NOTE: INFORMATION IN THIS DOCUMENT MARKED WITH AN "[*]" HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit 10.56
SEVENTH AMENDMENT TO MASTER AFFILIATION AGREEMENT
-------------------------------------------------
This Seventh Amendment (the "Seventh Amendment") to the Master Affiliation
Agreement dated as of December 22, 1998, as amended in the First Amendment dated
March 8 1999, the Second Amendment dated June 28, 1999, the Third Amendment
dated July 24, 2000, the Fourth Amendment dated September 7, 2000, the Fifth
Amendment dated December 22, 2000, and the Sixth Amendment dated March 1, 2001
(as amended, the "Master Agreement"), by and between Wink Communications, Inc.,
a Delaware corporation ("Wink"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and DIRECTV, Inc., a California corporation, whose
address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("DIRECTV")
is made as of this 8th day of March, 2002 (the "Effective Date").
1. Section 6.7 of the Master Agreement is hereby replaced with the following:
"6.7. Starting with the first Wink-enabled DIRECTV System Receiver,
Wink agrees to fund a marketing pool with funds in the amount of (a)
[*] per Wink-enabled DIRECTV System Receiver before December 31, 2000
(b) [*] per Wink-enabled DIRECTV System Receiver activated on or after
January 1, 2001 but before March 31, 2002, and (c) [*] per Wink-enabled
DIRECTV System Receiver activated on or after April 1, 2002 (the "Wink
MDF Funds"), through the term of the Agreement.
The Wink MDF Funds shall be allocated by DIRECTV to support marketing
and promotional tactics by DIRECTV that directly relate to the
promotion of the Wink platform to potential customers and/or existing
Wink-enabled customers. DIRECTV will reasonably consult with Wink
regarding its plans for expending the Wink MDF Funds including tactics
and results. Subject only to the obligations set forth above, DIRECTV
shall determine in its sole discretion the tactics, timing and any
other parameters around the expenditures of Wink MDF Funds. If DIRECTV
determines to expend Wink MDF Funds on DIRECTV controlled media,
including, without limitation, "on-air" promotion, ▇▇▇▇ stuffers, ▇▇▇▇
messages and print ads, then Wink shall reimburse DIRECTV from the Wink
MDF Funds at the current market rate, as reasonably determined by
DIRECTV, provided that such market rate shall in no case exceed
DIRECTV's published rate card for such DIRECTV controlled media and
shall be consistent with rates paid to DIRECTV by similarly situated
advertisers who are partners with DIRECTV.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
In addition to and not in lieu of the Wink MDF Funds, Wink agrees to
pay DIRECTV marketing funds to be used by DIRECTV in its sole
discretion in promoting the DIRECTV System network, which may include
the promotion of the Wink platform to potential and/or existing
Wink-enabled customers (the "System Funds"). The amount of the System
Funds shall be (a) [*] per Wink-enabled DIRECTV System Receiver
activated on or after January 1, 2001 but before March 31, 2002, and
(b) [*] per Wink-enabled DIRECTV System Receiver activated on or after
April 1, 2002, through the end of the Agreement term. On each March
31st, June 30th, September 30th and December 31st commencing with the
year 2002 and continuing for the duration of the term of the Master
Agreement, DIRECTV shall invoice Wink in an amount equal to any and all
System Funds earned by DIRECTV for the three month period ending with
the month indicated above. Subject to Wink's audit rights contained in
this Master Agreement and based upon the subscriber reports defined in
Section 6.6, Wink shall pay the invoice amount within thirty (30) days
of receipt of such invoice."
2. Section 5.8 of the Master Agreement is hereby replaced with the following:
"5.8 Wink agrees to guarantee certain revenues for DIRECTV as follows:
(a) A "Second Year Wink Subscriber Unit" shall be a Wink-enabled
DIRECTV System Subscriber provided with an activated
Wink-enabled DIRECTV System Receiver on or before the first
anniversary of the Measurement Date or, for a subscriber
whose Wink-enabled DIRECTV System Receiver was activated
after such anniversary, the number x = the number of full
months elapsed after the first anniversary of the Measurement
Date and prior to twenty four 24 months following the
Measurement Date that such subscriber had a Wink-enabled
DIRECTV System Receiver, divided by 12.
(b) Wink agrees to pay to DIRECTV on or before April 12, 2002 an
amount equal to [*] per Second Year Wink Subscriber Unit
(the "Second Year Revenue Guarantee"). However, since the
second year will not have been completed by April 12, 2002,
Wink shall pay to DIRECTV $[*] per Second Year Wink
Subscriber Unit based upon an estimate of [*] Second Year
Wink Subscriber Units (the "Estimated Second Year Wink
Subscriber Units"), equaling [*].
(c) On or before November 1, 2002, DIRECTV shall provide to Wink
a signed representation of the actual Second Year Wink
Subscriber Units (the "Actual Second Year Subscriber Units").
If the Actual Second Year Wink Subscriber Units are less than
the Estimated Second Year Wink Subscriber Units (the "Revenue
Guarantee Overpayment"), then Wink may offset any future
payments due to
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
DIRECTV by an amount equal to the difference between [*]
times the Estimated Second Year Wink Subscriber Units and [*]
times the Actual Second Year Wink Subscriber Units. In the
event that at the end of the term of the Master Agreement
there remains monies owing to Wink as a result of the Revenue
Guarantee Overpayment that have not been offset (the
"End-of-Term Revenue Guarantee Outstanding Balance"), DIRECTV
shall pay Wink the End-of-Term Revenue Guarantee Outstanding
Balance no later than thirty (30) days after the end of the
term of the Master Agreement. The rights and obligations
stated in the preceding sentence shall survive any
termination or expiration of this Master Agreement. If the
Actual Second Year Wink Subscriber Units are greater than the
Estimated Second Year Wink Subscriber Units, Wink shall pay
DIRECTV on or before November 30, 2002 an amount equal to the
difference between [*] times the Actual Second Year Wink
Subscriber Units and [*] times the Estimated Second Year Wink
Subscriber Units.
(d) If DIRECTV's Incremental Wink Revenues between the first and
second anniversaries of the Measurement Date ("Year Two")
exceed a cumulative total of [*] per Second Year Wink
Subscriber Unit (the "Revenue Share Overpayment"), then Wink
may offset any future payments due to DIRECTV by the
difference between [*] per Second Year Wink Subscriber Unit
and the actual cumulative Incremental Wink Revenues captured
in Year Two per Second Year Wink Subscriber Unit. In the
event that at the end of the term of the Master Agreement
there remains monies owing to Wink as a result of the Revenue
Share Overpayment that have not been offset (the "End-of-Term
Revenue Share Outstanding Balance"), DIRECTV shall pay Wink
the End-of-Term Revenue Share Outstanding Balance no later
than thirty (30) days after the end of the term of the Master
Agreement. The rights and obligations stated in the preceding
sentence shall survive any termination or expiration of this
Master Agreement.
(e) DIRECTV and Wink agree that Wink has no obligation after the
end of Year Two to pay any revenue guarantee to DIRECTV.
3. Section 14.11 of the Master Agreement is hereby replaced with the following:
"14.11 MOST FAVORED NATIONS. The term "Distributor" shall be defined as
any entity distributing (or controlling an entity which
distributes) video programming to subscribers. Notwithstanding
the foregoing, the term Distributor does not include Programmers
as defined herein (unless such programmer also distributes video
to subscribers) [*]. If at any time Wink agrees to pay to any
Distributor ("Third Party Agreement") a
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
revenue guarantee between October 1, 2001 and the end of the
Term that in aggregate equals more than the amount payable to
DIRECTV pursuant to Section 5.8, Wink shall give written notice
thereof to DIRECTV and, within forty-five (45) days of such
notice, Wink shall pay to DIRECTV (or, shall increase the amount
to be paid to DIRECTV pursuant to Section 5.8 by) the difference
between the amount paid to the Distributor and the amount paid
or payable to DIRECTV pursuant to Section 5.8. (For purposes of
clarification, if Wink enters into such a Third Party Agreement
after April 12, 2002, then the difference between the aggregate
revenue guarantee payable to such Distributor and the amount
payable to DIRECTV pursuant to Section 5.8 shall be paid to
DIRECTV within 45 days of the notice described above.) Wink
hereby represents and warrants that as of the date of this
Seventh Amendment it has no existing obligations to any
Distributor which would provide such distributor with a revenue
guarantee between October 1, 2001 and the end of the Term that
in aggregate equals more than the amount payable to DIRECTV
pursuant to Section 5.8."
4. Exhibit A to the Master Agreement is hereby replaced with Exhibit A attached
to this Seventh Amendment.
5. The Master Agreement is hereby amended to include the following Section 15:
"15. STOCK GRANT. Wink hereby agrees to issue to DIRECTV and/or its
designees, at no cost to DIRECTV, a one-time grant of [*] shares
of Wink common stock, it being understood that such shares shall
be unregistered shares (the "Stock Grant"). Any and all rights
or obligations under this Seventh Amendment are expressly
contingent upon the execution of a mutually acceptable stock
grant agreement providing for such Stock Grant no later than
fourteen (14) days after the Effective Date hereof. Wink and
DIRECTV shall use best commercial efforts to execute such a
stock grant agreement within the 14 day period, it being
understood and agreed that a failure to do so shall cause this
Seventh Amendment to be null and void upon written notification
by either party."
6. The Master Agreement is hereby amended to include the following Section 16:
"16. FRAUD DETECTION DATA. Wink hereby agrees to provide to DIRECTV
data that Wink currently gathers that indicates that multiple
receivers have connected to the Wink Response Server with the
same unique digital address (the "Fraud Detection Data")..
DIRECTV shall determine the frequency and format of such Fraud
Detection Data and Wink shall use commercially reasonable
efforts to comply with DIRECTV's requests."
7. All capitalized terms not defined herein shall have the meanings set forth
in the Master Agreement.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
8. In the event of any inconsistency between this Seventh Amendment and the
Master Agreement, this Seventh Amendment shall be deemed controlling. In
all other respects, the Master Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Seventh Amendment to be
executed by their duly authorized officers and representatives as of the day and
year first written above.
WINK COMMUNICATIONS, INC. DIRECTV, INC.
By:___________________________ By:___________________________
Name:________________________ Name:_________________________
Title:_________________________ Title:________________________
EXHIBIT A.: WINK/DIRECTV REVENUE SHARE
--------------------------------------
WINK RESPONSE SERVICE TRANSACTION FEES
Transaction Revenue Share is calculated as a percentage of Wink's gross revenues
on the applicable Gross Transaction Routing Fees, based on the schedule below:
------------------------------------- -----------------------------------
RESPONSES TO INTERACTIVE WINK RESPONSE TO INTERACTIVE WINK
PROGRAMS CARRIED WITH THIRD PARTY PROGRAMS INSERTED BY DIRECTV AT
VIDEO PROGRAMMING OR ADVERTISING, DIRECTV'S FACILITIES, EXCLUDING
INCLUDING THOSE PROVIDED BY ALL NATIONAL RESPONSES
PROGRAMMERS ("NATIONAL RESPONSES")
(+)
------------------------------------- -----------------------------------
[*] [*]
------------------------------------- -----------------------------------
(+) National Responses shall also include responses to Interactive Wink Programs
inserted at DIRECTV's facility if such insertion is caused or triggered by
Interactive Wink Programs or any unique identifier inserted by Programmers, and
is presented with such Programmers' video signal(s).
For the avoidance of doubt, the parties acknowledge and agree that the [+]
revenue share described above will apply to the following services currently
available or planned to be launched (both as of the Effective Date):
Music Choice On Screen Service (Program Synchronous)
Music Choice Virtual Channel
▇▇▇▇▇▇ & ▇▇▇▇▇ Virtual Channel
The Weather Channel Virtual Channel
ESPN Virtual Channel
NBCi Virtual Channel
DIRECTV INTERACTIVE Center
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.