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Exhibit 10.1
September 1, 1999
Mr. Frank J. Amadeo
President
Estefan Enterprises, Inc.
420 Jefferson and 5th Street
Miami Beach, Florida 33139
This letter agreement (the "Agreement") between quepasa.com, inc.
("quepasa"), Estefan Enterprises, Inc. ("EEI") fso Gloria Estefan and Gloria
Estefan ("Gloria") sets forth the terms and conditions upon which Gloria will
act as spokesperson for quepasa through December 31, 2000 and quepasa will
sponsor Gloria's upcoming United States concert tour ("Tour 2000").
1. Spokesperson Relationship and Sponsorship. Upon execution of this
Agreement, Gloria shall act as quepasa's spokesperson and quepasa shall sponsor
Tour 2000 as follows:
A. ADVERTISING AND BRANDING
Gloria will act as quepasa's spokesperson for all electronic
media to include but not limited to:
- Eight unique 30-second TV spots (to be
produced in both Spanish and English for a
total of sixteen spots)
- Eight unique 30-second radio spots (to be
produced in both Spanish and English for a
total of sixteen spots)
These spots will be produced around Gloria's songs and music.
The TV spots will be based on your existing videos as follows:
- One imaging spot using the song "Reach"
- Two imaging spots using other mutually
approved uplifting and inspirational Gloria
songs
- One spot exclusively promoting Gloria's Tour
2000 o One spot exclusively promoting the
New Year's Eve Gala (the "Millenium
Concert")
- Three imaging spots incorporating newly
recorded music from Gloria's upcoming
Spanish-language album
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The radio spots would be equivalent to the TV spots. Each
30-second spot will be edited to contain a five second tag
promoting Tour 2000. These spots will be produced throughout
the contract term. The use of Gloria's name, image, likeness,
voice or music in each spot shall be subject to EEI's prior
written approval (subject to the use of the music described
above).
Quepasa will use its best efforts to promote Tour 2000,
including the Millennium Concert in Miami on New Year's Eve
1999 (the "Millennium Concert"), through a portion of its
existing Spanish and English-language media plan.
EEI will cause Foreign Imported Productions & Publishing, Inc.
and Estefan Music Publishing, Inc. to waive all mechanical,
sychronization or fixed fees to the musical compositions owned
or controlled by these entities, except that quepasa agrees to
pay a one-time fee of $5,000 to The 1992 Diane Warren Trust
dba Realsongs for the use of the song "Reach". Quepasa agrees
that if any musical compositions not owned or controlled by
these two companies are used in any of the television spots,
quepasa will be responsible for payment of any such fees,
provided that EEI will use its best efforts to negotiate
favorable fees for quepasa. There will be no license or other
fees required for the use of the videos used in the spots.
Gloria will be quepasa's spokesperson for all types of print
and online media to include but not limited to:
- Magazine, newspaper, direct mail, outdoor
billboards
- All out-of-home media to include buses, bus
shelters, benches, subways, subway shelters,
in-store point-of-purchase in record, video
and computer stores
- Online advertising
All magazine, newspaper, direct mail, outdoor billboards,
buses, bus shelters, benchs, etc. will use the likeness of
Gloria when it relates solely to the advertising campaign as
described above. All media that contains Gloria's name, image
or likeness will be striped with panels promoting Tour 2000.
The image of Gloria as quepasa's spokesperson shall be tacit.
The use of Gloria's name, image, likeness, voice or music in
all print and online advertising shall be subject to EEI's
prior written approval.
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Quepasa has provided EEI with its current media plan, which is
subject to change through the term of the agreement. Quepasa
agrees to consult with EEI about the location of its
advertising that uses Gloria's name, image, likeness, voice or
music, but quepasa maintains the sole right to make final
determinations on media mix, location and spending.
On-line advertising that contains Gloria's name, image,
likeness, voice or music shall be subject to EEI's prior
written approval and shall be limited to advertising either
supporting the quepasa sponsorship ads or promoting Tour 2000.
B. CO-BRANDED WEB PAGE AND ONLINE STORE
- Quepasa will create a co-branded web page
and online store ("web-page"), hosted by
quepasa, which will be devoted exclusively
to the Gloria/quepasa relationship and will
contain pertinent information and purchasing
opportunities including the items set forth
below
- Gloria's name, image, likeness, voice or
music will not be used on the co-branded web
page to endorse any other products; however,
quepasa will be entitled to sell routine
banner advertising on the page consistent
with other run-of-site advertising
- EEI will grant quepasa certain exclusive
rights, including but not limited to the
following:
- Premiering Gloria videos from her
forthcoming album prior to
broadcast airing , subject to the
approval of Sony Music/Epic
Records, which approval may not be
unreasonably withheld; EEI will use
its best efforts to obtain this
approval of Sony Music/Epic Records
- Announcement of Tour 2000 dates
- Preferred seating by ordering Tour
2000 tickets online through quepasa
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- Purchase of co-branded merchandise
(specific items to be mutually
agreed upon) from [name of
merchandising company]; EEI will
use its best efforts to negotiate
favorable purchasing 1terms from
[name of merchandising company];
two items will be created and sold
on the web-page where profits will
be split 50/50 between quepasa and
EEI
- Links between quepasa's web-site
and Gloria's website
(gloriafan.com) and up to four
additional websites designated by
EEI, but not to include any website
in direct competition with quepasa
(including, but not limited to,
starmedia.com, yupi.com and
elsitio.com)
- All on-line contesting for Tour
2000 tickets, backstage passes,
etc. will be conducted exclusively
on quepasa.com or gloriafan.com;
EEI is not required to provide any
tickets to quepasa for such
contests other than those tickets
mentioned elsewhere in this
Agreement (and all front-row
tickets mentioned in this Agreement
must be contested), although EEI
will use its best efforts to enable
quepasa to purchase additional
tickets at favorable prices for
contesting; any user registering
for a contest on gloriafan.com will
be required to enroll with
quepasa.com in order to enter the
contest (there will be no charge to
the user to enroll with
quepasa.com)
- Purchase of Gloria's CD's,
including the new "Millennium CD",
if one is recorded, and new Spanish
CD, to be purchased through Sony
Music/Epic Records; EEI will use
its best efforts to have Sony
Music/Epic Records make these CD's
available
- Lyrics to all songs on the new
"Millennium CD"
- Online promotion of Gloria's
Educational Foundation in
conjunction with Quepasa.com
Foundation
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C. THE ANNOUNCEMENT AND TOUR 2000
- The press release in the form of Exhibit A
hereto will be distributed on the date of
execution of this Agreement, or another
business day selected by quepasa and
reasonably acceptable to EEI but in no event
later than five days after the signing of
this Agreement, provided that the initial
cash payment of $2 million and the issuance
of the stock, each as described in Section H
below, has occurred.
- Gloria will appear at a press conference to
announce that she is a spokesperson for,
partner with, and investor in quepasa in New
York City on or about September 14, 1999,
but no later than September 15, 1999.
- The exclusive sponsorship of Tour 2000 will
be billed as "quepasa.com proudly presents"
on all media material produced in connection
with Tour 2000 (including but not limited to
concert tickets, print ads, posters, and
radio and television spots); except that
where this phrase cannot reasonably be
placed on concert tickets or other media,
EEI will use its best efforts to place a
shorter sponsorship phrase on such media
that is reasonably satisfactory to quepasa;
Tour 2000 will appear in at least 20 U.S.
cities, and California, Texas, New York,
Florida, Illinois and Arizona will be
included in the tour
- Kick-off for the tour will be the Millenium
Concert; Quepasa will receive 50 tickets to
the Millenium Concert, two of which will be
front row seats (EEI will use its best
efforts to provide two additional front row
seats), and EEI will use its best efforts to
provide the remainder in the best seats
available; quepasa will receive backstage
passes for 20 people and, if Gloria holds a
Millenium party, 10 invitations (each for
two people) to the party.
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Other Tour Commitments:
- Quepasa will receive visual sponsorship
presence at each concert on video screens
prior to and at the end of the concerts
- Quepasa to receive 50 tickets for each
concert, four of which will be front row
seating, the remainder in the best 10% of
the house excluding the first 15 rows
- Quepasa will be granted the exclusive right
to webcast one song in its entirety from the
Millenium Concert and one song from the
first concert performance of Tour 2000
following the Millenium Concert, provided
that the webcast songs, or any components of
the songs, including but not limited to
sound bytes, may not be saved or stored to
any user's hard-drive directly from the
webcast and neither quepasa nor any of its
internet partners may create a master
recording or MP3 from the webcasts.
- National contest with up-front concert
tickets and a "meet and greet " for
quepasa.com contest winners and quepasa
employees and guests with Gloria on December
30, 1999 for the Millenium Concert and each
other concert on the tour (only applies to
contest winners of the tickets provided to
quepasa under this Agreement); EEI will use
its best efforts to have Gloria attend these
"meet and greet" sessions; however, if she
is unable to attend for a legitimate reason
outside of her control (such as serious
illness or unavoidable travel delays), a
substitute session will be arranged.
- Quepasa will have an exclusive right of
first negotiation for 15 business days to
negotiate with EEI the financial terms (in
equivalent detail to those set forth in
paragraph H below) for any Gloria Latin
American tour sponsorship.
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D. ONLINE CHAT SESSIONS
- Gloria will appear on three chat sessions
hosted by quepasa:
- To announce the partnership
- To announce the release of her
Spanish Language album in early
2000
- To announce the commencement of
Tour 2000
E. PERSONAL APPEARANCES BY GLORIA
- In addition to the personal appearance in
New York described in paragraph C above,
Gloria will make at least two personal
community appearances to promote the
Internet, Tour 2000, her music and
educational opportunities for Hispanics; one
of these appearances will be in Phoenix at
the Roosevelt School District and EEI will
use its best efforts to arrange for the
other appearance to be in Los Angeles and to
coordinate Tour 2000 around these
appearances; however, if Gloria is unable to
attend for a legitimate reason outside of
her control (such as serious illness or
unavoidable travel delays), a substitute
appearance will be arranged by mutual
agreement.
- These appearances would be filmed and
webcast on the quepasa website; EEI may also
use this footage provided that it is not
edited in any way without quepasa's consent.
- Gloria and EEI will use their best efforts
to have Gloria do an additional "meet and
greet" appearance at quepasa's headquarters
in Phoenix, or at another mutually agreed
upon location in Phoenix.
F. TERM
- Quepasa would have the rights to use
Gloria's name, image and likeness as
described in this Agreement through
midnight, December 31, 2000
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G. EXCLUSIVITY
- Quepasa will be the exclusive primary
sponsor for Tour 2000 (including the
Millennium Concert) and EEI will use its
best efforts to include quepasa in all local
advertising by various promoters and
identified as "quepasa.com proudly
presents"; an isolated, inadvertent failure
by EEI to secure this advertising shall not
constitute a breach of this Agreement.
- Quepasa will permit secondary sponsorships
as long as they appear below Gloria's name
on all printed advertising and are not
competitive with quepasa.
- Gloria and EEI will not agree for Gloria to
be a spokesperson for any other Internet
company for the term of this Agreement and
will not enter into any agreement of any
nature that involves Gloria with any
Internet company that is in competition with
quepasa; provided that this limitation does
not apply to any other EEI artists or
businesses.
H. REMUNERATION
- Quepasa will pay EEI $6.0 million ($4.0
million in cash and $2.0 million in
unregistered common stock of quepasa) for
the terms and conditions of this contract to
be paid as follows:
- $2 million in cash and $2 million
in stock to be paid upon the
signing of this Agreement
- $1 million in cash (or certified or
bank check) to be paid no later
than 1:00 am (east coast time) on
January 1, 2000
- $0.5 million in cash to be paid by
wire transfer or certified or bank
check on April 1, 2000
- $0.5 million in cash to be paid by
wire transfer or certified or bank
check on the day after the final
concert tour performance
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- The $2 million payable in quepasa common
stock will equal 156,863 shares (the Shares)
of unregistered common stock issued in the
name "Estefan Enterprises, Inc. fso Gloria
Estefan" (determined by dividing $2 million
by the lowest common stock closing price as
reported on Nasdaq on August 5, 1999
($12.75) or August 6, 1999 ($12.8125); thus
the lowest price is $12.75 (the "Stock
Price"))
- The shares must be held by EEI or an
affiliate of EEI for one year from the date
of this Agreement
- If quepasa's common stock's closing price as
reported on Nasdaq on the one year
anniversary of this Agreement is below the
Stock Price, you may "put" the entire amount
of the Shares back to quepasa for $2 million
to be paid by wire transfer or certified or
bank check within five business days of
delivery to quepasa of your put notice and
upon surrender of your stock certificate(s)
representing the Shares; provided that if
quepasa merges with or is acquired by
another company or effects a "going private"
transaction and as a result quepasa is not
the surviving corporation or quepasa's
common stock is no longer traded on Nasdaq
(the "Transaction"), and the consideration
you receive for the Shares has a fair market
value below $2 million (such differential,
the "Shortfall"), you will receive the
Shortfall at the same time you receive the
consideration payable in the Transaction and
quepasa will use its best efforts to ensure
that the surviving corporation satisfies
this obligation.
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- Upon the actual sale date of any of the
Shares (including in connection with a
merger or acquisition of quepasa), if the
gross price per share received for such
Shares (whether in cash or other
consideration)(the "Sale Price") is more
than $18.75, EEI must return to quepasa a
number of whole Shares which, when
multiplied by the Sale Price, equals 50% of
the difference between the Sale Price and
$18.75 multiplied by the number of Shares
being sold on such date; provided, that EEI
will have no further obligation to return
Shares to quepasa pursuant to this paragraph
upon the earlier to occur of: (i) quepasa
receiving shares from EEI having an
aggregate value as calculated under this
paragraph at each sale date of Shares equal
to $6 million or (ii) EEI shall have sold
all of the Shares and complied with the
provisions of this paragraph with respect to
each sale of Shares. o Simultaneously with
the signing of this Agreement, quepasa and
EEI will sign the Registration Rights
Agreement in the form of Exhibit B hereto.
2. Representations and Warranties of Quepasa.
- Quepasa has full corporate authority and has
taken all necessary corporate action to
authorize this Agreement and the
Registration Rights Agreement, and when
executed and delivered they will constitute
valid and binding obligations of quepasa,
enforceable against quepasa in accordance
with their terms.
- This Agreement and the Registration Rights
Agreement do not violate the terms of, or
cause a default under, any other agreement
or instrument binding on quepasa or any of
its property, and no consent is required of
any person that has not been obtained for
the execution and delivery of, and
performance by, quepasa under the Agreement
and the Registration Rights Agreement.
- The Shares have been duly authorized, and
when issued in accordance with the terms of
this Agreement, will be validly issued,
fully-paid and non-assessable.
- Quepasa's relationship with Telemundo
Network Group, LLC ("Telemundo"), an
investor in and strategic partner of
quepasa, will not limit quepasa's
responsibilities and obligations hereunder,
and quepasa will not permit Telemundo to
assert any relationship or "tie-in" to EEI
or Gloria.
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- Quepasa will defend and indemnify EEI and
Gloria against all claims, losses, damages
and liabilities (or actions in respect
thereto) ("Losses") arising under federal or
state securities laws arising from Gloria's
identification as a "spokesperson",
"partner", and/or "investor" in quepasa;
provided that quepasa will not be liable for
any Losses suffered by EEI or Gloria upon
its or her sale of the Shares (except as
specifically provided for elsewhere in this
Agreement) or for any Losses arising from
EEI's or Gloria's knowing fraudulent or
grossly negligent conduct. Quepasa will use
its best efforts to cause the coverage under
its now or hereafter existing directors' and
officers' liability insurance policy to
include Gloria as an additional named
insured, for federal and/or state securities
laws, for losses suffered by Gloria arising
from Gloria's indemnification as a
"spokesperson", "partner", and/or "investor"
in quepasa.
3. Representations and Warranties of EEI and Gloria.
- EEI has full corporate authority and has
taken all necessary corporate action, and
Gloria has taken all action, to authorize
this Agreement and the Registration Rights
Agreement, and when executed and delivered
they will constitute valid and binding
obligations of each of EEI and Gloria,
enforceable against each of them in
accordance with their terms.
- This Agreement and the Registration Rights
Agreement do not violate the terms of, or
cause a default under, any other agreement
or instrument binding on EEI, Gloria or any
of their respective property and no consent
is required of any person that has not been
obtained for the execution and delivery of,
and performance by EEI and Gloria under, the
Agreement and the Registration Rights
Agreement.
- Each of EEI and Gloria is an "accredited
investor" as defined in Regulation 501 under
the Securities Act of 1933, as amended, and
the Shares are being acquired by EEI for its
own account and for investment purposes only
and not with a view to any resale or
distribution thereof, in whole or in part,
to others.
- EEI has reviewed a copy of quepasa's
prospectus dated June 24, 1999 and its
Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August
16, 1999, and has had an opportunity to ask
questions of, and receive satisfactory
answers from, duly designated
representatives of quepasa concerning
quepasa.
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4. Public Announcements; Confidentiality. All press releases,
trade releases or other public announcements with respect to the
transactions contemplated herein shall be jointly prepared by
quepasa and EEI, to the extent required by law and except that the
parties hereby agree to the press release attached hereto as Exhibit
A. Except for the information contained in the press release
attached hereto as Exhibit A and except as required by law,
including the disclosure requirements of applicable securities laws,
the terms of this Agreement shall not be disclosed to any other
person without the consent of each of the parties hereto; provided,
if such disclosure is so required by law, the party producing or
directing the production of such information will use all reasonable
efforts to provide the other parties hereto with notice of such
disclosure and a reasonable opportunity to comment upon, limit or
contest such disclosure.
5. Expenses. Each of the parties hereto shall pay its own
expenses in connection with the transactions contemplated herein,
including travel and other related expenses associated with the
execution and fulfillment of this Agreement.
6 Notices. Either party may give notice to the other in writing
at the addresses set forth below or by facsimile at the facsimile
number set forth below, unless a change of address or facsimile
number has been provided in writing to the other party; notices in
writing shall be deemed delivered upon actual receipt and by
facsimile upon generation of a standard transmission confirmation:
If to EEI or Gloria:
Estefan Enterprises, Inc.
420 Jefferson and 5th Street
Miami Beach, FL 33139
Attention: Frank J. Amadeo
Facsimile No.: 305-695-7108
If to quepasa:
One Arizona Center
400 East Van Buren
Fourth Floor
Phoenix, AZ 85004
Attention: Gary L. Trujillo
Facsimile No.: 602-716-0200
7. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Arizona. If any
portion of this Agreement is held to be invalid or unenforceable, the
remainder of this Agreement shall remain in full force and effect and
shall be valid and enforceable according to its terms.
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8. Entire Agreement. This Agreement and the Registration
Rights Agreement contain the full and final understanding between the
parties hereto and are intended as an integration of all prior
negotiations and understandings unless otherwise provided for herein.
No change or modification to this Agreement shall be valid unless in
writing and signed by all parties hereto. No waiver of any provision of
this Agreement shall be valid unless in writing and signed by the party
granting such waiver.
9. Non-Waiver. No waiver of any default shall constitute a
waiver of default on a future occasion, and no delay or omission shall
preclude the exercise of any remedy provided herein, or exercise of any
other right or remedy.
10. Binding Effect; No Assignment. The terms, conditions,
representations and warranties of this Agreement shall survive the
execution hereof and shall be binding upon the parties, their
respective successors and assigns, heirs and personal representatives.
This Agreement may not be assigned, in whole or in part, to any other
person without the express written consent of the other parties hereto.
11. Attorney's Fees. If either party breaches any provision of
this Agreement, or the representations, warranties or covenants
contained herein or the performance required herein does not occur, or
legal action is require to enforce a party's rights hereunder, then the
prevailing party in such action shall be entitled to reimbursement from
the non-prevailing party for the prevailing party's attorney's fees
incurred in connection with such breach, or the enforcement or
protection of rights herein, whether such attorney's fees are incurred
in or out of court, on appeal, in arbitration, in bankruptcy court or
otherwise.
12. Arbitration. Any controversy or claim arising out of or
relating to this Agreement that arises after the full execution of the
Agreement shall be settled by binding arbitration conducted in Phoenix,
Arizona in accordance with, and by three arbitrators appointed pursuant
to, the Rules of the American Arbitration Association then in effect,
unless the parties otherwise agree, and judgment upon the award
rendered pursuant thereto may be entered in any court having
jurisdiction hereof, and all rights or remedies of the parties hereto,
or any of them, to the contrary are hereby expressly waived.
13. Counterparts. This Agreement may be signed in multiple
counterparts, and when signed by all parties, all counterparts shall be
considered as a single document.
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If the foregoing correctly sets forth our understanding please
sign and return a copy of this Letter of Intent to the undersigned.
Very truly yours,
quepasa.com, inc.
/s/ Gary L. Trujillo
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By: Gary L. Trujillo
Its: Chairman/CEO
Estefan Enterprises, Inc.
/s/ Frank J. Amadeo
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By: Frank J. Amadeo
Its: President
/s/ Gloria Estefan
--------------------------------
Gloria Estefan
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