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Exhibit 10.17
NBC Interactive Media, Inc.
30 Rockefeller Plaza
New York, New York 10112
December 29, 1999
Mr. Steve Maloney
President & CEO
Intelligent Information Incorporated
181 Harbor Drive, 3rd Fl.
Stamford, CT 06902
Dear Steve:
As you know, we at NBC Interactive Media ("NBC") are excited about
working with Intelligent Information Incorporated ("III") regarding a wireless
distribution deal for certain of our interactive properties. Pending the
execution of one or more definitive distribution agreements (each, a
"Distribution Agreement") and certain other documentation as more fully
described below, this letter agreement will confirm our discussions regarding
our relationship as follows:
1. Distribution. (a) III shall make wireless distribution services available to
NBC and its affiliates (including, for example, NBC Internet, Inc., MSNBC
Interactive News LLC and CNBC.com LLC) (each, an "NBC Entity") for use in
connection with their interactive content offerings. III shall provide each NBC
Entity with a Distribution Agreement with terms and conditions, including
marketing fee allocations and distribution and performance metrics, no less
favorable to such NBC Entity than those provided to any other customer of III
contracting for a similar volume of services.
(b) Following execution of any Distribution Agreement, to the extent
III offers a lower price or a more favorable marketing fee allocation to any
customer contracting for a similar volume of services, such lower price shall
automatically be applied on a going forward basis to each of the Distribution
Agreements. At any time during the term of the Distribution Agreements, an NBC
Entity may request, and III shall promptly provide, an officer's certificate
certifying that III has been and remains in compliance with this Section.
2. Preferred Placement: Each Distribution Agreement shall provide, to the extent
technically feasible within the III wireless services, Preferred Placement (as
defined below) for NBC's interactive properties and affiliates with respect to
the type of content distributed pursuant to such Distribution Agreement (for
example, a Distribution Agreement for MSNBC.com would provide Preferred
Placement for MSNBC in the news category); provided that III shall not be
required to provide such Preferred Placement if exclusivity or Preferred
Placement for such type of content has been provided, prior to the execution of
the Distribution Agreement, to a third party not affiliated with III. Preferred
Placement shall mean (a) where a link to or display of content appears on a
list, such link or content is in the default, top-most and left-most position;
or (b) when a link to or display or content appears in a format other than a
list, the link or content is more visually prominent, or at a higher rate of
exposure, than other content partners.
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3. Promotion: (a) III will make five percent (5%) of its unused inventory of
wireless advertising taglines available to the interactive properties of the NBC
Entities following execution of any Distribution Agreement; provided that if
more than one NBC Entity enters into a Distribution Agreement, the first two NBC
Entities that enter into Distribution Agreements with III shall allocate such
unused inventory equally between them. The value of this inventory for purpose
of this Agreement shall be calculated at the III rate card for run of service
taglines in effect at the time such taglines are ordered.
(b) The taglines shall promote the products and services of NBC and its
affiliates, and may not advertise, promote or mention any other product,
service, web site or third party whatsoever without the prior written consent of
III. In addition, with respect to the placement or delivery of such taglines on
any particular wireless network, III may reject such taglines if they would
compete with or violate the rights of any other advertiser, sponsor or III
distribution partner, as determined by III in its sole discretion and in good
faith.
(c) III will provide marketing funds at a mutually agreed upon level to
NBC and the NBC Entities in support of the joint wireless initiatives of III and
the NBC Entities, but in no event shall the amount of marketing funds provided
to NBC and the NBC Entities be less than the value of the advertising taglines
provided to NBC and the NBC Entities. These funds will be used in support of
marketing activities at the discretion of the parties.
4. Warrants. (a) Upon execution of each Distribution Agreement by III and NBC
Entity, III will grant to NBC for distribution to itself or, pursuant to NBC's
instructions, in whole or in part, to such NBC Entity, a fully-vested warrant
(each, a "Warrant") to purchase up to 20,000 shares of III's Common Stock at an
exercise price equal to $10.00 per share. In the event the first Distribution
Agreement is executed on or before March 31, 2000, the Warrant granted in
consideration therefore shall be for 30,000 shares (the "Bonus Shares"). The
aggregate number of shares available hereunder, including the Bonus Shares,
shall not exceed 110,000 shares. NBC shall use its commercially reasonable
efforts to cause the NBC Entities to enter into Distribution Agreements with
III.
(b) Each Warrant shall expire three (3) years following its issuance
and shall not terminate upon an initial public offering or change of control of
III. Subject to any relevant securities laws, rules and regulations, each
Warrant, as well as the equity acquired through exercise thereof, will be freely
transferable by NBC or such NBC Entity and may be exercised in whole or in part.
When exercising any Warrant, NBC or such NBC Entity shall have the right to
either (i) purchase the total number of shares of equity which such Warrant
entitles NBC or such NBC Entity to purchase at the exercise price described
above or (ii) receive the net number of shares of equity arising from the
difference between the market price of such equity at the date of exercise and
the exercise price for the Warrant.
5. Public Relations. Each party will issue a press release announcing the
relationship between the parties, with each such press release subject to the
approval of the other party. NBC will provide a reasonable level of public
relations resources to promote the strategic alliance between of III and NBC.
6. Term. The term of this Letter Agreement shall be two (2) years and, during
such period, each NBC Entity shall have the right to enter into a Distribution
Agreement with a term of up to three (3) years, with each such term commencing
upon the execution of each such Distribution Agreement.
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It is expressly understood that this Letter Agreement constitutes a
binding obligation on the parties. This Letter Agreement shall be governed by
and construed under the laws of the State of New York applicable to contracts
fully performed in New York, without regard to New York conflicts law. This
Letter Agreement may be executed in counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement
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 two (2) days of the date set forth above.
Sincerely,
NBC Interactive Media, Inc.
/s/ Margaret T. Murphy
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Margaret T. Murphy
Vice President
Acknowledged and agreed:
Intelligent Information Incorporated
/s/ Stephen G. Maloney
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Stephen G. Maloney
President & CEO