PORTIONS OF THE EXHIBIT CONTAINING CONFIDENTIAL INFORMATION HAVE BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
TERM SHEET
This TERM SHEET (this "TERM SHEET") sets forth the basic terms of the
agreement in principle between ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware
corporation, on one part, and Global Leisure Travel, Inc., a Washington
corporation ("GLTI"), on another part, and is dated as of April 2, 1999. The
terms of the strategic alliance proposed hereunder must be submitted to the
Board of Directors of each of the parties hereto for approval.
I. STRATEGIC ALLIANCE.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. in conjunction with its Genesis Intermedia,
Inc. subsidiary (collectively, "GENESIS") is entering into a strategic
alliance with GLTI, pursuant to which Genesis will become the principal
marketing and advertising agent and the exclusive Internet marketing and
advertising agent and e-commerce consultant and provider to GLTI and all of
its subsidiaries and affiliates (collectively, "GLOBAL"). In return,
Global provides to Genesis channel access options to acquire.
II. ALIGNMENT -- The opportunity to capitalize on one another's strengths:
GENESIS INTERMEDIA GLOBAL LEISURE
Marketing Know How Brand Name Recognition
New Channels Current Product Inventory
Technology Base Negotiated Contracts
Established Media Business Established Leisure Vacation Business
III. GENESIS' INITIATIVES.
The strategic alliance will initially comprise a number of initiatives to
be performed by Genesis for or in conjunction with Global and will be
embodied by such agreements as appropriate. The initiatives will include
the following:
A. INTERNET ADVERTISING CAMPAIGN. An Internet-based advertising campaign
to be prepared by Genesis for Global, which will include:
i. The creation of initial basic advertising campaign outlines for
each of the principal Global companies.
ii. The creation of initial Internet advertising layouts and features
to be mutually determined by the parties, taking into account the
short time line under which this project will be developed.
iii. The overhaul of the web sites for each of the principal Global
companies. Genesis has the right to display its logos and
appropriate "Powered by" language on the sites.
B. MALL DEVELOPMENT PROJECT. Development of basic graphical user
interfaces and advertising templates for Global for Genesis's mall
kiosk deployment program. Genesis has the right to display its logos
and appropriate "Powered by" language at the malls and kiosks.
C. E-COMMERCE PROJECTS. The development of a fully functional e-commerce
business structure for all Global products and services to include:
i. Direct customer Internet access to Global product and service
inventory.
ii. On-line virtual tours.
iii. On-line real-time consultation and booking.
iv. Payment processing fees to be charged at Genesis's customary
fees in effect from time to time and to be incorporated in
Genesis's standard tariff schedule updated no less frequently
than quarterly.
v. Unlimited product and service listings, subject to price
adjustments at product/service number breaks.
vi. Unlimited cataloguing.
vii. Standard feature set described on the attached Exhibit A.
viii. Help Desk support.
ix. Subject to pricing/profit sharing structure set forth below.
D. PRICING.
i. The following monthly pricing will apply to the above-referenced
e-commerce project:
- Base Pricing: A monthly base fee to be calculated on the
basis of the number of unique product or service offerings
(including available combinations or packages of product and
service offerings). The Base Pricing will be based upon
the Genesis's budgeted fully allocated overhead associated
with the project.
- Charges for product and service offerings above Base Pricing
will be based on the standard pricing schedule as set forth
from time to time by Genesis.
- Prices subject to adjustment on a quarterly or more frequent
basis as determined by Genesis.
ii. PER TRANSACTION FEE: The parties will negotiate a per
transaction marketing and payment processing fee based on a
percentage of commission or income to Global, with a set dollar
minimum per transaction.
iii. Global will pay to Genesis mall advertising rent for all mall
advertising at a rate equal to one standard deviation above the
mean of all comparable third party mall advertising.
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iv. Global will pay to Genesis kiosk participation rent for all
kiosk participation at a rate equal to one standard deviation
above the mean of all comparable third party kiosk participant
rent.
v. Global shall pay to Genesis for all personnel training at
Genesis's standard hourly rates.
vi. Custom work to be performed at Genesis's standard hourly rates.
E. FUNDING COMMITMENT FOR INITIAL EFFORT. The parties acknowledge that
Global does not currently have the funds necessary to fully develop
its Internet and e-Commerce distribution channel. Genesis has agreed
to provide up to $3 million of senior secured debt to Global to
facilitate the development and deployment of its Internet and
e-Commerce capability and for general corporate purposes. The
obligation to advance any funds and the final terms and conditions of
such loans shall be subject to the negotiation and execution of and
shall be included in definitive documentation, which shall include, at
a minimum, a first priority security interest in all of the personal
property of each company comprising Global, and performance hurdles
for each agreed Tranche of funding.
IV. GLOBAL INITIATIVES.
The strategic alliance will initially comprise a number of initiatives to
be performed by Genesis for or in conjunction with Global and will be
embodied by such agreements as appropriate. The initiatives will include
the following:
A. NON-INTERNET MARKETING AND ADVERTISING; ADDITIONAL CHANNELS. The
parties acknowledge that Global currently has marketing and
advertising arrangements for non-Internet marketing and advertising.
Global hereby grants to Genesis a five-year right of first refusal on
any new marketing or advertising contracted for by Global, which shall
include any replacements or extensions of current marketing or
advertising. Global will not during the term of this right of first
refusal commence any in-house advertising or marketing initiatives
unless Genesis shall have been granted the right to bid on such
initiatives. The parties have also discussed that Genesis intends to
market Global products and services through various other new channels
and possibly through reseller relationships. Global hereby agrees
that Genesis shall have the exclusive right to develop and market such
new channels and to participate in any such reseller relationships
created or facilitated by Genesis and that the parties shall mutually
agree upon the compensation for such services.
B. CHANNEL. During the term of the agreement, Global shall use its
reasonable best efforts to enroll as many of its affiliated agents as
possible for Genesis's Internet distribution channel and to
continuously and prominently market and promote Genesis's Internet
channel to Global's customers.
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C. ACQUISITION OPTION GRANTED TO GENESIS.
i. OPTION 1 -- PURCHASE THE ▇▇▇▇▇▇ GROUP. In consideration of
Genesis's initiatives as contained in this Term Sheet, Global
hereby grants to Genesis the option to purchase substantially all
of the operating and capital assets of ▇▇▇▇▇▇ Group, including
all assets and intellectual property constituting the "Contour
System." This strategy is in keeping with Global's business
strategy of focusing on the travel business only and Genesis'
business strategy of building enhanced product delivery services,
especially as they directly relate to e-commerce.
- PRICE. The purchase price shall be $2.5 million + or - 20%
based on an agreed to audit to be conducted within 30 days
of said purchase. This payment acknowledges the Global's
current investment.
- TERM. The option shall expire on June 30, 1999.
- ASSUMPTION OF FUTURE DEVELOPMENT COSTS. In the event
Genesis exercises this option, Genesis shall assume the
obligation to pay for and complete and in process
technology development being conducted by Fourth Dimension
Systems.
- ASSUMPTION OF RELATIONSHIP WITH FOURTH DIMENSIONS SYSTEMS,
INC. In the event Genesis exercises this option, Genesis
will assume control of the Contour System Software License
issued by Fourth Dimension Software, Inc. Furthermore,
Genesis will honor the royalty payment to Fourth Dimensions
Software as prescribed in this System Software License.
- GLOBAL USE COMMITMENT. In the event Genesis exercises this
option, ▇▇▇▇▇▇ agrees to commit to subscribe to and use the
Contour System for a period of not less than * * *. For
the * * *, Global hereby commits to pay to Genesis a
transaction fee of $ * * * per transaction for such usage,
with a minimum fee of $ * * *, payable on * * *, commencing
on * * *. This contract will be re-negotiated for the
remaining * * *.
ii. OPTION 2 -- PURCHASE GLOBAL. In consideration of Genesis's
initiatives as contained in this Term Sheet, Global hereby grants
to Genesis a right of first refusal to purchase Global or all of
the assets of Global.
- PRICE. Price will be equal to the fair market value of
Global as determined by an independent valuation firm
selected by Genesis and GLTI. Such valuation shall be
incorporated herein by this reference.
- TERM. The option shall expire on June 30, 2000.
* * * These portions containing confidential information have been omitted
pursuant to a request for confidential treatment and have been filed
separately with the Commission.
[*] Indicates redacted text.
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V. COORDINATION.
The parties acknowledge that they anticipate a close alliance and ongoing
relationship. To this end, project owners form both organizations will be
appointed. It is anticipated that they will coordinate for periodic
project meetings to agree upon business objectives, scope, resource
commitment and schedule. Such meetings will be in person or by telephone
as appropriate. In order to establish the relationship, during the first
60 days, weekly project meetings will be scheduled (not to exceed 20 hours
per month) at such times or times as the parties agree. Thereafter
meetings will be scheduled as the parties determine to be necessary. Such
project meetings will also include, but not be limited to, discussion
concerning Global marketing efforts and success, implementation and use of
the electronic channel, design and functionality of the electronic channel.
VI. CLOSING.
While the parties intend to replace this Strategic Agreement with a more
formal set of documents, this agreement nonetheless intended to be a
binding agreement between the parties when signed by both of the parties in
the spaces provided below. This initial strategic agreement will govern
the relationship between the parties until a more formal set of documents
is executed and will not in any way be affected by the failure to complete
such formal set of documents.
ACCEPTED AND AGREED:
GLOBAL LEISURE TRAVEL, INC. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: By:
-------------------------------- -------------------------------
Name: ▇▇▇▇ ▇▇▇ Name: ▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
Title: Chief Executive Officer Title: Chief Executive Officer
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EXHIBIT A
STANDARD FEATURE SET
CATALOGS
- International Currencies
- Weight Units: Kilograms, Grams, Pounds, and Ounces
- Sending Methods: Internet, Fax/Mail, and Phone
- Faxed Internet Orders
- Payment Methods: VISA, MasterCard, American Express, Discover, Diners Club
and JCB
- Custom Payment Methods
- Standard Shipping Destinations: US States, Canadian Provinces, and World
Countries
- Custom Shipping Destinations
- Multiple Shipping Methods and Regions
- Shipping Formula Variables: Quantities Ordered, Weight, and Subtotal
- Shipping Formula Functions: Minimum, Maximum, and Range
- Custom Tax Rates
- Custom Survey Questions: Long Answer, Short Answer, Multiple Choice, and
Single Choice
- Custom Subtotal Items: Fixed, User Enterable, and Optional
- Users and Passwords
CATEGORIES
- Unlimited Categories
- Full Description
- Image
PRODUCTS
- Base Item Number
- Description
- Full Description
- Image
- Price
- Sale Price
- Unique Sale Price for Each Catalogue
- Non-taxable products
- Weight
- Category
- Multiple Product Options (i.e. Color, Size)
- Multiple Product Option Items (i.e. Red, Green, Blue)
- Custom Item Numbers based on Options
- Custom Pricing based on Options
- Option Conflicts
- Quantity Discounts
- Links to Related Items
- Links to other URLs
- Preview product pages
- Generated HTML code to copy and paste into existing sites
- Graphical pricing for easy integration into existing sites
- Import product information from a test-delimited file
ORDERS
- E-mail notification of new Orders
- Order Status
- Waybill Number and Shipper
- Custom Notes
- End-user Order Tracking
- Export Order Information
POINT OF SALE
- Multiple Merchant Numbers
- Automatic Authorizations of orders sent over the Internet
- Manual Authorizations
- Credits
- Automatic Settlement
E-COMMERCE HOSTING
- Home Page builder
- Unique URL
- 10 MB Free
- Virtual Hosting of existing domain names
- Professionally Designed Templates
- Customize your own Templates
E-COMMERCE SEARCH
- Product Based Search Engine
- Full Word Listing
- Phrase or Boolean Searching
- Re-index your site anytime
- Integrate into existing sites
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