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Exhibit 10.11
Jan 19, 2000
TERM SHEET
PROPOSED WEB SITE MARKETING AGREEMENT
Xxxxxxx Communications, Inc. ("Xxxxxxx")
and
xxxxxxx.xxx, Inc. ("itarget")
1. Xxxxxxx proposes to develop and host a new home page on one of its
web-sites (the "New Website") using either a new brand name or a
co-branded name using Xxxxxxx'x and itarget's names (the "Brand Name") to
market its GroupLotto program. Xxxxxxx'x GroupLotto program involves the
registration of visitors in Xxxxxxx'x subsidiary's XxxxxXxxxx.xxx program
(the "Multibuyer Program"). The Brand Name will be selected by itarget's
subject to Xxxxxxx'x approval, which shall not be unreasonably withheld or
delayed.
2. Xxxxxxx will be responsible for the following at its expense with respect
to the New Website:
a. design and technical implementation and maintenance;
b. Choice of products and services offered, subject to itarget's
approval, which shall not be unreasonably withheld or delayed;
initially the product/service will be a version of the GroupLotto
program now being offered by Xxxxxxx'x subsidiary Xxxxxxxxxx.xxx;
c. Marketing strategies and materials; provided that the manner of use
of itarget's name in any of such materials shall be subject to
itarget's approval, which shall not be unreasonably withheld or
delayed;
d. Customer service.
3. itarget will market the New Website as a promotional vehicle to its
marketing partners and affiliates to drive customers to their products and
services in the same manner in which itarget now markets its discount
telephone card, e.g., providing the telephone card free of charge to other
web site owners for their use as a premium offered to prospective
customers to capture data about the prospective customer. In addition,
itarget may market the New Website to customers and visitors to itarget's
websites. The price and other terms of the programs offered by the New
Website will be determined by Xxxxxxx. Xxxxxxx will have the right to
pre-approve the identity of the persons or other entities to which itarget
markets the New Website, such approval not to be unreasonably withheld or
delayed.
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4. Gross Profit with respect to revenues received by Xxxxxxx with respect to
the use of the New Website shall be shared as provided in this Section 4.
x. Xxxxxxx will pay itarget 50% of the Gross Profit (defined below) on
Direct Enrolled Program Revenues (defined below) earned by Xxxxxxx
on the revenues received by Xxxxxxx from Enrolled Customers (defined
below) obtained through the New Website. Xxxxxxx will pay itarget
twenty-five percent (25%) of the Gross Profit (defined below) earned
by Xxxxxxx on sales revenues from Enrolled Customers during the term
of the Marketing Agreement, other than Direct Enrolled Program
Revenues.
b. The term "Direct Enrolled Program Revenues" for purposes of this
Agreement means sales revenues earned by Xxxxxxx on orders by
Enrolled Customers for Xxxxxxx products or services made while the
Enrolled Customer is using the New Website.
c. The term "Enrolled Customer" means each unique, valid customer
enrolled as a customer in the XxxxxXxxxx.xxx program from the New
Website.
d. As an example of the application of the provisions of Paragraph
4(a), if the Enrolled Customer logs on to the New Website directly
or through a link to the New Website provided on one of itarget's
websites, and purchases a product or service from Xxxxxxx while
logged on to the New Website, then itarget will be entitled to
receive 50% of the Gross Profit from such sales. If an Enrolled
Customer thereafter contacts or is otherwise directed to another
Xxxxxxx Website other than the New Website, then itarget will
receive 25% of the Gross Profit from the sales made to the Enrolled
Customer as a result of such contact.
x. Xxxxxxx will pay itarget nine cents ($.09) for each Enrolled
Customer.
f. Only direct expenses will be charged by Xxxxxxx in determining Gross
Profit, in accordance with generally accepted accounting principles,
consistently applied.
g. Payments due to itarget will be made monthly on a provisional basis
and reconciled quarterly and annually.
h. If Xxxxxxx obtains a customer from a third party who is identical to
an Enrolled Customer or other customer for which Xxxxxxx would
otherwise share revenues with itarget, and Xxxxxxx is obligated to
share with such third party the revenues or profits derived from
sales to such customer, then itarget shall not be entitled to
receive any share of the Gross Profit generated by Xxxxxxx from such
customer.
i. The definitive Agreement will contain procedures for record keeping
and audit of the calculation of Gross Profit.
x. Xxxxx Profit will mean gross revenues received by Xxxxxxx for the
transactions referred to in this section 4, less Xxxxxxx'x direct
product expenses, determined in accordance with generally accepted
accounting principles, consistently applied.
5. Xxxxxxx may continue to offer group lotto and any other programs or
services offered on the New Website on its other websites and through
other marketing vehicles. During the term of the
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Agreement, itarget will not offer or promote a game or promotion similar
to the GroupLotto or MultiBuyer program.
6. The New Website and the customers and database created using the New
Website (the " the New Website Database") will be shared jointly by
itarget and Xxxxxxx; provided, however, that itarget may use the New
Website Database only in the marketing of itarget's products and services
to prospective customers, and itarget shall not have the right to sell,
lease or license the New Website Database to any third party. If, however,
itarget sells one or more of its products or services to a customer first
identified by itarget from the New Website Database, following such sale,
information about such person thereafter obtained by itarget shall
constitute part of itarget's database.
7. The initial term of the Agreement shall be one (1) year, except that for a
period of six months following the end of the term, the New Website may
continue in existence to service continuing visitors, provided that the
parties will not engage in active marketing of the New Website.
8. The existing marketing agreement between Xxxxxxx and itarget dated
November _______, 1999 shall be amended in the following respects:
a. The provisions of Section 1.3 of such existing marketing agreement
shall be amended to provide that in the event of a Sale Transaction,
as defined in such Section 1.3, the right to terminate described in
such Section 1.3 may be exercised only after a minimum of one
million (1,000,000) customers have been enrolled in the Xxxxxxx
Marketing Programs.
b. If requested to do so by Xxxxxxx, customers enrolled by itarget in
Xxxxxxx'x Marketing Programs conducted under the existing marketing
agreement shall be enrolled using the "opt-out" method, in which
they will be advised that they are being enrolled in the Xxxxxxx
Marketing Program, and the customer will be enrolled in such Program
unless the customer affirmatively indicates that it does not want to
be enrolled in the Program.
9. This term sheet is subject in all respects to the negotiation, execution
and delivery of a definitive agreement regarding the subject matter
hereof; provided, however, that until execution and delivery of such
agreement, this document shall constitute a binding agreement
XXXXXXX COMMUNICATIONS, INC xxxxxxx.xxx, inc.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxxx Xxxxx
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1/19/00
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