EXHIBIT 10.9
MICROSOFT ONLINE MARKETING AGREEMENT
THIS ONLINE MARKETING AGREEMENT ("Agreement") is made and entered into
as of the later of the two signature dates below (the "Effective Date") by and
between AUTO-BY-TEL, LLC ("ABT"), a California limited liability company, and
MICROSOFT CORPORATION ("MS"), a Washington, U.S.A. corporation.
Recitals
--------
i. MS has established an online service for the Microsoft Network
called "CarSource" that includes research materials and other useful information
about Automobiles (as defined below) and accessories.
ii. ABT operates an Automobile marketing company which has
subscribing dealers throughout the United States. ABT plans to expand
operations with subscribing dealers in other territories outside the United
States.
iii. MS and ABT wish to enter into a business relationship to develop
and implement an Automobile marketing service on CarSource for persons
interested in purchasing Automobiles in the United States, Canada, and other
territories subject to all the terms and conditions of this Agreement.
NOW, THEREFORE, the parties agree as follows:
Agreement
---------
1. DEFINITIONS. In addition to the terms defined elsewhere in this
-----------
Agreement, the following terms, when used herein, shall have the following
meanings:
1.1 "Automobile" shall mean any kind of motor vehicle, including, but
not limited to, passenger vehicles, trucks, and vans.
1.2 "CarSource" shall mean the MS-sponsored service on the Microsoft
Network ("MSN") that includes information and materials related to Automobiles,
including any successor products and/or services that appear on MSN or the
Internet's World Wide Web.
1.3 "Person" or "Persons" shall mean an individual, corporation,
partnership, unincorporated association, trust, joint venture or other
organization or entity.
1.4 "Dealer" shall mean an independently operated retail seller of
Automobiles that is located in the United States, Canada or other territories
and is a subscribing member to ABT's marketing program.
[*] Confidential Treatment has been requested for portions of this exhibit.
2. ONLINE MARKETING SERVICE
------------------------
2.1 Within a reasonable period after the Effective Date, MS shall,
with the assistance of ABT, develop and post a digital page or portion thereof
on CarSource featuring information about ABT's auto marketing and financing
services and an interactive electronic order form in substantially the form of
Exhibit A hereto (an "E-form"). At least [*] during the term of this Agreement,
---------
MS or its representatives shall download all E-forms that have been completed by
CarSource users and transmit them to ABT via electronic mail or other reasonable
means to ensure prompt delivery to ABT. No later than [*] after receiving each
E-form, ABT shall forward the E-form to one of its subscribing Dealers who will
call the CarSource user with information regarding the price and availability of
the vehicle request.
2.2 ABT may offer information regarding Automobile financing and
leasing options to CarSource users in response to an E-form request for such
information.
2.3 ABT shall at all times conduct its operations with respect to the
marketing program described above in a reasonable and professional manner in
accordance with all applicable laws and regulations.
2.4 The rights set forth in Sections 2.1 and 2.2 above are granted on
a non-exclusive basis; provided, that MS shall not grant such rights to any
other party during the term of this Agreement on terms and conditions that are
more favorable than the terms and conditions of this Agreement.
3. TERM. The term of this Agreement shall be [*] from the Effective Date
----
unless terminated earlier in accordance with Section 12.
4. FEES.
----
4.1 Marketing Fees. ABT shall pay MS a fee of [*]
--------------
for [*] whether or not the CarSource users purchase an Automobile through ABT or
its Dealers. MS shall not forward any incomplete E-forms to ABT. No marketing
fee shall be paid or incurred by ABT for [*] ABT shall not deduct or withhold
any amounts from such payments, except for any applicable taxes which are
required to be withheld or deducted by applicable law.
4.2 Finance & Leasing Fees. ABT shall pay to MS [*]
----------------------
that ABT receives from each Third Party in connection with such a financing or
leasing transaction. The parties understand and agree that at the time of
signing this Agreement, the [*] fees that ABT expects to pay to MS are as
follows: [*]. ABT shall not deduct or withhold any
[*] Confidential Treatment Requested
-2-
amounts from such payments, except for any applicable taxes which are required
to be withheld or deducted by applicable law. ABT shall at all times act in good
faith with respect to the calculation and payment of such fees and shall not
attempt to limit such fees by restructuring its financial arrangement with
lending institutions so as to avoid payment of the fees described in this
Section. In addition to the fees described in this Section 4, ABT shall pay MS
the fees described in Section 10.2.
5. PAYMENT SCHEDULE. Within [*] days after the end of each
----------------
[*] with respect to which ABT owes MS any fees pursuant to Section 4 and/or
10.2, ABT shall furnish MS a statement together with payment for any amount
shown thereby to be due to MS. The fee statement shall contain information about
(a) the number of E-forms received from MS during the period, (b) the total
marketing fee payment to MS, (c) the number of CarSource users referred by ABT
to financing entities during the period, (d) the number of CarSource users who
completed a financing transaction for an Automobile with a financing entity
referred by ABT during the period, (e) the total amount of financing origination
fees received by ABT during the period, pursuant to this Agreement (f) the total
amount of the financing origination fee payment to MS, (g) the amount of any
deductions from amounts payable to MS and the method of calculating such
deductions, (h) the number of CarSource users who completed a user survey
authorized under Section 10.2, (i) the number of CarSource users who registered
for the affinity program described in Section 10.2, (j) the amount of any fees
payable to MS pursuant to Section 10.2, and (k) any other information that is
relevant to the payment terms described in this Agreement.
6. HYPERLINK. During the term of this Agreement, ABT shall prominently
---------
feature a hyperlink to the uniform resource locator for MS CarSource on ABT's
World Wide Web home page in the manner set forth on Exhibit B hereto. ABT shall
---------
not materially modify the placement, size, presentation or layout of the
hyperlink to MS CarSource without the written consent of MS, which shall not be
unreasonably withheld. In addition, ABT shall not place hyperlinks to World Wide
Web home pages of on-line services that compete with CarSource (e.g., Edmunds,
Autoinfocenter, Autolink) on the same level as the hyperlink to CarSource. MS
hereby consents to the use of the "Microsoft" and "CarSource" trademarks for the
limited purposes described in this Section 6.
7. USE OF TRADEMARKS. ABT hereby grants MS the right to use and
-----------------
publish in connection with the promotion of the services described in Section 2
of this Agreement the following unregistered trademarks and trade names which
are associated with ABT ("ABT's Trademarks"):
Auto-by-Tel
Auto-by-Tel, LLC
MS shall add the appropriate trademark symbol or designation (i.e., (TM) or R),
as shown above wherever ABT's Trademarks are first mentioned in CarSource. ABT
shall promptly notify MS in the event that any person shall challenge its right
to use such Trademarks in connection with the Business (defined below). The
rights granted by this section shall not preclude MS from creating, developing,
applying for and obtaining and otherwise using and enjoying any logos,
trademarks and trade names of its own with respect to any products or services,
nor applying for and obtaining copyright and/or trademark protection therefor.
[*] Confidential Treatment Requested
-3-
8. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF ABT. ABT hereby
-------------------------------------------------
represents, warrants, and covenants to MS that:
8.1 ABT has the full and exclusive right and power to enter into and
perform according to the terms of this Agreement. Without limiting the
foregoing, ABT warrants that (i) to the best of ABT's knowledge, ABT has the
full and exclusive right to grant MS the licenses granted herein to use the
trademarks and trade names and, to the best of ABT's knowledge, the use of such
trademarks and tradenames by MS as provided under this Agreement will not
violate any trademark, or other proprietary right of any third party, and (ii)
it shall not violate any rights of privacy of any third party in providing the
services described in Section 2.
8.2 Personnel of ABT shall be available to consult with respect to
the matters governed by this Agreement with MS and its personnel, at such times
and for such periods as MS may reasonably request.
8.3 ABT and its officers, directors, employees, contractors, agents
and representatives shall conduct all activities related to this Agreement in
compliance with all applicable laws or regulations including, but not limited to
the laws and regulations relating to the sale and brokerage of automobiles,
telemarketing, consumer credit, and tax laws.
8.4 ABT has obtained standard form general liability insurance from a
nationally-recognized insurance provider and such policy has limits of [*] and
coverage of [*] and ABT shall maintain such insurance (or comparable replacement
insurance) at all times during the term of this Agreement and for a period of
one year thereafter.
The representations, warranties, and covenants contained in this Section 8 are
continuous in nature and shall survive termination or expiration of this
Agreement except as expressly stated in Section 8.4.
9. INDEMNITY.
---------
9.1 ABT hereby agrees to indemnify, pay the defense costs of, and
hold MS harmless from any and all claims, demands, costs, liabilities, losses,
expenses and damages (including attorneys' fees, costs, and expert witnesses'
fees) arising out of or in connection with any claim which, taking the
claimant's allegations to be true, (a) would result in a breach by ABT of any of
ABT's warranties and covenants set forth in this Agreement, or (b) would
constitute a violation of any applicable law or regulation governing the
business of ABT. ABT shall reimburse MS on demand for any payment made by MS in
respect of any liability or claim to which the foregoing indemnity relates, and
which has resulted in an adverse judgment against MS or has been settled with
the written consent of ABT. Prompt notice shall be given to ABT of any claim to
which the foregoing indemnity relates. The indemnity provisions hereof shall
survive any termination or expiration of this Agreement.
[*] Confidential Treatment Requested
-4-
9.2 MS hereby agrees to indemnify, pay the defense costs of, and hold
ABT harmless from any and all claims, demands, costs, liabilities, losses,
expenses and damages (including attorneys' fees, costs, and expert witnesses'
fees) arising out of or in connection with any claim which is related to MS's
operation of CarSource, except for claims, demands, costs, liabilities, losses,
expenses and damages arising out of or in connection with any claim related to
the business of ABT and such other claims as ABT has an obligation to indemnify
MS pursuant to Section 9.1 of this Agreement. MS shall reimburse ABT on demand
for any payment made by ABT in respect of any liability or claim to which the
foregoing indemnity relates, and which has resulted in an adverse judgment
against ABT or has been settled with the written consent of MS. Prompt notice
shall be given to MS of any claim to which the foregoing indemnity relates. The
indemnity provisions hereof shall survive any termination or expiration of this
Agreement.
10. NONDISCLOSURE AGREEMENT.
-----------------------
10.1 Each party expressly undertakes to retain in confidence and to
require its distributors, resellers and all other contractors to retain in
confidence all information and know-how transmitted to such party that the
disclosing party has identified as being proprietary and/or confidential or
which, by the nature of the circumstances surrounding the disclosure, ought in
good faith to be treated as proprietary and/or confidential. Without limiting
the foregoing, the existence and all terms and conditions of this Agreement
shall be considered confidential and shall not be disclosed (except to either
party's attorneys and accountants on a need-to-know basis or under order from a
court of competent jurisdiction) without the prior written consent of the other
party. Except as specifically provided for in this Agreement, ABT shall not use
the information about individual CarSource users (including information
disclosed on E-forms) or disclose such information to any third party except as
specifically authorized by MS in this Agreement or consented to in writing by
MS; by way of illustration and not limitation, ABT agrees that it shall not
disclose information about individual CarSource users to any on-line service
provider, on-line marketing company, automobile magazine publisher, or
automobile company without the express written permission of MS.
10.2 ABT may conduct follow up surveys to CarSource users who submit
requests to ABT. These surveys shall be sent via email within one week of the
original request submission. The primary purpose of such surveys will be to
measure customer satisfaction with the ABT auto marketing and finance services,
the performance of individual Dealers, type of vehicle purchased, etc. As part
of the email survey, ABT may offer to CarSource users free membership in an ABT
affinity program of auto-related discounts, products, and services. For every
CarSource user who accepts ABT's offer to join the affinity program, ABT shall
pay to MS a fee of [*]. This fee is in addition to any Marketing Fees or Finance
and Leasing fees earned with respect to said CarSource user pursuant to Section
5 of this Agreement.
11. AUDITS
------
11.1 ABT agrees to keep all proper records and books of account and
all proper entries therein relating to the referral of prospective Automobile
purchasers and the financing of Automobiles purchased by CarSource users
referred to ABT by MS and MS' fees therefrom.
[*] Confidential Treatment Requested
-5-
11.2 MS may cause an audit to be made, at its expense, of ABT's
applicable records in order to verify statements rendered hereunder; provided,
that if there is a greater than [*] discrepancy between the amounts paid by ABT
to MS and the amounts that should have been paid, according to the statements,
as audited, then ABT shall pay MS, in addition to any unpaid fees, the cost of
such audit. Any such audit shall be conducted only by a nationally-recognized
independent certified public accountant (other than on a contingency fee basis)
who is not the primary internal auditor for either ABT or MS, upon thirty (30)
days prior written notice to ABT, and shall be conducted during regular business
hours at ABT's offices and in such a manner as not to interfere with ABT's
normal business activities. The results of any such audit shall be subject to
the nondisclosure obligations set forth in Section 10.
12. TERMINATION. MS may terminate this Agreement by written notice to ABT
-----------
at any time if it determines [*] that the services provided by ABT and/or its
Dealers jeopardize MS's good name or brands or expose MS to financial or legal
risks that are unacceptable to MS, as determined by MS in its sole discretion.
In addition, MS may terminate this Agreement for any other cause or no cause
upon [*] advance written notice.
13. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION. MS shall cease
-----------------------------------------------------
all transmission of the E-form and references to ABT in CarSource on or before
[*] after the date of expiration or termination of this Agreement. ABT shall
cease all references to CarSource and its hyperlink to CarSource on or before
[*] after the termination or expiration of this Agreement.
14. DELIVERY OF LEGAL NOTICES. During the term of this Agreement, ABT
-------------------------
shall promptly deliver to MS, and in no event less than ten (10) days after
receipt by ABT, copies of any and all (a) letters from third parties, including
governmental agencies, that relate to the potential commencement of legal or
administrative proceedings against ABT in connection with the business described
in this Agreement (the "business"), and (b) all summons, complaints, and
petitions served by third parties upon ABT in connection with legal or
administrative proceedings arising out of the Business, except to the extent
that such disclosure would be prevented by the terms of a protective order of a
court or governmental entity.
15. GOVERNING LAW, VENUE, ATTORNEYS' FEES
-------------------------------------
15.1 This Agreement shall be construed and controlled by the laws
of the State of Washington, and ABT further consents to jurisdiction by the
state or federal courts sitting in the State of Washington. Process may be
served on either party by U.S. Mail, postage prepaid, certified or registered,
return receipt requested, or by such other method as is authorized by law.
15.2 If either MS or ABT employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs, including expert
witness fees.
[*] Confidential Treatment Requested
-6-
16. NOTICES AND REQUESTS. All notices and requests in connection with
--------------------
this Agreement shall be deemed given as of the day they are (i) deposited in the
U.S. mails, postage prepaid, certified or registered, return receipt requested;
or (ii) sent by overnight courier, charges prepaid, with a confirming fax; and
addressed as follows:
COMPANY: AUTO-BY-TEL., LLC
0000 X. Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxx Xxx Xxx, XX 00000
Attention: President
Fax: (000) 000-0000
Phone: (000) 000-0000
MS: MICROSOFT CORPORATION
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attention: Vice President, Worldwide Consumer Division
with a cc to: MICROSOFT CORPORATION
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attention: Law & Corporate Affairs Department
Fax: U.S. Legal Group
(000) 000-0000
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
17. NO ASSIGNMENT. Neither party may assign this Agreement, or any
-------------
portion thereof, to any third party unless the other party expressly consents to
such assignment in writing. Any attempted assignment without such consent shall
give the non-assigning party the right to terminate this Agreement effective
upon written notice.
18. LEGAL RELATIONSHIP. This Agreement is intended solely as a services
------------------
agreement, and no partnership, joint venture, employment, agency, franchise, or
other form of Agreement or relationship is intended.
19. SEVERABILITY. In the event that any provision of this Agreement is
------------
found invalid or unenforceable pursuant to judicial decree or decision, the
remainder of this Agreement shall remain valid and enforceable according to its
terms. The parties intend that the provisions of this Agreement be enforced to
the fullest extent permitted by applicable law.
-7-
20. ENTIRE AGREEMENT/MODIFICATION/OFFER. The parties hereto agree that
-----------------------------------
this Agreement constitutes the entire Agreement between the parties with respect
to the subject matter hereof and merges all prior and contemporaneous
communications. It shall not be modified except by a written agreement dated
subsequent hereto signed on behalf of ABT and MS by their duly authorized
representatives. Neither this Agreement nor any written or oral statements
related hereto constitute an offer, and this Agreement shall not be legally
binding until executed by both parties hereto.
21. BINDING EFFECT. Subject to the limitations herein before expressed,
--------------
this Agreement will inure to the benefit of and be binding upon the parties,
their successors, administrators, heirs, and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the dates indicated below.
MICROSOFT CORPORATION AUTO-BY-TEL, LLC.
/S/ XXXXX XXXXXXXX /S/ XXXXX X. XXXXX
---------------------------- ----------------------------
By By
XXXXX XXXXXXXX XXXXX X. XXXXX
---------------------------- ----------------------------
Name (Print) Name (Print)
PRODUCT UNIT MANAGER PRESIDENT
---------------------------- ----------------------------
Title Title
MARCH 27, 1996 MARCH 11, 1996
---------------------------- ----------------------------
Date Date
-8-
EXHIBIT A
---------
ELECTRONIC ORDER FORM
---------------------
A completed Electronic Order Form will contain the following information:
First Name
Last Name
Xxxxxx Xxxxxxx, Xxx./Xxxxx #
Xxxx
Xxxxx
Zip Code
Phone Number
Year, Make, and Model of Vehicle Requested
-9-
EXHIBIT B
---------
ABT Screen Shot
-10-
