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EXHIBIT 10.21
[*] Confidential Treatment has been requested for certain portions of this
exhibit.
April 1, 1997
[NBC LETTERHEAD]
Federal Express
Mr. Peter Ellis
President/CEO
Auto-By-Tel
11872 MacArthur Blvd., Second Floor
Irvine, CA 92612
Re: Auto-By-Tel Participation in NBC Syndication Platform
Dear Mr. Ellis:
This Letter sets forth the initial agreement between NBC Multimedia, Inc.
("NBC"), and Auto-By-Tel Marketing Corporation ("Company") with respect to the
Company's agreement to provide content as part of NBC's Syndication Platform.
The terms and conditions shall be as follows:
1. Description of NBC Syndication Platform: NBC intends to create a menu of
localized world wide web services (the "NBC Syndication Platform") which
it will offer to the NBC Television Network's ("NBC TV") owned and
operated stations and interested affiliates (the "Stations"). NBC agrees
that if it does actually offer the NBC Syndication Platform, localized
versions of the Auto-By-Tel online automotive information, purchasing
financing and related services created and operated by the Company
("Auto-By-Tel") shall be among the list of primary services offered as
part of such platform subject to the terms and conditions hereof. Company
acknowledges (i) that each Station will have the sole right to determine
which individual services it will accept as part of the NBC Syndication
Platform, (ii) that Auto-By-Tel may or may not be included in any
individual Station's list of such services, and (iii) that NBC and
declining Stations shall have no liability or obligations to Company due
to any Stations' decision not to so include Auto-By-Tel.
2. Creation of Auto-By-Tel Local Sites: Company agrees that it shall create
customized local versions of Auto-By-Tel (each a "Auto-By-Tel Local
Site") for use by Stations participating in the NBC Syndication Platform.
Such Auto-By-Tel Local Sites will be designed to provide online viewers
of the Stations' world wide web sites (the "Station Sites") with
automotive information and purchasing financing and related services.
Each such Auto-By-Tel Local Site shall be a mirror Auto-By-Tel site which
shall be framed within a sub-page of the Station Site but which will
contain material to be provided by Company and located at a to be
established URL on a server of the Company. As a result, all online
viewers will be accessing and bookmarking the Auto-By-Tel Local Site
content through the NBC Syndication Platform's portion of the Station's
URL, and any user searches will continue to take place within the portion
of the Station Site framing the Auto-By-Tel Local Site.
3. Links: As a condition of utilizing the NBC Syndication Platform, each
participating Station will be required to devote a portion of the front
page of the Station Site to the NBC Syndication Platform, subject to
Station's right to have overall design control of the Station Site. Each
Station shall be encouraged to devote enough space on its front page to
permit the placement of hotlinks to the individual services which make up
the NBC Syndication Platform within space on such front page allocated
and dedicated to the NBC Syndication Platform, but at a minimum, each
participating Station Site's front page shall contain a prominent hotlink
to a special sub-page devoted to hotlinks for all of the services making
up the NBC Syndication Platform, the size and placement
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of which shall be comparable to that of any other link to a service
offered by the Station. NBC agrees that when the individual services which
make up the NBC Syndication Platform are displayed and a hotlink to the
Auto-By-Tel Local Site is provided, whether on a front page or on a
separate page, the link to the Auto-By-Tel Local Site which may be either
a generic category description or a Auto-By-Tel logo or text (the
"Auto-By-Tel Link") shall be comparable and consistent with the links
devoted to any of the other individual services which are part of the NBC
Syndication Platform.
4. Management of Auto-By-Tel Local Sites: The day-to-day management of the
Auto-By-Tel Local Sites, and all costs associated therewith, shall be the
responsibility of the Company subject to the following:
(a) Content - Company will provide all of the content for each of the
Auto-By-Tel Local Sites, provided that as part of the localization and
customizing process required herein, NBC and the Stations may provide
relevant local material (but not advertising) in their own discretion from
time to time with reasonable notice for use on the relevant Auto-By-Tel
Local Sites and Company will make good faith efforts to include such
material in its reasonable discretion. Company will acquire all necessary
rights and licenses required for the operation of each Auto-By-Tel Local
Site as contemplated herein and for the acquisition and use of any content
(e.g., automobile purchase analyses, appreciation costs, financing
incentives, etc.) not provided by NBC and the Stations. Each of the
Company, NBC and the Stations will retain and own all copyrights and other
intellectual property rights in, and to, the material which that entity
contributes for use hereunder.
(b) Editorial - Editorial standards and direction regarding the inclusion
and presentation of content will come from Company. In addition, Company
agrees to allow NBC to review the Auto-By-Tel Local Sites for compliance
with any NBC Broadcast Standards and Practices which may apply to the
Auto-By-Tel Local Sites and make all changes requested by NBC in
connection therewith. Finally, Company agrees to comply with any Rules and
Regulations of the Federal Communications Commission which may be
applicable to the Auto-By-Tel Local Sites and/or the rules and regulations
of any other governmental body having jurisdiction.
(c) Technology - Auto-By-Tel shall be responsible for all maintenance of
the Auto-By-Tel Local Sites (including customer service, technical upkeep,
etc.) including the costs associated therewith. Auto-By-Tel agrees to use
its best efforts to work with NBC's technology partners to coordinate the
interface between the Auto-By-Tel Local Sites and the Station Sites and
provide the required services contemplated herein.
(d) Branding - NBC shall create the Auto-By-Tel Link and may request that
Company provide appropriate proprietary material for use thereon. The
Auto-By-Tel Local Sites will be co-branded with trademarks and other
material to be provided by NBC, the Stations and Company subject to the
approval of each party and provided that the size of such brands shall be
left to the reasonable discretion of NBC. The parties agree that the
Company's brands on the Auto-By-Tel Local Sites shall be not more than
fifty percent (50%) smaller than, but as visible as, the brands of NBC and
the relevant Stations. Company agrees to abide by all requirements and
guidelines which NBC and the Stations may have regarding the use of their
trademarks, service marks and other brands and agrees that it shall make
no use of such marks and brands which is not approved in advance by NBC
and the relevant Stations. Branding for all other areas of the NBC
Syndication Platform and the Station Sites shall be at the sole discretion
of NBC and the Stations.
5. Promotion: As a condition of utilizing the NBC Syndication Platform, each
Station will be required of offer a minimum of 10 on-air promos
concerning, or mentions of,
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the URL address of the Station Site per week. NBC shall encourage
Stations to include information regarding the NBC Syndication Platform
as part of such promos or mentions.
6. Exclusivity: NBC agrees that Auto-By-Tel will be the exclusive service
provider for the online automotive purchasing and information category
of the NBC Syndication Platform offered by NBC, provided that Company
acknowledges that nothing in this Section 6 or elsewhere in the Letter
Agreement shall restrict NBC rights in any way in connection with NBC's
world wide web site ("NBC.com"), MSNBC.com, Intellicast.com or any
other future NBC related interactive (or other) services other than the
NBC Syndication Platform. Notwithstanding the foregoing, Company
acknowledges that (i) other services provided by third parties may be
offered to the Stations by NBC as part of the NBC Syndication Platform
which happen to provide online automotive information in addition to
their primary services as long as NBC does not offer such third party
services in place of Company's services on the NBC Syndication Platform
or materially promote such competing aspects of such third party
services to the Stations or the public (other than through general
advertising) in connection with the NBC Syndication Platform and (ii)
NBC will have no ability to prevent the Stations from placing competing
services elsewhere on their own Station Sites. Company agrees that NBC
will be the exclusive United States television distribution partner for
Auto-By-Tel's content and service, and Company agrees not to provide
the Auto-By-Tel service, or any portion thereof, to national or
regional television networks, syndicated programming services or
syndicated or like content platforms distributed by or through the
foregoing; provided, however, that NBC recognizes that such exclusivity
shall not prevent Company from providing the Auto-By-Tel service to any
internet service provider which uses televisions as a delivery device
(i.e., Web TV). The exclusivity terms of this Paragraph 6 will be
contingent upon NBC's reaching and then maintaining over each following
year on average the following critical mass of Station support for the
NBC Syndication Platform: [*] If such contingencies are not
met, the exclusivity terms of this Section 6 shall no longer apply,
but all other terms of this Letter Agreement shall remain in effect
until the termination hereof. In addition, if Company is not able to
provide competitive, localized coverage and service for any of the NBC
TV markets, NBC will be free to contract with Company's competitors in
order to obtain online automotive information in such markets.
7. Advertising Sales: Company shall be responsible for the sale of
advertising inventory to be placed on each Auto-By-Tel Local Site, if
any. Company shall have the responsibility of administering the contract
for such advertising, paying all necessary expenses and collecting all
fees related thereto in return for a seller's commission of [*] of the
gross advertising revenues related to such sale (the "Sales
Commission"). Unless the parties mutually agree to the contrary, if
Company decides in its sole discretion to sell advertising inventory for
the Auto-By-Tel Local Sites at less than the rates normally charged by
Company for advertising appearing elsewhere on Auto-By-Tel (the "Normal
Rates") or barters such inventory in any way, such advertising inventory
shall be deemed to have been sold at such Normal Rates for purposes of
calculating revenues for purposes of Section 8(b) below. Company
acknowledges that NBC and the Stations will be solely responsible for
the sale of advertising which appears within the area of the Station
Sites which frames Auto-By-Tel Local Sites and that Company will have no
right to advertising revenues received by NBC and Stations in connection
with such frames or any other portions of the
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Station Sites other than the Auto-By-Tel Local Sites. NBC acknowledges
that manufacturers' financing and insurance products or services offered
through the Auto-By-Tel Local Site shall not be deemed advertising for
the purposes hereof.
8. Financial Terms: Company agrees that it will be responsible for all costs
and expenses associated with the creation and operation of the Auto-By-Tel
Local Sites. Auto-By-Tel shall make the following monthly payments to NBC.
(a) Annual License Fee - Company will pay NBC a license fee of [*]
hereof and upon each anniversary date of the launch of the NBC Syndication
Platform occurring during the term hereof. This fee shall also be
considered a non-refundable advance on any revenues payable to NBC in
connection with the terms of sub-section (c) of this Section 8.
(b) Advertising Revenues - NBC and Company will equally share (i.e.,
50/50) all gross revenues received by Company in connection with the sale
of advertising for display anywhere within the Auto-By-Tel Local Sites
after deduction of the Sales Commission is made but prior to the
deduction of any expenses of any kind.
(c) Lead Generation Revenues - Company will pay NBC [*] for each online
or physical (e.g., mail, fax, etc.) submission of any "unique purchase
request" to Auto-By-Tel by any individual or corporate user which is
received by Company and attributable to usage on an Auto-By-Tel Local
Site. "Unique purchase request" shall mean a purchase request from a user
with a different name and e-mail address from any name or address received
by Company in the past. In addition, once the Auto-By-Tel Local Sites
generate [*] such submissions in any calendar year during the term hereof,
then Company will pay NBC [*] for each such submission received thereafter
until the end of that calendar year. The parties agree that the Annual
License Fee described above shall be an advance against payments for the
first [*] submissions otherwise owed hereunder.
(d) Future Revenue - The parties agree that if any future revenue
generating opportunities not engaged in by Company through its
Auto-By-Tel service as of the date hereof or described above are created
in connection with the Auto-By-Tel Local Sites, the parties will
negotiate in good faith regarding what revenue sharing arrangements
between the parties would be appropriate, provided that, unless such
opportunities involve characteristics which would make them materially
different from the opportunities described above, it is the intent of the
parties to share such revenues equally.
9. Payment and Audit Conditions. At the end of each month in which Company
receives any revenue of the type described in Section 8 (b) and (c),
Company shall prepare a monthly statement providing sufficient detail
regarding the source of such revenue and will deliver such statement
along with the required payment described therein to NBC no less than
thirty (30) days following such date. Company agrees that NBC shall have
the right to conduct a reasonable audit of the relevant books and records
of such party in order to determine compliance with the terms of this
Letter Agreement. The parties agree that all amounts due under this
Agreement from the Company to NBC shall be paid directly to NBC and not
to any of the individual Stations.
10. Representations and Warranties: (a) Company represents and warrants to
NBC and the Stations that it has the right and power to perform its
obligations and to grant the rights granted herein, that Company's
creation and operation of the Auto-By-Tel Local Sites pursuant to this
Letter Agreement will not violate any agreement or obligation between
Company and a third party or any laws or regulations and that, except for
material provided by NBC and the Stations, the material included on the
Auto-By-Tel Local Sites and the Auto-By-Tel Link as well as the operation
of the Auto-By-Tel
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Local Sites as contemplated herein will, to the best of its knowledge, be
accurate and correct and will not violate or infringe any third party
rights, including intellectual property rights. Company also agrees that
standard software industry representation and warranties will apply to
all software and technology used by Company in order to carry out its
obligations described herein. Company acknowledges that the Final
Agreement (as defined below) will contain additional and more detailed
versions of the representations and warranties described above.
(b) NBC represents and warrants to Company that it has the right and
power to perform its obligations and to grant the rights granted herein
and that the material provided by NBC to Company for inclusion on the
Auto-By-Tel Local Sites will, to the best of its knowledge, be accurate
and correct and will not violate or infringe any third party rights,
including intellectual property rights.
11. Indemnity. (a) Company agrees to indemnify, defend, and hold NBC, the
Stations, their affiliates and their successors, officers, directors and
employees harmless from any and all actions, causes of action, claims,
demands, costs, liabilities, expenses (including reasonable attorneys'
fees) and damages arising out of or in connection with any third party
claims (i) relating to Company's operation and management of the
Auto-By-Tel Local Sites, or (ii) relating to a breach of any of Company's
representations and/or warranties set forth in Section 10 of this Letter
Agreement.
(b) NBC agrees to indemnify, defend, and hold Company, its affiliates
and its successors, officers, directors and employees harmless from any
and all actions, causes of action, claims, demands, costs, liabilities,
expenses (including reasonable attorneys' fees) and damages arising out
of or in connection with any third party claims relating to a breach of
any of NBC's representations and/or warranties set forth in Section 10 of
this Letter Agreement.
(c) The indemnified party agrees to notify the other party promptly of
any written claims or demands against the indemnified party for which the
other party is responsible, and the Indemnified Party for which the other
party will be entitled, at its option, to assume the defense or
settlement of any such claim, provided that no settlement shall be
reached without the consent of the indemnifying party. The indemnified
party will promptly be reimbursed by the other party for Indemnified
Amounts as they are incurred.
(d) IN NO EVENT UNDER ANY CIRCUMSTANCES SHALL EITHER PARTY (OR ITS
AFFILIATES) BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR IN CONNECTION WITH ITS
OBLIGATION UNDER THIS LETTER AGREEMENT; PROVIDED HOWEVER, THAT THE
FORGOING LIMITATION SHALL NOT APPLY TO DIRECT DAMAGES RESULTING FROM THE
INTENTIONAL OR WILLFUL BREACH OF THIS LETTER AGREEMENT.
12. Term. The initial term of this Letter Agreement shall be [*],
and ninety (90) days prior to the end of the initial term, the parties
agree to negotiate in good faith regarding a possible extension of the
term hereof for an additional [*]. Either party may terminate
this Letter Agreement upon a material default by the other party of the
terms hereof which default is not cured within thirty (30) days following
such party's receipt of a written notice regarding the default. In
addition, if Company materially alters the nature or quality of its
service (e.g., changes Auto-By-Tel from a free to subscription service),
NBC may terminate this Letter Agreement, at its option, by providing
Company with ten (10) days prior notice thereof in writing. Finally, if
NBC determines in its sole discretion at any time, not to offer the NBC
Syndication Platform as such term is described in Paragraph 1, it will
inform the Company of such
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decision in writing and this Letter Agreement shall be deemed terminated as
of the date of such notice.
13. Formal Agreement. Recognizing that time is of the essence, this Letter
Agreement shall serve as the intent of both parties to enter into a more
formal agreement for the creation and operation of Auto-By-Tel Local Sites
(the "Final Agreement"). Both parties shall use reasonable efforts to
complete the Final Agreement within a reasonable time period following the
date of execution of this Letter Agreement, provided, however, that
notwithstanding the foregoing, if no Final Agreement is reached, the terms
contained herein shall govern the relationship between the parties for the
Term.
14. NBC Local Link. The parties agree that each Auto-By-Tel Local Site shall
include a link (which may include an appropriate NBC logo) to the NBC
Local section of NBC.com in its first page.
15. Confidentiality. Neither party shall issue a press release or make any
statement to the general public concerning this Letter Agreement, the NBC
Syndication Platform or the Auto-By-Tel Local Sites, or the existence
thereof, without the express prior written consent of the other; provided,
however, that NBC agrees that Company may file this Letter Agreement with
the Securities and Exchange Commission (the "SEC") if so required by the
Securities Act of 1933 and Securities Exchange Act of 1934, in each case,
as amended, the rules and regulations related thereto or any applicable
state laws (the "Securities Laws") as long as Company agrees to use its
best efforts to obtain confidential treatment of the economic and other
material terms hereof under the Securities Laws and consult with NBC
during the process.
16. Miscellaneous. This Letter Agreement constitutes the entire agreement and
understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, negotiations, and
understandings between the parties, both oral and written, provided that
the Non-Disclosure and Confidentiality Agreement between the parties shall
remain in full force and effect. No waiver or modification of any
provision of this Letter Agreement shall be effective unless in writing
and signed by both parties. Any waiver by either party of any provision of
this Letter Agreement shall not be construed as a waiver of any other
provision of this Letter Agreement, nor shall such waiver operate as or be
construed as a waiver of such provision respecting any future event or
circumstance. This Letter Agreement shall be governed by and construed
under the laws of the State of New York applicable to contracts fully
executed in New York, without regard to New York conflicts law. The
parties hereby consent to and submit to the jurisdiction of the federal
and state courts located in the State of New York.
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If you are in agreement with the above terms and conditions, please
indicate your acceptance by signing in the space provided below, and return one
original to me. This Letter Agreement shall be null and void if not signed
within 7 days of the date set forth above.
Very truly yours,
NBC MULTIMEDIA, INC.
By: /s/ KEN KRUSHEL
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Name: Ken Krushel
Title: Vice President
ACCEPTED AND AGREED;
AUTO-BY-TEL MARKETING
CORPORATION
By: /s/ MARK W. LORIMER
-----------------------------------
Name: Mark W. Lorimer
Title: Vice President, General Counsel
and Secretary
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[*]
NBC must reach and maintain over each following year, on average, the following
critical mass:
[*]