>>Note G - CNet Promotional Agreement:
HealthAxis's amended agreement with CNet provides that CNet will promote HealthAxis as its exclusive provider of medical and PPO, dental, vision, prescription, long term care, and long term disability insurance through the Internet and television, for a total approximating $2,400 (of which $500 has been accounted for as advertising and promotional expense). The balance of $1,900 will be paid in two increments of $1,008 (in 1999) and $882 (in 2000) and accounted for as prepaid interactive marketing expense and amortized over the initial term of the agreement. HealthAxis may, at its option, extend the agreement during a renewal term until March 31, 2001 by paying CNet an additional $7,500 of which $1,875 and $5,625 would be due in 2000 and 2001, respectively. In addition, HealthAxis shall pay to CNet certain fees based upon the success of sales from the co-branded web site.
Since signing the original agreement CNet and Snap.Com have become separate entities. Consequently, CNet and Snap.Com have extended an offer whereby they are requesting HealthAxis to separate the CNet agreement into two agreements with CNet and Snap.Com. If the agreement is split, the payments as discussed above will remain substantially the same. HealthAxis is currently negotiating with both companies and has a verbal agreement to suspend the payments due in 1999 until such time as the new arrangement can be mutually agreed upon.<< |
