July 21, 1999
Via Fedex
Xxxxxxxx Xxxxxxx,
President and CEO
Justsystem Corporation
Aoyama Building
1-2-3 Kita-Aoyama
Minato-ku 107 Japan
Via Fedex
Xxxxxxx Xxxxxx,
President and CEO
XXxxxxxx.xxx, Inc.
7th Floor
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX
Xxxxxx X0X 0X0
Re: Letter of Understanding
Gentlemen:
When signed by the parties named below, this letter will serve
to set forth and confirm the basic points of mutual understanding
reached by and between Mr. Xxxxxxxx Xxxxxxx on behalf of Justsystem
Corporation, a Japanese corporation ("justsystem") on the one hand;
and Xx. Xxxxxxx Xxxxxx on behalf of XXxxxxxx.xxx, Inc., a Florida
corporation ("Wcollect"), on the other with respect to the
marketing and promotion of the WCollect Web site "XXxxxxxx.xxx" to
Japanese speaking users in Japan. Notwithstanding anything to the
contrary elsewhere set forth, the parties hereto hereby agree as
follows, to wit:
1. WCollect and Justsystem have established the goals of
making WCollect the leading e-commerce Web site in Japan and
permitting Justsystem to earn 10 to 15% of its gross
income from
WCollect. In connection therewith, the parties have agreed to
fully cooperate in a commercially reasonable manner so as to allow
WCollect to reach these goals incrementally, within a mutually
agreeable period of time, and in accordance with the outside time
frame dictated by the re-development of Justsystem's Internet
service company ("Justnet") and its new business infrastructure.
2. In connection with the foregoing, the parties have agreed to
consult with each other in regard to any and all issues related to
jointly reaching out to and servicing Japanese customers, including
without limitation: the establishment of a marketing plan; market
research; the creation of market recognition; the development of
brand loyalty; generation of promotional events; public relations;
the identification and purchase of appropriate media advertising;
the selection of appropriate artwork and collectible products for
sale to Japanese consumers; the building and maintenance of a
customer base; the appropriate use of technology (including
Justsystem's ConceptBase, Ichitaro Ark for Java, Digimarc, etc.);
customer service and technical support; Web design; localization
and translation; etc.
3. The parties have intended that the aforementioned will be
effected in a multi-stage process, with the stages arranged
generally as follows:
a. Stage 0. (As early as possible): Justsystem to provide
XXxxxxxx.xxx with hypertext link on the top page of Justnet (at
fees or upon a pricing structure to be discussed), and to
prepare a business plan.
b. Stage 1. (From inception to gross revenues totaling
approximately Yen 20,000,000/ year): Parties to begin to jointly
focus on market research, marketing, advertising, promotion,
formulation of strategic partnerships, partial localization and
translation, in addition to any other activities, at an annual cost
not to exceed approximately Yen 10,000,000. Each party will be
responsible for its own costs of development, overhead, personnel
and travel, which costs (along with any other similar charges) will
be considered "soft" costs, to be recouped, if at all, as per
below. Wcollect will be responsible for the payment of any "hard"
costs, including amounts charged by outside third-parties, such as
the costs of purchasing advertising space, to be recouped, if at all,
as per below.
Reduced costs for ad space on JustNet may, at Justsystem's option,
be considered a "hard" cost. All hard costs shall be subject to
Wcollect's pre-approval, and shall be
pre-paid or reimbursed pursuant to customary payment terms. Justsystem
will not be responsible for customer support nor for the transactions
themselves.
c. Stage 2. (From gross revenues totaling
approximately Yen 20,000,000/ year to Yen 100,000,000/ year ):
Same as above, with furtherance of implementation of market research,
marketing, advertising, promotion, localization and translation.
Possible adaptation of ConceptBase for use in localized site.
Establishment of "xxxxx.xxxxxxxx.xxx" URL, core online community,
including e-mail, "chat," synergy, additional technology as
necessary or desirable. Obtaining of additional commercial venture
partners. Justsystem will undertake customer support, but will
remain uninvolved in the transactions themselves.
d. Stage 3. (From gross revenues totaling
approximately Yen 100,000,000/ year to Yen 1,500,000,000+): Same as
above, with establishment of Japan XXxxxxxx.xxx, Inc. as
autonomous, separately run, Japanese company. Server operations
located in Japan. Justsystem may begin to become involved in
transactions.
4. During Stages 0-1, Justnet will received 10-15% of all
gross revenues from the sale of items by WCollect which originate
from, or can be attributed to Justnet, payable in advance of and as
applicable against 50% of the net profits. As used herein, the term
"gross revenues" means and shall be defined as 100% of all moneys
collected; and "net profits" means and shall be defined as all gross
revenues actually actually collected by Wcollect or Justsystem or
any party acting on their behalf, minus any returns, less only the
costs of fulfillment and costs of collection (e.g., legal fees),
if any. "Fulfillment costs" are intended to mean the costs
associated with the acquisition of any item (including third party
royalties) and/or manufacture of any item for sale, along with the
costs of shipping and insurance, if any. No responsibility is taken
by either party for the fluctuation of currencies. The fee structure
for Stages beyond Stage 1 shall be subject to good faith negotiation
between the parties.
5. All URLs, trademarks and logos are and shall continue to
remain the property of their respective owners, and, except as
specifically agreed in writing, no assignment thereof is intended
nor implied. Any URLs, trademarks and logos which are created
pursuant to or during the term of this agreement shall belong to
WCollect regardless of
which party has actually registered or initiated the use of same.
This document may be subject to modification by a more formal
agreement setting forth these points and others which are found to
be standard in agreements of such nature. In the interim, this
document shall set forth the fundamental principles governing both
parties and is intended as a binding agreement embodying the terms
set forth above.
If the foregoing accurately reflects the parties=
understanding, please so indicate by signing in the spaces allotted
for such purposes below.
Thank you.
Sincerely,
Xxxx & Xxxxxx LLP
By: Xxxxxx Xxxxxx
cc: Xx. Xxxxxx Xxxx
Accepted and agreed as of the first date written above:
Justsystem Corporation XXxxxxxx.xxx, Inc.
By: \s\Xxxxxxxx Xxxxxxx By: \s\ Xxxxxxx Xxxxxx
_________________________ ________________________
Xxxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx,
President and CEO President and CEO
