<PAGE>
As filed with the Securities and Exchange Commission on February 7, 2000
Registration No. 333-95425
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
REPLAYTV, INC.
(Exact Name of Registrant as Specified in Its Charter)
---------------
<TABLE>
<CAPTION>
Delaware 4841 77-0465127
<S> <C> <C>
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
1945 Charleston Road
Mountain View, CA 94043-1201
(650) 210-1000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------
Earle H. "Kim" LeMasters, III
Chairman and Chief Executive Officer
ReplayTV, Inc.
1945 Charleston Road
Mountain View, CA 94043-1201
(650) 210-1000
(Name, Address Including Zip Code, and Telephone Number Including Area Code,
of Agent for Service)
---------------
Copies to:
<TABLE>
<S> <C>
Mark A. Medearis Richard J. Sandler
Laura A. Donald DAVIS POLK & WARDWELL
Kristen A. Lamb 450 Lexington Avenue
Scott S. Ring New York, NY 10017
VENTURE LAW GROUP (212) 450-4000
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
(650) 854-4488
</TABLE>
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
---------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Title Of Each Class Of Securities To Be Registered Proposed Maximum Aggregate Offering Price(1) Amount Of Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.001.................... $150,000,000 $39,600(2)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(a) and Rule 457(o) under the
Securities Act.
(2) $39,600 has been previously paid by the Registrant in connection with the
filing of the Registration Statement on January 26, 2000.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
The purpose of this Amendment No. 1 is solely to file certain exhibits to
the Registration Statement as set forth below in Item 16(a) of Part II.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
sale of common stock being registered. All amounts are estimates except the
SEC registration fee and the NASD filing fee and the Nasdaq National Market
listing fee.
<TABLE>
<CAPTION>
Amount
to be Paid
----------
<S> <C>
SEC registration fee............................................ $ 39,600
NASD filing fee................................................. 15,500
Nasdaq National Market listing fee.............................. 95,000
Printing and engraving expenses................................. 200,000
Legal fees and expenses......................................... 400,000
Accounting fees and expenses.................................... 300,000
Blue Sky qualification fees and expenses........................ *
Transfer Agent and Registrar fees............................... *
Miscellaneous fees and expenses................................. *
--------
Total......................................................... *
</TABLE>
- --------
* to be filed by amendment
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "Delaware Law")
authorizes a court to award, or a corporation's Board of Directors to grant,
indemnity to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Article XIV of our certificate of
incorporation (Exhibit 3.2 hereto) and Article VI of our bylaws (Exhibit 3.4
hereto) provide for indemnification of our directors, officers, employees and
other agents to the maximum extent permitted by Delaware Law. In addition, we
have entered into Indemnification Agreements (Exhibit 10.2 hereto) with our
officers and directors. The Underwriting Agreement (Exhibit 1.1) also provides
for cross-indemnification among ReplayTV and the underwriters with respect to
certain matters, including matters arising under the Securities Act.
Item 15. Recent Sales of Unregistered Securities
Since our incorporation in August 1997, we have issued and sold the
following securities:
1. On September 15, 1997, we sold 7,862,770 shares of common stock for
an aggregate purchase price of $3,931 to two investors.
2. On November 26, 1997, we sold 2,494,070 shares of Series A preferred
stock for an aggregate purchase price of $274,348 to two investors.
3. On March 11, 1998, we issued a promissory note in the aggregate
principal amount of $100,000 to one investor.
4. On April 10, 1998, we sold 1,451,610 shares of Series B preferred
stock for an aggregate purchase price of $450,000, including cancellation
of the $100,000 note described in 3 above, to four investors.
5. On June 29, 1998, we sold 806,448 shares of Series B preferred stock
for an aggregate purchase price of $250,000 to four investors.
II-1
<PAGE>
6. On September 11, 1998, September 14, 1998, September 28, 1998,
October 6, 1998, October 15, 1998 and October 27, 1998 we issued six
promissory notes in the aggregate principal amount of $570,000 to one
investor.
7. On November 5, 1998, we sold 1,818,488 shares of Series C preferred
stock for an aggregate purchase price of $1,150,000 to three investors.
8. On November 19, 1998, we sold 1,344,096 shares of Series C preferred
stock for an aggregate purchase price of $850,000 to six investors.
9. On February 12, 1999, February 22, 1999 and March 11, 1999, we issued
three promissory notes in the aggregate principal amount of $1,500,000 to
one investor.
10. On March 24, 1999, we sold 10,193,544 shares of Series D preferred
stock for an aggregate purchase price of $7,900,000, including cancellation
of $80,000 of the notes described in 6 above and cancellation of the notes
described in 9 above, to twelve investors.
11. On May 31, 1999, we issued a warrant to purchase 6,666 shares of
Series E preferred stock to a lender in connection with a line of credit.
12. On July 16, 1999 and July 19, 1999, we issued two promissory notes
in the aggregate principal amount of $600,000 to two investors.
13. On July 30, 1999, we sold 6,886,663 shares of Series E preferred
stock for an aggregate purchase price of $52,249,973, including
cancellation of the notes described in 12 above, to 41 investors.
14. On August 16, 1999, we sold 666,666 shares of Series E preferred
stock for an aggregate purchase price of $5,000,000 to one investor.
15. On January 25, 2000, we sold 5,627,267 shares of Series F preferred
stock for an aggregate price of $61,899,937 to 12 investors.
16. From April 28, 1999 to December 31, 1999, we issued an aggregate of
322,507 shares of common stock to one director and 14 consultants outside
of our stock plans.
17. From November 19, 1997 to December 31, 1999, we issued options to
purchase an aggregate of 9,545,522 shares of common stock to employees,
directors and consultants pursuant to the 1997 stock option plan.
18. From August 26, 1999 to December 31, 1999, we issued options to
purchase an aggregate of 4,230,000 shares of common stock to employees,
directors and consultants pursuant to the 1999 stock plan.
The issuances of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of such
Securities Act as transactions by an issuer not involving any public offering.
In addition, certain issuances described in Items 1, 17 and 18 were deemed
exempt from registration under the Securities Act in reliance upon Rule 701
promulgated under the Securities Act. The recipients of securities in each
such transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and warrants issued in such transactions. All recipients had
adequate access, through their relationships with us, to information about us.
II-2
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Number Description
-------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Sixth Amended and Restated Articles of Incorporation of ReplayTV.
3.2** Amended and Restated Certificate of Incorporation of ReplayTV (as
proposed).
3.3** Amended and Restated Bylaws of ReplayTV.
3.4** Amended and Restated Bylaws of ReplayTV (as proposed).
4.1* Specimen Stock Certificate.
4.2** Warrant dated May 31, 1999 issued by the Company to Imperial
Bancorp.
5.1* Opinion of Venture Law Group regarding the legality of the common
stock being registered.
10.1** Sixth Amended and Restated Investors' Rights Agreement dated
January 25, 2000 among ReplayTV and certain investors.
10.2** Form of Indemnification Agreement between ReplayTV and each of its
executive officers and directors.
10.3* 1997 Stock Option Plan (as amended) and forms of Stock Option
Agreements.
10.4* 1999 Stock Plan and forms of Stock Option Agreement and Restricted
Stock Purchase Agreement.
10.5** 2000 Employee Stock Purchase Plan and form of Subscription
Agreement.
10.6** 2000 Directors' Stock Option Plan and form of Stock Option
Agreement.
10.7** Offer Letter with Earle H. "Kim" LeMasters, III.
10.8*** Offer Letter with Anthony J. Wood.
10.9** Offer Letter with Craig W. Dougherty.
10.10** Offer Letter with Bruce L. Kaplan.
10.11** Offer Letter with Alexander Gray.
10.12** Offer Letter with Layne L. Britton.
10.13+ Master Collaboration Agreement dated December 20, 1999 between
ReplayTV and Matsushita-Kotobuki Electronics Industries, Ltd.
10.14+ OEM Distribution Agreement dated December 20, 1999 between ReplayTV
and Matsushita-Kotobuki Electronics Industries, Ltd.
10.15+ Manufacturing Agreement dated November 3, 1998 between ReplayTV and
Flextronics International USA, Inc.
10.16+ Television Listings Agreement dated June 1, 1998, as amended
October 26, 1998, between ReplayTV and Tribune Media Services,
Inc.
10.17+ Agreement dated February 1, 1999 between ReplayTV and Showtime
Networks Inc.
10.18+ Agreement dated July 30, 1999 between ReplayTV and National
Broadcasting Company, Inc.
10.19*+ Network Service Agreement dated July 30, 1999 among ReplayTV,
Turner Broadcasting System, Inc. and Time Warner, Inc.
10.20*** Common Stock Purchase Agreement dated September 15, 1997 between
ReplayTV and Anthony J. Wood.
10.21** Consulting Agreements between ReplayTV and Kevin Bohren.
10.22* Lease Agreement dated January 27, 1999 between John Arrillaga,
Trustee, or his Successor Trustee, UTA dated July 20, 1977 (John
Arrillaga Survivor's Trust) as amended, and Richard T. Perry,
Trustee, or his Successor Trustee, UTA dated July 20, 1977
(Richard T. Perry Separate Property Trust) as amended, and
ReplayTV, as amended.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
23.1 Independent Auditors' Consent.
23.2* Consent of Attorney (see Exhibit 5.1).
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be supplied by amendment.
** Previously filed.
*** Supersedes exhibit previously filed.
+Confidential treatment requested as to certain portions of this Exhibit.
(b) Financial Statement Schedules
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
Item 17. Undertakings
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to Registration Statement on Form S-1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Mountain View, State of California on February 7, 2000.
REPLAYTV, INC.
By: /s/ Craig W. Dougherty
---------------------------------
Craig W. Dougherty
Executive Vice President, Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chief Executive Officer and February 7, 2000
____________________________________ Chairman (Principal
Earle H. "Kim" LeMasters, III Executive Officer)
/s/ Craig W. Dougherty Executive Vice President, February 7, 2000
____________________________________ Finance and Chief Financial
Craig W. Dougherty Officer (Principal
Financial and Accounting
Officer)
* Director February 7, 2000
____________________________________
Jeffrey Berg
* Director February 7, 2000
____________________________________
Kevin L. Bohren
* Director February 7, 2000
____________________________________
Sky D. Dayton
* Director February 7, 2000
____________________________________
William R. Hearst III
* Director February 7, 2000
____________________________________
Anthony J. Wood
</TABLE>
* Power of Attorney
/s/ Craig W. Dougherty
By:_______________________
Craig W. Dougherty
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Sixth Amended and Restated Articles of Incorporation of ReplayTV.
3.2** Amended and Restated Certificate of Incorporation of ReplayTV (as
proposed).
3.3** Amended and Restated Bylaws of ReplayTV.
3.4** Amended and Restated Bylaws of ReplayTV (as proposed).
4.1* Specimen Stock Certificate.
4.2** Warrant dated May 31, 1999 issued by the Company to Imperial
Bancorp.
5.1* Opinion of Venture Law Group regarding the legality of the common
stock being registered.
10.1** Sixth Amended and Restated Investors' Rights Agreement dated
January 25, 2000 among ReplayTV and certain investors.
10.2** Form of Indemnification Agreement between ReplayTV and each of its
executive officers and directors.
10.3* 1997 Stock Option Plan (as amended) and forms of Stock Option
Agreements.
10.4* 1999 Stock Plan and forms of Stock Option Agreement and Restricted
Stock Purchase Agreement.
10.5** 2000 Employee Stock Purchase Plan and form of Subscription
Agreement.
10.6** 2000 Directors' Stock Option Plan and form of Stock Option
Agreement.
10.7** Offer Letter with Earle H. "Kim" LeMasters, III.
10.8*** Offer Letter with Anthony J. Wood.
10.9** Offer Letter with Craig W. Dougherty.
10.10** Offer Letter with Bruce L. Kaplan.
10.11** Offer Letter with Alexander Gray.
10.12** Offer Letter with Layne L. Britton.
10.13+ Master Collaboration Agreement dated December 20, 1999 between
ReplayTV and Matsushita-Kotobuki Electronics Industries, Ltd.
10.14+ OEM Distribution Agreement dated December 20, 1999 between ReplayTV
and Matsushita-Kotobuki Electronics Industries, Ltd.
10.15+ Manufacturing Agreement dated November 3, 1998 between ReplayTV and
Flextronics International USA, Inc.
10.16+ Television Listings Agreement dated June 1, 1998, as amended
October 26, 1998, between ReplayTV and Tribune Media Services,
Inc.
10.17+ Agreement dated February 1, 1999 between ReplayTV and Showtime
Networks Inc.
10.18+ Agreement dated July 30, 1999 between ReplayTV and National
Broadcasting Company, Inc.
10.19*+ Network Service Agreement dated July 30, 1999 among ReplayTV,
Turner Broadcasting System, Inc. and Time Warner, Inc.
10.20*** Common Stock Purchase Agreement dated September 15, 1997 between
ReplayTV and Anthony J. Wood.
10.21** Consulting Agreements between ReplayTV and Kevin Bohren.
10.22* Lease Agreement dated January 27, 1999 between John Arrillaga,
Trustee, or his Successor Trustee, UTA dated July 20, 1977 (John
Arrillaga Survivor's Trust) as amended, and Richard T. Perry,
Trustee, or his Successor Trustee, UTA dated July 20, 1977
(Richard T. Perry Separate Property Trust) as amended, and
ReplayTV, as amended.
23.1 Independent Auditors' Consent.
23.2* Consent of Attorney (see Exhibit 5.1).
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule.
</TABLE>
- --------
*To be supplied by amendment.
**Previously filed.
***Supersedes exhibit previously filed.
+Confidential treatment requested as to certain portions of this Exhibit.
<PAGE>
EXHIBIT 10.8
March 5, 1999
Anthony J. Wood
Dear Anthony:
The following sets forth the revised terms of your employment relationship
with Replay Networks, Inc. (the "Company"). This letter agreement replaces and
-------
supercedes in its entirety that certain employment offer letter agreement dated
November 10, 1997 between you and Pacific Digital Media, Inc. (the "Prior Offer
-----------
Letter").
- ------
1. Position.
--------
a. You will continue to serve as the Chairman, President, Chief
Executive Officer and Acting Chief Financial Officer of the Company. You will
report to the Company's Board of Directors.
b. You agree to the best of your ability and experience that you will
at all times loyally and conscientiously perform all of the duties and
obligations required of and from you pursuant to the express and implicit terms
hereof, and to the reasonable satisfaction of the Company. During the term of
your employment, you further agree that you will devote all of your business
time and attention to the business of the Company, the Company will be entitled
to all of the benefits and profits arising from or incident to all such work
services and advice, you will not render commercial or professional services of
any nature to any person or organization, whether or not for compensation,
without the prior written consent of the Company's Board of Directors, and you
will not directly or indirectly engage or participate in any business that is
competitive in any manner with the business of the Company. Nothing in this
letter agreement will prevent you from accepting speaking or presentation
engagements in exchange for honoraria or from serving on boards of charitable
organizations, or from owning no more than one percent (1%) of the outstanding
equity securities of a corporation whose stock is listed on a national stock
exchange.
2. Compensation.
------------
a. Base Salary. You will be paid a monthly salary of $12,500, which
-----------
is equivalent to $150,000 on an annualized basis. Your salary will be payable
in two equal payments per month pursuant to the Company's regular payroll policy
(or in the same manner as other
<PAGE>
March 5, 1999
Page 2
officers of the Company). Pursuant to the Prior Offer Letter, as of January 26,
1998, your annual base salary should have been increased to $100,000 from
$12,000. To the extent such increase was not implemented, you will be entitled
to deferred compensation from January 26, 1998 until such date as the Company
first begins to pay you at the rate of $100,000 or greater per year, equal to
the difference between the base salary actually paid during such period and
$100,000, both on an annualized basis.
b. Annual Review. Your base salary will be reviewed at the end of
-------------
each calendar year as part of the Company's normal salary review process.
3. Stock.
-----
a. Current Position. Pursuant to a Common Stock Purchase Agreement
----------------
dated as of September 15, 1997, you purchased 3,000,000 shares of Common Stock
of the Company (the "Shares"). The Shares are subject to a repurchase option in
------
favor of the Company should your employment with the Company terminate. Such
repurchase option currently lapses at the rate of 1/36th of the total number of
Shares each month from the vesting commencement date of August 1, 1997, and will
be fully released from the Company's repurchase option as of August 1, 2000 (the
"Vesting Schedule").
----------------
b. Acceleration of Vesting. In the event that the Company hires a
-----------------------
new Chief Executive Officer, all of the Shares that have not yet been released
from the Company's repurchase option pursuant to the Vesting Schedule will
immediately be released from the repurchase option and will be fully vested as
of the date of hire of the new Chief Executive Officer.
c. New Option Grant. The Company will recommend that the Board of
----------------
Directors grant you an option to purchase 137,500 shares of the Company's Common
Stock ("Option Shares") with an exercise price equal to the fair market value on
-------------
the date of the grant. These option shares will vest at the rate of 1/12th of
the total number of Option Shares on each monthly anniversary of the vesting
commencement date, which shall be August 1, 2000. Vesting will, of course,
depend on your continued employment with the Company. The option will be an
incentive stock option to the maximum extent allowed by the tax code and will be
subject to the terms of the Company's 1997 Stock Option Plan and the Stock
Option Agreement between you and the Company.
d. Subsequent Option Grants. Subject to the discretion of the
------------------------
Company's Board of Directors, you may be eligible to receive additional grants
of stock options or purchase rights from time to time in the future, on such
terms and subject to such conditions as the Board of Directors shall determine
as of the date of any such grant.
4. Benefits.
--------
a. Insurance Benefits. The Company will provide you with standard
------------------
medical and dental insurance benefits. In addition, the Company currently
indemnifies all officers and
-2-
<PAGE>
March 5, 1999
Page 3
directors to the maximum extent permitted by law, and you have entered into the
Company's standard form of Indemnification Agreement giving you such protection.
Pursuant to the Indemnification Agreement, the Company has agreed to advance any
expenses for which indemnification is available to the extent allowed by
applicable law.
b. Vacation, Sick Leave and Holidays. You will be entitled to three
---------------------------------
weeks paid vacation/sick leave per year, plus seven paid holidays.
5. Severance Agreement.
-------------------
a. If your employment is terminated by the Company or its successor
for any reason other than Cause (as defined below) or you become subject to an
Involuntary Termination (as defined below), you will be entitled to receive
continuation of your base salary and insurance benefits and continued vesting
under all stock options or restricted stock purchases for a period of 12 months
following the date of termination of your employment.
b. "Cause" shall mean (i) gross negligence or willful misconduct in
-----
the performance of your duties to the Company where such gross negligence or
willful misconduct has resulted or is likely to result in substantial and
material damage to the Company or its subsidiaries, (ii) repeated unexplained or
unjustified absence from the Company, (iii) a material and willful violation of
any federal or state law; (iv) commission of any act of fraud with respect to
the Company; or (v) conviction of a felony or a crime involving moral turpitude
causing material harm to the standing and reputation of the Company, in each
case as determined in good faith by the Board of Directors of the Company.
c. "Involuntary Termination" shall include any termination by the
-----------------------
Company other than for Cause and your voluntary termination, upon 30 days prior
written notice to the Company, following (i) a material reduction or change in
job duties, responsibilities and requirements inconsistent with your position
with the Company and your prior duties, responsibilities and requirements, other
than the hiring of a new Chief Executive Officer of the Company; (ii) any
reduction of your base compensation (other than in connection with a general
decrease in base salaries for most similarly situated employees); or (iii) your
refusal to relocate to a location more than 50 miles from the Company's current
location.
6. Confidentiality of Terms. You agree to follow the Company's strict
------------------------
policy that employees must not disclose, either directly or indirectly, any
information, including any of the terms of this agreement, regarding salary,
bonuses or stock purchase or option allocations to any person, including other
employees of the Company; provided, however, that you may discuss such terms
with members of your immediate family and any legal, tax or accounting
specialists who provide you with individual legal, tax or accounting advice.
7. At-Will Employment. Notwithstanding the Company's obligation
------------------
described in Section 5 above, your employment with the Company will be on an "at
will" basis, meaning that either you or the Company may terminate your
employment at any time for any reason or no reason, without further obligation
or liability.
-3-
<PAGE>
March 5, 1999
Page 4
To indicate your acceptance of this offer, please sign and date this letter
in the space provided below and return it to me. This letter, together with the
Confidential Information and Invention Assignment Agreement previously executed
by you, set forth the terms of your employment with the Company and supersede
any prior representations or agreements, whether written or oral. This letter
may not be modified or amended except by a written agreement, signed by the
Company and by you.
Very truly yours,
REPLAY NETWORKS, INC.
By: /s/ Anthony Wood
------------------------------
Title: President
--------------------------
ACCEPTED AND AGREED:
ANTHONY J. WOOD
/s/ Anthony Wood
- ------------------------------
Signature
3/5/99
- ------------------------------
Date
-4-
<PAGE>
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,
---------
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.
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
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1.2 "Competitive Service" means any service that (a) permits viewing of
-------------------
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
--------
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.
--------------------- ---------
1.5 "Gold Master" means, for each MKE Product version, the master
-----------
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
---------------------
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.
---
1.8 "Reference Specification" means those minimum hardware and software
-----------------------
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
------------
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
------------
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
----
Matsushita Electric Corporation of America.
1.12 "Product Specification" means those hardware and software
---------------------
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
-----------------
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
----
documentation, developed by or for Replay in connection with any Replay
software.
1.15 "Replay Device Software" means Replay's proprietary and/or licensed
----------------------
(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
----------------------
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
----------------------------
owned by Replay.
1.18 "Replay Server Software" means Replay's proprietary server-based
----------------------
software and applications designed to provide the RTVS and communicate with
ReplayTV Products.
1.19 "RTVS" means Replay's proprietary service providing for the
----
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
-----------------
without limitation the Replay Server Software, Replay Device Software, and
Replay Driver Software.
1.21 "ReplayTV 3000 Product" means Replay's proprietary ReplayTV 3000
---------------------
product as it exists on the Effective Date.
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1.22 "Technology" means computer software, algorithms, designs, ideas,
----------
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
-----
Initial Term pursuant to Section 13.2.
1.24 "Territory" means the United States, and will, automatically and
---------
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.
----------------------------------
(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
----------------
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
----------------------------------------------------------
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
-------------------------------------
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.
-------
(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.
------------------
(a) General. Subject to the terms and conditions of this Agreement,
-------
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
------------------
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.
-------------------
(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
-------- -------
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,
--------
however, that (a) any such Subsidy shall be paid solely to MKE and not directly
- -------
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.
----------------------
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.
------------------------------------
(a) Specifications. All MKE Products shall comply fully with the
--------------
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
-----------
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
-----------------------------
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
-------------------------------
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
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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
-----------
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),
-20-
<PAGE>
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
-------- -------
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
------
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.
-------------
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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<PAGE>
19.4 License. Subject to the terms and conditions of this Agreement,
-------
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
--------
not to be used in the interpretation of this Agreement.
20.5 Notices. Any notice or other communication required to permitted
-------
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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<PAGE>
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
-------------
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
--------
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.
-23-
<PAGE>
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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<PAGE>
EXHIBIT A
---------
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.
-25-
<PAGE>
EXHIBIT 10.14
OEM Distribution Agreement
This Distribution Agreement ("Agreement") is entered into the 30th day of
---------
July, 1999, and amended this 20/th/ day of December, 1999, between Matsushita-
Kotobuki Electronics Industries, Ltd. having its principal place of business at
8-1 Furujin-machi, Takamatsu, Kagawa prefecture, Japan ("MKE") and Replay
---
Networks, Inc., 1945 Charleston Road, Mountain View, California 94303, U.S.A.
("Replay Networks").
---------------
RECITALS:
--------
Replay Networks has designed certain Products that MKE desires to resell.
Replay Networks has entered into contracts with, and may in the future enter
into other contracts with, manufacturers of the Products ("Contract
--------
Manufacturers"). Under such contracts, the Contract Manufacturers have agreed
- -------------
to manufacture the Products pursuant to Specifications provided by Replay
Networks and to deliver such Products. MKE desires to have the Contract
Manufacturers manufacture the Products and deliver the Products directly to MKE
and to have Replay Networks manage the Contact Manufacturers performance of the
design, production and delivery process.
AGREEMENT:
---------
In consideration of the foregoing and the agreements contained herein, the
parties agree as follows:
1. Definitions.
-----------
"Confidential Information" of a party shall mean any information
------------------------
disclosed by that party to the other pursuant to this Agreement which is in
written, graphic, machine readable or other tangible form and is marked
"Confidential," "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include oral information
disclosed by one party to the other pursuant to this Agreement, provided that
such information is designated as confidential at the time of disclosure and is
reduced to writing by the disclosing party within a reasonable time (not to
exceed twenty (20) days) after its oral disclosure, and such writing is marked
in a manner to indicate its confidential nature and delivered to the receiving
party.
"Content" shall mean any video, text, graphics, images,
-------
advertisements, promotions or other materials which are modified and/or updated
from time to time as part of the Replay Network Service, including, without
limitation, reserved channels, zones, hard drive allocation and other
configurations of any Product.
"Intellectual Property" shall mean patents, copyrights, authors'
---------------------
rights, trademarks, tradenames, know-how and trade secrets relating to the
Products or the design, specifications or manufacture of the Products, and any
modifications or improvements thereto, irrespective of whether such rights arise
under U.S., or Japan or international intellectual property, unfair competition
or trade secret laws.
"Inventory" shall mean raw materials and supplies necessary for the
---------
manufacture of Products pursuant to this Agreement.
"Products" shall mean the products manufactured by Contract
--------
Manufacturers at the direction of Replay Networks pursuant to this Agreement, as
set forth on Exhibit A attached hereto.
---------
"Purchase Order" shall mean a MKE Purchase Order in the form attached
--------------
as Exhibit B.
---------
"Replay Software" shall mean Replay Networks' proprietary and/or
---------------
licensed operating systems and application software that is incorporated into or
downloaded onto any Product, including any
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
improvements, modifications or enhancements thereto, but excluding hardware
driver software used to interface the Replay Software with the hardware
components of any Products.
"Specifications" shall mean the specifications for the Products as
--------------
provided to Contract Manufacturers by Replay Networks and as accepted by MKE in
writing, and as revised from time to time upon mutual written agreement of the
parties.
2. Agreement to Manage Production. Replay Networks agrees to use diligent
------------------------------
commercial efforts to perform the work (hereinafter "Work" as further defined
----
below) pursuant to Purchase Orders or changes in Purchase Orders issued by MKE
and accepted by Replay Networks on behalf of its Contract Manufacturers. Work
shall mean to, on behalf of MKE, manage the design, production , delivery of
Products and other related matters by the Contract Manufacturers. All Products
will be manufactured by the Contract Manufacturers pursuant to the
Specifications. Except for any Replay Software or Content which does not affect
the functioning of the Products, Replay Networks shall not alter the design or
Specifications of any Products, nor deviate from such design or Specifications
for any purpose, including without limitation, of improving product quality or
safety, without a prior written consent of MKE.
3. MKE's subsidiary. Replay Networks acknowledges and agrees that MKE
----------------
shall have the right to cause the obligations of MKE hereunder to be performed
by one or more of its subsidiaries, and all references herein to MKE shall
include any subsidiaries of MKE to the extent such subsidiaries perform
obligations of MKE hereunder. The performance of the obligations of MKE
hereunder by one or more of its subsidiaries shall not release MKE from
liability for the performance of its obligations hereunder.
4. Forecasting, Orders, Material Procurement
-----------------------------------------
(a) Forecast. Replay Networks shall cause the Contract Manufacturers
--------
to supply the quantities of the Products meeting the Specifications on the
Delivery Dates requested by MKE provided the Delivery Dates (as defined below)
conform to the Product lead-times and MKE forecasts set forth herein. Lead time
from placing Purchase Order to the delivery of the Products shall be [***]
unless otherwise agreed in the Purchase Order by the parties. On the fifteenth
(15/th/) day of each month, MKE shall provide Replay Networks with a rolling
forecast in writing of MKE's estimated aggregate purchase requirements of
Product for the subsequent [***] (the "Forecast"). Such Forecast shall be
legally binding on MKE. Replay Networks shall use its best efforts to cause the
Contract Manufacturers to supply the number of Products set forth in the
Forecast.
(b) Purchase Orders. All Purchase Orders for each calendar month
---------------
shall be submitted on or before the fifteenth (15/th/) day of such month to
Replay Networks in writing by mail or facsimile to the address set forth on the
signature page to this Agreement. Such Purchase Orders must specify all Product
types and quantities, and must set a date of requested delivery (the "Delivery
--------
Date"). Replay Networks will confirm receipt of Purchase Orders by facsimile or
- ----
e-mail. The parties agree that the terms and conditions contained in this
Agreement shall prevail over any terms and conditions of any Purchase Order,
acknowledgment form or other instrument.
(c) Acceptance or Rejection of Purchase Orders. Purchase Orders
------------------------------------------
submitted each month pursuant to Section 4(b) will be accepted or rejected by
Replay Networks in writing by the twenty-third (23/rd/) calendar day of each
month (or the following business day in the event the 23/rd/ day is a weekend or
a holiday). Any such Purchase Orders within Forecast amount and lead times
specified in Section 4(a) that are not rejected in writing by Replay Networks by
such date shall be deemed accepted by Replay Networks effective upon receipt of
such Purchase Order.
(d) Order Forecast Variations.
-------------------------
(i) Purchase Order Acceleration. Replay Networks will use
---------------------------
diligent commercial efforts to manage and cause the Contract manufacturer to
perform accelerated production and delivery of Products if MKE requests
acceleration ("Purchase Order Schedule Increase"). A request for a Purchase
--------------------------------
Order Schedule Increase shall be submitted in writing by MKE to Replay Networks,
by mail or
[***]= 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.
<PAGE>
facsimile. Replay Networks will notify MKE in writing by mail or fax within
[***] business days of receipt of the request for a Purchase Order Quantity
Increase of (i) Replay Networks' capability to fill the Purchase Order Schedule
Increase and (ii) whether Replay Networks will add Expediting Charges to the
purchase price in order to meet the demands of the Purchase Order Schedule
Increase. Replay Networks' notification to MKE that it will accept a Purchase
Order Schedule Increase with no Expediting Charge will operate as an acceptance
of the Purchase Order Schedule Increase. Should Replay Networks notify MKE that
a Expediting Charge will be imposed, MKE will notify Replay Networks within
[***] business days if MKE accepts the revised terms of such Purchase Order
Schedule Increase. Agreements with respect to Purchase Order Schedule Increases
shall supercede prior Purchase Orders to the extent such prior Purchase Orders
conflict with the Purchase Order Schedule Increase. Any failure to provide
notification where required pursuant to this section 4(d)(i) shall be deemed to
operate as a rejection.
(ii) Other Schedule Alterations. For each Purchase Order or
--------------------------
Forecast Product amounts, MKE shall be entitled, without penalty, to delay the
Delivery Date of Products as set forth in the table below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
# of days before Maximum Maximum
Shipment Date on Reschedule Quantity Reschedule Period
Purchase Order or
Forecast Product
amount
-------------------------------------------------------------------
<S> <C> <C>
0-30 [***] [***]
-------------------------------------------------------------------
31-60 [***] [***]
-------------------------------------------------------------------
61-90 [***] [***]
-------------------------------------------------------------------
91-120 [***] [***]
-------------------------------------------------------------------
</TABLE>
(iii) Any Purchase Order quantities rescheduled pursuant to
this section may not be subsequently rescheduled without the prior written
consent of Replay Networks. All other changes in shipment date other than as
authorized in this Section 4(d) require Replay Networks' prior written consent
and shall be subject to an inventory carrying charge of [***] per month for
finished Product, procured by the Contract Manufacturers to support the original
schedule.
5. Components; Tooling.
-------------------
(a) Replay Networks' acceptance of Purchase Orders will constitute
authorization for Replay Networks to grant Contract Manufacturers permission to
procure, using standard purchasing practices, the components, materials,
supplies and other Inventory necessary for the manufacture of Products covered
by such Purchase Orders.
(b) MKE authorizes Replay Networks to grant Contract Manufacturers
permission to purchase, in amounts beyond the amount necessary to fill accepted
Purchase Orders, the components, materials, and supplies: (i) with lead times
greater than [***] at the time the Purchase Order is placed ("Long Lead Time
--------------
Components").
- ----------
(c) MKE shall be responsible for all Inventory and Long Lead Time
Components purchased by Replay Networks or the Contract Manufacturers pursuant
to this Section 5 under the conditions provided elsewhere in this Agreement. In
the event, however, Replay Networks cancels any Purchase Order and/or Forecast,
MKE shall not be responsible for any Inventory or Long Lead Time Components
which were ordered or procured for such Purchase Order or Forecast.
(d) MKE shall pay for or obtain and consign to Contract Manufacturer,
via Replay Networks any Product-specific tooling and other reasonably necessary
non-recurring expenses specific to the Product, as set forth in Replay Networks'
quotation.
[***]= 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.
<PAGE>
(e) End Of Life Component Purchase Order. Replay Networks shall
------------------------------------
notify MKE in writing at least [***] in advance of the End of Life ("EOL") of
any Product. MKE may submit a Purchase Order of such EOL for spare parts for
such Products on terms, conditions and pricing to be mutually agreed by the
parties. Neither Replay Networks nor any Contract Manufacturer shall have any
obligation to supply spare parts to MKE for any Product after the EOL of such
product. By the end of [***] Replay Networks will establish a service center for
Replay direct products. MKE, at its option, may enter into a separate agreement
with such service center for out-of-warranty Product repairs and EOL inventory.
(f) Training. Replay Networks shall provide a reasonable number of
--------
training classes for Matsushita Electric Corporation of America ("MECA")
personnel, at MECA's request, at locations in the United States mutually agreed
upon by Replay Networks and MECA. All reasonable expenses for such training
shall be mutually borne between MKE and Replay Networks.
6. MKE Requested Changes. MKE may request, at any time, in writing, that
---------------------
Replay Networks make changes to any of the following: (i) the design or
specifications of the Products, (ii) MKE's chosen method of shipment or packing,
or (iii) MKE's chosen place of delivery (collectively, "MKE Requested Changes").
---------------------
Replay Networks will evaluate MKE Requested Changes and notify MKE of whether it
accepts the MKE Requested Changes within [***] business days of Replay Networks'
receipt of MKE's request. If, in the sole judgement of Replay Networks, the MKE
Requested Change will cause an increase in the cost or delay in the delivery of
the Products, Replay Networks will notify MKE of such in writing within the same
time period. Should Replay Networks notify MKE that an increase in the cost or
delay in the delivery of the Products will occur, MKE will notify Replay
Networks within [***] business days following its receipt of such notice if MKE
accepts the revised terms of such Purchase Order.
7. Product Shipment and Inspection.
-------------------------------
(a) Shipments. All Products delivered pursuant to the terms of this
---------
Agreement shall be suitably packed for shipment in accordance with Replay
Networks' specifications, as approved in advance by MKE, marked for shipment to
MKE's destination specified in the applicable Purchase Order and delivered.
Shipment will be CIF to up to [***] warehouse locations in the continental
United States specified by Panasonic Consumer Electronics Company ("PCEC"), at
which time risk of loss and title will pass to MKE. All freight, insurance and
other shipping expenses will be paid by Replay Networks. The minimum shipment
order per location will be [***] Product units. Any special packing expenses not
included in the original price quotation for the Products will be paid by MKE.
(b) Cancellation. MKE may not cancel any part of any Purchase Order
------------
under this Agreement without Replay Networks' prior written consent, which
consent will not be unreasonably withheld. In the event MKE cancels any Purchase
Order, reasonable cancellation charges will be paid by MKE directly to Contract
Manufacture (Flextronics International) pursuant to the letter agreement agreed
upon by Replay Networks, MKE and Flextronics International substantially in the
same form attached as Exhibit D. If MKE pays such cancellation charges to
---------
Flextronics, Replay Networks shall waive any rights to claim and receive remedy
arising or in relation to such cancellation.
(c) Product Inspection and Acceptance.
---------------------------------
(i) MKE will inspect the Products within [***] business days
of receipt in accordance with the inspection standard mutually agreed upon by
the parties in writing. MKE may, subject to Contract Manufacturer's prior
approval, implement the outgoing inspection, in its sole discretion, at the
facility of the Contract Manufacturer, provided, however, in no case MKE shall
waive its rights to implement incoming inspection at MKE's facility. If the
Products are found to be defective in material and workmanship, fail to meet
Specifications or the acceptable quality levels ("AQL") in the attached Exhibit
C, MKE has the right to reject such Products, at Replay Networks' cost and
expense, during said period. Products not rejected during said period will be
deemed accepted.
[***]=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.
<PAGE>
(ii) In the event of any rejection of Product pursuant to
Section 7(c)(i), MKE shall promptly notify Replay Networks in writing, and
provide a written failure report substantiating the basis for the rejection.
Within [***] business days after receipt of such notice and failure report,
Replay Networks shall either (a) send a Replay Networks representative to
inspect the Products at the applicable PCEC location, or (b) accept return of
rejected Products. In the event of an emergency request by MKE, Replay Networks
shall use diligent commercial efforts to shorten this [***] business day period.
(d) Documentation. Replay Networks shall be responsible for supplying
-------------
operating instructions and registration card with each Product shipped to MKE;
provided, however, that the costs of such items do not exceed the costs of
- -------- -------
comparable items in the ReplayTV 3000 product being shipped by Replay Networks.
8. Payment Terms, Additional Costs and Price Changes.
-------------------------------------------------
(a) Payment Terms. The price for Products to be manufactured will be
-------------
as specified in the attached Exhibit A, as such Exhibit may be amended in
---------
writing by mutual agreement by the parties from time to time, and shall be
reflected in Purchase Orders issued by MKE and accepted by Replay Networks. All
prices quoted are exclusive of federal, state and local excise, sales, use and
similar taxes, and any duties, and MKE shall be responsible for all such items.
Payment for any Products, services or other costs to be paid by MKE hereunder is
due at the [***] day following the [***] the invoice has issued and delivered to
MKE (in the event such day is the holiday in U.S., then the following business
day) and shall be made in lawful U.S. currency. MKE agrees to pay [***] monthly
interest on all late payments. Furthermore, if MKE is late with payments and
fails to make such payments to Replay Networks within [***] days after receipt
of written notice from Replay Networks notifying MKE of such late payments,
Replay Networks may require prepayment or delay shipments or suspend work until
all such delinquent payments owed to Replay Networks are received. Such pre-
payment will be made to an escrow account designated by Replay Networks.
(b) Additional Costs. MKE is responsible for (i) any expediting
----------------
charges reasonably necessary because of a change in MKE's requirements
("Expediting Charges") which charges are preapproved by MKE, (ii) any overtime
------------------
or downtime charges incurred as a result of delays in the normal production or
interruption in the workflow process and caused by MKE's change in
Specifications or other MKE Requested Changes which charges are preapproved by
MKE.
(c) Cost Reductions. Replay Networks agrees to make every possible
---------------
effort to reduce Products costs at Replay Networks sole responsibility. MKE will
assist Replay Networks to establish low components pricing for the Products.
(d) Purchase Volumes; Reports. During each [***] period set forth in
Exhibit A hereto, the parties will agree upon a guaranteed minimum and
target maximum number of Products MKE shall purchase from Replay, net of any
returns or cancellations, as set forth in Exhibit A. In the event that
(a) [***] (b) [***] or (c) [***] the parties agree to have further discussions
regarding the pricing for such Products and purchase volumes.
9. License Grants; Ownership Rights.
--------------------------------
(a) License. During the term of this Agreement, MKE grants Replay
-------
Networks a [***] license, with the right to sublicense to Contract
Manufacturers, to use all of MKE's Confidential Information and Intellectual
Property required to perform the Work and allow the Contract Manufacturer to
manufacture the Products pursuant to the terms of this Agreement. In addition,
MKE grants Replay Networks a [***] license, including the right to sublicense,
to use and modify any improvements, modifications or specifications for the
Products provided by MKE for the purposes of manufacture of the Products and
delivery thereof to MKE.
[***]=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.
<PAGE>
(b) Replay Software License. Subject to the terms and conditions of
-----------------------
this Agreement, and during term hereof, Replay Networks grants to MKE a [***]
license, to use the Replay Software contained in the Products (in object code
form only) solely in conjunction with such Products. Except for the license
granted in this Section 9(b), all right, title and interest in the Replay
Software shall remain the exclusive property of Replay Networks or its
licensors. Noting in this Agreement entitles MKE to the receipt or use of, or
access to, Replay Software source code or any right to reproduce the Replay
Software. The Products are offered for sale and are sold by Replay Networks
subject in every case to the condition that such sale does not convey any
license, expressly or by implication, to modify, improve, manufacture,
reproduce, decompile, disassemble, compile or reverse engineer the Replay
Software. MKE acknowledges and agrees that it (i) may not modify the Replay
Software, and (ii) receives no title or ownership rights to such Replay
Software.
(c) Intellectual Property Rights.
----------------------------
(i) Replay Networks shall retain sole right, title and
interest in and to all Intellectual Property owned as of the date hereof and
solely developed by Replay Networks thereafter.
(ii) MKE shall retain sole right?title and interest in and to
all Intellectual Property owned as of the date hereof and solely developed by
MKE thereafter.
(iii) Replay Networks and MKE shall retain undivided and equal
right, title and interest to all Intellectual Property jointly developed by
Replay Networks and MKE hereunder. The parties do not currently contemplate any
jointly developed Intellectual Property being developed pursuant to this
Agreement.
10. Confidential Information.
------------------------
(a) Nondisclosure and Nonuse. Each party shall treat as confidential
------------------------
all Confidential Information of the other party for a period of [***] after
termination of this Agreement, shall not use such Confidential Information
except as set forth in this Agreement, and shall use reasonable efforts not to
disclose such Confidential Information to any third party, without the prior
written consent of the disclosing party. Each party shall promptly notify the
other party of any actual or suspected misuse or unauthorized disclosure of the
other party's Confidential Information.
(b) Exceptions. Notwithstanding the above, neither party shall have
----------
liability to the other with regard to any Confidential Information of the other
which the receiving party can prove: (i) was in the public domain at the time it
was disclosed or has entered the public domain through no fault of the receiving
party; (ii) was known to the receiving party, without restriction, at the time
of disclosure, as demonstrated by files in existence at the time of disclosure;
(iii) is disclosed with the prior written approval of the disclosing party;(iv)
is disclosed by the disclosing party to a third party without restriction on
such third party's rights to disclose or use the same, (v) is independently
developed by the receiving party, or (vi) is disclosed pursuant to the order or
requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice of such
court order or requirement to the disclosing party to enable the disclosing
party to seek a protective order or otherwise prevent or restrict such
disclosure.
(c) Return of Confidential Information. Upon expiration or
----------------------------------
termination of this Agreement, each party shall promptly return all Confidential
Information of the other party.
(d) Remedies. Any breach of the restrictions contained in this
--------
Section 10 is a breach of this Agreement which may cause irreparable harm to the
nonbreaching party. Any such breach shall entitle the nonbreaching party to
injunctive relief in addition to all legal remedies.
(e) Confidentiality of Agreement. Each party agrees that the
----------------------------
existence and the terms and conditions of this Agreement shall be treated as
Confidential Information and shall not be
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
disclosed to any third party; provided, however, that each party may disclose
the terms and conditions of this Agreement:(i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal counsel of
the parties; (iv) in confidence, to accountants, banks, and financing sources
and their advisors; (v) in connection with the enforcement of this Agreement or
rights under this Agreement; or (vi) in confidence, in connection with an actual
or proposed merger, acquisition, or similar transaction.
11. Indemnity.
---------
(a) By Replay Networks. Except for any indemnification obligation of
------------------
of MKE pursuant to Section 11(b) below, Replay Networks shall defend, indemnify
and hold harmless MKE from all claims, costs, damages, judgments and attorney's
fees resulting from or arising out of any third party claim alleging that the
Products infringe any valid U.S. and Japanese patents, patent rights,
trademarks, trademark rights, trade name rights, copyrights, trade secrets,
proprietary rights and processes or other intellectual property right. MKE shall
promptly notify Replay Networks in writing of the initiation of such claims. In
addition, Replay Networks shall have sole control of the defense and any
settlement of any such claim, and MKE shall provide reasonable assistance in
connection with the defense or settlement of any such claim. In the event of
infringement on third party's intellectual property rights, Replay Networks
shall, at its option, and subject to MKE's consultation: (i) procure for MKE the
right to continue the use or sale of the Products, (ii) provide Products which
do not infringe such intellectual property right or (iii) accept return of such
Products and refund the amounts paid by MKE therefore.
(b) By MKE. MKE shall defend, indemnify and hold harmless Replay
------
Networks from all claims, costs, damages, judgments and attorney's fees
resulting from or arising out of any third party claim that any MKE Requested
Change, alone or in combination with any Product, infringes any valid U.S. and
Japanese patents, patent rights, trademarks, trademark rights, trade name
rights, copyrights, trade secrets, proprietary rights and processes or other
such intellectual property right. Replay Networks shall promptly notify MKE in
writing of the initiation of such claims. In addition, MKE shall have sole
control of the defense and any settlement of any such claim, and Replay Networks
shall reasonably cooperate and provide reasonable assistance in connection with
the defense or settlement of any such claim.
(c) Limitations. THE FOREGOING STATES THE ENTIRE LIABILITY AND
-----------
OBLIGATIONS OF, AND THE EXCLUSIVE REMEDY OF, THE PARTIES, WITH RESPECT TO ANY
ALLEGED OR ACTUAL INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADE SECRETS, TRADEMARKS
OR OTHER INTELLECTUAL PROPERTY RIGHTS.
(d) Product Liability. Replay Networks agrees that, if notified
-----------------
promptly in writing and given sole control of the defense and all related
settlement negotiations, it will defend MKE from any claim or action and will
hold MKE harmless for any property damage or personal injury, including death,
which arises from any alleged defect of any Products, other than for any claim
or action resulting from or arising out of any modification, enhancement, or
change in specifications of the Product specified in any written MKE design
instructions or drawings. Replay Networks shall name MKE as an additional
insured under Replay Networks' product liability policies for any Products.
12. No Other Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
------------------
NEITHER PARTY NOR ITS AGENT(S), REPRESENTATIVE(S) OR EMPLOYEE(S) SHALL BE LIABLE
TO THE OTHER PURSUANT TO THIS AGREEMENT FOR AMOUNTS REPRESENTING LOSS OF
REVENUES, LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT, CONSEQUENTIAL, SPECIAL
OR PUNITIVE DAMAGES OF THE OTHER PARTY, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
EXCEPT FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY) AND
SECTION 10 (CONFIDENTIALITY), EACH PARTY'S TOTAL LIABILITY, AND THE LIABILITY OF
ITS AGENT(S), REPRESENTATIVE(S) AND EMPLOYEE(S), FOR DAMAGES OR ALLEGED DAMAGES,
WHETHER IN CONTRACT OR TORT (INCLUDING STRICT LIABILITY AND NEGLIGENCE) WITH
RESPECT TO THIS AGREEMENT IS LIMITED TO AND SHALL NOT
<PAGE>
EXCEED THE TOTAL AMOUNTS PAID BY MKE TO REPLAY NETWORKS UNDER THIS AGREEMENT.
13. Warranty and Disclaimer; Returns.
--------------------------------
(a) Warranty and Disclaimer. Replay Networks warrants that the
-----------------------
Products will conform to Specifications and will be free from defects in
material and workmanship for a period of [***] from the date of sales to
end-users from PCEC subject to repair with no charge of labor costs, and
[***] from the date of sales to end-users from PCEC, subject to repair with
no charge for materials, parts and components; provided, however, that in no
-------- --------
event shall Replay Networks have any warranty obligation for (i) labor costs
more than [***] after shipment to PCEC, or (ii) materials, parts and components
more than [***] after shipment to PCEC. This express limited warranty does not
apply to (a) materials consigned or supplied by MKE to Replay Networks or the
Contract Manufacturers, (b) defects resulting from MKE's contributions to the
design of the Products or from MKE Requested Changes; or (c) Product that has
been abused, damaged, altered or misused by any person or entity after the title
passes to MKE. With respect to first articles, prototypes, pre-production units,
test units or similar Products, Replay Networks makes no representations or
warranties whatsoever. Upon any failure of Product to comply with the above
warranty, Replay Network's sole obligation and MKE's sole remedy, is for Replay
Networks to have the Contract Manufacturer (or Replay Networks' designated
repair vendor), at Replay Networks' option, promptly repair or replace such
Product pursuant to the provisions of Section 13(b). EXCEPT FOR THE FOREGOING
EXPRESSLY STATED WARRANTIES, REPLAY NETWORKS MAKES NO EXPRESS OR IMPLIED
WARRANTIES RELATING TO THE PRODUCTS COVERED BY THIS AGREEMENT. REPLAY NETWORKS
EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(b) Returns.
-------
Products (or subassemblies thereof) in breach of warranty to
Section 13(a) shall be returned by MKE directly to the Contract Manufacturer (or
other point of repair specified by Replay Networks), freight pre-paid, subject
to (a) MKE notifying Replay Networks of MKE's intention to return such Products
(or subassemblies thereof), (b) MKE's completion of a failure report and (c) MKE
obtaining a return material authorization number from Replay Networks to be
displayed on the shipping container. Shipment of such repaired or replaced
Products (or subassemblies thereof) shall be at Replay Networks' expense, except
that MKE shall bear all shipping costs for Products (or subassemblies thereof)
that MKE, Replay Networks and Contract Manufacturer determine after testing are
not defective and conform to Specifications.
Alternatively, MKE may to repair such defective Products itself
at Replay Networks' cost and expense. The detailed procedure, conditions, and
acceptable costs for such warranty return, repair and replacement by MKE shall
be mutually agreed upon by the parties in writing.
14. Term and Termination.
--------------------
(a) Term. This Agreement shall become effective on the date of this
----
Agreement and shall continue until [***].
(b) Termination. This Agreement may be terminated at any time with or
-----------
without cause by either party upon the giving of not less than [***] written
notice by registered mail to the other party. Either party may terminate this
Agreement at any time if the other party breaches any material term or condition
hereof and fails to cure such breach within [***] after notice of such breach in
the case of a default in any payment, or [***] after notice of such breach in
the case of any breach of any other material term or condition of this
Agreement, or if the other party shall be or becomes insolvent, or if either
party makes an assignment for the benefit of creditors, or if there are
instituted by or against either party proceedings in bankruptcy or under any
insolvency or similar law or for reorganization, receivership or dissolution.
[***]=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.
<PAGE>
(c) Termination Liability. Neither party shall be liable in any
---------------------
manner on account of the termination or cancellation of this Agreement. The
rights of termination and cancellation as set forth herein are absolute. Both
MKE and Replay Networks are aware of the possibility of expenditures necessary
in preparing for performance hereunder and the possible losses and damages that
may occur to each in the event of termination or cancellation. Both parties
clearly understand that neither shall be liable for damages of any kind
(including but not limited to special, incidental or consequential damages) by
reason of the termination or cancellation of this Agreement except as otherwise
expressly provided herein.
(d) Obligations Upon Termination. The termination or expiration of
----------------------------
this Agreement shall in no way relieve either party from its obligations to pay
the other any sums accrued hereunder and to fulfill the performance under any
accepted Purchase Order regarding the Products in existence prior to such
termination or expiration.
(e) Survival of Certain Provisions. Notwithstanding anything to the
------------------------------
contrary in this Agreement, the following sections shall survive termination of
this Agreement: 1, 8, 9, 10, 11, 12, 13, 14 and 15.
15. Miscellaneous.
-------------
(a) Amendments and Waivers. Any term of this Agreement may be amended
----------------------
or waived only with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 15(a) shall be binding upon the parties and their respective successors
and assigns.
(b) Successors and Assigns. Neither party shall have the right to
----------------------
assign or otherwise transfer its rights or obligations under this Agreement
except with the prior written consent of the other party, not to be unreasonably
withheld. Subject to the foregoing, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(c) Governing Law; Jurisdiction. This Agreement and all acts and
---------------------------
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California and the United States, without giving effect to
principles of conflicts of law and without regard to the United Nations
Convention on Contracts for the International Sale of Goods. Each of the parties
to this Agreement consents to the exclusive jurisdiction and venue of the courts
of the state and federal courts of Santa Clara County, California for actions
related to the subject matter of this Agreement.
(d) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) Notices. Any notice required or permitted by this Agreement shall
-------
be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by overnight delivery service with tracking capabilities with
costs prepaid, or three (3) days after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage
prepaid and return receipt requested, if such notice is addressed to the party
to be notified at such party's address or facsimile number as set forth below,
or as subsequently modified by written notice:
If to Replay Networks:
Replay Networks, Inc.
<PAGE>
1945 Charleston Road
Mountain View, California 94303
Atten: Legal Department
Tel. 650-210-1000
Fax 650-964-4847
If to MKE:
Matsushita-Kotobuki Electronics Industries, Ltd.
8-1 Furujin-machi
Takamatsu
Kagawa prefecture
Japan
Attn: Legal Department
Tel. 81-87-851-7228
Fax. 81-87-851-1047
(g) Severability. If one or more provisions of this Agreement are
------------
held to be illegal or unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision within five (5)
business days, then (i) such provision shall be limited or eliminated to the
minimum extent necessary to be enforceable, (ii) the balance of the Agreement
shall be interpreted as if such provision were limited or eliminated as the case
may be and (iii) the balance of the Agreement shall be enforceable in accordance
with its terms.
(h) Entire Agreement. This Agreement is the product of both of the
----------------
parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein. Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.
(i) Independent Contractors. The relationship of Replay Networks and
-----------------------
MKE established by this Agreement is that of independent contractors, and
nothing contained in this Agreement will be construed (i) to give either party
the power to direct and control the day-to-day activities of the other, (ii) to
constitute the parties as partners, joint ventures, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) to allow either party to
create or assume any obligation on behalf of the other for any purpose
whatsoever.
(j) Force Majeure. If the performance of this Agreement or any
-------------
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation, regulation, ordinance, demand or
requirement of any government agency, or any other act or condition beyond the
reasonable control of the parties hereto, the party so affected upon giving
prompt notice to the other parties shall be excused from such performance during
such prevention, restriction or interference.
(k) Advice of Legal Counsel. Each party acknowledges and represents
-----------------------
that, in executing this Agreement, it has had the opportunity to seek advice as
to its legal rights from legal counsel and that the person signing on its behalf
has read and understood all of the terms and provisions of this Agreement. This
Agreement shall not be construed against any party by reason of the drafting or
preparation thereof.
The parties have executed this Agreement as of the date first set forth
above.
<PAGE>
MATSUSHITA-KOTOBUKI REPLAY NETWORKS, INC.
ELECTRONIC INDUSTRIES, LTD.
By: /s/ Takao Kanamura By: /s/ Kim LeMasters
--------------------------- ---------------------------
Name: Takao Kanamura Name: Kim LeMasters
-------------------------- ---------------------------
(print) (print)
Title: Senior Management Director Title: Chief Executive Officer
-------------------------- ---------------------------
Date: December 20, 1999 Date: December 20, 1999
-------------------------- ---------------------------
<PAGE>
Exhibit A
---------
Products and Pricing
I. First Period - Products shipped from [***] to [***]
Product Price Projected MSRP
- ------- ----- --------------
PV-HS1000 (20 GB Hard Drive) [***] [***]
PV-HS2000 (30 GB Hard Drive)* [***] [***]
Guaranteed Minimum Purchase Volume: [***] Product units**
Target Maximum Purchase Volume: [***] Product units**
* This Product will be available on [***].
**Guarantee minimum and target maximum volumes apply to all Products and any
products manufactured by MKE containing Replay Software that support the Replay
Network Service ("MKE Products").
II. Second Period - Products shipped from [***] to [***]
MKE and Replay Networks will meet prior to [***] to negotiate in good
faith the pricing and guaranteed minimum and maximum purchase volumes for each
Product or MKE Product to be sold during the second period. In determining such
pricing, the parties shall consider, for each Product or MKE Product: (a) [***],
(b) [***], and (c) [***]. The agreed upon pricing, minimum and maximum purchase
volumes for each Product or MKE Product shall be attached to this Exhibit A upon
the completion of such negotiations.
[***]= 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.
<PAGE>
Exhibit B
---------
Form of Purchase Order
<PAGE>
Exhibit C
---------
Acceptable Quality Levels (AQL)
1.1. Defect Classifications
The following definitions and defect classifications shall be used when defining
a Hard Disk Recorder (hereinafter called HDR) defect:
Defect A definite HDR characteristic one or more defect.
Defective HDR A HDR containing one or more Defect.
Note: A HDR containing Defects in more than one (1)
category shall be classified as being defective in the
most severe classification.
Fitness for Use To be fit for use, a HDR must be free of Safety, Critical
and Major Defects.
Safety Defect [***] A Defect that would cause the HDR to be unsafe, in
violation of an applicable safety code or which, when
connected with another piece of equipment (e.g., video
source or monitor), would materially damage said connected
equipment.
Critical Defect [***] A Defect that would cause the HDR to be inoperative.
Major Defect [***] A Defect which reduces materially the usability of the
HDR, yields unsatisfactory results or detracts from the
appearance of the HDR and is likely to leave customer
dissatisfied.
Minor Defect [***] A Defect which does not affect fitness for use, but one
which should be noted for corrective action by the
Supplier.
2. Lot Acceptance
(a) Lot size: [***] units typical
(b) Lots rejected for Major Defects may be reconsidered for acceptance upon
notification of MKE and remedial action implemented by Replay
Networks, Inc.
[***]= 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.
<PAGE>
TABLE FOR INSPECTION FOR OUT-GOING PRODUCT MODEL;PV-HS1000
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ITEMS CRITERIA DECISION NOTES
----------------------
[***]
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. PACKING A
1-1 PACKING CASE NOTICEABLE DAMAGES [***]
INCORRECT INDICATIONS [***]
1-2 PACKING SPEC
MIS-PRINTINGS [***]
OUT-OF-SPEC ISSUES [***]
MIXTURE OF ALIEN OBJECTS [***]
- ---------------------------------------------------------------------------------------------------------------------------------
2. INCLUDED ACCESSORIES A
2-1 SUPPLIED ACCESSORIES SHORTAGE, MIS-INSERTION, MIXTURE [***]
OF ALIEN OBJECTS
DIRT OR STAIN
- ---------------------------------------------------------------------------------------------------------------------------------
3. OUTER APPEARANCE A
3-1 GENERAL OUTER APPEARANCE NOTICEABLE DIRT OR STAIN, DAMAGES [***]
3-2 LABEL SHORTAGE, MIS-LOCATION [***]
MIS-PRINTING, DIRT OR STAIN [***]
- ---------------------------------------------------------------------------------------------------------------------------------
4. FUNCTION
4-1 POWER ON/OFF BUTTON NO FUNCTION [***]
4-2 REMOTE HDR FUNCTION NO FUNCTION [***]
4-3 REMOTE OTHER FUNCTION NO FUNCTION [***]
- ---------------------------------------------------------------------------------------------------------------------------------
5. LED INDICATION
5-1 POWER (G) INCORRECT INDICATION [***]
5-2 RECORDING (R) INCORRECT INDICATION [***]
5-3 NEW CONTENT INCORRECT INDICATION [***]
- ---------------------------------------------------------------------------------------------------------------------------------
6. INPUT/OUTPUT TERMINALS A
6-1 ANT/CATV IN NO VIDEO, OR NO COLOR, OR NO AUDIO [***]
TROUBLES ON VIDEO OR AUDIO [***]
(POOR, EXCESSIVE, NOISY, DISTORTED)
6-2 LINE1, LIN2, S-VIDEO NO VIDEO, OR NO COLOR, OR NO AUDIO [***]
TROUBLES ON VIDEO OR AUDIO [***]
(POOR, EXCESSIVE, NOISY, DISTORTED)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[***] = 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.
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
7. CONTROL TERMINALS
7-1 IR BLASTER PORT NO FUNCTION (NO CONTROLLING [***]
A DBS AND CABLE BOX WITH IR
CONTROL)
7-2 SERIAL CONTROL NO FUNCTION (NO LINKING A DSS) [***]
7-3 TEL LINE NO FUNCTION (NO CONNECTING TO
THE REPLAY NETWORKS SERVICE) [***]
- ---------------------------------------------------------------------------------------------------------
</TABLE>
A = Classification subject to mutually agreed upon specification.
[***] = 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.
<PAGE>
EXHIBIT D
---------
LETTER AGREEMENT
This Letter Agreement is entered into as of , 1999 by and among Replay
Networks Inc. ("Replay Networks"), Matsushita-Kotobuki Electronics Industries,
Ltd. ("MKE"), and Flextronics International ("Flextronics").
Replay Networks and MKE have entered into the OEM Distribution Agreement ("OEM
Agreement") in which MKE will purchase ReplayTV 3000 ("Products") manufactured
by Flextronics from Replay Networks.
Replay Networks, MKE and Flextronics desire to establish certain procedure and
conditions with respect to the cancellation of purchase orders for the Products
under the OEM Agreement.
The parties undersigned acknowledge and agree as follows:
1. MKE may not cancel any part of any purchase order of Products issued by
MKE and accepted by Replay Networks under the OEM Agreement ("Purchase
Order") without Replay Networks' prior written consent, which consent will
not be unreasonably withheld.
2. In the event MKE cancels any Purchase Order, MKE will reimburse reasonable
cancellation charges directly to Flextronics. Flectronics shall invoice
MKE such cancellation charges based on actual costs supported by
documentation, which costs will be identified by Flextronics within [***]
after said cancellation. For the purpose of this Addendum, said actual
costs are defined as the costs of materials, together with related
restocking charges, which have been procured specifically for Products and
expected to be built for MKE on any MKE Purchase Order(s) accepted by
Replay Networks, and any production related charges due to cancellation of
such Purchase Order(s). Upon determination of the cancellation charges,
MKE may accept delivery of Products under the terms of the Purchase Order
in lieu of paying such cancellation charges.
3. MKE shall promptly notify Flextronics and Replay Networks in the event of
any cancellation of any Purchase Order. MKE shall not be responsible for
any portion of such cancellation charge arising from any delay by
Flextronics in stopping or ceasing procurement of any materials, or
manufacturing of the Products, and Flextronics shall bear such costs.
Replay Networks, Inc. Matsushita-Kotobuki Electronics
Industries, Ltd.
By:____________________ By:_________________________
Title: Title:
Flextronics International
By:____________________ .
Title:
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.15
Flextronics International Manufacturing Contract
This Manufacturing Agreement ("Agreement") is entered into this 3rd day of
November, 1998 by and between Replay Networks having its place of business at
1003 Ewell Court, Palo Alto, California 94303 ("Replay Networks") and
Flextronics International USA, Inc., 2090 Fortune Drive, San Jose, CA 95131
("Flextronics").
Replay Networks has created a market for Replay Networks' Products and is solely
responsible for the sales and marketing of the Products. Flextronics has
developed processes and practices for manufacturing products for many different
electronic applications and at Replay Networks' request desires to manufacture
Replay Networks' Products in accordance with Replay Networks' specifications.
Replay Networks acknowledges that Flextronics' expertise is manufacturing and
that Flextronics' responsibility related to the Replay Networks' Products is
limited to this extent. The parties agree as follows:
1.0 WORK LICENSE
Flextronics agrees to use reasonable commercial efforts to perform the work
(hereinafter "Work") pursuant to purchase orders or changes thereto issued by
Replay Networks and accepted by Flextronics. Work shall mean to procure
components, materials, equipment and other supplies and to manufacture,
assemble, test, and products (hereinafter "Products") pursuant to detailed
written specifications for each such Product which are provided by Replay
Networks and accepted by Flextronics and to deliver such Products. For each
Product or revision thereof, written specifications shall include but are not
limited to bill of materials, schematics, assembly drawings, process
documentation, test specifications, current revision number, and approved vendor
list (hereinafter "Specifications") as attached hereto.
Flextronics is granted by Replay Networks a non-exclusive license during the
term of this Agreement to use all of Replay Networks' patents, trade secrets and
other intellectual property required to perform Flextronics' obligations under
this Agreement.
2.0 FORECASTS, ORDERS, MATERIAL PROCUREMENT
2.1 Forecast. Replay Networks shall provide Flextronics, on a [***] basis, a
rolling [***] Product order forecast.
2.2 Purchase Orders. Replay Networks will issue written purchase orders [***]
per calendar [***] which specify all Work to be completed within a minimum [***]
period commencing on the date of the purchase order. Each purchase order shall
reference this Agreement, and the applicable written Specifications as described
in Section 1.0. Purchase orders shall normally be deemed accepted by
Flextronics, provided however that Flextronics may reject any order that
represents a significant deviation from Replay Networks' historical ordering
volumes or shipment dates. Flextronics shall notify Replay Networks of rejection
of any purchase order within [***] working days of receipt of such order.
Replay Networks may use its standard purchase order form to release items,
quantities, prices, schedules, change notices, specifications, or other notice
provided for hereunder. The parties agree that the terms and conditions
contained in this Agreement shall prevail over any terms and conditions of any
purchase order, acknowledgment form or other instrument.
2.3 Material Procurement. Replay Networks' accepted purchase orders will
constitute authorization for Flextronics to procure, using standard purchasing
practices, the components, materials and supplies necessary for the manufacture
of Products ("Inventory") covered by such purchase orders.
In addition, Replay Networks authorizes Flextronics to purchase, in amounts
beyond the amount necessary to fill accepted purchase orders, the components,
materials, and supplies: (i) with lead times greater than [***] days at
the time the order is placed ("Long Lead Time Components") plus [***] to
account for the order, shipment, receipt and manufacturing time and, (ii)
purchased in quantities above the required amount in order to achieve price
targets ("Economic Order Inventory"), and (iii) purchased in excess of
requirements because of minimum lot sizes available from manufacturers ("Minimum
Order Inventory"). Together these are called "Special Inventory".
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[***] = 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.
<PAGE>
Flextronics may purchase Long Lead Time Components sufficient to meet all
deliveries under the purchase orders and Product forecast in effect at the time
the order with the supplier is placed, and may reasonably purchase Minimum Order
Inventory even if greater than the amount necessary to meet purchase orders and
Product forecast. Economic Order Inventory shall be purchased by Flextronics
only with the prior approval of Replay Networks. Flextronics may, from time to
time, hold Long Lead Time Components and finished goods in inventory to increase
Replay Networks flexibility. The components and quantities of all such
inventory will be documented in a separate letter and signed by both Flextronics
and Replay Networks.
Replay Networks will be responsible for all Inventory and Special Inventory
purchased by Flextronics under this Section 2.1 under the conditions provided
elsewhere in this Agreement.
3.0 SHIPMENTS, SCHEDULE CHANGE, CANCELLATION
3.1 Shipments. All Products delivered pursuant to the terms of this Agreement
---------
shall be suitably packed for shipment in accordance with Replay Networks'
Specifications, marked for shipment to Replay Networks' destination specified in
the applicable purchase order and delivered.. Shipment will be F.O.B.
Flextronics' facility at which time risk of loss and title will pass to Replay
Networks. All freight, insurance and other shipping expenses, as well as any
special packing expenses not included in the original price quotation for the
Products, will be paid by Replay Networks.
3.2 Quantity Increases and Shipment Schedule Changes. For any accepted
------------------------------------------------
purchase order, Replay Networks may (i) increase the quantity of Products or
(ii) reschedule the quantity of Products and their shipment date as provided in
the table below:
Maximum Allowable Variance From Purchase Order Quantities/Shipment Dates
------------------------------------------------------------------------
# of days before Allowable Maximum Maximum
Shipment Date Quantity Reschedule Reschedule
on Purchase Order Increases Quantity Period
----------------- --------- ---------- ----------
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
Any purchase order quantities increased or rescheduled pursuant to this Section
may not be subsequently increased or rescheduled without the prior written
approval of Flextronics. All other changes in quantity or shipment date require
Flextronics' prior written consent and shall be subject to an inventory carrying
charge of [***] per month for finished Product, and Inventory and Special
Inventory procured to support the original schedule. Allowable quantity
increases are subject to material availability. Flextronics will use reasonable
commercial efforts to meet quantity increases. If there are extra costs to meet
a schedule increase in excess of the above limits, Flextronics will inform
Replay Networks for its approval in advance.
3.3 Cancellation. Replay Networks may not cancel any portion of Product
------------
quantity of an accepted purchase order without Flextronics' prior written
approval, not to be unreasonably withheld. If the parties agree upon a
cancellation, Replay Networks will pay Flextronics for Products, Inventory, and
Special Inventory affected by the cancellation as follows: (i) [***] of the
contract price for all finished Products in Flextronics' possession, (ii) [***]
of the cost of all Inventory and Special Inventory in Flextronics' possession
and not returnable to the vendor or usable for other Replay Networkss, whether
in raw form or work in process, less the salvage value thereof, (iii) [***] of
the cost of all Inventory and Special Inventory on order and not cancelable,
(iv) [***] vendor cancellation charges incurred with respect to Inventory and
Special Inventory accepted for cancellation or return by the vendor, and (v)
expenses incurred by Flextronics related to labor and equipment specifically put
in place to support Replay Networks' purchase orders.
Flextronics will use reasonable commercial efforts to return unused Inventory
and Special Inventory and to cancel pending orders for such inventory, and to
otherwise mitigate the amounts payable by Replay Networks.
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
If the forecast for any period is less than the previous forecast supplied over
the same period, that amount will be considered canceled and Replay Networks
will be responsible for any Special Inventory as set forth in the specific
letter described in Section 2.3.
4.0 ENGINEERING CHANGES
Replay Networks may request, in writing, that Flextronics incorporate
engineering changes into the Product. Such request will include a description
of the proposed engineering change sufficient to permit Flextronics to evaluate
its feasibility and cost. Flextronics' evaluation shall be in writing and shall
state the costs and time of implementation and the impact on the delivery
schedule and pricing of the Product. Flextronics will not be obligated to
proceed with the engineering change until the parties have agreed upon the
changes to the Product's Specifications, delivery schedule and Product pricing
and upon the implementation costs to be borne by the Replay Networks including,
without limitation, the cost of Inventory and Special Inventory on-hand and on-
order that becomes obsolete.
5.0 TOOLING, NON-RECURRING EXPENSES, SOFTWARE
Flextronics shall provide non-Product specific tooling at its expense. Replay
Networks shall pay for or obtain and consign to Flextronics any Product specific
tooling and other reasonably necessary non-recurring expenses, to be set forth
in Flextronics' quotation. All software which Replay Networks provides to
Flextronics is and shall remain the property of Replay Networks. Replay
Networks grants Flextronics a license to copy, modify and use such software
required to perform Flextronics' obligations under this Agreement. All
software developed by Flextronics to support the process tooling or otherwise
shall be and remain the property of Flextronics.
6.0 PRODUCT ACCEPTANCE AND WARRANTIES
6.1 Product Acceptance. Flextronics will build, inspect and test Products for
------------------
Replay Networks and deliver them to Replay's on-site Product Inventory Storage
Area at which time title will pass. Flextronics will provide a certificate of
conformance that the products meet the parties joint Product acceptance
criteria. Replay Networks will have [***] days after shipment of the Product
to review the report and come to Flextronics to audit the Product. If no audit
is performed within the [***] days the Product will be deemed accepted.
Products shipped to a location other than the on-site Replay Product Inventory
Storage area will be inspected and tested as required by Replay Networks within
[***] days of receipt. If Products are found to be defective in material or
workmanship, Replay Networks has the right to reject such Products during said
period. Products not rejected during said period will be deemed accepted.
Replay Networks may return defective Products, freight collect, after obtaining
a return material authorization number from Flextronics to be displayed on the
shipping container and completing a failure report. Rejected Products will be
promptly repaired or replaced, at Flextronics' option, and returned freight pre-
paid. If the Product is source inspected by Replay Networks prior to shipment,
Replay Networks will inspect goods within [***] days of its request date.
6.2 Express Limited Warranty. Flextronics warrants that the Products will
------------------------
conform to Replay Networks' applicable Specifications and will be free from
defects in workmanship for a period of [***] days from the date of shipment.
Materials are warranted to the same extent that the original manufacturer
warrants the materials. This express limited warranty does not apply to (a)
materials consigned or supplied by Replay Networks to Flextronics; (b) defects
resulting from Replay Networks' design of the Products; (c) any other defects;
or (d) Product that has been abused, damaged, altered or misused by any person
or entity after title passes to Replay Networks. With respect to first articles,
prototypes, pre-production units, test units or other similar Products,
Flextronics makes no representations or warranties whatsoever. Notwithstanding
anything else in this Agreement, Flextronics assumes no liability for or
obligation related to the performance, accuracy, specifications, failure to meet
specifications or defects of or due to tooling, designs or instructions produced
or supplied by Replay Networks and Replay Networks shall be liable for costs or
expenses incurred by Flextronics related thereto. Upon any failure of a Product
to comply with the above warranty, Flextronics' sole obligation, and Replay
Networks' sole remedy, is for Flextronics, at its option, to promptly repair or
replace such unit and return it to Replay Networks freight collect. Replay
Networks shall return Products covered by the warranty freight pre-paid after
completing a failure report and obtaining a return material authorization number
from Flextronics to be displayed on the shipping container.
FLEXTRONICS MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS,
IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION
WITH
[***] = 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.
<PAGE>
REPLAY NETWORKS, AND FLEXTRONICS SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR
CONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.0 PAYMENT TERMS, ADDITIONAL COSTS AND PRICE CHANGES
7.1 Price and Payment Terms. The price for Products to be manufactured will be
-----------------------
set from time to time through purchase orders issued by Replay Networks and
accepted by Flextronics. All prices quoted are exclusive of federal, state and
local excise, sales, use and similar taxes, and any duties, and Replay Networks
shall be responsible for all such items. Payment for any Products, services or
other costs to be paid by Replay Networks hereunder is due [***] days net
from the date of invoice and shall be made in lawful U.S. currency. Replay
Networks agrees to pay [***] monthly interest on all late payments. Furthermore,
if Replay Networks is late with payments, or Flextronics has reasonable cause to
believe Replay Networks may not be able to pay, Flextronics may require
prepayment or delay shipments or suspend work until assurances of payment
satisfactory to Flextronics are received.
7.2 Letter of Credit. Upon Flextronics' request at any time during the term of
----------------
this Agreement, Replay Networks agrees to obtain and maintain a stand-by letter
of credit (LOC) to minimize the financial risk to Flextronics for its
performance of Work under this Agreement. The LOC shall be for a minimum period
of time of [***] and shall be for a total amount which is equal to [***]. The
calculation shall be based upon the forecast provided by Replay Networks
pursuant to Section 2.1. The draw-down procedures under the LOC shall be
determined solely by Flextronics. Flextronics will, in good faith, review Replay
Networks' creditworthiness periodically and may provide more favorable terms
once it feels it is prudent to do so. Replay Networks agrees to provide all
necessary financial information required for Flextronics to make a proper
assessment of creditworthiness.
7.3 Additional Costs. Replay Networks is responsible for [***]. Replay
----------------
Networks caused delays as a result of consigned inventory will result in a
special charge to the Replay Networks of [***] of the sales price of the
Product for each month, or part thereof, delayed.
7.4 Price Changes. The price of Products to Replay Networks may be increased
-------------
by Flextronics if (a) the market price of fuels, materials, raw materials,
equipment, labor and other production costs, increase beyond normal variations
in pricing as demonstrated by Flextronics, and (b) the parties agree to the
increase after good faith negotiation.
7.5 Cost Reductions. Flextronics agrees to seek ways to reduce the cost of
---------------
manufacturing Products by methods such as elimination of components, obtaining
alternate sources of materials, redefinition of Specifications, and improved
assembly or test methods. Upon implementation of such ways which have been
initiated by Flextronics, Flextronics will receive [***] of the demonstrated
cost reduction. Replay Networks will receive [***] of the demonstrated cost
reduction upon implementation of such ways initiated by Replay Networks. Replay
Networks and Flextronics will review costs on a quarterly basis.
8.0 TERM AND TERMINATION
8.1 Term. The term of this Agreement shall commence on the date hereof above
----
and shall continue for [***] thereafter until terminated as provided in Section
8.2 or 10.9. After the expiration of the initial term hereunder (unless this
Agreement has been terminated) this Agreement shall be automatically renewed for
separate but successive one-year terms.
8.2 Termination. This Agreement may be terminated by either party (a) for any
-----------
reason upon [***] days written notice to the other party, or (b) if the other
party defaults in any payment to the terminating party and such default
continues without a cure for a period of [***] days after the delivery of
written notice thereof by the terminating party to the other party, or (c) if
the other party defaults in the performance of any other material term
[***] = 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.
<PAGE>
or condition of this Agreement and such default continues unremedied for a
period of [***] days after the delivery of written notice thereof by the
terminating party to the other party. Termination of this Agreement for any
reason shall not affect the obligations of either party which exist as of the
date of termination. Upon termination for any reason whatsoever, Replay Networks
shall be responsible for the finished Products, Inventory, and Special Inventory
in existence at the date of termination in the same manner as for cancellations
as set forth in Section 3.3. Notwithstanding termination of this Agreement,
Sections 6.2, 9.0, and 10.1 shall survive said termination.
9.0 LIABILITY LIMITATION
9.1 Patents, Copyrights, Trade Secrets, Other Proprietary Rights. Replay
------------------------------------------------------------
Networks shall defend, indemnify and hold harmless Flextronics from all claims,
costs, damages, judgments and attorney's fees resulting from or arising out of
any alleged and/or actual infringement or other violation of any patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, trade secrets, proprietary rights and processes or other such rights
related to the Products. Flextronics shall promptly notify Replay Networks in
writing of the initiation of any such claims.
THE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER
CONCERNING INFRINGEMENT OF PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL
PROPERTY RIGHTS.
9.2 Product Liability. Replay Networks agrees that, if notified promptly in
-----------------
writing and given sole control of the defense and all related settlement
negotiations, it will defend Flextronics from any claim or action and will hold
Flextronics harmless from any loss, damage or injury, including death, which
arises from any alleged defect of any Products. Replay Networks shall name
Flextronics as an additional insured under Replay Networks' product liability
policies for any Products.
9.3 No Other Liability. EXCEPT FOR THE EXPRESS WARRANTIES CREATED UNDER THIS
------------------
AGREEMENT AND EXCEPT AS SET FORTH OTHERWISE IN THIS AGREEMENT, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL
OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE
SALE OF PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT,
TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR
OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS
OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF
THEIR ESSENTIAL PURPOSE.
10.0 MISCELLANEOUS
10.1 Confidentiality. All written information and data exchanged between the
---------------
parties for the purpose of enabling Flextronics to manufacture and deliver
Products under this Agreement that is marked "Confidential" or the like, shall
be deemed to be Confidential Information. The party which receives such
Confidential Information agrees not to disclose it directly or indirectly to any
third party without the prior written consent of the disclosing party.
Confidential Information disclosed pursuant to this Agreement shall be
maintained confidential for a period of [***] after the disclosure thereof.
10.2 Entire Agreement. This Agreement constitutes the entire agreement between
----------------
the Parties with respect to the transactions contemplated hereby and supersedes
all prior agreements and understandings between the parties relating to such
transactions. Replay Networks shall hold the existence and terms of this
Agreement confidential, unless it obtains Flextronics' express written consent
otherwise. In all respects, this Agreement shall govern, and any other
documents including, without limitation, preprinted terms and conditions on
Replay Networks' purchase orders shall be of no effect.
10.3 Amendments. This Agreement may be amended only by written consent of both
----------
parties.
10.4 Independent Contractor. Neither party shall, for any purpose, be deemed to
----------------------
be an agent of the other party and the relationship between the parties shall
only be that of independent contractors. Neither party shall have any right or
authority to assume or create any obligations or to make any representations or
warranties on behalf of any other party, whether express or implied, or to bind
the other party in any respect whatsoever.
[***] = 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.
<PAGE>
10.5 Expenses. In the event a dispute between the parties hereunder with
--------
respect to this Agreement must be resolved by litigation or other proceeding or
a party must engage an attorney to enforce its right hereunder, the prevailing
party shall be entitled to receive reimbursement for all associated reasonable
costs and expenses (including, without limitation, attorneys fees) from the
other party.
10.6 Security Interest. Until the purchase price and all other charges payable
-----------------
to Flextronics hereunder have been received in full, Flextronics hereby retains
and Replay Networks hereby grants to Flextronics a security interest in the
Products delivered to Replay Networks and any proceeds therefrom up to the total
amounts owed to Flextronics. Replay Networks agrees to promptly execute any
documents requested by Flextronics to perfect and protect such security
interest.
10.7 Governing Law. This Agreement shall be governed by and construed under the
-------------
laws of the State of California, excluding its choice of law principles. The
parties consent to the exclusive jurisdiction of the state and Federal courts in
Santa Clara County, California.
10.8 Successors, Assignment. This Agreements shall be binding upon and inure to
----------------------
the benefit of the parties hereto and their respective successors, assigns and
legal representatives. Neither party shall have the right to assign or
otherwise transfer its rights or obligations under this Agreement except with
the prior written consent of the other party, not to be unreasonably withheld.
10.9 Force Majeure. In the event that either party is prevented from
-------------
performing or is unable to perform any of its obligations under this Agreement
(other than a payment obligation) due to any Act of God, fire, casualty, flood,
earthquake, war, strike, lockout, epidemic, destruction of production
facilities, riot, insurrection, material unavailability, or any other cause
beyond the reasonable control of the party invoking this section, and if such
party shall have used its commercially reasonable efforts to mitigate its
effects, such party shall give prompt written notice to the other party, its
performance shall be excused, and the time for the performance shall be extended
for the period of delay or inability to perform due to such occurrences.
Regardless of the excuse of Force Majeure, if such party is not able to perform
within [***] days after such event, the other party may terminate the
Agreement. Termination of this Agreement shall not affect the obligations of
either party which exist as of the date of termination.
ACCEPTED AND AGREED TO:
REPLAY NETWORKS: FLEXTRONICS INTERNATIONAL USA, INC.:
/s/ Anthony Wood /s/ Michael McNamara
- ---------------------------- ------------------------------------
By: Anthony Wood By: Michael McNamara
------------------------- ---------------------------------
Title: CEO Title: President
---------------------- ------------------------------
[***] = 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.
<PAGE>
EXHIBIT 10.16
Tribune Media Services
----------------------
435 N. Michigan Ave., Suite 1500
--------------------------------
Chicago, Illinois 60611
-----------------------
312-222-8650
------------
TRIBUNE MEDIA SERVICES TELEVISION LISTINGS AGREEMENT
This Agreement is made this June 1, 1998, between Tribune Media Services, Inc.,
(TMS), a Delaware corporation d/b/a TMS TV Listings and Pacific Digital Media,
Inc. (Publisher). TMS TV Listings herein grants to Publisher the non-exclusive
right and privilege of using TMS television program listings information within
its "Product" (as defined in Addendum 1) located at 1003 Elwell Court, Palo
Alto, California 94303 on terms and conditions set forth herein.
1. TMS shall provide to Publisher [***] television programming listings as
defined in Addendum 2. The service shall be delivered to Publisher over
communication equipment owned by Publisher at Publisher's premises.
2. (a) Publisher shall pay to TMS [***] fees as described in Addendum 4
for services provided hereunder. TMS will bill Publisher [***] and invoices
shall be payable upon receipt.
(b) This rate will increase [***] by [***] in successive years of this
Agreement with the first increase on [***].
3. Publisher shall pay all sums accruing in each [***] on or before the
fifteenth day of the following [***]. Should it become necessary to institute
collection proceedings, Publisher agrees to pay all costs, including reasonable
attorneys' fees, whether or not suit is filed. Publisher consents to the
personal jurisdiction of the courts of Illinois for all purposes and consents to
venue in the courts of Cook County, Illinois. Any objections as to jurisdiction
and venue being expressly waived.
4. This Agreement shall continue for [***] from June 1, 1998, and shall
renew itself continuously for further terms of [***] each unless either party
notifies the other by certified letter received by Publisher at 1003 Elwell
Court, Palo Alto, California 94303 or by TMS at Tribune Media Services, Inc.,
435 N. Michigan Avenue, Suite 1500, Chicago, Illinois 60611 at least [***]
before the end of the then current term of its desire to terminate, in which
event this agreement shall terminate at the end of the then current term. TMS
may also terminate this agreement if any invoice specified in Clause Two above
is not paid within [***] following receipt by Publisher. Notwithstanding the
above, Publisher shall have the right to terminate this Agreement upon [***]
notice to TMS if TMS fails to perform the services it has agreed to perform and
if such failure continues for [***] days after Publisher gives TMS notice of the
failure.
5. Publisher agrees to review all TMS television program listing
transmissions and immediately notify TMS of any changes necessary to Publisher's
format or any mistakes, errors or omissions in data. TMS shall not be liable for
any loss or damage arising to Publisher by reason of nondelivery, delay or
interruption in delivery of data due to circumstances beyond the control of TMS,
which shall include without limitation, failure of communication equipment. IN
NO EVENT SHALL TMS' LIABILITY TO PUBLISHER OR ANY OTHER PARTY FOR MISTAKES,
ERRORS, OR OMISSIONS IN DATA, FOR NONDELIVERY OR LATE DELIVERY OF DATA, EXCEED
THE AMOUNT PAYABLE BY PUBLISHER TO TMS FOR THE DATA IN WHICH THE MISTAKE, ERROR,
OR OMISSION OCCURRED, OR FOR THE DATA WHICH WAS NOT DELIVERED OR WAS NOT
DELIVERED ON A TIMELY BASIS. IN NO EVENT SHALL TMS BE LIABLE FOR INCIDENTAL,
CONSEQUENTIAL, OR PUNITIVE DAMAGES OR LOST-PROFIT DAMAGES.
6. TMS and Publisher (each, "the Indemnifying Party") shall indemnify and
hold the other party and its Affiliates (as defined in this Agreement) and their
respective employees, officers and directors (the Indemnified Party(ies))
harmless from and against any and all claims, damages, costs, expenses and other
liabilities (whether under a theory of strict liability or otherwise) by third
parties incurred by, or threatened, imposed or filed against, any Indemnified
Party (including, without limitation,(a) costs of investigation and defense,
which shall include without limitation court costs and reasonable attorney and
other expert and third party fees and (b) to the extent permitted by Law, any
fines, penalties and forfeitures in connection with any proceedings against an
Indemnified Party) caused by (i) any breach of this Agreement by the
Indemnifying Party; and (ii) any personal injury, property
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[***]= 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.
<PAGE>
damage or physical damage or any other harm or damage, to any person resulting
from or arising out of or related to the Indemnifying Party's performance or
misperformance of any obligation under this Agreement; and (iii) an actual or
alleged infringement of any patent, copyright, trademark, servicemark or other
intellectual property right and/or interest (including without limitation,
misappropriation of trade secrets) arising out of any action or inaction by an
Indemnified Party and/or its agents or employees with respect to its obligations
under this Agreement or any portion thereof, or any and all other materials or
Services furnished directly or indirectly to, or the use thereof by, the
Indemnifying Party(ies) (Infringement Claim(s)). The indemnification obligations
under this Section 6 expressly include an obligation to indemnify the
Indemnified Party for the actions or inactions of any and all agents,
contractors, employees, officers, directors, subcontractors or other persons
working for, under the director of, or on behalf of the Indemnifying Party with
respect to its obligations under this Agreement. Affiliate(s) mean any
corporation or other entity controlling, or controlled by, or under common
control with, a person, as the case may be.
7. Publisher shall not use any of the data provided by TMS hereunder
except for use within its "Product."
8. CONFIDENTIAL/PROPRIETARY INFORMATION
a. Licensed Data as Confidential/Proprietary Information. The parties
acknowledge that the Licensed Data listed in Addendum 2 received by Publisher
from TMS will be deemed Confidential/Proprietary Information, the use and
disclosure of which is restricted by this Section.
b. Security Conditions. Confidential/Proprietary Information will be
maintained under secure conditions by Publisher using reasonable security
measures but in any event (a) not less than the same security procedures used by
Publisher for the protection of its own Confidential/Proprietary Information of
a similar kind, and (b) any specific security measures required by this
Agreement.
c. Non-Disclosure Obligation.
i. Except as may be otherwise permitted by this Agreement, Publisher shall
not disclose any Confidential/Proprietary Information to any third party without
the prior consent of TMS.
ii. Publisher may disclose the Confidential/Proprietary Information to
those of its personnel who have a substantial need to know the specific
information in question in connection with the Publisher's exercise of rights
under this Agreement. All such Personnel will be instructed by Publisher that
the Confidential/Proprietary Information is subject to the obligation of
confidence set forth by this License Agreement.
d. No Unauthorized Copying. Except as may be otherwise permitted by this
Agreement, Publisher shall not copy, duplicate, reverse engineer, reverse
compile, disassemble, record, or otherwise reproduce any part of
Confidential/Proprietary Information, nor attempt to do any of the foregoing,
without the prior written consent of TMS. Any tangible embodiments of the
Confidential/Proprietary Information that may be generated by Publisher, either
pursuant to or in violation of this Agreement, will be deemed to be the sole
property of TMS and fully subject to the obligation of confidence set forth in
this Section.
e. Reports of Third-Party Misappropriation. Publisher shall immediately
report to TMS any attempt by any person of which Publisher has knowledge (a) to
use or disclose Confidential/Proprietary Information without authorization from
TMS, or (b) copy, reverse assemble, reverse compile or otherwise reverse
engineer any part of the Licensed Data.
f. Post-Termination Procedures. Upon any termination of Publisher's right
to possess and/or use Confidential/Proprietary Information (e.g., termination or
expiration of the license), Publisher agrees not to use such
Confidential/Proprietary Information in any way or form.
9. In the event Publisher requests format revisions or additional service,
there may be increases in the monthly rate set forth in Paragraph Two above, or
an additional one-time charge, depending on the additional service requested.
Specific rate increases or charges shall be provided to Publisher by TMS in
advance of the actual format changes requested by Publisher.
<PAGE>
10. This Agreement shall be governed by and interpreted under the laws of
the State of Illinois. This Agreement shall not take effect until accepted and
executed by an officer of Tribune Media Services, Inc., at Chicago, Illinois.
11. This Agreement contains the entire understandings of the parties
concerning the subject matter herein, and supersedes and cancels all prior
understandings, agreements, representations, oral or otherwise, between the
parties. This Agreement may only be amended in writing.
In Witness Whereof, the undersigned have executed this Agreement on the dates
indicated.
Accepted by: Accepted by:
Pacific Digital Media, Inc. Tribune Media Services, Inc.
/s/ Anthony Wood /s/ Donald C. Kraska
- ----------------------------- -----------------------------------
(Signature of Publisher) (Signature of Tribune Media Services, Inc.,
officer)
Anthony Wood Donald C. Kraska
- ----------------------------- -----------------------------------
(Publisher) (Tribune Media Services, Inc., officer)
CEO VP/Finance
- ----------------------------- -----------------------------------
(Title) (Title)
6/25/98 7/14/98
- ----------------------------- -----------------------------------
(Date) (Date)
<PAGE>
ADDENDUM 1: PRODUCT DESCRIPTION AND LIMITATIONS OF USE
Publisher will use television program listings information provided by TMS
exclusively on the electronic program guide of its Pacific Digital Media
consumer hardware device or in subsequent usage agreed upon by both parties. No
redistribution or derivative product uses are permitted without the express
written consent of TMS.
<PAGE>
ADDENDUM 2: DEFINITION OF SERVICE FOR LICENSED DATA
1. TV Schedules ("Schedules"):
- -------------------------------
SEE ATTACHED DOCUMENT "Data Specification: TV Schedules"
2. System-Specific Channel Lineups ("Channel Lineups"):
- -------------------------------------------------------
SEE ATTACHED DOCUMENT "Data Specification: Channel Lineups"
Publisher agrees to accept the Licensed Data as defined in the attached
documents during the term of this Agreement.
TMS agrees not to change the record format of the Licensed Data without
deliberation, if at all, and only then by notifying Publisher in writing in
advance.
TMS and Publisher agree that TMS may change the Licensed Data only by adding
fields at the end of file(s) and/or possibly modifying field formats, but that
TMS may not delete any fields.
<PAGE>
ADDENDUM 3:
[***]
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTTED PORTIONS.
<PAGE>
ADDENDUM 4: FEES
On a [***] basis, within Publisher's [***], Publisher pays TMS the following:
1. TV Schedules:
[***] [***] for the Schedules defined in Addendum 2,
delivered once [***].
[***] [***] for the Schedules defined in Addendum 2,
delivered once [***].
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] and on: [***] for the Schedules defined in Addendum 2.
2. System-Specific Channel Lineups:
[***] [***] for [***] DBS lineups and [***] cable markets,
delivered once [***].
[***] [***] for [***] DBS lineups and [***] cable markets,
delivered once [***].
[***] [***] for the Channel Lineups defined in Addendum 2,
delivered once [***].
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] and on: [***] per Channel Lineup per [***] for the Channel
Lineups defined in Addendum 2.
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.16
AMENDMENT TO THE DATA LICENSE AGREEMENT BETWEEN PACIFIC DIGITAL
MEDIA INC., AND TRIBUNE MEDIA SERVICES, INC.
This amendment, dated October 26, 1998, amends the Tribune Media Services TV
Listings Agreement between Tribune Media Services, Inc., ("TMS") and Pacific
Digital Media Inc., ("Publisher") dated June 1, 1998. The same terms of the
referenced agreement will apply to the following amendments, which replace the
first sentence of Section 4 and replace the entire Addendum 4: Fees:
Replace the first sentence in Section 4 with the following:
This Agreement shall continue for [***] from June 1, 1998, and shall renew
itself continuously for further terms of [***] each unless either party
notifies the other by certified letter received by Publisher at 1003 Elwell
Court, Palo Alto, California 94303 or by TMS at Tribune Media Services, Inc.,
435 N. Michigan Avenue, Suite 1500, Chicago, Illinois 60611 at least [***]
before the end of the then current term of its desire to terminate, in which
event this agreement shall terminate at the end of the then current term
Replace ADDENDUM 4: FEES with the following:
ADDENDUM 4: FEES
On a [***] basis, within Publisher's [***], Publisher pays TMS the
following:
1. TV Schedules:
[***] [***] for the Schedules defined in Addendum 2, delivered
once [***].
[***] [***] for the Schedules defined in Addendum 2, delivered
once [***].
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] [***] for the Schedules defined in Addendum 2.
[***] and on: [***] for the Schedules defined in Addendum 2.
2. System-Specific Channel Lineups:
[***] [***] for [***] DBS lineups and [***] cable markets,
delivered once [***].
[***] [***] for [***] DBS lineups and [***] cable markets,
delivered once [***].
[***] [***] for the Channel Lineups defined in Addendum 2,
delivered once [***].
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] [***] for the Channel Lineups defined in Addendum 2.
[***] and on: [***] per Channel Lineup per month for the Channel Lineups
defined in Addendum 2.
[***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
1
<PAGE>
Accepted by:
Pacific Digital Media, Inc. Tribune Media Services, Inc.
By: /s/ Anthony Wood By: /s/ Donald C. Kraska
------------------------------- -------------------------------------
Anthony Wood Donald C. Kraska
- ---------------------------------- ----------------------------------------
Printed name Printed name
CEO VP/Finance
- ---------------------------------- ----------------------------------------
Title Title
6/25/98 7/14/98
- ---------------------------------- ----------------------------------------
Date Date
2
<PAGE>
EXHIBIT 10.17
Execution Copy
Agreement
This agreement (the "Agreement") is made as of February 1, 1999 by and between
Replay Networks, Inc., 1003 Elwell Court, Palo Alto, CA 94303 ("Replay") and
Showtime Networks Inc., 1633 Broadway, New York, NY 10019 ("SNI").
The parties, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, agree as follows:
1. The term of this Agreement shall commence as of February 1, 1999
and expire on [***] (the "Term") unless earlier terminated in accordance with
this Agreement. The Term shall be extended automatically for [***] period
thereafter unless either party notifies the other in writing at least [***]
prior to [***] of its desire not to so extend the Term of this Agreement.
2. Replay shall use the "Network Content" (as defined below) provided
to Replay by SNI as contemplated in Section 3 below to create promotional areas
(currently known as "Replay Channels" and "Replay Zones") for the "SNI Services"
(as defined in Paragraph 3 below) that will be accessible to users of the
"Replay Network Service" (as defined below) from Replay's primary "Replay
Channel" and "Replay Zone" video-interface screens. For the purposes hereof, the
term "Replay Network Service" shall mean the electronic program guide and other
features (including customization of television lineups and easy, one-touch
record capability) provided by Replay that enable owners of Replay's
receiver/storage devices ("ReplayTV Units") to customize their television
viewing. Replay shall offer at all times throughout the Term the ability for
each user of the Replay Network Service the capability to create at least [***]
for each SNI Service (each, an "SNI Replay Channel") and [***] for all of the
SNI Services (the "SNI Replay Zone"); provided that SNI acknowledges and agrees
that each Replay Zone will only accommodate up to approximately [***] Replay
Channels and that, as such, if there are greater than [***] SNI Services, a user
of the Replay Network Service may not be able to include all of the SNI Replay
Channels for the SNI Services in [***] SNI Replay Zone. SNI Replay Channels may
be deleted from an SNI Replay Zone by a Replay Network Service subscriber,
however, the SNI Replay Zone may not be deleted. Replay and SNI shall mutually
agree on the look and feel for a template to serve as the basis for each of the
SNI Replay Channels and the SNI Replay Zone. SNI shall produce and maintain
network content for the SNI Replay Zone and SNI Replay Channels throughout the
Term of this Agreement. SNI and Replay shall establish and implement a process
which will allow SNI to update, modify, delete or otherwise alter Network
Content on each SNI Replay Channel and the SNI Replay Zone on no less than a
weekly basis via a dial-up telephone modem line or other mutually agreed upon
electronic interface methodology. In addition to, and without limiting the
foregoing, SNI shall be responsible for the look and feel of each SNI Replay
Channel and the SNI Replay Zone. SNI will upload changes to the look and feel of
any or all of the SNI Replay Channels and the SNI Replay Zone as it deems
necessary and Replay will subsequently integrate those new elements into the
Replay Network Service and disseminate those elements to ReplayTV Units on a
timely basis. In addition, Replay shall, prior to factory shipment, make
reasonable efforts to load onto the hard
CERTAIN INFORMATION IN THIS EXHIBIT 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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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
disk of each ReplayTV Unit to be shipped during the Replay release 1.0 version
of its software, approximately [***] of promotional programming (to be supplied
by SNI in a mutually agreed upon format to Replay [***] days prior to loading)
exclusively promoting the SNI Services. SNI will update the supplied promotional
programming on a mutually agreed upon schedule. SNI shall pay Replay a [***]
set-up fee of [***] to cover Replay's manufacturing costs to pre-load the
promotional programming on the hard disks of the ReplayTV Units. Replay shall
invoice SNI for this fee within [***] days after the first number of ReplayTV
Units are pre-loaded and shipped. SNI shall pay the fee within [***] days after
receipt of the invoice.
3. SNI shall provide Replay with certain program information, text,
pictures, graphics, sound, video and other data (collectively, the "Network
Content") related to each of the television program services currently known as
Showtime, The Movie Channel, Sundance Channel and Flix (together with such
services' multiplex (including but not limited to Showtime Extreme) and time
zone feeds, the "SNI Services"). SNI will be responsible for creating,
selecting, producing and providing all Network Content (within Replay
specifications to be supplied by Replay to SNI) and for clearing all rights and
obtaining all requisite consents for the use of the Network Content in the
manner contemplated by this Agreement. The selection, substitution and
withdrawal of any element of the Network Content shall at all times remain
within the sole discretion of SNI and may be changed or altered at any time by
SNI without notice. Replay shall not make any alterations, amendments, additions
or deletions to any of the Network Content (including without limitation credit
obligations, copyright and trademark notices and the like) or to any SNI Replay
Channel or SNI Replay Zone except at the request of SNI.
4. Prior to the date that Replay first ships consumer units (such date
referred to herein as "FCS"), Replay shall provide to SNI [***] beta test
ReplayTV Units [***] and promptly following FCS, Replay shall provide to SNI
[***] additional ReplayTV Units. Replay shall make an additional [***] ReplayTV
Units available for purchase by SNI at [***] plus shipping and handling. All of
the foregoing ReplayTV Units shall contain the highest memory/storage capability
available at the time such ReplayTV Units are provided to SNI in the case of the
[***] ReplayTV Units and purchased by SNI in the case of the [***] plus shipping
and handling priced ReplayTV Units.
5. All right, title and interest in and to any and all Network Content
and any and all content or material provided to Replay by SNI for the purpose of
creating the SNI Replay Channels and the SNI Replay Zone shall remain the
property of SNI. Replay acknowledges and agrees that all trade names, trademarks
and service marks of SNI and its program suppliers (the "Marks") shall remain
the property of SNI or such program supplier, as applicable, and nothing in this
Agreement shall confer on Replay any right of ownership in or to any such Marks
and all uses of such Marks shall inure to the benefit of SNI or such program
supplier, as applicable.
6. Replay shall provide the SNI Service known as "Showtime" with [***]
positioning on the Replay Network Service comparable to any and all other
programming networks and services which appear on the Replay Network Service
(including [***]).
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
-2-
<PAGE>
No changes shall be made to the [***] of such positioning on the Replay Network
Service without the prior written consent of SNI. In addition, Replay shall use
its best reasonable efforts to afford each of the other SNI Services [***]
placement on the Replay Network Service. Furthermore, in the event that Replay
has surplus promotional inventory within the Replay Network Service, then Replay
shall make that surplus inventory available to SNI on a basis [***] than any
other similarly situated sponsor to allow SNI to provide additional video and
graphic information relating to the television programming being offered by SNI.
7. Replay shall collect [***] viewership and usage data on a [***]
basis, subject to technical capability, during the Term from subscribers to the
Replay Network Service and shall make that data available to SNI within [***]
following the [***] as to which the data applies; provided that such data will
only be made available to SNI as permitted by law and by Replay's agreement with
its subscribers to the Replay Network Service. Replay will also provide SNI the
ability to conduct reasonable qualitative and/or quantitative research among
Replay Network Service users that also subscribe to SNI movie-based television
services. For the purpose of conducting said research (and not for the purposes
of sale to third parties), upon SNI's request, Replay will provide SNI's
designated third party research vendor with access to Replay Network Service
users via telephone contact information. No contact information shall be
provided by such third party research vendor to SNI and all data obtained from
Replay Network Service users by such third party research vendor is to be shared
and used by SNI and Replay for their own internal research purposes with strict
respect to privacy of such Replay Network Service users.
8. Within [***] after execution of this Agreement by both parties, SNI
shall pay to Replay [***] setup fee in the amount of [***] for the creation of
software required to program the SNI Replay Zone. Replay shall bear any and all
additional costs and expenses incurred by it in the performance of its
obligations under this Agreement and SNI shall bear all costs and expenses
incurred in the creation of the Network Content.
9. SNI shall make reasonable efforts to provide Replay with the
opportunity to sponsor select Showtime events during the Term of this Agreement.
The terms of each sponsorship opportunity shall be negotiated in good faith at
the time of the particular sponsorship opportunity. SNI shall provide a link
from SNI's website to Replay's website and Replay shall provide a reciprocal
link from Replay's website to destination URL specified by SNI. SNI shall have
the right to display the Replay logo on SNI advertising and promotional
materials. Such logo may be displayed as a small icon in a peripheral portion of
the Showtime advertisement or promotion. Replay shall have the right to display
the Showtime logo and name in a peripheral portion of Replay advertisements and
promotional materials provided that Replay first obtains the prior written
consent of SNI as to each such use.
10. If Replay at any time has entered or hereafter enters into an
agreement with any other person or entity (including without limitation any
subsidiary, division or business unit of Viacom Inc.) for the inclusion of such
person's or entity's programming as part of the Replay Network Service which
agreement embodies provision(s) which is(are) [***] (a "[***]
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
-3-
<PAGE>
"), then Replay shall promptly make such [***] available to SNI for application
by SNI to the SNI Services.
11. In the event that any subsidiary, division or business unit of
Viacom Inc. has entered into or hereafter enters into an agreement with Replay
to participate in the Replay Network Service, Replay shall, at a minimum, make
available to such subsidiary, division or business unit an agreement on the
terms and conditions set forth herein for the duration of this Agreement.
12. Each party hereto and its employees and representatives shall keep
confidential the terms and conditions of this Agreement and any and all data,
reports and information relating thereto or derived thereunder (including
without limitation Replay keeping confidential (other than providing such
information to SNI) any and all usage data or other similar information
pertaining to the SNI Services) except (a) if required by a valid subpoena
issued by a court of competent jurisdiction or other governmental agency or
franchise authority (in which event the disclosing party shall (i) give the
other party reasonable notice of such intended disclosure (in advance if
practicable) and (ii) use its diligent efforts to request confidentiality of all
information subject to disclosure), (b) if required by governmental laws or
regulations (including SEC filings or franchise authorities), (c) as part of its
normal reporting or review procedure to its parent company, its auditors, legal
advisors, bankers or investment bankers; provided, however, that the disclosing
party agrees to (i) require such parent company, its auditors, legal advisors,
bankers or investment bankers to be bound by this Section 12 and (ii) be
responsible for any breach of the provisions of this Section 12 by such parent
company, its auditors, legal advisors, bankers or investment bankers; (d) in
order to enforce its rights or perform its obligations pursuant to this
Agreement; provided, however, that prior to such disclosure under this subclause
(d) such party shall request confidential treatment of such information; and (e)
in any other instance, if mutually agreed by the parties, in advance of such
disclosure, in writing.
13. Neither party may issue a press release or other public
announcement concerning this Agreement, or the activities contemplated hereby,
without the prior written consent (not to be unreasonably withheld) of the other
party to this Agreement as to the content and timing of such press release or
other announcement.
14. Commencing as of the date of this Agreement and continuing
throughout the Term, Replay and SNI shall use reasonable efforts to create and
employ on the Replay Network Service additional promotional offerings regarding
the SNI Services. Replay and SNI shall mutually agree, in good faith on a
project-by-project basis, the amount of financial, creative, production and
technical resources each party shall commit to the development and
implementation of each such additional project. Specifically, Replay and SNI
shall jointly develop thematic virtual channels relating exclusively to the SNI
Services to be made available as a feature of the Replay Network Service. Replay
and SNI shall also use reasonable efforts to create and employ as part of the
Replay Network Service enhanced promotional offerings relating exclusively to
the SNI Services using added value elements such as [***] which will be [***] of
the telecast of the [***] to which such
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REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
-4-
<PAGE>
promotional offering relates and [***] by any user that has also selected to
[***] the particular long-form program (subject to the limits of the ReplayTV
Unit's [***] and network [***]). SNI shall be responsible for supplying [***] to
Replay all such added value programming content and Replay shall be responsible
for [***].
15. Replay will indemnify, defend and hold harmless SNI and its
affiliated companies (and each of their respective present and former employees,
agents, directors, shareholders and parent and subsidiary companies) against and
from any and all claims, damages, penalties, liabilities, costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel and
court costs) arising out of or relating to (a) the use of any of Replay's
equipment or software, to the extent that such use infringes, or is alleged to
infringe, any copyright, mask work, patent or trademark, or misappropriates, or
is alleged to misappropriate, any trade secret, or violates or is alleged to
violate any other right of any third party, (b) any failure on the part of
Replay or Replay's equipment or software to be in compliance with any law, rule,
regulation or court or administrative decree to which it is subject, (c) any
failure on the part of Replay to have acquired good title to each and every
property right (whether relative to tangible or intangible property) or any
license, usage or other right necessary to effectuate the acts or performances
contemplated by, or failure to satisfy any obligations imposed on Replay
pursuant to, this Agreement, (d) any personal injury, property damage or other
injury sustained by others that is alleged or proven to have been caused by
Replay's equipment or software (or any equipment, technologies, processes or
component used in such equipment or software) or (e) any breach or alleged
breach by Replay of any of its representations, warranties, covenants or
undertakings in this Agreement.
16. SNI will indemnify, defend and hold harmless Replay and its
affiliated companies (and each of their respective present and former employees,
agents, directors, shareholders and parent and subsidiary companies) against and
from any and all claims, damages, penalties, liabilities, costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel and
court costs) arising out of or relating to (a) any claim that the Network
Content (i) infringes on, or constitutes a misappropriation of any third party's
copyright, patent, trademark, trade secret or other proprietary or intellectual
property right, or right of publicity or privacy; (ii) is defamatory or trade
libelous; (iii) is lewd, pornographic or obscene; or (iv) violates any laws
regarding unfair competition, anti-discrimination or false advertising (provided
that Replay shall, to like extent, indemnify, defend and forever hold SNI and
the corresponding SNI entities, harmless from and against any and all claims,
damages, penalties, liabilities, costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel and court costs)
arising out of any deletion from, alteration of, or addition to, the Network
Content by Replay or creation of any material by Replay (such as the creation of
promotional materials)), or (b) any breach or alleged breach by SNI of any of
its representations, warranties, covenants or undertakings in this Agreement.
17. All parties shall be required to negotiate in good faith any
provision in this Agreement requiring mutual agreement of the parties or any
provision that contemplates the parties having to determine matters necessary to
effectuate the purposes of this Agreement after
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REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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the execution hereof. The provisions of this Agreement are for the exclusive
benefit of the parties who are signatories hereto and their permitted successors
and assigns, and no third party shall be a beneficiary of, or have any rights by
virtue of, this Agreement (whether or not such third party is referred to
herein). Nothing contained herein shall be deemed to create a joint venture,
partnership, principal/agent relationship or other fiduciary relationship
between the parties hereto. This Agreement (including any Attachments attached
hereto) sets forth the entire understanding and agreement of the parties hereto
regarding the subject matter hereof, and supersedes all prior agreements,
statements, negotiations and understandings (whether written or oral) among the
parties hereto regarding such subject matter. This Agreement may not be altered,
amended, or modified except by a subsequent writing signed by the parties hereto
that specifically references this Agreement. Any ambiguities shall be resolved
without reference to which party may have drafted this Agreement.
18. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE WHOLLY PERFORMED THEREIN. REPLAY AND SNI
EACH CONSENTS TO SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AT THE ADDRESS FOR SUCH PARTY SET FORTH ABOVE.
19. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
SHOWTIME ONLINE INC. REPLAY NETWORKS, INC.
By: /s/ Jefferson Morris By: /s/ Michael D. Kornet
---------------------------- -------------------------
Name: Jefferson Morris Name: Michael D. Kornet
Title: SVP, New Media Title: Vice President,
Business Development
Media & New Media
-6-
<PAGE>
EXHIBIT 10.18
July 30, 1999
Mr. Martin Yudkovitz
President
National Multimedia Inc.
30 Rockefeller Plaza
New York, New York 10112
Re: Replay Zones /Advertising
-------------------------
Dear Marty:
Replay is pleased to have National Broadcasting Company, Inc. ("NBC") join its
group of investors in its Series E financing. NBC will invest $5 million
dollars under the terms of the Series E financing. Additionally, this letter
agreement (the "Agreement") shall embody the agreement between Replay and NBC on
the following issues:
1) The term of this Agreement shall commence on the date hereof and end on
[***] (the "Term"); provided, that if in NBC's good faith judgment Replay
fails to comply with Section 2 hereof, then NBC shall have the option to
extend the Term for a period of [***] by providing written notice to
Replay.
2) Replay will use its best efforts to address concerns related to how the use
of the [***] on the Replay remote affects advertising. Specifically,
within the [***] period after the date hereof Replay will consult with its
investors and advertisers to determine the best course of action to
encourage both advertiser and viewer support for the category of
personalized television and shall use its best efforts to take such action
in connection with the Replay service (the "Replay Network Service").
During this review process, Replay will no longer [***] the [***]
functionality in advertisements or marketing materials, including without
limitation in brochures, press releases and on the ReplayTV website.
3) Replay will provide to NBC [***] Replay Zone [***] during the Term. NBC
shall receive additional Replay Zones at a cost that is equal to the [***]
of (a) [***] of the Replay ratecard rate for the sponsorship of a Replay
Zone, and (b) [***] charged to [***]. "Replay Zone" means an area which may
be directly linked to from the Replay Zone Guide which features programming
designated by the applicable NBC television network (each, an "NBC
Network"); provided, that Replay shall work in conjunction with
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[***] = 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.
<PAGE>
NBC creative services to produce each NBC Replay Zone, including special
programming packages highlighting current programming and upcoming events.
4) Replay shall promptly develop the Replay Zone Guide in which NBC may
promote its Replay Zones. Replay shall provide NBC with [***] positioning
[***] for [***] during the Term. The Replay Zone Guide shall be the primary
area devoted to displaying Replay's programming partners, and shall be
directly linked to the main screen of the Replay Network Service.
5) In regard to lead-in advertisements, lead-out advertisements and insertion
advertisements surrounding programming that is time shifted from any NBC
Network will be sold by Replay; provided, that NBC shall have [***] right
[***] all advertising sold by Replay, which [***] shall be [***] in good
faith consistent with NBC's [***] concerning advertisements or promotional
messages to be aired on NBC, also taking into account existing
sponsorships, category or programming [***] or similar arrangements that
each NBC Network may have with certain of its advertisers. This restriction
will remain in place during the Term. Notwithstanding the foregoing, Replay
shall not swap out, replace or otherwise alter any advertisements included
within any NBC Network programs, whether such programs are viewed on a
real-time or time-shifted basis, without the prior written consent of NBC.
6) NBC will have the right to appoint one individual who shall serve as an
observer on Replay's Board of Directors subject to the limitations and
obligations set forth in the attached Observer Policy letter.
7) Other terms consistent with terms granted to other major media investors in
the Series E financing will be negotiated in good faith between Replay and
NBC. Replay agrees to disclose to NBC the material terms granted to other
major media investors in the Series E financing to the extent it has the
right to do so.
8) The Replay Network Service will not intentionally delete any programming or
data within the signals that are transmitted by any NBC Network provided
that this material does not interfere with the Replay Network Service.
9) The Replay Network Service is intended to provide Internet connectivity as
soon as it is technology and commercially reasonable to do so. At such
time, (a) Replay will ensure that any links and/or web content incorporated
within or otherwise accompanying the signal of each NBC Network will be
passed through to users of the Replay Network Service provided that this
material does not interfere with the Replay Network Service and it is
technology and commercially feasible to do so, and (b) Replay shall
negotiate in good faith with NBC with respect to placement for the Internet
assets of NBC and its affiliates.
[***] = 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.
<PAGE>
10) Replay shall not modify, alter or re-design the Replay Network Service in a
manner which shall have a material adverse impact on the rights granted to
NBC herein.
If this Agreement is acceptable to you, I would appreciate your indicating
your acceptance of this Agreement by executing this letter at the place
indicated below.
Sincerely,
REPLAY NETWORKS, INC.
By: /s/ Layne Britton
--------------------------------------
Layne Britton
Executive Vice President, Network Services
Replay Networks, Inc.
Agreed and consented to:
NATIONAL BROADCASTING
COMPANY, INC.
By: /s/ Martin Yudkovitz Date: July 30,1999
-----------------------
Name: Martin Yudkovitz
Title: President, NBC MultiMedia, Inc.
<PAGE>
EXHIBIT 10.20
PACIFIC DIGITAL MEDIA, INC.
COMMON STOCK PURCHASE AGREEMENT
-------------------------------
This Common Stock Purchase Agreement (the "Agreement") is made as of
---------
September 15, 1997 by and between Pacific Digital Media, Inc., a California
corporation (the "Company"), and Anthony J. Wood ("Purchaser").
------- ---------
1. Sale of Stock. Subject to the terms and conditions of this Agreement,
-------------
on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, 3,000,000 shares
of the Company's Common Stock (the "Shares") at a purchase price of $0.001 per
------
Share for a total purchase price of $3,000.00. The term "Shares" refers to the
------
purchased Shares and all securities received in replacement of or in connection
with the Shares pursuant to stock dividends or splits, all securities received
in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other
properties to which Purchaser is entitled by reason of Purchaser's ownership of
the Shares.
2. Purchase. The purchase and sale of the Shares under this Agreement
--------
shall occur at the principal office of the Company simultaneously with the
execution of this Agreement or at such other time and place as the Company and
Purchaser shall agree (the "Purchase Date"). On the Purchase Date, the Company
-------------
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
purchase price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, or (c) by a
combination of the foregoing.
3. Limitations on Transfer. In addition to any other limitation on
-----------------------
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below), except as provided below.
After any Shares have been released from the Repurchase Option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with the provisions below and applicable securities laws.
(a) Repurchase Option.
-----------------
(i) In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including death or disability), with or without cause, the Company shall
upon the date of such termination (the "Termination Date") have an irrevocable,
----------------
exclusive option (the "Repurchase Option") for a period of sixty (60) days from
-----------------
such date to repurchase all or any portion of the Shares held by Purchaser as of
the Termination Date which have not yet been released from the Company's
Repurchase Option at the original purchase price per Share specified in Section
1 (adjusted for any stock splits, stock dividends and the like); provided,
--------
however, that the Repurchase Option shall continue for a period of up to one
- -------
year from the Termination Date to the extent that the Company reasonably
determines that such an extension of time is necessary to prevent the
<PAGE>
repurchase of Purchaser's Shares from causing other capital stock of the Company
to not qualify as "small business stock" under Section 1202 of the Internal
Revenue Code of 1986, as amended.
(ii) The Repurchase Option shall be exercised by the Company by
written notice to Purchaser or Purchaser's executor and, at the Company's
option, (A) by delivery to Purchaser or Purchaser's executor with such notice of
a check in the amount of the purchase price for the Shares being purchased, or
(B) in the event Purchaser is indebted to the Company, by cancellation by the
Company of an amount of such indebtedness equal to the purchase price for the
Shares being repurchased, or (C) by a combination of (A) and (B) so that the
combined payment and cancellation of indebtedness equals such purchase price.
Upon delivery of such notice and payment of the purchase price in any of the
ways described above, the Company shall become the legal and beneficial owner of
the Shares being repurchased and all rights and interest therein or related
thereto, and the Company shall have the right to transfer to its own name the
number of Shares being repurchased by the Company, without further action by
Purchaser.
(iii) One hundred percent (100%) of the Shares shall initially
be subject to the Repurchase Option. 1/36th of the Shares shall be released from
the Repurchase Option at the end of each month following the Vesting
Commencement Date (as set forth on the signature page of this Agreement), until
all Shares are released from the Repurchase Option (provided in each case that
Purchaser's employment or consulting relationship with the Company has not been
terminated prior to the date of any such release). Fractional shares shall be
rounded to the nearest whole share.
(b) Right of First Refusal. Before any Shares held by Purchaser or
----------------------
any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
------
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the "Right of First Refusal").
----------------------
(i) Notice of Proposed Transfer. The Holder of the Shares
---------------------------
shall deliver to the Company a written notice (the "Notice") stating: (A) the
------
Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each proposed purchaser or other transferee ("Proposed Transferee"); (C)
-------------------
the number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
-------------
terms as similar as reasonably possible) to the Company or its assignee(s).
(ii) Exercise of Right of First Refusal. At any time within
----------------------------------
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
-------------- --------------
the Shares purchased by the Company or its assignee(s) under this Section 3(b)
shall be the Offered
-2-
<PAGE>
Price. If the Offered Price includes consideration other than cash, the cash
equivalent value of the non-cash consideration shall be determined by the Board
of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made, at
-------
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(v) Holder's Right to Transfer. If all of the Shares proposed
--------------------------
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section 3(b), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within sixty (60) days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
(vi) Exception for Certain Family Transfers. Anything to the
--------------------------------------
contrary contained in this Section 3(b) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of
Purchaser's Immediate Family shall be exempt from the provisions of this Section
3(b). "Immediate Family" as used herein shall mean spouse, lineal descendant or
----------------
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section 3, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section 3.
(c) Involuntary Transfer.
--------------------
(i) Company's Right to Purchase upon Involuntary Transfer. In
-----------------------------------------------------
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(b)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such
-3-
<PAGE>
Shares shall be provided to the Company for a period of thirty (30) days
following receipt by the Company of written notice by the person acquiring the
Shares.
(ii) Price for Involuntary Transfer. With respect to any stock
------------------------------
to be transferred pursuant to Section 3(c)(i), the price per Share shall be a
price set by the Board of Directors of the Company that will reflect the current
value of the stock in terms of present earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within thirty (30) days after receipt by it of written notice of
the transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.
(d) Assignment. The right of the Company to purchase any part of the
----------
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the parent or a 100% owned subsidiary
of the Company, must pay the Company, upon assignment of such right, cash equal
to the difference between the original purchase price and fair market value, if
the original purchase price is less than the fair market value of the Shares
subject to the assignment.
(e) Restrictions Binding on Transferees. All transferees of Shares
-----------------------------------
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. Any sale or transfer of the Company's Shares shall be void
unless the provisions of this Agreement are met.
(f) Termination of Rights. The right of first refusal granted the
---------------------
Company by Section 3(b) above and the option to repurchase the Shares in the
event of an involuntary transfer granted the Company by Section 3(c) above shall
terminate upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"). Upon termination of the right of first refusal
--------------
described in Section 3(b) and the expiration or exercise of the Repurchase
Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.
4. Escrow of Unvested Shares. For purposes of facilitating the
-------------------------
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
---------
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser
-4-
<PAGE>
hereby acknowledges that the Secretary of the Company, or the Secretary's
designee, is so appointed as the escrow holder with the foregoing authorities as
a material inducement to make this Agreement and that said appointment is
coupled with an interest and is accordingly irrevocable. Purchaser agrees that
said escrow holder shall not be liable to any party hereof (or to any other
party). The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
Purchaser agrees that if the Secretary of the Company, or the Secretary's
designee, resigns as escrow holder for any or no reason, the Board of Directors
of the Company shall have the power to appoint a successor to serve as escrow
holder pursuant to the terms of this Agreement.
5. Investment and Taxation Representations. In connection with the
---------------------------------------
purchase of the Shares, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
(b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Purchaser understands that the Shares are "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, Purchaser must hold the Shares indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares and
requirements relating to the Company which are outside of the Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy.
(d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
--------------------------------------------
(a) Legends. The certificate or certificates representing the Shares
-------
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):
-5-
<PAGE>
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.
(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
(iii) Any legend required to be placed thereon by the California
Commissioner of Corporations.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure
---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
-------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
7. No Employment Rights. Nothing in this Agreement shall affect in any
--------------------
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment, for any reason, with or
without cause.
8. Section 83(b) Election. Purchaser understands that Section 83(a) of
----------------------
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
----
income the difference between the amount paid for the Shares and the fair market
value of the Shares as of the date any restrictions on the Shares lapse. In
this context, "restriction" means the right of the Company to buy back the
-----------
Shares pursuant to the Repurchase Option set forth in Section 3(a) of this
Agreement. Purchaser understands that Purchaser may elect to be taxed at the
time the Shares are purchased, rather than when and as the Repurchase Option
expires, by filing an election under Section 83(b) (an "83(b) Election") of the
--------------
Code with the Internal Revenue Service within
-6-
<PAGE>
thirty (30) days from the date of purchase. Even if the fair market value of the
Shares at the time of the execution of this Agreement equals the amount paid for
the Shares, the election must be made to avoid income under Section 83(a) in the
future. Purchaser understands that failure to file such an election in a timely
manner may result in adverse tax consequences for Purchaser. Purchaser further
understands that an additional copy of such election form should be filed with
his or her federal income tax return for the calendar year in which the date of
this Agreement falls. Purchaser acknowledges that the foregoing is only a
summary of the effect of United States federal income taxation with respect to
purchase of the Shares hereunder, and does not purport to be complete. Purchaser
further acknowledges that the Company has directed Purchaser to seek independent
advice regarding the applicable provisions of the Code, the income tax laws of
any municipality, state or foreign country in which Purchaser may reside, and
the tax consequences of Purchaser's death.
Purchaser agrees that he or she will execute and deliver to the
Company with this executed Agreement a copy of the Acknowledgment and Statement
of Decision Regarding Section 83(b) Election (the "Acknowledgment"), attached
--------------
hereto as Exhibit B. Purchaser further agrees that Purchaser will execute and
---------
submit with the Acknowledgment a copy of the 83(b) Election, attached hereto as
Exhibit C, if Purchaser has indicated in the Acknowledgment his or her decision
- ---------
to make such an election.
9. Market Standoff Agreement. In connection with the initial public
-------------------------
offering of the Company's securities and upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Shares (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the public
offering.
10. Miscellaneous.
-------------
(a) Governing Law. This Agreement and all acts and transactions
-------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
(b) Entire Agreement; Enforcement of Rights. This Agreement sets
---------------------------------------
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement. The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.
(c) Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith.
-7-
<PAGE>
In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded from
this Agreement, (ii) the balance of this Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of this Agreement shall be
enforceable in accordance with its terms.
(d) Construction. This Agreement is the result of negotiations
------------
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.
(e) Notices. Any notice required or permitted by this Agreement shall
-------
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.
(f) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) Successors and Assigns. The rights and benefits of this Agreement
----------------------
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.
(h) California Corporate Securities Law. THE SALE OF THE SECURITIES
-----------------------------------
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
[Signature Page Follows]
-8-
<PAGE>
The parties have executed this Agreement as of the date first set forth
above.
PACIFIC DIGITAL MEDIA, INC.
By: /s/ Anthony Wood
--------------------------------
Title: Chairman of Board
-----------------------------
Address:
555 Clyde Avenue
Mountain View, CA 94043
PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.
PURCHASER:
ANTHONY J. WOOD
/s/ Anthony Wood
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(Signature)
Address:
Vesting Commencement
Date: August 1, 1997
I, Susan P. Wood, spouse of Anthony J. Wood, have read and hereby approve
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
/s/ Susan P. Wood
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Spouse of Anthony J. Wood
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<PAGE>
EXHIBIT A
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ASSIGNMENT SEPARATE FROM CERTIFICATE
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FOR VALUE RECEIVED and pursuant to that certain Common Stock Purchase
Agreement between the undersigned ("Purchaser") and Pacific Digital Media, Inc.
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(the "Company") dated _______________ (the "Agreement"), Purchaser hereby sells,
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assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company standing in Purchaser's
name on the Company's books and represented by Certificate No. _____, and does
hereby irrevocably constitute and appoint ______________________ to transfer
said stock on the books of the Company with full power of substitution in the
premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND
THE EXHIBITS THERETO.
Dated: ______________________
Signature:
/s/ Anthony J. Wood
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Anthony J. Wood
/s/ Susan P. Wood
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Spouse of Anthony J. Wood (if applicable)
Instruction: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
repurchase option set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>
EXHIBIT B
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ACKNOWLEDGMENT AND STATEMENT OF DECISION
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REGARDING SECTION 83(b) ELECTION
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The undersigned has entered into a stock purchase agreement with Pacific
Digital Media, Inc., a California corporation (the "Company"), pursuant to which
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the undersigned is purchasing 3,000,000 shares of Common Stock of the Company
(the "Shares"). In connection with the purchase of the Shares, the undersigned
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hereby represents as follows:
1. The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the undersigned is purchasing the Shares.
2. The undersigned either [check and complete as applicable]:
(a) X has consulted, and has been fully advised by, the undersigned's
----
own tax advisor, Laurie Crawford, whose business address is San Jose,
California, regarding the federal, state and local tax consequences of
purchasing the Shares, and particularly regarding the advisability of
making elections pursuant to Section 83(b) of the Internal Revenue
Code of 1986, as amended (the "Code") and pursuant to the
----
corresponding provisions, if any, of applicable state law; or
(b) ____ has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided [check
as applicable]:
(a) X to make an election pursuant to Section 83(b) of the Code, and is
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submitting to the Company, together with the undersigned's executed
Common Stock Purchase Agreement, an executed form entitled
"Election Under Section 83(b) of the Internal Revenue Code of
1986"; or
(b) ____ not to make an election pursuant to Section 83(b) of the Code.
<PAGE>
4. Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's purchase of the Shares or of the making or
failure to make an election pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.
Date: 9/26/97 /s/ Anthony J. Wood
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Anthony J. Wood
Date: 9/26/97 /s/ Susan P. Wood
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Spouse of Anthony J. Wood
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<PAGE>
EXHIBIT C
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ELECTION UNDER SECTION 83(b)
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OF THE INTERNAL REVENUE CODE OF 1986
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The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year, the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME OF TAXPAYER: Anthony J. Wood
NAME OF SPOUSE: Susan D. Wood
ADDRESS: (omitted)
IDENTIFICATION NO. OF TAXPAYER: (omitted)
IDENTIFICATION NO. OF SPOUSE: (omitted)
TAXABLE YEAR: 1997
2. The property with respect to which the election is made is described as
follows:
3,000,000 shares of the Common Stock, $0.001 par value, of Pacific Digital
Media, Inc., a California corporation (the "Company").
3. The date on which the property was transferred is: 9/15/97
4. The property is subject to the following restrictions:
Repurchase option at cost in favor of the Company upon termination of
taxpayer's employment or consulting relationship.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $3,000.
6. The amount (if any) paid for such property: $3,000
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
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except with the consent of the Commissioner.
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Dated: 9/26/97 /s/ Anthony J. Wood
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Taxpayer
Dated: 9/26/97 /s/ Susan P. Wood
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Spouse of Taxpayer
<PAGE>
RECEIPT
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Pacific Digital Media, Inc. hereby acknowledges receipt of a check in the
amount of $3,000 given by Anthony J. Wood as consideration for Certificate No.
____ for 3,000,000 shares of Common Stock of Pacific Digital Media, Inc.
Dated: 9/26/97
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PACIFIC DIGITAL MEDIA, INC.
By: /s/ Edward M. Kessler
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Title: President
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<PAGE>
RECEIPT AND CONSENT
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The undersigned hereby acknowledges receipt of a photocopy of Certificate
No. _____ for 3,000,000 shares of Common Stock of Pacific Digital Media, Inc.
(the "Company").
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The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as escrow holder pursuant to the Common Stock
Purchase Agreement Purchaser has previously entered into with the Company. As
escrow holder, the Secretary of the Company, or his or her designee, holds the
original of the aforementioned certificate issued in the undersigned's name.
Dated: _________________________
______________________________
Anthony J. Wood
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated August 31, 1999 relating to the financial statements of
ReplayTV, Inc., which appears in such Registration Statement. We also consent
to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Jose, California
February 7, 2000
