March 9, 1999
Xxxxxxx Xxxxxxxxx
Chief Executive Officer
iVillage Inc.
000 0xx Xxxxxx, 0xx xxxxx
Xxx Xxxx, X.X. 10010
Re: NBC/iVillage Advertising Purchases
----------------------------------
Dear Xx. Xxxxxxxxx:
This letter amends and restates in its entirety the agreement between
the National Broadcasting Company, Inc. ("NBC"), and iVillage Inc.
("Advertiser") dated November 11, 1998 (the "Original Letter Agreement") with
respect to the Advertiser's purchase of certain NBC Television ("NBC TV")
advertising inventory, Exhibit A of the Original Letter Agreement is
incorporated herein by this reference and made a part of this Letter Agreement
in its entirety. The amended and restated terms and conditions shall be as
follows:
1. General Terms. NBC shall provide Advertiser with the use of fifteen
(15) and thirty (30) second advertising spots (each, a "Spot") to be telecast on
NBC TV reasonably spread over 36 months commencing on January 1, 1999. All such
Spots run by Advertiser shall be, as much as practicable, broadcast nationally
by NBC TV, and shall, at all times, be subject to NBC TV's standard terms and
conditions for such advertising which are described in the "Participating
Sponsorship Agreement" attached to the Original Letter Agreement as Exhibit A
thereto (the "Standard Terms"); provided, however, that in the case of a
conflict between the terms of this Letter Agreement and the terms of the
Standard Terms, the terms of this Letter Agreement shall govern. For purposes
of the Standard Terms, Advertiser shall be both the "Advertiser" and the
"Agency" as such terms are used therein. Advertiser acknowledges that the
commercial material previously delivered to NBC may be telecast by NBC TV on any
Spot; provided, however, that it is understood that if Advertiser supplies any
new commercial material to NBC, Advertiser instructs NBC to use such new
material in lieu of the commercial material previously delivered to NBC, and
such new material complies with the standards described in the Standard Terms,
including NBC Advertising Standards, then NBC will make reasonable commercial
efforts to telecast such new material on all Spots commencing 72 hours after
receipt of such new material by NBC.
2. Spots for Cash. (a) NBC undertakes that Advertiser's Spots telecast (i)
prior to January 1, 2000 (including all Spots telecast on or prior to the date
of this Letter Agreement) shall have an aggregate value equal to $13,500,000,
(ii) on or after January 1, 2000 and prior to January 1, 2001 shall have an
aggregate value equal to $8,500,000 and (iii) on or after January 1, 2001 and
prior to January 1, 2002 shall have an aggregate value equal to $8,500,000, in
each case with the value of each Spot calculated at 85% of the gross market
rate charged and agreed by NBC at such time; provided, however, that in the
event that Advertiser does not consummate a Qualified Public Offering (as such
term is defined in Advertiser's Certificate of Incorporation) by June 30, 1999,
Advertiser's Spots telecast prior to January 1, 2000 (including all Spots
telecast on or prior to the date of this Letter Agreement) shall have an
aggregate value not exceeding $5,000,000.
(b) NBC shall provide Advertiser with a written report within 10 business
days after the end of each calendar month following the date hereof setting
forth the aggregate value of the Spots telecast by NBC in the preceding month
(each, a "Monthly Report") and, within 10 business days after the end of each
calendar quarter, a written non-binding estimate of the Spots that NBC intends
to telecast during the upcoming calendar quarter. NBC shall provide Advertiser
with a Monthly Report for the months of January and February 1999 within 10
business days after the end of February 1999. Within 30 days after receiving
each Monthly Report, absent manifest error, Advertiser shall pay NBC in cash the
amount set forth in such Monthly Report.
3. Spot Placement and Terms. (a) The Spots shall be targeted, as much as
commercially reasonable (as determined by NBC), to maximize reach and frequency
to women aged 25-49. The Spots shall be telecast on the Dates, Days and Times
determined by NBC in its sole discretion (following reasonable consultation with
Advertiser); provided, however, that (i) the Spots telecast by NBC TV shall be
teleast primarily in prime time, (ii) nothwithstanding anything to the contrary
contained herein, 10% of the value of the Spots in any calendar year may, in
NBC's sole discretion, be telecast on advertising spots primarily promoting
Advertiser or any of its brands or channels on Xxxx.xxx (provided that all such
co-branded spots shall be subject to Advertiser's consent, such consent not to
be unreasonably withheld), (iii) nothwithstanding anything to the contrary
contained herein, 2% of the value of the Spots in any calendar year may be
placed in on-line advertising or promotion on any Internet, world-wide-web or
other service delivered via interactive delivery owned or controlled by NBC
(such service subject to Advertiser's prior approval, such approval not to be
unreasonably withheld) with the value for such on-line advertising or promotion
calculated at the market rate (less any agency commission) charged by such
service at such time.
(b) The parties agree that no agency fees or other expenses may be
deducted by Advertiser in any way in connection with determining the amount of
cash to be paid to NBC pursuant hereto at any time. Advertiser acknowledges that
NBC makes no guarantee regarding what the actual rating for any particular
Program will be. The parties agree that the payment of cash pursuant hereto
constitutes full and complete payment to NBC for the transactions and
considerations contemplated hereby.
4. Distribution Arrangements. In addition to the other provisions of this
Letter Agreement, Advertiser agrees to pay NBC $1,100,000 for prominent
placement of Advertiser on XXX.xxx, which placement shall Commence on 1 January
1999 and terminate on 31 December 1999. The payments for such placement shall be
made in equal installments on the first business day of each calendar quarter
during 1999.
5. Representations and Warranties. NBC and Advertiser each represent and
warrant that this Letter Agreement has been duly authorized, executed and
delivered by such party and that this Letter Agreement constitutes the legal,
valid and binding obligations of such party, enforceable against it in
accordance with its terms.
6. Confidentiality. Neither party shall issue a press release or make any
statement to the general public concerning this Letter Agreement, the Spots, or
the existence thereof, without the express prior written consent of the other;
provided, however, that NBC agrees that Advertiser may file this Letter
Agreement with the Securities and Exchange Commission (the "SEC") and/or
describe this Letter Agreement in any registration statement filed with the SEC,
in each case 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
2
state laws (the "Securities Laws") as long as Advertiser agrees to use its best
efforts to obtain confidential treatment of the economic and other material
terms hereof under the Securities Laws and to consult with NBC during the
process.
7. Termination. (a) Notwithstanding any other remedy available to NBC, in
the event that:
(i) NBC notifies Advertiser in writing (with specificity) that Advertiser has
materially breached this Letter Agreement and Advertiser has not cured such
alleged breach within ten (10) days of its receipt of such notice; or
(ii) upon the occurence of a Corporate Transaction (as hereinafter defined);
or
(iii) Advertiser admits in writing its inability to pay its debts generally;
makes a general assignment for the benefit of creditors; has any proceeding
instituted by or against it seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of Advertiser or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or similar official for it or any substantial part of its property;
provided, in the case where such proceeding is involuntarily instituted
against Advertiser, such proceeding remains undismissed after thirty (30)
days,
then, in any such case, NBC shall have the right, but not the obligation, to
terminate this Letter Agreement, without prejudice to the rights of the parties
hereunder and thereunder, and require Advertiser to immediately pay NBC a cash
amount equal to the value of the advertising already telecast or
delivered by NBC as of such termination. Notwithstanding the foregoing,
the terms contained in Sections 5, 6, 7, 8 and 9 shall survive the termination
hereof. Any such termination right in connection with a Corporate Transaction
shall be exercisable no later than the later to occur of (x) twenty (20) days
prior to the consummation of such Corporate Transaction and (y) ten (10)
business days after receipt by NBC of notice (which notice shall identify the
Competitor, be in writing, explicitly state that it is being delivered in
accordance with this Section 7 and provide NBC with such additional information
as has been provided to the other stockholders of Advertiser (from Advertiser of
such Corporate Transaction (which termination shall become effective only upon
the consummation of such Corporate Transaction). For purposes of this Section 7,
the following terms shall have the following meanings:
(i) "Corporate Transaction" shall mean (A) any consolidation, reorganization
or merger of Advertiser with a Competitor, other than a transaction resulting in
the holders of the capital stock of Advertiser (prior to such consolidation,
reorganization or merger) having Control over the surviving or resulting entity,
(B) any Competitor becoming the holder of a majority of the capital stock of
Advertiser entitled to vote for the election of directors or (C) any sale,
transfer or other disposition by Advertiser of all or substantially all of its
assets to a Competitor.
(ii) "Competitor" shall mean a television broadcast network entity that
directly competes with NBC or an entity that is an Affiliate of such television
broadcast network entity.
(iii) "Affiliate" shall mean a person that directly, or indirectly through one
or more intermediates, Controls, or is Controlled by, or is under common Control
with a television broadcast network.
(iv) "Control" and "Controlled by" means (A) the director or indirect
ownership of more than 50% of the voting capital stock or other voting
securities, as the case may be, of such entity or (B) the direct or indirect
ownership of at least 30% of the voting capital stock or other voting
3
securities, as the case may be of such entity and the right to vote by contract
or otherwise for a majority of the board of directors or other governing body of
such entity.
8. 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 relating to the
subject matter hereof. 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 cirucmstance. The terms of this Letter Agreement shall apply
to parties hereto and any of their successors or assigns. 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.
9. Governing Law and Jurisdiction. This Letter Agreement shall be governed
by and construed under the laws of the State of New York applicable to contracts
fuly performed in New York, without regard to New York conflicts law. The
parties hereto irrevocably consent to and submit to the exclusive jurisdiction
of the federal and state courts located in the County of New York. The parties
hereto irrevocably waive any and all rights to trial by jury in any proceeding
arising out of or relating to this Agreement.
4
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.
Very truly yours,
NATIONAL BROADCASTING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title:
----------------------------
ACCEPTED AND AGREED:
iVILLAGE INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx, Esq.
----------------------------
Title: General Counsel and Secretary
-----------------------------
5
