EXHIBIT 10.47
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.
MASTER AGREEMENT
THIS Master Agreement is made as of the 26th day of May, 2000 (the "Effective
Date"), by and between WINK COMMUNICATIONS, INC., a Delaware corporation
("Wink"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and
EchoStar Satellite Corporation, a Colorado corporation ("EchoStar"), whose
address is ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
0. RECITALS
Whereas Echostar develops, markets and broadcasts a variety of services for
devices that receive and display video and data services including set-top
boxes, televisions and internet devices;
Whereas, Wink provides viewer response services for interactive content to
mufti-channel operators, video broadcasters and advertisers as well as
software and tools to enable the receipt and display of certain enhanced
interactive content over video using proprietary Wink protocols-,
Whereas, contemporaneously with the execution of the Master Agreement, Wink
is providing Echostar a warrant to purchase 1,300,000 shares of Wink common
stock as further defined in Exhibit H, and
Whereas, pursuant to the terms of this Master Agreement, the parties wish
to set forth the terms under which they may cooperate to develop, deliver
and promote interactive content and Wink's viewer response services for
Echostar subscribers;
The parties hereby agree as follows:
1. GRANT OF LICENSE
1.1. Subject to the terms of this Master Agreement, Wink hereby grants to
EchoStar a non-exclusive license (the "License") to use the Wink software
products listed in Exhibit B (hereinafter collectively referred to as "Wink
Software") in the continental United States, Alaska, Hawaii, and the US
territories and possessions (collectively, the "Territory") to:
(a) deliver interactive program(s) which are compliant with the Wink
interactive communications application protocol ("Interactive
Wink Programs") to customers receiving video programming from
EchoStar ("EchoStar Subscribers"), and generate and collect
viewer responses to same.
(b) generate and collect EchoStar Subscriber responses to interactive
programs which are interpreted and/or executed by software
licensed by third parties, but excluding Interactive ATVEF
Programs as defined below ("Other Interactive Programs"). Other
Interactive Programs shall include, but not be limited to
interactive programs which are interpreted and/or executed by
software licensed by OpenTV Corporation ("OpenTV Interactive
Programs").
(c) generate and collect EchoStar Subscriber responses to interactive
programs which are compliant with the Advanced Television
Enhancement Forum's 1.1 specification and/or later
specifications approved and published by that organization
("Interactive ATVEF Programs").
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1.2. Subject to the terms of this Master Agreement, Wink further agrees to
extend the License to geographical markets outside the Territory, provided
that Wink shall have no obligation to provide any equipment to EchoStar for
use outside the Territory, and provided that any installation, support,
custom development, marketing, programming or other services to be
performed by Wink for any use of the Wink Software outside the Territory
shall be negotiated and agreed upon between the parties. Wink is
specifically not obligated to operate the Wink Response Network (as defined
in section 4.1 herein) or the equivalent thereof outside the Territory, or
provide payments of any kind to EchoStar for use of the Wink Software
outside the Territory.
1.3 "Updates" shall mean updates containing error corrections or minor
enhancements to the Wink Software created by or for Wink, and designated
for all of Wink's customers by a change in version number to the right of
the decimal point. Updates do not include New Releases. "New Release" shall
mean a major release of the Wink Software which occurs subsequent to the
Measurement Date (as defined below), which contains significant new
functionality and/or major enhancements, and which is designated for all of
Wink's customers by a change in the digit or digits to the left of the
decimal point in the version number. Wink shall provide a license to all
Updates and New Releases at no charge to EchoStar during the term of this
Master Agreement and EchoStar, in its sole discretion, shall have the
option to utilize such Updates and New Releases. "New Products" shall mean
new software developed or licensed by Wink which has different
functionality than the Wink Software and is not required for the
performance of Wink's obligations hereunder. Wink shall also provide
support hereunder for all versions of the Wink Software (including all
Updates and New Releases). Wink shall offer to EchoStar a license to all
New Products created by Wink during the Term on terms that are as favorable
or more favorable than the terms of any agreement Wink has entered into
with any other United States video, audio and/or data service operator,
including all cable and satellite video, audio and/or data service
operators, for the provision of the New Products; provided, however, that
in no event shall EchoStar's decision not to license any New Products have
any impact whatsoever on the functionality of the Wink Software or
EchoStar's rights to provide Interactive Wink Programs to EchoStar
subscribers throughout the Term, and EchoStar shall be under no obligation
to license or launch such New Products. If Wink decides not to make a New
Product available to other parties, Wink agrees to offer to EchoStar an
exclusive license to such New Products at a one-time fee equal to Wink's
costs (on a Time and Materials basis) in developing and testing the New
Products, which shall be documented in writing to EchoStar.
1.4 For purposes of this Master Agreement, the following definitions shall
apply:
(a) equipment capable of receiving EchoStar signals shall be defined as an
"EchoStar Receiver".
(b) an EchoStar Receiver which has been enabled to receive both EchoStar
programming and Interactive Wink Programs transmitted over EchoStar's
network, and (if, and only if, such Echostar Receiver has been made
capable of receiving OpenTV Interactive Programs or Interactive ATVEF
Programs) which has been made capable of capturing viewer responses to
OpenTV Interactive Programs and/or Interactive ATVEF Programs
(whichever is applicable), shall be referred to in this Master
Agreement as a "Wink-enabled EchoStar Receiver"
(c) EchoStar subscribers which utilize at least one Wink-enabled EchoStar
Receiver to receive EchoStar video programming shall be referred to as
"Wink-enabled EchoStar Subscribers".
(d) An EchoStar Receiver which has been enabled to receive EchoStar
programming and which has also been made capable of capturing viewer
responses to Interactive ATVEF Programs, but which has not been made
capable of receiving Interactive Wink Programs shall be referred to in
this Master Agreement as a "ATVEF-response Enabled EchoStar Receiver"
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(e) EchoStar subscribers which utilize at least one ATVEF-response
Enabled EchoStar Receiver and no Wink-enabled EchoStar Receivers to
receive EchoStar video programming shall be referred to as "ATVEF
Response-enabled EchoStar Subscribers".
1.5 EchoStar shall incur no costs except as may be expressly provided in this
Master Agreement.
1.6 Contemporaneously with the execution of the Master Agreement, Wink agrees
to issue to Echostar a warrant to purchase 1,300,000 shares of Wink
Common Stock, as described further in Exhibit H. Wink further agrees to
use commercially reasonable best efforts to obtain the necessary
approvals in order to grant Echostar registration rights with respect to
the shares issuable upon exercise of such warrants, as described further
in Exhibit M.
2. TERM
2.1. The "Term" of this Master Agreement shall commence on the Effective Date
and shall automatically terminate on the earlier of (a) seven (7) years
following the first day the Interactive Wink Programs are distributed to
and received by at least 10,000 Wink-enabled EchoStar Subscribers (the
"Measurement Date") in accordance with the terms of this Master
Agreement; or (b) seven and one half years after the Effective Date. The
parties agree that EchoStar may, in its sole discretion, extend the
Master Agreement upon the expiration of the Term for an additional three
year period, provided that EchoStar shall provide prior written notice to
Wink no later than sixty (60) days prior to the date of expiration of the
Term of its intention to extend the Term. Such extension of the Term
shall be granted on the most favorable rates, terms and conditions
offered or made available to any United States video, audio and/or data
service operator, including cable and satellite video, audio and/or data
service operators. Wink agrees to give written notice to EchoStar no
later than one hundred and twenty (120) days prior to the date of
expiration of the Term of the rates, terms and conditions available to
EchoStar for such extension.
3. INTEGRATION AND DEPLOYMENT
3.1. The parties agree to use their commercially reasonable efforts to develop
a written final statement of work ("Final Statement of Work") and a
written final schedule ("Final Schedule") within ninety (90) days of the
Effective Date of this Master Agreement, and to incorporate such Final
Statement of Work and Final Schedule into this Master Agreement as
Exhibit E and Exhibit F, respectively. Once the Final Statement of Work
and Final Schedule have been agreed upon in writing, neither party shall
make any modifications to the Final Statement of Work and/or the Final
Schedule without the other party's prior written consent. Each party
acknowledges and agrees that changes to the Final Statement of Work or
the Final Schedule may result in additional work and/or expense for the
other party and may require changes to the Wink Software. In the event
EchoStar desires changes, the parties will cooperate to make such changes
on reasonable terms.
3.2. Wink agrees to license the Wink Engine and the Wink Response Module to
EchoStar on the following terms:
(a) Wink agrees, at no charge to EchoStar, to develop, adapt and test the
Wink Engine and the Wink Response Module (if applicable) for all EchoStar
Receiver families released during the Term which provide adequate
functionality to receive Interactive Wink Programs, as such functionality
is defined in Exhibit C, which EchoStar reasonably anticipates (but under
no circumstances guarantees) will generate sales of at least 250,000
units annually, and for which EchoStar requests in writing that Wink
perform such work. These families may include, but may not be limited to,
the families of
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EchoStar Receivers which have been enabled to receive OpenTV Interactive
Programs. The parties agree to negotiate without obligation on EchoStar's
part, the commercial terms for Wink Engine and Wink Response Module
adaptations for Echostar Receiver families which do not meet the 250,000
unit minimum volume requirement. Wink further agrees that the Wink Engine
and Wink Response Module for receivers capable of receiving OpenTV
Interactive Programs shall be implemented as an o-code application using
the OpenTV toolset and software libraries, unless Echostar provides
written notice to the contrary, and that Wink's failure to implement the
Wink Engine and Wink Response Module in this manner shall be considered a
material breach under this Master Agreement.
(b) For the sake of clarification, Echostar's current intention under this
Master Agreement is to download the Wink Engine and the Wink Response
Module for Interactive OpenTV Programs to all Echostar receivers located
in the Territory which have been or are enabled by Echostar to receive
OpenTV Interactive Programs, provided that it is technically feasible to
develop, adapt and test the Wink Engine and the Wink Response Module for
such Echostar receivers in Echostar's sole and reasonable judgment.
However, such download shall be subject to (i) the downloaded software
(ie. the Wink Engine and the Wink Response Module) meeting all
Specifications (as defined in section 3.2(d) below), as evidenced by
testing acceptable to Echostar, (ii) Echostar's right to commence such
download at any time within ninety (90) days following Echostar's final
acceptance of the Wink Engine and Wink Response Module for each Echostar
Receiver model, (iii) without limitation of any other rights of EchoStar
hereunder to cease, disable or not commence the downloads, Echostar's
right to cease, disable or not commence the downloads of the Wink Engine
and the Wink Response Module if such download interferes in any way with
the normal operation of such Echostar Receiver, causes an unusual number
of customer service calls, or creates: any other, kind of significant
operational or marketing issue for Echostar, in Echostar's sole and
reasonable judgment, (iv) Echostar's right to complete such download to
all Echostar Receivers of a certain model over a ninety (90) day period
following the Start of Download ("Start of Download" shall be defined on
a model by model basis as when at least 10,000 Echostar Receivers of such
model have become Wink-enabled Echostar Receivers) for that model
Echostar Receiver; and (y) Echostar's right to cease, disable or not
commence the downloads of the Wink Engine and the Wink Response Module
for any reason other than those provided under (iii) above, provided
Echostar shall provide Wink with thirty days prior written notice of
Echostar's reasons for ceasing, disabling or not commencing the download,
and shall use reasonable efforts to propose ways in which Wink can
address Echostar's concerns, if applicable in Echostar's reasonable
judgment. In the event Wink performs a port pursuant to EchoStar's
request under Section 3.2(a), which ported Wink Engine and/or Wink
Response Module as integrated in the Wink-enabled EchoStar Receiver is
finally accepted by EchoStar, and EchoStar fails to sell or distribute
the applicable model series of the Wink-enabled EchoStar Receiver or to
download the Wink Engine to applicable Wink-enabled Echostar Receivers
(if such Echostar Receiver has already been distributed by Echostar),
then, as Wink's sole remedy, Wink shall be entitled to reimbursement of
the actual porting costs for such model series of the Wink-enabled
EchoStar Receiver, up to an amount of $100,000.
(c) EchoStar agrees to provide to Wink free of charge (including all taxes
and freight) no more than 20 Echostar Receiver units per receiver model
to which EchoStar requests Wink to port the Licensed Engine. All other
development and test equipment and tools (including but not limited to
bit stream generators), and all hardware, software, documentation and
equipment reasonably necessary for Wink to complete development and
duplicate the EchoStar environment (collectively the "EchoStar
Equipment") are the sole responsibility and expense of Wink and shall be
provided and billed to Wink by Echostar at Echostar's cost plus shipping
and handling. If a third party, such as OpenTV, must perform work to
integrate the Wink Engine and Wink Response Module into such party's
software, EchoStar shall use its reasonable efforts to require such third
party to perform such work.
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Upon completion, Wink shall deliver to EchoStar each item identified as a
deliverable in the Statement of Work (a "Deliverable"). Accompanying the
final Deliverable for a given Statement of Work, Wink shall include test
criteria that will exercise critical functionality of such Deliverables.
Test criteria will include test cases and test applications that test for
cross-platform compatibilities and for EchoStar specific implementation
features. Within sixty (60) days after receipt, EchoStar shall review and
evaluate each Deliverable according to mutually agreed upon criteria, if
applicable, and shall provide Wink with a written acceptance of the
Deliverables or a written statement setting forth those errors to be
corrected ("Statement of Errors"). "Specifications" means the technical
and other specifications for the Deliverables to be developed by the
parties under this Master Agreement as set forth in the Final Statement
of Work. EchoStar shall not withhold acceptance of any Deliverable unless
such Deliverable deviates from the Specifications. Wink and EchoStar
recognize that the Deliverables will not be error-free, provided that
such errors are not material. If EchoStar provides a Statement of Errors,
Wink shall correct such errors, if any, as soon as practicable, and
return a copy of the updated Deliverables to EchoStar for review and
reevaluation. Wink shall have an obligation to validate any error which
actually exists. The foregoing procedure shall be repeated until
acceptance by EchoStar in its sole discretion of the Deliverables or
EchoStar in its sole discretion ceases development and terminates this
Master Agreement or the applicable Statement of Work. EchoStar's failure
to accept or provide a Statement of Errors for such Deliverables within
such sixty day period shall not be deemed an acceptance of such
Deliverables. The parties agree that EchoStar's acceptance of any
Deliverable containing any errors shall not relieve Wink of its
obligation to fix such errors in accordance with the timetables set forth
in Section 3.9, except to the extent that EchoStar's rights to such fixes
are expressly waived in writing by EchoStar.
(d) At the start of application testing, and again upon EchoStar's acceptance
of the completed Wink Engine and Wink Response Module ("Final
Acceptance"), Wink shall deliver to EchoStar a master diskette or other
digital storage media with all source code for all Wink Engine, Wink
Response Module and code source files and all files necessary to create
the final o-code modules, for use by EchoStar in accordance with the
terms of this Master Agreement, winch diskette or media must be delivered
in compliance with Wink's obligations under this Master Agreement. With
the delivery, EchoStar shall receive all rights to modify, create
derivative works of, and support and maintain the Wink Engine and the
Wink Response Module at its sole discretion, as described further in
section 13.4.
(e) Subject to the terms and conditions of this Master Agreement, effective
upon Final Acceptance, Wink grants to EchoStar at no cost to EchoStar a
non-exclusive right and license, to (a) modify, use, reproduce and have
reproduced the Wink Engine and Wink Response Module adapted for EchoStar
Receivers (the "Licensed Engine"), solely for the purpose of
incorporating the Licensed Engine into a EchoStar Receiver and as
necessary in the course of distribution and support of the Wink-enabled
EchoStar Receiver and EchoStar's performance as permitted hereunder; (b)
distribute and authorize others to distribute copies of the Licensed
Engine solely for incorporation into a Wink-enabled EchoStar Receiver
which was previously acquired by an Echostar Subscriber (directly or
indirectly) from EchoStar; and (c) distribute the Wink-enabled EchoStar
Receiver in the Territory (and outside the Territory as described in
section 1.2 above). All such procedures, including related record
retention and audit procedures, shall be mutually agreed in writing by
EchoStar and Wink prior to any such distribution.
(f) As described further in section 13.4, EchoStar shall have the rights to
modify, prepare derivative works of, reverse engineer, disassemble,
decompile, or otherwise obtain access to the source code of the Licensed
Engine, including but not limited to modifications of the o-code source
code.
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(g) EchoStar may exercise its distribution rights hereunder through the use
of manufacturers of consumer electronics equipment authorized by EchoStar
to brand and distribute the Wink-enabled EchoStar Receivers
("Subdistributors"); provided, that each Subdistributor must agree in
writing, prior to obtaining any copy of the Licensed Engine from
EchoStar, to be bound by restrictions similar to those imposed on
EchoStar set forth in this Master Agreement. EchoStar shall promptly
notify Wink if EchoStar has reason to believe that any of EchoStar's
Subdistributors may not be abiding by such restrictions.
3.3. Wink shall, at Wink's sole cost and expense (including costs and expenses
of all taxes and freight), purchase for and on behalf of EchoStar and
deliver to EchoStar at such location as EchoStar shall designate, all of
the foregoing at no cost to EchoStar, all equipment (including total
system-redundant equipment for back-up use) necessary to run the Wink
Software and to enable EchoStar's insertion of Interactive Wink Programs,
including Customer Service Virtual Channels pursuant to Section 3.8, into
EchoStar's signals (the "Equipment"), with the exception that any MPEG
encoders or related equipment (including, but not limited to,
multiplexers and re-multiplexers) of the type generally used by EchoStar
for broadcasting of data and all personal computers utilizing or running
Microsoft Windows 95, Windows 98, Windows 2000 or Windows NT required to
operate the Wink Software will be provided by EchoStar, at EchoStar's
sole cost and expense, and such computers shall not be deemed Equipment
hereunder. In addition, the parties agree that Wink shall be obligated to
provide all equipment necessary for the insertion of Interactive Wink
Programs associated with EchoStar's retransmission of broadcast network
affiliate signals ("local-into-local") provided EchoStar agrees to pass
such Interactive Wink Programs under,section 3.5. The parties agree
that Wink shall. have no obligation to provide any additional equipment
that may be required to enable storage or insertion of Interactive Wink
Programs not provided by Wink or by a Programmer (as defined below) as
part of such Programmer's video signal. Throughout the Term, Wink shall
repair or replace any defective Equipment at its sole expense. All
Equipment provided by Wink to EchoStar hereunder shall become the sole
property of EchoStar upon the Measurement Date. The installation shall be
subject to the following terms:
(a) Wink shall assist EchoStar, as EchoStar may request and at no
additional cost to EchoStar, in connection with the installation of
the Equipment at its Facilities. For purposes of this Master
Agreement, "Facilities" shall mean EchoStar's broadcast centers in
Cheyenne, WY and Gilbert, AZ, and EchoStar's "mini-uplink" and
"test-bed" (with the understanding that the installation at the
mini-uplink shall be for engineering development and test purposes
only, and shall not include retransmission of all Interactive Wink
Programs provided by Programmers (as defined in section 3.5 below)).
Exhibit I provides a preliminary list of Equipment to be provided by
Wink, and is subject to final confirmation following a final site
visit by Wink's Operations department.
(b) Wink shall, at its sole cost, expense and responsibility, and
subject to EchoStar's direction and control, install and integrate
the Wink Software into EchoStar's equipment and facilities and
ensure the reliable transmission of the Interactive Wink Programs.
Alternatively, at EchoStar's option, Wink shall assist EchoStar in
EchoStar's installation and integration thereof.
(c) Wink's assistance and/or installation and integration as provided in
paragraphs (a) and (b), above (i) shall occur during normal business
hours (i.e., 9 A.M. to 5 P.M., Monday through Friday, excluding
holidays) and during such time periods which are scheduled in
advance by the parties and (ii) shall be subject to EchoStar's
customary safety and security procedures
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employed at its Facilities.
3.4. Starting on the Effective Date, and throughout the Term EchoStar shall
provide Wink with access (at times and in a manner determined by EchoStar
'in its sole discretion) to its Facilities for purposes of development
and test of Wink Software and Wink Response Network (as defined in
section 4.1 below) services. EchoStar shall provide Wink, at Wink's
expense (including telecommunications costs of remote access) and
liability, with remote access necessary to transmit and receive test
broadcasts and signals over EchoStar's satellite network, subject to
Echostar's security and confidentiality concerns and other reasonable
policies and procedures.
3.5. For as long as Echostar Subscriber households are enabled to receive
Interactive Wink Programs, and except as otherwise set forth herein,
EchoStar will not prevent the distribution through EchoStar's
transmission facilities of Interactive Wink Programs inserted by
Programmer, as defined below, in the VBI or MPEG of video signals,
distributed 24 hours a day, from a broadcaster or cable programmer which
provide video programming to EchoStar Subscribers and with whom EchoStar,
and entities wholly owned by EchoStar, have a valid agreement for
carriage (each, a "Programmer"), and EchoStar agrees to pass Interactive
Wink Programs to Wink-enabled EchoStar Receivers without any charge to
such Programmers during the Term of this Master Agreement, all of the
foregoing in this Section 3.5 provided that:
(a) the Programmer agrees to provide and does Provide such Interactive
Wink Programs at no cost to EchoStar during the Term,
(b) such Interactive Wink Programs shall be limited to using the
equivalent of up to three (3) VBI lines (equal to 30 kbits/sec.) per
programming service.
(c) the Interactive Wink Programs are related in content, nature and
intended audience to the associated video programming or
advertising,
(d) the Programmer agrees to provide EchoStar with indemnities similar
to that provided in the video programming carriage agreement
between that Programmer and EchoStar,
(e) the Programmer agrees that all viewer responses to Interactive Wink
Programs shall be routed through Wink's Response Network,
(f) the Programmer agrees to protect subscriber privacy in accordance
with Wink's guidelines,
(g) the Interactive Wink Programs do not promote or market video, audio
and/or data service operators (including direct broadcast satellite
and cable operators, but excluding EchoStar) or their products or
services,
(h) the Interactive Wink Programs are delivered to EchoStar's facility
in Cheyenne, WY and Gilbert, AZ in a format that can be received by
the Equipment at no incremental cost to EchoStar, and
(i) if any Programmer requires EchoStar to carry data programming other
than Wink-enabled data programming, then EchoStar shall not be
obligated in any manner to pass through or distribute the Wink
interactive programming of such Programmer.
The parties further agree that this Master Agreement in no way creates any
obligation on behalf of EchoStar to carry or pass any other form of programming
or data of any Programmer. Notwithstanding the above, if EchoStar transmits the
Programmers' Interactive Wink Programs, the parties agree that EchoStar shall
not be obligated to dedicate aggregate bandwidth in excess of 950 kbits/sec. to
all Interactive Wink Programs provided by Programmers in conjunction with such
Programmers' video signals, unless separately agreed upon in writing between
Wink and EchoStar. During such time that the actual, aggregate bandwidth
utilized by such Programs is less than 950 kbits/sec., EchoStar agrees to
transmit all such Interactive Wink Programs; provided, however, that once the
aggregate amount of available Interactive Wink Programming meets or exceeds 950
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kbits/sec., the parties shall negotiate in good faith to determine the
Interactive Wink Programming transmitted to EchoStar Subscribers, which
selection shall, in the aggregate, equal no more than 950 kbits/sec.
3.6. Wink shall ensure that at least [*] major broadcast or cable Programmers
have agreements with Wink to provide original Interactive Wink Programs
for no less than five (5) hours each per week during the Term and Wink
shall provide EchoStar with weekly Interactive Wink Program schedules for
such Programmers ("major" shall be defined as national programming
services which have total day ratings as measured by ▇▇▇▇▇▇▇ in the top
fifty of all US broadcast and cable programming services, ranked by total
day ratings). Wink further represents that as of the Effective Date, Wink
has agreements for the broadcast of Interactive Wink Programs with ABC,
CBS, FOX and NBC.
3.7. Notwithstanding any other provision of this Master Agreement, EchoStar
may in its sole discretion ~cause the Wink Engine to be downloaded into
any EchoStar Receivers desired by EchoStar, it being understood that
EchoStar shall have no obligation whatsoever to download the Wink Engine
to any EchoStar Receivers. The parties agree that Echostar shall have the
right to temporarily or permanently suspend or disable the download of
the Wink Engine for any reason whatsoever, including if such download
causes unusual or unanticipated technical or customer service problems,
as determined by Echostar in its sole judgment. In the event of such a
technical or customer service problem, Echostar agrees to use reasonable
efforts to provide written notice of the problems within 24 hours of such
suspension, and Wink agrees to cooperate to resolve the problems
promptly subject to the timetables set forth in Section 3.9. In the event
the problem(s) are not of a technical or customer nature, Echostar shall
provide Wink with written notice of Echostar's reasons for ceasing
or reversing the download, and shall use reasonable efforts to propose
ways in which Wink can address Echostar's concerns. Without limitation of
any other rights of Echostar, the parties further agree that Echostar
shall have the right and be provided by Wink with the ability to
deactivate the Wink Engine on a Echostar Receiver by Echostar receiver
basis if requested by an Echostar Subscriber, or if the Wink Engine in
Echostar's sole judgment is interfering with other functionality in such
Echostar Receiver.
3.8. For as long as Echostar Subscriber households have been enabled to
receive interactive Wink Programs, Echostar shall provide various full
screen Interactive Wink Programs or Other Interactive Programs ("Customer
Service Virtual Channels") required for customer-related educational
services for Winkenabled Echostar Subscribers, including but not limited
to a credit card registration program, a Wink user's guide program and
interactive tutorial, a transaction history program featuring the
Winkenabled Echostar Subscriber's most recent transactions (including
fulfillment status for such transactions), and a set-up screen for
various viewer-definable options, such as response dial-back times, etc.
Echostar shall have no obligation to provide bandwidth in excess of 50
kbits/sec for the Customer Service Virtual Channels, and shall have the
right to discontinue transmission of the Customer Service Virtual Channel
if it is deemed by Echostar in its sole and reasonable discretion to
cause customer service or technical problems, or if Echostar ceases
transmission of Interactive Wink Programs. In the event of such
discontinuation of transmission, Echostar agrees to provide a written
statement of proposed corrective actions to Wink. Echostar may in its
sole discretion collaborate with Wink to integrate notification of which
programming services and programs include Interactive Wink Programs 'in
the electronic program guide for Wink-enabled Echostar Receivers. The
exact nature of such integration shall be defined in the Statement of
Work. Wink shall not use the Customer Service Virtual Channel for
advertising or any purpose other than as specified herein without
EchoStar's prior written consent. Echostar, in its reasonable discretion,
shall review the content of the Wink Customer Service Virtual Channel
prior to delivery to its Echostar Subscribers.
3.9. Wink, at its sole cost and expense, shall perform all Wink-related
installation work necessary to ensure
[*] 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.
Proprietary and Confidential 8
proper operation of the Wink Software, the Wink Response Network (as defined in
section 4.1 below) and the Wink Engine, and reliable delivery of Interactive
Wink Programs, and shall provide on-going technical support for the Wink
Software and the Wink Response Network during the Term. EchoStar shall permit
Wink reasonable secure remote access to the Wink Software and associated
equipment solely for the specific purpose of monitoring and troubleshooting the
provisioning of Interactive Wink Programs to EchoStar Subscribers. Wink, at its
sole cost and expense, shall provide all technical support to EchoStar staff
("Technical Support") as EchoStar may reasonably request in connection with the
development and distribution of Interactive Wink Programs and any related aspect
of the Wink Software. The parties agree that Technical Support may be
categorized as follows:
(a) support to ensure proper operation of the Wink Broadcast Server (as
defined in Exhibit B), of all Equipment provided by Wink and software directly
associated with the transmission of Interactive Programs, and of software and
services directly associated with the collection of viewer responses through the
Wink Response Network ("Emergency Technical Support") and
(b) all other technical support, including but not limited to, support for
Wink Studio and Wink Server Studio ("Regular Technical Support").
Without limiting the generality of the foregoing, and at no charge to EchoStar,
all Technical Support (i) shall include on-call (by telephone and dial-in modem)
availability of Wink personnel knowledgeable in the operation and
troubleshooting of the Wink Software and/or the Wink Response Network, and (ii)
shall be made available at all times during normal business hours. In addition
and at no charge to EchoStar, Emergency Technical Support shall be made
available after normal business hours during the week and-during all holidays
and week-ends, as described further, below. If technological problems persist,
such on-call Emergency Technical Support shall be provided by expert engineers
and programmers. If technological problems prevent or adversely affect
transmission of Interactive Wink Programs, and cannot be resolved through remote
support, Wink shall provide onsite visit(s) by Wink personnel, at no cost to
EchoStar, within twenty four hours of EchoStar's request (or sooner, as required
below).
While the Wink Engine is enabled to receive Interactive Wink Programs in
Echostar Subscriber homes, Wink will provide the following Response Times (time
to respond to Echostar notification of an error or problem) and Fix Times (time
to provide a solution which corrects the error or problem, or eliminates any
impact of the error or problem on Programmers, Echostar and its subscribers) for
error corrections and other problem resolution:
Critical Error (severely impairs or prevents functioning of the
Equipment or any of the Wink Products, as defined in section 7.1.2, which
impact Echostar Subscribers or Echostar operations related to this Master
Agreement)
Response Time: within 5 minutes.
Fix Time: within 8 hours.
Severe Error (impairs important functionalities)
Response Time: within 1 hour.
Fix Time: within 24 hours.
Non-critical Error (impairs or affects minor functionalities)
Response Time: within 24 hours.
Fix Time: within 3 days.
Proprietary and Confidential 9
Echostar agrees to provide Wink with classification (which shall be reasonable)
of each reported problem into one of the three categories of errors. In the
event Wink fails to respond and fix errors within the timetables specified
above, EchoStar shall have the right (in addition and without limitation of any
other rights and remedies) to terminate this Master Agreement immediately upon
written notice, and without a right to cure pursuant to Section 13.1.
3.10 Wink agrees to provide support to Wink-enabled EchoStar Subscribers as
follows: Wink shall provide all customer service, without limitation,
related to the Interactive Wink Programs. Wink shall make available one
or more toll-free numbers, staffed with such level of live customer
service representatives as is reasonably necessary to promptly service
customer calls related to the Interactive Wink Programs and/or any Wink
Response, as defined below in Section 4.2. The toll-free line(s) shall be
operational at the commencement of Interactive Wink Program delivery and
available 24 hours per day, 7 days per week. Wink will forward all
inquiries not related to Interactive Wink Programs and/or Wink Responses
(meaning EchoStar Services inquiries) to the EchoStar customer service
line designated by EchoStar. EchoStar will forward all Wink-related
inquiries to the Wink customer service line designated by Wink. In
addition, Wink, at its sole expense, shall enable EchoStar to "live
transfer" all calls related to the Interactive Wink Programs and/or any
Wink Response to the Wink customer service line designated by Wink. Wink
shall also provide Echostar's customer service operation with the ability
to electronically check status for Wink Transactions (as defined in
section 4.2 below), correct customer information, look up problem
resolution information and processes for individual Fulfillment Entities
(as defined in section 6.3 below), address customer inquiries and
generally perform any necessary customer service operation related to
Interactive Wink Programs, the Wink Engine and. any other product or,
service provided by Wink to Echostar or Echostar Subscribers. All support
and other services by Wink pursuant to Sections 3.9 and 3.10 shall be at
no charge to EchoStar, its subscribers or subdistributors.
If the number of calls primarily concerning Interactive Wink Programs,
the Wink Engine, Wink Transactions and any other product or service
provided by Wink that are received by Echostar in any calendar quarter
exceed 10% of the number of Wink enabled Echostar Subscribers at the
beginning of such calendar quarter, then Echostar shall charge Wink on a
monthly basis for the incremental costs incurred by Echostar in providing
such customer service response and/or referring such calls to Wink Such
costs shall not average, on a monthly basis, more than three dollars
($3.00) per call from Echostar subscribers.
3.11. EchoStar agrees to provide technical specifications and other support
reasonably required to enable Wink to:
(a) receive the minimum information necessary from EchoStar's billing
system, or other system designated by EchoStar, to support routing of
Wink Transactions (as defined in section 4.1 below). This information,
which includes subscriber name, ▇▇▇▇-to and service address, phone
number, unique identifier of the Wink-enabled EchoStar Receiver(s), and
any other information to be mutually agreed upon between the parties,
shall be deemed Confidential Information, as defined in Section 12.
EchoStar agrees to use reasonable efforts to ensure the accuracy of the
subscriber information, but does not represent that such data will be
accurate. All subscriber information including the names, addresses and
other identifying information of the subscribers shall be the exclusive
property of EchoStar.
(b) interface with EchoStar equipment in order for EchoStar to insert
Interactive Wink Programs into a EchoStar satellite transponder data
stream such that the Interactive Wink Programs can be either (x) linked
to particular video programming and only accessible to Wink-enabled
EchoStar Receivers
Proprietary and Confidential 10
tuned to that service (e.g. "program-related" or "program-synchronous"
Interactive Wink Programs) or (y) accessed independently of video
programming through direct tuning or a Wink provided menu that can be
accessed through direct tuning (e.g. "virtual channels"). The
specifications for this interface are attached as Exhibit G.
(c) integrate the Wink Software with other EchoStar equipment and
software, including but not limited to video playout and playlist control
systems, asset management systems, billing systems, LANs and WANs, etc.,
as reasonably necessary and determined jointly by the parties.
(d) route Wink Transactions back to Echostar for purposes of enabling
Echostar to ▇▇▇▇ ▇▇▇▇-enabled Echostar Subscribers for Wink Transactions
as part of Echostar's billing process with such Echostar Subscribers.
3.12. Wink shall keep the Wink Software, the Wink Response Network (as defined
in Section 4.1 below) and associated equipment provided by Wink in good
working order for uninterrupted reception and use of Interactive Wink
Programs by Wink-enabled EchoStar Subscribers, and to ensure regular and
reliable collection, reporting and forwarding of Wink Responses (as
defined in Section 4.2 below).
3.13. Notwithstanding anything to the contrary set forth herein, and without
limitation of any other rights Echostar may have under this Master
Agreement (including but not limited to section 3.7), EchoStar has the
right without prior notice to interrupt the carriage of Interactive Wink
Programs at any time for the purpose of Emergency Broadcast and other
Federal Communications Commission (FCC) mandated broadcasts in the
Territory, or if the Interactive Wink Programs or response collection
interferes in any way with transmission of the signal of the applicable
channel, interferes with the operations of EchoStar or causes other
technical problems. EchoStar agrees that it shall use commercially
reasonable efforts to give notice to Wink within three (3) hour of any
such interruption, and EchoStar and Wink will each use their commercially
reasonable efforts to restore the delivery of Interactive Wink Programs
and,collection of viewer responses as soon as possible.
4. RESPONSES
4.1 The parties agree that Wink shall be responsible at no cost to EchoStar,
for operating a network (the "Wink Response Network") capable of
receiving in-bound calls from Wink-enabled EchoStar Receivers, collecting
Wink Responses (as defined in Section 4.2 below), distributing such Wink
Responses to applicable Fulfillment Entities (as defined below), routing
subscriber billing information to Echostar in a format determined by
Echostar in its sole and reasonable discretion in the event Echostar
wishes to ▇▇▇▇ subscribers for Wink Transactions as part of Echostar's
billing process (and the Echostar Subscriber has been notified of such
billing arrangement for such Wink Transactions), and reporting on such
Wink Responses to EchoStar, Programmers and other agreed-upon parties as
necessary for the fulfillment of Wink Transactions (as defined below).
Wink Transactions shall be collected daily. Wink Responses other than
Wink Transactions shall be collected daily if capacity is available. Wink
shall ensure that all Wink Responses are collected within 7 days. Wink
agrees to perform the transaction, response collection and other
obligations set forth in this Section in a manner which does not cause
any interference of any kind with other EchoStar collection and other
activities. Wink shall be responsible for any damages caused by Wink's
performance of its obligation pursuant to this Section 4.1. The parties
shall agree in writing as to the collection strategy for Wink
transactions and responses.
4.2. For purposes of this Master Agreement, the following definitions shall
apply:
Proprietary and Confidential 11
(a) A "Wink Response" is any EchoStar Subscriber response data generated
by Interactive Wink Programs, Other Interactive Programs or Interactive
ATVEF Programs and collected electronically by Wink.
(b) A "Wink Transaction" is a Wink Response initiated by a Wink-enabled
EchoStar Subscriber, and in which the Wink-enabled EchoStar Subscriber
uses a Wink-enabled EchoStar Receiver to request products or services,
whether such products and services are either provided at no charge to
the Wink -enabled EchoStar Subscriber or require payment by the
Wink-enabled EchoStar Subscriber, and where the fulfillment of that
request requires the disclosure of subscriber specific information by
such EchoStar Subscriber, such as name and address.
(c) "Wink Revenue Transaction" are all Wink Transactions whereby Wink
derives any revenue from any source pursuant to a EchoStar Subscriber's
Wink Response; provided, however, Wink Revenue Transactions specifically
do not include without limitation (i) the purchase of a subscription to a
EchoStar service, whether video, audio, data or otherwise, (ii) the
purchase of a EchoStar supplied pay-per-view movie or event, (iii) the
purchase of any other digitally delivered content services or video
programming product and/or hardware similar to (i) and (ii), and which is
provided by EchoStar.
Commencing on the Measurement Date and throughout the remainder of the
Term, Wink shall provide to EchoStar standard weekly reporting (which
shall summarize Echostar Subscriber usage of Interactive Wink Programs
and all Wink Transactions by unique Interactive Wink Program), at no
charge to EchoStar, of all Wink Responses generated during the previous
week. Wink further agrees to provide at no charge to EchoStar daily
standard reports of Wink Transactions generated by Interactive Wink
Programs inserted by EchoStar into EchoStar promotional programming,:
including, without limitation, programming which promotes EchoStar
subscription programming, pay-per-view movies and events and other
EchoStar provided products and services EchoStar Wink Programs").
EchoStar accepts Wink's terms for all other reporting regarding Wink
Responses as defined in Exhibit J. Wink warrants and represents that such
terms are as favorable or more favorable than the terms of any agreement
Wink has entered into with any other United States video, audio and/or
data service operators, including cable and satellite video, audio and/or
data service operators, for the provision of the same or similar
services. Wink further agrees to promptly notify EchoStar in writing,
should Wink decide to enter into new agreements or amend existing
agreements with any United States video, audio and/or data service
operator to include more favorable terms for services similar to those
defined in Exhibit J, and to immediately offer (and at EchoStar's option
make immediately effective) such terms to EchoStar. Notwithstanding the
foregoing and Exhibit J, Wink acknowledges and agrees that Wink
Transactions for any EchoStar Wink Program will be processed at no charge
to EchoStar (for purposes of illustration only, there would be no charge
to EchoStar in the event that a Wink-enabled EchoStar Subscriber upgrades
his current EchoStar programming package via a Wink-enabled EchoStar
Virtual Channel or a Wink-enabled EchoStar ▇▇▇▇▇▇ channel). EchoStar
agrees that Wink Revenue Transactions shall be subject to Wink's rates
for request for information responses ("RFI Response") and purchase
responses ("Purchase Response"), as defined in Exhibit J. Wink agrees to
provide to Echostar all reports described above in hard copy or
electronic form, per EchoStar's instructions. In addition, Wink agrees
that it shall provide EchoStar with any improvements or additions to the
amount and type of data that Wink generally provides to any other video,
audio, and/or data service operators with respect to Wink Responses, Wink
Transactions or Wink Revenue Transactions. All Wink Transactions and Wink
Revenue Transactions shall be undertaken by Wink or its agents in
accordance with applicable law, including, without limitation, truth in
advertising and customer privacy laws.
4.3 During the Term of this Master Agreement, Wink shall pay to EchoStar, on
a monthly basis, a share of the fees on each Wink Revenue Transaction
that is generated by Wink-enabled EchoStar Receivers and ATVEF-response
Enabled EchoStar Receivers and routed by Wink to the appropriate entity.
Proprietary and Confidential 12
EchoStar's share of Wink Revenue Transactions generated by ATVEF-response
Enabled EchoStar Receivers shall be subject to EchoStar's written
warranty and representation that EchoStar controls content and data
services for such EchoStar Receivers. Wink's gross revenues (net of
returns, cancellations and bad debt allowance [i.e., debts past due and
not collected for one year from date of applicable transaction]) from
Wink Revenue Transactions (including but not limited to Purchase
Responses and RFI Responses, as defined in Exhibit J) generated by
EchoStar Subscribers shall be referred to as "Gross Transaction Routing
Fees." EchoStar's share of Gross Transaction Routing Fees shall be as set
forth in Exhibit A. Once EchoStar reaches four million (4,000,000)
Wink-enabled EchoStar Subscribers, EchoStar shall have the choice of
being paid a share of Wink's Gross Transaction Routing Fees per Exhibit
A, or being paid [*] percent ([*]) of Wink's Net Transaction Routing
Fees. Wink's Net Transaction Fees shall be as set forth in Exhibit L.
Once EchoStar notifies Wink it has reached four million (4,000,000)
Wink-enabled EchoStar Subscribers, Wink shall prepare a report for
EchoStar calculating the Net Transaction Fees for the four calendar
quarters preceding the receipt of such notice. Upon receipt of this
report, EchoStar shall have thirty (30) days to choose between being paid
based on Gross Transaction Fees and Net Transaction Fees for the
remainder of the Tenn. If EchoStar does not provide written notice to
Wink within thirty (30) days of receipt of the report of it's desire to
change from Gross Transaction Fees to Net Transaction Fees, Wink shall
continue to pay EchoStar based on Gross Transactions Fees as defined in
Exhibit A. The payments made by Wink to EchoStar for EchoStar's share of
such Gross Transaction Routing Fees or Net Transaction Fees, as
applicable, shall be defined as "Transaction Revenue Share" for purposes
of this Master Agreement. Wink shall be solely responsible for all taxes
and/or other similar governmental transactional charges, if any, with
respect to all Gross Transaction Routing Fees and Net Transaction Routing
Fees. Without limitation of any other rights of EchoStar, Wink warrants
and represents that the terms for Echostar's Transaction Revenue Share
(as defined in this Section 4.3 and in Exhibit A) are as favorable or
more favorable than the corresponding terms of any agreement Wink has
entered into with other United States video, audio and/or data service
operators, including cable and satellite video, audio and/or data service
operators. Wink further agrees to promptly notify EchoStar in writing,
should,Wink decide to enter into new agreements or amend existing
agreements with any United States video, audio and/or data service
operator to include more favorable revenue sharing, and to immediately
offer (and at EchoStar's option make immediately effective) such terms to
EchoStar.
4.4 Response Routing Services shall be defined as the collection and routing
of viewer response data from broadcast interactive programs. Wink shall
provide Response Routing Services for Interactive Wink Programs during
the Term applicable to any Wink-Enabled EchoStar Receivers. In addition,
the parties agree that at EchoStar's sole determination and written
request, Wink shall provide Response Routing Services to EchoStar for all
Other Interactive Programs and for Interactive ATVEF Programs which are
broadcast by a Programmer in conjunction with a video programming
service, with it being understood that Response Routing Services do not
include the collection or processing or EchoStar Subscriber responses
collected or provided through a web site other than ▇▇▇.▇▇▇▇.▇▇▇ and
other sites owned and operated by Wink.
5. FEES AND PAYMENT TERMS
5.1 EchoStar acknowledges and accepts Wink's licensing fees, rates for Wink
services, and payment terms for EchoStar, as set forth in Exhibits D and
J. EchoStar may choose to utilize other products and services of Wink
from time to time under this Master Agreement. These products and
services will be offered by Wink to EchoStar at the most favorable rate
and terms and conditions offered or made available to any United States
video, audio and/or data service operator, including cable and satellite
video, audio and/or data service operators. Wink agrees that Wink's
pricing under Exhibit J shall remain competitive with other similar
services offered by third parties. Such comparisons shall
[*] 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.
Proprietary and Confidential 13
be made considering all costs which a third party advertiser or merchant
would incur in obtaining viewer responses.
5.2 Wink shall provide reports of and pay the Transaction Revenue Share to
EchoStar on or before forty five (45) days after the end of each month
throughout the Term. Past due payments by either party shall bear
interest at a rate equal to the lesser of. (1) one percent (1%) per
month; or (ii) the maximum legal rate permitted under law.
6. PROMOTION AND RESEARCH
6.1 The parties agree to issue a joint and mutually agreeable press release
announcing this Master Agreement within thirty (30) days of the Effective
Date. EchoStar agrees to sponsor an event for the press following the
announcement of the Master Agreement, the incremental cost of which shall
be shared equally by the parties, subject to the prior approval by both
parties of such incremental costs.
6.2. Wink may, from time to time and in conformance with all applicable
federal, state or other law, undertake marketing tests and surveys,
rating polls and other research in connection with Wink - enabled
EchoStar Subscribers. Wink shall give prior written notice to EchoStar of
the nature and scope of each such test, survey, poll or project which
applies to or involves Wink-enabled EchoStar Subscribers, and shall
obtain Echostar's written permission as to the frequency and methods
which such tests, surveys, polls and other projects use to reach or
contact EchoStar subscribers. EchoStar may in-its sole discretion to the
extent permissible under applicable law, provide Wink, upon request from
Wink, with reasonable assistance in conducting such research in
connection with undertaking such test, survey, poll or project. Wink
shall reimburse EchoStar for all costs and expenses incurred in
connection with rendering such assistance upon EchoStar's demand. Wink
shall promptly provide EchoStar with the results of all such tests,
surveys, polls and projects at no cost to EchoStar. The results of all
such tests,, surveys,polls and projects . shall,be Confidential .
Information, shall be in an aggregate form which does not identify
individual Echostar Subscribers or use any other method by which one
could conclude or deduct that the subscriber is an Echostar Subscriber,
and shall not identify any Wink-enabled EchoStar Subscriber. EchoStar
agrees that Wink shall be provided with any and all research in an
aggregate and anonymous form directly related to the deployment, launch,
and usage of the Interactive Wink Programs or the generation of Wink
Revenue Responses by Wink enabled EchoStar Subscribers that is created or
paid for by EchoStar at no cost to Wink. Such research shall be
Confidential Information of Echostar as defined in Section 12 hereof.
6.3. EchoStar acknowledges that Wink will be providing to Programmers, Third
Party Wink Program Providers, advertisers, or parties designated by such
entities to fulfill Wink Transactions ("Fulfillment Entities") both (a)
aggregate reports on Wink Responses and (b) reports on individual Wink
Transactions that are generated as a result of a Wink-enabled EchoStar
Subscriber's deliberate interaction with the Interactive Wink Programs,
Other Interactive Programs or Interactive ATVEF Programs to which the
report relates. Wink represents and warrants to EchoStar that: (1),
except as set forth in the preceeding sentence, it shall not provide to
any third party any information related to a Wink-enabled EchoStar
Subscriber including, but not limited to, name, address, phone number and
credit card number (collectively, "Wink-enabled EchoStar Subscriber
Data"); (ii) Fulfillment Entities shall be expressly prohibited pursuant
to executed written agreements with Wink from (x) collecting or using any
Wink-enabled EchoStar Subscriber Data for purposes other than fulfilling
orders and requests from the Wink-enabled EchoStar Subscriber, and (y)
selling or providing any Wink-enabled EchoStar Subscriber Data to third
parties except that, notwithstanding the foregoing (x) and (y),
Fulfillment Entities may be permitted to use (but not to provide to third
parties) the Wink-enabled
Proprietary and Confidential 14
EchoStar Subscriber Data related to a particular Subscriber if such
Wink-enabled EchoStar Subscriber has purchased a product in the amount of
at least $2.00 through an Interactive Wink Program, provided that such
Wink-enabled EchoStar Subscriber Data shall not identify EchoStar
Subscribers as "EchoStar Subscribers" or use any other method by which one
could conclude or deduct that the subscriber is an EchoStar Subscriber.
Wink agrees to provide Wink-enabled EchoStar Subscribers with a means of
securely registering their credit card or other preferred method of payment
with the Wink Response Network through an on-screen Interactive Wink
Program (or Other Interactive Program or Interactive ATVEF Program), and
agrees to ensure that all EchoStar Subscribers by default "opt-out" of
having their personal information sold or provided to third parties). Wink
represents and warrants that it shall use its best efforts to enforce its
rights under such agreements with Fulfillment Entities, to EchoStar's
benefit, should such Fulfillment Entities be in breach of such agreements
with respect to their unauthorized use of any EchoStar Subscriber data.
Prior to the Measurement Date and throughout the Term thereafter, Wink
shall ensure that under any new agreements with Fulfillment Entities
entered into on or after the Measurement Date, EchoStar shall be a named
third party beneficiary and be expressly permitted to seek legal and
equitable relief against such Fulfillment Entities for any act or omission
by such entities. Fulfillment Entities can not be competitors of EchoStar
or market competitive products or services using Interactive Wink Programs.
6.4 If and for as long as EchoStar uses the Interactive Wink Programs, EchoStar
agrees to promote and market the availability of the Interactive Wink
Programs to Winkenabled EchoStar Subscribers in the Territory. The parties
agree that EchoStar may brand such interactive capabilities of the
Wink-enabled EchoStar Receiver in EchoStar's sole discretion, and that
EchoStar's use of any Wink-owned or controlled brand or ▇▇▇▇ ▇▇▇ be done in
a manner so as to be clearly subordinate to EchoStar's brand and in
conformance with EchoStar's trademark utilization guidelines. Subject to
the preceding understanding and agreement, EchoStar agrees to use
reasonable efforts to use Wink brands in EchoStar's Marketing of
Interactive Wink Programs and Wink-enabled EchoStar receivers, including
specifically the on-screen "attract icon" (e.g. the scripted) used by Wink
to indicate to viewers that a particular program or advertisement is
Wink-enhanced. EchoStar may in its sole discretion collaborate with Wink
to enable the electronic programming guide in each Wink-enabled EchoStar
Receiver to display in each of the commonly used "views" for such
electronic programming guide which channels and programs are broadcast with
companion Interactive Wink Programs. Advertising, promotional, marketing
and/or sales materials concerning the Interactive Wink Programs or the Wink
Software provided by Wink may be used at the sole discretion of EchoStar.
Wink agrees that it shall only provide to EchoStar those marketing
materials whereby Wink has received all necessary prior approval from the
applicable Programmers and Third Party Wink Program Providers featured in
such marketing materials such that no further approvals shall be required
from Programmers and Third Party Wink Program Providers for minor
customization of the materials, including but not limited to, adding the
name, logo and other marks of EchoStar.
6.5. EchoStar agrees that any marketing materials separately developed by
EchoStar intended to promote the capabilities of the Interactive Wink
Programs must be approved in writing by Wink prior to distribution, which
approval shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, use of the names and marks of Wink and separately Wink-developed
marketing and promotional materials regarding Wink and the Interactive Wink
Programs in routine promotional materials, such as program guides, program
listings and ▇▇▇▇ stuffers, shall be deemed approved unless Wink
specifically gives written notice to EchoStar to the contrary. Nothing
contained herein shall limit or restrict the right of EchoStar to use such
names and marks (i) in connection with the exercise of its rights hereunder
or (ii) as permitted under any other contract or agreement, in connection
with
Proprietary and Confidential 15
any advertising inserted in any television service or programming if the sponsor
of such advertisement had the right to use such names and marks therein or
otherwise than under this Master Agreement.
6.6. During the term of this Master Agreement and for the duration of EchoStar's
rights to use the Wink Software, in the event that EchoStar advertises,
promotes or markets the Licensed Engine or Interactive Wink Programs,
EchoStar may, and may require its Subdistributors to, use the trademarks,
marks, trade names, logos, and other product and company identifiers of
Wink that Wink may adopt, from time to time ("Wink Trademarks"). Use of the
Wink Trademarks shall be consistent with Wink's trademark usage policy
which Wink may adopt from time to time and of which Wink has notified
EchoStar. All representations of Wink's Trademarks that EchoStar intends to
use shall first be submitted to Wink for approval (which shall not be
unreasonably withheld) of design, color, and other details, or shall be
exact copies of those used by Wink.
6.7. Remote controls that EchoStar markets for use with Wink-enabled EchoStar
Receivers may in EchoStar's sole discretion contain a button for enabling
the functionality of the Licensed Engine ("Wink Button"). Under no
circumstances shall EchoStar be required to change the physical layout of
the remotes shipping with Wink-enabled EchoStar Receivers. For each remote,
the location and size of the Wink Button shall be determined solely by
EchoStar. EchoStar in its sole discretion may decide that manuals, or any
other documentation describing functionality of the Licensed Engine will
contain information on use of the Licensed Engine functionality and Wink
copyright and proprietary notices. The content and location of such
information and notices shall be determined by EchoStar in its sole
discretion. Wink will provide to EchoStar artwork for a logo that may be
placed. on all Wink-enabled EchoStar Receivers. EchoStar may silk
screen or similarly affix this logo on each Wink-enabled EchoStar
Receiver.
6.8. EchoStar agrees to provide to Wink at no charge, on a monthly basis,
EchoStar's estimate of the number of:
(a) Wink-enabled EchoStar Subscribers
(b) Wink-enable EchoStar Receivers installed in Wink-enabled EchoStar
Subscriber homes
(c) ATVEF-response enabled EchoStar Subscribers
(d) ATVEF-response enabled EchoStar receivers
EchoStar shall use commercially reasonable efforts to include in the
monthly report data detailing (a) through (d) information regarding
subscriber state and ZIP code. The parties agree that Wink shall have the
right to verify EchoStar's compliance with this provision in accordance
with Section 14.11.
6.9. Provided the Measurement Date has occurred as of February 2 8, 200 1, Wink
agrees to pay EchoStar [*] within thirty (30) days of the Measurement Date.
Provided EchoStar enables a minimum of one million (1,000,000) EchoStar
Subscribers to receive Interactive Wink Programs (e.g. such subscribers
become Wink-enabled EchoStar Subscribers) as of the Measurement Date, Wink
agrees to provide EchoStar with promotional funds from Wink in the amount
of (a) [*] and (b) an additional [*] per Wink-enabled EchoStar Subscriber
after the first one million Wink-enabled EchoStar Subscribers (the sums
specified in (a) and (b) above are collectively referred to herein as "Wink
MDF Funds"). All promotional and marketing expenses deemed eligible for
Wink MDF Funds by EchoStar must be submitted to Wink for approval prior to
commitment to such expenses, which approval shall not be unreasonably
withheld. Payments of Wink MDF Funds to EchoStar shall be made monthly
within 30 days of receipt of both (a) the subscriber reports defined in
section 6.6 and (b) presentation of evidence of expenditure of such
amounts. Marketing and promotional expenses eligible for Wink MDF Funds
include events, television, print,
[*] 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.
Proprietary and Confidential 16
radio or outdoor advertising, retail marketing materials, direct mail campaigns
and other marketing communications specifically aimed at improving sales of
Wink-enabled EchoStar Receivers and/or awareness or usage of Interactive Wink
Programs among Wink-enabled EchoStar Subscribers. The parties agree that each
party may contribute "in-kind" products and services in place of cash outlays on
the approval of the other party. "In-kind" products and services include, but
are not limited to, local advertising avails and templates for various forms of
advertising and promotion that can be tailored for EchoStar's use. In addition
to the marketing programs funded by the Wink MDF Funds, Wink may in its sole
discretion choose to fund additional marketing programs. Execution of such
additional marketing programs shall be subject to EchoStar's prior written
approval, which shall be provided in EchoStar's sole discretion. In such event,
Wink shall be offered the lower of (a) EchoStar's most favorable terms offered
to programmers and service providers and (b) the average price realized by
EchoStar at that time for any EchoStar service (including "local" ad avails) and
any out-of-pocket costs incurred by EchoStar for materials or services which
would be required to execute such marketing programs, provided that Wink's
proposal is submitted for review and approval to EchoStar prior to execution.
7. REPRESENTATIONS, WARRANTIES AND LIABILITY LIMITATION
7.1 WINK'S WARRANTIES.
7.1.1. All warranties of Wink set forth in this Section 7.1 shall be valid and
binding throughout the Term of this Master Agreement. Wink hereby
represents and warrants to EchoStar that:
(i) Wink is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(ii) Wink has and will continue to have at all times during the
Term the requisite power and AUTHORITY TO OWN, LEASE AND OPERATE ITS
PROPERTIES AND TO CARRY on its business as now being or PROPOSED TO BE
CONDUCTED AND to execute and deliver this Master Agreement and to fully
perform its obligations hereunder, including its obligations, to
deliver all of the shares in the Warrant pursuant to Section 1.6;
(iii) Wink has the right to furnish the Wink Software and operate
the Wink Response Network and the services related thereto as provided
in this Master Agreement, free and clear of (a) any patent, copyright
and other intellectual property or proprietary right of third parties
and (b) any contractual or legal limitations or restrictions;
(iv) the execution, delivery and performance of this Master
Agreement including the issuance and delivery of all of the shares in
the Stock Grant have been duly authorized by all corporate actions
necessary on the part of Wink, and Wink's SEC filings, as of their
respective dates, did not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(v) Wink has not previously and will not during the Term enter
into any contractual or other legal obligation which will in any way
interfere with its full performance of this Master Agreement, and no
other consents, approvals, authorizations and other requirements
prescribed by any contract, law, rule or regulation must be obtained or
satisfied by Wink 'in connection with the execution, delivery and
performance of this Master Agreement;
(vi) the individual executing this Master Agreement on behalf of
Wink has the authority to do so;
(vii) the Wink Software and the Wink Response Network (and
subsequent revisions and upgrades to same provided by Wink to EchoStar)
will operate and perform in accordance with all published
specifications with respect thereto (which specifications shall be
provided to EchoStar on the earlier of ninety (90) days from the
Effective Date and the date of the Final Statement of Work) throughout
the Term of this Master Agreement;
Proprietary and Confidential 17
(viii) the use or carriage by EchoStar of the Wink Software or any
other rights granted by Wink hereunder will not infringe upon the
patent, copyright, trademark, or other proprietary or intellectual
property right of any third party;
(ix) Wink will perform all obligations and render all services
hereunder in a professional and workmanlike manner to the best of its
abilities;
(x) Wink presently is and will remain at all times during the Term
in full compliance with all applicable local, state, and federal laws
and regulations, including without limitation such statutes, laws,
rules, regulations and orders enforced, administered, promulgated or
pronounced by the Federal Communications Commissions or any successor
agency thereto, as amended from time to time; and
(xi) Wink will comply with all of its representations, warranties,
obligations and responsibilities herein contained during the Tenn.
(xii) the use or carriage by EchoStar of the Wink Software, Wink
Response Network or any other rights granted by Wink hereunder will not
cause any errors in, degradation in quality or performance of, or
damage of any kind to, the EchoStar products, hardware, or video or
data services.
(xiii) Wink will, at its own expense, ensure that throughout the
Tenn hereof, the Wink Response Module, Wink Broadcast Server and Wink
Response Network will remain compatible with then current industry
standards and operating systems, including without limitation future
ATVEF development.
Wink's warranty shall not extend to problems in the Licensed
Engine that result from: (a) changes by EchoStar to the operating
system or environment or to EchoStar Receivers which adversely affects
the Licensed Engine and wInch are not contemplated by this Master
Agreement (unless such changes have been mutually agreed upon or
otherwise approved by Wink or is a result of remaining compatible with
then current industry standards and operating systems, including
without limitation future ATVEF development); (b) any alterations of or
additions to the Licensed Engine performed by parties other than Wink
without Wink's prior written authorization unless the same are
necessary as a result of Wink's failure to perform; (c) use of the
Licensed Engine in a manner expressly prohibited in the Specifications;
or (d) problems caused solely by other products not supplied by Wink,
which products were not compatible or intended or approved for use with
the Licensed Engine. EXCEPT FOR THE EXPRESS LIMITED WARRANTIES SET
FORTH IN THIS MASTER AGREEMENT, WINK MAKES AND ECHOSTAR RECEIVES NO
WARRANTIES WITH RESPECT TO THE LICENSED ENGINE, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AND WINK SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE.
7.1.2. Wink represents and warrants to EchoStar that the Wink Software and the
Wink Response Network (collectively, "Wink Products") are designed and
developed to be, and will continue to be, Year 2000 Compliant. "Year
2000 Compliant" shall mean that:
(a) the Wink Products are fully functional and perform in
accordance with Wink's published specifications and the specific
warranties set forth elsewhere 'in this Master Agreement (together, the
"Standards") prior to, during, and after the calendar year 2000 A.D.,
and that the Wink Products shall perform during each such period of
time without any error relating to date functionality and/or data;
(b) without limiting the generality of the foregoing, that the
Wink Products (i) shall not cease to perform or provide or cause any
software and/or system with which the Wink Products operates to provide
invalid or incorrect results as a result of date functionality and/or
data, or otherwise experience any degradation of performance or
functionality with respect to the Standards as a result of such
interfacing specifically arising from, relating to or including date
functionality, (10 has been developed and designed to be fully
interoperable with year 2000-compliant software, hardware, and data and
to ensure year 2000 compatibility, including, but not limited to, date
data century recognition
Proprietary and Confidential 18
and calculations which accommodate same century and multi-century and leap year
formulas and date values; (iii) shall effectively and accurately manage and
manipulate data derived from, involving or relating in any way to dates
including single century formulas and multi-century or leap year formulas, and
will not cause an abnormally ending scenario within the Wink Products, or
generate 'incorrect values or invalid results involving such dates, and (iv)
provides that all date-related user interface functionalities and data fields
include an indication of century.
7.2 EchoStar represents and warrants to Wink as of the Effective Date that:
(i) EchoStar is a corporation duly organized and validly existing
under the laws of the State of Colorado;
(ii) EchoStar has the requisite power and authority to enter in
this Master Agreement and to fully perform its obligations hereunder;
(iii) EchoStar is not subject to any contractual or other legal
obligation which will in any way interfere with its full performance of
this Master Agreement;
(iv) the execution, delivery and performance of this Master
Agreement has been duly authorized by all corporate actions necessary
on the part of EchoStar; and
(v) the individual executing this Master Agreement on behalf of
EchoStar has the authority to do
7.3 LIMITATION OF LIABILITY
NEITHER WINK (OR ITS AFFILIATES) EXCEPT AS SET FORTH IN SECTIONS 4.1,
7.1.l(iii), 7.1.l(viii), 8.1 or 12, ON THE ONE HAND, NOR ECHOSTAR (OR
ITS AFFILIATES), ON THE OTHER HAND, SHALL, FOR ANY REASON OR UNDER ANY
LEGAL THEORY, BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR LOSS OF
PROFITS, REVENUES, DATA OR SERVICES, REGARDLESS OF WHETHER SUCH DAMAGES
OR LOSS WAS FORESEEABLE AND REGARDLESS OF WHETHER IT WAS INFORMED OR
HAD DIRECT OR IMPUTED KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES OR
LOSS IN ADVANCE.
8. INDEMNIFICATION
8.1 Wink shall indemnify, defend and hold harmless EchoStar, its parents,
subsidiaries, affiliates, and their respective officers, directors,
employees and agents from and against any and all losses, settlements,
claims, actions, suits, proceedings, investigation, judgments, awards,
damages, liabilities, costs and expenses including, without limitation,
reasonable attorneys' fees (collectively "Losses" and, individually, a
"Loss") which arise out of or as a result of
(i) any breach or default of any representation, warranty, obligation
or duty of this Master Agreement by Wink or any act or omission
by or on behalf of Wink;
(ii) any claim, demand, action, suit or proceeding in which it is
alleged that the Wink Products or any part thereof, is
defamatory, libelous, slanderous or obscene, or violates or
infringes any patent or copyright, trademark or other proprietary
or intellectual property right of any third party or constitutes
a misappropriation of any third party's trade secrets;
(iii) any improper disclosure by Wink of any Confidential Information
as defined herein ("Confidential Information Disclosures");
Proprietary and Confidential 19
(iv) any misuse under the terms of this Master Agreement or otherwise
by Wink or any third party, including, without limitation any
Fulfillment Entity, of any EchoStar Subscriber information,
including but not limited to EchoStar Subscriber credit card
information or other personal financial data;
(v) any advertising and marketing of the Wink-enabled EchoStar
Receivers by Wink;
(vi) the use by EchoStar of any materials, including advertising and
promotional copy, supplied and/or approved by Wink;
(vii) use of any logos, trademarks, service marks, trade names or other
identifying information of EchoStar inconsistent with EchoStar's
instructions;
and Wink shall reimburse them for any and all legal, accounting and
other fees, costs and expenses (collectively, "Expenses") reasonably
incurred by any of them in connection with investigating, mitigating or
defending any such Loss; provided, however, that the same shall not
relieve EchoStar of its obligations under Section 8.2. If it is, or may
be, determined by competent authority that the Wink Products or any
part thereof infringes any patent, copyright, trade secret, trademark
or other proprietary or intellectual property right of a third party or
is enjoined, then Wink, at its sole expense and sole option, may: (a)
procure for EchoStar the right under such patent, copyright, trade
secret, trademark or other proprietary or intellectual property right
to use, reproduce and distribute the Wink Products or such part thereof
or such trademark as authorized in this Master Agreement, at no cost to
EchoStar, or (b) subject to EchoStar's approval, which shall not be
unreasonably withheld, replace the Wink Products or such part thereof
or such trademark with other suitable software or trademark without
material degradation in performance or functionality at no cost to
EchoStar; or (c) subject to EchoStar's approval, which shall not be
unreasonably withheld, modify the Wink Products or such part thereof or
such trademark to avoid infringement without material degradation in
performance or functionality at no cost to EchoStar. The foregoing
shall not be in limitation of any rights of EchoStar to suspend or
terminate its performance under this Master Agreement, or suspend or
terminate this Master Agreement, pursuant to its terms, at law, or in
equity, which EchoStar shall have full rights to do.
Notwithstanding anything to the contrary contained in this Master
Agreement (but without limitation of any other termination rights of
EchoStar) in the event of any actual or threatened third party claim of
infringement, as determined by EchoStar in its reasonable discretion,
EchoStar shall have the right to discontinue distributing the
Interactive Wink Programs and/or de-activate the Wink Engine.
8.2 EchoStar shall indemnify Wink, its officers, directors, shareholders,
employees and agents for, and shall hold them harmless from and
against, any and all direct Losses which are sustained or incurred by
or asserted against any of them and which arise out of (i) any breach
or default of any representation, warranty, obligation or duty of this
Master Agreement by EchoStar; and (ii) EchoStar's advertising and
marketing of the Interactive Wink Programs unless such materials are
provided or approved by Wink, provided however that the same shall not
relieve Wink of its obligations under Section 8.1. EchoStar shall
reimburse Wink for any and all Expenses reasonably incurred by Wink in
connection with investigating, mitigating or defending any such Loss.
8.3 Promptly after receipt by either party of notice of the commencement of
any action, suit, proceeding or investigation in respect of which such
party may make a claim for indemnification hereunder, such party will
give written notice thereof to the other party; but the failure to so
notify the other party will
Proprietary and Confidential 20
not relieve the other party from any liability or obligation which the other
party may have to any indemnified person (i) otherwise than under this Master
Agreement or (ii) under this Master Agreement except to the extent of any
material prejudice to the other party resulting from such failure. If any such
action, suit, proceeding or investigation is brought against an indemnified
person, the indemnifying party shall undertake the defense and permit the
indemnified party to participate therein at the indemnified party's expense. If
Wink is the indemnifying party, Wink shall make no compromise or settlement of
any claim without the prior written consent of EchoStar. The compromise or
settlement of any such claim without EchoStar's prior written consent shall
release EchoStar from its obligations hereunder with respect to such claim or
action so settled. The indemnities contained in this Section 8 shall continue
throughout the Term and shall survive the termination of this Master Agreement.
9. NOTICES
All notices, statements, and other communications given hereunder shall
be in writing and shall be delivered by personal delivery, facsimile
transmission, certified mail, return receipt requested, postage
prepaid, or by next day express delivery, or such other addresses or
fax numbers as such party may have substituted by notice given to the
others in accordance with this Section. Such notices must be addressed
as follows:
If to WINK COMMUNICATIONS:
Attn.: Executive Vice President, Sales
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Chief Financial Officer
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to EchoStar: EchoStar Satellite Corporation
Attn.: ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
EchoStar Satellite Corporation
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President and General Counsel
EchoStar Satellite Corporation
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
The date of such telegraphing, personal delivery or facsimile
transmission (with confirmation of receipt thereof), or the date of
receipt of a certified notice or express delivery, if applicable, shall
be deemed the date on which such notice is given and effective.
Proprietary and Confidential 21
10. TRADEMARKS
Other than as expressly provided otherwise herein, all right, title and
interest in and to the Interactive Wink Programs or other rights, of
whatever nature, related thereto shall remain the property of Wink.
Further, the parties acknowledge and agree that with respect to all
names, logos, marks, copyright notices or designations owned and
utilized by the respective party in connection with the activities of
that party are the sole and exclusive property of that party and no
rights or ownership are intended to be or shall be transferred as a
result of this Master Agreement. Wink shall not use, and no right or
license is hereby granted to Wink to use, any of the trade names,
trademarks, copyrights, styles, slogans, titles, logos or service marks
of EchoStar. Notwithstanding the foregoing, EchoStar permits Wink to
include EchoStar's trade name and logo for Wink's industry marketing
materials, subject to (i) EchoStar's Trademark and Style Guide,
attached hereto and incorporated herein as Exhibit K and (ii) prior
written approval by EchoStar.
11. FORCE MAJEURE
Neither party shall have any liability to the other party for any
failure to perform hereunder, if such failure is due to: an act of God;
war; inevitable accident; fire; lockout; strike or other labor
dispute-, riot or civil commotion; act of government or governmental
instrumentality (whether federal, state or local); act of terrorism;
failure of performance by a common carrier; failure in whole or in part
of technical facilities; sun spots or other electronic,
electro-magnetic, atmospheric or other condition affecting
transmission; loss or degradation of any EchoStar satellite capacity
(regardless of whether the Wink Interactive Programs are currently
delivered on the affected transponder(s) at the time of such loss or
degradation); or other cause (excluding financial inability or
difficulty of any kind) beyond such party's reasonable control. The
Tenn shall be suspended during the period when a party is unable to
fulfill its obligations hereunder by reason of such occurrence;
provided, however, that either party may terminate this Master
Agreement upon written notice to the other party in the event of a
Force Majeure which prevents either party from substantially performing
under this Master Agreement for a period of sixty (60) continuous days.
12. CONFIDENTIALITY
12.1. As used herein, "Confidential Information" shall include: (w)
information which by its nature ought to be treated as confidential,
including but not limited to technical documents, software, business
plans, projections and financial analysis, (x) the terms and
conditions, other than the existence and duration, of this Master
Agreement; (y) any information marked or orally disclosed as
"confidential;" and (z) all personally identifiable information related
to Wink-enabled EchoStar Subscribers or any other subscriber of
EchoStar. Neither party shall disclose Confidential Information to any
third party (other than as necessary to its respective employees, in
their capacity as such) except: (i) as expressly provided herein; (ii)
at the written direction of the other party; (iii) as may be required
by any court of competent jurisdiction, governmental agency, law or
regulation, provided that the disclosing party takes reasonable steps
to obtain confidential treatment of such information pursuant to an
appropriate Protective Order (in such event the disclosing party shall
also notify the other party as promptly as practicable and, if
possible, prior to making any disclosure so that the non-disclosing
party may take further steps to protect the confidentiality of such
information); (iv) in connection with any arbitration proceeding; (v)
as part of the normal reporting or review procedure to a party's
accountants, auditors, agents, legal counsel, investment bankers and
employees of parent and subsidiary companies, provided such
accountants, auditors, agents, investors and potential investment
partners, legal counsel, and employees of parent and subsidiary
companies agree to be bound by this Section; and (vi) to enforce
Proprietary and Confidential 22
any of a party's rights pursuant to this Master Agreement. Any data
transmission, including all reports, between Wink, EchoStar and
approved third parties containing EchoStar Subscriber data, is the sole
property of EchoStar and is hereby identified as Confidential
Information and all such Subscriber data shall be transmitted and
stored in such a manner so as to ensure, through the use of best
efforts, the security of such data from access by unauthorized parties.
12.2. Wink acknowledges and agrees that any and all Wink-enabled EchoStar
Subscribers shall be deemed customers of EchoStar for all purposes
relating to programming services (including without limitation video,
audio and data services) and the hardware necessary to receive such
services. Wink further acknowledges and agrees that (a) the names,
addresses, profiles or other identifying information of such
subscribers ("Subscriber Information") are, as between EchoStar and
Wink, the sole and exclusive property of EchoStar, and that (b) Wink
will treat all Subscriber Information strictly confidential, and will
not directly or indirectly use, or permit any others to use, any
Subscriber Information for any purpose during the Term and at all times
thereafter, except as expressly permitted in Sections 6.3.
12.3. Each party agrees that a breach of these, obligations of
confidentiality will result in the substantial likelihood of
irreparable harm and injury to the other party, for which monetary
damages are difficult to accurately measure. Accordingly, each party
agrees that the other party shall have the right, in addition to any
other remedies available, to obtain immediate injunctive relief as well
as other equitable relief allowed by the federal and state courts. The
forgoing remedy of injunctive relief is agreed to without prejudice to
the other party's to exercise any other rights and remedies it may
have, including without limitation, the right to terminate this Master
Agreement and seek damages or other legal or equitable relief The
forgoing confidentiality obligations will survive termination of this
Master Agreement.
12.4. In the event that Wink derives an economic benefit, in any form, from a
violation of its obligations under Section 12. It is hereby agreed
that such economic benefit is the property of Echostar and that Wink
shall deliver the cash value of the economic benefit to EchoStar
immediately upon receipt of the economic benefit. It is further agreed
that Wink shall hold. such economic benefit in trust for the benefit of
EchoStar. The foregoing is agreed to without prejudice to EchoStar to
exercise any other rights and remedies it may have, including without
limitation, the right to terminate this Master Agreement and seek
damages or other legal or equitable relief. The confidentiality
obligations set forth in Section 12.1 above will survive termination of
this Master Agreement indefinitely.
13. TERMINATION
13.1 BREACH. Notwithstanding any other provision herein, either party shall
have the right to terminate this Master Agreement and any License
granted herein by giving written notice to the other party if such
other party breaches any of its material obligations under this Master
Agreement or such party has made any material misrepresentations and
such breach is not cured within thirty (30) days (or ten (10) days in
the case of payment default) of receipt of written notification
specifically setting forth those items of nonperformance. If such
breach is timely cured, the notice of termination shall be void. The
termination of this Master Agreement by either party shall be without
prejudice to any other remedies that party may have. Each party shall
be obligated to pay outstanding fees and payments accrued as of the
date of termination.
13.2 BANKRUPTCY. If a party (1) becomes bankrupt or insolvent, however
evidenced, (ii) admits in writing its inability to pay its debts when
due, (iii) makes a general assignment for the benefit of creditors,
(iv) has appointed, voluntarily or involuntarily, any trustee,
receiver, custodian or conservator with respect
Proprietary and Confidential 23
to it or a substantial part of its property, (v) files, or has filed
against it, a voluntary or involuntary petition in bankruptcy or (vi)
makes any arrangement or otherwise becomes subject to any proceedings
under the bankruptcy, insolvency, reorganization or similar laws of the
United States or any state, then the other party shall have the right
at any time thereafter to terminate this Master Agreement by giving
written notice to such party.
13.3 RIGHTS UPON TERMINATION. All rights of EchoStar to use the Wink
Software (or any License granted hereunder for any reason) will cease
upon expiration of the Term or upon the termination of this Master
Agreement by Wink due to material breach hereof by EchoStar, and in
such event EchoStar will (i) reasonably promptly purge all copies of
all Wink Software from all computer processors or storage media on
which EchoStar has installed or permitted others to install such Wink
Software (not including software, if any, within any Wink-enabled
EchoStar Receiver), (ii) within ninety (90) days of such expiration or
termination return all materials (other than the Equipment) provided
by Wink or allow Wink to retrieve such materials at EchoStar's
Facilities on notice during regular business hours and without
interrupting EchoStar operations and further subject to EchoStar's
security concerns, and (iii) within ninety (90) days of such
expiration or termination, certify to Wink in writing, signed by an
officer of EchoStar, that all copies of the Wink Software have been
returned to Wink or destroyed and that no copy of any Wink Software
remains in EchoStar's possession or under its control. Upon termination
or expiration of the Master Agreement, Wink shall immediately
discontinue all use of all EchoStar trademarks, including all marks
associated in any way whatsoever with the Wink-enabled EchoStar System
and all marks or names associated with any programming or product
offered by EchoStar. The parties will reasonably cooperate and assist
each. other to effectuate the purposes of this Section 13.3.
13.4 SOURCE CODE. Upon execution of this Master Agreement, Wink shall
deliver the o-code (source code) for the Wink Engine, to EchoStar at
EchoStar's address first provided above in this Master Agreement.
EchoStar shall have a non-exclusive, non-transferable license to use
such source code solely to support, maintain, modify, create derivative
works of and improve the Wink-enabled EchoStar Receiver until the
expiration or termination of all of EchoStar's rights under the Master
Agreement (it being understood that EchoStar shall have full rights to
use such source code in the event of and continuing indefinitely after
termination by EchoStar, due to breach by Wink, or in the event of an
event described in Section 13.2, or in the event Wink merges with, is
acquired by, or engages in a similar transaction with, a competitor of
EchoStar. EchoStar agrees to inform all employees who are given access
to the source code that such source code is the confidential material
of Wink licensed to EchoStar as such. Access to the source code will be
limited to those EchoStar employees needing such access to effect the
purposes of this Master Agreement. EchoStar will obligate each EchoStar
employee who is given access to the source code to maintain the
confidentiality of such source code with the standard of care that
EchoStar protects its own confidential information. EchoStar will
notify Wink promptly in the event of any breach of its security where
it appears that any source code was misappropriated, disclosed in
violation of this Master Agreement or exposed to loss, and EchoStar
will take all reasonable actions required to recover the source code in
the event of loss or misappropriation or to otherwise prevent its
unauthorized disclosure or use.
Notwithstanding anything herein to the contrary, all Wink warranties
and support obligations shall be void if EchoStar modifies the Wink
Engine source code, except when (a) such modifications result from a
material breach by Wink and are necessary to resolve deviations from
the Specifications or to fix errors, (b) such changes to the Wink
Engine source code does not materially affect other Wink Software or
the Wink Response Network, in which case Wink's warranties and support
obligations
Proprietary and Confidential 24
with respect to the unaffected portion of the Wink Software and with
respect to the Wink Response Network shall remain.
13.5 RIGHTS OF ECHOSTAR UPON BREACH BY WINK. Without. limitation of any
other rights or remedies of EchoStar, in the event of a material breach
by Wink, EchoStar shall have the right to (a) at least the same level
of Technical Support and customer service as that provided by Wink to
any other video, audio and/or data service provider and (b) take any
necessary remedial measures, including modifications to the Wink
Software such that it complies with the Specifications or the fixing of
errors, the costs of which shall be reimbursed by Wink to EchoStar.
14. GENERAL
14.1 BINDING EFFECT; ASSIGNMENT This Master Agreement and License shall be
binding upon, and shall redound to the benefit of, the parties hereto
and their respective successors and assigns except that it may not be
assigned by transfer, by operation of law or otherwise, without the
prior written consent of the non-transferring party, which consent
shall not be unreasonably withheld; provided, however, that either
party may assign its rights and obligations under this Master Agreement
and License in whole or in part to an Affiliated Company. Such
assignment shall require that the entity assuming the assigning party's
rights and obligations is not a competitor of the non-assigning party.
Except for the assignment rights provided herein, the License shall
otherwise be non-transferable. Except as otherwise provided herein, any
assignment of rights or delegation of duties under this Master
Agreement by a party, without the prior written consent of the other
party, if such consent is required hereby, shall be void. Except as
otherwise provided herein, no person shall be a third party beneficiary
of this Master Agreement. For the purposes of this Master Agreement,
"Affiliated Company(ies)" shall mean, with respect to any person or
entity, any other person or entity directly or indirectly controlling,
controlled by or under common control (i.e., the power to direct
affairs by reason of ownership of voting stock, by contract or
otherwise) with such person or entity and any member, director, officer
or employee of such person or entity.
14.2 AMENDMENTS, MODIFICATIONS, CANCELLATIONS. Except as otherwise
contemplated herein, no addition to, and no cancellation, renewal,
extension, modification or amendment of, this Master Agreement shall be
binding upon a party unless such addition, cancellation, renewal,
extension, modification or amendment is set forth in a written
instrument which states that it adds to, amends, cancels, renews,
extends or modifies this Master Agreement and which is executed and
delivered on behalf of each party by an officer of each party.
14.3 WAIVERS LIMITED. No waiver of any provision of this Master Agreement
shall be binding upon a party unless such waiver is set forth in a
written instrument which is executed and delivered on behalf of such
party by an officer of such party. Such waiver shall be effective only
to the extent specifically set forth in such written instrument.
14.4 RELATIONSHIP. The relationship of the parties hereto is that of
independent contractors. Neither party shall be or hold itself out as
the agent of the other party under this Master Agreement. Nothing
contained herein shall be deemed to create, and the parties do not
intend to create, any relationship of partners, joint venturers or
agents as between EchoStar and Wink, and neither party is authorized to
or shall act toward third parties or the public in any manner which
would indicate any such relationship. Likewise, no supplier of
advertising or programming or anything else included in connection with
the Interactive Wink Programs shall be deemed to have any privity of
contract or direct contractual or other relationship with EchoStar by
virtue of this Master Agreement or
Proprietary and Confidential 25
EchoStar's License hereunder. Wink disclaims any present or future
right, interest or estate in or to the transmission facilities of
EchoStar.
14.5 GOVERNING LAW. The validity, interpretation, performance and
enforcement of this Master Agreement shall be governed by the law of
the State of Colorado, without regard to its principles of conflicts of
laws. The respective obligations of the parties under this Master
Agreement are subject to all applicable federal, state and local laws,
rules and regulations. The federal and state courts located in the
State of Colorado shall have exclusive jurisdiction to hear and
determine any claims, disputes, actions or suits which may arise under
or out of this Master Agreement. The parties voluntarily consent to the
personal jurisdiction of, and waive any objection as to venue, in such
courts for such purposes.
14.6 ATTORNEYS FEES. In the event of any suit or action to enforce or
interpret this Master Agreement or any provision thereof, the
prevailing party shall be entitled to recover its costs, expenses and
reasonable attorney fees, both at trial and on appeal, in addition to
all other sums allowed by law.
14.7 ENTIRE AGREEMENT; EXHIBITS; CONSTRUCTION. This Master Agreement
together with the Schedules and Exhibits attached hereto constitutes
the entire contract between the parties with respect to the subject
matter hereof and cancels and supersedes all of the previous or
contemporaneous contracts, representations, warranties and
understandings (whether oral or written) by, between or among the
parties with respect to the subject matter hereof. In the case of a
conflict between the provisions of this Master Agreement and any
Schedule and/or Exhibit, the. Master Agreement shall prevail. This,
Master Agreement has been fully reviewed and negotiated by the parties
hereto and their respective counsel. Accordingly, in interpreting this
Master Agreement, no weight shall be placed upon which party hereto or
its counsel drafted the provision being interpreted.
14.8 SEVERABILITY. If any. provision of this Master Agreement shall
hereafter be held to be invalid, unenforceable or illegal, in whole or
in part, in any jurisdiction under any circumstances for any reason,
(i) such provision shall be reformed to the minimum extent necessary to
cause such provision to be valid, enforceable and legal while
preserving the intent of the parties as expressed in, and the benefits
to the parties provided by, this Master Agreement or (ii) if such
provision cannot be so reformed, such provision shall be severed from
this Master Agreement and an equitable adjustment shall be made to this
Master Agreement (including, without limitation, addition of necessary
further provisions to this Master Agreement) so as to give effect to
the intent so expressed and the benefits so provided. Such holding
shall not affect or impair the validity, enforceability or legality of
such provision in any other jurisdiction or under any other
circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any
other provision of this Master Agreement.
14.9 HEADINGS. The headings set forth in this Master Agreement have been
inserted for convenience of reference only, shall not be considered a
part of this Master Agreement and shall not limit, modify or affect in
any way the meaning or interpretation of this Master Agreement.
14.10 SURVIVAL OF REPRESENTATIONS. All representations and warranties set
forth herein shall survive the termination or expiration of this Master
Agreement indefinitely and the consummation of the transactions
contemplated hereby. In addition, Sections 8, 10, 12 and 14 shall
survive any termination or expiration of this Master Agreement.
Proprietary and Confidential 26
14.11 AUDIT RIGHTS. During the term of this Master Agreement and for one (1)
year thereafter, both parties shall maintain accurate and complete
documents and information, as well as books and records in accordance
with generally accepted accounting principles and practices which, at a
minimum, shall contain sufficient information to enable an auditor to
verify compliance with this Master Agreement. Upon not less than 30
days' prior written notice, either party shall have the right, during
the term of this Master Agreement and for one (1) year thereafter to
have an independent Big-5 accounting firm examine during normal
business hours all of the documents, information, books and records of
the other party related to this Master Agreement to the extent
necessary to verify compliance with this Master Agreement; provided,
however, that such examinations shall not be conducted more frequently
than once annually. If any such examination reveals a discrepancy in
the amount paid by or to either party and the amount which should have
been paid by or to either party, the party who has been demonstrated to
have paid too little shall immediately pay to the other party an amount
equal to the cost of such examination, plus the amount of the
discrepancy, plus interest on the amount of such discrepancy at the
rate of 1.5% per month (or, if lower, the maximum rate permitted by
law) from the date on which such amount was paid by or should have been
paid to the other party through the date on which payment is made to
the other party (such payments shall only be made by EchoStar if the
under reporting by EchoStar actually caused Wink to make payments to
EchoStar).
14.12 REMEDIES CUMULATIVE. It is agreed that the rights and remedies herein
provided in case of default or breach by either party of this Master
Agreement are cumulative and shall not affect in any manner other
remedies that the other party may have by reason of such default or
breach. The exercise of any right or remedy herein provided shall be
without prejudice to the right to exercise any other right or remedy
provided herein, at law, or in equity.
IN WITNESS WHEREOF, the parties by their duly authorized representatives have
entered into this Master Agreement as of the Effective Date.
WINK COMMUNICATIONS, INC. ECHOSTAR SATELLITE CORPORATION
By: By:
--------------------------- -------------------------------
Name: Name:
------------------------- -----------------------------
Title: Title:
------------------------ ----------------------------
Proprietary and Confidential 27
EXHIBIT A.: WINK/ECHOSTAR REVENUE SHARE
Transaction Revenue Share is calculated as a percentage of Wink's gross revenues
on the applicable Gross Transaction Routing Fees.
EchoStar's Transaction Revenue Share shall be as set forth in Table A below, and
shall increase if either or both of Milestone I or Milestone 2 are reached. The
percentage of Transaction Revenue Share due to EchoStar shall always be the
percentage applicable to the higher of the milestones reached (i.e. Milestone I
or Milestone 2). For example, if EchoStar has 2.5 million Wink-enabled EchoStar
Subscribers and generates $4.50 in Annualized Transaction Revenue Share, the
Transaction Revenue Share percentage for National Responses shall be [*], and
the Transaction Revenue Share percentage for other Wink Revenue Responses shall
be [*].:
TABLE A
-------------------------------------------------------------------------------------------------------------------
Milestone 1: Milestone 2: Wink Revenue Wink Revenue Responses
Number of Wink- Annualized Transaction Responses derived from derived from Interactive
enabled EchoStar Revenue Share per third party video Wink Programs, Other
Subscribers (as Wink-enabled EchoStar programming or Interactive Programs and
determined by Subscriber in preceding advertising, including Interactive ATVEF
EchoStar, and subject calendar quarter those provided by Programs inserted by
to audit by Wink) Programmers EchoStar at EchoStar's
("National Responses") facilities, excluding all
National Responses
-------------------------------------------------------------------------------------------------------------------
Less than 2,000,000 Less than $3.00 [*] [*]
-------------------------------------------------------------------------------------------------------------------
2,000,000 - 2,999,999 $3.00 - $3.99 [*] [*]
-------------------------------------------------------------------------------------------------------------------
3,000,000 - 3,999,999 $4.00 - $4.99 [*] [*]
-------------------------------------------------------------------------------------------------------------------
4,000,000 - 4,999,999 $5.00 - $5.99 [*] [*]
-------------------------------------------------------------------------------------------------------------------
5,000,000 - 5,999,999 $6.00 - $6.99 [*] [*]
-------------------------------------------------------------------------------------------------------------------
6,000,000 or more $7.00 or more [*] [*]
-------------------------------------------------------------------------------------------------------------------
In addition to the Transaction Revenue Shares defined above, once the 2,000,000
Wink-enabled EchoStar Subscriber ▇▇▇▇ has been reached, the Transaction Revenue
Share for any amount collected by Wink in excess of $2.50 per individual Wink
Transaction shall be as follows:
Amounts between Transaction Revenue Share
--------------- -------------------------
$2.50 and $3.50 [*]
$3.50 and $4.50 [*]
$4.50 and $5.50 [*]
above $5.50 [*]
In addition, if EchoStar publicly announces on or before June 30, 2000 its hope
to reach 4,000,000 Wink-enabled EchoStar Subscribers, and reaches 4,000,000
Wink-enabled EchoStar Subscribers by June 30, 2003, the Transaction Revenue
Share in Table A above shall increase by an additional [*] points.
The Transaction Revenue Share for the applicable number of Wink-enabled EchoStar
Subscribers shall apply for all Gross Transaction Routing Fees captured by Wink
in the month in which that number of Wink-enabled EchoStar Subscribers is
reached and for all months thereafter during the Term, until the next threshold
for Wink-Enabled EchoStar Subscribers is met, at which point that next
Transaction Revenue Share shall apply for all Gross Transaction Routing Fees
thereafter, and so forth.
[*] 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.
28
EXHIBIT B: WINK SOFTWARE
STANDARD ITEMS:
- WINK ENGINE IMPLEMENTED AS AN EN2.1 0-CODE APPLICATION. THE WINK ENGINE IS
AN ECHOSTAR RECEIVER INDEPENDENT INTERPRETER CAPABLE OF RECEIVING, DECODING
AND DISPLAYING INTERACTIVE WINK PROGRAMS, AND OF GENERATING WINK RESPONSES
TO SUCH INTERACTIVE WINK PROGRAMS.
- WINK RESPONSE MODULE IMPLEMENTED AS AN EN2.1 O-CODE APPLICATION. THE WINK
RESPONSE MODULE IS AN ECHOSTAR RECEIVER INDEPENDENT SOFTWARE APPLICATION
CAPABLE OF GENERATING WINK RESPONSES TO OPEN TV INTERACTIVE PROGRAMS.
- WINK BROADCAST SERVER VERSION 2x THE WINK BROADCAST SERVER IS A SERVER
CAPABLE OF SCHEDULING AND BROADCASTING INTERACTIVE WINK PROGRAMS OVER
ANALOG OR DIGITAL TRANSMISSION NETWORKS.
- WINK SERVER MODULE ENGINE VERSION 1.x
- WINK RESPONSE SERVER (MODEM RETURN PATH) VERSION 1.x
- WINK BILLING SYSTEM INTERFACE VERSION 1.x
- WINK A/D GATEWAY FOR CAPTURING AND REINSERTION OF INTERACTIVE WINK PROGRAMS
PROVIDED IN ANALOG VBI AND REINSERTED IN ECHOSTAR DATA BROADCAST STREAMS
- WINK STUDIO VERSION 2.x
- WINK SERVER STUDIO 1.x
OPTIONAL ITEMS:
- WINK AD INSERTION SERVER MODULE, DIFFERENT INTERFACES AVAILABLE
Proprietary and Confidential 29
EXHIBIT C.: WINK ENGINE HARDWARE REQUIREMENTS
--------------------------------------------------------------------------------
REQUIREMENTS
--------------------------------------------------------------------------------
PROCESSOR 28 CISC MIPS available to Wink while the receiver
is decoding MPEG video and receiving guide data.
--------------------------------------------------------------------------------
PROGRAM FLASH ROM 512K x 8 - field upgradeable (not including
TCP/IP/PPP protocol stack)
--------------------------------------------------------------------------------
RAM 1M x 8 (see attached memory budget)
--------------------------------------------------------------------------------
NON-VOLATILE STORAGE 4Kx8
--------------------------------------------------------------------------------
ON SCREEN DISPLAY 704 x 480 resolution
(GRAPHICS) both 16 & 256 color modes full screen during video
can be restricted to, 16 color full
screen, 256 color 1/2 screen
Hardware Support for Translucency or
'Alpha-Blending'
Hardware Flicker Reduction (recommended)
Hardware Support for BitBlt (recommended)
--------------------------------------------------------------------------------
BROADCAST TRANSPORT Ability to read 2 Wink streams concurrently with
normal programming: one Wink programming stream and
one Wink announcement stream.
Up to 150 K bits/second for each Wink enhanced
video channel
Up to 450 K bits/second for each Wink virtual
channel (may have audio) 4K bits/second
'Announcement Stream' - always available
(MPG IRD only)
--------------------------------------------------------------------------------
MPEG DECODER Capable of continuous display of static I-Frame
under software control
--------------------------------------------------------------------------------
MODEM 2400 baud or higher
--------------------------------------------------------------------------------
TELEPHONE INTERFACE US and Internationally approved with dial tone and
off-hook detection.
--------------------------------------------------------------------------------
DEVICE CONTROL System Resource Manager:
INTERFACE - Key input routing
- OSD control
- Memory management
- Modem control and TCP/IP/PPP (with
CHAP/PAP/LCP/IPCP)
- Channel tuning
- Audio mute control
--------------------------------------------------------------------------------
POWER SUPPLY 24 hr Power Supply for Engine and Tuner
--------------------------------------------------------------------------------
Proprietary and Confidential 30
EXHIBIT D.: PRICING AND PAYMENT TERMS
All products and services are billed Net/45.
(A) WINK SOFTWARE PROVIDED FREE OF CHARGE DURING THE TERM:
ALL SOFTWARE DEVELOPED BY WINK AND NECESSARY TO DELIVER INTERACTIVE WINK
PROGRAMS AND COLLECT
WINK RESPONSES FROM WINK-ENABLED ECHOSTAR SUBSCRIBERS, INCLUDING unlimited:
- Site License for the Wink Broadcast Servers 2.x
- Site License for the Wink Response Server 1.x
- License for the Wink Billing System Interface 1.x
- Site License for Wink Server Module Engine 1.x
- Site License for A/D Gateway
- Site license for Wink Studio 2.x
- Site license for Wink Server Studio 1.x
- Wink Engine and Wink Response Module for EchoStar Receivers
EchoStar may deploy as many copies of each Wink Software program as necessary to
ensure reliable transmission from Facilities for the purpose of serving
Wink-enabled EchoStar Subscribers in the Territory.
(B) WINK SERVICES PROVIDED FREE OF CHARGE:
- Site survey and installation of all Wink Software and other products
provided by Wink
- A two-day training session for operating and maintaining the Wink Broadcast
Server for up to two employees every six months during the term
- A two-day training session for developing Interactive Wink Programs using
Wink Studio and Wink Server Studio for up to eight employees every six
months during the term
- All technical training shall be provided at Wink's facilities at Wink's
regularly scheduled classes. However, the first training sessions for each
Wink Software product shall be provided at EchoStar's facilities at a
mutually agreeable time
- Up to five one day Customer Service and Sales training sessions for
EchoStar staff at EchoStar's facilities
(C) THIRD PARTY PRODUCTS PROVIDED FREE OF CHARGE:
- All necessary server hardware to support reception and transmission of
national Interactive Wink Programs and the Wink Virtual Channels (as
defined in section 3.3)
- Norpak VBI readers for each incoming analog video strewn carrying
Interactive Wink Programs
- Cables, hubs, etc. necessary to connect all Wink related equipment
All telecom products and services to support collecting of Wink Responses from
Wink-enabled EchoStar Receivers, and to interface to EchoStar's billing system
(D) Optional Wink Software and services:
- License for Wink Ad Insertion Server Module (delivery dependent on
vendor/interface)
Existing interfaces Free
New interfaces NRE based on time and materials, not to
exceed $25,000
- Custom interface work $1,000/day
- Phone training and consulting beyond bundled services $125/hr
- Application development $2,500 min., $125/hr
Proprietary and Confidential 31
EXHIBIT E.: FINAL STATEMENT OF WORK
To be prepared by the parties per section 3.1
Proprietary and Confidential 32
EXHIBIT F.: FINAL SCHEDULE
To be prepared by the parties per section 3.1
Proprietary and Confidential 33
EXHIBIT G.: SPECIFICATIONS FOR INTERFACE To ECHOSTAR DATA TRANSMISSION EQUIPMENT
To be provided by Echostar. Need spec for interface between Wink Broadcast
Server and EchoStar data transmission equipment.
Proprietary and Confidential 34
EXHIBIT H.: WARRANT
Common Stock Purchase Warrant for 1,300,000 shares of Wink Common Stock, expires
May 26, 2005
Proprietary and Confidential 35
EXHIBIT I.: EQUIPMENT PROVIDED BY WINK
- Sun Sparc Servers (primary + back-up) as necessary to operate the Wink
Broadcast Server and Server Module Engine for the Interactive Wink Programs
supplied by Programmers and the Wink Virtual Channels.
- Norpak VBI readers for all incoming national video signals which contain
Interactive Wink Programs and which EchoStar has agreed to pass through to
Wink-enabled EchoStar Receivers (including 2 spare units that can be
"swapped" for defective ones by EchoStar staff)
- All modems, servers and other equipment associated with the Wink Response
Network
Equipment not provided by Wink:
- MPEG encoders, multiplexers, data networking equipment, etc. for
transmission of video, audio and data to EchoStar Subscribers
- Windows-based PCs to operate Wink Studio, Wink Server Studio, graphical
user interfaces to Wink Broadcast Server, Wink Response Network, etc.
- Equipment for origination or retransmission of Interactive ATVEF Programs
or Other Interactive Programs
Proprietary and Confidential 36
EXHIBIT J.: WINK RESPONSE ROUTING PRICING
PURCHASE RESPONSES.
Purchase Responses are billed based on the gross price of the item or service
being sold, excluding taxes, freight and other charges (the "Item Price").
Wink's Response Network charges 12% of the Item Price for each Purchase
Response, with a minimum fee of $2.00 per transaction and a maximum fee of $6.00
per transaction. Each unique application (UIC) is charged a minimum of $25 per
month.
RFI Responses
RFI Responses are billed based on monthly volume for the billed entity per the
table below. Each unique application (UIC) is charged a minimum of $25 per
month.
NUMBER OF RFI RESPONSES/MO. Price/RFI Response
--------------------------- ------------------
1-5,000 $1.60/ea
5,001 - 25,000 $1.44/ea
25,001 - 100,000 $1.28/ea
100,001 - 250,000 $1.12/ea
250,001 - 500,000 $0.96/ea
500,001+ $0.80/ea
POLL RESPONSES
Poll Responses are billed a one-time standard report set-up fee of $ 100. There
is no charge per Poll Response or per standard report for parties with a valid
Wink Broadcast Server license. For all other customers, each standard poll
report costs $ 100. Wink controls the sample rate for all polls, and may at its
sole discretion choose to reduce the sample rate and provide a statistical
projection of all poll responses in the applicable Wink universe.
Notes
1. Per transaction pricing and minimum monthly charges for Purchase Responses,
RFI Responses and Poll Responses include UIC registration, standard weekly
summary reports (as defined by Wink, currently include number of Wink
Responses/day/UIC/city). and one certification test (excl. Wink server
modules).
2. Additional certification tests for the same UIC will be billed at $50/hour,
one hour minimum.
3. Electronic interface set-up and maintenance fee for order exchange with the
Wink Response Network - $100/interface/month
4. All reports can be delivered by fax, e-mail, or electronic FTP or mailbox.
5. Wink may change pricing with 90 days notice
6. Direct 3rd party costs, such as tape dubbing fees, and shipping and
handling will be billed separately at cost. Tape dubbing is currently
billed at $100 per tape.
7. Wink Response Network custom reports - quoted on request.
DEFINITIONS
A "Purchase Response" is any Wink Revenue Response which constitutes an
agreement by a Wink-enabled Viewer to purchase a product or service, regardless
of the method of payment.
An "RFI Response" is any Wink Revenue Response other than Purchase Responses.
A "Poll Response" shall be defined as a Wink Response generated by a Wink
"vote/poll" script or processing using Wink's "vote/poll" reporting.
A "UIC" is a unique code by Wink's Response Network assigned to each Interactive
Wink Program prior to airing. The same UIC can air multiple times on different
networks.
Proprietary and Confidential 37
EXHIBIT K.: ECHOSTAR TRADEMARK AND STYLE GUIDELINES
EchoStar Trademark and Style Guide or other similar documentation. To be
provided by Echostar.
Proprietary and Confidential 38
EXHIBIT L.: DEFINITION OF WINK'S NET TRANSACTION ROUTING FEES
Wink's Net Transaction Routing Fees shall be defined as Gross Transaction
Routing Fees, less:
(1) Directly Attributable Costs, including but not limited to:
a) revenue share payments made by Wink to third parties from Gross Transaction
Routing Fees
b) marketing costs incurred by Wink in marketing to Wink-enabled EchoStar
Subscribers
c) customer service and technical support costs incurred in supporting
Wink-enabled EchoStar Subscribers and EchoStar
d) telecommunications costs incurred by Wink in collecting Wink Responses from
Wink-enabled EchoStar Subscribers
e) depreciation and amortization of assets directly related to servicing
EchoStar or EchoStar Subscribers
f) other costs incurred by Wink that the parties may mutually agree to include
in Directly Attributable Costs
(2) Allocated Costs, which shall include all expenses recognized by Wink in
it's public financial statements filed with the Securities and Exchange
Commission, less
a) Interest income/expense,
b) non-operating expenses,
c) Directly Attributable Costs (as defined in paragraph I above),
d) the equivalent of Directly Attributable Costs for other video, audio and/or
dataservice operators (including revenue share and revenue guarantee
payments made to such operators, and all depreciation and amortization from
general purpose assets, such as office buildings, etc.)
The Allocated Costs shall be multiplied by the number of Wink-enabled EchoStar
subscribers at the end of the reporting period, divided by the total number of
Wink-enabled households in the United States at the end of the reporting period
for which Wink provides response routing services.
Proprietary and Confidential 39
EXHIBIT M.: SHAREHOLDER RIGHTS AMENDMENT
Wink Communications Consent and Amendment of Investor Rights Agreement and
Co-sale Agreement
Proprietary and Confidential 40