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EXHIBIT 10.14
June 3, 1997
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Vice President
NBC
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Gentlemen:
This letter sets forth the agreement between Wink Communications, Inc.
("Wink") and NBC Multimedia, Inc. dba NBC Interactive Media ("NBC"), among other
things, provision of certain programming by NBC and its affiliates containing
Wink Enhancements (as defined below). This agreement is referred to as the
"Letter Agreement" in the Warrant Purchase Agreement between Wink and General
Electric Capital Corporation.
Whereas, Wink is engaged in the business of producing, licensing and
distributing software and technology for placement in consumer electronic
devices and in network, cable, satellite and other facilities;
Whereas, such software and technology will permit television and cable
viewers to interact with television programming enhanced with content which
utilizes such software and technology in order to obtain additional information
and conduct transactions through a television; and
Whereas, Wink intends to aggressively market such software and
technology to cable set top box and television manufacturers, program
broadcasters and cable system operators and desires to expand the amount of
available television programming that contains such Wink enhancements in order
to aid it in initial deployment of its product and service offerings.
Now therefore, the parties hereto hereby agree as follows:
1. Processing Fee. (a) Wink shall pay NBC [ * ] of the Net Transaction
Processing Response Revenues (as defined in paragraph I (c)) (the
"Processing Fee") through the period ending December 31, 2002. Wink and
NBC shall negotiate in good faith regarding the appropriate Processing
Fee, if any, to be used for any years following 2002 beginning no later
than 90 days prior to the end of 2002. Payments of the Processing Fee
shall be made by Wink to NBC by no later than thirty (30) days following
the end of each calendar quarter and shall be accompanied by a report
providing all information involved in the calculation of such Processing
Fee as well as any other information reasonably requested by NBC. NBC or
its
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* Confidential treatment has been requested with respect to
certain portions of this exhibit pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed with the Commission.
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independent accounting firm shall have the right to audit and inspect
the books and records of Wink upon reasonable notice and during regular
business hours to confirm payments are properly made, provided that such
audit and inspection by NBC personnel will be limited to aggregated
financial information but will not include any information which is
directly applicable to any television network or broadcaster or cable
programming provider other then NBC and its affiliates.
(b) Wink agrees that the Processing Fee arrangement with NBC is the
most favorable fee arrangement granted by Wink to any cable programming
provider or television network or broadcaster for transmissions
originated and received in the United States whether such network or
broadcaster distributes it signals via terrestrial antennas, cable or
satellite. Wink further agrees that if it enters into a Processing Fee
arrangement more favorable to another such similarly situated company in
the future, Wink shall notify NBC of the terms of such arrangement and
then, if requested by NBC, the Processing Fee arrangement with NBC shall
be adjusted to match such more favorable arrangement from and after that
date, provided that NBC agrees to assume all comparable terms and
conditions of such arrangement,
(c) The term "Net Transaction Processing Response Revenues" shall
mean the gross amounts received by or on behalf of Wink in connection
with transactions attributable to Wink- enhanced programming for which
the broadcast signal originates with NBC and NBC TV (as defined in 5
below) in the United States and is received in the United States or is
distributed by its cable programming affiliates in the United States and
received in the United States less only discounts, bad debts, sales
taxes, actual returns and any direct and identifiable reasonable
expenses and out-of-pocket costs attributable to Wink's operation of the
Wink Response Processing Data Center which processes such transactions,
which expenses and costs are applicable to such transactions.
2. License to Wink Material. For as long as NBC and its affiliates elect to
continue its programming commitment as described in paragraph 4, Wink
will provide [ * ] license for one Wink Broadcast Server, one Wink
WebCore server module, and one Wink Ad Insertion Server Module. In
addition during such period, Wink will provide free maintenance releases
as necessary. Wink will also provide [ * ] copies of Wink Studio, and
will provide copies of all Studio 1.0 templates created by Wink [ * ].
For as long as it broadcasts or distributes Wink Programs as described
in paragraph 4, NBC will be responsible for providing all necessary
hardware which NBC requires to create Wink Programs for the purposes
hereof, which may include, but not be limited to, a Sun server, data
insertion equipment, network interfaces, and PCs for Wink Studio.
3. Resources. For as long as NBC and its affiliates broadcast or distribute
Wink Programs as described in Section 4, Wink will commit reasonable
production and engineering resources to support NBC specific content
development, including support for authoring, scripting, and server
module creation. During the same period Wink will also dedicate
engineering resources reasonably necessary to create interfaces to
important NBC equipment, including
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serial digital playout systems, live data feeds, ad scheduling and
billing systems. For as long as it broadcasts or distributes Wink
Programs as described in paragraph 4, NBC agrees to make the appropriate
technical personnel, including broadcast operations staff, reasonably
available for consultation during this process, and NBC and Wink intend
to make reasonable efforts to make appropriate management personnel
available (such personnel to be determined by each party in its sole
discretion) on a regular basis to discuss Wink-related creative,
technical and commercial projects.
4. Wink Programming. (a) NBC will make reasonable efforts to cause the
broadcast or distribution of one or more Wink Programs as soon as
possible after Wink has provided NBC with all software, materials,
training and support described herein which are necessary to begin
broadcasting and distribution of Wink Programs or otherwise reasonably
requested by NBC. For purposes hereof, (i) any television program that
is broadcast by NBC and NBC TV in their sole discretion or (ii) any
cable program as mutually agreed in each case by Wink and NBC and which
is distributed by NBC and NBC cable programming affiliates and contains
some form of enhancement which utilizes any of the Wink software and
technology provided hereunder to NBC or made available to cable set top
box or television manufacturers (a "Wink Enhancement") and appears on
the television screen in some form during the time that such program is
broadcast or distributed (within the program itself but not including
within the advertising accompanying such program) and relates in some
manner to the content of the program shall be deemed a "Wink Program".
NBC shall provide Wink with written notice when it and its affiliates
have broadcast or distributed the first Wink Program for purposes
hereof.
(b) NBC agrees to make reasonable efforts to cause the broadcast
and/or distribution of an average of [ * ] of Wink Programs, which may
include some entertainment and sports programming, (any week in which at
least [ * ] of Wink Programs are broadcast by NBC and NBC TV or
distributed by NBC and NBC cable programming affiliates to the extent
agreed upon as provided in paragraph 4(a)(ii) is referred to as a "Wink
Programming Week") for a period of one year from the date that the first
Wink Program is broadcast or distributed; provided, however, that NBC
and its affiliates shall have sole discretion in choosing (i) which
entertainment and sports programming will be enhanced to create Wink
Programs, (ii) the mix of particular Wink Programs in any week and (iii)
the actual content and placement of the Wink Enhancements within the
Wink Programs. NBC shall provide Wink with written notice after it has
broadcast or distributed its twenty-sixth (26th) Wink Programming Week
pursuant hereto.
(c) After NBC and its affiliates have broadcast or distributed Wink
Programs for a period of one year, NBC shall make a decision in its sole
discretion regarding whether it intends to continue to broadcast or
distribute Wink Programs. Wink agrees that NBC, NBC TV, NBC cable
affiliates and NBC licensors shall retain all rights, including the
right to assign or transfer such rights, in the Wink Programs and in any
Wink Enhancements that they create or obtain, and shall retain all
revenues derived by NBC, NBC TV, NBC cable affiliates or its
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NBC licensors from the Wink Programs, including the advertising
appearing within the Wink Programs, and the Wink Enhancements, Finally,
NBC reserves the right to alter or discontinue any Wink Enhancements or
Wink Programs in its sole discretion.
5. Distribution. In any market where Wink will be deploying cable set top
boxes or televisions containing Wink engines, NBC agrees that Wink
Enhancements shall be made available as part of the standard signal for
any of the Wink Programs chosen by NBC pursuant to Section 4 which are
broadcast by the NBC Television Network ("NBC TV") and provided by NBC
TV to the NBC TV's affiliates or which are distributed by NBC TV or NBC
cable affiliates to cable operators which carry NBC TV programming.
NBC's inclusion of Wink Enhancements in the standard signal broadcast or
distributed by NBC TV or the NBC cable affiliates in connection with any
program shall meet the requirements for the broadcast or distribution of
a Wink Program for purposes of paragraph 4. Notwithstanding the
foregoing, Wink acknowledges that the NBC TV affiliates or cable
operators may block out, fail to transmit or be unable to properly
receive that portion of the NBC TV or NBC cable affiliates' signals
which contain a Wink Program. If any affiliates or cable operators
choose to block out, fail to transmit or are unable to properly receive
that portion of the NBC TV or NBC cable affiliates' signals which
contains a Wink Program and NBC is made aware of it by the affiliates or
the cable operators, NBC will use reasonable efforts to notify Wink of
such fact within a reasonable time following such discovery, and such
action by an affiliate or cable operator shall not be deemed to be a
breach by NBC of any of the terms hereof. The obligations contained in
this paragraph shall run for as long as NBC broadcasts or distributes
Wink Programs as described in paragraph 4.
6. Training. NBC will commit a minimum of two full-time staff members to a
two-day training program on Wink Studio, and a minimum of one staff
member to a two-day training program on server administration and Wink's
Server Module API. The training shall be held in Alameda or in New York,
with the final choice of location subject to the mutual agreement of the
parties,
7. Press-Releases. NBC shall have approval rights regarding any references
in any press release that concern NBC or its obligations or interests in
the contemplated transactions. NBC and Wink agree to issue a joint press
release containing a mutually acceptable description of the content
arrangement described herein within thirty (30) days of such closing,
provided that NBC and Wink agree to make reasonable efforts to agree
upon the content of the joint press release within fourteen (14) days of
such closing, NBC and Wink intend to create some form of mutually
agreeable public relations material for distribution in the following
two stages: (1) an early stage aimed at the broadcast and cable industry
and (2) a second stage timed with the launch of Wink Programming Weeks
and aimed at mass market consumer media. In addition, unless the parties
agree to the contrary, within thirty (30) days following NBC's first
Wink Programming Week, NBC and Wink will hold a mutually agreeable joint
press conference to kick off the consumer press activity.
Notwithstanding the foregoing, it is understood and agreed that Wink may
not use or deploy, in any manner or for any purpose,
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any NBC (or its affiliates) logos, tradenames, trademarks, or other
intellectual property without NBC's express prior consent.
8. Sales Calls. NBC will consider pursuing opportunities in support of
Wink's business development efforts in the television set manufacturing
industry as may be mutually agreed from time to time.
9. Confidentiality. (a) NBC and Wink each acknowledge that it may receive
"Confidential Information" of the other party. "Confidential
Information" means any information, technical data, or know-how,
including, but not limited to, that which relates to research, product
plans, products, services, customers, markets, software, software source
code, developments, inventions, processes, designs, drawings,
engineering, hardware configuration information, marketing or finances,
or other business or technical information which the disclosing party
treats confidentially or which the recipient has reason to believe is so
treated, this Letter Agreement and the terms of this Letter Agreement.
Confidential Information does not include information that: (i) is in
the possession of the receiving party at the time of disclosure; (ii)
prior or after the time of disclosure, becomes public knowledge or
literature, not as a result of any inaction or action of the receiving
party, (iii) is approved by the disclosing party, in writing, for
release in violation hereof, (iv) becomes available to the receiving
party from a third party source which receiving party reasonably
believes is not bound by any obligation of confidentiality with respect
to such information; (v) is independently developed by receiving ▇▇▇▇▇
without reference to the Confidential Information and/or (vi) is
required to be disclosed by law, regulation (including the rules and
regulations of the Securities and Exchange Commission or of any
securities exchange) or legal process, including any deposition,
interrogatory, request for documents, subpoena, civil investigative
demand, SEC filing or similar process or pursuant to advice of counsel
to disclose any of the Confidential Information. in case of such
required disclosure the disclosing party will use reasonable efforts to
seek a protective order or confidential treatment request for the
Confidential Information.
(b) NBC and Wink each agree not to use the Confidential Information
disclosed to it by the other party for any purpose except to carry out
its obligations or exercise its rights under this Letter Agreement,
other agreements relating to the transactions referred to herein, the
Wink Warrants (each entered into by Wink and GE Capital Corporation)
(the "Warrants"), or the Wink Investors Rights Agreement or Co-Sale
Agreement, each among Wink and each other party thereto as well as the
letter agreement between the parties related to Visitation Rights and
the Confidentiality and Nondisclosure Agreement related thereto. No
party will disclose the Confidential Information of the other to any
third party, provided that a party may disclose confidential information
to is employees, agents and affiliates who are required to have the
information in order to carry out such party's obligations hereunder.
Each party agrees that it will take all reasonable measures to protect
the secrecy of and avoid disclosure or use of Confidential Information
of the other in order to prevent it from falling into the public domain
or the possession of persons other than those persons authorized
hereunder to
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have any such information, which measures shall include the degree of
care that the receiving party utilizes to protect its own Confidential
Information of a similar nature. Each party's obligation with respect to
Confidential Information shall terminate 7 years following the date of
disclosure thereof.
10. LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY
LOSS OF PROSPECTIVE PROFITS OR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES BY REASON OF ANY FAILURE BY SUCH PARTY TO PERFORM
ITS OBLIGATIONS PURSUANT TO THIS LETTER AGREEMENT.
11. TERM AND TERMINATION (a) Except as otherwise provided herein, the period
during which this Letter Agreement will be in effect (the "Term") begins
on the date of the execution of this Letter Agreement and shall end on
December 31, 2002. By no later than ninety (90) days prior to December
31, 2002, the parties agree to enter into the discussions referred to in
paragraph I (a) and as part of such discussions shall negotiate
regarding the possibility of an extension of this agreement or of a new
agreement.
(b) Any party will have the right to cancel this Letter Agreement
(subject to any accrued rights or obligations) at any time by giving
written notice that the other party has breached a material term or
condition of this Letter Agreement provided the breaching party fails to
cure such breach within thirty (30) days from the date of the written
notice.
(c) NBC shall have the right to cancel this Letter Agreement
immediately, in its sole discretion, if any of the following occur: (i)
the commencing by Wink or Wink's intention to commence a voluntary case
under any applicable bankruptcy laws (as now or hereafter may be in
effect); (ii) the adjudication that Wink is bankrupt or insolvent; or
(iii) the filing by Wink or the intent to file by Wink of a petition
seeking to take advantage of any other law providing for the relief of
debtors.
12. Governing Law. This Letter Agreement shall be governed and construed in
accordance with the laws of the State of New York (excluding the laws
regarding conflict of laws questions). The parties hereby submit to the
jurisdiction of the federal and state courts located in the State of New
York, and any action or suit under this Letter Agreement shall only be
brought by the parties in any federal or state court with appropriate
jurisdiction over the subject matter established or settled in the State
of New York. The parties shall not raise in connection therewith, and
hereby waive, trial by jury and/or any defenses based upon the venue,
the inconvenience of the forum, the lack of personal jurisdiction, the
sufficiency of service of process or the like in any action or suit
brought pursuant to this Letter Agreement.
13. Relationship of the Parties: It is understood that this Letter Agreement
does not create any partnership, agency, joint venture or employment
relationship between the parties, that the parties are acting as
independent contractors with respect to each other, and that none of the
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employees of any party shall be deemed to be employees of the other
party for any purpose. Each party shall pay and be solely responsible
for all contributions, taxes and premiums payable under any and all
applicable, laws, rules or regulations with respect to employees.
14. Severability. If any provision of this Letter Agreement shall be found
by a court of competent jurisdiction to be invalid or unenforceable,
such finding shall not affect the validity or enforceability of this
Letter Agreement as a whole or of any other part of this Letter
Agreement. Any such provision shall be enforced to the maximum extent
permissible. In the event such provision is considered an essential
element of this Letter Agreement, the parties agree to promptly
negotiate a replacement thereof
15. Notices. All notices and other official communications under this Letter
Agreement shall be in writing and addressed as follows for each of the
parties:
To WINK To NBC:
Wink Communications NBC Multimedia, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇ Fax, (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ With a copy to:
With a copy to:
WILSON, SONSINI, ▇▇▇▇▇▇▇▇ National Broadcasting
& ▇▇▇▇▇▇ Company, Inc.
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: Legal Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be effective upon receipt of the relevant party.
16. Survival. Sections 1(a) (the last sentence only), 9, 10, 12, 13, 14, 15,
16, and 20 will survive the expiration or termination of this Letter
Agreement.
17. Assignment. Except in the case of a merger, sale or transfer of all or a
substantial portion of the material assets of the business to which this
Letter Agreement relates, or sale or transfer of a majority of the
outstanding voting shares of stock in the corporation to a single
entity, and subject to the next sentence hereof, Wink shall not assign
or subcontract this Letter Agreement or any right or obligation
hereunder without the prior written consent of NBC. In the case of such
a merger, sale or transfer, Wink will NBC at least 30 days before the
closing
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of the transaction (the "Notice of Transaction"). NBC shall have the
right, in its sole discretion and without liability to any person to
terminate this Letter Agreement effective as of the closing date of such
transaction and thereby prevent the assignment of this Letter Agreement
by giving Wink written notice of termination, within 5 business days
from receipt by NBC of the Notice of Transaction. If the transaction
does not close, this Letter Agreement will remain in effect. Exercise of
this right of termination shall not be a breach of this Letter
Agreement.
18. Waiver/Modification: No modification or amendment to, or waiver of, this
Letter Agreement will be binding and valid unless it is in writing and
executed by the party against whom enforcement is sought. No waiver of a
breach of any provision of this Letter Agreement or of any default
hereunder shall be deemed a waiver of any other breach or default of
this Letter Agreement.
19. Force Majeure: Neither party will be liable to the other party for
failure to perform its obligations hereunder because such performance is
prevented by a "Force Majeure Event." A "Force Majeure Event" shall mean
an act of God, war (whether declared or not), riot, embargo, act of
governmental or military authority, strike, labor dispute, fire or other
similar cause beyond the party's control. Notwithstanding the foregoing,
a party failing to perform because of a Force Majeure Event shall
immediately use reasonable efforts to mitigate the impact of any Force
Majeure Event and commence performance. In addition, if NBC fails to
present any Wink Program over the NBC facilities because of the
unavailability of technical facilities, defect or breakdown of equipment
or transmission facilities, labor dispute, government action, the
unforeseen absence of a principal performer, or any cause beyond the
control of NBC and its affiliates, whether of a similar or dissimilar
nature, such failure to broadcast or distribute shall not constitute a
breach of this Agreement.
20. Reservation of Rights. This Agreement does not grant any right or
license, under any intellectual property rights of NBC, Wink or their
affiliates and licensors, except as expressly provided herein, and no
other right or license is to be implied by or inferred from any
provision of this Letter Agreement or the conduct of the parties
hereunder. In particular, Wink acknowledges that this Letter Agreement
gives it no rights to Wink Programs or Wink Enhancements or any portions
thereof. Notwithstanding the foregoing, Wink shall have the right to
request authorization to display and publicly perform segments from
previously broadcasted Wink Programs in connection with Wink's marketing
and promotional activities, subject to NBC's prior approval of the
particular segments and the manner of use of such segments, which
approval shall be in NBC's sole discretion, provided that NBC will give
reasonable consideration to each such reasonable Wink request.
21. Entire Agreement. The provisions of this Letter Agreement set forth the
entire agreement and understanding between the parties as to the subject
matter hereof and supersedes all prior agreements, oral or written, and
all other communications between the parties relating to the subject
matter hereof other than the Warrant Purchase Agreements, the Warrants
and/or the
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Wink Investors Rights Agreement or Co-Sale Agreement, each among Wink
and each other party thereto as well as the letter agreement between the
parties related to Visitation Rights and the Confidentiality and
Nondisclosure Agreement related thereto.
22. Counterparts. This Letter Agreement may be executed in counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute one agreement, and shall become effective
when one or more such counterparts have been signed by each of the
parties and delivered to the other parties.
If you are in agreement with the above terms and conditions, please
indicate your acceptance by signing in the space provided below.
Very truly yours,
WINK COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President & CEO
ACCEPTED AND AGREED:
NBC MULTIMEDIA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President & CEO
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