TECHNICAL CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is dated as of July 1, 1996, by and between VICTOR
TECHNOBRAIN CO., LTD., a Japanese company, located at 804 Futowo-cho, Kohoku-ku,
Yokohama-shi, Kanagawa 222, Japan, Facsimile No.: 045-546-5940 (hereinafter
referred to as Consultant) and MACROVISION JAPAN K.K., a Japanese corporation,
located at 2-5-3-301, Asagaya-Minami, Suginami-Ku, Tokyo 166, Japan, Facsimile
No.: 03-5378-7213 (hereinafter referred to as the 'Company').
WHEREAS, the Company wishes to retain the services of the Consultant to perform
certain technical consultation services for the company subject to the terms and
conditions of this Agreement;
AND THEREFORE, in consideration of the mutual agreement herein contained, the
Company and Consultant hereby agree as follows:
1) The Company agrees to retain services of the consultant, and the
Consultant agrees to act as a Consultant to the Company, on the terms
and conditions contained in this Agreement. During the term of this
Agreement, the Consultant shall perform such consulting services as
may be assigned from time to time by the President of Macrovision
Corporation and/or the Vice President, AntiCopy Process ('ACP') Sales
and Marketing of Macrovision Corporation and/or the Worldwide
Technical Support Director, ACP of Macrovision Corporation, and/or the
Managing Director of the company. Such services shall include coping
with technical problems arising from licensed duplicators, right
owners and system operators, (satellite, cable, telephone line
operators), set-top box suppliers to system operators, and
semiconductor suppliers to such set-top box suppliers, either of the
Company or of Macrovision Corporation's master licensee in countries
listed in Appendix 1.
2) The Company agrees to retain the services of the Consultant pursuant
to the terms of this Agreement for a period of one year from the date
of this Agreement (the 'Consulting Period'). This Agreement will be
extended automatically for successive one year terms unless either
party provides written notice to the other no later than ninety (90)
days prior to the end of the initial or any succeeding one year term.
3) In rendering consulting services pursuant to this Agreement, the
Consultant will be required to devote its reasonable efforts to the
performance of its duties and responsibilities under this Agreement.
The Company agrees to devote its reasonable efforts to support the
activities of the Consultant in any reasonably possible technical,
administrative and commercial way and to provide the Consultant with
documentation, statements, credentials and equipment which shall allow
the Consultant to perform duties and responsibilities in the capacity
of a Technical Consultant for the purpose of this Agreement. Within
thirty (30) days from the date of this Agreement, the Consultant
agrees to send its employees to an initial training session with
Macrovision Corporation's technical staff for three to five days, and
in that session the Company agrees to provide basic technical
education necessary for duties and responsibilities of the consultant
to the Consultant with its reasonable efforts. In the event that the
employee that attends the initial training session leaves the
employment of Consultant, then consultant agrees to transfer all the
basic technical knowledge to the successor employee in advance to such
an employee's departure.
4) Consultant's relationship with the Company is that of an independent
contractor and nothing in this Agreement should be construed to create
a partnership, joint venture, or
employer-employee relationship. Consultant is not an agent of the
company and is not authorized to make any representation, contract, or
commitment on behalf of the Company unless specially requested or
authorized to do so in writing by the Company.
5) For the consulting services to be rendered under this Agreement the
Company agrees to pay to the Consultant as compensation for its
services, and the Consultant agrees to accept as full compensation the
a) The sum of Y400,000 initial training session fee within thirty
(30) days from the commencement of the Consulting Period.
b) The sum of Y200,000 minimum fee per quarter, payable quarterly,
in advance from the commencement of the Consulting Period.
c) Following hourly, daily and weekly charges which would be
multiplied by the number of hours, days and weeks that Consultant
devoted on specific technical problem basis to the performance of
the duties and responsibilities under this Agreement.
Y80,000/day (= consecutive eight hours)
Y150,000/consecutive two days
Y210,000/consecutive three days
Y270,000/consecutive four days
Y320,000/week (= consecutive five days)
d) Reimbursement on a monthly basis of necessary business expenses
against presentation of adequate receipts or evidence of payment.
A monthly expenditure for business expenses in excess of Y100,000
per month shall not to be reimbursed by the Company to the
Consultant, unless prior written approval has been obtained from
e) Consultant agrees that it will not perform any services which
result in any hourly, daily, or weekly charges to the Company
without the prior written consent from the Company in advance of
performing each such service.
f) Consultant agrees that it will not perform any services which
result in any travels to countries listed in Appendix 1 except to
Japan without the prior written consent from the Company in
advance of performing each such service. Both parties agree that
such prior written consent will be given by the Company to
Consultant only after Consultant devotes its reasonable effort to
the performance of its duties and responsibilities by making
maximum use of telephone/facsimile communication, sample video
cassette tapes and sample video cassette recorders.
6) The Consultant agrees to promptly communicate and disclose to the
Company all information obtained by it in the course of its consulting
services relating to the business of the Company and its parent,
subsidiaries or affiliates. The Consultant shall prepare and submit
to the Company written reports as required with respect to the
activities undertaken by it in connection with specific solution
processes to each individual technical problem arising from licensed
duplicators, right owners, system operators, set-top box suppliers to
such system operators, and semiconductor suppliers to such set-top box
suppliers of the Company or of Macrovision Corporation or of
Macrovision Corporation's master licensees in countries listed in
Appendix 1. The
Company agrees to promptly communicate and disclose to the Consultant
all information related to the business activities and interests of
the Company which may assist the Consultant in performing its duties
and provide prompt replies on matters either of technical or
commercial nature, which at the discretion and initiative of the
Consultant may be needed to perform its duties and responsibilities.
7) a) Consultant shall not disclose any confidential information
communicated by the Company to Consultant or confidential
information related to the Company's intellectual property
communicated to Consultant to customers of the Company or other
third party with whom Consultant interacts while performing
services pursuant to this Agreement, such as product technology,
design, marketing strategies and related information to any third
party. Consultant shall hold all such confidential information
within its own organization and shall not, without specific prior
written consent of the Company, disclose such information. Such
information shall not include what is deemed as general or common
knowledge already known. The information deemed confidential
shall be specifically designated as such by the Company in
writing. Consultant's agreement to not disclose any confidential
information extends for three years after termination of this
b) All right, title and interest in and to all inventions, work
product, drawings, methods, or other intellectual property
developed by Consultant while providing services under this
Agreement shall vest exclusively in the Company and Consultant
shall have no rights in such inventions, work product, drawings,
methods, or other intellectual property unless specifically
granted in writing by a separate agreement executed by the
8) This Agreement may be terminated by the Company for cause prior to the
end of the Consulting Period by written notice. For purpose of this
Agreement, 'cause' shall mean any material action or inaction by
Consultant which affects negatively the ability to perform the
services contemplated by this Agreement, including but not limited to
any of the following; gross incompetence or misconduct;
misrepresentation of the Company or its products; misrepresentation of
equipment or funds of the Company; insolvency; or liquidation.
9) If either party fails to perform any provision of this Agreement or in
the case of the Company, it becomes insolvent and a proceeding under
bankruptcy law is commenced and not discharged within 60 (sixty) days,
then that party shall be considered in default of this Agreement upon
a written notice from the other party.
Upon receipt of a written notice of default, the defaulting party
shall, at its own expense, undertake immediate steps to remedy such
default. Should the defaulting party fail to remedy such default
within 30 (thirty) business days, after receipt of such written notice
of default, the non-defaulting party may, in writing, without
prejudice to any other rights under this Agreement and/or applicable
laws, terminate this Agreement. If a default is remedied and any
subsequent default of the same or similar nature committed by the same
previously defaulting party occurs within one year following the first
default, the other party may terminate this Agreement upon 10 (ten)
days written notice without the right of the defaulting party to
remedy such default.
10) This Agreement may be terminated by the Company, at its sole option,
upon ninety (90) days written notice if the Company has a material
change in strategy for the
marketing of ACP in the Asian market or, in the Company's opinion, the
cost of continuing the Agreement outweigh the business gains
achievable in Asia or the Company experiences financial difficulties
causing it to substantially curtail its expenses.
11) This Agreement may be terminated by Consultant for any reason at the
end of the Consulting Period or at the end of any subsequent one-year
extension of the Consulting Period.
12) Consultant's agrees to comply with all applicable laws of Japan. In
a) Consultant agrees not to offer, pay, promise to pay, or authorize
the payment of any money, or offer, give, promise to give, or
authorize the giving of anything of value, to any employee of a
customer, or potential customer or government employee for the
purpose of improperly influencing a business decision to its
b) Without limiting any other rights or remedies of the Company,
Consultant agrees to indemnify and hold the Company, its officers
and directors harmless from and against any and all claims,
losses, liabilities, judgments, settlements, expenses and costs,
including attorneys' fees, to which the Company may be put or
subjected by reason of Consultant's breach of paragraph 12a.
In the event Consultant performs unlawful acts in connection with this
Agreement, the Company shall be under no obligations to pay Consultant for such
services connected with unlawful acts.
13) In performing its consultancy services hereunder, the Consultant
understands that it shall not execute any documents or assume
commitments on behalf of the Company without prior written consent of
14) Consultant agrees during the term of this Agreement not to accept work
or enter into a contract inconsistent with Consultant's obligations to
refrain from competitive activity, conflict of interest, transfer of
confidential or proprietary information or other obligations under
15) Consultant agrees to indemnify the Company from any and all loss or
liability incurred by reason of the alleged breach by Consultant of
any confidentiality or services agreement with anyone other than the
Company. Consultant shall hold the Company harmless from damages or
obligations incurred by reason of conduct of Consultant while
performing services hereunder or otherwise.
16) Consultant agrees that prior to the public release of any material
prepared as a result of or in conjunction with material prepared under
this Agreement, Consultant shall provide the Company with the material
and a description of the publications for the Company's approval.
Such material shall not be published or leased without prior written
approval of the Company.
17) Consultant agrees to deliver promptly all the Company's property and
all copies of the Company's property in Consultant's possession to the
Company at any time upon the Company's request. Upon termination of
this Agreement for any reason or in any manner, Consultant agrees to
deliver promptly to the Company all such documents,
together with any other of the Company's property then in Consultant's
possession, except as the Company may, by prior written approval,
allow Consultant to retain.
18) All notices hereunder shall be given in writing by hand delivery or by
registered or certified mail, addressed to the party to receive the
same at its respective address set forth below, or at such address as
may from time to time be designated by either party to the other.
To the Consultant:
VICTOR TECHNOBRAIN CO., LTD.
Kanagawa 222, Japan
To the Company:
Macrovision Japan K.K.
2-5-3-301, Asagaya-Minami, Suginami-ku
19) No failure by either party hereto to exercise, and to delay in
exercising, any rights hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right hereunder by
either party preclude any other or future exercise of that right or
any other right hereunder by that party.
20) In case any one or more of the provisions of this Agreement should be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
21) This Agreement is not assignable in whole or in party by Consultant
without the written consent of the Company.
22) This Agreement shall be construed under and governed by the law of
Japan. Any controversy, or claim arising out of, or relating to this
Agreement, or breach thereof, shall be settled under the jurisdiction
of the Tokyo District Court.
23) This Agreement shall constitute the complete and exclusive agreement
between the parties respecting this subject matter. This Agreement
may not be amended terminated or superseded except by an agreement in
writing between the parties. This Agreement supersedes all previous
agreements between Consultant and the Company whether oral or in
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as the day and year first above written.
VICTOR TECHNOBRAIN CO., LTD. MACROVISION JAPAN K.K.
/s/ Akira Hirota /s/ Masao Komei
President Managing Director
January 28, 1997 February 3, 1997