all times comply with each such party's corporate identity policies.
10. Manufacturing Subsidy.
10.1 Paid on Each Box. TiVo shall pay Philips a Manufacturing Subsidy on
each Philips-branded TiVo Stand-alone Box [*] manufactured by Philips (or
manufactured by a third party for Philips). For as long as TiVo is paying a
Manufacturing Subsidy to Philips the parties acknowledge that the Manufacturing
Subsidy on [*] may be zero or negative depending on [*]. The total of such
negative subsidies shall not exceed TiVo's total subsidy liability to Philips,
and shall be paid in the form of a credit to TiVo's Manufacturing Subsidies paid
to Philips.
10.2 Fixed Amount. The Manufacturing Subsidy shall be a fixed amount on
each Philips-branded TiVo Stand-alone Box [*] manufactured by Philips (or
manufactured for Philips by a third party). For [*], the Manufacturing Subsidy
shall be [*] per unit for the [*], and shall be [*] on a per unit basis for the
[*]. On or prior to the dates specified in Section 10.3 and upon TiVo's written
request, Philips shall provide TiVo with cost and other relevant data (e.g.,
BOM) relating to the manufacture of Philips-branded Personal TV System Boxes by
or for Philips. In the event that the [*] during [*] for the [*] is different
than [*], then the [*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
14.
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[*] will be paid or credited to the appropriate party at [*]. Adjustments to the
Manufacturing Subsidy for the [*] for [*] will be agreed by the parties.
The Manufacturing Subsidy for [*] the Philips-branded TiVo Stand-alone Box
and [*] manufactured by Philips (or manufactured by a third party for Philips)
shall be an amount determined [*] and [*], based on [*], as reasonably agreed by
the parties.
10.3 Semi-Annual Basis. For Manufacturing Subsidies paid after [*],
the Manufacturing Subsidy shall be [*], based on [*].
10.4 [*]. Unless agreed otherwise in writing, Manufacturing Subsidies on
the Philips-branded TiVo Stand-alone Box and [*] paid after [*], shall be that
fixed dollar amount, per unit, which results in [*] that is equal to [*].
Notwithstanding the foregoing, during [*], the Manufacturing Subsidy on such [*]
shall be that fixed dollar amount, per unit, which results in [*] that is equal
to [*].
10.5 Quantum Drives. In connection with the manufacture of Personal TV
System Boxes which enable the TiVo Service, the parties acknowledge that
Philips shall have an option to purchase Quantum hard disk drives from Quantum
or TiVo at [*]. In such event, Philips shall credit an amount [*] against the
Manufacturing Subsidy due from TiVo.
10.6 Payment. An amount equal to [*] of the Manufacturing Subsidy due on
each Personal System TV Box shall be due and payable within [*] of the end of
the [*]. The remaining [*] of such manufacturing subsidy shall be payable within
[*] of the end of the [*]. TiVo shall pay Philips interest at the rate of [*],
compounded [*], on all late payments.
10.7 Most Favored Status. Until [*], provided Philips is manufacturing
(or having manufactured) Philips-branded Personal TV System Boxes which enable
the TiVo Service, TiVo shall not give any Manufacturing Subsidy to any third
party which is greater than the Manufacturing Subsidy given to Philips; provided
that such
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
15.
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Manufacturing Subsidy paid to such third party is paid on a Personal TV System
Box which is substantially similar to the Personal TV System Box(es)
manufactured by or for Philips. In the event TiVo pays a higher subsidy to any
such third party, TiVo shall pay Philips the difference in subsidy amounts
[*].
10.8 Direct Sales. In any given calendar year, if total direct sales of
Philips-branded TiVo Stand-alone Boxes to consumers exceed [*], Philips will
credit against sums due Philips from TiVo an amount equal to [*] for each such
Box sold in excess of the above percentage. Credits for [*] sales shall be
determined based on [*]. Credits shall be posted within [*] days of the end of
each calendar year.
10.9 Suggested [*] Retail Price. For all Philips-branded TiVo Stand-alone
Boxes [*] manufactured or subsidized by TiVo, TiVo shall have the right, at its
sole discretion, to [*] the manufacturer's suggested retail price, [*]: [*].
After [*], and based on a suggested retail price agreed to by the parties,
Philips shall [*]. Except for the foregoing, Philips is free to unilaterally
establish the manufacturers suggested retail pricing for the Philips-branded
Stand-alone Personal TV System Boxes and Philips-branded DTV Combination Boxes
to its customers.
10.10 Guaranty. At any time prior to the commencement of manufacturing by
Philips (or for Philips by third parties) of Philips-branded TiVo Stand-alone
Boxes, TiVo shall provide, for the benefit of Philips: (i) an irrevocable letter
of credit; (ii) other credit facility; or (iii) a guaranty from a third party;
in each case, from a financial institution with a minimum S&P rating of A+, any
other financial provider reasonably acceptable to Philips, which acceptance
shall not be unreasonably withheld, or any financial institution pre-approved by
Philips in the amount of One Million Dollars (US$1,000,000) (the "Guaranty
Facility"). Such Guaranty Facility shall provide that Philips shall have the
right, in its sole discretion, to directly draw against the Guaranty Facility in
the event that TiVo is sixty (60) days delinquent in its payment to Philips of
the Manufacturing Subsidy set forth in this Section 10. In no case may the
amount drawn by Philips exceed the Manufacturing Subsidy for which TiVo has
failed to pay. Such Guaranty Facility shall expire upon the earlier of an
initial public offering of TiVo common stock with gross proceeds to TiVo of at
least Fifteen Million Dollars (US$15,000,000), or December 31, 2001.
Philips acknowledges that it has pre-approved Comdisco Inc. (not an
affiliate or subsidiary thereof) for such Guaranty.
The amount available under such Guaranty Facility shall be reevaluated no
later than October 1, 1999. Such reevaluation shall be based on the product of
the total volume of Philips-branded TiVo Personal TV System Boxes shipped in the
previous quarter and the [*] Manufacturing Subsidy due to Philips from TiVo. For
the purposes of
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
16.
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this calculation, such per-box Subsidy shall be net of any Quantum subsidies
paid to TiVo or Philips. In the event the parties cannot agree to a revised
amount, the Guaranty Facility shall remain in place according to the terms of
this Section 10.10.
11. Service Revenue Share.
11.1 Amount. TiVo shall pay Philips a service revenue share (the "Service
Revenue Share") for each [*]. Such Service Revenue Share shall be in the amount
of [*] per [*] for each [*] in which such [*] for a total of [*]. Service
Revenue Share for [*] shall be [*] but in no case will the payment for such [*]
for each [*] in which such [*] for a total of [*].
11.2 Payment Due. Such Service Revenue Share shall be due and payable
within [*] of the end of the [*] in which each [*]; provided, however, payment
of Service Revenue Share for [*] shall be [*], and shall be paid at the [*]
until paid in full.
11.3 Monthly Reports. TiVo shall provide Philips with a monthly report
indicating the number of [*] from [*] and the amount of Service Revenue Share
earned or accrued in each such month.
12. Authentication Codes. In the event any authentication code, identifier, or
password is to be generated in conjunction with the use of any Philips-branded
Personal TV System Box, Philips shall have the right to generate any such code,
identifier, or password.
13. Tivo Services And Support. TiVo shall provide First, Second, and Third
Level Support for all service and software related to the Philips-branded TiVo
Stand-alone Box, the DTV Combination Box, and the TiVo Service. TiVo shall
provide end-users of Philips-branded Personal TV System Boxes (which enable the
TiVo Service) with direct telephone access to TiVo's customer support function.
TiVo customer support shall be provided 24 hours per day, seven days per week as
the market requires. In no event will TiVo offer customer support be provided
less than six days a week, from 9 a.m. to 9 p.m. PT. In the event that TiVo
customer support reasonably determines that the customer problem is a hardware
problem, TiVo support shall refer such customer to Philips for resolution.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
17.
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14. Philips Services.
14.1 Delivery of Value-added Services. TiVo acknowledges that Philips
intends to provide Value-added Services and other services for delivery through
Personal TV Systems. If requested by Philips, TiVo shall provide access to, and
modify the TiVo Service capabilities as necessary (including, without limitation
access to TiVo's servers), subject to the provisions of Section 17, to enable
Philips to provide Value-added Services and other services to end-users of
Philips-branded Personal TV Systems through, or in connection with, the TiVo
Service. Philips shall pay TiVo the reasonable cost of such modifications and
the increase in TiVo's reasonable cost of operation directly attributable to
the provision of Philips' Value-added Services and other services; provided,
however, in no event shall Philips pay more than the [*].
14.2 Collection and Modifications. In the event that Philips provides
value-added Services to end-users through, or in connection with, the TiVo
Service, TiVo shall, upon request by Philips: (i) bill and collect payment for
the Philips Value-added Services from such end-users; and (ii) provide such
modifications and upgrades to the Philips Value-added Services, as are intended
for end-users who have purchased Philips-branded Personal TV System Boxes,
directly to such end-users over the TiVo Service. TiVo shall remit such payments
to Philips within thirty (30) days of the end of the month in which each such
payment is received by TiVo. TiVo shall pay Philips interest at the rate of two
percent (2%) per month, compounded monthly, on all late payments.
15. Sales Agency. The parties contemplate that TiVo shall act as Philips'
agent, from time to time, for the purpose of booking direct sales and order
fulfillment for such sales from Philips to end-users of Philips-branded TiVo
Stand-alone Boxes through TiVo's web site. Any such agency shall be granted
only pursuant to a separate agreement containing the terms and conditions
which apply to any such agency. No such agency shall exist, or be created,
until the execution of such an agreement by Philips. At no time shall TiVo
have the right to make sales of Philips-branded products into the retail
channel. Notwithstanding the foregoing, the parties contemplate that, prior to
Commercial Release, TiVo shall purchase from Philips, and Philips shall sell
to TiVo, not more than [*] units of Philips-branded TiVo Stand-alone Boxes for
sale directly to end-users pursuant to the Purchase Addendum. The purchase
price of such Boxes shall be [*] per unit. For sales booked and fulfilled on
Philips' behalf after Commercial Release, Philips shall pay or credit to TiVo
a commission equal to [*] per unit sold. Such commissions shall be paid within
thirty (30) days of the end of each month during which TiVo is booking such
sales for which Philips has received full payment.
16. Audit Rights. The parties shall collect and retain complete, clear and
accurate records regarding the services and obligations performed in connection
with the Agreement. Upon seven (7) days advance written notice, relevant records
may be audited from time to time to the extent necessary to verify compliance
with the Agreement, but not more than once in each calendar year. Such audit
shall be performed by a reliable, independent, internationally-recognized audit
professional (reasonably acceptable to the other party) chosen and paid by the
auditing party. Such audit shall be conducted during normal business hours and
in such a manner as not to unreasonably interfere with normal business
operations. If an audit discloses that inaccurate information caused a
discrepancy in the amount actually due to the auditing party, payment of
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
18.
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such discrepancy shall promptly be made. In addition, if the discrepancy is of
ten percent (10%) or more of the amount actually due to or paid by the auditing
party, then the audited party will bear the costs of the audit. All information
disclosed by the party being audited during the course of such audit shall be
kept in confidence by the auditor except for such information which must be
disclosed to the other party in order to accomplish the purposes of this Section
16. In no event shall an auditor provide the auditing party with any information
which is confidential or proprietary. This provision will survive any
termination of the Agreement for two (2) years.
17. Confidentiality.
17.1 Confidential Information. Each party (the "Disclosing Party") may,
from time to time during the Term, disclose or make available to the other party
(the "Receiving Party") certain proprietary and/or non-public information of the
Disclosing Party, including, but not limited to Software, hardware, trade
secrets, know-how, formulas, flow charts, diagnostic routines, business
information, forecasts, financial plans and data, customer information,
marketing plans, the Specifications, Manufacturing Package, the TiVo Enabling
Technology and unannounced product information (collectively, "Confidential
Information"). For purposes of the Agreement, Confidential Information includes
all such information disclosed between the parties in the course of negotiating
the Agreement and the Memorandum of Understanding which preceded the Agreement.
If such Confidential Information is in writing, it shall be marked prominently
with the legend "confidential", "proprietary", or with a similar legend, or if
disclosed orally shall be described as Confidential Information at the time of
oral disclosure and confirmed as such in writing within forty-five (45) days
thereafter.
17.2 Protection. The Receiving Party shall not use or disclose
Confidential Information of the Disclosing Party, except as expressly authorized
by written agreement or in writing by the Disclosing Party, using the same
degree of care which 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.
17.3 Third Parties. The Receiving Party may disclose Confidential
Information only to its employees, consultants and contractors on a need-to-know
basis for purposes of the Agreement, provided such employees, consultants and
contractors are expressly bound by nondisclosure obligations and restrictions
containing terms no less restrictive than those set forth in this Master
Agreement.
17.4 Limitation. Confidential Information shall exclude information the
Receiving Party can demonstrate: (i) 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; (ii) becomes 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 the
Agreement; (iii) 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; (iv) was
rightfully known to the receiving party, without restriction, at the time of
disclosure; (v) was approved for disclosure by the Disclosing Party beforehand
and in writing; or (vi) was
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
19.
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disclosed by Disclosing Party to a competitor of Receiving Party without
obligation of confidentiality.
18. Ownership.
18.1 TiVo's Ownership. TiVo retains exclusive ownership of all
Proprietary Rights in any Technology, proprietary to TiVo, which is incorporated
into Personal TV Systems. Philips shall take reasonable measures to protect
TiVo's Proprietary Rights in such Technology, including giving of such
assistance and measures as are reasonably requested by TiVo from time to time.
Except as expressly granted in the Agreement, Philips is not granted any rights
or licenses with respect to TiVo's Proprietary Rights in any TiVo Technology.
TiVo shall remain the sole and exclusive owner of all of the TiVo-owned features
and functionality of the TiVo Service and related hardware components, including
all of TiVo's Proprietary Rights in the design, architecture and software or
hardware implementation thereof. No licenses or rights with respect to the TiVo
Service or related hardware components are granted in the Agreement.
18.2 Philips' Ownership. Philips retains exclusive ownership of all
Proprietary Rights in any Technology, proprietary to Philips, which is
incorporated into Personal TV Systems. TiVo shall take reasonable measures to
protect Philips' Proprietary Rights in such Technology, including giving of such
assistance and measures as are reasonably requested by Philips from time to
time. Except as expressly granted in the Agreement, TiVo is not granted any
rights or licenses with respect to Philips' Proprietary Rights in the Philips
Technology. Philips shall remain the sole and exclusive owner of all of the
Philips-owned features and functionality of the Philips' Value-added Services
and related hardware components, including all of Philips' Proprietary Rights in
the design, architecture and software implementation thereof. No licenses or
rights with respect to the Value-added Service or related hardware components
are granted in the Agreement.
19. Representations And Warranties.
19.1 By TiVo.
(a) TiVo represents and warrants that the bill of materials (the
"BOM") for the TiVo Stand-alone Box attached hereto as part of the Hardware
Specification shall have the following lead-time breakdown: (a) less than [*] of
the [*] shall be comprised of components having lead times greater than [*]; (b)
less than [*] of the [*] shall be comprised of components having lead times
greater than [*]; and (c) less than [*]of the [*] shall be comprised of
components having lead times greater than [*]. In the event of breach of this
warranty, Philips shall have the right to delay commencement of manufacturing.
(b) TiVo represents and warrants that the TiVo Enabling Technology
and the Specification will be sufficient to ensure that the TiVo Stand-alone Box
and DTV Combination Box shall achieve the Minimum Service Requirements set forth
in Exhibit E. In the event of breach of this warranty, TiVo shall modify the
TiVo Enabling Technology at its sole cost and expense in order that such Boxes
shall achieve the Minimum Service Requirements set forth in Exhibit E.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
20.
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19.2 By Philips. Philips represents and warrants that: (i) for so long as
Philips is manufacturing the Philips-branded TiVo Stand-alone Boxes and DTV
Combination Boxes, Philips shall manufacture or have manufactured, such Boxes in
accordance with the respective Specifications of such Philips-branded TiVo
Stand-alone Boxes and DTV Combination Boxes; and (ii) such Boxes will perform in
substantial accordance with such Specifications. In the event of breach of this
warranty, Philips shall repair or replace such Boxes for the benefit of the
purchasers of such Boxes.
19.3 General Representations and Warranties. Each party hereby represents
and warrants to the other party that:
(a) it has the full corporate power and authority under the laws of
the jurisdiction of its incorporation to enter into the Agreement and to carry
out the provisions hereunder;
(b) it will not take any material action or fail to take any
material action which would be in conflict with its obligations under the
Agreement;
(c) the Agreement is a legal and valid obligation binding upon it
and is enforceable in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance; and
(d) the execution, delivery and performance of the Agreement by it
does not materially conflict with any agreement, oral or written, to which it is
a party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
(e) TiVo represents and warrants to Philips that, to TiVo's
knowledge, as of the Effective Date of the Agreement, there is not pending
before any U.S. federal or state court of competent jurisdiction any suit,
action or proceeding commenced by any third party against TiVo in which the
Proprietary Rights of TiVo to the TiVo Technology are being challenged by such
third party, nor has TiVo been notified by any third party that such third party
in writing intends to make any such claim.
19.4 Personal TV System Box Warranty. Philips shall not extend to third
parties, on TiVo's behalf, any warranty from TiVo covering defects in materials
or workmanship in the manufacture of the Philips-branded Personal TV System
Boxes, nor shall Philips direct or instruct any third party, including without
limitation retailers or end-users, to contact TiVo directly or indirectly with
respect to such defects. In the event of a defect in materials or workmanship,
in the event that any such third party contacts TiVo, TiVo shall direct such
third party to contact Philips directly. Philips shall indemnify and hold TiVo
harmless from and against any claims, liabilities and expenses (including, but
not limited to, attorneys' fees) asserted against, or incurred by, TiVo
resulting from any representation or warranty made by Philips in breach of the
foregoing.
21.
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19.5 TiVo Service Warranty. TiVo shall not extend to third parties, on
Philips' behalf, any warranty from Philips related to the TiVo Service or
TiVo's. Technology, nor shall TiVo direct or instruct any third party, including
without limitation retailers or end-users, to contact Philips directly or
indirectly with respect to the TiVo Service or use of the TiVo Technology in
operation of the Philips-branded Personal TV System Boxes. In the event of a
failure in the operation of the TiVo Service or in the operation of TiVo's
Technology, in the event that any such third party contacts Philips, Philips
shall direct such third party to contact TiVo directly. TiVo shall indemnify and
hold Philips harmless from and against any claims, liabilities and expenses
(including, but not limited to, attorneys' fees) asserted against, or incurred
by, Philips resulting from any representation or warranty made by TiVo in breach
of the foregoing.
19.6 Product Defect Warranties.
(a) Philips Authority to Authorize Recall. In the event of any
defects materially impacting end users, TiVo and Philips shall work together in
good faith to determine appropriate methods of addressing such defects but
Philips shall have the right, in its sole and reasonable discretion, to
determine the mitigation efforts involved in addressing any such defects
including, but not limited to, in the event of an Epidemic Defect or a Safety
Hazard, authorization and undertaking of a recall. For a period of [*] after
Commercial Release, in the event of a recall due to Epidemic Defect or Safety
Hazard of the first generation TiVo Stand-alone Box, if the parties determine
that the cause of such Epidemic Defect or Safety Hazard is a TiVo design defect,
TiVo shall cover all reasonably necessary costs involved in such recall. If the
parties determine that the cause of such Epidemic Defect or Safety Hazard is a
Philips manufacturing defect, Philips shall cover all reasonably necessary costs
involved in such recall. For purposes of this Section 19.6, Epidemic Defect
shall mean a defect materially impacting end users occurring within the same
Philips-branded Personal TV System Box configuration enabling the TiVo Service
with a recurrence rate of [*]. For purposes of this Section 19.6, Safety Hazard
shall mean a defect of any Philips-branded Personal TV System Box configuration
enabling the TiVo Service that could result in injury to person or damage to
property.
(b) Parties to Allocate Costs. For a period of [*] after the
applicable Commercial Release, for all other defects in all future jointly-
developed Personal TV System Boxes (including next-generation TiVo Stand-alone
Boxes and the DTV Combination Box), Philips and TiVo shall work together in good
faith to determine the cause of such defect. In the event the parties determine
that the cause of such defect is a design defect, the parties shall negotiate in
good faith to allocate all reasonably necessary costs involved in the mitigation
of such defect based on the respective amounts of design contribution each party
made to such design. If the parties determine that the cause of such defect is a
manufacturing defect, Philips shall cover all reasonably necessary costs
involved in the mitigation of such defect. In the event such defect is a hybrid
of a design defect and manufacturing defect, the parties shall work together in
good faith to allocate all reasonably necessary costs involved in the mitigation
of such defect between the parties. In the event the parties cannot reasonably
agree upon such allocation of any of the foregoing reasonably necessary costs,
TiVo shall cover half of all reasonably necessary costs involved in the
mitigation of such defect.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
22.
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19.7 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE
AGREEMENT: (I) ALL TECHNOLOGY, INFORMATION AND SOFTWARE PROVIDED BY EITHER
PARTY TO THE OTHER IS ON AN "AS IS" BASIS; (II) BOTH PARTIES EXPRESSLY DISCLAIM
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 MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE AND NON-
INFRINGEMENT; AND (III) NEITHER PARTY REPRESENTS OR WARRANTS THAT SUCH
TECHNOLOGY, INFORMATION OR SOFTWARE WILL MEET THE OTHER PARTY'S NEEDS OR WILL BE
FREE FROM ERRORS OR OMISSIONS.
20. Indemnification.
20.1 Philips Indemnification. With respect to those Philips-branded
Personal TV Systems manufactured by or for Philips (excluding units of the TiVo
Stand-alone Box manufactured by TiVo) which enable the TiVo Service and which,
subject to the Agreement, bear the TiVo Marks, Philips, at its own expense,
shall (i) defend TiVo from and against any claims, suits, and actions
(collectively "Claims") based upon allegations that, the Philips' Value-added
Services, Philips Marks, implementations of the Philips Technology used in such
Philips-branded Personal TV Systems that enable the TiVo Service or any
modifications or additions to, or derivatives of, the TiVo Enabling Technology
made by or for Philips, and portions of the Interface developed by or for
Philips, whether alone or in combination with such Philips-branded TV Systems
manufactured by or for Philips, infringe any third party's patents, copyrights,
trade marks or misappropriate any third party's trade secrets; and (ii)
indemnify and hold TiVo harmless from and against any award or damages or costs
(including, without limitation, attorneys' fees) in any such Claim.
20.2 TiVo Indemnification. TiVo, at its own expense, shall (i) defend
Philips from and against any claims, suits, and actions (collectively "Claims")
based upon allegations that the TiVo Enabling Technology, the TiVo Stand-alone
Box, portions of the Interface developed by or for TiVo, TiVo Marks, in the form
provided to Philips by TiVo and the TiVo Service, whether alone or in
combination with any Philips Branded Personal TV System Box, infringe any third
party's patents, copyrights, trade marks or misappropriate any third parties
trade secret; and (ii) indemnify and hold harmless Philips from and against any
award or damages or costs (including, without limitation, attorneys' fees) in
any such Claim.
20.3 Mutual Manufacturing Product Liability Indemnity. Each party (the
"Indemnifying Party") shall indemnify and defend the other party (the
"Indemnified Party") from and against any and all claims, suits, and actions
(collectively, "Claims") brought against the Indemnified Party arising out of
any defect in the Boxes manufactured by such Indemnifying Party; provided, that
any such Claim (i) is attributable to bodily injury, death or injury to or
destruction of physical property (other than the Box); (ii) that the Indemnified
Party actually pays out damages on such claim to a third party claimant; (iii)
with respect to Claims which arise out of a defect of the Box, that the
Indemnified Party is able to provide to the Indemnifying Party with reasonable
evidence of such Claim, which establishes based on a pursuing third party's
claim that the Indemnified Party is liable to such third party under applicable
product liability law; and (iv) that the Indemnified Party is not liable for the
defect. This obligation on the part of the Indemnifying Party is subject to the
Indemnified Parties obligations to (x) promptly notify the Indemnifying Party,
in writing, of all such Claims; (y) cooperate reasonably with the
23.
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Indemnifying Party (at the Indemnifying Party's expense) in defending such
Claims; and (z) allow the Indemnifying Party the sole right to control the
defense (including the selection of counsel), or at the Indemnifying Party's
sole option, to settle, all such Claims.
20.4 Design Defect Indemnity. TiVo, at its own expense, shall defend
Philips from and against any claims, suits, and actions (collectively "Claims")
based upon allegations that the TiVo Enabling Technology and the first
generation TiVo Stand-alone Box contain any design defect that is shown to have
caused bodily injury including death, or has damaged real property or tangible
personal property. This obligation on the part of TiVo is subject to Philips'
obligations to (x) promptly notify TiVo, in writing, of all such Claims; (y)
cooperate reasonably with TiVo (at TiVo's expense) in defending such Claims; and
(z) allow TiVo the sole right to control the defense (including the selection of
counsel), or at TiVo's sole option, to settle, all such Claims.
20.5 Modify or Obtain the Right to Use. In the event the party liable to
indemnify ("Indemnifying Party") reasonably believes that an infringement is
likely to have occurred, the Indemnifying Party shall be entitled, at
Indemnifying Party's option and expense, to: (a) suitably modify the applicable
Technology, Personal TV System Box or Personal TV Service to be reasonably
equivalent and non-infringing; (b) obtain for the Indemnified Party a license to
continue using the such Technology, Box or Service; or, if the foregoing
alternatives are not commercially practicable, then (c) the parties will
negotiate in good faith to establish a mutually agreeable alternative.
20.6 Conditions. The obligations on the part of the Indemnifying Party
in this Section 20 are subject to the other party's obligations to: (i) promptly
notify the Indemnifying Party, in writing, of all such Claims; (ii) cooperate
reasonably with the Indemnifying Party (at the Indemnifying Party's expense) in
defending such Claims; and (iii) allow the Indemnifying Party the sole right to
control the defense (including the selection of counsel) or settlement of all
such Claims.
20.7 Entire Obligation. The foregoing states the Indemnifying Party's
entire liability, and the other party's sole remedy, with respect to: (i) any
infringement of any patents, copyrights, trademarks, trade secrets or other
Proprietary Rights of any third party whether direct or contributory; and (ii)
any product liability.
21. Term and Termination.
21.1 Term. The term of this Master Agreement shall begin on the Effective
Date and continue seven (7) years therefrom. Subject to the provisions of this
Master Agreement, the Agreement may be terminated prior to end of the Term.
(a) Minimum Volume Requirement During Term. Beginning on the [*]
anniversary of the Effective Date of this Master Agreement, the number of units
sold by Philips of Philips-branded Personal TV System Boxes enabling the TiVo
Service (the "Philips Annual Volume") shall be at least [*] units per year (the
"Minimum Volume Requirement"). The Philips Annual Volume shall be calculated by
TiVo within [*] of the end of each month beginning on the [*] anniversary of the
Effective Date of this Master
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
24.
<PAGE>
Agreement. Such calculation shall based on the average unit volume during the
three (3) months preceding the month in which the calculation is made. Such
calculated quarterly volume shall be at least [*] units per quarter. In the
event the Philips Annual Volume is less than the Minimum Volume Requirement or
[*] units per quarter, the Agreement may be terminated by TiVo, at TiVo's sole
discretion, upon [*] written notice to Philips.
(b) Minimum Requirements After Term. Unless the Agreement is
terminated for any reason, beginning on the [*] anniversary of the Effective
Date of this Master Agreement:
(i) Base Unit Volume. The Philips Annual Volume shall be greater
than [*] units per year. The Philips Annual Volume shall be calculated by TiVo
within [*] of the end of each month beginning on the [*] anniversary of the
Effective Date of this Master Agreement. Such calculation shall be based on the
average unit volume during the [*] months preceding the month in which the
calculation is made.
(ii) Percentage of TiVo-Enabled Units. The Philips Annual Volume
shall be no less than [*] (the "Base Percentage") of the total unit volume of
Personal TV System Boxes sold for distribution to end users in the Territory in
the preceding year. The Philips Annual Volume and the total unit volume of
Personal TV System Boxes enabling the TiVo Service will be calculated by TiVo
within [*] of the end of each month beginning on the [*] anniversary of the
Effective Date of this Master Agreement based on the respective average unit
volumes during the [*] months preceding the month in which the calculation is
made.
For so long as the conditions in Section 21.1(b)(i) and (ii) are satisfied,
the provisions set forth in Sections 5.1 and 5.2, and the license(s) granted
under Section 5.5 (only to the extent the option to such license(s) has been
exercised prior to the end of the Term), and Section 11 will survive the
expiration of this Master Agreement; provided, with respect to Service Revenue
Share, the provisions of Section 21.l(c) below shall be satisfied.
(c) Service Revenue Share after Term. For so long as the Philips
Annual Volume is greater than [*] units per year, the provisions of Section 11
shall survive expiration of this Master Agreement. The Philips Annual Volume
shall be calculated by TiVo within [*] of the end of each month beginning on the
seventh anniversary of the Effective Date of this Master Agreement. Such
calculation shall be based on the average unit volume during the [*] months
preceding the month in which the calculation is made.
21.2 Termination of Select Provisions.
(a) TiVo shall within fifteen (15) days after the Effective Date of
this Master Agreement deliver to Philips a preliminary draft of the minimum
service requirement applicable to the TiVo Service. The parties intend for
such minimum service requirements to include customer service, billing and
back-office operations, and service performance and availability requirements.
If TiVo fails to deliver such preliminary draft of the minimum service
requirement applicable to the TiVo Service, Philips shall have the right, in
its sole discretion, to
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
25.
<PAGE>
terminate all, but not less than all, of the parties' obligations with respect
to TiVo Stand-alone Box exclusivity, Manufacturing Subsidy payments, and
Marketing Spend. Philips and TiVo shall work together in good faith to agree to
the definitive minimum service requirement applicable to the TiVo Service within
thirty (30) days of the Effective Date of this Master Agreement.
In addition to the foregoing, if prior to [*]: (i) Commercial Release of
the Philips-branded TiVo Stand-alone Box has not occurred; (ii) TiVo Service has
not met the minimum service requirements set forth in Exhibit E; or (iii) TiVo
has not entered into a commercial relationship with DIRECTV for the marketing of
Personal TV System Boxes, Philips shall have the right, in its sole discretion,
to terminate all, but not less than all, of the parties' obligations with
respect to TiVo Stand-alone Box exclusivity, Manufacturing Subsidy payments, and
Marketing Spend.
(b) If Philips: (i) has not commenced volume shipments of the Philips-
manufactured TiVo Stand-alone Box within forty-five (45) days from Commercial
Release of such TiVo Stand-alone Box; (ii) has not commenced volume shipments
of the Philips-manufactured TiVo Stand-Alone Box to the mainstream retail
channel within one hundred twenty (120) days from Commercial Release of such
Philips-manufactured TiVo Stand-alone Box, TiVo shall have the right, in its
sole discretion, to terminate all, but not less than all, of the parties'
obligations with respect to TiVo Stand-alone Box exclusivity, Manufacturing
Subsidy payments, and Marketing Spend.
(c) If cumulative sales of the TiVo Stand-alone Boxes have not reached
[*] units within ninety (90) days of Commercial Release, either party shall have
the right, in its sole discretion, to terminate all, but not less than all, of
the parties' obligations with respect to TiVo Stand-alone Box exclusivity,
Manufacturing Subsidy payments, and Marketing Spend.
21.3 Material Breach. The Agreement and all licenses granted by the non-
breaching party hereunder may be terminated, by the non-breaching party, if the
breaching party fails to cure: (i) any material breach within forty-five (45)
days of receipt of written notice of such breach; or (ii) any breach of Sections
5, 17 or 18 within five (5) days of receipt of written notice of such breach.
21.4 Effect of Termination. At the end of the Term or upon termination of
the Agreement under Sections 21.1 except as set forth in Section 21.1(b), 21.2,
and 21.3, notwithstanding any provision set forth in an Addendum hereto, all
provisions of this Master Agreement shall terminate, cease to be binding on the
parties and have no further force or effect. Upon written request by either
party (the "Requesting Party"), the other party shall promptly return or destroy
all Confidential Information and Technology of the Requesting Party in its
possession and existing in tangible form and shall promptly confirm in writing
to the Requesting Party that it has done so.
21.5 Inventory. Notwithstanding the foregoing, upon termination of the
Agreement, Philips shall be entitled to manufacture, and its right and license
shall continue hereunder for the purpose of: (i) manufacturing units of Personal
TV System Boxes to fulfill existing orders placed prior to the termination or
expiration date hereof and then in the process of being manufactured;
* Material has been omitted pursuant to a request for confidential treatment.
Such material has filed separately with the Securities and Exchange Commission.
26.
<PAGE>
(ii) to complete work in process; and (iii) to utilize unique materials unable
to be returned to the supplier. In no event shall such right extend for a period
of more than one (1) year following the date of such termination. Without
limiting the foregoing, Philips shall be entitled to offer for sale and sell any
Personal TV System Boxes in its inventory at the time of termination or
expiration.
21.6 No Liability. 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 Master 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.
21.7 Survival. The provisions of Sections 20.1, 20.2, 21, and 24 shall
survive any termination or expiration of this Master Agreement.
22. Limitation Of Liability. 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 or
other commercial loss), or cost or procurement of substitute goods, technology
or services, arising out of or in connection with the performance of this
Agreement, even if such party has been advised of the possibility of such
damages.
23. Independent Development. Each party (the "Owning Party") acknowledges that
other companies, potentially including the other party to this Master Agreement
(the "Independent Developer"), have developed or will develop Personal TV
Systems and Personal TV Services with or incorporating Technology similar to the
Technology of the parties developed, or to be developed, hereunder. The Owning
Party acknowledges that nothing in the Agreement prohibits the Independent
Developer from creating and/or marketing Personal TV Systems or Personal TV
Services incorporating functionality similar or identical to the functionality
of such Personalized TV Systems. The Owning Party agrees that it will not be
entitled to any compensation because of the Independent Developer's development
or distribution of similar systems or services, unless such systems or services
would infringe the other party's Proprietary Rights (absent a license) or are
otherwise developed, manufactured or distributed in breach of any provision of
the Agreement.
24. General Provisions.
24.1 No Agency. Each party will in all matters relating to the Agreement
act as an independent contractor. Nothing contained in the 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.
24.2 Governing Law. The Agreement shall be governed in all respects by
the laws of the United States of America and the State of New York excluding the
application of its conflict
27.
<PAGE>
of laws rules. The parties agree that the United Nations Convention on Contracts
for the International Sale of Goods is specifically excluded from application to
the Agreement.
24.3 Notices. All notices or reports permitted or required under the
Agreement shall be in writing and shall be delivered by personal delivery,
telegram, telex, telecopier, facsimile transmission or by certified or
registered mail, return receipt requested, and shall be deemed given upon
personal delivery, five (5) days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices shall be sent to
the address set forth below or such other address as either party may specify in
writing:
To: TiVo To: Philips
Michael Ramsay or General Counsel Jos Swillens
894 Ross Drive CEO Digital Receivers
Sunnyvale, CA 94089 Building OAN-3
Fax (408) 747-5096 PO Box 80002
5600 JB Eindhoven, The Netherlands
With a copy to: With a copy to:
Alan Mendelson Philips Business Electronics B.V.
Cooley Godward LLP Legal Department: Attn General Counsel
Five Palo Alto Square Building SX2
3000 E1 Camino Real Glaslaan 2
Palo Alto, CA 94306 5616 LW
Fax (650) 857-0663 Eindhoven, The Netherlands
24.4 Injunctive Relief. It is understood and agreed that, notwithstanding
any other provision of the Agreement, any breaches of Sections 5, 17 or 18 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 the Agreement, in
addition to any and all remedies available at law.
24.5 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.
24.6 Severability. In the event that any provision of the Agreement shall
be unenforceable or invalid under any applicable law or be so held by applicable
court decision, such unenforceability or invalidity shall not render the
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.
24.7 Headings. The section headings appearing in the 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 the
Agreement.
28.
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24.8 Confidentiality of Agreement. Neither party will disclose any terms
of the Agreement, except pursuant to a mutually agreeable press release or as
otherwise required by law.
24.9 Compliance with Laws; Export Controls. Each party agrees to comply
with all applicable laws, rules and regulations in connection with its
activities under the Agreement. Each party further 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.
24.10 Assignment. Neither party shall assign any rights or obligations
arising under the Agreement without the prior written consent of the other
party, except that either party may assign the Agreement in the event of a
merger or acquisition of such party or: (i) to any Affiliate of such party; or
(ii) to a new entity as a spin-off of the business of such party.
Notwithstanding the foregoing, TiVo shall not assign any rights or obligations
arising under the Agreement without the prior written consent of Philips where
such assignment is to a third party consumer electronics manufacturer. Subject
to the above restriction on assignment, the Agreement shall inure to the benefit
of and bind the successors and assigns of the parties. Any assignment in
violation of this provision will be void. In any event, neither party shall
assign the right to use the Marks of the other party without that party's prior
written consent and the Agreement shall not, in any event, be construed to
include such right to assign the Marks.
24.11 Entire Agreement. The Agreement and Exhibits hereto constitute the
entire agreement between the parties with respect to the subject matter hereof.
The Agreement supersedes, and the terms of the Agreement govern, any prior or
collateral agreements with respect to the subject matter hereof. The Agreement
may only be changed by mutual agreement of authorized representatives of the
parties in writing.
Rest Of Page Intentionally Left Blank
29.
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In Witness Whereof, the parties hereto have duly executed this Master
Agreement by their respective duly authorized officers. This Master 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.
TiVo Inc. Philips Business Electronics B.V.
/s/ Michael Ramsay /s/ R.L. von Oostenbrugge
--------------------------- ---------------------------------
Authorized Signature Authorized Signature
Michael Ramsay R.L. von Oostenbrugge
--------------------------- ---------------------------------
Printed Name Printed Name
President, CEO Managing Director
--------------------------- ---------------------------------
Title Title
April 2, 1999 31-03-1999
--------------------------- ---------------------------------
Date Date
30.
<PAGE>
Exhibit A
DEFINITIONS
For purposes of the Agreement, the following terms shall have the
respective meanings indicated:
1. "Affiliate" shall mean shall mean any entity that directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with another entity.
2. "Combination Box(es)" shall mean any single, discrete, integrated Personal
TV System Box which incorporates (i) [*] and [*]; and (ii) the TiVo
Service.
3. "Commercial Release" shall mean the date on which the parties jointly agree
that a Personal TV System Box meets the applicable specification in such a
manner to allow general availability to the general public, and declare
that this milestone has been met.
4. "Competitive Device" shall mean any consumer electronic device capable
of [*].
5. "Confidential Information" shall be as defined in this Master Agreement
Section 17 ("Confidentiality").
6. "Co-Op Advertising Expenditures" shall mean amounts paid to retailers for
dealer advertising purposes, as such term is commonly used in the retail
trade.
7. "Coordinator" shall mean that person from each party who shall be
responsible for all matters pertaining to a specific element of the
Agreement, including but not limited to the following responsibilities:
(a) administering and coordinating the administrative or technical matters;
(b) arranging meetings, visits and consultations relating to the parties
performance; (c) coordinating the submission and acceptance of all
deliverables, if any; and (d) coordinating the exchange of Confidential
Information.
8. [*]
9. "Derivatives" shall mean any "Derivative Work" of all or part of a party's
Technology, as defined by the Copyright Law of the United States of
America, Title 17 U.S.C. (S) 101 et seq.
10. "DTV Combination Box(es)" shall mean any Combination Box which (i) [*],
(ii) enables the TiVo Service, and (iii) enables the DIRECTV service, and
(iv) [*].
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
i.
<PAGE>
11. [*] shall mean a Personal TV System Box, specifically designed
for use and distribution in [*] which enables the TiVo Service.
12. "First Level Support" shall mean direct telephone and/or on-line support of
customers.
13. [*]
14. "Hardware Specification" shall mean the hardware specification to the TiVo
Stand-alone Box set forth at Exhibit G. The parties will work together to
define the hardware specifications for the DTV Combination Box.
15. "[*]" shall mean a [*] having a [*] at [*].
16. "Joint Technology" shall mean any Technology that (i) is developed jointly
by both parties during the term of this Master Agreement and (ii) is
developed as a result of the technical collaboration that is the subject of
this Master Agreement.
17. "[*]" shall mean a [*] having a [*] at [*].
18. "Marketing Activities" shall mean: [*]
19. "Marketing Spend Period" shall mean that period from the Effective Date of
this Master Agreement until [*] after Commercial Release of the
Philip-branded TiVo Stand-alone Box.
20. "Manufacturing Subsidy" shall mean, a fixed dollar amount paid in
connection with the manufacture of Personal TV System Boxes to reduce the
Cost of Goods Sold or to encourage Philips or third parties to reduce the
manufacturer's suggested retail price of such Personal TV System Boxes. The
Manufacturing Subsidies paid to Philips by TiVo are specified in Section 10
of this Master Agreement.
21. "Marketing Principles" shall mean those principles identified in Exhibit c
to the Marketing Addendum.
* Material has been omitted pursuant to a request for confidential treatment.
Such Material has been filed separately with the Securities and Exchange
Commission.
ii.
<PAGE>
22. "Network Operator" shall mean [*].
23. "Personal TV System(s)" shall mean [*] of hardware [*], software, and
technology which enables Personal TV Services.
24. "Personal TV System Box(es)" shall mean any [*] which (i) provides, or
allows for: (i) [*]; and (ii) [*]; and (iii), [*].
25. "Personal TV Service(s)" shall mean any [*] which provides: (i) an [*]; and
(ii) [*].
26. "Philips Marks" shall mean the trademarks, service marks, trade names and
logos of Philips, specifically listed in Exhibit B ("Philips Marks") to the
Marketing Addendum, as such exhibit may be amended upon the agreement of
the parties from time to time.
27. "Pre-Existing Technology" shall mean any Technology that was developed by,
or for the benefit of, a party prior to the Effective Date of this Master
Agreement and not in the course of the technical collaboration which is the
subject of this Master Agreement.
28. "Proprietary Rights" shall mean any and all intellectual property rights
[*]arising under statutory law, common law or by contract and
whether or not perfected, including without limitation, all: (i) patents,
patent applications and patent rights; (ii) rights associated with works or
authorship including copyrights, copyright applications, copyright
registrations, mask works rights, mask work applications, mask work
registrations; (iii) trade and service marks; (iv) rights relating to the
production of trade secrets and confidential information; (v) rights
analogous to those set forth in this definition and any other proprietary
rights relating to intellectual property; and (vi) divisional applications,
continuations, renewals, reissues and extension of the foregoing (as and to
the extent applicable) now existing, hereafter filed, used or acquired,
whether registered or unregistered.
29. "Quality Plan" shall mean the quality assurance agreement mutually agreed
to by the parties for each of the Personal TV System Boxes to be
manufactured as contemplated by the Agreement.
30. "Retail Price" shall mean the price equal to the maximum price as
established by TiVo for subsidized Stand-alone Personal TV Systems and DTV
Combo Boxes and the suggested retail price for all other Personal TV
Systems.
31. "Retail Rollout" shall mean a Commercial Release through national retail
and distribution channels including, without limitation, compliance with
the Roll Out milestones set forth in the Marketing Addendum.
[*]Material has been omitted pursuant to a request for confidential treatment.
such material has been filled seperately with the Securities and Exchange
Commission.
iii.
<PAGE>
32. "Second Level Support" shall mean support of First Level Support staff. No
calls from customers are to be fielded by Second Level Support staff.
33. "Service Subscriber" shall mean an end user who subscribes, activates and
pays for a subscription to Personal TV Services.
34. "Showcase Screen(s)" shall mean screens dedicated to network programming
promotions sold by TiVo.
35. "Software" shall mean computer programming software including both Object
Code and Source Code. "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. "Source Code" shall
mean computer programming code that may be displayed in a form readable and
understandable by a programmer of ordinary skill; including related source
code level system documentation, comments and procedural code, such as job
control language. Source Code does not include Object Code, and vice-versa.
36. "Software Specification" shall mean the software specification for the TiVo
Stand-alone Box set forth at Exhibit H. The parties will work together to
define the software specifications for the DTV Combination Box.
37. "Specifications" shall mean the Hardware Specification and Software
Specification, including the engineering, operational and/or functional
descriptions, features, manufacturing specifications (including Bills of
Materials, "BOMs") and requirements as mutually designated and agreed by
the parties.
38. "Stand-alone Box(es)" shall mean a discrete Personal TV System Box which
provides external connectivity to a satellite, cable or television
broadcast receiver and contains a standard television tuner.
39. "Subsidy" shall mean hardware subsidies paid by TiVo to Philips to offset
the costs associated with the manufacturing and distribution of the Stand-
alone Box and/or DTV Combo Box.
40. "Technology" shall mean any discovery, improvement or invention whether or
not patentable, and all related know-how, designs, mask works, formulae,
processes, manufacturing techniques, trade secrets, ideas, artwork,
software or other copyrightable or patentable works.
41. "Territory" shall mean[*].
42. "Third Level Support" shall mean appropriate response, such as software bug
fixes, to recurrent issues brought to the attention TiVo's software
development organization by Second Level Support staff.
43. "Third Party Technology" shall mean any Technology that is owned or
controlled by a party other than Philips, TiVo or one of their Affiliates.
[*]Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
iv.
<PAGE>
"TiVo Enabling Technology" shall mean that Technology set forth in Exhibit
B.
45. "TiVo Marks" shall mean the trademarks, service marks, trade names and
logos of TiVo, specifically listed in Exhibit A ("TiVo Marks") to the
Marketing Addendum, as such exhibit may be amended upon the agreement of
the parties from time to time.
46. "TiVo Service(s)" shall mean services provided by TiVo over the Personal TV
System, including, without limitation, Personal TV Services.
47. "TiVo Stand-alone Box" shall mean a Stand-alone Box which enables the TiVo
Service and does not enable the Personal TV Services of any third party.
[*].
48. "Value-added Services" shall mean services, other than Personal TV
Services, which are capable of being provided via Personal TV Systems.
* Material has been omitted pursuant to a request for confidential treatment.
Such maaterial has been filed seperately with the Securities and Exchange
Commission.
v.
<PAGE>
Confidential
Exhibit B
TIVO ENABLING TECHNOLOGY
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such maaterial has been filed seperately with the Securities and Exchange
Commission.
i.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
ii.
<PAGE>
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
iii.
<PAGE>
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
iv.
<PAGE>
Confidential
Exhibit C
COMMERCIAL RELEASE BRANDING REQUIREMENTS
. Pre-open sequence with a duration of approximately five (5) seconds
highlighting the transition between the Philips and TiVo Marks. The Philips
shield comes in to view, pauses to state "Philips Presents", and then fades
into the glint in TiVo's eye.
. Philips will be in the video background loop of both TiVo Central and Setup
page and the OSD layer of the Setup page.
. Philips will be offered an opportunity to create a "Philips Corner" line-
item on TiVo Central provided that Philips has content for viewers to
navigate through from that line-item. The Philips line-item will be
replaced by an "anchor tenant" position in the TiVo On-Air mall as soon as
technically feasible.
. Philips will be offered the opportunity to create additional Philips
branding via background video loops and the OSD layer.
. TiVo will notify Philips of changes that are made to the user interface
from the agreed specifications for commercial release to the extent such
changes affect Philips' brand presence as set forth in this Exhibit C.
<PAGE>
Confidential
Exhibit D
MINIMUM TERMS AND CONDITIONS OF END USER AGREEMENTS
This package may contain the following materials provided by Licensor to
Licensee: software and related explanatory written materials ("Documentation").
The term "Software" shall include any updates, modified versions, additions, and
copies of the Software that may be provided by Licensor from time to time.
Licensor grants to Licensee a nonexclusive license to use the Software and
Documentation, provided that Licensee agrees to the following:
1. License Grant. Licensee may use the Software solely in machine executable
object code form and solely in conjunction with the Product purchased by
Licensee.
2. Documentation. Licensor will deliver a copy of the End User documentation
for the Software (the "Documentation") to Licensee. Licensee shall have
the right to use the Documentation solely in connection with Licensee's use
of the Software with the Product.
3. Restrictions. Licensee may not copy, modify, or transfer the Software, or
any copy thereof, in whole or in part. Licensee may not reverse engineer,
disassemble, decompile, or translate the Software, or otherwise attempt to
derive the source code of the Software, except to the extent allowed under
any applicable law. Any attempt to transfer any of the rights, duties or
obligations hereunder is void. Licensee may not rent, lease, load, resell
for profit, or distribute the Software, or any part thereof.
4. Ownership. The Software is licensed, not sold, to Licensee for use only
under the terms of this Agreement, and Licensor and its suppliers reserve
all rights not expressly granted to Licensee. Licensee owns the media, if
any, on which the Software or Documentation is recorded, but Licensor and
its suppliers retain ownership of all copies of the Software and
Documentation itself.
5. Reservation of Rights. Except as stated above, this Agreement does not
grant Licensee any intellectual property rights in the Software or
Documentation.
6. Term. This Agreement will terminate immediately upon notice to Licensee if
Licensee materially breaches any term or condition of this Agreement.
Licensee agrees upon termination to promptly destroy the Software and all
copies.
7. Warranty Disclaimer. NEITHER LICENSOR NOR ANY OF ITS REPRESENTATIVES MAKES
OR PASSES ON TO LICENSEE OR OTHER THIRD PARTY ANY WARRANTY OR
REPRESENTATION ON BEHALF OF LICENSOR'S SUPPLIERS, INCLUDING BUT NOT LIMITED
TO ANY IMPLIED WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR
A PARTICULAR PURPOSE.
i.
<PAGE>
8. Limitation of Liability. IN NO EVENT WILL LICENSOR'S SUPPLIERS BE LIABLE TO
LICENSEE FOR ANY CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, INCLUDING
ANY LOST PROFITS OR LOST SAVINGS, EVEN IF LICENSOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY. Some
states or jurisdictions do not allow the exclusion or limitation of
incidental, consequential or special damages, so the above limitations may
not apply to Licensee.
9. General. This Agreement will be governed by the laws of the State of
California without regard to or application of conflicts of law rules or
principles. This Agreement will not be governed by the United Nations
Convention on Contracts for the International Sale of Goods, the
application of which is expressly excluded. If any part of this Agreement
is found void and unenforceable, it will not affect the validity of the
balance of the Agreement, which shall remain valid and enforceable
according to its terms. Licensee agrees that the Software will not be
shipped, transferred or exported into any country or used in any manner
prohibited by the United States Export Administration Act or any other
export laws, restrictions or regulations. This Agreement shall
automatically terminate upon failure by Licensee to comply with its terms.
This Agreement may only be modified in writing signed by an authorized
officer of Licensor and its suppliers.
10. Third-Party Beneficiary. Licensee is hereby notified that TiVo Inc., a
California corporation, and having its principal place of business at 894
Ross Drive, Sunnyvale, California USA 94089, is a third-party beneficiary
to this Agreement to the extent that this Agreement contains provisions
which relate to Licensee's use of the Software and Documentation licensed
hereby. Such provisions are made expressly for the benefit of TiVo and are
enforceable by TiVo in addition to Licensor.
ii.
<PAGE>
Confidential
Exhibit E
MINIMUM SERVICE REQUIREMENTS
<PAGE>
Confidential
Exhibit F
PROCEDURES RELATING TO PROPRIETARY RIGHTS
1. Technology Notification. With respect to Philips Technology developed
exclusively pursuant to development of the Interface, Philips agrees to
disclose promptly each such Philips Technology to TiVo specifically
pointing out the features or concepts that Philips believes to be new or
different. With respect to TiVo Technology developed pursuant to
development of the Interface, TiVo agrees to disclose promptly such TiVo
Technology to Philips specifically pointing out the features or concepts
that TiVo believes to be new or different.
2. Proprietary Rights Protection.
(a) Assistance. Each party shall give the other party all reasonable
assistance in obtaining patent or other Proprietary Rights protection for
jointly-made inventions and in preparing and prosecuting any patent or other
Proprietary Rights application for such jointly-made inventions filed by the
other party (at such party's expense), and shall cause to be executed
assignments and other instruments and documents as the other party may consider
necessary or appropriate to perfect the rights granted pursuant to joint
development of the Interface.
(b) Election Not To Seek Protection. In the event that one party
elects not to seek and/or maintain patent or other Proprietary Rights protection
for the Interface in any particular country or not share equally in the expenses
thereof with the other party, the other party shall have the right to seek
and/or maintain such protection at its own expense in such country and shall
have full control over the prosecution and maintenance thereof even though title
to any patent or other Proprietary Rights protection issuing therefrom is
jointly owned. The other party shall keep the party electing not to seek or
maintain patent or other Proprietary Rights protection fully informed concerning
the prosecution or maintenance of such patent or other Proprietary Rights
protection for such jointly-made inventions by providing copies of all
communications with patent offices and by giving the party electing to seek or
maintain patent or other Proprietary Rights protection for such jointly-made
inventions the right to comment on such communications. Regardless of who has
responsibility, patent applications relating to the Interface may be filed only
after review of such applications by both parties. During the pendency of such
applications, and until a patent issues thereon or the application is officially
published by the governmental agency handling such applications, the contents of
such applications shall be considered Confidential Information.
(c) Third Party Obligations. In rendering performance pursuant to
development of the Interface, both parties shall comply at all times with all
restrictions and covenants applicable to third party Technology. Each party
shall have sole responsibility for payment of all royalties and other charges
with respect to the third party Technology it supplies to the other party and
the developed efforts hereunder, including royalties and charges that accrue as
a result of the subsequent exercise by a party, its Affiliates and their
successors and assigns, and sublicensees, end users and resellers of such party
of rights and licenses in and to end-products derived from development
hereunder.
i.
<PAGE>
(d) Proprietary Rights Claims. Each party shall make reasonable
efforts to notify, without unnecessary delay, the other party in writing of, and
to give such party any information provided by the third party claimant
concerning, any suits or claims of patent, copyright, trademark, mask work
infringement or trade secret misappropriation which have been made in writing
with respect to each party's respective Personal TV Systems and Services in
which such third party claims to have Proprietary Rights.
ii.
<PAGE>
Confidential
Exhibit G
HARDWARE SPECIFICATION
<PAGE>
--------------------------------------------------------------------------------
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
3.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such maaterial has been filed seperately with the Securities and Exchange
Commission.
4.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such maaterial has been filed seperately with the Securities and Exchange
Commission.
5.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
6.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
7.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
8.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
9.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
10.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
11.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
12.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
13.
<PAGE>
[*]
* Material has been omitted pursuant to a request for Confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
14.
<PAGE>
Confidential
Exhibit H
SOFTWARE SPECIFICATION
<PAGE>
[*]
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
3.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
4.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
5.
<PAGE>
[*]
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
6.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
7.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
8.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
9.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
10.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
11.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
12.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
13.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
14.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
15.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
16.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
17.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
18.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
19.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
20.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
21.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
22.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed seperately with the Securities and Exchange
Commission.
23.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed seperately with the Securities and Exchange
Commission.
24.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed seperately with the Securities and Exchange
Commission.
25.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed seperately with the Securities and Exchange
Commission.
26.
<PAGE>
[*]
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed seperately with the Securities and Exchange
Commission.
27.
<PAGE>
CONFIDENTIAL
ADDENDUM A
PHILIPS BUSINESS ELECTRONICS B.V. - TIVO INC.
PURCHASE ADDENDUM
<PAGE>
CONFIDENTIAL
PURCHASE ADDENDUM
This Purchase Addendum ("Purchase Addendum") by and between TiVo
Inc. ("TiVo") and Philips Business Electronics B.V. ("Philips") shall be
effective as of March 31, 1999 (the "Effective Date"). Capitalized terms not
defined herein shall have the meanings assigned to such terms in that certain
Master Agreement (the "Master Agreement") between the parties dated March 31,
1999.
1. Scope. This Purchase Addendum sets forth the rights and obligations of the
parties with respect to Philips' initial purchase of [*] TiVo Stand-alone Boxes
from TiVo. The parties intend that this Purchase Addendum shall be replaced, in
its entirety, with a more comprehensive OEM Purchase Addendum to the Master
Agreement that will set forth the terms and conditions for subsequent purchases
of the TiVo Stand-alone Box by Philips.
2. Initial Purchase Obligation. Philips shall purchase [*] TiVo Stand-alone
Boxes that have been manufactured by TiVo in accordance with TiVo's current
Specifications.
3. Terms and Conditions for Purchase.
3.1 Philips' Standard Purchase Order. Philips and TiVo acknowledge and
agree that except as expressly set forth in this Purchase Addendum, the terms
and conditions set forth in Philips' standard purchase order shall govern and
control such purchase by Philips. To the extent that Philips' standard terms and
conditions of purchase conflict with those of this Purchase Addendum, the terms
and conditions of this Purchase Addendum shall prevail. A copy of Philips'
standard terms and conditions of purchase is attached hereto as Exhibit A
("Terms and Conditions of Purchase").
3.2 Payment Terms. Philips shall pay TiVo [*] for each TiVo Stand-alone
Box within [*] of the date of invoice. Philips shall pay TiVo interest at a rate
of [*] compounded [*] on all late payments.
3.3 Warranty. The parties acknowledge that Philips shall sell the
Philips-branded TiVo Stand-alone Boxes (which are subject to this Purchase
Addendum) to TiVo for resale to end users. TiVo shall provide all end users
with the TiVo standard end user warranty agreement attached hereto as Exhibit B
and shall be responsible for all warranty claims made by end users for defective
Philips-branded TiVo Stand-alone Boxes. TiVo shall defend, indemnify and hold
Philips harmless from and against all claims, suits and actions based on
warranty claims by end users.
3.4 Year 2000 Warranty. TiVo warrants that the Philips-branded TiVo
Stand-alone Boxes delivered pursuant to this Purchase Addendum will be Year 2000
Compliant. "Year 2000 Compliant" means that neither performance nor
functionality is affected by dates prior to, during, and after the year 2000.
3.5 Indemnification. Except as otherwise provided in Section 3.3 of
this Purchase Addendum, the indemnification provisions set forth in the Master
Agreement are incorporated herein by reference.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1
<PAGE>
CONFIDENTIAL
3.6 No Changes or Termination. Philips' acknowledges and agrees that its
purchase of [*] TiVo Stand-alone Boxes is firm and the "Changes" and
"Termination" provisions of the Philips' standard terms and conditions of
purchase shall not apply to this transaction.
4. OEM Purchase Agreement. Within [*] of execution of this Purchase Addendum,
the parties agree to negotiate in good faith the terms and conditions of and to
execute a more comprehensive OEM Purchase Addendum that shall supersede and
replace, in its entirety, this Purchase Addendum.
In Witness Whereof, the parties hereto have caused this Purchase Addendum
to be duly executed as of the date first set forth above.
TiVo Inc. Philips Business Electronics B.V.
/s/ Michael Ramsay /s/ R. L. von Oostenbrugge
-------------------------------------- --------------------------------------
Authorized Signature Authorized Signature
Michael Ramsay R. L. von Oostenbrugge
-------------------------------------- --------------------------------------
Printed Name Printed Name
President, CEO Managing Director
-------------------------------------- --------------------------------------
Title Title
April 2, 1999 31-03-1999
-------------------------------------- --------------------------------------
Date Date
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2
<PAGE>
CONFIDENTIAL
Exhibit A
TERMS AND CONDITIONS OF PURCHASE
ACCEPTANCE. This Order can be accepted only on the terms and conditions set
forth in this Purchase Order and any attachments hereto by a written
acknowledgment and/or commencement of performance. Additional or different terms
proposed by Seller or set forth on Seller's acknowledgment, invoice or other
communication to Buyer shall not become part of the Agreement unless such is
accepted in writing and signed by Buyer.
INVOICES. Invoices shall be submitted in triplicate and shall contain the
following information: purchase order number, item number, description of
items, sizes, quantities, unit prices and extended totals in addition to any
other information specified elsewhere herein. Payment of invoice shall not
constitute acceptance of goods and shall be subject to adjustment for errors,
shortage, defects in goods or other failure of Seller to meet the requirements
of the Order.
ASSIGNMENT AND SUBCONTRACTS. Seller shall not assign the accounts receivables
or subcontract this Order or any right or obligation hereunder without the
written consent of Buyer. Purchases of parts and materials to comply with this
Order shall not be construed as assignments or subcontracts.
CASH DISCOUNTS. Time in connection with any discount offered will be computed
from (i) scheduled delivery date, (ii) date of actual delivery, or (iii) date an
acceptable invoice is received by Buyer's Accounts Payable Department, whichever
is later. Payment is deemed to be made for purpose of earning a discount on the
date of mailing of Buyer's check.
TAXES. Unless otherwise specified, the prices set forth in this Order exclude
all applicable federal, state and local taxes. All such taxes shall be stated
separately on Seller's invoice.
GIFTS. Seller shall not make or offer gifts or gratuities of any kind to
Buyer's employees agents or members of their families to secure or influence any
business transaction. Violations shall be a material breach of this Agreement.
TRANSPORTATION. F.O.B. POINT. Unless otherwise specified, shipment will be
made F.O.B. destination to Buyer's designated plant or plants. Packing and
Shipment. Unless otherwise specified, when the price of this Order is based on
the weight of ordered goods, such price covers net weight of material ordered
only. Any charges for boxing, crating, handling, storage or other packing
requirements shall be stated separately on Seller's invoice. Seller shall mark
all containers with necessary lifting, handling a shipping information and also
purchase order numbers, release numbers, dates of shipment, and the names of the
consignee and consignor. An itemized packaging sheet must accompany each
shipment. No partial or complete delivery shall be made prior to the date or
dates shown unless Buyer has given prior written consent.
CHANGES. The Buyer may at any time, by a written and/or verbal order and
without notice to sureties or assignees, suspend performance hereunder, increase
or decrease the ordered quantities or
A-1.
<PAGE>
CONFIDENTIAL
make changes within the general scope of this Order in any one or more of the
following ways: a) Applicable drawings, designs or specifications; b) Method of
shipment or packing, and/or. c) Place of delivery and /or delivery schedule. If
any such change causes an increase or decrease in the cost of, or the time
required for performance of this Order, an equitable adjustment shall be made in
the Order price or delivery schedule, or both and the Order shall be modified in
writing accordingly. No claim by Seller for adjustment shall be valid unless
asserted within twenty (20) days from the date or receipt by the Seller of the
notification of change provided, however that such period may be extended upon
the written approval of the Buyer. Nothing in this clause shall excuse the
Seller from proceeding with the order as changed or amended.
DIRECT ALL COMMUNICATIONS TO BUYER
P.O. ORIGIN Sunnyvale, CA Telephone: (408) 991-2000 Fax: (408) 991-2487
P.O. ORIGIN Albuquerque, New Mexico Telephone: (505) 822-7000 Fax: (505) 822-
7002
RESALE NO. California SYGH 99-65467 5 NM Tax Idnet. 02-096896-005
RESPONSIBILITY FOR GOODS. Irrespective of any prior inspections or the F.O.B.
point named herein, Seller shall bear all risks of loss, damage, or destruction
for nonconforming goods. Seller shall also bear the same risks with respect to
goods rejected by Buyer. Buyer shall be responsible for any loss occasioned by
the gross negligence of its employees.
PATENTS. Seller will settle or defend at Seller's expense (and pay any costs,
fines or damages resulting from) all proceedings or claims against Buyer, its
subsidiaries or affiliates and their respective customers, for infringement or
alleged infringement by the goods furnished under this Order, or any part or use
thereof, of patents (including utility models and registered designs) now or
hereafter granted in the United States or any country where the Seller, its
subsidiaries or affiliates have furnished similar goods. Seller will at Buyer's
request identify the countries in which Seller, its subsidiaries or affiliates
have furnished similar goods.
TOOLING AND DOCUMENTS. All specifications, drawings or other documents and data
furnished by Buyer and all tools, dies, molds, jugs, fixtures, patterns,
machinery, special test equipment, special taps and gauges which have been
furnished, paid for, or charged against Buyer, or which have and their cost
amortized shall be deemed Buyer's property, treated as confidential information,
and delivered in good condition, normal wear and tear excepted, by Seller to
Buyer, F.O.B. Seller's plant, immediately upon request.
APPLICABLE LAW. The Agreement arising pursuant to the Order shall be governed
by and construed in accordance with the laws of the State of California. Any
rights, remedies and warranties available to Buyer by operation of law may only
be waived or modified in writing by Buyer in a supplement or an amendment to
this Order.
COMPLIANCE WITH LAWS AND REGULATIONS. Seller agrees to comply with all
applicable federal, state and local laws, rules and regulations. This Order
incorporates the provision of Executive Order No. 11246 (as amended) of the
President of the United States on Equal Employment Opportunity and the rules and
regulations issued pursuant thereto with which the Seller represents that it
will comply unless exempted. Seller further agrees to comply with all
provisions of Section 503 of the Rehabilitation of Act of 1973, as amended,
prohibiting
A-2.
<PAGE>
CONFIDENTIAL
discrimination against any employee or applicant for employment because of
physical or mental handicap in regard to any position for which the employee or
applicant for employment is qualified, and agrees to comply with the rules and
regulations promulgated with respect to this Act. Seller further agrees to
comply with the provisions of 38 USC Section 2012, and following, with respect
to the employment and training of disabled and Vietnam Era veterans. Seller
agrees not to discriminate against any employee or applicant for employment
because he or she is a disabled veteran or a veteran of the Vietnam Era in
regard to any position for which the employee or applicant for employment is
qualified. Seller agrees to comply with all rules and regulations issued
pursuant to these provisions of law. There are incorporated in this Order the
following provisions of Federal Acquisition Regulations they apply to performing
work or rendering services under Government procurement contract. all applicable
federal, state and local taxes. All such taxes shall be stated separately on
Seller's invoice.
GIFTS. Seller shall not make or offer gifts or gratuities of any kind to
Buyer's employees agents or members of their families to secure or influence any
business transaction. Violations shall be a material breach of this Agreement.
Utilization of Small Business Concerns and Small Disadvantaged Business Concerns
(if in excess of $10,000) [FAR 19.708]; Small Business and Small Disadvantaged
Business Subcontracting Plan (if in excess of $500,000) [FAR 19.708(b)];
Utilization of Labor Surplus Area Concerns (if in excess of $10,000) [FAR
20.301(b)]; Labor Surplus Area Subcontracting Program (if in excess of
$5000,000) [FAR 20.301(b)]; Employment of the Handicapped (if excess of $2,500)
[FAR 22.1402]; Listing of Employment Openings (if in excess of $10,000)
[FAR22.1302]. Seller warrants that in the performance of the Order he has
complied with all the provisions of the Fair Labor Standards Act of 1938 (as
amended) of the United States. If Seller does not have Workers Compensation of
Disability Benefits Insurance, Seller agrees to indemnify Buyer against all
damages sustained by Buyer resulting from Seller failure to have such insurance.
TERMINATION. Buyer may terminate this Order for convenience in whole or in
part, at any time, by verbal and/or written notice prior to Seller's written
order acknowledgment or commencement of performance under this Order. After
Seller has given written acknowledgment of this Order or has commenced
performance, Buyer may terminate this Order by giving ten (10) days written
notice of such termination.
A-3.
<PAGE>
Exhibit B
STATEMENT OF LIMITED WARRANTY
--------------------------------------------------------------------------------
IMPORTANT
THIS STATEMENT OF LIMITED WARRANTY ("LIMITED WARRANTY") DESCRIBES THE WARRANTY
FOR THE ACCOMPANYING TIVO CENTER UNIT, ACCESSORIES AND DOCUMENTATION
(COLLECTIVELY, THE "DEVICE"). BY KEEPING THIS DEVICE BEYOND THIRTY (30) DAYS
AFTER THE DATE OF PURCHASE, YOU ACCEPT THIS LIMITED WARRANTY. PLEASE READ THIS
LIMITED WARRANTY CAREFULLY BEFORE OPERATING THE DEVICE. IF YOU DO NOT AGREE
WITH THESE TERMS AND CONDITIONS, YOU MUST NOT OPERATE THE DEVICE AND SHOULD
RETURN THE DEVICE FOR A FULL REFUND.
--------------------------------------------------------------------------------
1. Warranty. TiVo Inc. ("TiVo") warrants that the Device will be free of
defects in materials and workmanship in normal use in an environment specified
by TiVo for up to one (1) year from the date of purchase (the "Warranty Period")
as follows. In the event of any such defects in materials or workmanship which
arise up to and including ninety (90) days from the date of purchase of the
Device (the "Purchase Date"), TiVo will repair or replace, at its option and
expense, any affected Device which is returned to TiVo within ten (10) days of
the end of the Warranty Period, and shall return a repaired or replacement
Device to you at TiVo's expense. In the event of any such defects in materials
or workmanship which arise beginning ninety-one (91) days from the Purchase Date
until one (1) year from the Purchase Date, TiVo will provide at its own expense
repair parts for any affected Device which is returned to TiVo within ten (10)
days of the end of the Warranty Period, subject to payment by you of TiVo's
then-applicable labor rates for associated Device repair, and shall return a
repaired Device to you at TiVo's expense. This Limited Warranty is extended
only to the original purchaser of the Device, and not to any subsequent owner or
purchaser of the Device. This Limited Warranty does not cover any defect in,
damage to, or inoperability or incorrect performance of, the Device due to acts
of God, negligence, misuse, abuse, accident, neglect, or unauthorized
alterations, modifications or repairs to any part of the Device. This Limited
Warranty does not cover improper installation of the Device, loss of use of the
Device, wasted service charges due to Device malfunction, damages due to
improper operation or maintenance, connection to an improper voltage supply,
customer installation, setup, instruction or television signal reception
problems. This Limited Warranty is valid only for Devices purchased and used in
the United States. As TiVo's sole obligation and your exclusive remedy for any
defective Device returned to TiVo within ten (10) days of the end of the
Warranty Period, TiVo will, at its option and expense, repair or replace the
Device as provided above, or give you a refund of the price you paid for the
Device. Any replacement Device will be warranted only for the remainder of the
original Warranty Period. This Limited Warranty is invalid if the TiVo serial
number has been altered or removed from the Device.
2. Warranty Procedure. To obtain warranty service for a Device which is
subject to the foregoing warranty, you should contact TiVo by calling toll-free
1-877-FOR-TIVO during TiVo's normal business hours. The responding TiVo
representative authorizing the return of your Device will give you a return
authorization number by telephone, and instructions on where and how to return
such Device to TiVo. You are responsible to select a shipment means for the
Device, and to insure such Device for its full replacement value. You must also
enclose your original receipt, invoice or bill of sale.
3. Disclaimer. TIVO MAKES NO WARRANTY THAT YOUR USE OF THE DEVICE WILL BE
ERROR-FREE OR UNINTERRUPTED. THE LIMITED WARRANTY ABOVE IS PROVIDED IN LIEU OF
ALL OTHER WARRANTIES CONCERNING THE DEVICE, WHETHER EXPRESS, IMPLIED, OR
PROVIDED BY STATUTE, INCLUDING ANY WARRANTIES OF
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CONFIDENTIAL
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT.
TIVO EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES. Because some jurisdictions do not
permit the exclusion of implied warranties, this disclaimer may not apply to
you. HOWEVER, EXCEPT TO THE EXTENT PROHIBITED BY APPLICABLE LAW, ANY IMPLIED
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-
INFRINGEMENT THAT MAY BE AVAILABLE IS LIMITED IN DURATION TO THE WARRANTY
PERIOD. Because some jurisdictions also do not allow limitations on how long an
implied warranty lasts, this limitation may also not apply to you. TIVO'S
SUPPLIERS MAKE NO WARRANTIES OF ANY KIND CONCERNING THE DEVICE. This Limited
Warranty gives you specific rights, and you may also have other rights that vary
from state to state.
4. Limitation Of Liability. IN NO EVENT WILL TIVO OR ITS SUPPLIERS BE LIABLE
TO YOU OR ANY THIRD PARTY FOR ANY LOST PROFITS, LOSS OF DATA, OR OTHER
CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES ARISING FROM
OR RELATING TO THE USE OF OR INABILITY TO USE THE DEVICE, EVEN IF TIVO HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. TIVO'S SUPPLIERS WILL HAVE NO
LIABILITY OF ANY NATURE TO YOU OR ANY SUBSEQUENT OWNER OR PURCHASER OF THE
DEVICE, WHETHER OR NOT THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. IN NO CASE WILL TIVO'S TOTAL CUMULATIVE LIABILITY EXCEED THE PRICE YOU
PAID FOR THE DEVICE. YOU UNDERSTAND THAT THESE LIMITATIONS OF TIVO'S AND TIVO'S
SUPPLIERS' LIABILITY ARE A FUNDAMENTAL PART OF THIS LIMITED WARRANTY. Some
states do not allow the exclusion or limitation of incidental or consequential
damages, so the above limitation or exclusion may not apply to you.
5. Other Matters. The following two (2) sentences apply if you are a branch,
agency, or representative of the U.S. government. The Device is a "commercial
item" as that term is defined at 48 CFR 2.101 and is provided to the U.S.
Government only as a commercial end item. Consistent with FAR 12.211-12.212,
DFARS 227.7202-1 through 227.7202-4, and DFARS 252.227-7015, all U.S. Government
end users acquire the Device with only those rights, and subject to the
limitations, set forth herein. The laws of the United States and of the State
of California will govern this Limited Warranty. The State and Federal Courts
located in Santa Clara County, California shall have sole jurisdiction over any
disputes under this Limited Warranty, and you hereby submit to the personal
jurisdiction of such courts. The United Nations Convention on Contracts for the
International Sale of Goods will not apply to this Limited Warranty. If any
provision in this Limited Warranty is unenforceable under applicable law, it
will be deemed modified to the extent necessary to render it enforceable, and in
any event the other provisions will remain in full force and effect. Unless you
have entered into a signed, written agreement with TiVo governing your purchase
of the Device, this Limited Warranty is the complete and exclusive statement of
the warranty between you and TiVo with respect to the Device, and supersedes any
and all demonstrations, advertisements, proposals, and other oral or written
communications between you and TiVo (or your supplier) relating thereto. Should
you have any questions concerning this statement of Limited Warranty or, if you
desire to contact TiVo for any reason, please write to:
TiVo Inc.
894 Ross Drive, Suite 100
Sunnyvale, CA 94089
ATTN: TiVo Customer Service
or call toll-free:
1-877-FOR-TIVO (Toll-Free)
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B-2.
<PAGE>
Confidential
Marketing Addendum
Addendum B to
Philips Business Electronics B.V-TiVo Inc.
Master Agreement
<PAGE>
Confidential
Marketing Addendum
This Marketing Addendum ("Marketing Addendum") by and between TiVo Inc.
("TiVo") and Philips Business Electronics B.V. ("Philips") is incorporated by
reference into the Master Agreement, and is an integral part thereof. To the
extent that the terms and conditions of this Marketing Addendum conflict with
those of the Master Agreement, the terms and conditions of Master Agreement
prevail. Capitalized terms not defined herein shall have the same meaning as
those defined in the Master Agreement. This Marketing Addendum shall be
effective as of March 31, 1999 (the "Effective Date").
1. Scope. This Marketing Addendum sets forth the rights and obligations
of the parties with respect to the promotion and marketing of Philips Personal
TV Systems, the Philips- branded TiVo Stand-alone Box, and the DTV Combination
Box.
2. Marketing, Promotion And Advertising.
2.1 Philips' Marketing Spend.
(a) Initial Spend. Philips shall spend [*] (herein, the
"Marketing
Spend") on Marketing Activities prior to [*] and intends to spend
[*] cumulative during the Marketing Spend Period; provided, however, for each
day that Commercial Release is delayed past June 1, 1999, the Marketing Spend
Period shall be extended for an equal number of days. Such Marketing Spend shall
[*]. All Marketing Activities shall be conducted according to a marketing plan
or plans adopted by Philips. During such period, marketing plans shall be
developed in collaboration with TiVo and shall be consistent with the principles
set forth in Exhibit C ("Marketing Principles"). The Marketing Spend shall be
implemented, as follows:
(i) Not less than [*] by [*].
(ii) Not less than [*] by [*].
(iii) Not less than [*] by [*].
In the event Philips spends, on Marketing Activities, less
than [*] by [*], [*] by [*], or [*] by [*], the parties will renegotiate, in
good faith, the terms of the Master Agreement and all Addenda. If the parties
cannot agree, each party shall have the option, in its sole discretion, to
terminate the Master Agreement and all Addenda.
(b) Subsequent Spending. Thereafter, Philips shall spend, on
marketing and promotional activities and campaigns for Philips-branded Personal
TV Systems and Personal TV Systems Boxes, a minimum of [*] of that portion of
[*], received by Philips [*]. So, for example, [*].
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE>
Confidential
For purposes of the Agreement, Philips' Co-Op Advertising Expenditures shall
be [*]
2.2 Retail Rollout. Philips, in good faith, shall use commercially
reasonable efforts to achieve the Retail Rollout of the Philips-branded TiVo
Stand-alone Box no later than [*].
2.3 Philips Advertising. Philips shall establish the character of all
advertising and promotional activities conducted by Philips for the Marketing
Activities. Notwithstanding the foregoing, and provided such advertising and
promotion is for products which enable the TiVo Service, TiVo Marks shall be
displayed consistent with the Marketing Principles. In no event shall the TiVo
Marks be more prominent than Philips' Marks. Final determination as to the
appearance and relative placement of the Philips Marks and TiVo Marks shall be
made by Philips. Notwithstanding the foregoing, use of each party's Marks shall
at all times comply with each such party's corporate identity policies. From and
after the Marketing Spend Period, Philips shall have no obligation to include
the TiVo Marks in Philips' advertising and promotion.
2.4 TiVo Advertising. TiVo shall establish the character of all
advertising and promotional activities conducted by TiVo. Notwithstanding the
foregoing, and provided such advertising and promotion is for the TiVo Service,
Philips Marks shall be displayed consistent with the Marketing Principles. In no
event shall the Philips Marks be more prominent than the TiVo Marks. Final
determination as to the appearance and relative placement of the Philips Marks
and TiVo Marks shall be made by TiVo. Notwithstanding the foregoing, use of each
party's Marks shall at all times comply with each such party's corporate
identity policies. From and after the Marketing Spend Period, TiVo shall have no
obligation to include the Philips Marks in TiVo's advertising and promotion.
2.5 Industry Promotion.
(a) Philips shall conduct [*] during the Marketing Spend Period.
During the Exclusivity Periods for the Philips-branded TiVo Stand-alone Box and
the DTV Combination Box, TiVo shall, [*] and upon the reasonable request of
Philips, support Philips' promotional campaigns by (i) [*], (ii) [*], and (iii)
[*]. [*], Philips may invite TiVo to [*]. Philips shall feature Philips-branded
TiVo Stand-alone Boxes and other Personal TV System Boxes enabling the TiVo
Service, as agreed by the parties at [*].
(b) Neither party shall issue any written press release
regarding cooperative developments and joint efforts with, or the intentions of,
the other party, without the prior written consent of such other party.
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE>
Confidential
(c) For so long as the Agreement is in effect, the parties shall
reasonably cooperate in promoting Personal TV System Technology with all
appropriate standard-setting bodies and associations.
(d) The parties agree that TiVo will be the lead public
relations contact for the TiVo Personal TV Service and that Philips will be the
lead public relations contact for the Philips-branded Personal TV System boxes.
3.[*]
3.1 [*]. TiVo and Philips recognize that [*]. For each Philips-branded
TiVo Stand-alone Personal TV System and each Philips-branded DTV Combination
System [*]. At the end of each calendar quarter the [*]. Notwithstanding the
foregoing, TiVo [*] pursuant to this Section 3 reasonably necessary to [*].
3.2 [*]. TiVo will be invited to participate in any meetings [*] and
will retain sole discretion over whether [*].
3.3 [*]. TiVo will be responsible for the management of [*]. Upon agreement
with [*] TiVo will establish [*]. Philips will provide any information requested
to assist in the establishment and maintenance of such [*].
4. Promotional Materials. Philips shall include, and have final approval
of, all promotional material to be included in the packaging of Philips-branded
Personal TV System Boxes. Notwithstanding the foregoing, TiVo shall have the
right, during the Marketing Spend Period, to include certain promotional
materials in Philips' packaging of all such Boxes which enable the TiVo Service
subject to the approval of Philips, which approval shall not be unreasonably
withheld or delayed.
5. Registration Forms. The registration forms included in Philips-branded
TiVo Stand-alone Boxes and DTV Combination Boxes shall have a distinctive look
and feel. Each party shall be supplied with the information provided by the end
user on such forms and may be used by either party for any purpose, without
restriction; provided, that both parties shall comply with any privacy statement
of use restrictions contained within such forms. Either party may contact such
end users at any time without the consent of the other party.
6. End-User Data. TiVo shall provide to Philips copies of all names and
addresses of Service Subscribers who have purchased Philips-branded Personal TV
System Boxes; provided, however, that Philips and TiVo shall: (i) not use such
data for any purposes prohibited
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE>
Confidential
by any such Service Subscriber pursuant to the TiVo/Philips privacy statement
included with the end-user documentation; (ii) only use such data for their own
advertising, marketing, customer support, warranty, and product development
purposes; (iii) shall protect such information as they do their own confidential
information; and (iv) shall not distribute such data to any third party for any
purpose, except their employees, consultants and contractors with a need to
know.
7. Not For Resale Units.
7.1 TiVo Service. TiVo shall provide Philips with not less than fifty
(50) subscriptions to the TiVo Service, at no cost; provided, however, such
subscription may only be used for its own evaluation, testing, marketing and
public relations purposes.
7.2 Philips Boxes. Philips shall provide TiVo with not fewer than
fifty (50) Philips-branded Personal TV System Boxes (which enable the TiVo
Service), each quarter, at cost; provided, however, such Personal TV System
Boxes may only be used for its own evaluation, testing, marketing and public
relations purposes.
8. Trademark Licenses.
8.1 Philips Marks. Subject to the terms and conditions of the
Agreement, unless sooner terminated, in Philips' sole discretion, Philips hereby
authorizes TiVo to use Philips Marks, during the term of the Agreement solely:
(i) for purposes of branding Personal TV System Boxes manufactured by TiVo for
sale to Philips; and (ii) in the advertising and promotion of the Philips-
branded Personal TV Systems Boxes in connection with the TiVo Services as
provided in the Agreement. Before making use of any Philips Mark, TiVo will
provide Philips with a sample of the proposed use of the Philips Mark for
approval by Philips. If Philips does not accept, in writing, the proposed use of
the Philips Mark within five (5) days after receipt of the sample from TiVo,
Philips will be deemed to have rejected the proposed use. If Philips rejects
the proposed use of the Philips Mark, TiVo will modify or cancel the proposed
use, as requested by Philips. In addition, TiVo will comply with all trademark
usage guidelines or policies that Philips may furnish to TiVo in writing from
time to time concerning use of the Philips Marks. All use of the Philips Marks
hereunder will inure to the benefit of Philips. Philips has and will retain
exclusive ownership of the Philips Marks, and TiVo will not contest or
challenge, or do anything inconsistent with, Philips' exclusive ownership of
the Philips Marks. Without limiting the generality of the foregoing, TiVo may
not affix, append, or place any of its trademarks, trade names, or logos to,
or in close proximity to, the Philips Marks in a manner that results or could
result in the creation of a unitary composite mark. Except as otherwise
provided for herein, nothing in the Agreement shall be construed to create, by
implication or otherwise, a right by TiVo to manufacture or distribute Philips-
branded Personal TV System Boxes except for sale to Philips (as provided in
the Purchase Agreement and the contemplated OEM Purchase Addendum) or as
otherwise specifically authorized by Philips in writing.
8.2 TiVo Marks. Subject to the terms and conditions of the Agreement,
unless sooner terminated, in TiVo's sole discretion, TiVo hereby authorizes
Philips to use TiVo Marks, during the term of the Agreement solely for purposes
of branding and in the advertising and promotion of Philips-branded Personal TV
System Boxes which enable the TiVo Service as provided in this Agreement. Before
making use of any TiVo Mark, Philips will provide TiVo
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE>
Confidential
with a sample of the proposed use of the TiVo Mark for approval by TiVo. If
TiVo does not accept, in writing, the proposed use of the TiVo Mark within
five (5) days after receipt of the sample from Philips, TiVo will be deemed to
have rejected the proposed use. If TiVo rejects the proposed use of the TiVo
Mark, Philips will modify or cancel the proposed use, as requested by TiVo. In
addition, Philips will comply with all trademark usage guidelines or policies
that TiVo may furnish to Philips in writing from time to time concerning use
of the TiVo Marks. All use of the TiVo Marks hereunder will inure to the
benefit of TiVo. TiVo has and will retain exclusive ownership of the TiVo
Marks, and Philips will not contest or challenge, or do anything inconsistent
with, TiVo's exclusive ownership of the TiVo Marks. Without limiting the
generality of the foregoing, Philips may not 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 mark.
9. Survival. The provisions of Sections 8 shall survive any termination or
expiration of this Marketing Addendum.
In Witness Whereof, the parties hereto have caused this Collaboration and
Marketing Addendum to be duly executed as of the date first set forth above.
TiVo Inc. Philips Business Electronics B.V.
/s/ Michael Ramsay /s/ R.L. von Oostenbrugge
--------------------------- ---------------------------------
Authorized Signature Authorized Signature
Michael Ramsay R.L. von Oostenbrugge
--------------------------- ---------------------------------
Printed Name Printed Name
President, CEO Managing Director
--------------------------- ---------------------------------
Title Title
April 2, 1999 31-03-1999
--------------------------- ---------------------------------
Date Date
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
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<PAGE>
Confidential
Philips Business Electronics B.V.- TiVo Inc.
Master Agreement
<PAGE>
Confidential
Exhibit A
TiVo Marks
[PICTURE APPEARS HERE]
-A-1-
<PAGE>
Confidential
Exhibit B
Philips Marks
[LOGO OF PHILIPS APPEARS HERE]
-B-1-
<PAGE>
Confidential
Exhibit C
Marketing Principles
Goals:
Define guidelines in their respective marketing plans that will be
beneficial to both parties and position them as the leaders in creating personal
television while developing clear brand association for both parties.
Promote the use of the Philips-branded Personal TV System Boxes with the
TiVo Service.
Implementation:
Marketing Activities shall be implemented such that:
(i) Philips shall leverage its strength with consumer
electronic retail sales and distribution channels to promote the Retail Rollout
of the Philips-branded Personal TV System Boxes and the on-going promotion,
marketing and sales of such products following the Retail Rollout.
(ii) Philips and TiVo shall encourage synergy and coordination
between all advertising, public relations and research agencies to establish
consistent marketing messages for the Philips-branded Personal TV System Boxes
and the TiVo Service.
(iii) Philips and TiVo shall develop and implement a direct
marketing and fulfillment campaign for the Philips-branded TiVo Stand-alone Box.
(iv) Philips and TiVo shall develop and implement a specific
marketing and sales campaign targeted to DIRECTV subscribers and potential
subscribers.
Relative Positioning:
In promoting personal television, the positioning of the two companies
shall strive to work cohesively so it is clear to the consumer how the two
together deliver the value experience.
Until [*] (i) TiVo shall include the designated Philips Marks and mention
of the Philips Personal TV Systems in its advertising in a manner which is
appropriate for the medium and the number of consumer electronics manufacturers
who have commercially released Personal TV System Boxes enabling the TiVo
Service; and (ii) Philips shall include the designated TiVo Marks and mention of
the TiVo Service in its Personal TV System advertising in a manner which is
appropriate for the medium.
From [*] Philips shall market the Personal TV category
* Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-C-1-
<PAGE>
Confidential
which will include a TiVo presence, and TiVo shall include Philips in its
advertising consistent with the way it includes other consumer electronics
manufacturers.
From date which is one year after Commercial Release of the first Philips-
branded Standalone Personal TV box and thereafter, Philips shall have no
obligation to include the TiVo Marks in Philips' advertising and promotion, and
TiVo shall have no obligation to include the Philips Marks in TiVo's advertising
and promotion.
Materials To Be Included:
Each party's advertising materials (such as TV spots, print ads,
infomercials, direct marketing materials, sales materials, product brochures,
data sheets, etc.) shall include representation of the other party in a manner
pre-approved by such other party during Marketing Spend Period. Such
advertising materials are not intended to include either party's corporate
collateral such as company backgrounders, strategy documents and press releases.
Retail Channel Marketing:
Marketing activities may include, but are not limited to the following:
. TV, radio, Internet and print advertising
. Promotional activities including trade show promotions, product
announcements, press releases, etc.
. Point-of-sale materials including marketing collateral, point-of-sale
advertisements, etc.
. Sales force training
. Marketing collateral for inclusion in device packaging
. Sales promotions and incentives
-C-2-