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EXHIBIT 10.54
PNV INC.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
November 18, 1999
PACCAR Inc
000 - 000xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx, Executive Vice President
Dear Xxx:
This letter (the "Letter") describes the agreements between XXXXXX.xxx,
a division of PACCAR Inc, ("PACCAR") and PNV Inc. ("PNV") in connection with the
strategic relationship between PACCAR and PNV.
In furtherance of the strategic relationship between PACCAR and PNV,
PACCAR (directly or through one or more of the other divisions, subsidiaries and
affiliates of PACCAR Inc) and PNV agree as follows:
- PACCAR will purchase up to five million dollars ($5,000,000) of
advertising services provided by PNV through PNV's various advertising
channels, including PNV's Connect! magazine, Internet properties and/or
programming over PNV's cable network (subject to PNV's existing
contractual obligations) during the two-year period following the
Effective Date (as defined below). PACCAR will purchase a minimum of
one million dollars ($1,000,000) of such services during each of the
first two years from and after the Effective Date (the "Minimum
Commitment"). Any discounts made available to PACCAR by PNV pursuant to
this Letter or otherwise will not reduce PACCAR's Minimum Commitment.
- PACCAR will pay for the inside back cover of Connect! magazine for each
of the first two years from and after the Effective Date. PACCAR will
have the right of first refusal to pay for the back cover and/or the
inside front cover (in lieu of the inside back cover), if and when
either becomes available after the expiration or termination of any
existing commitments, for the remainder of the two-year period. The
rates for these Connect! magazine advertisements will be the lesser of
(i) twenty-five percent (25%) off the then-current published rate cards
without further reduction for commissions or any other discounts or
promotions, or (ii) the rate paid by any other third party purchasing
comparable volumes of services (the "Agreed Rates") and will be
credited against the Minimum Commitment described above. PACCAR will
supply copy for each such advertisement.
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- PACCAR will provide free to PNV one-page advertisements twice per year
in Kenworth's World's Best magazine and Peterbilt's Class Pays magazine
during the first two years from and after the Effective Date (which
will be a total of eight (8) one-page advertisements). PNV will supply
copy for each advertisement, which shall comply with each magazine's
general advertising policies.
- PACCAR will provide free to PNV hyperlinks from Kenworth's home page
and Peterbilt's home page to PNV's website during the first two years
from and after the Effective Date. The size and content of the
hyperlink icon will be mutually agreed to by the parties.
- PACCAR will install PNV connection plates (for cable, telephone and
Internet) on certain of its premium models (it being understood that
PACCAR will place such connection plates on each of the trucks
purchased by the PACCAR customers to whom PACCAR makes available
XXX.xxx ISP memberships as provided below).
- PNV will make available to PACCAR the lead banner advertisement
(including hyperlinks to up to three websites of PACCAR Inc or its
divisions, subsidiaries and affiliates, with the size and content of
the hyperlink icon to be mutually agreed to by the parties) on the
first page of each of the "Headlines," "Technology," and "Trucking
News" sections (or any successor sections) of PNV's website during the
first two years from and after the Effective Date. The rates for these
banner advertisements will be at the Agreed Rates and will be credited
against the Minimum Commitment. PNV will not permit any other truck
original equipment manufacturer to advertise on "Headlines,"
"Technology," and "Trucking News" sections (or any successor sections)
at any time PACCAR has purchased the banner advertisements on each such
page. PNV may rotate in noncompetitive banner advertisements on these
pages from time to time during the two-year term if PACCAR does not
purchase all such banner advertisements.
- PNV will grant to PACCAR a right of first refusal, during the first two
years from and after the Effective Date, with respect to the banner
advertisement (including hyperlinks to up to three websites of PACCAR
Inc or its divisions, subsidiaries and affiliates, with the size and
content of the hyperlink icon to be mutually agreed to by the parties)
on the home page (or any successor page) of PNV's website currently
held by Volvo, upon the termination or expiration of PNV's contract
with Volvo. The rates for these banner advertisements will be at the
Agreed Rates and will be credited against the Minimum Commitment.
- PNV will provide to PACCAR without cost five thousand (5,000) one-year
XXX.xxx ISP memberships during each of the first three years
immediately after the Effective Date ( for a total of fifteen thousand
(15,000) annual memberships) for PACCAR to make available to its
customers. With respect to the CD-ROMs to be distributed to PNV
customers in connection with the installation of PNV's ISP software,
PNV will allow PACCAR to have co-marketing and co-branding
opportunities on the splash page, provided that PACCAR pays any third
party fees and expenses for the preparation of such
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splash page. (It being understood that PNV has existing arrangements
with an Internet service provider to provide splash page marketing.)
- Subject to compliance with applicable securities laws and the receipt
of customary representations and warranties from PACCAR in connection
with such securities laws, PNV will grant to PACCAR (i) five-year
warrants, which shall vest one year after the Effective Date, to
purchase up to thirty-one thousand two-hundred fifty (31,250) shares of
PNV's common stock at a purchase price of one cent ($0.01) per share,
and (ii) five-year warrants, which shall vest one year after the
Effective Date, to purchase up to seventy-five thousand (75,000) shares
of PNV's common stock at a purchase price per share equal to the
offering price in PNV's initial public offering; provided, however,
that all such warrants will terminate and/or PNV will have the right to
repurchase (if such warrants have been exercised) the underlying common
stock at a purchase price per share equal to the exercise price paid by
PACCAR if PACCAR fails to meet its Minimum Commitment and fails to cure
such default within thirty (30) days after receiving written notice of
such default. For each one million dollars ($1,000,000) actually
received by PNV or contractually committed to by PACCAR in excess of
the Minimum Commitment (on a cumulative basis) during the first two
years immediately after the Effective Date, PNV will grant to PACCAR,
subject to compliance with applicable securities laws and the receipt
of customary representations and warranties from PACCAR in connection
with such securities laws and no earlier than the first anniversary of
the Effective Date, fully vested five-year warrants to purchase up to
fifty thousand (50,000) shares of PNV's common stock at a purchase
price per share equal to the then-current fair market value per share
at the time the warrants are issued, subject to an aggregate cap on
warrants to be issued under this sentence of one-hundred and fifty
thousand (150,000) shares (exclusive of the warrants to purchase
one-hundred and six thousand two-hundred fifty (106,250) shares
discussed above) of PNV's common stock. The warrants shall be in a form
reasonably acceptable to both parties and shall include protection from
dilution due to stock splits, recapitalizations or any similar events.
In furtherance of the strategic relationship between PACCAR and PNV,
PACCAR and PNV will:
- Meet quarterly to discuss the strategic focus of PNV and work together
to identify and develop new products, services and content for delivery
through PNV channels. Funding for such projects will be determined on a
case-by-case basis. PACCAR and PNV expect that each party will provide
the resources or funding necessary to develop such products, services
and content commensurate with the anticipated benefits to be derived by
such party.
- Issue a joint press release regarding the strategic relationship
between PACCAR and PNV in a form and at a time mutually agreed to by
the parties in advance.
The terms and conditions of this Letter will become effective
immediately after the closing of PNV's initial public offering and, if
necessary, approval of this Letter by the
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respective Boards of Directors of each of PNV and PACCAR (the earliest date on
which each of the foregoing shall have occurred is referred to herein as the
"Effective Date").
* * * * * * * *
If you are in agreement with the terms set forth in this Letter, please
sign this Letter in the space provided. PNV looks forward to a long relationship
with PACCAR.
Sincerely,
PNV INC.
By:/s/
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Xxxxxx X. May, Chief Executive Officer
ACKNOWLEDGED AND AGREED:
XXXXXX.xxx, a division of PACCAR Inc
By:/s/
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Name:
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Title:
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