1
Exhibit 10.26
SYSTEM ADDENDUM
This System Addendum is made as of the 25th day of NOVEMBER, 1998 (the
"Commencement Date"), by and among WINK COMMUNICATIONS, INC., a California
corporation ("Wink"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, TIME WARNER CABLE OF NEW YORK CITY ("TWCNYC"), a division of Time Warner
Entertainment Company, L.P., ("TWE") a Delaware limited partnership, whose
address is ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and TIME WARNER CABLE, a
division of TWE ("Affiliate"), whose address is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
1. RECITALS
WHEREAS, on September 23, 1998, Wink and Affiliate executed a Master
Cable Affiliation Agreement (the "Master Agreement");
WHEREAS, TWCNYC desires to become a Participating System pursuant to the
Master Agreement;
NOW THEREFORE, the parties agree to be bound by the following terms and
conditions.
2. GENERAL
2.1 All capitalized terms used herein shall have the same meaning and
definition as set forth in the Master Agreement.
2.2 Except as otherwise set forth herein, all terms and conditions set forth
in the Master Agreement shall apply to Wink and to TWCNYC, as a
Participating System thereunder.
2.3 For purposes of this System Addendum, TWCNYC's Operating Area shall be
Manhattan, Queens, Brooklyn, and Mt ▇▇▇▇▇▇, Staten Island is not
included in this Agreement.
2.4 This System Addendum shall not be effective unless and until executed by
Affiliate's Senior Vice President of Programming (or another person
designated by him in writing), TWCNYC and Wink.
3. ADDITIONAL OR AMENDED TERMS AND CONDITIONS
Wink acknowledges and agrees that the performance by TWCNYC of its
obligations hereunder is conditioned on the compliance of Wink and the
Wink Software with the acceptance criteria and specifications set forth
on Schedule A (the "Acceptance Criteria"). Accordingly, if Wink or the
Wink Software does not comply with or satisfy the Acceptance Criteria,
TWCNYC shall be relieved of its obligations hereunder,
2
3.2 Deployment:
A. In One-Way Network Environment. TWCNYC shall use commercially
reasonable efforts to install and test the Wink Software and to
provide resources reasonably necessary to distribute Interactive
Wink Programs to at least 100 Wink STB Subscribers in a cable
network environment that does not permit responses by the Wink
STB Subscriber (a 'One-Way Environment') beginning February 15,
1999, beginning in TWCNYC's Southern Manhattan system (the
"Pre-Launch"), provided that the failure of TWCNYC to do so
shall not constitute a breach of the Master Agreement or this
System Addendum and TWCNYC may change the foregoing date in its
sole discretion at any time, TWCNYC shall use commercially
reasonable efforts to distribute Interactive Wink Programs in a
One-Way Environment to all Wink STB Subscribers in the Operating
Area (the "One-Way Launch") by April 1, 1999, provided that the
failure of TWCNYC to do so shall not constitute a breach of the
Master Agreement or this System Addendum and TWCNYC may change
the foregoing date in its sole discretion at any time.
B. In Two-Way Network. Environment. By May 1999, TWCNYC may (but
has no obligation to) test the distribution of Interactive Wink
Program in a network environment that permits a Wink STB
Subscriber to interact with and respond to an Interactive Wink
Programs (a "Two-Way Environments. TWCNYC may change the
foregoing date in its sole discretion at any time. In the event
that TWCNYC distributes the Interactive Wink Programs to 75,000
Wink STB Subscribers ('Two-Way Distribution'), then, as of the
date of such launch, the last sentence often 5.4 of the Master
Agreement shall be deleted in its entirety and replaced with the
following:
'If, within eighteen (18) months of the date Participating
System first commences Two-Way Distribution Participating
System's incremental Wink Revenues have not reached a cumulative
total of [*] per Wink Subscriber Unit, Wink shall pay
Participating System, within forty five (45) days, the
difference between [*] per Wink Subscriber Unit and the actual
cumulative incremental Wink Revenues per Wink Subscriber Unit.'
C. Digital Service: If TWCNYC deploys digital converter boxes to
its subscribers, TWCNYC may, at its sole discretion, offer to
distribute Interactive Wink Programs to its digital subscribers,
provided that nothing herein shall be construed to obligate
TWCNYC to commence a digital product offer.
D. Upgrades: Wink acknowledges that TWCNYC is upgrading its cable
television systems on a node by node basis and that only those
subscribers in the upgraded areas will have access to an
advanced analog or digital set-
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.
2
3
top box which is capable of utilizing the Wink Software (e.g.,
the Instrument CFT2200 set top box), and therefore the option of
becoming Wink STB Subscribers Wink agrees that TWCNYC has made
no representation as to when or if TWCNYC will complete the
upgrades and that TWCNYC not be in breach of System Addendum or
the Master Agreement E such upgrade in whole or in part is not
completed.
3.3 Exclusivity: Wink shall not enter into an agreement or understanding for
the distribution of Interactive Wink Programs with any other entity that
provides, via terrestrial facilities (except television broadcasters).
multi-channel video programming in the Operating Area for a period of
ten (10) months from the Commencement Date (the "Exclusivity Period").
if TWCNYC agrees to test the distribution of the interactive Wink
Program in a Two-Way Environment on or before May 31, 1999, the
Exclusivity Period shall be extended up to and including March 1, 2000.
If TWCNYC commences Two-Way Distribution by August 1, 1999 (the 'Two-Way
Launch Target Date'), the Exclusivity Period ▇▇▇▇ be extended for the
duration of the Term. If TWCNYC is unable to meet the Two-Way Launch
Target Date because Wink has not complied with (or the Wink Software
does not comply with) the Acceptance Criteria, then the Exclusivity
Period will continue through the Term, provided that TWCNYC commences
Two- Way Distribution within sixty (60) days from the date that Wink
satisfies the Acceptance Criteria. If TWCNYC fails to commence Two-Way
Distribution by the Two-Way Launch Target Date and such failure is not
caused by the non-compliance of Wink or the Wink Software with the
Acceptance Criteria but does so on or before October 1, 1999, then the
Exclusivity Period shall be extended through October 2, 2000. If TWCNYC
fails to commence Two-Way Distribution on or before October 1, 1999 and
such failure is not caused by the non-compliance of Wink or the Wink
Software with the Acceptance Criteria, then the Exclusivity Period shall
expire as of October 2, 1999. Notwithstanding the foregoing, Wink
acknowledges that achieving Two-Way Distribution by August 1, 1999 is
contingent upon Pioneer delivering a Wink-capable STB to TWCNYC by June
30, 1999. Wink agrees that in the event that Pioneer fails to deliver
such a Wink-capable STB by June 30, 1999, the Exclusivity Period shall
be extended through the end of the Term.
3.4 License Fees. Notwithstanding Section 5.1 of the Master Agreement,
TWCNYC shall not be required to pay, for the Term, any license fees for
the Wink Software specified in Section A of Exhibit D of the Master
Agreement. In addition, notwithstanding Section 5.1 of the Master
Agreement, Wink shall pay (or reimburse TWCNYC if applicable) any
license fees due and owing by TWCNYC for the first 75,000 CFT-2200 set
top boxes deployed by TWCNYC. TWCNYC shall pay to the applicable
manufacturer all license fees due for the CFT-2200 set top boxes
deployed the thereafter.
3
4
3.5 Development Funds. Notwithstanding Section 6.6 of the Master Agreement,
within the first eighteen (18) months following the date on which TWCNYC
commences the Pre-Launch, Wink shall provide TWCNYC with [*] as
launch and development funds ("Development Funds'}. The parties agree
that [*] of such Development Funds shall be provided to TWCNYC
within thirty (30) days of the execution of this System Addendum and
shall be used prior to June 30, 1999 to promote the distribution of
interactive Wink Programs in a One-Way Environment. The balance of the
Development Funds shall be distributed by Wink when requested by TWCNYC.
3.6 Termination. Upon expiration of the Term (including any extensions
thereof) or upon the termination of this Master Agreement or this System
Addendum, within ninety (90) days of such expiration or termination,
Wink shall retrieve from TWCNYC's premises all equipment provided by
Wink on notice during regular business hours and without interrupting
TWCNYC's operation.
3.7 Certification. Wink shall obtain from General Instrument ("GI")
certification that the Wink Software functions according to published
specifications in a live environment in conjunction with version 2.3 of
the ▇▇▇▇ in GI's CFT2200
.(512K) and the CFT2200 (lmg) Wink-capable set top boxes. Wink agrees
that TWCNYC shall have no obligations under this System Addendum or the
Master Agreement unless and until Wink obtains the foregoing
certification from GI and that such certification is condition precedent
to TWCNYC's performance hereunder.
IN WITNESS WHEREOF, the parties by their duly authorize representatives have
Entered into this System Addendum as of the Effective Date
WINK THE WARNER CABLE
By: By:
Name: Name:
Title: Title:
TIME WARNER CABLE NEW YORK CITY
By:
Name:
Title:
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.
4
5
TIME WARNER CABLE NEW YORK CITY ACCEPTANCE CRITERIA
---SCHEDULE A--
1. [*]
1.1 [*]
1.2 [*]
1.3 [*]
1.4 [*]
2. [*]
2.1 [*]
2.2 [*]
2.3 [*]
3. [*]
3.1 [*]
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.
SchA - 1
6
3.2 [*]
3.3 [*]
3.4 [*]
3.5 [*]
3.6 [*]
4. [*]
4.1 [*]
4.2 [*]
4.3 [*]
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.
Sch.A - 2
7
4.4 [*]
4.5 [*]
4.6 [*]
4.7 [*]
4.8 [*]
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.
Sch. A-3
8
4.9 [*]
4.10 [*]
-------------
* Confidential treatment has been requested with respect to certain
portions of this exhibit pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission. Omitted portions have been filed
with the Commission.