Exhibit 10.3
Sales Representation Agreement
This Agreement is entered into between Xxxxx.xxx, Inc. ("About") and PRIMEDIA
Inc. on behalf of itself and its wholly owned subsidiaries (collectively,
"PRIMEDIA") as of October 29, 2000.
WHEREAS, About owns and operates XXXXX.XXX, a platform comprised of more
than 800 targeted, topic-specific web sites (the "About Sites");
WHEREAS, About employs approximately 150 sales persons who have been
primarily charged with selling advertising on About;
WHEREAS, PRIMEDIA is an integrated media company which owns and operates a
variety of media products including more than 200 web sites, employs more than
1300 sales persons and has substantial expertise in selling endemic advertising;
WHEREAS, About wishes to engage PRIMEDIA, and PRIMEDIA wishes to be
engaged, as About's advertising sales representative with respect to certain
types of advertising as set forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements contained herein, and for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows
1. DEFINITION. For purposes of this Agreement, "Endemic Advertising" shall
mean advertising that promotes goods or services related to the editorial
of a particular publication or web site (e.g., automobile manufactures
would be Endemic Advertisers for car enthusiast magazines and web sites).
2. REPRESENTATION. Beginning on the date hereof and for the duration of the
Term (as defined) PRIMEDIA and About hereby agree that PRIMEDIA will serve
as About's worldwide advertising sales representative for the purpose of
effecting the sale of Endemic Advertising for the About Sites listed on
Schedule A hereto (the "PRM Sold Sites"). This representation will go into
effect as follows: (a) from November 1, 2000 through January 31, 2001,
PRIMEDIA will serve as About's exclusive third party sales representative
for the PRM Sold Sites; (b) from February 1, 2001 through April 30, 2001,
PRIMEDIA will serve as About's exclusive third party representative as the
preferred seller (over any About employees or other agents with whom there
is a channel conflict) for the PRM Sold Sites; and (c) beginning in the
second quarter of 2001 and for the remainder of the term, PRIMEDIA shall
serve as the exclusive sales representative on the PRM Sold Sites. The
parties agree that the number of PRM Sold Sites shall grow to 20% of
About's Sites so long as PRIMEDIA's selling efforts are commercially
reasonable as to price and volume.
3. TERMS. PRIMEDIA shall use commercially reasonable efforts to solicit and
sell About advertising and to otherwise advance and promote the About
Sites consistent with good sales practices. PRIMEDIA shall provide About
with regular reports and forecasts with respect to its sales efforts.
PRIMEDIA shall adhere to the established rate policies of About as in
effect and changed from time to time provided however that the rate
policies for the PRM Sold Sites shall be consistent with those of About's
other sites. About shall have the right, in its sole discretion and
without obligation to PRIMEDIA, to accept or reject any order, advertiser
or any sale of advertising space, or advertising of any nature tendered by
PRIMEDIA. About reserves the right to sell to all non-Endemic Advertising
without paying the Commission (as defined).
4. COMMISSIONS. About agrees to pay PRIMEDIA a commission equal to 20% of the
Net Advertising Revenues (as defined) from Endemic Advertising on the PRM
Sold Sites (the "Commission"). Through March 31, 2001, the Commission
shall be payable only with respect to advertising sales actually generated
by PRIMEDIA. Beginning on April 1, 2001 and for the remainder of the term,
the Commission shall be payable on all Endemic Advertising on the PRM Sold
Sites regardless of whether such sales are generated directly by PRIMEDIA.
Net Advertising Revenue is defined as cash received by About after
deduction of charges for agency commissions, refunds, credits, allowances
and cash discount for payment.
5. SALES LITERATURE. About agrees to provide PRIMEDIA with sales literature
and related materials in appropriate types and quantities at no cost to
PRIMEDIA. PRIMEDIA agrees that all information and materials provided by
About, including but not limited to, publications, sample product, selling
aids, selling presentations, sales literature, customer and prospective
customer lists and databases, and call reports, whether maintained on a
computer or in non-computerized format, is the property of About, and all
such non-public information and materials and trade secrets, including but
not limited to, advertiser/customer and prospect lists, that PRIMEDIA may
come into possession of shall be kept confidential and not be disclosed by
PRIMEDIA to any third party. PRIMEDIA further agrees that About retains
the ownership of its customer databases, and software supplied in
relationship to such databases. Upon termination, PRIMEDIA agrees to
return immediately to About all company-owned property, including but not
limited to, equipment, selling aids, materials, letterhead, call reports,
route books, customer lists, prospect lists, and databases. Any sales
literature created by PRIMEDIA will be subject to About's reasonable
approval.
6. INTEGRATION/COORDINATED EFFORTS. As soon as practicable after the
execution of this Agreement, PRIMEDIA and About will each designate two
senior level executives with responsibility and experience in sales (the
"Sales Task Force") to meet for the purpose of coordinating the efforts of
the sales forces of PRIMEDIA and About. The Sales Task Force will develop
strategies designed to take advantage of the strengths, experience and
industry contacts of the various members of the parties' respective sales
forces. This strategy shall include plans to:
o develop "package buys" for advertisers of advertising in
PRIMEDIA and About products;
o develop plans for converting additional About Sites to
PRM Sold Sites;
o target Endemic Advertisers with appropriate personnel;
and
o provide opportunities and incentives for members of the
respective sales forces to sell each other's
advertisements.
7. TERM. The term of this Agreement shall be from the date of this Agreement
through December 31, 2005 (the "Term") and shall automatically renew for
additional one year terms unless one party notifies the other of its
intent not to renew one hundred and eighty (180) days in advance of the
expiration of any term. If either party is in material breach of this
Agreement for a period of at least six months, the non-breaching party
shall have, in addition to any other remedies available under law, the
right upon notice to the breaching party, to terminate this Agreement.
8. NAMES. PRIMEDIA understands that it has no proprietary rights to the names
"About", "Xxxxx.xxx" nor the names of any of the Web Sites and shall only
use such names in a manner approved by About.
9. REPRESENTATIONS OF PRIMEDIA. PRIMEDIA represents and warrants that it has
the full power and authority to enter into this Agreement; that in
performing under this Agreement, it will not violate the terms of any
agreement with any third party; that the materials it and all elements
thereof that it contributes will not violate any third party rights.
PRIMEDIA agrees to indemnify and hold About harmless against any
liabilities, losses, damages, costs or expenses, including reasonable
attorneys' fees, arising from any claim, action or proceeding based upon
or in any way related to breach or alleged breach of these representations
and warranties.
10. REPRESENTATIONS OF ABOUT. About represents and warrants that it has the
full power and authority to enter into this Agreement; that in performing
under this Agreement, it will not violate the terms of any agreement with
any third party; that the materials it and all elements thereof that it
contributes will not violate any third party rights. About agrees to
indemnify and hold About harmless against any liabilities, losses,
damages, costs or expenses, including reasonable attorneys' fees, arising
from any claim, action or proceeding based upon or in any way related to
breach or alleged breach of these representations and warranties.
11. INDEMNIFICATION. (a) About shall indemnify, defend and hold harmless
PRIMEDIA and its subsidiaries, affiliates, officers, directors and
employees from any loss, expense (including reasonable attorneys' fees),
damage or liability arising out of any claim, demand or suit resulting
from (i) any breach of any representation or warranty made by About
hereunder, (ii) any false or misleading information in About's sales
literature and related materials or otherwise provided to PRIMEDIA by
About for the purpose of soliciting sales, and (iii) About's failure to
fulfill its obligations under any duly authorized advertising contract or
insertion order.
(b) PRIMEDIA shall indemnify, defend and hold harmless About and its
subsidiaries, affiliates, officers, directors and employees from any loss,
expense (including reasonable attorneys' fees), damage or liability
arising out of any claim, demand or suit resulting from (i) any breach of
any representation or warranty made by PRIMEDIA hereunder and (ii) any
false or misleading information generated by PRIMEDIA for the purpose of
soliciting sales.
12. GOVERNING LAW. The terms and provisions of this Agreement shall be
governed and interpreted in accordance with the laws of the State of New
York.
13. AMENDMENT; WAIVER. No provision of this Agreement may be amended or
modified except by an instrument or instruments in writing signed by the
parties hereto. Any party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision or subsequent breach. Any
waiver must be in writing. The failure of any party hereto to enforce at
any time any provision hereof shall not be construed to be a waiver of
such provision, nor in any way to affect the validity hereof or any part
hereof or the right of any party thereafter to enforce each and every such
provision.
14. NOTICES. All notices and other communications under this Agreement shall
be in writing and shall be deemed given when delivered personally, mailed
by registered mail, return receipt requested, sent by documented overnight
delivery service or, to the extent receipt is confirmed, by telecopy to
the parties at the following addresses (or to such other address as a
party may have specified by notice given to the other party pursuant to
this provision):
If to About to it at
Xxxxx.xxx, Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx,
President Corporate Development
Fax: (000) 000-0000
with a copy to
Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to PRIMEDIA, to:
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No. (000) 000-0000:
Confirmation No.(000) 000-0000
Attention: Xx. Xxxxxxx XxXxxxx
with a copy to:
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
15. SEPARABILITY. If any provision of this Agreement is held by any court of
competent jurisdiction to be illegal, invalid or unenforceable, such
provision shall be of no force and effect, but the illegality, invalidity
or unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
16. ASSIGNMENT AND BINDING EFFECT. None of the parties hereto may assign any
of its rights or delegate any of its duties under this Agreement without
the prior written consent of the others. All of the terms and provisions
of this Agreement shall be binding on, and shall inure to the benefit of,
the respective successors and permitted assigns of the parties.
17. NO BENEFIT TO OTHERS. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors and permitted assigns and
they shall not be construed as conferring and are not intended to confer
any rights on any other persons.
18. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and each party
thereto may become a party hereto by executing a counterpart hereof. This
Agreement and any counterpart so executed shall be deemed to be one and
the same instrument. The exchange (by facsimile) of facsimile copies of
executed counterparts of this Agreement shall be deemed execution and
delivery thereof, provided that receipt of such facsimile is confirmed in
writing. Original copies shall follow by documented overnight delivery.
19. EXPENSES. Each party shall pay all of its respective expenses relating to
the transactions contemplated hereby including, without limitation, the
expenses of its attorneys and financial advisors.
20. INTERPRETATION. The parties hereto agree that in interpreting this
Agreement there shall be no inference against the drafting party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
21.
XXXXX.XXX, INC. PRIMEDIA INC.
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxx
--------------------------------- ----------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Chairman and Chief Title: Vice Chairman
Executive Officer
