Third Amendment to Master Affiliation Agreement between Wink Communications, Inc. and DIRECTV, Inc.

Summary

This amendment updates the existing Master Affiliation Agreement between Wink Communications, Inc. and DIRECTV, Inc. It revises certain exhibits, modifies the calculation and payment of revenue shares from interactive transactions generated by DIRECTV subscribers, and outlines new procedures for handling non-standard transaction agreements. The amendment also introduces a collaborative effort to sell research data about subscriber responses to interactive programs, with implementation details to be agreed upon separately. Wink remains responsible for related taxes, and confidential information has been omitted from the public version.

EX-10.49 7 c61163ex10-49.txt 3RD AMENDMENT TO THE MASTER AFFILIATION AGREEMENT 1 NOTE: INFORMATION IN THIS DOCUMENT MARKED WITH AN "[*]" HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. EXHIBIT 10.49 THIRD AMENDMENT TO MASTER AFFILIATION AGREEMENT This amendment (the "Third Amendment") to the Master Affiliation Agreement dated December 22, 1998, as amended in the First Amendment dated March 8, 1999 and the Second Amendment dated June 28, 1999 (as so amended, the "Master Agreement"), by and between Wink Communications, Inc., a Delaware corporation ("Wink"), whose address is 1001 Marina Village Parkway, Alameda, CA 94501 and DIRECTV, Inc., a California Corporation ("DIRECTV"), whose address is 2230 East Imperial Highway, El Segundo, CA 90245, is dated July 24, 2000. The parties agree to amend the Master Agreement as follows: A. Exhibit A shall be replaced in its entirety by the attached Exhibit A. Exhibit K shall be replaced in its entirety by the attached Exhibit K. B. Section 4.3 shall be replaced in its entirety by the following new section 4.3: 4.3 During the Term of this Master Agreement, Wink shall pay to DIRECTV, on a monthly basis, a share of the fees on each Wink Revenue Transaction that is generated by a Wink-enabled DIRECTV System Subscriber and routed by Wink to the appropriate entity. Wink's gross revenues (net of returns, cancellations, bad debt allowance, etc.) from Wink Revenue Transactions generated by Wink DIRECTV System Subscribers shall be referred to as "Gross Transaction Routing Fees." If Wink enters into Wink Revenue Transaction agreements with third parties under which Wink agrees to waive per transaction fees for Wink Revenue Transactions derived from such parties' Interactive Wink Program(s) in exchange for lump sum payments or other similar consideration, the parties agree that Wink shall calculate the Gross Transaction Routing Fees for such Wink Revenue Transactions as if Wink had received payment based on Wink's then most prevalent pricing for Wink Revenue Transactions (as determined by a weighted average of transaction fees, based on the number of transactions at each rate). If Wink enters into agreements with third parties under which Wink offers a different pricing structure for Wink Revenue Transactions than Wink's then current standard pricing, but retains the concept of paying per Wink Transaction (a "Non-standard Transaction Routing Agreement" or "NTRA"), Wink agrees (a) to notify DIRECTV of such agreement and propose a method for calculating Transaction Revenue Share for each such agreement, (b) negotiate such proposal in good faith with DIRECTV and (c) if no compromise can be agreed upon between the parties, pay DIRECTV Transaction Revenue Share each calendar quarter as follows: Purchase Responses: On a quarterly basis, divide the total proceeds for that quarter from all Purchase Responses generated from DIRECTV Subscribers under the NTRA by the total number of Purchase Responses generated from DIRECTV Subscribers under the NTRA during that quarter. The result is an average amount of Gross Transaction Routing Fees per Purchase Response under the NTRA for the quarter. Multiply the applicable Transaction Revenue Share (as defined per Exhibit A, including the provision regarding the applicable Transaction Revenue Share for amounts collected in excess of $[*], if the average amount of Gross Transaction Routing Fees is in excess of $[*]) by the average amount of Gross Transaction Routing Fees per Purchase Response, and then multiply the resulting product by the total number of Purchase Responses generated from [*] 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. Confidential Page 1 03/27/01 2 DIRECTV Subscribers under the NTRA to determine the aggregate amount of Transaction Revenue Share from Purchase Responses under the NTRA for that quarter. For example: If - Total quarterly proceeds from all Purchase Responses generated by DIRECTV Subscribers under the NRTA is $100,000; and Total quarterly number of Purchase Responses generated from DIRECTV Subscribers under the NRTA is 200,000; and Number of Wink-enabled DIRECTV System Subscribers measured during each month of such quarter is between 2,000,000 and 2,999,999; and All Interactive Wink Programs were inserted at DIRECTV's facilities Then - The average amount of Gross Transaction Routing Fees per Purchase Response under the NTRA is [*] And - The aggregate amount of Transaction Revenue Share from Purchase Responses under the NTRA for that quarter shall be [*]. RFI Responses: On a quarterly basis, divide the total proceeds related to all RFI Responses generated from DIRECTV Subscribers under the NTRA by the total number of RFI Responses generated from DIRECTV Subscribers under the NTRA during that quarter. The result is an average amount of Gross Transaction Routing Fees per RFI Response under the NTRA for the quarter. Multiply the applicable Transaction Revenue Share (as defined per Exhibit A, including the provision regarding the applicable Transaction Revenue Share for amounts collected in excess of $2.50, if the average amount of Gross Transaction Routing Fees is in excess of $2.50) by the average amount of Gross Transaction Routing Fees per RFI Response, and then multiply the resulting product by the total number of RFI Responses generated from DIRECTV Subscribers under the NTRA to determine the aggregate amount of Transaction Revenue Share from RFI Responses under the NTRA for that quarter. The above-described payments made by Wink to DIRECTV for DIRECTV's share of such Gross Transaction Routing Fees shall be included as "Transaction Revenue Share" for purposes of this Master Agreement. DIRECTV specifically acknowledges and agrees that Wink is under no obligation to provide Participating Manufacturers with any share of Wink's Gross Transaction Routing Fees; provided, however, that in the event Wink elects to provide Participating Manufacturers with any share of Wink's Gross Transaction Routing Fees, such an election shall not serve to reduce the amount of overall Gross Transaction Routing Fees used to calculate DIRECTV's monthly Transaction Revenue Share. 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. C. The following new section 4.4 shall be added: 4.4 The parties have agreed to collaborate to pursue a new revenue opportunity aimed at selling research data regarding DIRECTV Subscriber responses to Interactive Wink Programs to third parties, and have agreed as follows: [*] 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. 3 (a) "Wink Research Services" shall include all custom reports and analysis based on Wink Responses which are provided by Wink to third parties, and which involve one or more of the following services: (i) filtering of Interactive Wink Programs based on data stored in a Wink-enabled DIRECTV System Receiver, (ii) merging of Wink Response data with third party data regarding consumer behavior, (iii) collecting Wink Responses from a pre-determined subset of the universe of Wink-enabled DIRECTV Subscribers which have consented to participating in such research regarding their opinions of certain television programming, advertising or promotion, (iv) verifying the airing of Interactive Wink Programs and the audience for same and (v) any other service which the parties mutually agree shall be considered Wink Research Services. (b) The actual implementation of each Wink Research Service shall be defined and agreed upon in writing between the parties, each in its sole discretion, prior to collection of any applicable Wink-enabled DIRECTV Subscriber information. Such definition shall include a subscriber communication plan, rules for the sharing of Wink Response data with third parties, the mechanics of how DIRECTV Subscriber "opt-in" or "opt-out" of participating in such Wink Research Service (as applicable), and the duration of the Wink Research Service offering. In addition, all Wink Research Services must comply with all applicable laws and regulations by federal or state governments. (c) "Wink Research Revenue" shall be defined as any revenues collected by Wink from Wink Research Services, net of out-of-pocket costs incurred by Wink for third party data or rights used in the provisioning of the Wink Research Services. Incremental Gross Transaction Routing Fees which may be attributable to Wink Research Services shall not be considered Wink Research Revenue, but shall be subject to Transaction Revenue Share from Wink to DIRECTV. Wink shall report to DIRECTV its total domestic Wink Research Revenues each calendar quarter on or before thirty (30) days following the end of such quarter. (d) Wink agrees to calculate and pay DIRECTV a revenue share on Wink Research Revenue. Wink Research Revenues solely attributable to Wink Responses collected from DIRECTV Subscribers shall be eligible for the same revenue share DIRECTV qualifies for at that time on Wink Revenue Responses defined for "National Responses" in Exhibit A. Wink shall provide DIRECTV a "Research Revenue Share" on all other Wink Research Revenue ("Non-attributable Research Revenues") with each Wink Research Revenue report as follows: the greater of (a) [*] of Wink's total gross Non-attributable Research Revenues, or (b) [*] of Wink's total gross Non-attributable Research Revenues less half of the revenue share from Wink's total gross Non-attributable Research Revenues granted by Wink to any multi-channel video operator other than DIRECTV and Charter Communications (and each's successors and assigns) (d) The parties expect that Wink will reach similar agreements for Wink Research Services with other distributors of video programming. Wink warrants and represents that the terms in this section 4.4 are as favorable or more favorable than the terms of any agreement Wink has entered into with other United States video distributors, including cable operators, for the provision of the same or similar services. Wink further agrees to promptly notify DIRECTV in writing, should Wink decide to enter into new agreements or amend existing agreements with any United States video distributors to include more [*] 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. 4 favorable terms for services similar to those defined in Exhibit K, and to immediately offer such terms to DIRECTV. D. Section 5.1 shall be replaced in its entirety by the following new section 5.1: 5.1. DIRECTV acknowledges and accepts Wink's licensing fees, rates for Wink services, and payment terms for DIRECTV as set forth in Exhibits D and K. DIRECTV 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 DIRECTV at the most favorable rate and terms and conditions offered or made available to any United States video distributor (including cable operators), advertiser or merchant (as applicable to the particular type of transaction). The parties agree that Wink may change the rates for Wink services quoted in Exhibit K upon written notice to DIRECTV, provided that any Wink Revenue Transactions delivered by Wink to DIRECTV, the parent company of DIRECTV and entities wholly owned by the parent company of DIRECTV shall be performed at the then current rates for up to ninety (90) days, if DIRECTV provides with Wink with written notice requesting such "price protection" within thirty (30) days of receiving notice of the price change. In the event of any inconsistency between the Third Amendment and the Master Agreement or any other agreement between the parties, the Third Amendment shall be deemed to be controlling. In all other respects, the Master Agreement shall continue in full force and effect. WINK COMMUNICATIONS, INC. DIRECTV, Inc. By: ______________________ By: _____________________ Name: ______________________ Name: _____________________ Title: ______________________ Title: _____________________ 5 EXHIBIT A.: WINK/DIRECTV REVENUE SHARE WINK RESPONSE SERVICE TRANSACTION FEES Transaction Revenue Share is calculated as a percentage of Wink's gross revenues on the applicable Gross Transaction Routing Fees, based on the schedule below:

(*) National Responses shall also include responses to Interactive Wink Programs inserted at DIRECTV's facility if such insertion is caused or triggered by Interactive Wink Programs or any unique identifier inserted by Programmers, and is presented with such Programmers' video signal(s). In addition, once the 2,000,000 Wink-enabled DIRECTV System Subscriber mark has been reached, the Transaction Revenue Share for any amount collected by Wink in excess of $[*] per Wink Transaction shall be [*], regardless of whether such Wink Responses are National Responses or not. The Transaction Revenue Share for the applicable number of Wink-enabled DIRECTV System Subscribers shall apply for all Gross Transaction Routing Fees captured by Wink in the month in which that number of Wink-enabled DIRECTV System Subscribers is reached and for all months thereafter during the Term, until the next threshold for Wink-Enabled DIRECTV System 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. 6 EXHIBIT K: 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. 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. 6. 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.