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TIVO INC (TIVO)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 04/16/2007
Filed Period 01/31/2007

Table of contents

  • Page 1
    TIVO INC (TIVO) 10-K Annual report pursuant to section 13 and 15(d) Filed on 04/16/2007 Filed Period 01/31/2007

  • Page 2
    ... 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2007 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 000-27141 TIVO INC. (Exact name of registrant as specified...

  • Page 3
    ... had 97,351,344 outstanding shares of common stock. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates by reference certain information from the registrant's definitive proxy statement (the "Proxy Statement") for the 2007 Annual Meeting of Shareholders to be filed on or before May 31...

  • Page 4
    ... 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS AND...

  • Page 5
    ...® service redefines home entertainment by providing consumers with an easy way to record, watch, and control television and receive videos, pictures, and movies from cable, broadcast, and broadband sources. TiVo offers such features as Season Pass recordings, WishList® searches, TiVoToGo transfers...

  • Page 6
    ... with features like digital music and photos, multi-room viewing, mobility, and unique control over what television programming is viewable in the home. Customers with the TiVo service and a Series2 DVR or Series3 HD DMR (High Definition, Digital Media Recorder) connected to their home network can...

  • Page 7
    ... to a broadband connection, a TiVo-enabled DVR with the TiVo services provides access to additional features. The TiVo service enables broadband applications such as Yahoo! Photos that allows users to access photos stored in Yahoo! Photos from their television or the ability to receive premium...

  • Page 8
    ...media-oriented file system, a high-performance transactional database, an integrated security system, and application components such as media management and user interface. We have enhanced the client software to support multiple services and applications, such as digital music and photos. The TiVo...

  • Page 9
    ... front-end that allows the basic platform to be used for digital and analog broadcast, digital and analog cable, and satellite applications. In addition, certain designs include USB ports to allow connection to broadband networks and external devices to enable existing and future services. A TiVo...

  • Page 10
    ... automatic recording capabilities and the delivery of promotional video to DIRECTV receivers with TiVo service. Subject to certain restrictions and exceptions, both DIRECTV and TiVo may sell advertising and audience research measurement data, with each party retaining all their respective revenues...

  • Page 11
    ... a version of the TiVo service, called TiVo Basic, for no additional fee that provides three days worth of program guide data, but otherwise limited recording capability. We also engage contract manufacturers to build TiVo-enabled standalone DVRs. We distribute these DVRs, selling them both directly...

  • Page 12
    ... limited promotions), or a pre-pay option between $179 for one-year, $299 for two-years or $399 for three-years (currently a special limited time offer priced at $299) of TiVo service. We no longer offer new product lifetime service subscriptions for general sale to the public. TiVo-enabled DVRs are...

  • Page 13
    ...) and Motorola. These products combine digital and analog cable reception with DVR functionality; some versions offer dual tuner and/or high definition capabilities. Other competition in the cable DVR market comes from other software providers including TV Guide, Microsoft, Aptiv, Digital, and Digeo...

  • Page 14
    ... electronic program guide (EPG) based DVR functionality offered by consumer electronics companies. These products record an analog television signal output from a cable or satellite set-top box, analog cable feed, or antenna. • Standalone DVRs and hard drive-equipped DVD recorders, TVs and game...

  • Page 15
    ... Random Access and Time-Based Functions on a Continuous Stream of Formatted Digital Data, originally filed on April 3, 1998, which describes a method of controlling streaming media in a digital device, including the functions that enable DVRs to pause live TV as well as rewind, fast-forward, play...

  • Page 16
    ...We have filed many other trademark applications covering substantially all of our trade dress, sound effects, logos, and slogans, including: "DIRECTIVO," "Season Pass," and "See it, want it, get it." These applications are currently pending with the U.S. Patent and Trademark Office. Additionally, we...

  • Page 17
    ... software products targeted at managed electronic distribution. From November 1994 to May 1996, Mr. Barton served as Chief Technical Officer of Interactive Digital Solutions Company, a joint venture of Silicon Graphics Incorporation (SGI) and AT&T Network Systems created to develop interactive...

  • Page 18
    ...the State of Delaware. We maintain an Internet website at the following address: www.tivo.com. The information on our website is not incorporated by reference in this annual report on Form 10-K or in any other filings we make with the Securities and Exchange Commission (the "SEC"). We make available...

  • Page 19
    ... attractive licensing agreements to service providers and manufacturers of DVRs. Established Competition for Advertising Budgets. Digital video recorder services, in general, and TiVo, specifically, compete with other advertising media such as print, radio, television, internet, Video on Demand, and...

  • Page 20
    ... provide certain aspects of the TiVo service to our customers. This would have serious repercussions on our brand and our ability to succeed in the market. We may be unable to secure an alternate source of guide data on acceptable terms. If our arrangements or our consumer electronics manufacturers...

  • Page 21
    ...major retail partners for distribution of our products to consumers. We currently rely on our relationships with major retail distributors including Best Buy, Circuit City, Radio Shack, and others for distribution of TiVo-enabled DVRs. We do not typically enter into long-term volume commitments with...

  • Page 22
    ...DVRs to DIRECTV subscribers, As a result of this and DIRECTV's support of a competing DVR by NDS we expect the number of our DIRECTV with TiVo subscriptions to decrease in the future. As a consequence of the loss of these future high margin revenues from these DIRECTV with TiVo service subscriptions...

  • Page 23
    ... video game consoles. The TiVo service competes with home entertainment services such as cable and satellite television, movie rentals, pay-per-view, video on demand, and mail-order DVD services. See also "We face intense competition from a number of sources, which may impair our revenues, increase...

  • Page 24
    ... the TiVo service. We also will need to work closely with television advertisers, cable, satellite, and telecommunications network operators, electronic commerce companies, and consumer electronics manufacturers to develop products and services in these areas. We may not be able to work effectively...

  • Page 25
    ... partners. These activities require significant time and resources and may require us to develop and promote new ways of generating revenue with established companies in the television industry. These companies include television advertisers, cable and satellite network operators, electronic...

  • Page 26
    ... high definition and the use of switched technology to deliver encrypted digital television signals, increased price sensitivity in the consumer base, any deterioration in the quality of our service, and product lifetime subscriptions no longer using our service may cause our TiVo-Owned subscription...

  • Page 27
    ...have agreed to share a substantial portion of our subscription and other fees with some of our retail customers and consumer electronics manufacturing companies in exchange for manufacturing, distribution and marketing support, and discounts on key components for DVRs. These agreements require us to...

  • Page 28
    ... were ordered to remove features from our DVRs, we may experience increased difficulty in marketing the TiVo service and related TiVo-enabled DVRs and may suffer reduced revenues as a result. Entertainment companies, networks, or video distributors may claim that our advertising product or features...

  • Page 29
    ... enforceable or changed substantially. Our TiVo software includes parts of the Linux kernel and the GNU/Linux operating system. The Linux kernel and the GNU/Linux operating system have been developed and licensed under the GNU General Public License, version 2 and similar open source licenses. These...

  • Page 30
    ... us to change our business. The delivery of television programming, access to television signals by consumer electronics devices, and the collection of viewing information from subscriptions via the TiVo service and a DVR represent a relatively new category in the television and home entertainment...

  • Page 31
    ... consumer electronic devices, such as DVRs and set-top boxes, may regulate and increase the production, manufacture, use, and disposal costs incurred by us and our customers. For example future energy regulations could potentially make it more costly for us to design, manufacture, and sell our DVRs...

  • Page 32
    ...from subscriptions could reduce demand for the TiVo service and result in increased expenses. Consumers may be concerned about the use of viewing information gathered by the TiVo service and the DVR. Currently, we gather anonymous information about our customers' viewing choices while using the TiVo...

  • Page 33
    ... at lower of cost or market and to account for product or materials which is not forecasted to be used in future production. We also record accruals for charges that represent Management's estimate of our exposure to the contract manufacturer for excess non-cancelable purchase commitments. As of...

  • Page 34
    ... of our common stock were not changed or exchanged, the rights will thereafter become exercisable for a number of shares of our common stock equal to two times the then current purchase price of the right. On April 12, 2006, we amended the Rights Plan's definition of Acquiring Person to remove the...

  • Page 35
    ... that may affect our annual operating results include demand for TiVo-enabled DVRs and the TiVo service; the timing and introduction of new services and features on the TiVo service; seasonality and other consumer and advertising trends; changes in revenue sharing arrangements with our strategic...

  • Page 36
    ... plans, also may adversely affect the terms upon which we are able to obtain additional capital through the sale of equity securities. We expect to continue to experience volatility in our stock price. The market price of our common stock is highly volatile. Since our initial public offering...

  • Page 37
    ..., sales and marketing, customer service and product development activities, is located in Alviso, California, under a lease that expires on January 31, 2010. We believe that we may need to expand our corporate facilities to meet our office space needs in the next several years as we currently...

  • Page 38
    ..., using, selling or importing digital video recording devices, digital video recording device software and/or personal television services in the United States that allegedly infringe the patents, and that such infringement is willful and ongoing. Under the terms of the Company's agreement with...

  • Page 39
    ... effect on the Company's results of operations. Securities Litigation. On June 12, 2001, a securities class action lawsuit in which the Company and certain of its officers and directors are named as defendants was filed in the United States District Court for the Southern District of New York...

  • Page 40
    ... is possible that the Federal District Court may not provide final approval to the settlement in whole or part. On December 5, 2006, the United States Court of Appeals for the 2nd Circuit issued a decision in In re: Initial Public Offering Securities Litigation (Docket No. 05-3349-cv), reversing the...

  • Page 41
    ... compensation plans of the Company is incorporated by reference to the Company's Proxy Statement for its 2007 Annual Meeting of shareholders. The definitive Proxy Statement will be filed within 120 days of the end of the fiscal year ended January 31, 2007. Recent Sales of Unregistered Securities On...

  • Page 42
    ... Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs Period (a) Total Number of Shares Purchased (b) Average Price Paid per share (c) Total Number of Share Purchased as Part of Publicly Announced Plans or Programs March 1 through March 31, 2006...

  • Page 43
    ... financial data as of and for the fiscal years ended January 31, 2007, 2006, 2005, 2004, and 2003, respectively, have been derived from our consolidated financial statements audited by KPMG LLP, independent registered public accounting firm. These historical results are not necessarily indicative...

  • Page 44
    ... Year Ended January 31, 2007 2006 2005 2004 2003 (in thousands, except per share data) Consolidated Statement of Operations Data: Revenues Service revenues Technology revenues Hardware revenues Rebates, revenue share, and other payment to channel* Net revenues Cost and Expenses Cost of service...

  • Page 45
    ...TiVo service redefines home entertainment by providing consumers with an easy way to record, watch, and control television and receive videos, pictures, and movies from cable, ® broadcast, and broadband sources. We offer such features as Season Pass recordings, WishList searches, TiVoToGo transfers...

  • Page 46
    ..., revenues share and other payments to channel and we will redirect a portion of those funds towards advertising expenditures to promote the TiVo brand and service, which will increase our sales and marketing expenses. In fiscal year 2008, we expect to continue to grow our TiVo-Owned subscription...

  • Page 47
    ... fiscal year. This change in cash flows used in operating activities is largely due to the increase in our net loss coupled with increased inventory spending and reduction of deferred revenues due to the Company's decision to discontinue general sale of the product lifetime subscription service. Key...

  • Page 48
    ... to DIRECTV's promotion of a competing DVR service from NDS. As of January 31, 2007, approximately 165,000 product lifetime subscriptions had exceeded the four-year period we use to recognize product lifetime subscription revenues, but had made contact to the TiVo service within the prior six months...

  • Page 49
    ... pricing issues, the growing importance of offering competitive service features such as high definition television recording capabilities, and increased churn from product lifetime subscriptions. Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful...

  • Page 50
    ... offset by our new multi-tiered pricing structure and bundled sales program which yielded a higher monthly subscription rate for new TiVo-Owned subscriptions. We expect the number of fully-amortized and still active product lifetime subscriptions to increase in fiscal year ended January 31, 2008...

  • Page 51
    ...to a monthly minimum payment by DIRECTV. We will continue to defer a portion of these fees as a non-refundable credit to fund mutually agreed development, maintenance, and support services, which may potentially be offset by increased advertising revenues in the future. Critical Accounting Estimates...

  • Page 52
    ...Policies" in the notes to our consolidated financial statements. Recognition Period for Product Lifetime Subscriptions Revenues. TiVo previously offered a product lifetime subscription option for general sale for the life of the DVR for a one-time, prepaid payment. During the first quarter of fiscal...

  • Page 53
    ... hand at lower of cost or market and to reserve for products or materials which are not forecasted to be used. We also record accruals for charges that represent Management's estimate of the Company's exposure to the contract manufacturer for excess non-cancelable purchase commitments. As of January...

  • Page 54
    ...'s consolidated financial statements as the Company has historically presented sales excluding all taxes and the Company currently has no plan to change its method of revenue reporting. Results of Operations Net Revenues. Our net revenues for the fiscal years ended January 31, 2007, 2006, and 2005...

  • Page 55
    ... Best Buy, Circuit City, Radio Shack, and others and by launching advertising campaigns directed at growing our subscription base. We anticipate fiscal year 2008 will have continued service revenue growth as our TiVoOwned subscription installed base increases and our advertising sales business grows...

  • Page 56
    ... sales volume due to increased competition from DIRECTV's TiVo products, as well as from other DVR distributors' and cable and service providers. Additionally, the average selling price has declined year-over-year due to consumer incentive programs, including one program which offered a free DVR...

  • Page 57
    ... multi-tiered pricing and bundled sales model in our direct sales channel which has resulted in an increased gross margin loss, both in terms of absolute dollars and as a percentage of hardware revenue. For the fiscal year ended January 31, 2007 we sold more DVR units into the retail channel than in...

  • Page 58
    ...our pricing programs during fiscal year 2006 as compared to the same prior year period. The number of DVRs sold to our retailers and through our direct channel decreased by approximately 35% compared to the fiscal year ended January 31, 2005, due to increased competition from DIRECTV's TiVo products...

  • Page 59
    .... We expect sales and marketing expense to increase in fiscal year 2008, in terms of absolute dollars, as a result of our planned new marketing and advertising strategies. Sales and marketing expenses, as a percentage of net revenue, decreased by 4% for the fiscal year ended January 31, 2006, as...

  • Page 60
    ... sale of equity and debt securities. Our cash resources are subject, in part, to the amount and timing of cash received from our subscriptions, licensing and engineering services customers, and hardware customers. At January 31, 2007, we had $128.8 million of cash and cash equivalents and short-term...

  • Page 61
    ... fiscal year 2006. The primary changes in net loss for the fiscal year ended January 31, 2006 were higher service and technology gross margins of $56.4 million coupled with lower rebates, revenue share, and other payments to channel of $7.7 million, which were partially offset by increased operating...

  • Page 62
    ... may issue up to $100,000,000 of securities, including debt securities, common stock, preferred stock, and warrants. On September 5, 2006 we sold 8,264,463 shares of our common stock, par value $.001 per share, at $7.865 per share in an underwritten public offering. The sale of the shares closed on...

  • Page 63
    ... service subscriptions, advertising expenditures, and other marketing activities; our future earnings including expected future service and technology revenues and future TiVo-Owned and DIRECTV ARPU; expectations of the growth in the future DVR market generally; possible future impact of our change...

  • Page 64
    ...and service revenues from Comcast and Cox and future deployment of the TiVo service by them; our estimates of the useful life of TiVo-enabled DVRs in connection with the recognition of revenue received from product lifetime subscriptions; consumer rebate redemption rates and sales incentive programs...

  • Page 65
    Table of Contents Fiscal Year Ended January 31, 2007 2006 Cash and cash equivalents and short-term investments (in thousands) Average interest rate $ 128,765 4.97% $ 104,213 3.30% Although payments under the operating lease for our facility are tied to market indices, we are not exposed to ...

  • Page 66
    ... annual report on Form 10-K. The unaudited quarterly results of our consolidated operations for our two most recent fiscal years are incorporated herein by reference under Item 6. "Selected Financial Data." Index to Consolidated Financial Statements Report of Independent Registered Public Accounting...

  • Page 67
    ... of Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of TiVo Inc.'s internal control over financial reporting as...

  • Page 68
    ... January 31, 2006 ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments Accounts receivable, net of allowance for doubtful accounts of $271 and $56 Inventories Prepaid expenses and other, current Total current assets LONG-TERM ASSETS Property and equipment, net Purchased technology...

  • Page 69
    ...and share amounts) Twelve Months Ended January 31, 2007 2006 2005 Revenues Service and technology revenues ( includes $6,805 from related parties for the fiscal year ended January 31, 2005) Hardware revenues Rebates, revenue share, and other payments to channel Net revenues Cost of revenues Cost of...

  • Page 70
    ... Issuance of common stock related to exercise of common stock options Issuance of common stock related to employee stock purchase plan Deferred compensation from issuance of stock options with exercise prices below fair market value Retirement due to forfeiture of unvested restricted common stock...

  • Page 71
    ...of common stock related to exercise of common stock options Issuance of common stock related to employee stock purchase plan Cashless exercise of 1,323,120 warrants resulting in the net issuance of 338,190 shares of common stock Issuance of restricted shares of common stock Deferred Compensation for...

  • Page 72
    ... 31, 2006 85,376,191 $ Issuance of common stock related to exercise of common stock options 1,892,697 Issuance of common stock related to employee stock purchase plan 627,215 Deferred compensation - reversal due to adoption of FAS 123R - Issuance of common stock related to equity offering, net...

  • Page 73
    ... 2005) Deferred revenue (change includes $(1,814) from related parties for the fiscal year ended January 31, 2005) Deferred rent and other long-term liabilities Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of short-term investments Sales of short...

  • Page 74
    ... paid-in capital related to prior year issuance of restricted common stock Deferred compensation recorded from acceleration of stock option vesting Deferred compensation recorded from the issuance of stock options at option price at less than fair market value The accompanying notes are an integral...

  • Page 75
    ... for digital video recorders (DVRs). The subscription-based TiVo service (the "TiVo service") improves home entertainment by providing consumers with an easy way to record, watch, and control television. TiVo also provides a unique platform for the television industry, including for advertisers and...

  • Page 76
    ... securities classified as available-for-sale are included in interest income in the consolidated statements of operations. Allowance for doubtful accounts TiVo also maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company reviews its trade...

  • Page 77
    ... the service is provided. Subscription revenues from product lifetime subscriptions are recognized ratably over a four-year period, which is the Company's estimate of the useful life of a TiVo-enabled DVR. End users have the right to cancel their subscription within 30 days of the activation. TiVo...

  • Page 78
    ... by TiVo to the end-users provided all appropriate revenue recognition criteria were met. After March 15, 2006, the Company began selling DVRs and service directly to end-users through Bundled Sales Programs - see Bundled Sales Programs. Bundled Sales Programs. Prior to March 15, 2006, the Company...

  • Page 79
    ... the Company's reported results to investors; and it is consistent with the recognition of hardware costs for bundled monthly sales programs. The Company recorded the change in method of accounting in accordance with Statement of Financial Accounting Standards (SFAS) No. 154, "Accounting Changes and...

  • Page 80
    ... Year Ended January 31, 2006 As As As As previously previously previously previously reported Adjustment Adjusted reported Adjustment Adjusted reported Adjustment Adjusted reported Adjustment Cost of revenues Cost of hardware revenues Total cost of revenues Gross margin Loss from operations Income...

  • Page 81
    ... fees, are expensed as incurred. Sales and Marketing Sales and marketing expenses consist primarily of employee salaries and related expenses, media advertising, public relations activities, special promotions, trade shows, and the production of product related items, including collateral and videos...

  • Page 82
    ...the Company's financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value because of their short maturities. Available-for-sale marketable securities are reported at their fair value based on quoted market prices...

  • Page 83
    ...find alternative suppliers or deliver its products and services to its customers on time, if at all. The TiVo service is enabled through the use of a DVR manufactured for TiVo by a third-party contract manufacturer and a limited number of other third parties. The Company also relies on third parties...

  • Page 84
    ... method for recording these sales taxes in the Company's consolidated financial statements as the Company has historically presented sales excluding all taxes and the Company currently has no plan to change its method of revenue reporting. 3. CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The...

  • Page 85
    ... amortized over the period of its estimated benefit period of 7 years. The total expected future annual amortization expense related to purchased technology, capitalized software, and intangible assets is calculated on a straight-line basis, using the useful lives of the assets, which range from...

  • Page 86
    ...-enabled DVRs returned due to product defect, within 90 days from the date of consumer purchase. Thereafter, consumers may exchange a TiVo-enabled DVR with a product defect for a charge. At January 31, 2007 and 2006, the accrued warranty reserve was $479,000 and $166,000, respectively. The Company...

  • Page 87
    ... this patent by making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in the United States. On April 13, 2006, the jury rendered a verdict in favor of the Company in the amount of approximately...

  • Page 88
    ..., using, selling or importing digital video recording devices, digital video recording device software and/or personal television services in the United States that allegedly infringe the patents, and that such infringement is willful and ongoing. Under the terms of the Company's agreement with...

  • Page 89
    ... effect on the Company's results of operations. Securities Litigation. On June 12, 2001, a securities class action lawsuit in which the Company and certain of its officers and directors are named as defendants was filed in the United States District Court for the Southern District of New York...

  • Page 90
    ...credit is to remain in effect the entire term of the lease, but the amount does decrease over time. The Company also has operating leases for sales and administrative office space in New York. Operating lease cash payments for the fiscal years ended January 31, 2007, 2006, and 2005 were $1.8 million...

  • Page 91
    ... 1999 Plan allows the grant of options to purchase shares of the Company's common stock to employees and other individuals at a price equal to the fair market value of the common stock at the date of grant. The options granted to new employees typically vest 25% after the first year of service, and...

  • Page 92
    ... The Directors' Plan provides for the automatic grant of options to purchase shares of the Company's common stock to non-employee directors at a price equal to the fair market value of the stock at the date of the grant. Initial options granted to new directors vest monthly over two years from the...

  • Page 93
    Table of Contents Stock Award Activity A summary of the stock options activity and related information for the twelve months ended January 31, 2007, 2006, and 2005 is as follows: WeightedAverage Exercise Price Shares (in thousands) Aggregate Intrinsic Value (in thousands) Outstanding at January ...

  • Page 94
    ...180,000 for the twelve months ended January 31, 2007, 2006, and 2005, respectively. The following table summarizes the Company's unvested stock activity for the three years ended January 31, 2007, 2006, and 2005: Weighted-Average Grant Date Fair Value Number of Shares (in thousands) Unvested stock...

  • Page 95
    ... amount and prepaid issuance costs were amortized using the straight-line method over the term of the notes or upon conversion, if earlier, which approximates the effective interest rate method. During the fiscal year ended January 31, 2004, the Company issued 2,506,265 shares of common stock as...

  • Page 96
    ... its holder to purchase, at the Right's then-current exercise price, a number of the acquiring company's common shares having a market value at that time of twice the Right's exercise price. The dividend distribution to establish the new Rights Plan was paid to stockholders of record on January 31...

  • Page 97
    ... SARs/Option Grants and Employee Stock Purchase Rights Fiscal Year Ended January 31, 2007 2006 2005 (In thousands, except per share amount) Cost of revenues Research and development Sales and marketing General and administrative Stock-based compensation effect before income taxes Income tax benefit...

  • Page 98
    ... of SFAS No. 123 to options granted under the Company's equity incentive plans, was as follows: Fiscal Year Ended January 31, 2006 2005 Net loss, as reported Add back: stock-based compensation expense recognized, net of related tax effects Pro forma effect of stock-based compensation expense...

  • Page 99
    ... The net change in the total valuation allowance for the years ended January 31, 2007, 2006, and 2005 was an increase of $5.0 million, $17.6 million, and $25.7 million, respectively. As of January 31, 2007, the Company had net operating loss carryforwards for federal and state income tax purposes of...

  • Page 100
    ... video recorder platforms and technology. In fiscal years 2007 and 2006, TGC performed design and development activities related to a potential TiVo product for the US market. During fiscal year ended January 31, 2007 and 2006 the Company paid TGC $2.2 million and $894,000 for a variety of services...

  • Page 101
    ... to acquire all of TGC after five years or upon a change of control of TiVo at a premium to TGC's fair market value. The Company also has the right to acquire at least a majority of TGC in the event of a TGC initial public offering at the net initial public offering price. TGC is incorporated in the...

  • Page 102
    ...enable any TiVo® specific DVR and networking features requested by Comcast, such as WishList searches, Season Pass recordings, home media features, and TiVoToGo transfers. In addition, the Company agreed to develop a TiVo Interactive Advertising Management System for deployment on Comcast platforms...

  • Page 103
    ... per box receiving the TiVo service through Cox. Cox will also pay the Company fees for engineering services for the development and integration of the TiVo service software solution and the advertising management system. Cox will also pay the Company commissions on certain new subscribers who use...

  • Page 104
    ... of advertising in connection with the TiVo service offered through Cox. The Company will also have a right to sell certain types of advertising on other Cox DVR set-top boxes enabled with the advertising management system. As part of the agreement, Cox is receiving a non-exclusive, non-transferable...

  • Page 105
    ... with authorizations of managements and our board of directors; and (iii) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements. Internal control over...

  • Page 106
    ...addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the...

  • Page 107
    ... in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our...

  • Page 108
    ... appearing in the Proxy Statement, is hereby incorporated by reference. We have adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, and Vice President, Controller & Treasurer. This code of ethics is posted on our Website located at www.tivo.com. The code of...

  • Page 109
    ...they are either not applicable or the information required is presented in the financial statement and notes there to under Item 8. Financial Statements and Supplementary Data. Exhibits are incorporated herein by reference or are filed with this report as indicated below (numbered in accordance with...

  • Page 110
    ...Quarterly Report on Form 10-Q filed on September 9, 2005). TiVo Inc. Amended & Restated 1999 Employee Stock Purchase Plan and related documents (incorporated by reference to Exhibit 10.8 of the registrant's Quarterly Report on Form 10-Q filed on September 9, 2005). Form of Stock Option Agreement for...

  • Page 111
    ... 1999 Non-Employee Directors' Stock Option Plan (filed herewith). Form of Senior Vice President Change of Control Terms and Conditions Agreement (filed herewith). Form of Vice President Change of Control Terms and Conditions Agreement (filed herewith). Marketing Agreement between DIRECTV, Inc. and...

  • Page 112
    ...registrant's Current Report on Form 8K filed on April 4, 2006). TiVo Inc. Fiscal Year 2008 Bonus Plan for Executives (filed herewith). Vendor Agreement, dated as of March 3, 2002, between TiVo Inc. and Best Buy Co., Inc. (incorporated by reference to Exhibit 10.1 of the registrant's Annual Report on...

  • Page 113
    ... TV Guide Promotion Rider to TiVo Interactive Program Guide License Agreement, effective as of June 6, 2003, by and between TiVo Inc. and Gemstar - TV Guide International, Inc. (incorporated by reference to Exhibit 10.3 of the registrant's Current Report on Form 8-K filed on July 30, 2003). Service...

  • Page 114
    ... Quarterly Report on Form 10-Q filed on September 9, 2004). Licensing and Marketing Agreement, effective as of March 15, 2005, between TiVo Inc., Comcast STB Software DVR, LLC, and Comcast Corporation (incorporated by reference to Exhibit 10.58 of the registrant's Annual Report on Form 10-K filed on...

  • Page 115
    ... Registered Public Accounting Firm's Consent (filed herewith). Power of Attorney (see signature page) of this Annual Report on Form 10-K and incorporated herein by reference. Certification of Thomas Rogers, Chief Executive Officer of TiVo Inc. dated April 16, 2007 pursuant to Securities Exchange Act...

  • Page 116
    ...SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized. TIVO INC. Date: April 16, 2007 /S/ THOMAS ROGERS Thomas Rogers Chief Executive...

  • Page 117
    ...-effective amendments) to this Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform...

  • Page 118
    Table of Contents /s/ JOSEPH UVA Joseph Uva /s/ GEOFFREY Y. YANG Geoffrey Y. Yang /s/ DAVID ZASLAV David Zaslav 115 Director Director Director April 16, 2007 April 16, 2007 April 16, 2007

  • Page 119
    ... Option Plan (the "Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions...

  • Page 120
    ... within three (3) months after your Continuous Service terminates; or (d) the Expiration Date indicated in your Grant Notice. 8. EXERCISE. (a) You may exercise your option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the...

  • Page 121
    ... be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 11. GOVERNING PLAN DOCUMENT. Your option is subject...

  • Page 122
    Exhibit 10.11 [SVP Version] Change of Control Terms and Conditions TiVo Inc. (the "Corporation") considers it essential to the best interests of its shareholders to foster the continuous employment of the Corporation's key management personnel. In this regard, the Corporation's Board of Directors (...

  • Page 123
    ... to vote in the election of Directors has changed; (vi) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the...

  • Page 124
    ...your annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time; (c) the relocation of the Corporation's offices at which you are principally employed immediately prior to the date of the Change in Control (your "Principal Location...

  • Page 125
    ..., to the benefits provided to you under the Corporation's compensation and benefit plans and practices immediately prior to the Change in Control; (f) the Corporation's failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated...

  • Page 126
    ...the event that you are ineligible under the terms of the Corporation's benefit plans to continue to be so covered, the Corporation shall provide you with substantially equivalent coverage through other sources or will provide you with a lump sum payment (determined on a present value basis using the...

  • Page 127
    ... effect immediately prior to the Change in Control, and otherwise to be in substantially the same form and to contain substantially the same terms, conditions and exceptions as the liability issuance policies provided for officers and directors of the Corporation in force from time to time, provided...

  • Page 128
    ...a third party. As used in this Agreement, the term "Confidential Information" means: information disclosed to you or known by you as a consequence of or through your relationship with the Corporation about the customers, employees, business methods, public relations methods, organization, procedures...

  • Page 129
    ... who, on or during the six (6) months immediately preceding the date of such solicitation or offer, is or was an officer or employee of the Corporation; provided, however, that a general advertisement to which an employee of the Corporation responds shall in no event be deemed to result in a breach...

  • Page 130
    ... with the Corporation followed by a Dispute as to whether you are entitled to the payments and other benefits provided under this Agreement, then, during the period of that Dispute the Corporation shall pay you fifty percent (50%) of the amounts specified in Section 4(ii)(b) hereof, and the...

  • Page 131
    ...and other guidance issued thereunder. The date determined under this subsection is referred to as the "Short-Term Deferral Date." (b) Notwithstanding anything to the contrary herein, in the event that any benefits provided pursuant to this Agreement are not actually or constructively received by you...

  • Page 132
    ... in the Corporation's stock option plan or otherwise that would impose a "cut-back" under Section 280G of the Code (but in no event shall this Agreement be construed or interpreted as providing any right to "gross-up" or similar tax reimbursement pay in respect of excise taxes payable as a result of...

  • Page 133
    Exhibit 10.12 [VP Version] Change of Control Terms and Conditions TiVo Inc. (the "Corporation") considers it essential to the best interests of its shareholders to foster the continuous employment of the Corporation's key management personnel. In this regard, the Corporation's Board of Directors (...

  • Page 134
    ... to vote in the election of Directors has changed;. (vi) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the...

  • Page 135
    ...your annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time; (c) the relocation of the Corporation's offices at which you are principally employed immediately prior to the date of the Change in Control (your "Principal Location...

  • Page 136
    ..., to the benefits provided to you under the Corporation's compensation and benefit plans and practices immediately prior to the Change in Control; (f) the Corporation's failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated...

  • Page 137
    ...the event that you are ineligible under the terms of the Corporation's benefit plans to continue to be so covered, the Corporation shall provide you with substantially equivalent coverage through other sources or will provide you with a lump sum payment (determined on a present value basis using the...

  • Page 138
    ... effect immediately prior to the Change in Control, and otherwise to be in substantially the same form and to contain substantially the same terms, conditions and exceptions as the liability issuance policies provided for officers and directors of the Corporation in force from time to time, provided...

  • Page 139
    ...a third party. As used in this Agreement, the term "Confidential Information" means: information disclosed to you or known by you as a consequence of or through your relationship with the Corporation about the customers, employees, business methods, public relations methods, organization, procedures...

  • Page 140
    ... who, on or during the six (6) months immediately preceding the date of such solicitation or offer, is or was an officer or employee of the Corporation; provided, however, that a general advertisement to which an employee of the Corporation responds shall in no event be deemed to result in a breach...

  • Page 141
    ... other benefits provided in Section 4(ii) of this Agreement, if, but only if, you agree in writing that if the Dispute is resolved against you, you shall promptly refund to the Corporation all payments you receive under Section 4(ii)(b) of this Agreement plus interest at the rate provided in Section...

  • Page 142
    ...and other guidance issued thereunder. The date determined under this subsection is referred to as the "Short-Term Deferral Date." (b) Notwithstanding anything to the contrary herein, in the event that any benefits provided pursuant to this Agreement are not actually or constructively received by you...

  • Page 143
    ... the Corporation, (ii) constitute any contract or agreement of employment, or (iii) interfere in any way with the at-will nature of your employment with the Corporation. If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy...

  • Page 144
    ..., severed, restated, or otherwise changed from time to time, the "Mortgage") to be recorded in the Office of the Clerk-Recorder for the County of Santa Clara, State of California. D. Pursuant to the Lease effective October 6, 1999 and as amended, February 1, 2006, (the "Lease"), Landlord demised...

  • Page 145
    ... to cancel or terminate the Lease or to claim a partial or total eviction arising (whether under the Lease or under applicable law) from Landlord's breach or default under the Lease. g. Other Capitalized Terms. If any capitalized term is used in this Agreement and no separate definition is contained...

  • Page 146
    ... in which case it shall be deemed effective at 9:00 a.m. on the next business day. For purposes of notice, the addresses and telefax number of the parties shall, until changed as herein provided, be as follows: i. If to the Mortgagee, at: Greenwich Capital Financial Products, Inc. 600 Steamboat Road...

  • Page 147
    ...subject matter of this Agreement. d. Mortgagee's Rights and Obligations. Except as expressly provided for in this Agreement, Mortgagee shall have...authority to enter into this Agreement, which has been duly authorized by all necessary actions. h. Execution. This Agreement may be executed in any number...

  • Page 148
    ...as of the date first above written. MORTGAGEE: GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation By: /s/ David Kennard Name: David Kennard Title: Managing Director TENANT: TIVO INC. a Delaware corporation By: /s/ Steven Sordello Name: Steven Sordello Title: Chief Financial Officer 5

  • Page 149
    ... any obligations of Mortgagee under the Mortgage and related loan documents to enter into a nondisturbance agreement with Tenant. LANDLORD: BIXBY TECHNOLOGY CENTER LLC., A Delaware limited liability company By: /s/ James Wolford James Wolford, Authorized Representative Dated: Dec. 18, 2006 6

  • Page 150
    ... COUNTY OF ORANGE On the 6th day of October in the year 2006 before me, the undersigned, a Notary Public in and for said state, personally appeared David B. Kennard, proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and...

  • Page 151
    ...SANTA CLARA On the 14th day of December in the year 2006, before me, the undersigned, a Notary Public in and for said state, personally appeared Steven Sordello, proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged...

  • Page 152
    LIST OF EXHIBITS If any exhibit is not attached hereto at the time of execution of this Agreement, it may thereafter be attached by written agreement of the parties, evidenced by initialing said exhibit. Exhibit "A" - Legal Description of the Land 9

  • Page 153
    ... revenues and media advertising and ARM sales revenue, subscription growth, Adjusted EBITDA* performance, and new product deployment and distribution deals. Additionally under our fiscal year 2008 incentive plan, we have instituted individual milestone plans for three of our named executive officers...

  • Page 154
    ... to a Change in Control (as defined below). 1. Term of Agreement. This Agreement shall commence on January 1, 2007 (the "Effective Date") and shall continue in effect until the earlier of its termination by mutual consent of you and the Corporation or the date all payments or benefits required to...

  • Page 155
    ... to vote in the election of Directors has changed; (vi) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the...

  • Page 156
    ... are offered a position as an executive officer with the same or more senior title by a publicly-traded parent of the Corporation). (b) the Corporation's reduction of your annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time...

  • Page 157
    ... compensation program of the Corporation, in each case within seven (7) days of the date such compensation is due; (e) the Corporation's failure to continue in effect compensation and benefit plans which provide you with benefits which are no less favorable on an aggregate basis, both in terms of...

  • Page 158
    ...Corporation shall, at the time specified in Section 4(iii), pay as severance pay to you a lump-sum severance payment equal to the sum of the following: (A) one hundred percent (100%) of the greater of (x) your annual base salary as in effect immediately prior to delivery of the Notice of Termination...

  • Page 159
    ...the event that you are ineligible under the terms of the Corporation's benefit plans to continue to be so covered, the Corporation shall provide you with substantially equivalent coverage through other sources or will provide you with a lump sum payment (determined on a present value basis using the...

  • Page 160
    ... accordance herewith, except that notice of change of address shall be effective only upon receipt. 7. Confidentiality and Non-Solicitation Covenants. (i) Confidentiality. You hereby agree that during the term of this Agreement and thereafter, you shall not, directly or indirectly, disclose or make...

  • Page 161
    ... who, on or during the six (6) months immediately preceding the date of such solicitation or offer, is or was an officer or employee of the Corporation; provided, however, that a general advertisement to which an employee of the Corporation responds shall in no event be deemed to result in a breach...

  • Page 162
    ...Section 4(ii)(f) hereunder, any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law. The obligations of the Corporation under Section 4 shall survive the expiration of the term of this Agreement. The section headings contained in...

  • Page 163
    ...and other guidance issued thereunder. The date determined under this subsection is referred to as the "Short-Term Deferral Date." (b) Notwithstanding anything to the contrary herein, in the event that any benefits provided pursuant to this Agreement are not actually or constructively received by you...

  • Page 164
    ... in the Corporation's stock option plan or otherwise that would impose a "cut-back" under Section 280G of the Code (but in no event shall this Agreement be construed or interpreted as providing any right to "gross-up" or similar tax reimbursement pay in respect of excise taxes payable as a result of...

  • Page 165
    Exhibit 10.68 EXECUTION COPY CREDIT AGREEMENT Dated as of January 25, 2007 among TIVO INC. as the borrower, and THE FINANCIAL INSTITUTIONS NAMED ON THE SIGNATURE PAGES HERETO, as the lenders and CITIGROUP GLOBAL MARKETS REALTY CORP., as the administrative agent

  • Page 166
    ... 5.03. Authorization SECTION 5.04. Consents SECTION 5.05. Due Execution and Delivery SECTION 5.06. Litigation SECTION 5.07. Financial Statements. SECTION 5.08. Information SECTION 5.09. Margin Stock SECTION 5.10. Investment Company Act SECTION 5.11. Restrictions SECTION 5.12. Security Interest...

  • Page 167
    ... 5.24. Deposit and Securities Accounts SECTION 5.25. OFAC SECTION 5.26. Patriot Act SECTION 5.27. Eligible Commitment Contracts SECTION 5.28. Eligible Non-Commitment Contracts SECTION 5.29. Permits, Etc SECTION 5.30. Employee and Labor Matters SECTION 5.31. Customer and Trade Relations SECTION 5.32...

  • Page 168
    ...Form of New Customer Report Form of Compliance Certificate Organization and Good Standing of TiVo Parties; Outstanding Equity Interest in each TiVo Party Subsidiaries Litigation ERISA Taxes Debt Liens Leases Investments Intellectual Property Material Contracts Deposit and Securities Accounts iii 61...

  • Page 169
    ... used in this Agreement, the following terms have the following meanings: "Account Control Agreement": Means each deposit account control agreement and each securities account control agreement, dated on or after the Closing Date, by and among the Administrative Agent, the Company and the applicable...

  • Page 170
    ...the Company in respect of the Eligible Commitment Contracts (assuming that such payments are made when due by the applicable Customers), calculated using a discount rate of 11% per annum; provided, that with respect to any Eligible Commitment Contracts with a remaining term of greater than 18 months...

  • Page 171
    ..., to the extent owned by the Company or its Subsidiaries free and clear of all Liens other than Liens created under the Collateral Documents and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United...

  • Page 172
    ... Agreement, the Account Control Agreements, the Intellectual Property Security Agreement, and any other agreement that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Lenders. "Commitment": The commitment of a Lender to make Loans to the Company...

  • Page 173
    ...Company (as such terms are used in Rule 14a-11 under the Exchange Act) and whose initial assumption of office resulted from such contest or the settlement thereof. "Contract": Means each contract created by the Company in the ordinary course of its business, that relates to its sale of TiVo Services...

  • Page 174
    ... and (ii) the number of months remaining in the contract term of such Eligible Commitment Contract. "Eligible Commitment Contracts": Means those Contracts that (a) bind the Customer to purchase TiVo Services on a month to month basis from the Company for a multi-month period of time, (b) comply with...

  • Page 175
    ... fee in connection with any cancellation of service by the related Customer (to the extent such fee or a portion thereof is permitted to be charged under applicable law), (p) Contracts that do not permit the Company to charge the Customer's credit card or bank account for scheduled monthly payments...

  • Page 176
    ... in accordance with this Agreement, (m) Contracts with respect to which less than 30 days have elapsed since the origination of such Contracts, (n) Contracts that do not permit the Company to charge the Customer's credit card or bank account for scheduled monthly payments and any termination fee, 8

  • Page 177
    ...": The Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate": Any Person that for purposes of Title IV of ERISA is a member of a "controlled group of corporations" with the Company, or under...

  • Page 178
    ..., such Plan. "Event of Default": As defined in Section 7.01. "Fee Letter": Means that certain fee letter, dated as of January 25, 2007, between the Company and the Administrative Agent. "Financial Officer": Means, with respect to any Person, the chief financial officer, principal accounting officer...

  • Page 179
    ...) on the basis of the London Inter-Bank Offered Rate for one-month U.S. dollar deposits, as such rate appears as "BBAM" "Page DG8 4a" on Bloomberg as of 8:00 a.m. (New York City time) on such date (rounded up to the nearest whole multiple of 1/100%); provided that if such rate does not appear on...

  • Page 180
    ... of such Person and with respect to the Company, each contract deemed to be a "material contract" (as defined in Item 601(b)(10) of Regulation S-K of the Securities Act of 1933) and filed as an exhibit to any report or form under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended...

  • Page 181
    ...of the Company and any other Loan Party from time to time owed to the Administrative Agent, the Lenders or any of them under the Loan Documents, whether for principal, interest, fees, expenses, indemnification or otherwise. "Patriot Act": As defined in Section 9.14. "PBGC": Means the Pension Benefit...

  • Page 182
    ..., including sources and uses; and (F) locations of all material personal and real property of the applicable Target, including the location of its chief executive office; (4) if delivered to the Company or if requested, the Administrative Agent shall receive copies of the environmental reports and...

  • Page 183
    ... in any event within 20 Business Days after such closing, the Company shall deliver copies of all documents executed as of such closing in connection with such Acquisition to the Administrative Agent; and (h) the Administrative Agent shall have received such other documents, agreements, certificates...

  • Page 184
    .... "Rights Plan": Means that certain Rights Agreement dated as of January 16, 2001 between the Company and Wells Fargo Shareowner Services, as amended on February 20, 2001 and as further amended on April 12, 2006. "Security Agreement": The Security Agreement, dated as of the Closing Date, among...

  • Page 185
    ... of a Person, acquired in an Acquisition. "TiVo Party": Means the Company and each of its Subsidiaries. "TiVo Services": Means the Company's digital video recording service. "Transaction": The transactions contemplated by the Loan Documents. "Type": When used in respect of any Loan or Borrowing...

  • Page 186
    ... Agent; provided that no such request shall be delivered at a time when a Potential Event of Default or Event of Default has occurred and is continuing. After delivery of such notice, the Administrative Agent or the Company, in consultation with the Administrative Agent, shall offer the increase in...

  • Page 187
    ... such option shall not affect the obligation of the Company to repay such Loan in accordance with the terms of this Agreement. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as...

  • Page 188
    ... of the Company and shall specify the following information: (i) the date of such Borrowing (which shall be a Business Day); (ii) the number and location of the account to which funds are to be disbursed (which shall be a deposit account that is subject to an Account Control Agreement); and (iii...

  • Page 189
    ... excess. (b) Optional Repayment. The Company may at its option pay the Loans, in whole or in part, at any time and from time to time, provided that the Administrative Agent shall have received from the Company notice of any such payment prior to 2:00 P.M., New York City time, one Business Day prior...

  • Page 190
    ... of demonstrable error. SECTION 3.04. Payments. (a) Payments; Settlement. The Company shall make each payment of principal, interest, fees or otherwise hereunder and under the Notes, without setoff or counterclaim, not later than 2:00 P.M., New York City time, on the day when due in lawful money of...

  • Page 191
    ...'s account not later than 2:00 p.m. New York City time on the next Business Day following the Interest Settlement Date, such Lender's applicable pro rata share of interest and fees, in each instance, received by the Administrative Agent for the immediately preceding month. (b) Payments after Event...

  • Page 192
    ... allocation of the aggregate of such cost increases or reduced amounts receivable resulting from such events) by any amount which such Lender reasonably deems material, then, in any such case, the Company shall pay to such Lender, within 10 days of its demand, any additional amounts necessary to...

  • Page 193
    ... of such costs to be conclusive absent manifest error). SECTION 3.09. Taxes. (a) Any and all payments by the Company hereunder or under any Loan Document shall be made, in accordance with Section 3.04, free and clear of and without deduction for any and all present or future taxes, levies, imposts...

  • Page 194
    ... as a corporation for United States federal Income tax purposes, provide the Company with Internal Revenue Service Form W-9 or applicable successor form. Each Lender shall promptly notify the Company if it determines that, due to an occurrence of any event (other than a change in law) after the date...

  • Page 195
    ... available its tax returns or any other information which it deems confidential to the Company or any other person. Notwithstanding anything to the contrary, in no event will the Administrative Agent or any Lender (or assignee) be required to pay any amount to the Company the payment of which would...

  • Page 196
    ...received on or before the Closing Date the following documents, agreements and certificates (together with all exhibits and schedules thereto), each duly executed and in form and substance satisfactory to the Administrative Agent and each Lender: (i) this Agreement; (ii) a Note issued by the Company...

  • Page 197
    ... Account Control Agreement which is described in the post closing agreement referenced in clause (xix) below); (vii) incumbency certificates executed by the Secretary (or any Assistant Secretary) of the Company, certifying the names and signatures of the officers of the Company, authorized to sign...

  • Page 198
    ... The Company shall have delivered to the Administrative Agent (i) UCC-1 financing statements in appropriate form for filing in all jurisdictions as may be necessary or, in the Administrative Agent's opinion, desirable to effectively perfect the security interests granted under the Security Agreement...

  • Page 199
    ... on its part to be observed or performed, and at the time of and immediately after such Borrowing, no Potential Event of Default or Event of Default shall have occurred and be continuing. (d) After giving effect to such Borrowing on such Funding Date, the Company shall be in compliance with the...

  • Page 200
    ... class of its Equity Interests authorized, and the number outstanding, on the Closing Date and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such TiVo Party and the number of shares covered by all outstanding options, warrants, rights of conversion or...

  • Page 201
    ..., 2006, and the related Consolidated statement of income and statement of cash flows of the Company and its Subsidiaries for the fiscal year then ended, duly certified by the chief financial officer of the Company and accompanied by an unqualified opinion of KPMG LLP, independent public accountants...

  • Page 202
    ...good faith, making use of such information as was available at the date such projection was made. SECTION 5.08. Information. No information, exhibit or report furnished by or on behalf of the Company or any other TiVo Party to the Administrative Agent or any Lender in connection with the Transaction...

  • Page 203
    ... the Company or such TiVo Party. SECTION 5.16. Taxes. Except as set forth on Schedule 5.16, the Company and each other TiVo Party have timely filed all federal and all other material required tax returns and reports or have properly and timely filed for extensions of the time for the filing thereof...

  • Page 204
    ... Party is the lessee as of the Closing Date, showing as of the Closing Date the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. Each lease to which the Company or any other TiVo Party is the lessee is the legal, valid and...

  • Page 205
    ... sets forth the name and location of each institution maintaining any deposit account, securities account or both of the Company or any other TiVo Party and the account number, name and balance for each such deposit account and securities account as of the end of the month immediately preceding the...

  • Page 206
    ... applicable legal requirements. All material payments due from any TiVo Party on account of workers compensation, wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such TiVo Party. SECTION 5.31. Customer and Trade Relations...

  • Page 207
    ... event within 100 days after the end of each Fiscal Year, a copy of the annual audit report for such year for the Company and its Subsidiaries, including therein a Consolidated balance sheet of the Company and its Subsidiaries as of the end of such Fiscal Year and a Consolidated statement of income...

  • Page 208
    ..., Subscription Programs. (i) Promptly after making any changes to material economic provisions contained in the Company's form of customer agreement applicable to existing and future Eligible Commitment Contracts and Eligible Non-Commitment Contracts existing as of the Closing Date and as provided...

  • Page 209
    ... protection and foreign exchange regulations) in connection with the servicing and management of the Collateral and performance by the Company and the other Loan Parties under the Loan Documents. Maintain an effective system of audits and controls adequate to ensure that each TiVo Party and its...

  • Page 210
    every 12 months (which number shall be reduced to two at any time that the Company shall have Consolidated Net Income Before Taxes of greater than $0 for the most recently ended period of four fiscal quarters for which financial statements are available); provided, that following the occurrence and ...

  • Page 211
    ... property), Account Control Agreements and Collateral Access Agreements), and (iv) any financing or continuation statements reasonably requested by Administrative Agent; provided, that TiVo Brands LLC and TiVo International, Inc. shall not be required to execute any such security documents or...

  • Page 212
    ... tax consequences to the Company under Section 956 (or a successor provision) of the Internal Revenue Code. (r) Within 30 days after the end of each Fiscal Quarter of the Company, the Company shall provide the information set forth on Exhibit E hereto with respect Persons which became new Customers...

  • Page 213
    ...will be filed against any TiVo Party, and (C) notice of a violation, citation, or other administrative order which reasonably could be expected to have in a Material Adverse Effect. (u) Disaster Back-Up. The Company shall maintain back-up data processing equipment or contracts with competent service...

  • Page 214
    ... a financing statement that names the Company or any other TiVo Party as debtor, or sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement, or assign, any accounts or other right to receive income, except: (i) Liens created under the...

  • Page 215
    ... or restrictive to the applicable TiVo Party; and (vii) other Debt not exceeding $1,000,000 in the aggregate. (d) Change in Nature of Business. Engage in any material line of business substantially different from the Company's current line of business unless such material line of business is...

  • Page 216
    ...of short-term marketable securities or in compliance with the Company's then current investment policy, which shall be substantially identical to the investment policy as in effect on the Closing Date; (iv) Investments pursuant to the Company's right of participation in new securities as provided by...

  • Page 217
    ... with the provisions of such plan; provided, that in no event shall the redemption or purchase price for such Rights exceed $.01 per Right unless the Administrative Agent and Lenders otherwise agree in writing; (C) the Company may issue or sell common stock, securities exchangeable into common stock...

  • Page 218
    ... restrict the Company from effecting a cashless or same-day exercise and sale of stock options or from withholding stock for the satisfaction of the Company's withholding tax obligations, in each case in connection with a holder's exercise of common stock options. (i) Accounting Changes. Make or...

  • Page 219
    ...of any Investment or payment) or transfer any of its assets, other than the performance of its obligations under the Specified TiVo Party Documents in accordance with the terms thereof and the performance of ministerial activities and the payment of taxes and administrative fees or (iii) consolidate...

  • Page 220
    ... 0.75:1.0 1.0:1.0 0.4:1.0 0.5:1.0 0.75:1.0 1.0:1.0 0.4:1.0 ; provided that if at any time the sum of Eligible Commitment Contracts and Eligible Non-Commitment Contracts is less than 675,000, the following covenant levels shall apply: Period Minimum Liquidity Ratio Closing Date through January 31...

  • Page 221
    ... any installment of interest or other amount payable hereunder or under any other Loan Document when due for a period of three Business Days; or (b) Any representation or warranty made by the Company herein or by the Company or any other TiVo Party (or any of their respective officers) in connection...

  • Page 222
    ... Company or any other TiVo Party shall so state in writing; or (j) any Collateral Document or related financing statement after delivery thereof shall for any reason (other than pursuant to the express terms thereof) cease to create a valid and perfected first priority lien on and security interest...

  • Page 223
    ...Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $300,000; or (n) (i) any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act...

  • Page 224
    ... by the Administrative Agent thereunder for the account of the Company, and to the payment of all costs and expenses paid or incurred by the Administrative Agent in connection with the Loan Documents, all in accordance with the terms of this Agreement and the other Loan Documents; (ii) thereafter...

  • Page 225
    ...any Lender for any statements, warranties or representations made in or in connection with this Agreement; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Company or any other...

  • Page 226
    ... from the Company in determining whether the Debt secured by any such Lien is permitted by Section 6.02). Upon request by the Administrative Agent at any time, Lenders will confirm in writing the Administrative Agent's authority to release, or subordinate its interest in, particular types or items...

  • Page 227
    ... event be effective unless the same shall be in writing and signed by the Majority Lenders and the Company (and each other applicable TiVo Party signatory thereto), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided...

  • Page 228
    ...two at any time that the Company shall have Consolidated Net Income Before Taxes of greater than $0 for the most recently ended period of four fiscal quarters for which financial statements are available); and (e) all documented costs and expenses, including attorneys' fees, fees, costs and expenses...

  • Page 229
    ... to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them. SECTION 9.07. Assignments and Participations. (a) With the consent of (i) the Administrative Agent and (ii) the Company (so long as no Event of Default...

  • Page 230
    ...of this Section 9.07, record in book entries maintained by such Lender the name and the amount of the participating interest of each participant entitled to receive payments in respect of such participating interests. (c) Each Lender may at any time pledge or assign a security interest in all or any...

  • Page 231
    ... DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS...thereby. Section headings in this Agreement are included for convenience of reference only and shall not be given any substantive effect. SECTION 9.13. Obligations Several...

  • Page 232
    ... such information relates by the disclosing party prior to (or, in the event that prior notice is not reasonably practicable or in case of a judicial order, promptly after) such disclosure, or (d) to current or prospective assignees, participants and contractual counterparties in connection with...

  • Page 233
    ...to such Lender or the Administrative Agent, as the case may be, relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws. The provisions of this Section 9.16 shall survive...

  • Page 234
    ... New York, NY 10013 Attn: TiVo Account Manager Fax: (212) 723-8591 COMMITMENT: $50,000,000 CITIGROUP GLOBAL MARKETS REALTY CORP., as Lender /s/ John Pawlowski By: Name: John Pawlowski Title: Authorized Signer Address: Citigroup Global Markets Realty Corp. 390 Greenwich Street, 6thFloor New York, NY...

  • Page 235
    ... A FORM OF NOTE $ New York, New York , 20 FOR VALUE RECEIVED, TIVO INC., a Delaware corporation (the "Company"), promises to pay to the order of [ ] (the "Lender") the principal amount of ( ), or, if less, the aggregate amount of Loans (as defined in the Credit Agreement referred to below) made by...

  • Page 236
    ...' fees, incurred in the collection and enforcement of this Note. The Company hereby waives diligence, presentment, protest, demand and notice of every kind as a defense to any demand hereunder. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK...

  • Page 237
    IN WITNESS WHEREOF, the Company has caused this Note to be executed and delivered by its duly authorized officer, as of the date and the place first above written. TIVO INC. By: Name: Title: A-3

  • Page 238
    TRANSACTIONS ON NOTE Amount of Loans Made Principal Paid Amount of Principal Balance Notation Made By Date

  • Page 239
    ... January 31, 2007, annual report on Form 10-K of TiVo Inc. As discussed in note 2 to the consolidated financial statements, effective February 1, 2006, TiVo Inc. adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment. /s/ KPMG LLP Mountain...

  • Page 240
    ... affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 16, 2007...

  • Page 241
    ...record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 16, 2007 /s/ STEVEN SORDELLO Steven Sordello Senior...

  • Page 242
    ... Act of 2002 In connection with the TiVo Inc. (the "Company") Annual Report on Form 10-K for the period ending January 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas Rogers, Chief Executive Officer of the Company, certify pursuant to 18...

  • Page 243
    ... Act of 2002 In connection with the TiVo Inc. (the "Company") Annual Report on Form 10-K for the period ending January 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven Sordello, Chief Financial Officer of the Company, certify pursuant to 18...