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EXHIBIT 10.33
[i3 Mobile (TM) LOGO]
March 30, 2000
Mr. Xxxx Xxxxx
Director, Online and Partner Marketing
XxxxxxXxxx.xxx, Inc.
0000 XX 0xx Xxx
Xx. Lauderdale, FL 33309
Re: i3 Mobile, Inc. - Letter of Intent
Dear Xxxx:
This letter sets forth a proposal to pursue further negotiations and discussions
leading to a definitive agreement between XXXXXXXXXX.XXX, INC.
("XXXXXXXXXX.XXX") and i3 Mobile, Inc. ("i3"). The proposed arrangement will
require further documentation and approvals, including the preparation and
approval of a definitive agreement setting forth the terms and conditions of the
business relationship (the "Agreement"). Nevertheless, i3 and XXXXXXXXXX.XXX, by
signing below, execute this letter to evidence their intentions to proceed in
mutual good faith to complete the work required to negotiate the Agreement on
terms that are consistent with this letter.
In our view, i3 is uniquely positioned to work with XXXXXXXXXX.XXX to develop
the value of XXXXXXXXXX.XXX wireless information and product offerings. The
proposed terms and conditions include, but are not limited to, the following:
1. LICENSE GRANT: During the term of the Agreement, i3 shall serve as the
exclusive integrator of XXXXXXXXXX.XXX's wireless information services from
the CBS SportsLine site. The Agreement will define the exclusivity
contemplated. The exclusivity language will not require XXXXXXXXXX.XXX to
utilize the services of i3 should a carrier or OEM require that
XXXXXXXXXX.XXX utilize a select ASP that is not i3 to deliver content to
that carrier or OEM. XXXXXXXXXX.XXX will first request that any such
carrier or OEM company utilize i3. Furthermore, nothing contained in the
Agreement will restrict XXXXXXXXXX.XXX's right to license content to other
entities for distribution in any medium, including other wireless
platforms.
2. TERM: The term of the Agreement shall be three (3) years beginning on the
Effective Date. The Effective Date of the Agreement shall be either (a) the
date the Agreement is fully signed by the parties; or (b) the date of the
first wireless service launch contemplated hereunder, whichever is later
provided that any delay is not caused by i3. XXXXXXXXXX.XXX shall have the
right, in its sole discretion, to terminate the Agreement on the 18 month
anniversary of the Effective Date by paying i3 $375,000. The parties agree
to translate the terms of this letter into the Agreement within 30 days of
the signing of this letter.
3. GEOGRAPHIC SCOPE: The Agreement shall cover the CBS SportsLine Web Site for
distribution within the US and Canada only. In any other geographic areas
covered by companies with whom XXXXXXXXXX.XXX has an affiliated company,
XXXXXXXXXX.XXX will exercise all reasonable
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efforts to introduce i3 to that affiliated company so that i3 can negotiate
an agreement on terms agreeable by all parties.
4. DEVELOPMENT FEE: Immediately upon execution of the Agreement, i3 shall work
with XXXXXXXXXX.XXX to design the Wireless Portals for the XXXXXXXXXX.XXX
service. Wireless Portal(s) will be defined as the presentation of content
and advertising displayed on a wireless devise and does not include any
pages on the XXXXXXXXXX.XXX Web Site, including, but not limited to, pages
dedicated to promotion and personalization/activation of the wireless
devices. XXXXXXXXXX.XXX shall pay i3 the sum of $100,000 for the
development of this web site. For the $100,000 payment, the following
services will be included:
- Technical design, development, testing and implementation of the
wireless portal (including all provisioning pages which will include
the ability to access audio content) pursuant to the proposed product
plan attached as Exhibit I. In addition, i3 will develop additional
products requested by XXXXXXXXXX.XXX and approved by i3 (which
approval shall not be unreasonably withheld) at a mutually agreed upon
cost. To the extent i3 will not agree to develop such product,
XXXXXXXXXX.XXX will be relieved of its exclusivity obligations to i3
with respect to such product.
- I3 will provide best efforts to ensure that the Wireless Portal is
maintained in accordance with the highest industry standards on a
24/7/365 basis - i3 Mobile Wireless Customer Care Set-Up
- In-house training of XXXXXXXXXX.XXX's staff relating to customer
service procedures and policies
- FAQ (Frequently Asked Questions) online document
- Second level customer support including access to i3 staff on a 24/7
basis, at XXXXXXXXXX.XXX's election, i3 will handle first level
customer support and/or assist XXXXXXXXXX.XXX in such first level
customer support.
5. PAYMENTS BY i3: In consideration of the rights granted by XXXXXXXXXX.XXX to
i3 in Paragraph 1, i3 agrees to pay XXXXXXXXXX.XXX as follows: $300,000
upon execution of the Agreement and an additional $200,000 on the
anniversary of the second year of this Agreement.
6. WARRANTS: In consideration of the rights granted by XXXXXXXXXX.XXX to i3 in
Paragraph 1, i3 shall issue to XXXXXXXXXX.XXX warrants (the "Warrant") to
purchase 20,000 shares of i3's Common Stock at an exercise price equal to
fifteen ($15.00) dollars per share. The Warrant shall vest 50% upon
execution and 50% on the 18 month anniversary of the deal (provided SPLN
does not exercise it's termination right) and shall expire three (3) years
following its issuance and shall not terminate upon an initial public
offering or change of control of the Company. Subject to any relevant
securities laws, rules and regulations, the Warrant, as well as the Common
Stock acquired through exercise thereof, will be freely transferable by
XXXXXXXXXX.XXX and may be exercised in whole or in part. When exercising
the Warrant, XXXXXXXXXX.XXX shall have the right to either (a) purchase the
total number of shares of Common Stock which such Warrant entitles
XXXXXXXXXX.XXX to purchase at the exercise price described above or (b)
receive the net number of shares of Common Stock arising from the
difference between the market price of such Common Stock at the date of
exercise and the exercise price of the Warrant. Prior to the grant of the
Warrant hereunder, i3 will provide XXXXXXXXXX.XXX with an opportunity to
review i3's standard Warrant form prior to execution. I3 and XXXXXXXXXX.XXX
will mutually agree upon the registration rights of the Warrant among other
things currently contemplated to be piggyback rights.
7. MARKETING FUNDS: In consideration of the rights granted by XXXXXXXXXX.XXX
to i3 in Paragraph 1, i3 shall pay XXXXXXXXXX.XXX $200,000 upon the launch
of the Wireless Portal during Year 1 of the Agreement, $225,000 on the
anniversary date for Year 2 of the Agreement and $275,000 on the
anniversary date for Year 3 of the Agreement. A marketing plan will be
developed to use these funds to promote the wireless products on
XXXXXXXXXX.XXX and the funds will be released in accordance with this plan.
In order to match i3's contribution to the marketing of said products,
XXXXXXXXXX.XXX will charge i3 a rate of $15 CPM that is half the normal
rate for said advertising.
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It is agreed that XXXXXXXXXX.XXX will have final approval of all creative
subject to i3's right to consult with XXXXXXXXXX.XXX. .
8. WIRELESS SUBSCRIPTION PACKAGES: Immediately upon signing the Agreement,
both parties will work to develop wireless products based on
XXXXXXXXXX.XXX's products and based upon the product plan set forth in
Exhibit I. The net revenue from such subscription-based products will be
divided equally between the two parties. XXXXXXXXXX.XXX will use
commercially reasonable efforts to promote and advertise the wireless
portals and products and to encourage subscription growth through the
various media sources it has access to.
9. CONTENT LICENSING: During the term of the Agreement, i3 shall have the
right to distribute the XXXXXXXXXX.XXX content to create additional
wireless products that will be branded with a XxxxxxXxxx.xxx brand and will
be approved by XXXXXXXXXX.XXX in advance (including the financial terms of
such distribution). It is also agreed that i3 and XXXXXXXXXX.XXX will share
revenue equally through the licensing of XXXXXXXXXX.XXX content after
deducting the cost of any third party content license fees incurred by
either party and/or any third party advertising sales commissions incurred
by either party (all such third party fees shall be mutually agreed by the
parties).
10. ADVERTISING REVENUE: XXXXXXXXXX.XXX and i3 will share Net Revenue from the
sale of advertising and sponsorship from within the Wireless Portal on a
50/50 basis. Net Revenue shall be defined as revenue generated from the
sale of advertising and sponsorship less any agency fees and commissions
not to exceed forty percent (40%). Should i3 be interested in selling any
of the inventory generated on the Wireless Portal, the parties will
mutually agree upon the process for i3 to sell this inventory.
11. E-COMMERCE REVENUE: XXXXXXXXXX.XXX will create (i) e-commerce (e.g. sale of
sports merchandise via the xxx.xxxxxxxxxx.xxx web site) within the Wireless
Portal. XXXXXXXXXX.XXX and i3 will share equally (50/50 basis) the Net
Merchandising Revenue derived from e-commerce sold or subscribed to on the
XXXXXXXXXX.XXX Wireless Portal. Net Merchandising Revenue is defined as the
gross retail price (excluding shipping and handling and applicable sales
taxes) LESS cost of goods sold, credit card processing costs, returns,
fraudulent transactions, charge-backs and other direct costs (including any
third party revenue sharing) associated with the sale.
12. OTHER SERVICES: XXXXXXXXXX.XXX (or it's e-commerce partner) will be
responsible for any credit card billing for any e-commerce or subscription
services.
13. WIRELESS PORTAL: XXXXXXXXXX.XXX and i3 agree to have the Wireless Portal
operational by a mutually agreeable date, which in no case will be later
than July 30, 2000.
14. WIND-DOWN PLAN: XXXXXXXXXX.XXX will mutually agree upon a wind-down plan
upon termination.
15. DATABASE: All user information generated shall be the exclusive property of
SPLN.
This transaction is subject to the negotiation and execution of the Agreement
with terms satisfactory to i3 and XXXXXXXXXX.XXX. No press release or other
announcement concerning the proposed transaction will be issued except by the
mutual written consent of the parties and except as may be required by
applicable securities laws in connection with i3's initial public offering. This
letter and all negotiations and discussions between the parties shall be
strictly confidential and will not be disclosed in any manner except to
employees and agents of the parties on a need to know basis.
Each of the parties will use its best efforts to complete and execute the
Agreement on or before April 30, 2000. This letter sets forth the intent of the
parties only, is not binding on the parties and may not be relied on as the
basis for a contract or be the basis for a claim based on detrimental reliance
or any other theory; provided that the confidentiality provisions are
enforceable in accordance with their terms. The
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parties understand that no party shall be bound until the Agreement has been
negotiated, executed and delivered.
This letter may be terminated at any time by either party giving written notice
to the other. This letter will terminate automatically on April 30, 2000 if the
Agreement has not been executed by that date. If this letter accurately reflects
your understanding of our agreement, then kindly countersign and return the
enclosed copy of this letter to my attention.
Sincerely,
i3 Mobile, Inc.
/s/ Xxxxx X. Xxxxxxx
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National Account Manager
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ACCEPTED AND AGREED TO:
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxx
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President
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Exhibit I
(see attached Spreadsheets)
