Document:

20130121AVerizonSettlementAgreementSECStarredRedactions-Updated

	
		
	Exhibit 10.1 
as filed with 
10-Q/A
	Confidential treatment has been requested for portions of this exhibit.  The copy filed herewith omits the information subject to the confidentiality request.  Omissions are designated as [*].  A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

SETTLEMENT AND PATENT LICENSE AGREEMENT
This Settlement and Patent License Agreement (“Agreement”), effective as of September 21, 2012 (“Effective Date”), is made by and between TiVo Inc., a Delaware corporation (“TiVo”), and Verizon Communications Inc., a Delaware corporation (“Verizon”). TiVo and Verizon are each referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, TiVo and Verizon are parties to the following lawsuit: TIVO INC. v. VERIZON COMMUNICATIONS INC., et al.; Case No. 2:09-CV-257-JRG, United States District Court for the Eastern District of Texas (the “Pending Litigation”); and
WHEREAS, the Parties have agreed, among other things, to settle such Pending Litigation and also grant one another beneficial patent licenses pursuant to the terms set forth below.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and other terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
Section 1.  DEFINITIONS AND CONSTRUCTION
In this Agreement, capitalized terms have the meanings set forth below or otherwise ascribed herein: 
1.1.    “Additional Subscriber” means any Person who is or becomes a DVR Subscriber of an MVPD or MVPD Service that becomes owned or controlled by Verizon or any of its Subsidiaries as a result of a Subscriber Acquisition Transaction (“Acquired MVPD Service”), except for any subscriber of such Acquired MVPD Service who at the time of closing [*].
1.2.    “Advanced Television Field” means any system, apparatus, method, or process that facilitates or is related to [*]. In addition, any system, apparatus, method, or process that would, in the absence of a license, directly or indirectly infringe any Verizon Patent-In-Suit, Verizon Related Patent, TiVo Patent-In-Suit, or TiVo Related Patent, as applicable, will be deemed to be a system, apparatus, method, or process in the Advanced Television Field for purposes of the licenses under the applicable Verizon Patent-In-Suit, Verizon Related Patent, TiVo Patent-In-Suit, or TiVo Related Patent.
1.3.    “Affiliate” means, with respect to a given Person (the “Subject Person”), any other Person that now or hereafter controls, is under the control of, or is under common control with the Subject Person, where control means direct or indirect ownership or control of more than fifty percent (50%) of the Voting Power of another Person. A Person will be deemed to be an Affiliate of the Subject Person under this Agreement only so long as such control exists. 
1.4.    “Agreement” has the meaning given to it in the preamble of this Agreement. 
1.5.    “Change of Control” of a Person (“Subject Entity”) means any of the following: (i) any merger, reorganization, share exchange, consolidation, business combination or other transaction or series of related transactions in which the holders of more than fifty (50%) of the Voting Power of the Subject 

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

Entity immediately prior to such transaction or series of related transactions will not hold more than fifty (50%) of the Voting Power of the surviving Person immediately after such transaction or series of transactions; (ii) any sale, lease, transfer or other disposition of all or substantially all of the Subject Entity’s assets where the current holders of more than fifty (50%) of the Voting Power of the Subject Entity immediately prior to such transaction or series of related transactions will not hold more than fifty (50%) of the Voting Power of the acquiring Person immediately after such transaction or series of transactions; or (iii) any Person or “group” (as such term is used in Rule 13d-5 under the United States Securities Exchange Act of 1934) who does not hold more than 50% of the total Voting Power of the Subject Entity as of the Effective Date becomes the beneficial owner, directly or indirectly, of more than 50% of the total Voting Power of the Subject Entity.
1.6.    “Current Subsidiary” means any Person that is a Subsidiary of a Party as of the Effective Date. 
1.7.    “[*]” means that [*].
1.8.    “Dismissal Motions” has the meaning given to it in Section 2.4.
1.9.    “DVR” means [*] product that enables [*] an MVPD Service [*] to a storage medium (e.g., a hard disk drive) and [*] the play back of recorded content. 
1.10.    “DVR Subscriber” means any Verizon Subscriber: (i) with a DVR for use with the Verizon Service; or (ii) to whom Verizon otherwise makes available [*] provided by the Verizon Service [*]. 
1.11.    “Effective Date” has the meaning given to it in the preamble of this Agreement.
1.12.    “Excluded Products” means: (i) any products or services [*]; and (ii) any products or services sold or distributed by or for Verizon or any of its Subsidiaries (x) that [*], or (y) [*]. As used in this Agreement a product will not be [*]. 
1.13.    “Fee” has the meaning given to it in Section 4.1.
1.14.    “Future Subsidiary” means any Person that becomes a Subsidiary of a Party after the Effective Date.
1.15.    “Initial Payment” means the first Installment Payment under Section 4.1 in the amount of $100,000,000.00.
1.16.    “Licensed Patents” means the Verizon Licensed Patents and/or TiVo Licensed Patents, as applicable.
1.17.    “Licensed Products” means the Verizon Licensed Products and/or TiVo Licensed Products, as applicable.

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

1.18.    “ [*]” means any [*] video program that is transmitted or otherwise made available [*]. By way of example and not of limitation, a video program transmitted [*].  
1.19.    “MVPD” or “Multichannel Video Programming Distributor” means any telco (including AT&T and Verizon), cable operator, multichannel multipoint distribution service provider, direct broadcast satellite service provider, television receive-only satellite program distributor or other Person who makes available for purchase, by subscribers or customers, multiple channels of video programming, and any Affiliates of Persons providing such services.
1.20.    “MVPD Service” means any satellite television service, any cable television service (including Verizon FiOS TV), any IPTV television service, and any other service [*] sold by an MVPD on a subscription basis comparable to video programming offerings being provided by any satellite, cable, or IPTV television services as of the Effective Date. 
1.21.    “Patent Challenge” means any legal or equitable action, litigation, arbitration, opposition, reexamination, entitlement proceeding, revocation, action for annulment, action for cancellation or other legal or administrative proceeding anywhere in the world that challenges the validity or enforceability of any of the Licensed Patents.
1.22.    “Patents” means all classes or types of patents other than design patents (including originals, divisions, continuations, continuations-in-part, extensions, reissues or counterparts) and all applications (including provisional applications) for these classes or types of patents, in all cases, throughout the world.
1.23.    “Pending Litigation” has the meaning given to it in the first recital of this Agreement.
1.24.    “Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).
1.25.    “Press Release” has the meaning given to it in Section 7.1.
1.26.    “Subscriber Acquisition Transaction” means any agreement, arrangement or other transaction or series of related transactions in which either (i) Verizon or any of its Subsidiaries acquires all or substantially all of the business or assets of a Third Party MVPD, whether by assignment, operation of law or otherwise; (ii) Verizon or any of its Subsidiaries acquires directly or indirectly, more than fifty percent (50%) of the Voting Power of any Third Party MVPD; or (iii) Verizon or any of its Subsidiaries participates in the transfer or transition of customers or subscribers from an MVPD Service of a Third Party to the Verizon Service after the occurrence of any of (i)-(ii) above or in connection with any other agreement or arrangement with any Third Party MVPD resulting in the acquisition or transfer of subscribers to the Verizon Service, including any system acquisition, subscriber acquisition, or termination or winding down of a Third Party MVPD Service. 

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

1.27.    “Subsidiary” means, as to any Person (“Subject Person”), any other Person that is now or hereafter controlled by the Subject Person, where control means direct or indirect ownership or control of more than fifty percent (50%) of the Voting Power of another Person. A Person shall be a Subsidiary of the Subject Person only during such time as such control exists. Verizon Wireless and/or Verizon-Redbox are each a Subsidiary of Verizon as of the Effective Date and will remain a Subsidiary so long as Verizon has direct or indirect ownership or control of more than fifty percent (50%) of the Voting Power of Verizon Wireless and/or Verizon-Redbox, as applicable. 
1.28.    “Taxes” means all applicable sales, use, withholding, excise, value added, and similar taxes, and duties, surcharges, and other charges levied by any governmental authority in connection with the Fees paid or payable under this Agreement. 
1.29.    “Third Party” means any Person other than TiVo, Verizon, or any of their respective Subsidiaries as of the pertinent time.
1.30.    “Threshold Amounts” means, with respect to any month in a calendar year during the Term, an amount equal to the number identified in Exhibit D for the respective calendar year (as adjusted pursuant to Section 9.5). For clarity, the Threshold Amount will be the same for each month in a particular calendar year (subject to adjustment pursuant to Section 9.5). 
1.31.    “TiVo Distribution Partners” means Third Parties (including MVPDs) who license or otherwise distribute or resell TiVo Licensed Products. 
1.32.    “TiVo Licensed DVR” means a DVR for which TiVo has granted a license under one or more of the TiVo Patents-In-Suit that remains in effect after a respective Subscriber Acquisition Transaction. TiVo Licensed DVR also includes [*].
1.33.    “TiVo Licensed Patents” means any and all Patents worldwide owned or controlled by TiVo or any of its Subsidiaries at any time during the Term that are applicable to the Advanced Television Field, except any Patents the license or release of which requires the payment of consideration to an unaffiliated Third Party. Without limiting the foregoing, TiVo Licensed Patents shall be deemed to include: (a) 6,233,389, 7,493,015 and 7,529,465 (the “TiVo Patents-In-Suit”), and (b) any continuations, continuations-in-part, divisionals, reissues, and foreign counterparts of the TiVo Patents-In-Suit and any other Patents that claim priority directly or indirectly from the TiVo Patents-In-Suit or the applications from which the TiVo Patents-In-Suit issued (collectively, the “TiVo Related Patents”). 
1.34.    “TiVo Licensed Products” means any system, apparatus, method, process or other implementation in the Advanced Television Field that is directly or indirectly used, sold, leased or otherwise provided by or on behalf of TiVo or any of its Subsidiaries, including [*]. By way of example and not of limitation, this includes [*]. For purposes of clarification, TiVo Licensed Products shall not include [*]. To the extent that a product of a Third Party includes [*], the product of the Third Party is not licensed with respect to [*].

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

1.35.    “Verizon Licensed Patents” means any and all Patents worldwide owned or controlled by Verizon or any of its Subsidiaries at any time during the Term that are applicable to the Advanced Television Field, except any Patents the license or release of which requires the payment of consideration to an unaffiliated Third Party. Without limiting the foregoing, Licensed Verizon Patents shall be deemed to include: (a) U.S. Patent Nos. 5,410,344, 5,635,979, 5,973,684, 6,367,078, 7,561,214 and 6,381,748 (collectively, the “Verizon Patents-In-Suit”); and (b) any continuations, continuations-in-part, divisionals, reissues, and foreign counterparts of any Verizon Patents-In-Suit and any other Patents that claim priority directly or indirectly from any Verizon Patents-In-Suit or the applications from which any Verizon Patents-In-Suit issued (collectively, the “Verizon Related Patents”). 
1.36.    “Verizon Licensed Products” means any system, apparatus, method, process or other implementation in the Advanced Television Field that is directly or indirectly used, sold, leased or otherwise provided solely by or on behalf of Verizon or any of its Subsidiaries for use with any Verizon Service and/or any Verizon-Redbox Service, including but not limited to Verizon Software, but excluding any Excluded Products. 
1.37.    “Verizon-Redbox” means the joint venture between Verizon and Redbox Automated Retail, LLC, described as of the Effective Date as “Verizon and Redbox Digital Entertainment Services, LLC.” 
1.38.    “Verizon-Redbox Service” means a video service that Verizon-Redbox makes available to subscribers or customers of Verizon-Redbox through Verizon Software but excluding any service directly or indirectly sold, licensed, or otherwise transferred by or on behalf of any Third Party or that provides any Live Television. 
1.39.    “Verizon Service” means any MVPD Service that Verizon, directly or through its Subsidiaries, makes available to end users, including the Verizon FiOS TV pay television service, but excluding any service directly or indirectly sold, licensed, or otherwise transferred (a) by or on behalf of any MVPD other than Verizon or any of its Subsidiaries or (b) for use in or with any MVPD Services of any Third Party. 
1.40.    “Verizon Software” means end user software of Verizon or any of its Subsidiaries, in object code, executable, or binary form, that is provided directly or indirectly by Verizon or any of its Subsidiaries to Verizon Subscribers or subscribers to any Verizon-Redbox Service to access video programming provided by any Verizon Service or Verizon-Redbox Service and is not capable  of accessing any MVPD Service of any Third Party (other than through a reconfiguration not permitted by Verizon or any of its Subsidiaries).
1.41.    “Verizon Subscriber” means a subscriber to a Verizon Service. Each customer account will be considered a separate Verizon Subscriber, regardless of the number of end users associated with such customer account. In addition, each dwelling unit within a multi-dwelling unit (for example, an apartment, condo, hotel room or dormitory building) that receives any Verizon Service will be considered a separate subscriber for purposes of determining the number of Verizon Subscribers. 

1.42.    “Verizon Wireless” means Cellco Partnership d/b/a Verizon Wireless, a Delaware partnership, with offices located at One Verizon Way, Basking Ridge, New Jersey 07920.
1.43.    “Voting Power” means the right to exercise voting power with respect to the election of directors or similar managing authority of a Person (whether through direct or indirect beneficial ownership of shares or securities of such Person or otherwise).
1.44.    Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating also “but not limited to” or “without limitation”; (ii) the word “day” or “month” means a calendar day or calendar month unless otherwise specified; (iii) the words “notice” and “requests” mean notice or request in writing (whether or not specifically stated) and shall include notices, consents, approvals, and other legally operative communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby,” and derivative or similar words refer to this Agreement; (v) provisions that require that a Party or the Parties to “agree,” “consent,” or “approve,” or the like shall require that such agreement, consent, or approval be specific and in writing, whether by written agreement, letter, or otherwise; (vi) “and/or” shall be defined to be inclusive and not exclusive and “A, B and/or C” shall mean any and all of A; B; C; A and B; A and C; B and C; and A, B and C; (vii) words of any gender include the other gender; (viii) words using the singular or plural number also include the plural or singular number, respectively; and (ix) references to any specific article, section, or other division thereof shall be deemed to include the then-current amendments thereto.
Section 2.    RELEASES AND SETTLEMENT
2.1.    TiVo Limited Release. Effective upon receipt by TiVo of the Initial Payment, TiVo, on behalf of itself and its Current Subsidiaries, hereby irrevocably releases and forever discharges:
(a)    Verizon and its Current Subsidiaries and their respective agents, representatives, officers, employees, directors and attorneys in their capacity as such, from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the TiVo Licensed Patents;
(b)     direct and indirect suppliers of products and/or services to Verizon and its Current Subsidiaries that are (or are used in, or are used in support of) any Verizon Licensed Products for the FiOS TV pay television service (“Verizon Suppliers”) from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the TiVo Licensed Patents by the particular units of products supplied or the particular services rendered directly or indirectly by such Verizon Supplier to or on behalf of Verizon and/or its Subsidiaries prior to the Effective Date for use in or with any Verizon Licensed Product for the FiOS TV pay television service solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date; 

(c)    Verizon Subscribers for possession and/or use of any Verizon Licensed Products for the FiOS TV pay television service prior to the Effective Date from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the TiVo Licensed Patents by use of Verizon Licensed Products for the FiOS TV pay television service prior to the Effective Date solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date; 
(d)    Verizon Subscribers that became subscribers of a Frontier MVPD Service as a result of a merger and distribution transaction with Frontier Communications Corporation (“Frontier”) from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the TiVo Licensed Patents for any possession and/or use of any Verizon Licensed Products for the FiOS TV pay television service prior to July 1, 2010 solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date and if the Frontier transaction described above had not occurred; and
(e)    Verizon Subsidiaries that became Frontier Subsidiaries as a result of a merger and distribution transaction with Frontier from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the TiVo Licensed Patents prior to July 1, 2010 solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date and if the Frontier transaction described above had not occurred.
For the avoidance of doubt, no release or discharge is provided under this Section 2.1 with respect to any claim of infringement of any Patent that is not a TiVo Licensed Patent or for any activity that would be outside of the scope of the licenses granted to Verizon and its Subsidiaries under this Agreement if conducted after the Effective Date. Notwithstanding anything to the contrary, no release, license or other rights of any kind are granted to any Verizon Supplier with respect to any units of products (i) used, sold, or otherwise distributed directly or indirectly by such Verizon Supplier other than to Verizon or any of its Subsidiaries, or (ii) otherwise sold, distributed, or used outside of any Verizon Licensed Products.
2.2.    Verizon Limited Release. Verizon, on behalf of itself and its Current Subsidiaries, hereby irrevocably release and forever discharge: 
(a)    TiVo and its Current Subsidiaries and their respective agents, representatives, officers, employees, directors and attorneys in their capacity as such, from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the Verizon Licensed Patents;
(b)    direct and indirect suppliers of products and/or services to TiVo and its Current Subsidiaries that are (or are used in, or are used in support of) TiVo Licensed Products (“TiVo Suppliers”) from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or 

not willful) of the Verizon Licensed Patents by the particular units of products supplied or the particular services rendered by such TiVo Supplier to or on behalf of TiVo and/or its Subsidiaries prior to the Effective Date for use in or with any TiVo Licensed Product solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date; and 
(c)    customers of TiVo Licensed Products prior to the Effective Date from any and all claims, losses, damages, or liability of any kind and nature, at law, in equity, or otherwise, known and unknown, with respect to infringement (whether direct or indirect and whether or not willful) of the Verizon Licensed Patents by use and distribution by such customers of TiVo Licensed Products prior to the Effective Date solely to the extent that such infringement would have been licensed under this Agreement if it had occurred after the Effective Date. For such purposes, customers of TiVo Licensed Products include direct and indirect customers of such TiVo Licensed Products, including TiVo Distribution Partners who license and distribute the respective TiVo Licensed Products, but only to the extent that such TiVo Distribution Partners are licensing and/or distributing the respective TiVo Licensed Products, and do not include TiVo Distribution Partners to the extent that they are licensing and/or distributing any Third Party products that are not TiVo Licensed Products. 
For the avoidance of doubt, no release or discharge is provided under this Section 2.2 with respect to any claim of infringement of any Patent that is not a Verizon Licensed Patent or for any activity that would be outside of the scope of the licenses granted to TiVo and its Subsidiaries under this Agreement if conducted after the Effective Date. Notwithstanding anything to the contrary, no release, license or other rights of any kind are granted directly or indirectly to any TiVo Supplier with respect to any products (i) sold or otherwise distributed directly or indirectly by such TiVo Supplier other than to TiVo or any of its Subsidiaries, or (ii) distributed or used outside of the TiVo Licensed Products. 
2.3.    Waiver of Cal. Civ. Code Sec. 1542. Effective upon receipt by TiVo of the Initial Payment, each Party, on behalf of itself and its Current Subsidiaries, hereby irrevocably and forever waives all rights it and they may have arising under California Civil Code Section 1542 (or any analogous requirement of law) with respect to the foregoing releases. Each Party, on behalf of itself and its Current Subsidiaries, understands that Section 1542 provides that:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Each Party, on behalf of itself and its Current Subsidiaries, acknowledges that it has been fully informed by its counsel concerning the effect and import of this Agreement under California Civil Code Section 1542 and other requirements of law.
2.4.    Dismissal of Pending Litigation. Concurrently with the execution of this Agreement, the Parties shall cause to be completed, executed and delivered (or have delivered) to the other Party the stipulations and joint motions (“Dismissal Motions”) requesting that the Pending Litigation between the 

Parties be dismissed in the form attached hereto as Exhibits A-1, A-2, A-3, and A-4. Within one (1) court day after receipt by TiVo of the Initial Payment, TiVo shall file the Dismissal Motions. The Parties shall cooperate in taking reasonable actions as might be required to dismiss the Pending Litigation.
2.5.    Inter Partes Petitions and Notices. Concurrently with the execution of this Agreement, the Parties shall cause to be completed, executed and delivered (or have delivered) to the other Party the notices to withdraw from (in the case of Verizon) and the petitions to vacate (in the case of TiVo) the inter partes reexaminations of U.S. Patent Nos. 7,493,015 and 7,529,465 in the forms attached hereto as Exhibits B-1, B-2, B-3, and B-4. Within one (1) U.S. Patent and Trademark Office day after the court enters a dismissal of the Pending Litigation, TiVo shall file the executed petitions to vacate and Verizon shall file the executed notices to withdraw with the U.S. Patent and Trademark Office. 
2.6.    No Admission. This Agreement is entered into in order to compromise and settle disputed claims, without any admission of liability or other acquiescence on the part of any Party as to the merit of any claim, defense, affirmative defense or counterclaim in the Pending Litigation (except to the extent expressly set forth in the Dismissal Motions).
2.7.    Attorneys’ Fees and Costs. Each Party shall be responsible for its own costs and attorneys’ fees in connection with the Pending Litigation and the negotiation of this Agreement.

Section 3.    LICENSES
3.1.    License to Verizon. Effective upon receipt by TiVo of the Initial Payment, and subject to Verizon’s satisfaction of its ongoing payment obligations set forth in Section 4, TiVo, on behalf of itself and its Current Subsidiaries and Future Subsidiaries, hereby grants and agrees to grant to Verizon and its Current Subsidiaries and Future Subsidiaries a worldwide, non-exclusive, non-transferable (except as provided in Section 9.4) license, with no right to grant sublicenses, solely under the TiVo Licensed Patents, to make, have made (subject to Section 3.3), use, offer for sale, sell, import, export, lease, distribute, and/or otherwise dispose of, directly or indirectly, any Verizon Licensed Products for use in or with any Verizon Service or Verizon-Redbox Service, as applicable; provided, however, that such license does not extend to use of any Excluded Products other than as set out in this Section. The above license includes the right for Verizon Subscribers and subscribers to any Verizon-Redbox Service to [*] within the scope of the above license for the Verizon Service or Verizon-Redbox Service, as applicable. For the avoidance of doubt, the foregoing license includes the right of Verizon Subscribers and subscribers to any Verizon-Redbox Service to [*], so long as such use is within the scope of the above license. For the further avoidance of doubt, any Verizon Software provided, directly or indirectly, by Verizon or any of its Subsidiaries to Verizon Subscribers prior to the Effective Date for the Verizon Service is subject to the releases under Section 2.1 and will be deemed covered by the licenses under this Section 3.1 for use of such products during the Term within the scope of and as permitted by the license granted to Verizon under this Section 3.1 for any Verizon Service (including [*]).[*].
3.2.     License to TiVo. Verizon, on behalf of itself and its Current Subsidiaries and Future Subsidiaries, hereby grants and agrees to grant to TiVo and its Current Subsidiaries and Future Subsidiaries a royalty-free, worldwide, non-exclusive, non-transferable (except as provided in Section 9.4) license, with no right to grant sublicenses, solely under the Verizon Licensed Patents, to make, have made (subject to Section 3.3), use, offer for sale, sell, import, export, lease, distribute, and/or otherwise dispose of TiVo Licensed Products. The license above extends to [*], and to the use of such TiVo Licensed Products (including [*]) by [*] customers of TiVo, [*], but only for such TiVo Licensed Products. For the avoidance of doubt, the foregoing license includes the right of such customers to [*], so long as such use is within the scope of the above license. For the further avoidance of doubt, TiVo Licensed Products sold or licensed directly or indirectly by TiVo or its Subsidiaries prior to the Effective Date are subject to the releases under Section 2.2 and will be deemed covered by the license under this Section 3.2 for use of such products during the Term within the scope of and as permitted by the license granted to TiVo under this Section 3.2 (including [*]).[*]. 
3.3.    Have Made Rights. The rights granted to a Party (“Grantee”) to have products made for such Party by a Third Party under the licenses granted under Sections 3.1 and 3.2 above shall apply whenever the products are purchased by such Party for use within the scope of the license granted to the Grantee above, whether the designs and specifications for the manufacture of such products are furnished to such Third Party by the Grantee and the products are made by such Third Party for the account of the Grantee or the Grantee orders products “off-the-shelf” (including components that do not themselves meet the definition of Licensed Products but that are for incorporation into Licensed Products), provided, however, that such products are not purchased for resale back to, or on behalf of, such Third Party or any 

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

Affiliate of such Third Party. Notwithstanding anything to the contrary, no release, license or other rights of any kind are granted directly or indirectly to any Verizon Supplier or TiVo Supplier with respect to any products sold or otherwise distributed directly or indirectly by such supplier other than to Grantee or its Subsidiaries, or distributed or used outside of the Verizon Licensed Products or TiVo Licensed Products, as applicable.
3.4.         Subsidiary Licenses.    
(a)    Each Party intends for this Agreement to extend to all of its Subsidiaries with respect to the applicable licenses granted by such Party to the other Party under this Agreement. The Parties agree that, to the extent they are not already bound, each Party shall ensure that all such Subsidiaries are bound by the terms of this Agreement.
(b)    Except as set forth in Section 9.4 or Section 9.5, the licenses and immunities granted to a Subsidiary under this Section 3 shall terminate on the date such Subsidiary ceases to be a Subsidiary of a Party. [*].  For clarity, all products and services of a Subsidiary of a Party that were licensed under this Agreement within the scope and as permitted under the license granted to such Subsidiary under this Agreement prior to the date such entity ceased to be a Subsidiary of a Party shall remain licensed with respect to periods of time prior to the date such entity ceased to be a Subsidiary of a Party. If a Subsidiary ceases to be a Subsidiary and holds, at or before such time, any Patents under which the other Party and/or its Subsidiaries is licensed, such license shall continue for the Term with respect to such Patents and any divisions, continuations, continuations-in-part, extensions, reissues or counterparts of such Patents. 
(c)    If a Person becomes a Subsidiary of a Party after the Effective Date, then such Person, upon becoming a Subsidiary, shall be granted the applicable license set forth in this Section 3; provided, however, that the licenses to Verizon and its Subsidiaries shall be subject to the payment obligations in Section 4, including, if applicable, the obligation to make Additional Payments for Additional Subscribers acquired by Verizon or its Subsidiaries in any Subscriber Acquisition Transaction as set forth in Section 4.3. 
3.5.    No Other Rights. No releases, rights or licenses are granted under any Patents except as expressly provided herein, whether by implication, estoppel or otherwise. Without limiting the foregoing sentence: (i) no right to grant sublicenses is granted under the licenses set forth this Agreement; and (ii) no right or license is granted under any copyrights, trademarks, mask work rights, or trade secret rights of either Party or any of its Subsidiaries. Notwithstanding anything to the contrary in this Agreement, no releases, licenses, or other rights whatsoever are granted or conveyed by TiVo or any of its Subsidiaries with respect to any MVPD or MVPD Services other than any Verizon Service, or for any products supplied directly or indirectly to or for any MVPD or MVPD Services other than any Verizon Service.
3.6.    [*]. During the Term, each Party shall use commercially reasonable efforts to [*], in each case in a commercially reasonable time frame not to exceed 75 days after receipt of written notice from the other Party [*] (as updated by written notice from time to time). The obligations under this Section 3.6 may be satisfied [*]. For purposes of clarification, neither Party will be in breach of this Section 3.6 if 

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

it [*] after the applicable written notice under this Section 3.6. Compliance with this Section 3.6 shall not be and not deemed to [*].
3.7.    Patent Challenges. 
(a)    By Verizon. So long as the license granted in Section 3.1 remains in effect and the respective TiVo Licensed Patent has not been asserted after the Effective Date against Verizon or any of its Subsidiaries or with respect to their respective products or services, Verizon and its Subsidiaries shall not directly or indirectly make or cause to be made, or participate or assist in making, any Patent Challenge with respect to such TiVo Licensed Patents. If Verizon or any of its Subsidiaries breaches this Section 3.7(a), TiVo shall notify Verizon in writing of such breach and Verizon shall have [*] to cure the breach (if possible). If Verizon fails to cure the breach by the end of this period, TiVo shall be entitled to terminate the license granted in Section 3.1 with respect to the Patent(s) subject to the Patent Challenge, and pursue all other remedies available at law or equity.
(b)    By TiVo. So long as the license granted in Section 3.2 remains in effect and the respective Verizon Licensed Patent has not been asserted after the Effective Date against TiVo or any of its Subsidiaries or with respect to their respective products or services, TiVo and its Subsidiaries shall not directly or indirectly make or cause to be made, or participate or assist in making, any Patent Challenge with respect to such Verizon Licensed Patents. If TiVo or any of its Subsidiaries breaches this Section 3.7(b), Verizon shall notify TiVo in writing of such breach and TiVo shall have [*] to cure the breach (if possible). If TiVo fails to cure the breach by the end of this period, Verizon shall be entitled to terminate the license granted in Section 3.2 with respect to the Patent(s) subject to the Patent Challenge, and pursue all other remedies available at law or equity. 
(c)    Breach. The Parties agree that any breach of Sections 3.7(a) or 3.7(b) is likely to cause irreparable harm to the non-breaching Party. Accordingly, each Party hereby agrees that the other Party may seek the entry of temporary, preliminary and permanent injunctive relief to remedy any breach of either Sections 3.7(a) or 3.7(b). For the avoidance of doubt, it will not be considered a breach of Sections 3.7(a) or 3.7(b) for either Party or its Subsidiaries to formally respond in writing or in a deposition under oath to a duly issued Third Party subpoena or other lawfully issued discovery requests or court order.
3.8.    Defensive Suspension. During the [*] month period following the Effective Date:
(a)    If TiVo or any of its Subsidiaries files suit against Verizon or any of its Subsidiaries for infringement of (i) any TiVo Licensed Patent with respect to a product or service not licensed under this Agreement, or (ii) any Patent that is not a TiVo Licensed Patent, then Verizon may suspend the license granted under Section 3.2 of this Agreement with respect to TiVo and its Subsidiaries for any or all of the Verizon Licensed Patents as of the date such litigation is filed. The license to TiVo and its Subsidiaries will be reinstated upon any dismissal or settlement of the claims made by TiVo or any of its Subsidiaries against Verizon or any of its Subsidiaries.

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

(b)    If Verizon or any of its Subsidiaries files suit against TiVo or any of its Subsidiaries for infringement of (i) any Verizon Licensed Patent with respect to a product or service not licensed under this Agreement, or (ii) any Patent that is not a Verizon Licensed Patent, then TiVo may suspend the license granted under Section 3.1 of this Agreement with respect to Verizon and its Subsidiaries for any or all of the TiVo Licensed Patents as of the date such litigation is filed. The license to Verizon and its Subsidiaries will be reinstated upon any dismissal or settlement of the claims made by Verizon or any of its Subsidiaries against TiVo or any of its Subsidiaries.
(c)    Nothing in this Section 3.8 or the exercise of any rights under this Section 3.8 by either Party will affect the other obligations under this Agreement, including Verizon’s obligations to make payments under Section 4. 
Section 4.    PAYMENT 
4.1.    Payment to TiVo. Verizon shall pay TiVo a non-refundable payment in the aggregate amount of $250,400,000 (“Fee”) except to the extent the Fee is reduced in accordance with Section 4.2, and with payment being made in installments according to the following payment schedule:
	
					
	Payment No.

	Due Date
	Payment Amount (before any Section 4.2 Credit)
	Net Payment*

	1
	

	No later than the fifth business day after the Effective Date
	$100,000,000 (“Initial Payment”)
	$100,000,000

	2 and 3

	Within thirty (30) days after the last day of each calendar quarter in 2012, beginning with the quarter ending September 30, 2012
	$6,016,000 per quarter
	$6,016,000 per quarter

	4, 5, 6 and 7

	Within thirty (30) days after the last day of each calendar quarter in 2013
	$6,016,000 per quarter
	$6,016,000 for Q1, $4,679,636.36 for Q2, Q3 and Q4

	8, 9, 10 and 11

	Within thirty (30) days after the last day of each calendar quarter in 2014
	$6,016,000 per quarter
	$4,679,636.36 per quarter

	12, 13, 14 and 15

	Within thirty (30) days after the last day of each calendar quarter in 2015
	$6,016,000 per quarter
	$4,679,636.36 per quarter

	16, 17, 18 and 19

	Within thirty (30) days after the last day of each calendar quarter in 2016
	$6,016,000 per quarter
	$4,679,636.36 per quarter

	20, 21, 22 and 23

	Within thirty (30) days after the last day of each calendar quarter in 2017
	$6,016,000 per quarter
	$4,679,636.36 per quarter

	24, 25 and 26**

	Within thirty (30) days after the last day of each calendar quarter, ending with the quarter ending September 30, 2018
	$6,016,000 per quarter
	$4,679,636.36 per quarter

	Total

	 
	$250,400,000
	$221,000,000

*Assuming that Verizon has provided [*] (as such terms are defined in the [*]) in [*], as described in Section 4.2 below.
**Payments continue through the end of the calendar quarter ending September 30, 2018 despite expiration of the Agreement on July 31, 2018 for the convenience of the Parties.
Each of quarterly payments set forth in 2 – 26 of the above table are hereinafter referred to as an “Installment Payment” and collectively as the “Installment Payments”. 
4.2.    [*]. If Verizon elects to [*] in accordance with [*], then Verizon will receive a credit of $445,454.55 per month [*] (up to a maximum amount of $29,400,000) toward the Fee so long as Verizon meets its material obligations [*], beginning in the first full month in which Verizon [*]. If Verizon breaches any of its material obligations [*], including Verizon’s failure to [*], and fails to cure any such breach [*], then Verizon will be considered in breach of a material obligation [*] solely for purposes of this Section 4.2 and will not be considered in breach under any other provision of this Agreement, and shall immediately pay to TiVo [*] and will not be eligible to receive any additional credits under this Section 4.2. Except as expressly set forth in this Section 4.2, in no event shall any credit or payment be provided or due under this Agreement [*] from TiVo or any of its Subsidiaries to Verizon or any of its Subsidiaries.
4.3.    Additional Monthly DVR Subscriber Fees. If the number of DVR Subscribers (including cumulative Additional Subscribers) on the last day of any month during the Term (each a “Calculation Date”) exceeds the applicable Threshold Amount, then Verizon shall pay TiVo an amount for that month equal to (a) the number of DVR Subscribers over the applicable Threshold Amount on such Calculation Date, multiplied by (b) [*] (“Additional Payments”). For example, if the number of DVR Subscribers on June 30, 2014 is [*], it exceeds the applicable Threshold Amount of [*] by [*], and Verizon will pay to TiVo an Additional Payment in the amount of [*] for that month. Verizon shall report and pay Additional Payments due under this section quarterly within thirty (30) days after the last day of each calendar quarter during the Term (beginning with the calendar quarter ending September 30, 2012 and ending with the calendar quarter ending September 30, 2018). The Additional Payments under this Section 4.3 are in addition to the Installment Payments to be paid under Section 4.1. 
4.4.    Payments; Taxes. 
(a)    Each payment from Verizon to TiVo under this Agreement, including the Fee payments and any Additional Payments, shall be made in U.S. dollars in immediately available funds by wire transfer pursuant to the following instructions (or in accordance with such other wire transfer instructions provided by notice from TiVo):
Bank Name:        [*]
SWIFT code:        [*]
ABA #:        [*]
Account Name:    [*]
Account Number:    [*]     

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

(b)    All Fee payments and Additional Payments shall be remitted so that they are received by TiVo in the amounts and according to the schedule set forth in Sections 4.1 and 4.3, as applicable. Verizon acknowledges and agrees that, in light of TiVo’s obligation to forbear from pursuing litigation with respect to the activities that are licensed and/or released hereunder, this Agreement shall remain in force, and the obligation of Verizon to make the payments to TiVo in accordance with Sections 4.1, 4.2 and 4.3 shall be absolute, unconditional, noncontingent (except as otherwise set forth in Section 4.3), noncancellable and nonrefundable, and shall not be subject to any abatement, set-off, claim, counterclaim, adjustment, reduction or defense for any reason, including, but not limited to, any claims that TiVo failed to perform under this Agreement, termination or breach of this Agreement, the use or non-use by Verizon of the license under Section 3.1, or the invalidity, unenforceability, or modification of one or more of the Licensed Patents. Verizon hereby forever waives any right to challenge or dispute the Fee to be paid pursuant to the terms and conditions of this Agreement.
(c)    All taxes shall be the financial responsibility of the Party obligated to pay such taxes as determined by the applicable law and neither Party is or shall be liable at any time for any of the other Party’s taxes incurred in connection with or related to amounts paid under this Agreement. Fees and other amounts to be paid by Verizon pursuant to this Section 4 are payable in full to TiVo without reduction for Taxes (including any withholding tax), provided that TiVo timely delivers an IRS W-9 form to Verizon. All payments under this Agreement will be made by Verizon or its U.S. based designee to TiVo or TiVo’s U.S. based designee.
4.5.    Breach of Payment Obligation. If the Initial Payment, any Installment Payment, or any undisputed Additional Payment is not made in full by Verizon to TiVo on the due date, and has not been paid in full by Verizon within thirty (30) days after written notice of such breach from TiVo, then the entire sum of any and all unpaid payments, and any portion thereof, as set forth in Section 4.1 ($250,400,000.00, less the sum of any Installment Payments made by Verizon to TiVo and any credits received to date by Verizon) that are due or will become due shall all be deemed due and owing upon written notice from TiVo to Verizon and immediately paid in full by Verizon to TiVo following receipt of such written notice. Past due amounts shall be subject to a monthly service charge of [*] per month of the unpaid balance or the maximum rate allowable by law, whichever is less. In addition to all other sums payable hereunder, other than with respect to a good faith dispute as to any Additional Payments due, Verizon shall pay all reasonable out-of-pocket expenses incurred by TiVo, including fees and disbursements of counsel, in connection with collection and other enforcement proceeding resulting therefrom. The foregoing obligation in no way limits any other rights or remedies available to TiVo or Verizon. 
4.6.    Reporting; Audit Right. Within thirty (30) days after the end of each calendar quarter during the Term, Verizon shall provide to TiVo a report detailing the number of Verizon Subscribers and DVR Subscribers as of the Calculation Date for each month during such quarter, any Subscriber Acquisition Transactions and cumulative Additional Subscribers (in aggregate and for each Subscriber Acquisition Transaction) as of the Calculation Date for each month during such quarter and the total Additional Payments due for each month during such quarter. During the Term and for [*]  thereafter, 

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

TiVo shall have the right, at its expense, not more than [*]   per calendar year, to have an independent certified public accounting firm, review or audit applicable books and records for the purpose of verifying the reports and payments under this Section 4. Any such audit shall be conducted during regular business hours, begin upon no less than [*] prior written notice, and shall be subject to reasonable confidentiality restrictions. Verizon shall keep accurate and complete records to allow such independent certified public accounting firm to determine such compliance. Any discrepancy in the amounts owed and paid by Verizon (plus interest at the rate set forth in Section 4.5) will be paid within [*] of the written notice of the results of the audit being delivered by the auditor. If any audit results in a determination that Verizon has underpaid amounts due hereunder by more than [*] for the time period audited, then in addition to any other rights and remedies available to TiVo, and in addition to Verizon’s obligation to pay such unpaid amounts plus interest as set forth in Section 4.5, Verizon shall, within thirty (30) days, reimburse TiVo for all out of pocket costs and expenses incurred in connection with such audit. If any audit results in a determination that Verizon has overpaid amounts due hereunder, the amount of such overpayment shall be credited against future payments owed or refunded to Verizon if no additional payments are owed.
Section 5.    TERM AND TERMINATION
5.1.     Term.    The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect until 11:59 PM (Pacific time) on July 31, 2018 (the “Term”), unless earlier terminated as set forth below. 
5.2.     Termination.    
(d)    If Verizon breaches any of its payment obligations under Section 4.1 or any of its undisputed payment obligations under Section 4.3 and does not cure by making such payment in full within [*] after written notice of such breach from TiVo (including late charges and expenses under Section 4.5), then TiVo shall have the right to terminate the rights and licenses granted to Verizon and its Subsidiaries under this Agreement. In such event, licenses and other rights granted to Verizon and its Subsidiaries shall immediately terminate. The rights and licenses granted to TiVo and its Subsidiaries in Sections 2 and 3 shall survive. TiVo shall not have the right to terminate as set out in this Section 5.2(a) if Verizon satisfies the payment obligation set out in Section 4.5. Except as expressly set forth in this Section 5.2(a) and Section 3.8, TiVo shall have no right to terminate the rights and licenses granted to Verizon and its Subsidiaries under this Agreement for any reason. 
(e)    Except as expressly set forth in Section 3.8, Verizon shall have no right to terminate the rights and licenses granted to TiVo and its Subsidiaries under this Agreement for any reason.
(f)    Upon expiration or termination of this Agreement, the releases granted to each Party and its Subsidiaries under Section 2 will survive; however, the licenses granted to each Party and its Subsidiaries under Section 3 shall terminate, except with respect to those units of Licensed Products distributed by a Party or its Subsidiaries to Third Parties on or prior to the expiration or termination within the scope and as permitted under the license granted to such Party under this Agreement. 

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

(g)    Sections 1, 2.1, 2.2, 2.3, 4.1, 4.2, 4.3 (with respect to accrued payment obligations), 4.4, 4.5, 4.6 (to the extent set forth therein), 5.2(c), 5.2(d), 7 and 9 shall survive any termination or expiration of this Agreement for any reason. 
Section 6.    REPRESENTATIONS, WARRANTIES, AND COVENANTS
6.1.    Representations and Warranties. 
(h)    Each Party represents and warrants to the other Party, as of the Effective Date, that: (i) it is a corporation, duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation and has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement; and (ii) this Agreement is a legal, valid, and binding obligation enforceable against each of the Parties in accordance with its terms and conditions, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws, from time to time in effect, affecting creditor’s rights generally. 
(i)    TiVo represents and warrants to Verizon, as of the Effective Date, that it has the right to grant the licenses set forth herein to the TiVo Licensed Patents. 
(j)    Verizon represents and warrants to TiVo, as of the Effective Date, that: (i) it has the right to grant the licenses set forth herein to the Verizon Licensed Patents; (ii) Verizon Services Corp., Verizon Corporate Resources Group, LLC, Verizon Corporate Services Group Inc., Verizon Data Services LLC, and their Subsidiaries and any other Person established or maintained by Verizon or its Subsidiaries for holding rights to Patents on behalf or for the benefit of Verizon or any of its Subsidiaries are (and will be deemed to be) Subsidiaries for purposes of the licenses and releases granted to TiVo and its Subsidiaries herein; (iii) Verizon holds more than fifty percent (50%) of the Voting Power of each of Verizon Wireless [*]; and (iv) the merger and distribution transaction with Frontier described in Section 2.1(d) was completed effective July 1, 2010 [*].
6.2.    Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 6.1, RIGHTS WITH RESPECT TO PATENTS ARE PROVIDED “AS IS,” AND NO PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES BY VIRTUE OF THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED. Without limiting the foregoing disclaimer, it is understood and agreed that nothing in this Agreement shall be construed as:
(d)    a warranty or representation by any Party as to the validity or scope of any of its Patents;
(e)    a warranty or representation by any Party that any manufacture, sale, use or other disposition of products by another Party has been or will be free from infringement of any Patents;
(f)    an agreement by any Party to bring or prosecute actions or suits against any other Person for infringement, or conferring any right to the other Party to bring or prosecute actions or suits against any other Person for infringement;

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

(g)    except to comply with requirements under Section 3.6, conferring upon any Party or its Subsidiaries any right to include in advertising, packaging or other commercial activities related to its products and services licensed under this Agreement, any reference to another Party (or any of its Subsidiaries), its trade names, trademarks or service marks in a manner which would be likely to cause confusion as to source of origin or to indicate that such product or service licensed under this Agreement is in any way certified by the other Party or its Subsidiaries;
(h)    conferring by implication, estoppel or otherwise, upon either Party, any right or license under any Patents except for the releases and licenses expressly granted hereunder; or
(i)    an obligation to furnish any technical information, copyrights, mask works or know-how.
Section 7.    CONFIDENTIALITY AND PUBLICITY
7.1.    Press Release. TiVo may release a press release concerning the settlement of the Pending Litigation in the form of Exhibit C (the “Press Release”). Neither Party nor any of their respective Subsidiaries may make any other public announcement or press release concerning the settlement of the Pending Litigation. Nothing in this Section 7.1 will prevent either Party from disclosing and discussing the settlement of the Pending Litigation as permitted under Section 7.2 (including, without limitation, in connection with securities filings and discussions of the content of the Press Release and other publicly available information).
7.2.    Confidentiality. Except as set forth in the Press Release, each Party hereby agrees not to disclose to Third Parties without the prior written consent of the other Party: (i) the terms and conditions of this Agreement, or (ii) the confidential information of the other Party disclosed pursuant to this Agreement and marked as confidential, which in the case of Verizon will include non-public information in reports provided under Section 4.6 marked as confidential by Verizon. Notwithstanding the foregoing, no Party shall be liable for the disclosure of the terms and conditions of this Agreement or such confidential information (a) pursuant to judicial action or decree, or any requirement of any government or any agency or department thereof having jurisdiction over such Party, provided that in the reasonable opinion of counsel for such Party such disclosure is required and such Party to the extent reasonably practical shall have given the other Parties notice prior to such disclosure sufficient to allow the other Party to seek a protective order; (b) pursuant to a duly issued subpoena, provided that in the reasonable opinion of counsel for such Party such disclosure is required and such Party shall have given the other Parties notice prior to such disclosure and such disclosure is made only pursuant to a duly entered protective order under the highest level of designated confidentiality (for example, outside counsel’s eyes only); (c) for the purposes of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, any other reports filed with the Securities and Exchange Commission, or any other filings, reports or disclosures that may be required under applicable laws or regulations or stock exchange rules; (d) to a Party’s affiliates, employees, consultants, contractors, auditors, legal, financial advisors, accountants, banks, or financing sources and their advisors, actual or prospective investors or acquirers of a Party or a Subsidiary (and their legal and financial advisors), or other representatives so long as such parties have a need to know such confidential information and are 

expressly bound to keep such information confidential and not use such information for any unauthorized purpose; (e) as reasonably required in connection with the enforcement of this Agreement or any rights hereunder; (f) to the extent such terms and conditions have become generally known or available to the public other than through the breach of this Section 7.2 by the disclosing Party; or (g) to a good faith purchaser or potential purchaser of any Licensed Patent(s), so long as such purchaser is under a suitable non-disclosure agreement and only receives information regarding the scope of licenses granted under such Licensed Patent(s). 
Section 8.    CHANGE OF CONTROL
8.1.    Change of Control. If a Party (the “Acquired Party”) undergoes a Change of Control involving a Third Party (the “Acquirer”), then each of the following subsections shall apply: 
(a)    The Acquired Party shall give notice within thirty (30) days after the closing of such Acquisition to the other Party (“Non-Acquired Party”). 
(b)    The license granted to the Acquired Party and its Subsidiaries will be limited to Licensed Products marketed, sold, licensed or announced by the Acquired Party or any of its Subsidiaries prior to the Change of Control (“Existing Licensed Products”) and improvements, updates, upgrades, bug fixes, modifications and follow on products and services to the Existing Licensed Products. The license will not otherwise extend to the Acquirer. 
(c)    The license granted to the Non-Acquired Party and its Subsidiaries will remain in effect with respect to the Licensed Patents of the Acquired Party and its Subsidiaries. However, no rights or licenses will be granted to the Non-Acquired Party or its Subsidiaries with respect to any Patents of the Acquirer or its Subsidiaries (other than the Licensed Patents acquired as part of the Acquired Party or its Subsidiaries in the respective Change of Control transaction).
(d)    Except as otherwise expressly set forth above in this Section 8.1, the licenses granted to each Party and its Subsidiaries (and permitted successors and permitted assigns) will remain in effect after such Change of Control in accordance with this Agreement for the remainder of the Term.

Section 9.    GENERAL
9.1.    Notices. All notices that are required or permitted to be given hereunder shall be in writing and shall be sent (a) by overnight courier service, charges prepaid, written signature of the receiving party requested and received, to the Party to be notified, addressed to such Party at the physical address set forth below; and (b) by e-mail to the e-mail address set forth below, or such other physical and e-mail address(es) as such Party may have substituted by written notice to the other Party. In the event of any notice concerning breach of payment obligations, the Party providing notice will make reasonable attempts to reach at least one of the persons listed below within two (2) business days of sending such notice to speak by telephone to indicate that notice has been provided. The receipt of such notice (in the case of delivery by overnight courier service) or, if the addressee refuses to accept the tender of such notice, then the tender of such notice for delivery shall constitute the giving thereof. 
if to TiVo:    TiVo Inc.
Attn: Office of the General Counsel
[*]

if to Verizon:    Verizon Communications Inc.
Attn: General Counsel
[*]

With a copy (which alone shall not constitute notice):

Verizon Communications Inc.
Attn: Senior Vice President and Deputy General Counsel
[*]

9.2.    Venue. The Parties shall bring any claims related to the interpretation or breach of this Agreement exclusively in the United States District Court for the District of Delaware; provided, however, that in the event the licenses under Sections 3.1 or 3.2 are suspended or terminated pursuant to Section 3.8 or Section 5.2(a), [*]. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods will not apply in any respect to this Agreement or sales of Goods. Nothing in this Agreement is, constitutes or shall be interpreted as or argued to be any admission, agreement, suggestion or acquiescence that [*].
9.3.    Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed as creating a joint venture, partnership, agency, employment or fiduciary relationship between the Parties. Neither TiVo nor any of its agents has any authority of any kind to bind Verizon in any respect whatsoever, neither Verizon nor any of its agents has any authority of any kind to bind TiVo in any respect whatsoever, and the relationship of the Parties is, and at all times shall continue to be, that of independent contractors. No Person except a Party to this Agreement may bring or assert any claim for breach or damages or other remedy under this Agreement and no other Person will have any rights as a third party beneficiary under this Agreement. 

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

9.4.    Assignment. This Agreement may not be assigned by any Party without the prior written consent of the other Party, including by operation of law. Notwithstanding the foregoing, such other Party’s consent shall not be required for any assignment to a Person that succeeds to all or substantially all of such Party’s business and assets to which this Agreement pertains (a) with respect to a Change of Control, subject to Section 8, or (b) other than as part of a Change of Control of Verizon, subject to the following additional requirements: [*]; however (x) any DVR Subscribers transferred or transitioned to the Transferred Verizon Services from any other MVPD Service of the assignee or its Subsidiaries after the closing of the assignment that are not already licensed under a TiVo Patent-In-Suit will be considered Additional Subscribers for purposes of this Agreement, and (y) the assignee will not have the right to make any further assignment of this Agreement; (vi) Verizon shall remain responsible for the performance of its obligations under this Agreement, including payment obligations (except to the extent such payments are actually made by the assignee); and (vii) the licenses granted by Verizon and its Subsidiaries to TiVo and its Subsidiaries under this Agreement will remain in effect notwithstanding such assignment. TiVo may assign its right to receive payments under this Agreement without the prior written consent of Verizon. Any assignment of any Licensed Patents by a Party or any of its Subsidiaries shall remain subject to the licenses granted to the other Party and its Subsidiaries under this Agreement which shall remain in effect notwithstanding such assignment. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective permitted successors and permitted assigns.
9.5.    Subscriber Transfers. If Verizon or any of its Subsidiaries transfers or sells a portion of the Verizon Subscribers (“Transferred Subscribers”) in one transaction or a series of related transactions in conjunction with the sale or spinoff of one or more regional or local MVPD systems other than as set forth in Section 9.4 (each a “Subscriber Transfer”) to a Third Party (each a “Transferee”), then: 
(a)    the license granted to Verizon and its Subsidiaries under Section 3.1 will remain in effect solely with respect to the DVRs that are [*] and will not extend to any other products or services of the Transferee or its Affiliates and specifically does not provide any right, license or other authority from TiVo to make, have made, offer to sell, sell or import any additional DVRs;
(b)    the Threshold Amount for the then-current calendar year and every calendar year of the Term thereafter will be reduced, effective as of the closing of the Subscriber Transfer, by multiplying each such Threshold Amount by an amount equal to (1 – x), where x is calculated as an amount equal to (i) the number of Transferred Subscribers, divided by (ii) the total number of Verizon Subscribers immediately prior to the Subscriber Transfer (for example, if Verizon transfers or sells [*] Transferred Subscribers in a Subscriber Transfer on December 15, 2014 when it has [*] Verizon Subscribers immediately before the transaction, then the Threshold Amount for each of 2014, 2015, 2016, 2017, and 2018 would be [*] going forward); 
(c)    [*]; and 
(d)    notwithstanding anything in this Section 9.5 to the contrary, [*].

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

9.6.    Waiver. A waiver, express or implied, of any right under this Agreement or of any failure to perform or breach hereof shall not constitute or be deemed to be a waiver of any other right hereunder or of any other failure to perform or breach hereof, whether of the same, or a similar or dissimilar nature thereto. 
9.7.    Severability. If any provision of this Agreement is unenforceable or invalid under any applicable law or is so held by applicable court decision, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole, and, in such event, such provision shall be changed and interpreted so as to best accomplish the objectives of the Parties within the limits of applicable law or applicable court decision.
9.8.    Bankruptcy. All licenses to Licensed Patents granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights of “intellectual property” and rights to “intellectual property” under agreements supplementary thereto as “intellectual property” is defined under Section 101 of the Bankruptcy Code. The Parties agree that any Party, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code in the event of any bankruptcy or insolvency proceeding of any kind or nature. Each Party acknowledges that if another Party, as a debtor in possession, or a trustee-in-bankruptcy for such Party, in a case under the Bankruptcy Code, rejects this Agreement, the other Parties and their Subsidiaries may elect to retain their rights under this Agreement as provided in Section 365(n) of the Bankruptcy Code. Each Party irrevocably waives all arguments and defenses arising under 11 U.S.C. § 365(c)(1) or successor provisions to the effect that applicable law excuses such Party from accepting performance from or rendering performance to an entity other than the debtor or debtor in possession as a basis for opposing assumption of this Agreement in a case under Chapter 11 of the Bankruptcy Code to the extent that such consent is required under 11 U.S.C. § 365(c)(1) or any successor statute, provided that any Change of Control shall remain subject to Section 8 and provided further that, with respect to any proceeding under Chapter 11 of the Bankruptcy Code with respect to Verizon, solely if TiVo has received full payment of the Fee. 
9.9.    Cumulative Remedies. The rights and remedies of the Parties as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies now or hereafter provided by law or at equity.
9.10.    Captions and Headings. The captions and headings used in this Agreement are inserted for convenience only, do not form a part of this Agreement, and shall not be used in any way to construe or interpret this Agreement.
9.11.    Construction. This Agreement has been negotiated by the Parties and shall be interpreted fairly in accordance with its terms and without any construction in favor of or against any Party.
9.12.    Sophisticated Parties Represented by Counsel. The Parties each acknowledge that they are sophisticated Parties represented at all relevant times during the negotiation and execution of this Agreement by counsel of their choice, and that they and their counsel have engaged in robust, arm’s-length negotiation of this Agreement.

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

9.13.    Counterparts. This Agreement may be executed (including by electronic transmission of scanned signature pages) in one or more counterparts with the same effect as if the Parties had signed the same document. Each counterpart so executed shall be deemed to be an original, and all such counterparts shall be construed together and shall constitute one agreement.
9.14.    Entire Agreement; Amendment. This Agreement, including the Exhibit(s) attached hereto which are incorporated herein by reference, [*], constitutes the entire understanding and only agreement between the Parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous negotiations, representations, term sheets, agreements, and understandings, written or oral, that the Parties may have reached with respect to the subject matter hereof. No agreements altering or supplementing the terms hereof may be made except by means of a written document signed by the duly authorized representatives of each of the Parties hereto. 
9.15.    No Consequential Damages. EXCEPT AS PROVIDED EXPLICITLY HEREIN, IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY OR ANY OTHER PERSON OR ENTITY (UNDER CONTRACT, STRICT LIABILITY, NEGLIGENCE, OR OTHER THEORY) FOR SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, OPPORTUNITIES OR SAVINGS, ARISING OUT OF OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT.
[Remainder of page intentionally left blank.]

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

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.
	
		
	VERIZON COMMUNICATIONS INC.

By:   /s/ Craig Silliman_____
Name: Craig Silliman
Title: Senior Vice President & Deputy General Counsel
Date: September 21, 2012

	TIVO INC.

By:   /s/ Matthew P. Zinn_____
Name: Matthew P. Zinn
Title: Senior Vice President, General Counsel, Secretary and Chief Privacy Officer
Date: September 21, 2012

 
Exhibits A-1, A-2, A-3, and A-4

Dismissal Motions

Exhibit A-1

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

	
		
	

TIVO INC., a Delaware corporation,
 
Plaintiff,

   v.

VERIZON COMMUNICATIONS INC., 
   a Delaware corporation, et al.,

Defendants.

	

  Civil Action No. 2:09-cv-257-JRG

STIPULATION AND JOINT MOTION TO DISMISS PURSUANT TO 
RULE 41 OF THE FEDERAL RULES OF CIVIL PROCEDURE

Plaintiff TiVo Inc. ("TiVo") and Defendants and Counterclaim Plaintiffs Verizon Communications Inc., Verizon Services Corp., Verizon Corporate Resources Group LLC, Verizon Corporate Services Group Inc., and Verizon Data Services LLC (collectively "Verizon") (with TiVo, the "Parties," and each individually, a "Party"), by and through counsel, stipulate as follows:
This Stipulation and Joint Motion to Dismiss is made pursuant to Rule 41 of the Federal Rules of Civil Procedure and agreements between the Parties.
The Parties hereby stipulate to the dismissal with prejudice of (i) all of TiVo's claims and counterclaims against Verizon in the above-captioned action and (ii) all claims and counterclaims made by Verizon against TiVo in the above-captioned action (including all claims which Verizon previously dismissed without prejudice), with each party to bear its own costs and attorneys' fees.

The dismissals set forth in this Stipulation are not intended to, and do not, have any impact on any claims TiVo has or may have against any party other than Verizon, or on any claims Verizon has or may have against any party other than TiVo.  Accordingly, pursuant to Rule 41 of the Federal Rules of Civil Procedure and agreement between the Parties, the Parties hereby request that the Court dismiss with prejudice as follows:
a.    All of TiVo's claims and counterclaims asserted against Verizon in the above-captioned action are dismissed with prejudice;
b.    All of Verizon's claims and counterclaims asserted against TiVo in the above-captioned action (including claims asserted in this action that were previously dismissed without prejudice) are dismissed with prejudice;
c.    TiVo and Verizon shall each bear their own costs and attorney's fees in this action; and
d.    The foregoing dismissals are without prejudice to any claims that TiVo has asserted, could have asserted, or may in the future assert against any party other than Verizon, and any claims that Verizon has asserted, could have asserted, or may in the future assert against any party other than TiVo. 
Text of a proposed Order of Dismissal With Prejudice has been lodged concurrently herewith.

	
		
	Dated:  September 28, 2012

Co-Counsel: 
IRELL & MANELLA LLP
Morgan Chu 
mchu@irell.com
Andrei Iancu 
aiancu@irell.com
Joseph M. Lipner
jlipner@irell.com
Richard M. Birnholz
rbirnholz@irell.com
Tom Werner 
twerner@irell.com
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
TEL: (310) 277-1010
FAX: (310) 203-7199

ROBINS, KAPLAN, MILLER &
CIRESI, L.L.P.
Ronald J. Schutz
rjschutz@rkmc.com
Cyrus A. Morton
camorton@rkmc.com
Michael A. Collyard
macollyard@rkmc.com
2800 LaSalle Plaza
800 LaSalle Avenue
Minneapolis, MN 55402-2015
Telephone: (612) 349-8500
Facsimile: (612) 339-4181

	Respectfully submitted,

/s/ Sam Baxter (with permission)
McKOOL SMITH, P.C.
Samuel F. Baxter
Lead Attorney
Texas State Bar No. 01938000
sbaxter@mckoolsmith.com
104 E. Houston St., Suite 300
Marshall, Texas 75670
Telephone: (903) 923-9000
Facsimile: (903) 923-9099

Rosemary Snider
Texas State Bar No. 18796500
rsnider@mckoolsmith.com
Garret W. Chambers
Texas State Bar No. 00792160
gchambers@mckoolsmith.com
McKool Smith, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: (214) 978-4000
Facsimile: (214) 978-4044

John F. Garvish, II
Texas State Bar No. 24043681
jgarvish@mckoolsmith.com
300 W. 6th St. Suite 1700
Austin, Texas 78701
Telephone: (512) 692-8700
Facsimile: (512) 692-8744

Attorneys for Plaintiff TiVo Inc.

	
		
	

Dated: September 28, 2012

John P. Frantz, pro hac vice 
Caren K. Khoo, pro hac vice 
VERIZON CORPORATE RESOURCES
   GROUP LLC
One Verizon Way
Basking Ridge, NJ 07920
Tel:  (908) 559-7000
Fax:  (908) 766-8264

	Respectfully submitted,

/s/ Clyde M. Siebman (with permission)
Clyde M. Siebman (#18341600)
SIEBMAN, REYNOLDS, BURG,
   PHILLIPS & SMITH LLP
Federal Courthouse Square
300 N. Travis Street
Sherman, TX  75090
Tel:  (903) 870-0070
Fax:  (903) 870-0066
Email:  siebman@siebman.com

Mark C. Hansen, pro hac vice
Michael K. Kellogg, pro hac vice
KELLOGG, HUBER, HANSEN,
   TODD, EVANS & FIGEL, P.L.L.C.
1615 M Street, NW, Suite 400
Washington, DC  20036
Tel:  (202) 326-7900
Fax:  (202) 326-7999
Email:    mhansen@khhte.com
mkellogg@khhte.com

	Counsel for Verizon Communications Inc., Verizon Services Corp.,
Verizon Corporate Resources Group LLC, Verizon Corporate Services Group Inc.,
and Verizon Data Services LLC

CERTIFICATE OF SERVICE
The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court's CM/ECF system on September 28, 2012.  Any other counsel of record will be served via electronic and first class mail.
Respectfully submitted,
/s/ Sam Baxter (with permission)
McKOOL SMITH, P.C.
Samuel F. Baxter
Lead Attorney
Texas State Bar No. 01938000
sbaxter@mckoolsmith.com
104 E. Houston St., Suite 300
Marshall, Texas 75670
Telephone: (903) 923-9000
Facsimile: (903) 923-9099

Exhibit A-2

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

	
		
	

TIVO INC., a Delaware corporation,
 
Plaintiff,

   v.

VERIZON COMMUNICATIONS INC., 
   a Delaware corporation, et al.,

Defendants.

	

  Civil Action No. 2:09-cv-257-JRG

ORDER OF DISMISSAL WITH PREJUDICE

This matter having come before the Court and it being represented that Plaintiff TiVo Inc. ("TiVo") and Defendants and Counterclaim Plaintiffs Verizon Communications Inc., Verizon Services Corp., Verizon Corporate Resources Group LLC, Verizon Corporate Services, Group Inc., and Verizon Data Services LLC (collectively "Verizon") (with TiVo, the "Parties"), have agreed to dismiss the above-captioned action with prejudice pursuant to Rule 41 of the Federal Rules of Civil Procedure: 
Based upon the agreement, consent, and approval of the Parties, IT IS HEREBY ORDERED that:
		
	a.
	All of TiVo's claims and counterclaims asserted against Verizon in the above-captioned action are dismissed with prejudice;

		
	b.
	All of Verizon's claims and counterclaims asserted against TiVo in the above-captioned action (including claims asserted in this action that were previously dismissed without prejudice) are dismissed with prejudice;

		
	c.
	TiVo and Verizon shall each bear their own costs and attorney's fees in this action;

		
	d.
	The foregoing dismissals are without prejudice to any claims that TiVo has asserted, could have asserted, or may in the future assert against any party other than Verizon, and any claims that Verizon has asserted, could have asserted, or may in the future assert against any party other than TiVo. 

 
SO ORDERED and SIGNED this ____ day of September, 2012

______________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE 

Exhibit A-3

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

	
		
	

TIVO INC., a Delaware corporation,
 
Plaintiff,

   v.

VERIZON COMMUNICATIONS INC., 
   a Delaware corporation, et al.,

Defendants.

	

  Civil Action No. 2:09-cv-257-JRG

STIPULATION AND JOINT MOTION FOR ENTRY OF CONSENT JUDGMENT

Plaintiff TiVo Inc. ("TiVo") and Defendants and Counterclaim Plaintiffs Verizon Communications Inc., Verizon Services Corp., Verizon Corporate Resources Group LLC, Verizon Corporate Services Group Inc., and Verizon Data Services LLC (collectively "Verizon") (with TiVo, the "Parties" and each individually, a "Party"), by and through counsel, stipulate as follows:
This Stipulation and Joint Motion For Entry of Consent Judgment is made pursuant to Rule 41 of the Federal Rules of Civil Procedure and agreements between the Parties.
The Parties have also submitted a separate Stipulation and Joint Motion To Dismiss With Prejudice in which the parties stipulated to and requested the dismissal with prejudice of (i) all of TiVo's claims and counterclaims against Verizon in the above-captioned action and (ii) all claims and counterclaims made by Verizon against TiVo in the above-captioned action (including all claims which Verizon previously dismissed without prejudice), with each party to bear its own costs and 

attorneys' fees.  By this Stipulation and Joint Motion for Entry of Consent Judgment, the Parties further agree to the Court's entry of a Consent Judgment as set forth herein.
Verizon agrees that it has not sustained its burden of proving invalidity of U.S. Pat. Nos. 7,529,465, and 7,493,015 and that the foregoing TiVo patents are valid.  Verizon consents to the entry of judgment against Verizon on Verizon's counterclaims seeking a judicial declaration that these patents are invalid.  Verizon and TiVo further waive any right to appeal the Consent Judgment, to the extent that any such right may exist, and agree that upon entry by the Court such Consent Judgment is final and not appealable.
Accordingly, pursuant to Rule 41 of the Federal Rules of Civil Procedure and agreement between the Parties, the Parties hereby request that the Court enter a consent judgment with regard to Verizon's Count V (Declaratory Judgment of Invalidity (U.S. Patent No. 7,529,465)) and Count VI (Declaratory Judgment of Invalidity (U.S. Patent No. 7,493,015)) seeking a judicial declaration regarding the validity of the foregoing TiVo patents as follows:
a.    Verizon has not sustained its burden of proving invalidity of U.S. Patent Nos. 7,529,465 (claims 1-20) and 7,493,015 (claims 1-24);
b.    Judgment is entered in favor of TiVo, and against Verizon, on Verizon's counterclaims entitled Verizon's Count V (Declaratory Judgment of Invalidity (U.S. Patent No. 7,529,465)) and Count VI (Declaratory Judgment of Invalidity (U.S. Patent No. 7,493,015)) seeking a judicial determination and declaration regarding the validity of U.S. Patent Nos. 7,529,465 and 7,493,015; and
c.    This judgment is final and the parties have waived any right to appeal therefrom.  

Text of a proposed Consent Judgment has been lodged concurrently herewith.
	
		
	Dated:  September 28, 2012

Co-Counsel: 
IRELL & MANELLA LLP
Morgan Chu 
mchu@irell.com
Andrei Iancu 
aiancu@irell.com
Joseph M. Lipner
jlipner@irell.com
Richard M. Birnholz
rbirnholz@irell.com

Tom Werner 
twerner@irell.com
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
TEL: (310) 277-1010
FAX: (310) 203-7199

ROBINS, KAPLAN, MILLER &
CIRESI, L.L.P.
Ronald J. Schutz
rjschutz@rkmc.com
Cyrus A. Morton
camorton@rkmc.com
Michael A. Collyard
macollyard@rkmc.com
2800 LaSalle Plaza
800 LaSalle Avenue
Minneapolis, MN 55402-2015
Telephone: (612) 349-8500
Facsimile: (612) 339-4181

	Respectfully submitted,

/s/ Sam Baxter (with permission)
McKOOL SMITH, P.C.
Samuel F. Baxter
Lead Attorney
Texas State Bar No. 01938000
sbaxter@mckoolsmith.com
104 E. Houston St., Suite 300
Marshall, Texas 75670
Telephone: (903) 923-9000
Facsimile: (903) 923-9099

Rosemary Snider
Texas State Bar No. 18796500
rsnider@mckoolsmith.com
Garret W. Chambers
Texas State Bar No. 00792160
gchambers@mckoolsmith.com
McKool Smith, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: (214) 978-4000
Facsimile: (214) 978-4044

John F. Garvish, II
Texas State Bar No. 24043681
jgarvish@mckoolsmith.com
300 W. 6th St. Suite 1700
Austin, Texas 78701
Telephone: (512) 692-8700
Facsimile: (512) 692-8744

Attorneys for Plaintiff TiVo Inc.

	
		
	

Dated: September 28, 2012

John P. Frantz, pro hac vice 
Caren K. Khoo, pro hac vice 
VERIZON CORPORATE RESOURCES
   GROUP LLC
One Verizon Way
Basking Ridge, NJ 07920
Tel:  (908) 559-7000
Fax:  (908) 766-8264

	Respectfully submitted,

/s/ Clyde M. Siebman (with permission)
Clyde M. Siebman (#18341600)
SIEBMAN, REYNOLDS, BURG,
   PHILLIPS & SMITH LLP
Federal Courthouse Square
300 N. Travis Street
Sherman, TX  75090
Tel:  (903) 870-0070
Fax:  (903) 870-0066
Email:  siebman@siebman.com

Mark C. Hansen, pro hac vice
Michael K. Kellogg, pro hac vice
KELLOGG, HUBER, HANSEN,
   TODD, EVANS & FIGEL, P.L.L.C.
1615 M Street, NW, Suite 400
Washington, DC  20036
Tel:  (202) 326-7900
Fax:  (202) 326-7999
Email:    mhansen@khhte.com
mkellogg@khhte.com

	Counsel for Verizon Communications Inc., Verizon Services Corp.,
Verizon Corporate Resources Group LLC, Verizon Corporate Services Group Inc.,
and Verizon Data Services LLC

CERTIFICATE OF SERVICE
The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court's CM/ECF system on September 28, 2012.  Any other counsel of record will be served via electronic and first class mail.
Respectfully submitted,
/s/ Sam Baxter (with permission)
McKOOL SMITH, P.C.
Samuel F. Baxter
Lead Attorney
Texas State Bar No. 01938000
sbaxter@mckoolsmith.com
104 E. Houston St., Suite 300
Marshall, Texas 75670
Telephone: (903) 923-9000
Facsimile: (903) 923-9099

Exhibit A-4

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

	
		
	

TIVO INC., a Delaware corporation,
 
Plaintiff,

   v.

VERIZON COMMUNICATIONS INC., 
   a Delaware corporation, et al.,

Defendants.

	

  Civil Action No. 2:09-cv-257-JRG

CONSENT JUDGMENT

This matter having come before the Court and it being represented that Plaintiff TiVo Inc. ("TiVo") and Defendants and Counterclaim Plaintiffs Verizon Communications Inc., Verizon Services Corp., Verizon Corporate Resources Group LLC, Verizon Corporate Services, Group Inc., and Verizon Data Services LLC (collectively "Verizon") (with TiVo, the "Parties"), have agreed to dismiss the above-captioned action with prejudice pursuant to Rule 41 of the Federal Rules of Civil Procedure and have waived any right to appeal the entry of this Consent Judgment to the extent such right may exist: 
Based upon the agreement, consent, and approval of the Parties, IT IS HEREBY ORDERED that:
		
	e.
	Verizon has not sustained its burden of proving invalidity of U.S. Patent Nos. 7,529,465 (claims 1-20) and 7,493,015 (claims 1-24);  

		
	f.
	Judgment is hereby entered in favor of TiVo, and against Verizon, on Verizon's counterclaims entitled Verizon's Count V (Declaratory Judgment of Invalidity (U.S. Patent No. 7,529,465)) and Count VI (Declaratory Judgment of Invalidity (U.S. Patent No. 7,493,015)) seeking a judicial determination and declaration regarding the validity of U.S. Patent Nos. 7,529,465 and 7,493,015; 

		
	g.
	This judgment is final and the parties have waived any right to appeal therefrom.  

 
SO ORDERED and SIGNED this ____ day of September, 2012

______________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE 

Exhibits B-1, B-2, B-3, and B-4

Inter Partes Petitions and Notices

Exhibit B-1

Docket No.: 027639.0026-US03 
(PATENT)

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE

	
				
	In re Inter Partes Reexamination of:  
	 
	 

	U.S. Patent No. 7,493,015
	 
	 

	 
	 
	 

	Control No.: 95/001,696
	 
	Confirmation No.: 8651

	 
	 
	 

	Filed: July 22, 2011
	 
	Group Art Unit: 3991

	 
	 
	 

	For:
	AUTOMATIC PLAYBACK OVERSHOOT CORRECTION SYSTEM
	 
	Examiner: J. R. Pokrzywa

REQUESTER NOTICE OF WITHDRAWAL AND NON-PARTICIPATION

MS Inter Partes Reexam
Central Reexamination Unit
Commissioner for Patents
P.O. Box 1450
Alexandria, VA  22313-1450

Dear Madam:

Third-party Requester Verizon Services Corp. hereby withdraws as a named Requester, and will no longer participate in the above-captioned reexamination proceeding Control. No. 95/001,696. 
This filing is submitted by the undersigned on behalf of the Requester, and the undersigned is acting in a representative capacity in accordance with 37 C.F.R. § 1.34(a).

If the Office has any questions regarding this Notice, the Office is encouraged to contact the undersigned counsel.
	
			
	Dated:  September 21, 2012
	Respectfully submitted,

	 
	By       /s/ Andrea G. Reister 

	 
	 

	 
	 
	Registration No.: 36,253

	 
	COVINGTON & BURLING LLP

	1201 Pennsylvania Avenue, N.W.
Washington, DC  20004-2401

	(202) 662-6000

	Attorney for Requester

Exhibit B-2

Docket No.: 027639.0026-US03 
(PATENT)

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE

	
				
	In re Inter Partes Reexamination of:  
	 
	 

	U.S. Patent No. 7,493,015
	 
	 

	 
	 
	 

	Control No.: 95/001,696
	 
	Confirmation No.: 8651

	 
	 
	 

	Filed: July 22, 2011
	 
	Group Art Unit: 3991

	 
	 
	 

	For:
	AUTOMATIC PLAYBACK OVERSHOOT CORRECTION SYSTEM
	 
	Examiner: J. R. Pokrzywa

REQUESTER NOTICE OF WITHDRAWAL AND NON-PARTICIPATION

MS Inter Partes Reexam
Central Reexamination Unit
Commissioner for Patents
P.O. Box 1450
Alexandria, VA  22313-1450

Dear Madam:

Third-party Requester Verizon Services Corp. hereby withdraws as a named Requester, and will no longer participate in the above-captioned reexamination proceeding Control. No. 95/001,696. 
This filing is submitted by the undersigned on behalf of the Requester, and the undersigned is acting in a representative capacity in accordance with 37 C.F.R. § 1.34(a).

If the Office has any questions regarding this Notice, the Office is encouraged to contact the undersigned counsel.
	
			
	Dated:  September 21, 2012
	Respectfully submitted,

	 
	By       /s/ Andrea G. Reister 

	 
	 

	 
	 
	Registration No.: 36,253

	 
	COVINGTON & BURLING LLP

	1201 Pennsylvania Avenue, N.W.
Washington, DC  20004-2401

	(202) 662-6000

	Attorney for Requester

Exhibit B-3

DOCKET NO:  389690US110RX

IN THE UNITED STATES PATENT & TRADEMARK OFFICE
	
		
	IN RE REEXAMINATION OF
U.S. PATENT NO. 7,529,465
	:

	INVENTOR:
JAMES M BARTON, ET AL.
	:  EXAMINER:  J.R. POKRZYWA

	CONTROL NO:  95/001,695
	:

	FILED:  JULY 22, 2011
	:  GROUP ART UNIT:  3992

	FOR:  SYSTEM FOR TIME SHIFTING MULTIMEDIA CONTENT STREAMS
	:

 
PETITION TO VACATE INTER PARTES REEXAMINATION 
UNDER 37 C.F.R. §1.182

Mail Stop Inter Partes Reexam
Central Reexamination Unit
Commissioner for Patents
P.O. Box 1450
Alexandria, VA 22313-1450 

Dear Sir:

Patent Owner, TiVo Inc. (“TiVo”) hereby petitions the Commissioner of Patents and Trademarks under 37 C.F.R. § 1.182 to vacate the above captioned inter partes reexamination of U.S. Pat. 7,529,465 (the ‘465 patent).  
TiVo asserted the ’465 patent against the requestor, Verizon Services Corp. (“Verizon”), in the Eastern District of Texas, Civil Action No. 2:09-cv-257-JRG.  TiVo respectively requests that the above proceedings be vacated and terminated by operation of estoppel (35 U.S.C. § 317(b)) because the District Court for the Eastern District of Texas has entered a final decision, by 

way of a Consent Judgment, a copy of which is attached as Exhibit A. The consent judgment triggers § 317(b) as a final, non-appealable holding that Verizon has not sustained its burden of invalidity regarding claims 1-20 of the ’465 patent.

FACTS
		
	1.
	A request for inter partes patent reexamination of the ‘465 Patent was filed on July 22, 2011 by Verizon Services Corp., reexamination was Ordered as Control No. 95/001,695 on September 14, 2011.

2.A First Office Action issued on October 20, 2011.
3.The TiVo response was filed on January 20, 2012.
4.The Verizon Response was submitted on February 17, 2012.
5.  A Consent Judgment was entered by the Eastern District of Texas, which states that i) Verizon has not sustained its burden of invalidity regarding claims 1-20 of the ’465 patent, ii) the judgment is final, and iii) the parties have waived any right to appeal therefrom. All claims by Verizon have been dismissed with prejudice.  A copy of the consent judgment is attached hereto as Exhibit A.

AUTHORITIES
35 U.S.C. § 317(b) 

FINAL DECISION.- Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.

37 C.F.R. § 1.182
All situations not specifically provided for in the regulations of this part will be decided in accordance with the merits of each situation by or under the authority of the Director, subject to such other requirements as may be imposed, and such decision will be communicated to the interested parties in writing. Any petition seeking a decision under this section must be accompanied by the petition fee set forth in § 1.17(f).

DISCUSSION
35 U.S.C. § 317(b) states in pertinent part “(b) Final Decision – Once a final decision has been entered against a party in a civil action....that the party has not sustained its burden of proving the invalidity of any patent claim in suit....an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office”.  The District Court has entered a consent judgment with respect to Verizon’s counterclaims of invalidity for the ’465 patent in a civil action between the patent owner and the requestor.  Ex. A.  A consent judgment is a decree that adjudicates all issues between the parties.  See F.R.C.P 54(a).  The consent judgment states that the judgment is final and the parties have waived any right to appeal.
The inter partes reexamination of the ’465 patent includes claims 1-20.  As ordered by the Court the consent judgment states that the requestor has not sustained its burden of invalidity regarding claims 1-20 of the ’465 patent.  All claims by Verizon have been dismissed with prejudice.  This inter partes reexamination should be terminated as required by § 317(b).
TiVo respectively requests that the Patent Office terminate and dismiss the inter partes reexamination proceedings as to the ’465 patent.
The Director is authorized to charge any fees or credit any overpayments to Deposit Account No. 15-0030.

	
			
	

	Respectfully Submitted,

OBLON, SPIVAK, McCLELLAND,
MAIER & NEUSTADT, L.L.P.

/Greg H. Gardella/

	 
	Greg H. Gardella
Reg. No. 46,045

Customer Number
   22850 
Tel. (703) 413-3000
Fax. (703) 413-2220
 (OSMMN 07/09)

	 

	 
	 
	 

Exhibit B-4

DOCKET NO:  389691US110RX
IN THE UNITED STATES PATENT & TRADEMARK OFFICE
	
		
	IN RE REEXAMINATION OF
U.S. PATENT NO. 7,493,015
	:

	INVENTOR:
WIGNAND VAN STAM, ET AL.
	:  EXAMINER:  J.R. POKRZYWA

	CONTROL NO:  95/001,696
	:

	FILED:  JULY 22, 2011
	:  GROUP ART UNIT:  3992

	FOR:  AUTOMATIC PLAYBACK OVERSHOOT CORRECTION SYSTEM
	:

 
PETITION TO VACATE INTER PARTES REEXAMINATION
UNDER 37 C.F.R. §1.182

Mail Stop Inter Partes Reexam
Central Reexamination Unit
Commissioner for Patents
P.O. Box 1450
Alexandria, VA 22313-1450 

Dear Sir:
Patent Owner, TiVo Inc. (“TiVo”) hereby petitions the Commissioner of Patents and Trademarks under 37 C.F.R. § 1.182  to vacate the above captioned inter partes reexamination of U.S. Pat. 7,493,015 (the ‘015 patent).  
TiVo asserted the ’015 patent against the requestor, Verizon Services Corp. (“Verizon”), in the Eastern District of Texas, Civil Action No. 2:09-cv-257-JRG.  TiVo respectively requests that the above proceedings be vacated and terminated by operation of estoppel (35 U.S.C. § 317(b)) because the District Court for the Eastern District of Texas has entered a final decision, by way of a Consent Judgment, a copy of which is attached as Exhibit A. The consent judgment triggers § 317(b) as a final, non-appealable holding that Verizon has not sustained its burden of invalidity regarding claims 1-24 of the ’015 patent.

FACTS
		
	5.
	A request for inter partes patent reexamination of the ‘015 Patent was filed on July 22, 2011 by Verizon Services Corp., reexamination was Ordered as Control No. 95/001,696 on September 14, 2011.

		
	6.
	A First Office Action issued on October 20, 2011.

		
	7.
	The TiVo response was filed on January 20, 2012.

		
	8.
	The Verizon Response was submitted on February 17, 2012.

		
	9.
	An Action Closing Prosecution issued on July 30, 2012.

		
	6.
	A Consent Judgment was entered by the Eastern District of Texas, which  states that i) Verizon has not sustained its burden of invalidity regarding claims 1-24 of the ’015 patent, ii) the judgment is final, and iii) the parties have waived any right to appeal therefrom.  All claims by Verizon have been dismissed with prejudice.  A copy of the consent judgment is attached hereto as Exhibit A.  

AUTHORITIES
35 U.S.C. § 317(b) 
FINAL DECISION.- Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.

37 C.F.R. § 1.182
All situations not specifically provided for in the regulations of this part will be decided in accordance with the merits of each situation by or under the authority of the Director, subject to such other requirements as may be imposed, and such decision will be communicated to the interested parties in writing. Any petition seeking a decision under this section must be accompanied by the petition fee set forth in § 1.17(f).
DISCUSSION
35 U.S.C. § 317(b) states in pertinent part “(b) Final Decision – Once a final decision has been entered against a party in a civil action....that the party has not sustained its burden of proving the invalidity of any patent claim in suit....an inter parties reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office”.  The District Court has entered a consent judgment with respect to Verizon’s counterclaims of invalidity for the ’015 patent in a civil action between the patent owner and the requestor.  Ex. A.  A consent judgment is a decree that adjudicates all issues between the parties.  See F.R.C.P 54(a).  The consent judgment states that the judgment is final and the parties have waived any right to appeal.
The inter partes reexamination of the ’015 patent includes claims 1-24.  As ordered by the Court the consent judgment states that the requestor has not sustained its burden of invalidity regarding claims 1-24 of the ’015 patent.  All claims by Verizon have been dismissed with prejudice.  This inter partes reexamination should be terminated as required by § 317(b).
TiVo respectively requests that the Patent Office terminate and dismiss the inter partes reexamination proceedings as to the ’015 patent.
The Director is authorized to charge any fees or credit any overpayments to Deposit Account No. 15-0030.

	
					
	 
	 
	

	Respectfully Submitted,

OBLON, SPIVAK, McCLELLAND,
MAIER & NEUSTADT, L.L.P.

/Greg H. Gardella/

	 
	 
	Greg H. Gardella
Reg. No. 46,045
	 

	 
	 
	 

	Customer Number
   22850 
Tel. (703) 413-3000
Fax. (703) 413-2220
 (OSMMN 07/09)
	 
	 

	 
	 

	 
	 

	 
	 

Exhibit C

Press Release

TiVo contacts: 
Media: Steve Wymer, (408) 519-9438, swymer @ tivo.com
Investors: Derrick Nueman, (408) 519-9677, dnueman @ tivo.com

TiVo Announces Settlement of Patent Litigation with Verizon;
TiVo and Verizon Enter into a Patent Licensing and Commercial Arrangement
ALVISO, CA -- 09/XX/2012 -- TiVo Inc. (NASDAQ: TIVO) announced today that it has settled its pending patent litigation with Verizon Communications Inc. and that the companies have entered into a mutual patent licensing arrangement. Under the terms of the settlement, Verizon will provide TiVo total compensation worth at least $250.4 million.  The payments from Verizon to TiVo shall be comprised of a $100 million initial cash payment followed by recurring quarterly payments totaling an additional $150.4 million through July 2018.  If the companies pursue certain commercial initiatives prior to December 21, 2012, up to $29.4 million of the payments made by Verizon would be subject to a credit of an equal amount.  In addition to the guaranteed compensation, Verizon will also pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of certain pre-determined levels. 
In addition to the cash payments described above, Verizon and TiVo are exploring, among other things, future distribution of Internet video services developed through Verizon’s joint venture with Redbox by making content distributed via that service part of the diverse selection of linear and broadband-delivered content accessible to users of TiVo’s retail DVR products.  
As part of the settlement, TiVo and Verizon agreed to dismiss all pending litigation between the companies with prejudice.  The parties also entered into a cross license of their respective patent portfolios in the advanced television field. 
"We are pleased to reach an agreement with Verizon which underscores the significant value our distribution partners derive from TiVo’s technological innovations and our shareholders derive from our investments in protecting TiVo’s intellectual property," said Tom Rogers, CEO and President of TiVo.  "We also look forward to working together on a variety of future opportunities as we continue to expand the content choices available to TiVo subscribers. As with prior settlements, we also benefit by being able to operate our business under license from Verizon and by avoiding future legal expenses that we would have incurred during and after trial.  Furthermore, we believe this settlement positions us well with respect to future enforceability of our patents.”
About TiVo Inc. 
Founded in 1997, TiVo Inc. (Nasdaq: TIVO - News) developed the first commercially available digital video recorder (DVR).  TiVo offers the TiVo service and TiVo DVRs directly to consumers online at  www.tivo. com  and through third-party retailers.  TiVo also distributes its technology and services through solutions tailored for cable, satellite, and broadcasting companies. Since its founding, TiVo has evolved into the ultimate single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo’s intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today.  TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry. www.tivo. com

TiVo and the TiVo Logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. © 2012 TiVo Inc. All rights reserved. All other trademarks are the property of their respective owners.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the amount of future payments TiVo expects to receive in connection with its settlement of its patent litigation with Verizon including possible future credits to such settlement amounts related to future commercial initiatives between Verizon and TiVo, TiVo’s ability to innovate its products and services in the future, future distribution of Internet video services developed through Verizon’s joint venture with Redbox on TiVo products, TiVo’s ability to avoid future legal expenses as result of the settlement with Verizon and the future enforceability of TiVo’s intellectual property. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "exploring," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in TiVo’s public reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended January 31, 2012, its Quarterly Reports on Form 10-Q for the periods ended April 30, 2012, and July 31, 2012 and Current Reports on Form 8-K. TiVo cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. TiVo disclaims any obligation to update these forward-looking statements. 

Exhibit D

Threshold Amounts

[*]

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidentail treatment has been requested with respect to the omitted portions.Exh 10.1 - TransitionAgreementTB

TRANSITION AGREEMENT 
AND 
AMENDMENT OF EXECUTIVE EMPLOYMENT AGREEMENT
This Transition Agreement and Amendment of Executive Employment Agreement (this “Agreement”) is entered into as of January 23, 2013 by and between Rainmaker Systems, Inc. (the “Company”) and Timothy Burns (“Executive”) for the purpose of providing for the orderly transition of Executive’s duties and responsibilities to the Company’s incoming Chief Financial Officer and amending the Executive Employment Agreement dated as of November 4, 2011 by and between the Company and Executive (as amended by an Amendment of Executive Employment Agreement dated as of November 17, 2012, the “Employment Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in the Employment Agreement.
WHEREAS, Executive is currently serving as Chief Financial Officer of the Company;
WHEREAS, Executive and the Company have agreed that Executive will voluntarily separate from employment with the Company on March 29, 2013 or such earlier date as provided herein;
WHEREAS, the Company desires to provide for an orderly transition of Executive’s duties and responsibilities, and Executive desires to assist the Company in realizing an orderly transition; and
WHEREAS, the Company acknowledges that Executive’s severance benefits are fully earned as of the date hereof.
NOW, THEREFORE, in consideration of the mutual promises and other consideration set forth herein, and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the Company and Executive hereby agree as follows:
1.Transition Period.  During the period beginning on the effective date of the appointment of Executive’s successor as Chief Financial Officer of the Company (the “Successor CFO”) and ending on the first to occur of: (i) March 29, 2013, (ii) the Company’s or Executive’s earlier termination of Executive’s employment ; provided, however, that, absent Cause, the Company shall not terminate Executive’s employment prior to February 22, 2013, and (iii) a date mutually agreed to by Executive and the Company (the first to occur of such dates, the “Separation Date”, and such period, the “Transition Period”), Executive shall continue to be employed by the Company under the terms of the Employment Agreement (as modified by this Agreement).  During the Transition Period, Executive shall hold the title of Executive Vice President and shall provide such assistance in transitioning Executive’s duties and responsibilities to the Successor CFO as may be reasonably requested by, and shall have such authority as may be assigned by, the Company’s Chief Executive Officer from time to time.  

2.    Company Acknowledgments.  The Company agrees and acknowledges that Executive’s anticipated separation from employment with the Company on the Separation Date is without Cause and for Good Reason.
3.    Special Bonus.  On the Company’s next regularly scheduled payroll date occurring after the date of this Agreement, Executive shall be paid a special bonus of $25,000 under the Employment Agreement, which bonus is fully earned as of the date hereof.
4.    Amendment to Employment Agreement.  Section 14(d) of the Employment Agreement is hereby amended and restated in its entirety as follows:
“(d)    Severance.  Upon the termination of Executive’s employment with the Company, the Company shall pay to Executive a severance benefit equal to six (6) months base salary, and the Company also agrees to pay the costs of continued health insurance coverage for Executive and his dependents under COBRA for six (6) months after Executive’s effective date of termination.  In addition, as partial consideration for payment of such severance amounts, Executive shall execute at the time of such termination and as a condition of receipt of the severance amounts, a Release Agreement in form and substance satisfactory to the Company.  Payments due to Executive under this Section shall be paid in cash or by check on the same dates on which Executive would otherwise have received payments of Executive’s annual base salary hereunder if employment had continued.  The Company further agrees that upon such termination of employment, (x) restricted shares of the Company’s common stock then held by Executive shall, to the extent not already vested, continue to vest for six months following the date of such termination, and (y) after giving effect to the operation of the previous clause (x), an additional 53,000 restricted shares of the Company’s common stock then held by Executive shall, to the extent not already vested, immediately vest on the date that is six months following the date of such termination; provided, however, that in the event of any Change of Control, all of such restricted shares that are scheduled to vest pursuant to the preceding clauses (x) and (y) shall, to the extent not already vested, vest on an accelerated basis immediately prior to the effectiveness of such Change of Control.”
1.    Post-Separation Consulting Arrangement.  For a reasonable time period not to exceed 12 months following the Separation Date, Executive agrees to make himself reasonably available to the Company and its counsel upon request from time to time and to cooperate fully in providing information to the Company and its counsel relevant to any and all facts concerning, and/or received during, his employment with the Company, subject to Executive and the Company entering into a mutually agreeable Consultant Agreement to commence at the Separation Date to compensate Executive for his time.

2.    Miscellaneous.  Except as expressly amended pursuant hereto, the Employment Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.  This Agreement shall be binding upon, inure to the benefit of and be enforceable by Executive and the Company and their respective successors and assigns.  This Agreement shall be governed by, and construed in accordance with, the law of the State of Texas.  This Agreement and the Employment Agreement contain the entire and exclusive agreement of the parties hereto and thereto with reference to the matters discussed herein and therein.  This Agreement supersedes all prior commitments, drafts, communications, discussion and understandings, oral or written, with respect thereto.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.
[Remainder of this page intentionally left blank.]

SIGNATURE PAGE TO TRANSITION AGREEMENT AND AMENDMENT OF EXECUTIVE EMPLOYMENT AGREEMENT
IN WITNESS WHEREOF, the Company and Executive have caused this Transition Agreement and Amendment of Executive Employment Agreement to be executed as of the date first written above.

Company:
Rainmaker Systems, Inc:
 
/s/  Donald J. Massaro_____________________
By: Donald J. Massaro
Title: President and Chief Executive Officer

 
/s/  Timothy Burns________________________
Executive:
Timothy Burns
 

LEGAL25643994.2

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