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EXHIBIT 10.31
April 20, 1999
Mr. David Ropes
Ford Motor Company
00000 Xxxxxxxxx Xxxxx Xxxxx, Xxxxx XX000
Xxxxxxxx, XX 00000
RE: LETTER OF AGREEMENT
Dear Xxxxx:
On behalf of Digital Entertainment Network, Inc. ("DEN"), I'd like to thank you
for your commitment to be one of DEN's Charter Sponsors. This Letter of
Agreement sets forth the basic agreement between DEN and Ford Motor Company
("Advertiser") with respect to the purchase of category-exclusive sponsorship
for Programming Year 1 (July 1, 1999-June 30, 2000).
1. Advertiser shall have advertising exclusivity for the multi-product
category of new and used, domestic and imported automobiles (i.e. passenger
cars and trucks), rentals and/or sales (collectively, "Automobiles") for
Programming Year 1 for DEN programming Episode(s) to be distributed on or
by DEN's channels and/or websites on the World Wide Web.
2. At Advertiser's request, DEN and Advertiser shall work together in good
faith to develop Advertiser's advertising and any other sponsorship
elements for Programming Year 1. If Advertiser desires, DEN will consult
with Advertiser and its advertising agencies to develop its creative for
DEN. If Advertiser desires, DEN will also produce in-house the banners and
commercials which Advertiser runs on DEN programming. If DEN produces
Advertiser's banners and commercials in-house, there will be no charge to
Advertiser for this production. Advertising may include audiovisual
advertising spots similar to television commercials ("Commercial Spots"),
so-called banner ads displayed on DEN's web pages ("Banner Ads"), in-Episode
product placements (i.e., "hero" cars and trucks in DEN shows), audio
clips, endorsements, games, contests, sweepstakes, hypertext links to
informational or purchase opportunities or other advertising opportunities
mutually agreeable to DEN and Advertiser (collectively "Ad(s)").
Additionally, if Advertiser desires to include in-Episode product
placement, DEN will, at no additional cost to Advertiser make good faith
efforts to incorporate such product(s) in recognizable form into Episode(s)
if consistent with DEN's artistic and creative vision of the Episode(s) and
subject to DEN's production schedule.
3. DEN guarantees that the aggregate of all Episode(s) first released in
Programming Year 1 which include Advertiser messages shall receive not less
than an aggregate of [*] advertising impressions. Of the [*] impressions, at
least [*] will come from Advertiser banners and commercials if Advertiser
chooses to make broadscale use of these types of creative elements. The
remainder may come from a combination of banners, commercials, product
placement and other types of Advertiser mentions. Impressions achieved for
Advertiser during the May-June 1999 development phase will be at no cost to
Advertiser, but DEN will count all impressions toward the [*] impressions
guarantee. The accounting of advertising impressions shall be verified by a
mutually agreed upon third-party verification service. If fewer Total
Impressions are verified, the remedy to Advertiser will be one of the
following: [*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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[*]
4. DEN shall collect data reasonably requested by Advertiser, provided such
data is readily available to DEN, concerning the viewers of Episode(s) and
the viewing of the Episode(s) and Ad(s) during Programming Year 1 and make
such information available to Advertiser.
5. In consideration of the above, Advertiser agrees to:
(a) pay DEN the sum of [*] for the period July 1, 1999-December 31, 1999 of
which [*] may be mutually agreed upon barter (for example, automobiles,
targeted youth media, etc.);
(b) pay to DEN the sum of [*] for the period January 1, 2000-June 30, 2000
on a mutually agreed upon payment schedule;
(c) For Programming Year 1, Advertiser shall not be required to [*].
6. Provided all amounts due hereunder have been paid, Advertiser shall have two
(2) successive, dependent rights of first negotiation and subsequent rights
of first refusal for each of the Programming Years 2 and 3 (July 2000-June
2001 and July 2001-June 2002, respectively) for the "Automobile"
multi-product category. The first of such rights (for Programming Year 2)
shall need to be exercised by [*] for Advertiser to hold "Automobile"
category. Commitment for Programming Year 3, if applicable, will need to be
exercised by Advertiser no later than [*]. (See Attachment I for Year 2 and
Year 3 maximum pricing for Ford for "Automobile" category.) Should Advertiser
choose to make an incremental commitment to DEN over and above its Charter
Sponsor commitment during any Programming Year in which it holds a
category-exclusive Charter Sponsorship. Advertiser will be entitled to a [*]
discount for this incremental buy vs. general market "spot" rates.
The parties shall negotiate in good faith to enter into a more formal agreement
incorporating the material terms and such other terms and conditions as are
typical of agreements of this type in the U.S. advertising industry. Until such
time, if ever, this agreement shall be binding upon the parties.
We look forward to working with you to develop an effective digital branding
effort for Ford Motor Company on the DEN.
Sincerely,
Xx Xxxxxx
Chief Marketing Officer
"UNDERSTOOD AND AGREED"
"Advertiser"
By: /s/ XXXXX ROPES
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Its: Director of Corporate Advertising
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Date Signed: 5/13/99
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* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Attachment I
Maximum Charter Sponsor pricing for Ford for "Automobile" category
Year 2 [*]
Year 3 [*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
