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SEVENTH AMENDMENT TO DEVELOPMENT AGREEMENT

Development Agreement

SEVENTH AMENDMENT TO DEVELOPMENT AGREEMENT | Document Parties: TIVO INC | DIRECTV, Inc., You are currently viewing:
This Development Agreement involves

TIVO INC | DIRECTV, Inc.,

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Title: SEVENTH AMENDMENT TO DEVELOPMENT AGREEMENT
Date: 6/9/2006
Industry: Broadcasting and Cable TV     Sector: Services

SEVENTH AMENDMENT TO DEVELOPMENT AGREEMENT, Parties: tivo inc , directv  inc.
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Exhibit 10.0

 

 

 

 

Exhibit 10.0

as filed with

10-Q

  

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

SEVENTH AMENDMENT TO DEVELOPMENT AGREEMENT

This SEVENTH AMENDMENT TO THE DEVELOPMENT AGREEMENT (this “Seventh Amendment” ) is made and entered into as of April 7, 2006 (the “Seventh Amendment Effective Date” ) by and between DIRECTV, Inc., a California corporation ( “DIRECTV” ), and TiVo Inc., a Delaware corporation ( “TiVo” ) (collectively, the “Parties” ).

Recitals

Whereas , the Parties entered into that certain Development Agreement having an effective date of February 15, 2002 (the “Development Agreement” );

Whereas , the Parties have previously amended the Development Agreement via that certain First Consolidated Amendment dated October 31, 2002, that certain Second Amendment dated December 20, 2002, that certain Third Amendment dated January 8, 2003, that certain Fourth Amendment dated April 17, 2003, that certain Fifth Amendment dated December 19, 2003, and that certain Sixth Amendment dated April 30, 2004; and

Whereas , the Parties wish to further amend certain provisions in the Development Agreement.

Now, Therefore , the Parties agree as follows:

Agreement

Unless stated otherwise, capitalized terms used herein shall have the meanings set forth in the Development Agreement.

 

 

1.

Definitions. Section 1.15 is hereby deleted and replaced in its entirety by the following:

1.15 “TiVo Software” shall mean the version of software most recently deployed by DIRECTV for each of the Combination Receivers.”

In addition, Article I is hereby amended to add the following provisions:

1.20 “DIRECTV Covered System” means a [*] for providing [*].

1.21 “IPG” means [*] which allows [*] information [*]

 


[*]

Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.


combined with the [*].

1.22 “PVR” means a [*] that [*].

1.23 “Satellite Receiver” means a [*] that [*].

1.24 “Subsidiary” of an entity (the “Parent Entity” ) means any entity, the majority voting power of which is controlled, directly or indirectly, by the Parent Entity.

1.25 “TiVo Licensed Technology” means any technology or intellectual property rights therein licensed by TiVo or a TiVo Subsidiary to a TiVo distributor or TiVo licensee for use in a TiVo Covered System pursuant to a bona fide commercial transaction, which technology or intellectual property is actually implemented or used in a specific TiVo Covered System utilized, deployed or otherwise exploited by such TiVo distributor or TiVo licensee. For clarity, TiVo Licensed Technology does not include any technology provided or supplied by a TiVo distributor or TiVo licensee for implementation or use in a TiVo Covered System.

1.26 “TiVo Covered System” means [*] systems related to [*].

1.27 “T & M Rate” means [*] until the first anniversary of the Seventh Amendment Effective Date and, in each subsequent year, [*] rate determined by multiplying the [*] rate from the preceding year times [*].

 

 

2.

Project Change Requests. Section 2.3(f) of the Development Agreement is hereby deleted and replaced in its entirety with the following:

(f) Project Change Requests. Each party may initiate a project change request ( “PCR” ) regarding the features of the TiVo Software by submitting to the other party a detailed description of the PCR in the form attached as Exhibit I (Project Change Request Form ). The parties will work together in good faith to estimate the feasibility, schedule and cost of each PCR, with such estimate to be completed within 30 days of a party’s initiation of the PCR. With respect to PCRs initiated by DIRECTV, each such PCR shall be priced by TiVo at the T & M Rate. The party initiating the PCR will accept or reject the PCR within 30 days of completion of the estimate. Once provided with schedule and cost, neither Party is under an obligation to accept the PCR, provided that TiVo may not reject a PCR initiated by DIRECTV if DIRECTV agrees to pay for the


[*]

Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

2


changes described in the PCR at the T & M Rate and provides TiVo a commercially reasonable amount of time to perform the changes described in the PCR, including, without limitation, all development and testing necessary to implement such changes. Upon mutual acceptance of the PCR, the Parties will work together to prepare a finalized development schedule, product requirement document and associated fee schedule in order to implement the accepted PCR.”

 

 

3.

Corrections. Section 2.4 of the Development Agreement is hereby deleted and replaced in its entirety with the following:

2.4 Corrections. Notwithstanding the foregoing, if at any time during the Term of this Agreement DIRECTV or TiVo determines (i) that there is a defect in the design for any of the DIRECTV-TiVo combination receivers (the “Combination Receivers” ) as provided by TiVo under this Agreement; or (ii) that a Combination Receiver design as provided by TiVo or the TiVo Software as provided by TiVo does not comply with the DIRECTV Technology, Exhibit A (Development Schedule and Specifications) , the Interface Specifications (if applicable), the ATSC specifications (if applicable), or any applicable product requirement document or specifications attached to any amendment to this Agreement, each of the foregoing as amended by any mutually agreed PCR, TiVo has an obligation to promptly correct such defect or non-compliance in accordance with the provisions set forth in this Section 2.4 .

(a) DIRECTV shall promptly notify TiVo of any such defect or non-compliance and shall provide TiVo with sufficient supporting information and materials reasonably requested by TiVo to verify, diagnose and correct the reported defect or non-compliance. In the event of a dispute regarding whether there is a defect or non-compliance, or failure by TiVo to promptly perform such correction, DIRECTV and TiVo shall immediately communicate such dispute to the appropriate business/project manager when such party becomes aware of the dispute. If such dispute cannot be mutually resolved by such business/project managers within five (5) business days, then such dispute shall be immediately referred to the senior management of each party for discussion and attempted resolution. Further, the parties agree to collaborate on a remedy of such defect as promptly as commercially reasonable, but not more than ten (10) business days from the time senior management begin discussions. The foregoing represents DIRECTV’s sole and exclusive remedy for any defect or non-compliance in the designs or TiVo Software provided hereunder; provided, that in the event TiVo materially breaches its obligations to correct such defect or non-compliance, DIRECTV shall be entitled to exercise any and all legal and equitable remedies available in accordance with the terms of this Agreement, including, but not limited to, release of the deliverables from the Software Escrow Account, as provided pursuant to Article XI (Network Operation Continuity). For [*] following the end of the Term of this Agreement, upon DIRECTV’s request, TiVo agrees to provide the services set forth in this Section 2.4 at commercially


[*]

Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

3


reasonable rates and subject to reasonable terms and conditions consistent with those set forth herein.

(b) TiVo shall maintain sufficient staff and resource availability to fulfill its correction obligations under this Section 2.4 . In the event of any defect or non-compliance that prevents operation of the material functions of any Combination Receiver, TiVo shall promptly allocate no less than 2 dedicated personnel with appropriate experience and expertise to diagnose and correct such defect or non-compliance, until such time as the correction is completed. In each instance, TiVo shall cooperate with DIRECTV and provide sufficient resources to permit the completion of any necessary TiVo Software download to all affected Combination Receivers within a timeframe of no less than nine (9) weeks from the start of such download, provided that such timeframe will be increased for any delays not attributable to TiVo.”

 

 

4.

Reno, Provo and Two-Chip Receiver Fees. A new Section 3.4(d) is hereby added to the Development Agreement, to read as follows:

(d) Notwithstanding anything in this Section 3.4 to the contrary, commencing on the Seventh Amendment Effective Date and continuing through the expiration or termination of this Agreement, DIRECTV shall pay to TiVo monthly DVR/PVR Service Fees of not less than [*]  per month. For purposes of clarification, if the actual calculation of DVR/PVR Service Fee payments pursuant to this Article III declines below [*] at any time during the Term, DIRECTV will continue to make DVR/PVR Service Fee payments of [*] per month (but not beyond the expiration or termination of this Agreement). Upon the mutual agreement of the parties, DIRECTV may advance some or all of the DVR/PVR Service Fees for any particular month to TiVo. Any such advance will reduce the minimum required monthly DVR/PVR Service Fees in that particular month by the amount of the advance ( i.e. , the minimum DVR/PVR Service fee for a particular month would be [*] minus the amount of such DVR/PVR Service Fees paid to TiVo in advance).”

 

 

5.

Development Credits. A new Section 3.14 is hereby added to the Development Agreement, to read as follows:

3.14 Development Credits. On an annual basis commencing on February 1, 2007, DIRECTV shall be entitled to a non-refundable “Development Credit” [*] made to TiVo during the prior 12 months; provided, however, that the Development Credit in any particular year will be calculated without regard to whether DVR/PVR Service Fees have been advanced to TiVo pursuant to Section 3.4(d) . The Development Credits shall be applied against amounts payable by DIRECTV to TiVo for development services undertaken pursuant to an accepted PCR as set forth in Section 2.3(f) , provided, however, any Development Credits to which DIRECTV is entitled as of February 1 of a given year must be used by no later than January 31 of the subsequent year. Development Credits


[*]

Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

4


not used by January 31 of the subsequent year shall be forfeited. DIRECTV may elect to use Development Credits to which DIRECTV expects to be entitled as of February 1 of a given year, up to a maximum of [*] or such greater amount agreed by TiVo, toward amounts payable by DIRECTV to TiVo for development services undertaken pursuant to an accepted PCR ( e.g. , if amounts are payable prior to February 1 of a given year


 
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