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AutoWeb, DealerX ink license agreement

AutoWeb Inc., previously known as Autobytel Inc., struck a license agreement with DealerX Partners LLC, a provider of data-driven marketing products for car dealerships and original equipment manufacturers.

AutoWeb will receive a perpetual license to access and use DealerX's proprietary platform and technology for targeted, online marketing, the company said Oct. 10. DealerX will operate the platform for AutoWeb and provide enhancements to and support for the platform for an initial five-year period, which may be extended in perpetuity.

The transaction consideration consists of a lump-sum payment to DealerX of $8 million upon the execution of the agreement. During the initial five-year support period, DealerX has the option to earn shares of AutoWeb common stock, representing roughly 5% of AutoWeb's outstanding common stock if AutoWeb's market capitalization reaches $225 million.

If these shares are issued to DealerX, its obligation to provide platform operation, enhancements and support for the platform will continue in perpetuity. Alternatively, AutoWeb may elect to make a lump-sum payment of $12.5 million to extend DealerX's obligations in perpetuity.

Further, in connection with the license agreement, the company's board granted an exemption to DealerX under its tax benefit preservation plan with respect to the common shares that may be issued to DealerX, and the companies entered into a stockholder agreement, as well.