EXHIBIT 10.18
July 30, 1999
Mr. Martin Yudkovitz
President
National Multimedia Inc.
30 Rockefeller Plaza
New York, New York 10112
Re: Replay Zones /Advertising
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Dear Marty:
Replay is pleased to have National Broadcasting Company, Inc. ("NBC") join its
group of investors in its Series E financing. NBC will invest $5 million
dollars under the terms of the Series E financing. Additionally, this letter
agreement (the "Agreement") shall embody the agreement between Replay and NBC on
the following issues:
1) The term of this Agreement shall commence on the date hereof and end on
July 31, 2002 (the "Term"); provided, that if in NBC's good faith judgment
Replay fails to comply with Section 2 hereof, then NBC shall have the
option to extend the Term for a period of three (3) years by providing
written notice to Replay.
2) Replay will use its best efforts to address concerns related to how the use
of the [***] on the Replay remote affects advertising. Specifically,
within the [***] period after the date hereof Replay will consult with its
investors and advertisers to determine the best course of action to
encourage both advertiser and viewer support for the category of
personalized television and shall use its best efforts to take such action
in connection with the Replay service (the "Replay Network Service").
During this review process, Replay will no longer [***] the [***]
functionality in advertisements or marketing materials, including without
limitation in brochures, press releases and on the ReplayTV website.
3) Replay will provide to NBC [***] Replay Zone [***] during the Term. NBC
shall receive additional Replay Zones at a cost that is equal to the [***]
of (a) [***] of the Replay ratecard rate for the sponsorship of a Replay
Zone, and (b) [***] charged to [***]. "Replay Zone" means an area which may
be directly linked to from the Replay Zone Guide which features programming
designated by the applicable NBC television network (each, an "NBC
Network"); provided, that Replay shall work in conjunction with
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
NBC creative services to produce each NBC Replay Zone, including special
programming packages highlighting current programming and upcoming events.
4) Replay shall promptly develop the Replay Zone Guide in which NBC may
promote its Replay Zones. Replay shall provide NBC with [***] positioning
[***] for [***] during the Term. The Replay Zone Guide shall be the primary
area devoted to displaying Replay's programming partners, and shall be
directly linked to the main screen of the Replay Network Service.
5) In regard to lead-in advertisements, lead-out advertisements and insertion
advertisements surrounding programming that is time shifted from any NBC
Network will be sold by Replay; provided, that NBC shall have an approval
right over all advertising sold by Replay, which approval shall be
exercised in good faith consistent with NBC's business interests, policies
and practices concerning advertisements or promotional messages to be aired
on NBC, also taking into account existing sponsorships, category or
programming exclusivities or similar arrangements that each NBC Network may
have with certain of its advertisers. This restriction will remain in place
during the Term. Notwithstanding the foregoing, Replay shall not swap out,
replace or otherwise alter any advertisements included within any NBC
Network programs, whether such programs are viewed on a real-time or time-
shifted basis, without the prior written consent of NBC.
6) NBC will have the right to appoint one individual who shall serve as an
observer on Replay's Board of Directors subject to the limitations and
obligations set forth in the attached Observer Policy letter.
7) Other terms consistent with terms granted to other major media investors in
the Series E financing will be negotiated in good faith between Replay and
NBC. Replay agrees to disclose to NBC the material terms granted to other
major media investors in the Series E financing to the extent it has the
right to do so.
8) The Replay Network Service will not intentionally delete any programming or
data within the signals that are transmitted by any NBC Network provided
that this material does not interfere with the Replay Network Service.
9) The Replay Network Service is intended to provide Internet connectivity as
soon as it is technology and commercially reasonable to do so. At such
time, (a) Replay will ensure that any links and/or web content incorporated
within or otherwise accompanying the signal of each NBC Network will be
passed through to users of the Replay Network Service provided that this
material does not interfere with the Replay Network Service and it is
technology and commercially feasible to do so, and (b) Replay shall
negotiate in good faith with NBC with respect to placement for the Internet
assets of NBC and its affiliates.
[***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
10) Replay shall not modify, alter or re-design the Replay Network Service in a
manner which shall have a material adverse impact on the rights granted to
NBC herein.
If this Agreement is acceptable to you, I would appreciate your indicating
your acceptance of this Agreement by executing this letter at the place
indicated below.
Sincerely,
REPLAY NETWORKS, INC.
By: /s/ Layne Britton
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Layne Britton
Executive Vice President, Network Services
Replay Networks, Inc.
Agreed and consented to:
NATIONAL BROADCASTING
COMPANY, INC.
By: /s/ Martin Yudkovitz Date: July 30,1999
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Name: Martin Yudkovitz
Title: President, NBC MultiMedia, Inc.