AMENDMENT NO. 3 TO THE TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENT BETWEEN SUN MICROSYSTEMS, INC. AND OPENTV, INC.
Exhibit 10.33
AMENDMENT NO. 3
TO THE TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN SUN MICROSYSTEMS, INC. AND OPENTV, INC.
TO THE TECHNOLOGY LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN SUN MICROSYSTEMS, INC. AND OPENTV, INC.
This Amendment No. 3 (“Amendment”) to the Technology License and Distribution Agreement dated March
20, 1998, as amended, (the “Agreement”), by and between Sun Microsystems, Inc., a Delaware
corporation with a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (“Sun”), and OpenTV, Inc., a Delaware corporation with a principal place of business now
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Licensee”), is entered into
this 30 day of June 2005 (the “Amendment Effective Date”) by and between the same parties.
This Amendment is in addition and is subject to the Agreement. Except as expressly amended herein,
the Agreement and all amendments and exhibits thereto shall remain unaltered and in full force and
effect. In the event of any conflict or inconsistency between the terms of this Amendment and the
Agreement, the terms of this Amendment shall control. Capitalized terms not defined herein shall
have the same meaning as the identical capitalized terms in the Agreement, unless otherwise stated.
Licensee desires to amend the Agreement to add Sun’s Java 2 Platform™ Micro Edition, Connected
Device Configuration and Foundation Profile, Personal Basis Profile, and Connected Device
Configuration HotSpot™ Implementation to the Technology previously licensed by Licensee thereunder.
Sun is willing to license same to Licensee pursuant to the terms and conditions of the Agreement
as amended by this Amendment. The parties therefore amend the Agreement as follows:
AMENDMENT
1.0 Definitions.
1.1 The parties agree that the following is hereby added to the definition of “Technology”: Java 2
Platform, Micro Edition, Connected Device Configuration and Foundation Profile (“CDC/FP”), Personal
Basis Profile (“PBP”), and the Connected Device Configuration HotSpot Implementation (“CDC-HI”), as
more fully described in Exhibits C-3, C-4, and C-5, respectively, and Upgrades thereto to the
extent Licensee is entitled to receive them.
1.2 The parties agree that the following is hereby added to the definition of “Java Environment”:
Java 2 Platform, Micro Edition, Connected Device Configuration and Foundation Profile, Personal
Basis Profile, and Connected Device Configuration HotSpot Implementation, as more fully described
in Exhibits C-3, C-4, and C-5, respectively.
1.3 The following is hereby added as section 1.5.1 to the Agreement: “Device Manufacturer” means
the original equipment manufacturer of a Device Manufacturer Product.
1.4 The following is hereby added as section 1.5.2 to the Agreement: “Device Manufacturer Product”
means any digital device capable of executing software programs and that may be connected to or is
included as a part of a television device and is loaded with Licensee’s Product.
2.0 Additional Technology Exhibits.
Exhibit C-3, C-4, and C-5 attached hereto, are hereby added to the Agreement.
3.0 Schedule of Fees and Royalties.
The following shall apply to the Technologies added in Exhibits C-3, C-4, and C-5:
a. Upfront Source License Fee: Except with regard to CDC-HI, no upfront source
license fees shall apply to the Technologies added by this Amendment. With respect to CDC-HI, an
annual upfront source license fee in the amount of fifty thousand dollars ($50,000.00) per year
shall apply upon delivery of the source code form of CDC-HI. Notwithstanding anything to the
contrary in the Agreement, Sun shall have no obligation to deliver any implementation of CDC-HI to
Licensee except upon mutual agreement with Licensee and subject to Licensee’s
payment of the foregoing fee (and Licensee may not accept source code of CDC-HI from any Sun
licensee unless expressly permitted by Sun in writing).
b. Source Support (if applicable): as set forth in separate support agreement.
c. Java Test Suite Support Fee: as set forth in the separate Java Test Suite support
agreement.
d. Binary Distribution Royalties per unit Prepayment:
i. Licensee agrees to pay a non-refundable, non-transferable “Royalty Prepayment” in the
amount of three million, sixty-thousand dollars ($3.06M) no later than July 29, 2005. Royalties
due for units distributed on or before December 28, 2009 may be satisfied by deduction against the
Royalty Prepayment. Any portion of the Royalty Prepayment not used by December 28, 2009, shall be
deemed forfeited. Upon timely payment of the Royalty Prepayment, Licensee shall not be obligated
to pay the Minimum Payment due pursuant to Section 4 of Amendment no. 1, as amended by Amendment
no. 2, and no further payments shall be due by Licensee under the Agreement except for such amounts
which may become payable under this Amendment.
ii. Licensee must pay a royalty to Sun as provided below for each Licensee Product unit
distributed. Payment of royalties shall be made quarterly, shall be due thirty (30) days following
the end of the calendar quarter to which they relate, and shall be submitted with a written
statement documenting the basis for the royalty calculation. In any quarter in which no royalties
are owed, Licensee will submit a report so indicating. For each Device Manufacturer Product,
Licensee will additionally report quarterly: (a) the identities and locations of each Device
Manufacturer whose Device Manufacturer Product (s) was deployed during the calendar quarter to
which the report applies; (b) the number of units of Device Manufacturer Products by manufacturer
and by service provider (or group of affiliated service providers) on whose behalf such units of
Device Manufacturer Products were deployed.
Example:
—
| Device Manufacturer (“DM”): | DM Location: | # Units SP Deploying: | ||||
| Motorola | Chicago, Illinois | 250,000 Skylife | ||||
Licensee shall be responsible for ensuring that OpenTV Customers adequately report all
distributions of Licensee Products for which royalties owed hereunder are derived. Licensee’s
royalties obligations hereunder are not contingent or dependent upon Licensee’s receipt of payment
from Licensee’s Customers. Royalty reporting and payments (except for royalty prepayments, which
shall be sent to the location specified on Sun’s invoice) shall be sent to: Sun Microsystems, Inc.,
Software Royalty Accounting Group, ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇.
iii. Upon timely payment of the Royalty Prepayment, the royalty rate for the software stack of
Technologies implementing CDC (or CDC-HI), FP, PBP, and JavaTV (“Combined Stack”) shall be ninety
cents ($0.90) per unit, unless either (a) Licensee provides prior written notice to Sun (“Notice”),
stating that Licensee has opted to pre-allocate a portion of the Royalty Prepayment corresponding
to a number of units of the Combined Stack (which may be no less than one million) for use in
Device Manufacturer Products to be manufactured by or for a particular Open TV customer (either
directly or indirectly through a service provider) who is a Device Manufacturer (such device
manufacturer shall be referred to as an “OpenTV Customer”) or (b) an OpenTV Customer distributes a
cumulative total number of units of the Combined Stack qualifying the Open TV Customer for reduced
future royalty rates as provided below. Upon Sun’s receipt of Notice of pre-allocation (“Allocated
Royalty”) or an Open TV Customer having distributed and paid a cumulative total of one million
units (“Qualified Royalty”), the royalty rate that shall apply to specified quantities of no less
than one million and up to two million four hundred ninety-nine thousand, nine hundred and
ninety-nine (2,499,999) units/users shall be seventy five cents ($0.75) per unit and the royalty
rate that shall apply to specified quantities equal to or greater than two million five hundred
thousand units/users shall be sixty cents ($0.60) per unit. Upon receipt of Notice by Sun, a
portion of the remaining Royalty Prepayment in the amount equal to the product of the appropriate
Allocated Royalty Rate multiplied by the number of units specified in the notice (“Allocated
Amount”) shall be set aside by Sun for such OpenTV Customer. For the avoidance of doubt, an OpenTV
Customer can also qualify for a lower royalty rate in the event that Licensee makes multiple
pre-allocations of the Royalty Prepayment so qualifying, e.g. Customer pre-allocates one million
units on
one date and then pre-allocates another 1.5 million on another date qualifying that OpenTV
Customer for the sixty cent ($.60) rate on distributions between one million to 2.5 million. Any
portion of any Allocated Amount that is not exhausted by distributions which occur on or before
December 28, 2009, shall expire and be deemed forfeited. Upon exhaustion or expiration of the
Royalty Prepayment, the royalty rate that shall apply to units distributed by each OpenTV Customer
shall be the rate the OpenTV Customer qualified for as of the date of exhaustion or expiration of
the Royalty Prepayment. Licensee’s allocation Notice must be sent to: (a) Sun Microsystems, Inc.,
Software Royalty Accounting Group, ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇; and (b) VP OEM Software Sales,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M/S: ▇▇▇▇▇-▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
b) Branding; Royalty Rates for Branded and Unbranded Products. Licensee shall be
responsible for ensuring that all Device Manufacturers receiving a sublicense to the Combined Stack
from Licensee shall have entered into an applicable trademark license with Sun relating to use of
the Sun “Java Powered” logo for TCK Compliant (as defined in Section 4.0 below) implementations of
the Combined Stack; provided that in the event Licensee does sublicense the Combined Stack to a
Device Manufacturer that has not entered into such a trademark license with Sun, then the
applicable royalty rates set forth above in Section 3(d)(iii) in respect of distributions of the
Combined Stack by such non-compliant Device Manufacturer shall be multiplied by two (2) until such
time as such Device Manufacturer enters into the applicable trademark agreement.
4.0 Distribution; Compatibility Requirements.
Licensee Products. Notwithstanding anything to the contrary in the Agreement,
Licensee may receive and incorporate into Licensee Products, a software product that includes an
implementation of the Combined Stack, in binary code form (such product shall be referred to as
“Channel Product”), from a party who has a license from Sun, permitting such party to use the Java
Test Suites to test its implementations for conformance to the requirements of the Sun
documentation for the Combined Stack Technologies (such documentation and Test Suite requirements
shall be referred to as “TCK Requirements” and products that meet with Sun’s TCK Requirements and
licensing requirements shall be deemed to be “TCK Compliant”), so long as: (a) the Channel Product
received by Licensee has been tested by such party and reasonably deemed TCK Compliant; (b)
Licensee has not modified the Channel Product or in any way rendered it non-TCK Compliant; and (c)
Licensee’s incorporation of the Channel Product into Licensee’s Product in no way renders it
noncompliant with the TCK Requirements. Upon payment by Licensee of royalties due under this
Amendment 3 for distribution of Licensee Product containing Channel Product, the party providing
such TCK Compliant Channel Product to Licensee shall be relieved of its royalty obligations to Sun,
for those units paid for by Licensee; provided that, if mutually agreed by Licensee and the third
party supplying the Channel Product, such third party supplier may pay its royalty obligation to
Sun in respect of such Channel Product pursuant to its agreement with Sun in lieu of Licensee
paying the applicable royalty hereunder.
OpenTV Customer Products. Open TV Customers may only distribute TCK Compliant
Licensee Product which incorporates the Combined Stack, as loaded on Device Manufacturer Products,
and not for further manufacture or incorporation into products that incorporate such OpenTV
Customers’ product which includes OpenTV’s Licensee Product. Licensee shall ensure that each
OpenTV Customer shall not in any way modify Licensee’s Product or render it non-TCK Compliant,
either by modifications to the Licensee Product, inclusion of other functionality, or otherwise.
5.0 Amendment 3 Term.
With respect to Java 2 Platform, Micro Edition, Connected Device Configuration and Foundation
Profile, Personal Basis Profile, JavaTV, and Connected Device Configuration HotSpot Implementation:
(a) the term of the Agreement shall commence on the Amendment 3 Effective Date and end on March 19,
2010, unless terminated earlier, pursuant to Section 10.1 of the Agreement, and (b) the second full
sentence in Section 10.1 of the Agreement is deleted. Upon any expiration, the parties may renew
the Agreement for additional periods of one (1) year each, subject to mutual agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment 3 to the Agreement to be executed by
their duly authorized representatives.
| SUN MICROSYSTEMS, INC. | OPENTV, INC. | |||||||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: | /s/ ▇▇▇ ▇▇▇▇▇▇▇
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| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇ | Name: | ▇▇▇ ▇▇▇▇▇▇▇ | |||||||||
| Title: | Sales Director | Title: | CEO | |||||||||
| Date: | June 30, 2005 | Date: | June 30, 2005 | |||||||||