EXHIBIT 10.11
[LOGO]
Interactive Marketing Inc.
Interactive Marketing Inc.
South Xxxxxxxxx Boulevard,
Suite 360, Manhattan Beach,
CA 00000 000.000.0000 Fax
310.374.4233
xxx.0xxxxxxxxxxxxxxxxxxxx.xxx
TO: XXXXX XXXXXX, SPORTSPRIZE ENTERTAINMENT, INC.
FROM: XXXX X. XXXXXX
SUBJECT: ENGAGEMENT AGREEMENT
DATE: MAY 6, 1999
--------------------------------------------------------------------------------
Thank you for your interest in retaining Interactive Marketing Inc. (hereafter
IMI) to provide strategic and tactical Marketing services to Sportsprize
Entertainment, Inc., (hereinafter, "SPE"). The following represents the terms of
our engagement:
1. Term.
a) SPE will retain Interactive Marketing Inc., to provide the
services as set forth in paragraph 3 below for a term of one (1)
year, commencing upon the signing of this agreement and the
receipt of the initial monthly retainer by IMI as provided herein
(the "Effective Date"). However, it is understood and agreed by
the parties that both IMI and SPE shall have the right to cancel
this Agreement at the end of the first One Hundred and Eighty
(180) days of such term (the "Term"), upon Five (5) days written
notice.
b) In the event that this Agreement is not cancelled at the end of
the first One Hundred and Eighty (180) days of the term, the
parties agree to begin to negotiate for an extension of this
understanding not later than ninety (90) days prior to the
expiration of the full One (1) year Term, for an exclusive
negotiation period not to exceed sixty (60) days.
2. Status of Personnel. The parties acknowledge that Interactive
Marketing Inc., (hereafter IMI) will be providing services hereunder
as a non-exclusive independent contractor. IMI shall provide the
services of Xxxxxx Xxxxxx and Xxxx Xxxxxx and such other of its
management and employees as it deems appropriate to provide the
contracted services to SPE hereunder. All such persons will be under
the specific direction and control of IMI and IMI is responsible for
their compensation and any and all other obligations of an employer or
general contractor, including but not limited to withholdings for
taxes and responsibility for any or all employee benefits. Nothing in
this agreement shall be construed to make such persons employees of
SPE for any purpose.
3. Services. IMI shall, during the first One Hundred and Eighty (180)
days of the term provide the following services under this agreement:
[Initials]
a) Create an overall Marketing and Operational Strategy for the
company, which will contain strategic and tactical business
recommendations for the operational, revenue, marketing and
organizational issues involved in the launch of the
Xxxxxxxxxxx.xxx website. These strategies and recommendations
will address, among other issues:
o The creation and operation of the Four (4) planned retailing
areas.
o A review of the structure and operations of the play of the
Xxxxxxxxxxx.xxx games.
o All legal and regulatory issues relating to the conduct of
the Xxxxxxxxxxx.xxx games.
o Site design, navigation, hosting, hardware and connectivity
issues.
o Database design, capabilities and report functionalities.
o The creation of a Go to Market plan for Xxxxxxxxxxx.xxx
which will address
- Review and revision of existing business plan
- Personnel requirements and job descriptions
- Liaison with Kaleidoscope Marketing and help secure
media and event partners
- Creation of Revenue, Traffic Building and Public
Relations strategies and assistance in locating
additional resources to execute such strategies,
including public relations, ad sales representation and
promotional marketing.
o Assist in identifying key management personnel and advisory
panels
o During the course of our engagement provide close
consultation to SPE management to develop additional new
business models and revenue generation strategies for SPE,
including revisions and fine-tuning of the Go to Market Plan
as well as integrate SPE into IMI's deal flow and strategic
contacts to extend SPE's business model and create
additional opportunities for the Company.
b) IMI will undertake in good faith to meet the following timetables
with respect to the above:
i) Within 30 days of the commencement of our engagement, IMI
will deliver an Initial Business Review and Assessment of
the company's objectives, core capabilities, assets,
products and services, as well as its relationships and
available media platforms to be leveraged and meet with
Kaleidoscope Marketing to integrate them into the planning
process. Not later than the end of that period, IMI will
meet with SPE management for an Initial Review and
Assessment, and to continue to prioritize Company
objectives.
ii) Within 45 days of the commencement of our engagement, IMI
will complete its review and recommendations relating to the
Site and Game products as well as any database, hardware and
infrastructure issues, as well as an initial review of
Organizational issues.
iii) Within 60 days of the commencement of our engagement, IMI
will present an Initial Draft and Outline of its Go to
Market plan for creating multiple revenue streams from
sources such as advertising, e-commerce, sponsorships,
promotions and subscriptions,
[Initials]
2
etc. relating to the exploitation of SPE content, player
following, and Retailing operations. Not later than the end
of that period, IMI will meet with SPE to review, prioritize
and finalize the strategies for that Go To Market Plan.
iv) Within 150 days following the commencement of our
engagement, IMI will deliver a detailed Interactive Go to
Market Plan, outlining strategies to create multiple
revenues streams for e-advertising, e-commerce,
e-subscriptions, that leverage interactive media and
technologies as a platform to extend the company's
capabilities, assets, products and services. These
strategies will include but not necessarily be limited to
its Game content and Retail operations and will contain our
strategic and tactical recommendations as to how SPE can
continue to maximize its consumer and trade marketing
effectiveness and generate new revenue opportunities by
leveraging its core assets and capabilities.
v) Throughout this engagement, IMI will provide close
consultation to SPE management to oversee the implementation
and execution of the strategies and tactical approaches
contained in the Plan, and to develop additional
deliverables.
vi) During the course of our engagement, IMI will integrate SPE
into its deal flow and strategic contacts to extend SPE's
business model and create additional opportunities for SPE,
and meet periodically with management to insure that IMI and
Management have the same understanding of Company goals and
objectives.
4. Compensation: It is understood and agreed by and between the parties that
in exchange for the mutual promises and undertakings contained herein that
IMI shall be compensated as follows:
a) IMI will receive a base monthly retainer fee of Twenty Five Thousand
Dollars ($25,000) for the first Three (3) months of the term and a
base monthly retainer fee of Thirty Thousand Dollars ($30,000.00) for
each subsequent month of the term, due and payable on the Effective
Date and thereafter on the first day of each subsequent full month
through the end of the Term.
b) SPE shall designate IMI as its non-exclusive Independent Sales Agent.
For acting in this capacity IMI shall receive as an additional fee,
15% of any and all of SPE's recurring Net revenues resulting from
advertising, sponsorship and promotion revenues generated by sales and
agreements that IMI directly brings to SPE during the term of this
Agreement, as extended, payable monthly for the length of the
underlying sales contract, as extended. IMI will also be entitled to
that commission on other direct revenue opportunities with respect to
which SPE requests IMI's assistance in developing and closing, payable
monthly for the length of the underlying sales contract, as the same
may extended. It is understood that the value of any prize or
merchandise promotions received by SPE shall be calculated at 50% of
the retail value of the merchandise or prize for the purpose of
calculating IMI's commission.
c) In addition, the President of SPE hereby agrees to sell to IMI or its
nominee 600,000 Reg S shares in Sportsprize Entertainment Inc. for a
price of $.01 per share. Of such total, 400,000 shares shall be
offered to IMI and available for sale immediately upon the Effective
Date of this Agreement, and, provided this Agreement is not cancelled
at the end of the first One Hundred Eighty (180) days, IMI shall be
offered and have the right to purchase the remaining 200,000 shares on
the 181st day. These shares are subject to Rule 144 and thus will not
be tradeable for a period of One (1) year. In the event that SPE
completes a registration statement or attains a small cap listing on
NASDAQ, these shares shall have full "piggyback" registration rights,
at SPE's expense, and will thus become free trading. IMI agrees that
when such shares become free trading, that IMI will limit the shares
it offers for sale in any single week to 5% of the previous weeks'
total share trading volume.
[Initials]
3
d) IMI shall be entitled to reimbursement of all reasonable, necessary
and pre-approved travel, entertainment and business expenses incurred
in furtherance of SPE business and pursuant to this undertaking, upon
submission of reasonable documentation and receipts, SPE will
designate an executive to be available to make timely approval of
requests by IMI to incur reimbursable expenses on SPE's account. IMI
will be guided by SPE policy relating to business entertainment and
travel expenses, and will submit requests for reimbursement on forms
acceptable to SPE. Reimbursement will be made to IMI not later than
Thirty (30) days after submission of documentation. However, it is
understood and agreed that SPE corporate policy notwithstanding, Air
Travel of a duration of more than Three (3) hours, undertaken by
Xxxxxx Xxxxxx or Xxxx Xxxxxx, at the request of SPE, will be booked in
the next highest level of cabin service above Coach which is available
for a required flight. With respect to other IMI employees, they will
be entitled to reimbursement for the cost of Upgrade Certificates on
such flights, and will book the underlying ticket at Coach fares.
5. Limitation of Liability. In the event of any breach of this Agreement by
either party, the limitation of any claim of loss by the non-breaching
party shall be no greater than the proven financial loss sustained by the
non-breaching party by virtue of such breach. In no event shall either
party be liable hereunder for incidental or consequential damages for any
breach of this Agreement.
6. Basis for Engagement: SPE acknowledges that IMI has been retained because
of its experience and knowledge in the field of Internet and Interactive
marketing, and that IMI will be providing its opinions and consultations
based on its accumulated knowledge and experience and that of its
principals and employees. SPE is free to accept or reject any such advice,
opinions and consultations offered, and to use, modify or reject any such
written materials prepared by IMI.
7. No Rights to Marks: Each party acknowledges that it is not being granted or
vested with any right or interest, ownership or otherwise, in or to any of
the other party's trademarks, trade-names, service marks or logos by virtue
of or pursuant to this Agreement.
8. Entire Agreement: This written Agreement constitutes the sole and only
agreement of the parties relating to the matters covered hereby. Any prior
or contemporaneous agreements, promises, negotiations or representations
not expressly set forth in the Agreement are of no force or effect. This
Agreement supercedes any and all existing contracts and agreements by the
parties with respect to the subject matter covered herein. Any and all
notices made or required hereunder shall be delivered in writing to each
party at their corporate address, attention of the respective Chief
Executive Officers.
If this Agreement, consisting of Four (4) pages including this signature page,
accurately states the terms of our Agreement, please sign below where indicated,
and return to IMI together with the payment specified in section 4a).
Sportsprize Entertainment, Inc. Interactive Marketing, Inc.
By /s/ Xxxx Xxxxxx By /s/ Xxxx X. Xxxxxx
-------------------------------- ----------------------------------
Name and Title Name and Title
Xxxx Xxxxxx, President Xxxx X. Xxxxxx, President
Date May 17/99 Date May, 17, 1999
--------- -------------
Acknowledged, President, Sportsprize Entertainment, Inc.
/s/ Xxxx Xxxxxx Date May/99
------------------------ -------
[Initials]
4
