EXHIBIT 10.13
MASTER COLLABORATION AGREEMENT
This Master Collaboration Agreement ("Agreement") is entered into as of
December 20, 1999 ("Effective Date") by and between MATSUSHITA-KOTOBUKI
ELECTRONICS INDUSTRIES, LTD., a corporation organized under the laws of Japan
with its principal place of business at 8-1 Furujin-machi, Takamatsu, Kagawa
prefecture, Japan ("MKE"), and REPLAY NETWORKS, INC., a California corporation
with its principal place of business at 1945 Charleston Road, Mountain View,
California 94043-1201, U.S.A. ("Replay").
WHEREAS, MKE designs, develops and manufactures, among other things, hard
disk drives and has substantial knowledge and expertise in and owns certain
technology and know-how relating to hard disk drives and other electronics
(including, without limitation, hardware and software);
WHEREAS, MKE, by itself and in collaboration with others, is designing and
developing various application products using audio visual hard disk drives and
other electronics;
WHEREAS, Replay is developing and owns certain technology and know-how
relating to the RTVS (as defined below) and the ReplayTV 3000 Product (as
defined below);
WHEREAS, MKE and Replay desire to develop a new market contemplated by the
integration of Replay's technology relating to the RTVS and ReplayTV Products
and MKE's technology in audio visual hard disk drives and other electronics;
WHEREAS, MKE has made an equity investment in Replay pursuant to a separate
Stock Purchase Agreement and a separate Investor's Rights Agreement;
WHEREAS, MKE and Replay have made and entered into an OEM Distribution
Agreement ("OEM Agreement") as of the 30/th/ day of July, 1999, as amended as of
the 20/th/ day of December, 1999, which enables MKE to purchase from Replay the
ReplayTV 3000 Product manufactured by Replay's third party contract manufacturer
and to market, sell and distribute such ReplayTV 3000 Product; and
WHEREAS, MKE and Replay desire to enter into this Agreement on terms and
conditions set forth below in order to establish the framework for development,
manufacturing, marketing, importation, sales and distribution of the ReplayTV
Products and intellectual property rights pertaining to said ReplayTV Products;
NOW THEREFORE, in consideration of the above premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" means, with respect to a party hereto, any corporation,
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partnership, joint venture, subsidiary, division or other business arrangement
which is directly or indirectly controlled by, controlling or under common
control with such party. Control shall mean any direct or indirect beneficial
ownership of fifty percent (50%) or more of the voting stock or participating
profit interest of such corporation or other business entity.
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1.2 "Competitive Service" means any service that (a) permits viewing of
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content on a television or monitor, (b) contains a dialup or other similar
network connection for the delivery of an electronic programming guide and other
content and/or software to any product enabling the enhancements or
personalization of television viewing, and (c) generates or has as part of its
business plan to generate at least [***] of its annual revenues from one or more
of the following: advertisers, media partners, television networks or production
companies, film studios or any similar content providers.
1.3 "End User" means any third party which lawfully obtains a Replay TV
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Product solely for its own personal or internal business purposes and not for
further distribution or resale.
1.4 "End User Restrictions" means the restrictions set forth in Exhibit A.
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1.5 "Gold Master" means, for each MKE Product version, the master
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electronic copy of all software applications, content and related material
installed or to be installed on the hard drive or memory device of all MKE
Products shipped by or on behalf of MKE, MEI or any MEI Affiliate.
1.6 "Intellectual Property" or "Intellectual Property Rights" means any
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and all patents, patent rights, trademarks, service marks, trade names, trade
dresses, copyrights, works of authorship and trade secrets, and all
registrations and applications of all of the foregoing, and any and all other
intellectual property and industrial property rights.
1.7 "MEI" means Matsushita Electric Industrial Co., Ltd.
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1.8 "Reference Specification" means those minimum hardware and software
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requirements established by Replay, in its sole discretion, for all ReplayTV
Products, as may be modified from time to time by Replay pursuant to Section
4.4.
1.9 "MKE Features" means features designed or developed by or on behalf of
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Replay for MKE and incorporated into any MKE Products (subject to the
requirements of Section 4.4), and which features the parties agree in writing
advance shall be subject to the exclusivity provisions of Section 6.3(b).
1.10 "MKE Products" means ReplayTV Products other than Replay TV 3000
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Product, which are (a) jointly designed and developed by MKE and Replay or (b)
designed or developed by MKE: in either case, (a) or (b), which will be
manufactured by or for MKE hereunder, including, without limitation, the next
generation digital terrestrial ReplayTV Products and those ReplayTV Products
integrating the ReplayTV 3000 Product with certain MKE products.
1.11 "PCEC" means Panasonic Consumer Electronics Company, a division of
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Matsushita Electric Corporation of America.
1.12 "Product Specification" means those hardware and software
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specifications established for each MKE Product by MKE. Each Product
Specification shall incorporate, at a minimum, the Reference Specification, as
such Reference Specification may be modified from time to time by Replay
pursuant to Section 4.4.
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1.13 "ReplayTV Products" means any products manufactured by, or on behalf
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of, MKE or Replay that use or incorporate Replay Technology or Replay
Intellectual Property, and which are compatible with and fully support the
features of the RTVS and the applicable Product Specification (and are not
compatible with any Competitive Service), as the RTVS may be modified and
enhanced by Replay from time to time.
1.14 "APIs" mean any application programming interfaces, and associated
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documentation, developed by or for Replay in connection with any Replay
software.
1.15 "Replay Device Software" means Replay's proprietary and/or licensed
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(a) operating system, streaming technology (excluding that streaming technology
necessary for the development of MPEG encoder/decoders or similar integrated
circuits), file storage and retrieval system, and (b) application software
providing functionality, content and/or used to interface with the Replay Server
Software, including any APIs developed in connection with the foregoing, that is
incorporated into or downloaded onto any ReplayTV Product, including any
improvements or modifications thereto which Replay distributes generally to OEMs
and End Users, over the RTVS or otherwise, during the Term. Replay Device
Software does not include any Replay Server Software or Replay Driver Software.
1.16 "Replay Driver Software" means Replay's proprietary hardware device
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driver software used to interface the Replay Device Software with the hardware
components of any ReplayTV Products (including that streaming technology
necessary for the development of MPEG encoder/decoders or similar integrated
circuits), that is incorporated into or downloaded onto any ReplayTV Product,
including any improvements or modifications thereto which Replay distributes
generally to OEMs and End Users, over the RTVS or otherwise, during the Term.
Replay Driver Software does not include any Replay Device Software and Replay
Server Software.
1.17 "Replay Intellectual Property" means any and all Intellectual Property
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owned by Replay.
1.18 "Replay Server Software" means Replay's proprietary server-based
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software and applications designed to provide the RTVS and communicate with
ReplayTV Products.
1.19 "RTVS" means Replay's proprietary service providing for the
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personalized viewing of content over a television or monitor and contains a
dialup or network connection for the delivery of software upgrades and/or
content updates. RTVS includes, without limitation, the following
functionality: (a) personalized programming (including time-shifting of
programming, automatic and intelligent program recording, promotion of "off-
hours" programming not otherwise immediately or easily viewed, future locally
modified and enhanced television programming), (b) an interactive on-screen
programming guide, (c) locally-inserted advertising, (d) e-commerce
capabilities, (e) pay-per-view services, and (f) premium virtual channels.
1.20 "Replay Technology" means all Technology owned by Replay, including
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without limitation the Replay Server Software, Replay Device Software, and
Replay Driver Software.
1.21 "ReplayTV 3000 Product" means Replay's proprietary ReplayTV 3000
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product as it exists on the Effective Date.
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1.22 "Technology" means computer software, algorithms, designs, ideas,
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know-how, processes, formulas, specifications, compositions, data, technical
drawings, schematics, flowcharts, techniques, improvements and inventions
(whether patentable or not), which are confidential or proprietary to a party.
1.23 "Term" means the Initial Term and any renewals or extensions to the
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Initial Term pursuant to Section 13.2.
1.24 "Territory" means the United States, and will, automatically and
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without further action by the parties, expand to include territories and
possessions of the United States and additional countries upon Replay's
commercial introduction and launch of the RTVS in such territories and
possessions of the United States or countries during the Term.
2. PRODUCT DEVELOPMENT
2.1 Phase One - ReplayTV 3000 Products.
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(a) During Phase One, MKE shall, pursuant to the terms and conditions
of the OEM Agreement, (i) purchase from Replay, on a private label basis,
ReplayTV 3000 Products manufactured by Replay's third party contract
manufacturer(s), and (ii) market, sell and distribute such private labeled
ReplayTV 3000 Products in the Territory under the Panasonic(R) brand name. As of
the Effective Date, the parties estimate that MKE's commercial launch of such
ReplayTV 3000 Products under the Panasonic(R) brand name will be [***] 2000,
provided that Replay delivers to MKE by such date ReplayTV 3000 Products that
comply with the Matsushita Industrial Standards and all reasonable requirements
of MKE and Replay, including, without limitation, the Reference Specification
and requirements relating to quality and copyright protection.
(b) MKE may, at its sole option, cost and expense, design or have
designed (by a third party or by Replay) (a) a custom remote control, front
bezel and printed materials for the ReplayTV 3000 Products, and (b) subject to
Replay's prior approval, other customized specifications for such ReplayTV 3000
Products. Replay and MKE agree to cooperate with each other on the design of
such customized specifications in order to meet and comply with the Matsushita
Industrial Standards and the Reference Specification. Replay and MKE agree that
subject to Replay's Intellectual Property Rights in the ReplayTV 3000 Products,
the custom remote control, front bezel and printed materials designed by or for
MKE, and all Intellectual Property Rights therein, shall be owned solely by MKE
and, except as otherwise agreed in writing, all other customized specifications
developed pursuant to this Section 2.1(b), and all Intellectual Property Rights
therein, shall be owned solely by Replay. Notwithstanding anything else in this
Section 2.1(b), Replay shall be free to independently develop features or
specifications for the ReplayTV 3000 Products, or any other ReplayTV Products,
that are similar in design, appearance or functionality to such MKE customized
specifications. In the event MKE designs or has designed such customized
specifications, Replay agrees to use commercially reasonable efforts to cause
its third party contract manufacturer(s) of ReplayTV 3000 Products, as promptly
as reasonably practical in light of such customized specifications, to commence
manufacture of ReplayTV 3000 Products for MKE in accordance with such customized
specifications.
2.2 Phase Two - MKE Products.
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(a) At such time that Phase One has progressed to the mutual
satisfaction of MKE and Replay, the parties agree to jointly develop the first
MKE Product. In such case, Replay will be primarily responsible for the further
development of the RTVS and MKE will be primarily responsible for the further
development of the hardware comprising MKE Products.
(b) In addition to subsection (a) above, MKE may, at its sole
discretion, and at its sole cost, design and develop MKE Products independent of
Replay. In such case, MKE shall establish a Product Specification for each
such MKE Product, and MKE shall at all times comply with the requirements of
Section 4.4 in connection with design, development and manufacture of such MKE
Products. Replay shall maintain and support the features of RTVS to any and
all such MKE Products that MKE manufactures, and markets, sells or distributes
in the Territory.
3. LICENSE GRANTS
3.1 Software License
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3.1.1 Replay Driver Software
(a) Subject to the terms and conditions of this Agreement,
Replay grants a [***] license to MKE (with the right to sublicense to MEI or any
MEI Affiliate), subject at all times to the requirements of Section 4.4: (i) to
use, copy (and have copied), modify, improve and create derivative works of the
Replay Driver Software (in both source code and object code form) solely in
connection with the development of MKE Products, (ii) to incorporate (and have
incorporated) the Replay Driver Software and any such modifications,
improvements or derivative works solely into MKE Products in object code form;
(iii) to manufacture, have manufactured, market, distribute, import and sell the
MKE Products incorporating the Replay Driver Software in the Territory by itself
or through MEI or any MEI Affiliate; and (iv) to sublicense to End User the
right to use the Replay Driver Software in the Territory, subject to Sections
3.1.3 and 3.1.4.
(b) Replay shall promptly deliver to MKE all source code and object
code for the Replay Driver Software, including any updates and upgrades thereof,
and all related documentation, developed by Replay as of the Effective Date and
during the Term. MKE hereby grants Replay a worldwide, nonexclusive,
nontransferable and royalty-free license (including the right to sublicense to
other OEMs as part of the Reference Specification, subject to Section 4.4(a)) to
any modifications or improvements to the Replay Driver Software. MKE shall
promptly deliver to Replay the reasonably documented (in English) source code to
all such modifications or improvements at the time such modifications or
improvements are provided to Replay for testing pursuant to Section 4.4.
3.3.3 Replay Device Software
(a) Subject to the terms and conditions of this Agreement, Replay
grants a [***] license solely to MKE (with the right to sublicense to MEI or any
MEI Affiliate), subject at all times to the requirements of Section 4.4, to: (i)
use and copy (and have copied) the Replay Device Software (in object code form
only) solely for the purpose of incorporating the Replay Device Software into
MKE Products, (ii) incorporate (and have incorporated) the Replay Device
Software into
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MKE Products in object code form, (iii) manufacture, have manufactured, market,
distribute, import and sell MKE Products incorporating the Replay Device
Software in the Territory by itself or through MEI or any MEI Affiliate, and
(iv) sublicense to End Users the rights to use the Replay Device Software in the
Territory subject to Sections 3.1.3 and 3.1.4.
(b) Subject to the terms and conditions of this Agreement, Replay
grants a [***] license solely to MKE to use, copy, modify, improve and create
derivative works of the Replay Device Software provided to MKE in source code
form, solely in connection with MKE's internal, noncommercial, development of
prototypes for MKE Products. The source code license provided in this Section
3.1.2(b) shall not include any third party software incorporated in any Replay
Device Software or otherwise licensed to Replay. MKE shall take all reasonable
steps necessary to prevent unauthorized disclosure of, or access to, all source
code provided by Replay pursuant to this Agreement.
(c) Replay shall promptly deliver to MKE source code for Replay Device
Software, including any updates and upgrades thereof, and all related
documentation, developed by Replay as of the Effective Date and for a period of
[***] thereafter (or such longer period as Replay may require to complete
development and documentation of planned APIs for such Replay Device Software).
Additionally, MKE may request Replay to modify or improve the Replay Device
Software, and subject to the parties' mutual written agreement upon
specifications and requirements for such modifications or improvements, Replay
shall provide such modifications or improvements to MKE subject at all times to
this Section 3.1.2.
3.1.3 Restrictions
MKE agrees that it will not attempt to (i) reverse assemble, reverse
engineer, decompile or otherwise attempt to derive source code (except as
otherwise provided in Section 3.1.1 and 3.1.2) from the Replay Device Software
or Replay Server Software, (ii) remove or unbundle the Replay Device Software
from any ReplayTV Product, or (iii) facilitate or encourage any third party
(including any End User) to do any of the foregoing. MKE further agrees that it
will not (iv) provide any functionality or software applications on any ReplayTV
Products that are directly competitive with any functionality or software
provided (or planned in good faith to be provided during the subsequent [***]
period, and such plans disclosed to MKE) by or through the RTVS or the Replay
Device Software, or (v) interfere with, or provide any hardware, software, or
other features that interferes with, the communication of the ReplayTV Products
with RTVS.
3.1.4 End User Licensing
MKE shall include an end user license agreement mutually agreed upon
by the parties in or with ReplayTV Products which contains, at a minimum, the
End User Restrictions ("End User License Agreement"), and require End User's
acknowledgement that any such ReplayTV Products distributed by MEI or any MEI
Affiliate or OEMs be subject to such End User License Agreement. MKE
acknowledges and agrees that, upon prior written notice to MKE, Replay may amend
the End User Restrictions from time to time in order to address issues arising
in particular geographic regions as the Territory is expanded, to address
changes in the law relating to such restrictions, and to achieve other good
faith business interests of Replay. Each End User sublicense shall be granted
in an End User License
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Agreement which shall include, at minimum, the End User Restrictions, and which
also expressly provides that (i) the End User's sublicense to use the Replay
Device Software is solely for such End User's personal or internal business
purposes; (ii) Replay may terminate such End User License Agreement upon written
notice of failure by such End User to comply with the terms of such End User
License Agreement, and (iii) Replay shall be a third party beneficiary of the
End User License Agreement, and the provisions of such End User License
Agreement shall be enforceable by Replay and/or MKE.
3.2 Replay Intellectual Property (other than Software) License
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Subject to the terms and conditions of this Agreement, and during the
Term and thereafter, Replay grants to MKE and its Affiliates a [***] license
under all of Replay Intellectual Property Rights relating to the ReplayTV 3000
Product (excluding any Replay software contained therein, which shall be
licensed solely as set forth in Section 3.1) to (i) design, develop, use,
manufacture and have manufactured worldwide MKE Products, and (ii) market,
import, sell and distribute in the Territory MKE Products. MKE may sublicense
such rights to MEI or any MEI Affiliate and may market, import, sell and
distribute MKE Products through MEI or any MEI Affiliate.
3.3 Sublicenses to MEI and MEI Affiliates
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All permitted sublicenses granted by MKE to MEI and MEI Affiliates
pursuant to this Section 3 and as otherwise provided in this Agreement are
conditioned upon MEI's and such MEI Affiliates' express acknowledgement of, and
agreement to abide by, the restrictions imposed on MKE pursuant to this Section
3 and Section 4.4.
4. MANUFACTURING.
4.1 General.
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(a) During Phase One, ReplayTV 3000 Products purchased by MKE from
Replay shall be manufactured by Replay's third party contract manufacturer in
accordance with the OEM Agreement.
(b) MKE will reasonably assist Replay in obtaining low pricing for
components used in the manufacture of ReplayTV 3000 Products. Provided that such
assistance shall not require MKE's participation in any negotiations with third
parties.
(c) Replay agrees to indemnify and hold harmless MKE, MEI and MEI
Affiliates and their respective contract manufacturers from any and all
liabilities, damages, settlements, costs and expenses (including reasonable
attorney's fees) that may arise as a result of any claim of trade secret
misappropriation by any of Replay's third party contract manufacturers of
ReplayTV 3000 Products in connection with the design, development, manufacture,
marketing, importation, sale or distribution of MKE Products as permitted under
this Agreement.
4.2 Manufacture by MKE.
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(a) General. Subject to the terms and conditions of this Agreement,
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MKE shall have the [***] license to manufacture and have
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manufactured the MKE Products (i) under the Panasonic(R) brand name, (ii) if
requested by Replay, under the Replay brand name, and (iii) under any private
label brand name.
(b) Under Replay Brand. If Replay orders any MKE Products from MKE and
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MKE accepts such order (provided that MKE shall not unreasonably reject Replay's
order), MKE will manufacture such MKE Products for Replay at prices that are
competitive to those offered to PCEC or any other third party (other than
another MKE Affiliate) under substantially similar terms and conditions,
including, without limitation, volume of purchase, specifications, types of
distribution channels used and payment terms. Such orders for MKE Products by
Replay shall be subject to the economic terms of Section 10 below.
(c) Under Private Label.
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(i) Subject to the terms and conditions of this Agreement,
including the license grants in Section 3 above, MKE shall have, solely during
the Initial Term, [***] right and license to sell, within the Territory, private
label MKE Products manufactured by or for MKE to and on behalf of OEMs,
including, without limitation, distributors, mass merchants, consumer
electronics companies, computer companies or any other types of companies or
businesses. Nothing in this Section 4.2(c) shall limit or restrict Replay's
rights to sell, manufacture or have manufactured products under private label
for any third party or OEM.
(ii) MKE is solely responsible for negotiating the terms of
the agreement with any such OEM, including, without limitation, product pricing,
revenue sharing and the procurement process; provided, however, that any such
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agreement shall contain provisions that shall protect and preserve Replay's
Intellectual Property Rights to at least the same levels as protected by this
Agreement (including without limitation Sections 3.1.3 and 3.1.4 hereof), and
the provisions of Section 7.2 and Replay shall be a third party beneficiary to
any such agreement in connection with the foregoing.
(iii) MKE shall comply with Replay's requirements as set forth
in Section 9.3 below regarding MKE's use of the Replay logo, and shall impose
such limitations on any OEM hereunder.
(iv) Replay agrees to extend the Subsidy payable to MKE as set
forth in Section 10 below to include all private label MKE Products manufactured
by or for MKE and sold by OEMs pursuant to this Section 4.2(c); provided,
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however, that (a) any such Subsidy shall be paid solely to MKE and not directly
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to any OEMs, and (b) MKE will not, without Replay's prior written approval,
enter into any private label agreement with any third party that has an existing
OEM or similar agreement with Replay. Replay will not, without MKE's prior
written approval, enter into any OEM or similar agreement with any third party
that has an existing private label agreement with MKE.
(v) If any third party that has previously entered into an
OEM or similar agreement with Replay requests that MKE perform contract
manufacturing of ReplayTV Products on its behalf, both Replay and MKE agree to
negotiate with such OEM to establish the necessary terms and conditions of such
agreement among the parties. MKE will not, without Replay's prior written
approval, enter into any contract manufacturing arrangement with such third
party.
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(vi) Product modifications to MKE Products that are requested
by such OEMs and that relate to the RTVS, Replay Driver Software or Replay
Device Software shall be forwarded to Replay by MKE.
4.3 Most Favored Agreement.
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In the event that Replay enters into an agreement during the term of
this Agreement with any third party in which, taken together, the (a) [***] and
(b) [***], are more favorable than the comparable [***] offered to MKE under
this Agreement for substantially similar products sold during similar time
periods under substantially similar terms and conditions, including, without
limitation, volume of purchase, specifications and functionality, types of
distribution channels used and payment terms, considered in the aggregate ("More
Favorable Agreement"), Replay will notify MKE of the above terms of such More
Favorable Agreement in writing no later than [***] after such More Favorable
Agreement is granted to such third party. If MKE notifies Replay in writing
within [***] thereafter, the parties agree to amend this Agreement [***]
provisions, taken together, with the corresponding provisions in the More
Favorable Agreement. The above amendment to the Agreement shall become effective
as of the effective date of the More Favorable Agreement. MKE shall be entitled
to have a third party auditor reasonable acceptable to Replay, upon reasonable
prior notice and not more than twice per calendar year, to review Replay's
agreements with third party OEMs for the purpose of verifying compliance with
this Section 4.3.
4.4 Specifications; Gold Master; Testing.
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(a) Specifications. All MKE Products shall comply fully with the
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Reference Specification and applicable Product Specification. Replay may, from
time to time and upon [***] days' written notice to MKE, revise the Reference
Specification for MKE Products. If such revisions relate to software, within
[***] days after such revised Reference Specification is provided to MKE (or
such other time period as may be mutually agreed by the parties), all MKE
Products manufactured by or on behalf of MKE shall conform to such revised
Reference Specification. If such revisions relate to hardware, within [***] days
after such revised Reference Specification is provided to MKE (or such other
time period as may be mutually agreed by the parties), all MKE Products
manufactured by or on behalf of MKE shall conform to such revised Reference
Specification. If the Reference Specification embodies any MKE Intellectual
Property Rights, Replay and MKE shall negotiate in good faith to determine a
reasonable one-time license fee to be charged to other OEMs manufacturing
products conforming thereto. In the event the Reference Specification embodies
any other OEM or third party Intellectual Property Rights, MKE shall pay a
reasonable one-time license fee to manufacture MKE Products conforming thereto.
(b) Gold Master. All MKE Products shall contain a hard disk or memory
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device installed with the contents of the then-current version of the Gold
Master supplied to MKE by Replay. Replay shall determine the pre-configured hard
drive content of such Gold Master, including, without limitation, initial Replay
channels, zones and promotions. In addition, Replay shall determine and may
periodically change (subject to the reasonable
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approval of MKE) the amount of hard disk drive space to be reserved for future
RTVS programming ("Reserved Capacity") and provide such information to MKE
promptly in writing. MKE shall not promote such Reserved Capacity as hard disk
drive space available to End Users of MKE Products. Replay may, from time to
time modify the Gold Master and provide a new version thereof to MKE. Within
[***] days after receipt of such Gold Master, MKE shall ensure that all MKE
Products manufactured thereafter have hard disks or memory devices loaded with
the new Gold Master Version. MKE shall not modify, add or remove any software,
content or other material to or from any Gold Master.
(c) Testing and Quality Assurance. MKE shall notify Replay in writing
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at least [***] days in advance of providing Replay with any new MKE Product that
MKE desires be tested for commercial release, and [***] days or such lesser
agreed upon time period for any modifications or improvements to any existing
MKE Product to be so tested. MKE shall provide Replay an agreed upon number of
units of such MKE Product necessary for Replay's testing and quality assurance,
including full compliance and operation with the Replay Device Software, Replay
Server Software and the RTVS. Replay shall conduct such testing within [***]
days after receipt of such units, and shall notify MKE in writing of the results
of such tests. In the event that any unit fails such Replay testing and quality
assurance, the parties will meet to coordinate a review and analysis of the
problems discovered by Replay. MKE shall not ship any new MKE Product until
Replay determines that such product meets such testing and quality assurance.
(d) Proposed Software Modifications. MKE may propose modifications or
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improvement to the Gold Master, the Replay Driver Software and the Replay Device
Software. After suitable testing and quality assurance, Replay may incorporate
such modifications or improvements into the Gold Master, the Replay Driver
Software or Replay Device Software, as appropriate, provided that such testing
and incorporation of any modification or improvement (other than to the Replay
Device Software, changes to which shall be at Replay's sole discretion) shall
not be unreasonably withheld by Replay. MKE shall not ship any MKE Product with
such modifications or improvements except as permitted pursuant to this Section
4.4.
(e) Restrictions. MKE, acknowledges and agrees that Replay is the
------------
sole entity entitled to transmit or have downloaded (over any network or other
dialup connection) any software, content or other material, or any improvement
or modification thereto, to the Gold Master or any hard disk or memory device
contained in any MKE Product. MKE shall not, directly or through any third
party, MEI or MEI Affiliate, transmit or have downloaded any such software,
content or other material, or any improvement or modification thereto, without
Replay's express prior written permission. This does not affect any other rights
of MKE, MEI and MEI Affiliate to install any software, content or other
materials into MKE Products using Gold Master as permitted pursuant to this
Agreement.
4.5 API Development.
---------------
Replay will use its best efforts to develop and document mutually
agreed upon Replay Device Software APIs reasonably necessary for the development
of MKE Products that combine Replay Technology with other features and
functionality developed or provided by MKE. In the event that MKE experiences
significant difficulty in utilizing such APIs in connection with the development
of such products, Replay will, at MKE's request, consider in good faith
providing source code updates and modifications for the applicable portions of
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the Replay Device Software on a case-by-case basis. Any provision by Replay of
such Replay Device Software source code updates and modifications shall be
subject to the provisions of Section 3 hereof.
5. CUSTOMER SERVICE.
MKE and Replay shall work together in good faith to develop and establish
mutually acceptable customer service and support standards and processes for the
ReplayTV Products. The parties shall agree upon further details regarding this
Section 5; provided, however, that MKE will at all times be responsible for
-------- -------
providing all first level support to End Users of MKE and OEMs regarding MKE
Products and ReplayTV 3000 Products and Replay will be responsible solely for
providing second level support to MKE. First level support will be provided by
MKE, and if MKE finds that such support relates to the RTVS and should be
provided by Replay, MKE will promptly notify Replay of such support request from
End User. In such event, Replay shall be responsible for providing all first
level support to such End Users. "First level support" means telephone support,
online support and/or any required End User site visits. "Second level support"
means software bug fixes and any support requested by MKE technical personnel
providing such first level support.
6. ADDITIONAL OBLIGATIONS OF REPLAY.
6.1 RTVS Programming. Replay shall maintain and support, and continue
----------------
development and expand the availability of, the RTVS for use in connection with
ReplayTV Products.
6.2 Replay agrees that, at MKE's request, it shall reasonably negotiate
with MKE in good faith with respect to granting MKE a license to Replay
Technology (including, without limitation, Replay Device Software and Replay
Driver Software) and Replay Intellectual Property Rights for use in geographic
regions where the RTVS is not available.
6.3 Favorable Terms for MKE. Replay agrees to provide certain favorable
-----------------------
terms to MKE, including, without limitation, the following:
(a) Replay agrees to provide MKE with a road map of the RTVS,
products, software and other related information in the earliest possible
timeframe.
(b) Replay agrees that MKE shall have exclusivity of any and all MKE
Features for a minimum period of [***] after the commercial launch of the first
commercially released MKE Product; and
(c) Replay agrees to reasonably provide support to MKE for original or
exclusive features designed or developed by or for MKE and incorporated into any
ReplayTV Products; provided, however, that (i) nothing in this Section 6.3(c)
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shall obligate Replay to devote engineering efforts to such support except to
the extent Replay agrees in writing in advance; and (ii) to the extent such
features require additional hardware, additional bandwidth, or third party
licenses or software, MKE shall reimburse Replay for reasonable expenses
incurred in connection with developing and/or procuring the same, provided that
Replay first obtains MKE's prior written approval of such expenses. The period
of Replay's obligation to support such features shall be negotiated by the
parties in good faith and mutually agreed upon on a case-by-case basis.
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7. ADDITIONAL RESTRICTIONS.
7.1 Except as expressly provided in Section 7.2 below, nothing in this
Agreement or otherwise shall be deemed or construed to prohibit or restrict MKE,
MEI or any MEI Affiliates from designing, developing, using, manufacturing,
having manufactured, marketing, importing, selling or distributing any products
that are or may be competitive with any ReplayTV Products; provided, however,
-------- -------
that (a) such products do not incorporate any Replay Technology or Replay
Intellectual Property, and that no access to, or use of, any Replay Confidential
Information relating to such Replay Technology or Replay Intellectual Property
is made in connection with the design or development of such products, and (b)
no person who has or has had access to any Replay software source code
(excluding Replay Driver Software source code) is involved in the design or
development of such products during the Term of this Agreement and for a period
of [***] thereafter.
7.2 During the Term of this Agreement, MKE shall not enter into any
agreement with any third party to design, develop, market or distribute any
products that support, or are compatible with, (i) a Competitive Service, or
(ii) [***]. The determination of whether a service is a Competitive Service
shall be made as of the effective date of any agreement between MKE or MKE
Affiliate and such service provider. Notwithstanding the foregoing, nothing in
this Section 7.2 shall preclude MKE from providing components or contract
manufacturing for products that support or are compatible with the [***];
provided, however, that no MKE employee who has or has had access to Replay
- -------- -------
Technology (including Replay software source code), or is or has been involved
in the design or development of ReplayTV Products will be involved in the
provision of components or contract manufacturing for products that support or
are compatible the [***] or a Competitive Service.
7.3 Nothing in this Agreement or otherwise shall be deemed or construed to
prohibit or restrict MKE, MEI or MEI Affiliates from designing, developing,
making, using, manufacturing, having manufactured, marketing, importing, selling
or distributing any components that were designed, developed, derived, used or
manufactured in the course of the development of any ReplayTV Products, except
to the extent that (a) any such components embody any Replay Technology or
Replay Intellectual Property, or (b) any person who has or has had access to any
Replay software source code (excluding Replay Driver Software source code) is
involved in the design or development of such components.
8. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS. As between the parties:
8.1 Except as provided in Section 8.5 below, any and all inventions
independently discovered, conceived, or reduced to practice by a party in the
course of development of any ReplayTV Products and any and all Intellectual
Property Rights in and to such inventions shall be owned solely by the party who
independently discovered, conceived, or reduced to practice such invention.
8.2 Except as provided in Section 8.5 below, any and all inventions
jointly discovered, conceived, or reduced to practice by both parties in the
course of development of any ReplayTV Products and any and all Intellectual
Property Rights in and to such inventions shall be owned jointly by both
parties; provided, however, that each party contributed
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engineering resources to such joint inventions. Each party shall have the right
to use or non-exclusively license such jointly owned inventions and any
Intellectual Property Rights thereto without a duty to report or account to the
other party.
8.3 Except as provided in Section 8.5 below, any and all copyrightable
works (including, without limitation, all computer software) independently
created by a party in the course of development of any ReplayTV Products and any
and all Intellectual Property Rights in and to such copyrightable works shall be
owned solely by the party who independently created such copyrightable work.
8.4 Except as provided in Section 8.5 below, any and all copyrightable
works jointly created by both parties in the course of development of any
ReplayTV Products and any and all Intellectual Property Rights in and to such
copyrightable works shall be owned jointly by both parties. Each party shall
have the right to use or non-exclusively license such jointly-owned
copyrightable works and any Intellectual Property Rights thereto without a duty
to report or account to the other party.
8.5 Notwithstanding anything else in this Section 8 or otherwise in this
Agreement, all Intellectual Property Rights in and to the RTVS, Replay Server
Software and Replay Device Software, and any modifications or improvements
thereto, whether made by Replay or MKE or jointly by Replay and MKE, shall be
owned solely by Replay.
8.6 Subject to Replay's ownership of Replay Technology and Replay
Intellectual Property Rights, including without limitation its ownership rights
pursuant to Section 8.5, and notwithstanding anything else in this Agreement,
all MKE Products and all Intellectual Property Rights in and to MKE Products
shall be owned solely by MKE.
8.7 Replay acknowledges and agrees that MKE may assign to MEI its
ownership interest in any inventions jointly owned by MKE and Replay hereunder
and the right to apply for, prosecute and maintain any patents therefor. Replay
agrees to reasonably cooperate with MEI and to provide MEI with necessary
assistance, at MEI's sole expense, in connection with the preparation and
prosecution of such patent applications. MKE agrees to reasonably cooperate
with Replay and to provide Replay with necessary assistance, at Replay's sole
expense, in connection with the preparation and prosecution of any Replay patent
applications.
8.8 MKE shall own any and all intellectual property rights in all
modifications or improvements made by MKE to the Replay Driver Software. If
such MKE Intellectual Property Rights are incorporated into the Reference
Specification, then MKE hereby grants Replay a license with sublicense rights in
accordance with Section 4.4(a). For the avoidance of doubt, the foregoing
ownership rights are expressly limited to those modifications or improvements to
the Replay Driver Software made by MKE, and expressly excludes any ownership of
the Replay Driver Software. In no event shall MKE use or incorporate any Replay
Driver Software modified by MKE in products other than ReplayTV Products.
Nothing in this Section 8.8 shall preclude Replay or any Replay OEM from
independently developing modifications or improvements to the Replay Driver
Software that are substantially similar to those developed by MKE.
9. MARKETING.
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9.1 Sales; Brand. Subject to the license grants in Section 3, MKE shall
------------
have the right to market, import, sell and distribute ReplayTV Products itself
or through MEI or any MEI Affiliates to customers (including, without
limitation, OEMs, resellers and end users) using its normal channels of
distribution. Subject to Sections 9.2 and 9.3 below, such ReplayTV Products
shall be marketed, sold and distributed under the Panasonic(R) brand name.
9.2 OEM Sales. Subject to the license grants in Section 3, MKE, MEI and
---------
MEI Affiliates shall have the right to market, import, sell and distribute
within the Territory to OEMs any private labeled MKE Products manufactured by or
for MKE.
9.3 Replay Logo and Trademark License. For all ReplayTV Products
---------------------------------
marketed, imported, sold or distributed by MKE, MEI or MEI Affiliates, MKE shall
affix or cause to be affixed the Replay logo (in such format as Replay provides
to MKE) on such ReplayTV Products and on related user interface, packaging and
advertising materials in accordance with MEI's and Replay's rules and standards
and in a manner mutually acceptable to both parties. Replay hereby grants to
MKE a [***] license to use (with a right to sublicense to third parties,
including, without limitation, MEI, MEI Affiliates and third party contract
manufacturers ("Sublicensees")), the Replay logo and related Replay trademarks
(collectively, "Marks") in connection with the ReplayTV Products, including,
without limitation, packaging and user interface and any other materials in
connection with the manufacture, marketing, importation, sale and distribution
of ReplayTV Products. MKE agrees, and shall cause its Sublicensees to agree,
that (a) all advertisements, promotional materials, packaging and user interface
and any other materials bearing the Marks shall identify Replay as the owner of
the Marks, (b) all use of the Marks by MKE or its Sublicensees shall inure to
the benefit of Replay, and (c) all use of the Marks by MKE or its Sublicensees
are subject to Replay's reasonable quality control requirements (which
requirements Replay shall promptly provide to MKE). MKE shall, and shall cause
its Sublicensees to, upon Replay's reasonable prior written request, provide
Replay with samples of use of the Marks by MKE or its Sublicensees in connection
with ReplayTV Products for the sole purpose of allowing Replay to verify quality
control compliance in accordance with Replay's quality control requirements that
Replay has provided to MKE as set forth above.
9.4 Promotion and Advertising.
-------------------------
(a) MKE and Replay shall reasonably cooperate in good faith to
jointly market and promote the RTVS and MKE Products. The parties understand and
agree that MKE shall be primarily responsible for promoting MKE Products, and
Replay shall be primarily responsible for promoting RTVS, and each party shall
respect the role and responsibility of the other party.
(b) MKE, through MEI Affiliates, will commit a minimum of [***] to
promote and advertise the ReplayTV Products sold or to be sold under the
Panasonic(R) brand before the first shipment or during the first [***] following
the first shipment of a ReplayTV Product to MKE under the OEM Agreement.
(c) MKE and Replay shall discuss in good faith and mutually agree
upon further details regarding this Section 9.4.
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10. ECONOMIC TERMS.
10.1 Subsidy. MKE shall be entitled to a mutually agreed upon product
-------
subsidy ("Subsidy") paid by Replay in connection with those MKE Products that
are shipped by or on MKE's behalf during the Term of this Agreement. The intent
of both parties when negotiating the Subsidy during the Initial Term is that
[***]. Such intention is subject to MKE's obligation to manufacture and operate
efficiently, and MKE's Affiliates' efficient and effective distribution,
marketing and sales of such MKE Products.
10.2 Subsidy Negotiation. Replay and MKE shall meet [***] to
-------------------
negotiate in good faith a mutually agreed upon Subsidy to be paid to MKE for
each MKE Product model sold during a subsequent [***] period, up to an agreed
upon [***], and a [***]. The parties will meet approximately [***] in advance of
the beginning of such period for such negotiations. The parties shall determine
the amount of the Subsidy by considering, at a minimum, for such MKE Product
model: (a) [***], (b) [***], and (c) [***]. In the event that [***], the parties
agree to have further discussions regarding the Subsidy.
10.3 Payment Terms. All payments for MKE Products made by Replay to MKE
-------------
during the Initial Term shall be made by irrevocable Letter of Credit ("LC") at
[***] prior to the shipment date (payment terms FOB Japan) of each Purchase
Order issued hereunder. After the Initial Term, Replay shall make reasonably
commercial efforts to reduce the payment terms from [***]. Payment for MKE
Products to be purchased by MKE or an Affiliate and paid to Replay shall be due
the [***] following the [***] that Replay's invoice has issued and delivered to
MKE or an Affiliate. All payments hereunder shall be made in U.S. dollars.
10.4 Revenue Share. MKE shall be entitled to a mutually agreed upon
-------------
[***] received by Replay solely in connection with those MKE Products that are
shipped by or on MKE's behalf after the Initial Term [***]. The amount, duration
and other terms of such [***] and an appropriate Subsidy shall be mutually
agreed upon by the parties. MKE agrees to waive any [***] in connection with any
MKE Products shipped during the Initial Term.
11. BOOKS AND RECORDS; AUDITS. Each party shall keep complete and accurate
books and records relating to the manufacture, distribution and sale of ReplayTV
Products and the calculation of the applicable Subsidy and/or [***] for MKE
Products for the duration of Term plus one (1) year ("Audit Period"). During the
Audit Period, a party ("Auditing Party") shall have the right, upon prior
written notice and no more than once a year, to inspect the books and records of
the other party ("Audited Party") relating solely to the manufacture,
distribution and sale of ReplayTV Products and the applicable Subsidy
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and/or [***] under Section 10 during the Audited Party's normal business hours,
using an independent certified public accountant retained by the Auditing Party
and reasonably acceptable to the Audited Party, for the purpose of verifying any
reports, information or payments provided or due hereunder and verifying
compliance with the material terms and conditions of this Agreement. Such
independent certified public accountant shall be bound to hold all information
in confidence except as necessary to communicate to the Auditing Party the
Audited Party's underpayment of payments, inaccurate reports or information
and/or noncompliance with any material terms or conditions of this Agreement.
The fees and expenses of such inspection/audit shall be paid by the Auditing
Party; however, if an underpayment of more than five percent (5%) of the total
payments due to the Auditing Party hereunder for any calendar year is
discovered, then such fees and expenses shall be paid by the Audited Party, and
the Audited Party shall promptly pay to the Auditing Party all such delinquent
payment amounts with interest thereon at the prime rate reported by the Bank of
America, San Francisco, California, plus one percent (1%), computed from the
date such payments were due until the date the Audited Party actually pays the
Auditing Party such payments.
12. CONFIDENTIALITY.
12.1 Each party agrees that confidential information it obtains from the
other party under this Agreement, including, without limitation, Technology,
trade secrets, patent applications, and business, technical and financial
information ("Confidential Information") is Confidential Information of the
disclosing party ("Discloser"). Without limiting the foregoing, the parties
agree that (a) information obtained by Replay via the RTVS that is specific MKE
or PCEC's sales or business activity (excluding any information specific to
purchasers of ReplayTV Products) is MKE Confidential Information, and (b) all
Replay software (source code and object code) and information relating to RTVS
net revenues is Replay Confidential Information. The receiving party
("Recipient") agrees to (i) keep the Discloser's Confidential Information
confidential, (ii) use the Discloser's Confidential Information only for the
purposes of fulfilling its obligations under this Agreement, (iii) use at least
the same degree of care in keeping the Discloser's Confidential Information
confidential as its uses for its own confidential information of a similar
nature, and (iv) limit access to the Discloser's Confidential Information to its
officers, directors, agents, professional advisors, contractors, subcontractors
and employees and to the officers, directors, agents, professional advisors,
contractors, subcontractors and employees of its Affiliates who have a need to
know for the purposes of this Agreement.
12.2 Confidential Information in tangible form is now and shall at all
times be conspicuously labeled by the Discloser as "Confidential" or similar
designation. If the Confidential Information is disclosed orally, it must be
specifically designated by the Discloser as Confidential Information at the time
of disclosure and confirmed in writing by the Discloser to be Confidential
Information. Such written confirmation shall be provided to the Recipient
within twenty (20) business days following such oral disclosure.
12.3 The obligations under this Section 12 shall not extend to any
information that the Recipient can document:
(a) was in the public domain at the time it was disclosed or becomes
part of the public domain after disclosure through no fault of the Recipient or
its employees or agents;
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(b) was known to the Recipient at the time of its disclosure or
becomes known to it without breach of this Agreement, as evidenced by
contemporaneous written records;
(c) is independently developed by the Recipient, as evidenced by
contemporaneous written records;
(d) is disclosed by the Discloser to a third party without
restriction on such third party's rights to disclose or use the same;
(e) is approved for release upon the Discloser's prior written
consent;
(f) is disclosed by Recipient pursuant to judicial order, a
requirement of a governmental agency or by operation of law, provided that the
Recipient gives the Discloser prompt written notice of any such requirement.
12.4 This Section 12 shall survive termination or expiration of the
Agreement for a period of [***].
13. TERM AND TERMINATION.
13.1 Term. This Agreement shall commence as of the Effective Date and
----
shall continue in effect for a period of [***] ("Initial Term"),
unless terminated earlier pursuant to this Agreement.
13.2 Renewal. Following the Initial Term, this Agreement may, at MKE's
-------
sole option, be renewed for one additional [***], provided that MKE gives at
least [***] written notice prior to the expiration of the Initial Term.
Thereafter, in the event either party wishes to renew this Agreement, such party
will provide the other party with [***] written notice prior to the expiration
of the Initial Term or then current renewal term, and the parties agree to
negotiate in good faith for a period of up to [***] in an attempt to renew this
Agreement on terms mutually acceptable to both parties, which renewal, if any,
shall be set forth in writing and signed by both parties. The foregoing renewal
option and procedure shall apply to any and all additional renewal terms.
13.3 Termination.
-----------
(a) This Agreement may be terminated in its entirety by either party
immediately upon the occurrence of any the following events:
(i) if the other ceases to do business, or otherwise terminates
its business operations;
(ii) if the other shall fail to promptly secure or renew any
license, registration, permit, authorization or approval necessary for the
conduct of its business in a manner contemplated by this Agreement, or if any
such license, registration, permit, authorization or approval is revoked or
suspended and not reinstated within [***] or if reinstatement is not possible
within [***],diligent efforts are not being made to effect such reinstatement;
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(iii) if the other materially breaches any material provision of
this Agreement and fails to cure such breach within [***] after receiving
written notice from the non-breaching party describing such breach; or
(iv) if the other shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other (and not
dismissed within [***]).
(b) This Agreement may be terminated by MKE in its absolute and sole
discretion without cause for any reason upon at least [***] days' prior written
notice to Replay. In the event of such termination by MKE, and notwithstanding
any other provision in this Agreement, (a) all license rights granted to MKE
hereunder shall terminate immediately (including all object code and source code
software licenses), (b) MKE shall cease any and all use of Replay Technology and
Replay Intellectual Property, including without limitation any development,
manufacture or sale of any products or components containing or embodying Replay
Technology or Replay Intellectual Property (excluding, for a period of [***]
after such termination, the manufacture and distribution of those components
necessary for the provision of spare parts for MKE Products to purchasers of
such products prior to termination of this Agreement), and (c) for a period of
[***] from the date of such termination, MKE shall not enter into any
discussions or agreements relating to the development or manufacture of any
products that support or are compatible with any Competitive Service or [***]
(except as expressly permitted under Section 7.2). The determination of whether
a service is a Competitive Service shall be made as of the effective date of any
agreement between MKE or MKE Affiliate and such service provider.
13.4 No Liability for Termination. Neither party shall incur any liability
----------------------------
whatsoever for any damages, loss or expenses of any kind suffered or incurred by
the other (or for any compensation to the other) arising from or incident to any
termination of this Agreement pursuant to Section 13.3 above, whether or not
such party is aware of any such damages, loss or expenses.
13.5 Effect of Termination. Upon expiration or any termination of this
---------------------
Agreement, all licenses granted by Replay hereunder shall immediately terminate
(excluding any End User Licenses), and MKE shall promptly return to Replay all
copies of any software source code, together with any modifications,
improvements and documentation relating thereto. Replay shall continue
supporting the RTVS and all End Users of ReplayTV Products as provided in this
Agreement. The following provisions shall survive the expiration or any
termination of this Agreement: Sections 1, 4.4(a), 4.4(b), 4.4(e), 5, 6.1, 7, 8,
10, 11, 12, 13.3 (b), 13.4, 13.5, 13.6, 13.7, 14.4, 15, 16, 19 and 20. Remedies
for all breaches hereunder will also survive. Each party will promptly return
all Confidential Information of the other party (and all copies and abstracts
thereof) that it is not entitled to retain under the surviving terms of this
Agreement.
13.6 Termination Not Sole Remedy. Termination is not the sole remedy under
---------------------------
this Agreement and, whether or not termination is effected, all other remedies
will remain available.
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13.7 OEM Agreement Option. Unless this Agreement is terminated by Replay
--------------------
pursuant to Section 13.3(a), or by MKE pursuant to Section 13.3(b), MKE shall
have the right, for a period of [***] to enter into an OEM Agreement with Replay
for the manufacture and distribution of MKE Products, on terms and conditions
comparable to those terms and conditions generally offered by Replay to its
other OEMs at the time.
14. REPRESENTATIONS AND WARRANTIES.
14.1 Replay Warranties. Replay represents and warrants that as of the
-----------------
Effective Date (a) it has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein, (b) it has not
previously granted and will not grant any rights in conflict with this
Agreement, and (c) to the best of Replay's knowledge, no third party has
asserted any claim or demand that the Replay Intellectual Property or Replay
Technology infringes any third party Intellectual Property Rights or other
proprietary rights.
14.2 MKE Warranties. MKE represents and warrants that as of the Effective
--------------
Date (a) it has the full right and authority to enter into this Agreement and
grant the rights granted herein, and (b) it has not previously granted and will
not grant any rights in conflict with this Agreement.
14.3 Other Warranties. Each party represents and warrants that it will
----------------
comply with all applicable laws, regulations and rules in connection with its
obligations and performance under this Agreement.
14.4 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED ABOVE IN
------------------------
SECTIONS 14.1, 14.2 14.3 AND 15, REPLAY AND MKE EACH EXPRESSLY DISCLAIM ANY
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THIS
AGREEMENT AND ALL ACTIVITIES HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR
NONINFRINGEMENT.
15. INDEMNIFICATION.
15.1 By Replay. Replay shall indemnify, defend and hold harmless MKE, and
---------
its Affiliates, officers, directors, employees and agents ("MKE Indemnified
Parties"), from and against all loss, harm and liability, including, without
limitation, all costs, damages, settlements, claims, suits and expenses
(including reasonable attorneys' fees) incurred by any MKE Indemnified Party
arising out of or resulting from: (a) any claim for property damage, personal
injury or death caused by any action or omission by Replay in performing its
obligations under this Agreement; or (b) any claim that any of Replay Technology
or Replay Intellectual Property Rights including, without limitation, the RTVS,
the Replay Server Software, Replay Driver Software, the Replay Device Software
or any ReplayTV Products (except to the extent such claim is based on a ReplayTV
Product (or a portion or component thereof) developed, modified or improved by
or for MKE (other than by Replay)) infringes any third party Intellectual
Property Rights; provided that MKE shall provide Replay with prompt written
notice of any claim for which it seeks indemnification under this Section 15,
Replay shall have sole control of the defense and any settlement of any such
claim, and MKE shall reasonably cooperate and provide reasonable assistance in
connection with the defense or settlement of any such claim.
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15.2 By MKE. MKE shall indemnify, defend and hold harmless Replay, and its
------
Affiliates, officers, directors, employees and agents ("Replay Indemnified
Parties"), from and against all loss, harm and liability, including, without
limitation, all costs, damages, settlements, claims, suits and expenses
(including reasonable attorneys' fees) incurred by any Replay Indemnified Party
and arising out of or resulting from: (a) any claim for property damage,
personal injury or death caused by any action or omission by MKE in performing
its obligations under this Agreement; or (b) any claim that the MKE Products
infringe any third party Intellectual Property Rights, except where such claim
arises solely as a result of the Replay Technology or Replay Intellectual
Property Rights; provided that Replay shall provide MKE with prompt written
notice of any claim for which it seeks indemnification under this Section 15,
MKE shall have sole control of the defense and any settlement of any such claim,
and Replay shall reasonably cooperate and provide reasonable assistance in
connection with the defense or settlement of any such claim.
15.3 Options. In the event of any allegation of infringement of any third
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party Intellectual Property Right which is subject to indemnification under this
Section 15, the indemnifying party shall have the right, in its sole discretion,
to (a) obtain a license from the third party; (b) defend against such allegation
through final judgment and all timely filed appeals; and/or (c) redesign the
allegedly infringing products in order to avoid infringement, in which case the
indemnified party shall use diligent commercial efforts to immediately cease use
and distribution of all such allegedly infringing products and commence use of
the redesigned product, provided that such redesigned product provides
substantially similar functionality and is of substantially similar quality as
the allegedly infringing product, but in no event of less quality than the
former product. In the event Replay does not take action under (a),(b) or (c)
above in a reasonable time, MKE shall, at its sole discretion, have a right to
terminate this Agreement.
15.4 Limitations. Notwithstanding the foregoing, neither party shall have
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any indemnification obligations pursuant to this Section 15 with respect to any
claim arising from (a) the combination, operation or use of the such party's
Technology or Intellectual Property Rights with other products, software or
materials not furnished by such party where such party's Technology or
Intellectual Property Rights would not themselves be infringing; or (b) the
modification or improvement of such party's Technology or Intellectual Property
Rights by the other party or any third party.
16. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT
OR OTHERWISE, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER
PERSON OR ENTITY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR
(I) ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR (II) LOST
PROFITS, LOST BUSINESS OR LOST DATA, EVEN IF THE REMEDIES PROVIDED FOR IN THIS
AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF EITHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES. EXCEPT FOR EACH
PARTY'S OBLIGATIONS UNDER SECTION 15 (INDEMNIFICATION), ANY BREACH OF SECTION 12
(CONFIDENTIALITY), OR BREACH OF ANY LICENSES GRANTED PURSUANT TO SECTION 3, EACH
PARTY'S LIABILITY FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT,
TORT (INCLUDING NEGLIGENCE),
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STRICT LIABILITY OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED,
TEN MILLION U.S. DOLLARS ($10,000,000).
17. ASSIGNMENT. Except as otherwise provided in this Agreement, neither party
may transfer or assign this Agreement nor the rights and obligations hereunder
(by operation of law or otherwise) without the prior written consent of the
other party; Notwithstanding the foregoing, no consent shall be required for any
assignment in connection with any merger, acquisition, sale or transfer of all,
or substantially all of a party's stock, assets or business to which this
Agreement relates; provided, however, that in the event of any acquisition of
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Replay by an entity that derives at least fifty percent (50%) of its gross
revenues from home electronics products, MKE shall have the right to terminate
this Agreement upon [***] prior written notice if MKE and such entity cannot
resolve any problems or issues relating to the continuation of this Agreement
within three (3) months after the date of such assignment. The terms and
conditions of this Agreement shall bind and inure to each party's successors and
permitted assigns.
18. PUBLICITY AND PRESS RELEASES. Except to the extent necessary under
applicable laws or regulations or for ordinary marketing purposes, the parties
agree that no press releases or other publicity relating to the substance of the
matters contained herein will be made without approval by both parties. A press
release announcing this Agreement will be jointly drafted and released by the
parties.
19. SOURCE CODE ESCROW.
19.1 Escrow. Within [***] after the Effective Date, Replay
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shall deposit with Data Securities International, Inc. ("Escrow Agent") the
------------
source code to the Replay Device Software and Replay Driver Software ("Escrow
------
Materials") pursuant to the terms of an escrow agreement to be entered into
- ---------
among MKE, Replay, and the Escrow Agent. At the end of each calendar quarter
thereafter, Replay shall deposit any updates or improvements to the Escrow
Materials completed during such calendar quarter. Replay shall be responsible
for establishing and maintaining the escrow account.
19.2 Release of Escrow Materials. In the event that (i) Replay files
---------------------------
for or becomes a party to any involuntary bankruptcy or receivership, and such
involuntary proceeding is not dismissed within [***] after filing; or (ii)
Replay commences liquidation proceedings or generally ceases doing business, a
"Release Event" shall be deemed to have occurred.
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19.3 Release Procedure. Upon the occurrence and continuation of a
-----------------
Release Event, MKE will notify the Escrow Agent. The Escrow Materials will be
released for use by MKE, subject to the terms and conditions hereof, only after
notice of such Release Event from the Escrow Agent to Replay and Replay's
failure to declare in writing to the Escrow Agent within [***] that no Release
Event has occurred. If Replay makes such written declaration, then the issue of
whether a Release Event has occurred and is continuing shall be submitted to
arbitration in Santa Clara County, California, under the Commercial Arbitration
Rules of the American Arbitration Association by one (1) arbitrator appointed in
accordance with said Rules. Judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The costs of the
arbitration, including administrative and arbitrator's fees, shall be shared
equally by the parties. Each party shall bear the costs of its own attorneys'
fees in connection with such arbitration.
[***] = 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.
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19.4 License. Subject to the terms and conditions of this Agreement,
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Replay hereby grants MKE a [***] right and license to use the Escrow Materials
pursuant to Section 3 hereof, which right and license MKE may exercise at any
time after the occurrence and during the continuation of a Release Event. Upon
the cessation of any Release Event, all licenses granted pursuant to this
Section 19.4 shall terminate, unless and until triggered again pursuant to this
Section 19, and MKE shall promptly return all copies of the Escrow Materials, or
any portion thereof, to Replay.
20. MISCELLANEOUS.
20.1 Export Control. The parties shall comply with the U.S. Foreign
--------------
Corrupt Practices Act and all applicable export laws, restrictions, and
regulations of any U.S. or foreign agency or authority. The parties will not
export or re-export, or allow the export or re-export of any product, technology
or information it obtains or learns pursuant to this Agreement (or any direct
product thereof) in violation of any such law, restriction or regulation,
including, without limitation, export or re-export to Cuba, Iran, Iraq, Libya,
North Korea or any other country subject to U.S. trade embargoes, or to any
party on the U.S. Export Administration Table of Denial Orders or the U.S.
Department of Treasury List of Specially Designated Nationals, or to any
prohibited destination in any of the Country Groups specified in the then
current Supplement No. 1 to part 740 or the Commerce Control List specified in
the then current Supplement to part 738 of the U.S. Export Administration
Regulations (or any successor supplement or regulations).
20.2 Amendment and Waiver. Except as otherwise expressly provided
--------------------
herein, any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or in any particular
instance and either retroactively or prospectively) only with the written
consent of the parties. However, it is the intention of the parties that this
Agreement be controlling over additional or different terms of any purchase
order, confirmation, invoice or similar document, even if accepted in writing by
both parties, and that waivers and amendments of any provision of this Agreement
shall be effective only if made by non-preprinted agreements signed by both
parties and demonstrably understood by its term to be an amendment or waiver.
The failure of either party to enforce its rights under this Agreement at any
time for any period shall not be construed as a waiver of such rights.
20.3 Governing Law and Legal Actions. This Agreement shall be
-------------------------------
governed by and construed under the laws of the State of California and the
United States without regard to conflicts of law provisions thereof and without
regard to the United Nations convention on Contracts for the International Sale
of Goods. The sole jurisdiction and venue for actions related to the subject
matter hereof shall be the California state and U.S. federal courts having
jurisdiction in Santa Clara County, California. In any action or proceeding to
enforce rights under this Agreement, the prevailing party shall be entitled to
recover reasonable costs and attorneys' fees.
20.4 Headings. Headings and captions are for convenience only and are
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not to be used in the interpretation of this Agreement.
20.5 Notices. Any notice or other communication required to permitted
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to be made or given to either party under this Agreement shall be deemed
sufficiently made or given on the date of delivery if delivered in person or by
overnight commercial courier
[***] = 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.
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service with tracking capabilities with costs prepaid, or three (3) days after
the date of mailing if sent by certified first class U.S. mail, return receipt
requested and postage prepaid, at the address of the parties set forth below or
such other address as may be given from time to time under the terms of this
notice provision:
If to MKE:
8-1 Furujin-machi, Takamatsu, Kagawa
760-0025 Japan
Matsushita-Kotobuki Electronics Industries, Ltd.
Attention: President
Telephone: 087-851-7228
Facsimile: 087-851-1047
If to Replay:
1945 Charleston Road
Mountain View, California 94303
Replay Networks, Inc.
Attention: Chief Executive Officer
Telephone: 650-210-1000
Facsimile: 650-964-4847
20.6 Severability. If any provision of this Agreement is held to be
------------
illegal or unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
20.7 Relationship of Parties. The parties hereto expressly understand
-----------------------
and agree that the other is an independent contractor in the performance of each
and every party of this Agreement and is solely responsible for all of its
employees and agents and its labor costs and expenses arising in connection
therewith. The parties are not partners, joint venturers or otherwise
affiliated and neither has any right or authority to bind the other in any way.
20.8 Force Majeure. No liability or loss of rights hereunder shall
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result to either party from delay or failure in performance caused by an event
of force majeure (that is, circumstances beyond the reasonable control of the
party affected thereby, including, without limitation, acts of God, fire, flood,
war, governmental action, compliance with laws or regulations, strikes, lockouts
or other serious labor disputes, or shortage of or inability to obtain material
or equipment) for so long as such event of force majeure continues in effect.
20.9 Remedies. Except as otherwise expressly stated in this
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Agreement, the rights and remedies of a party set forth herein with respect to
failure of the other to comply with the terms of this Agreement (including,
without limitation, rights of full termination of this Agreement) are not
exclusive, the exercise thereof shall not constitute an election of remedies and
the aggrieved party shall in all events be entitled to seek whatever additional
remedies that may be available in law or in equity.
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20.10 Basis of Bargain. Each party recognizes and agrees that the
----------------
warranty disclaimers and liability and remedy limitations in this Agreement are
material bargained for bases of this Agreement and that they have been taken
into account and reflect in determining the consideration to be given by each
party under this Agreement and in the decision by each party to enter into this
Agreement. In addition, each party acknowledges and agrees that it has not
relied upon any proposals, oral or written, negotiations, conversations,
promises or discussions between or among the parties relating to the subject
matter of this Agreement or any past dealing or industry custom not expressly
set forth in this Agreement (or the exhibits hereto), the OEM Agreement, the
Stock Purchase Agreement or the Investor's Rights Agreement.
20.11 Entire Agreement. The parties agree that this Agreement,
----------------
together with any exhibits hereto, and the OEM Agreement constitutes the entire
understanding and agreement with respect to the subject matter hereof and
supersedes all proposals, oral or written, all negotiations, conversations,
promises or discussions between or among parties relating to the subject matter
of this Agreement and all past dealing or industry custom.
MATSUSHITA-KOTOBUKI ELECTRONICS REPLAY NETWORKS, INC.
INDUSTRIES, LTD.
By: /s/ Sachihiko Hamaguchi By: /s/ Kim LeMasters
--------------------------- -----------------------------
Name: Sachihiko Hamaguchi Name: Kim LeMasters
------------------------ -------------------------
Title: President Title: Chief Executive Officer
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EXHIBIT A
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End User License Restrictions
All ReplayTV Products sold by or for MKE, including any private label MKE
Products manufactured by or for MKE on behalf of third parties pursuant to
Section 4.2 shall include an End User Software License Agreement containing
provisions at least as restrictive as the following provisions:
(1) the End User is granted a [***] license to use the Replay Driver
Software and Replay Device Software solely for its personal or internal business
purposes and solely in the geographic locations where the RTVS is supported,
subject at all times to the terms and conditions of the End User License
Agreement;
(2) Replay, MKE and their respective licensors retain all of their
respective Intellectual Property Rights in the Replay Driver Software and Replay
Device Software (including any Replay Driver Software or Replay Device Software
incorporated into any ReplayTV Product), and no title to such intellectual
property is transferred to the End User;
(3) the End User agrees to accept periodic software and content updates
that may be offered from time to time in connection with the RTVS;
(4) the End User agrees to provide name and contact information during the
initial product configuration process and for each subsequent software update.
(5) the End User agrees not to reverse assemble, decompile, or otherwise
attempt to derive source code from the Replay Driver Software and Replay Device
Software, or to remove or unbundle the Replay Driver Software or Replay Device
Software from any ReplayTV Product;
(6) the End User agrees to comply with all export and re-export
restrictions and regulations of the Department of Commerce or other agency or
authority of the United States or other applicable countries, and not to
transfer, or authorize the transfer, of the ReplayTV Products to a prohibited
country or otherwise in violation of any such restrictions or regulations;
(7) Neither Replay nor MKE shall be liable to the End User for any
indirect, consequential, incidental or special damages arising out of the use or
license of the ReplayTV Products, regardless of the theory of liability
(including contract, tort (including negligence) or strict liability).
[***] = 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.
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