TiVo 2006 Annual Report Download - page 103

Table of Contents
development of the TiVo service software solution and the TiVo Interactive Advertising Management System have not been completed by the relevant
deadlines, the Company could be subject to certain consequences, including, but not limited to, termination of the agreement. As part of this agreement,
Comcast is receiving a non-exclusive, non-transferable license to the Company's intellectual property in order to deploy the TiVo service software solution
and TiVo Interactive Advertising Management System, including certain trademark branding rights and a covenant not to assert under TiVo's patents, which
rights extend only to Comcast Corporation, its affiliates, and certain of its vendors and suppliers with respect to Comcast products and services. Such non-
exclusive, non-transferable license to the Company's intellectual property will, under certain circumstances, continue after the termination of this agreement.
In addition, Comcast is entitled to certain most favored customer terms as compared with other multi-channel video distributors who license certain TiVo
technology. Pursuant to the terms of this agreement, Comcast has the right to terminate the agreement in the event the Company is the subject of certain
change of control transactions involving any of certain specified companies.
20. DEVELOPMENT AGREEMENT AND SERVICES AGREEMENT WITH DIRECTV, INC.
On April 7, 2006, the Company entered into the Seventh Amendment of the Development Agreement, dated as of February 15, 2002, with DIRECTV,
Inc. Under this amendment, which amends the expiration date of the Development Agreement from February 15, 2007, to February 15, 2010, TiVo will
continue to provide support for DIRECTV receivers with TiVo service through the extended expiration date of the Development Agreement, and will provide
mutually agreed upon development services for no additional fee up to a defined maximum from February 2007 to February 2010. In addition, DIRECTV had
the right to continue to distribute DIRECTV receivers with TiVo service through February 15, 2007, and a related grace period as set forth in the
Development Agreement. Further, TiVo and DIRECTV agreed that neither party would assert its patents against the other party with respect to each
company's products and services deployed prior to the expiration of the agreement, subject to limited exceptions. DIRECTV will continue to pay a monthly
fee for each households using DIRECTV receivers with TiVo service similar to the amount paid by DIRECTV for households with DIRECTV receivers with
TiVo service deployed since February 15, 2002, subject to a monthly minimum payment by DIRECTV. The Company defers a portion of these fees equal to
the fair value of the undelivered development services. These deferred fees are classified on the Company's consolidated balance sheets under deferred
revenue, current.
On April 7, 2006, the Company also entered into the First Amendment of the Amended and Restated Services Agreement, dated as of March 31, 2005,
with DIRECTV. This amendment extends the terms of the current advertising arrangement between TiVo and DIRECTV, the Services Agreement until
February 15, 2010, and additionally provides DIRECTV with the ability to obtain additional technical support and training for its use of advertising-related
software tools with DIRECTV receivers with TiVo service.
21. COX AGREEMENT
On August 22, 2006, TiVo entered into a non-exclusive licensing and distribution agreement with Cox Communications ("CoxCom, Inc." or "Cox").
Pursuant to the agreement, the Company has agreed to develop a TiVo-branded software solution for deployment on Cox's DVR platforms, which would
enable Cox to offer TiVo DVR and advertising software to its customers and advertising clients respectively. In addition, the Company has agreed to develop
an advertising management system for deployment on Cox platforms to enable the provision of local and national advertising to Cox subscribers.
Under the agreement, Cox will pay TiVo a recurring monthly fee 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 the TiVo service as offered by Cox.
The initial term of the Company's agreement is for five years from completion of the TiVo service software solution, but no longer than seven years
after the effective date of the agreement.
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