Exhibit 10.4
Portions of this exhibit have been omitted pending a determination by the
Securities and Exchange Commission that certain information contained herein
shall be afforded confidential treatment. The omitted portions are indicated by
three asterisks.
CABLE SALES REPRESENTATION AGREEMENT
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This Agreement dated and effective as of April 15, 1996, between
MEDIAAMERICA, INC., a New York corporation with an address at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, XX 00000 ("MAI") and GREAT AMERICAN COUNTRY, INC., a Colorado
corporation with an address at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000
("G*A*C"). The parties hereto agree as follows:
1. Engagement. Pursuant to the terms and conditions of this Agreement,
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G*A*C hereby engages MAI as G*A*C's exclusive sales representative (except as
provided in Section 8) during the term of this Agreement through the area served
by the Network (as defined below), such area to be known as the "Territory", in
respect of advertising sales for the Network. The Territory shall be the United
States. MAI hereby accepts the engagement and by doing so agrees to render those
services customarily rendered by first-class sales representatives in the U.S.
in the cable television industry. MAI's services hereunder shall be non-
exclusive, it being understood and agreed that MAI is entitled to be the sales
representative for services, producers and distributors other than G*A*C.
2. The Network. The Network to be represented by MAI hereunder is a 24
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hour a day cable network playing country music videos entitled "Great American
Country" containing a minimum of four minutes of national advertising per hour.
G*A*C shall promptly advise MAI of any additional such formats or changes to the
formats and broadcast times/dates.
3. Parties' Obligations.
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3.1. MAI shall render its services hereunder with respect to all
national advertising time, as defined herein and
acknowledging grandfathered exclusions as specified
in Exhibit A, to be inserted during the broadcasting of the
Network (the "Advertisements"). In furtherance of its
responsibilities hereunder, MAI will use its best efforts to
promote the Network, maximize and collect Gross Sales (as
defined below) derived from the Advertisements, and
coordinate its sales activities with G*A*C personnel.
3.2. MAI shall render the following services, without limitation,
at MAI's sole expense:
3.2.1. engage in customary sales promotion activities to sell
the Advertisements;
3.2.2. negotiate and enter into agreements with, and pay
commissions to, all advertising agencies and
advertisers respecting the sale of the Advertisements.
All orders for Advertisements shall be acceptable to
G*A*C in its sole discretion. MAI shall furnish to
G*A*C promptly upon execution, copies of all
agreements entered into by MAI with respect to the
Advertisements. MAI shall make no sales of
Advertisements for any period which would extend
beyond the termination of this Agreement (whether by
expiration of its term or as a result of notice)
without first receiving the written consent of G*A*C.
3.3. MAI will provide information on sales to G*A*C as each sale
is made. The G*A*C log will close at 5
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P.M. Mountain Time each Thursday for the broadcast week
beginning a week from the following Monday. Any advertising
time within that broadcast week remaining unsold by MAI at
closing will revert to G*A*C. Completed sales orders for each
broadcast week along with appropriate television spots will
be furnished by MAI to G*A*C one week in advance on the
Monday preceding the Monday on which the broadcast begins.
3.4 MAI shall by notice advise G*A*C at least ten (10) days
before entering into any agreement to render services
comparable to those of MAI under this Agreement to any cable
television network. Such notice shall identify the
contracting party and shall confirm that MAI will observe the
provisions of Section 4.6 of this Agreement if they become
applicable as a result of such other agreement.
4. Gross Sales; Compensation to MAI.
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4.1. "Gross Sales" shall mean any and all revenues and income and
other consideration derived from the sales of advertising
time, including sales of advertising on G*A*C's World Wide
Web site as hereinafter defined in Section 8.(b)., by MAI
hereunder in respect of the Advertisements pursuant to all
contracts obtained by MAI during the term of this Agreement.
"Adjusted Gross Sales" shall mean Gross Sales less only
advertising agency or media buying service
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commissions (not to exceed 15 percent) actually paid by MAI
to unaffiliated third parties. "Subscriber Advertising Value"
shall mean the monetary value agreed upon by the parties from
time to time during the term hereof which is to be ascribed
to each full-time subscriber of G*A*C and which for the
period commencing as of June 1, 1996 and ending on December
31, 1997 shall be deemed to be $0.50. "Threshold Amount"
shall mean (i) with respect to the period from June 1, 1996
to December 31, 1996, $125,000; and (ii) with respect to each
calendar year of the term or any renewal thereof, and agreed
to in advance by both parties, an amount equal to the product
of the then applicable Subscriber Advertising Value and the
Network's full-time subscriber base at December 31 of the
year preceding the calendar year for which such calculation
is being made.
4.2. MAI shall render bills in respect of all Gross Sales within
five (5) business days after the end of the advertising
schedule or the Standard Broadcast month in which the Network
is broadcast and shall directly receive and use its best
efforts to collect one hundred percent (100%) of all Adjusted
Gross Sales. Copies of such bills shall be mailed
concurrently to G*A*C.
4.3. As compensation for its services under this Agreement, MAI
shall receive (i) *** of all collected Adjusted Gross Sales
for
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Advertisements booked and run for the period April 1, 1996 to
December 31, 1996 and for each calendar year of the term
thereafter up to the applicable Threshold Amount and (ii)
*** of the excess over the applicable Threshold Amount of all
collected Adjusted Gross Sales for Advertisements booked and
run for the period June 1, 1996 to December 31, 1996 and for
each calendar year of the term thereafter.
4.4. MAI shall account to G*A*C with respect to collected Adjusted
Gross Sales as and when received from advertisers or
agencies, but in no event less often than monthly, commencing
thirty (30) days after broadcast of the advertising schedule
on the Network for as long as bills are outstanding. MAI
shall remit G*A*C's share of Adjusted Gross Sales on a weekly
basis for checks that were received by MAI that week. Copies
of corresponding advertiser/ad agency checks will be
forwarded to G*A*C along with G*A*C's share of Adjusted Gross
Sales. A complete, detailed accounts receivable report will
be forwarded to G*A*C on a monthly basis, within ten (10)
days after the end of each month.
4.5. It is expressly agreed that as to the percentage amounts of
Adjusted Gross Sales which MAI has the right to receive
pursuant to Section 4.2 above and
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which, if received and collected, it shall remit to G*A*C
pursuant to this Agreement, MAI shall receive such funds in
trust for and on behalf of G*A*X. XXX shall have no ownership
interest in any of such amounts and such amounts shall not be
available to any of the creditors of MAI.
4.6. ***
4.7. The parties mutually agree to keep confidential the
compensation payable under Section 4 of this Agreement,
except if disclosure is required by law (including securities
law disclosure requirements), or if such information is
disclosed by MAI or is in the public domain.
5. Employees.
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5.1. Neither G*A*C nor any of its subsidiaries, partners, joint
venturers, employees or agents shall employ or offer to
employ any of the current staff of MAI for a period of one
(1) year from the termination of this Agreement for any
reason.
5.2. Neither MAI nor any of its subsidiaries, partners, joint
venturers, employees or agents shall employ or offer to
employ any of the current staff of G*A*C for a period of one
(1) year from the termination of this
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Agreement for any reason unless: (i) prior to the termination
of this Agreement, G*A*C shall have assigned its rights and
obligations hereunder pursuant to the provisions of Section
11.2, below, or (ii) if this Agreement is terminated because
the Network has been discontinued by G*A*C.
6. Books and Records. G*A*C shall have the right to examine all of
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MAI's books, records and other information relative to the sale of the Network
Advertisements, the booking and collection of the Network's Gross Sales, the
calculation of Adjusted Gross Sales, the relative contributions by G*A*C vis-a-
vis others pursuant to Section 4.6 and all related matters upon reasonable
advance written notice to MAI at any time and at a reasonable frequency, and
shall have the right to commence arbitration thereon within one (1) year after
the termination of this Agreement. In the event G*A*C's examination of MAI's
books and records reveals an underpayment to G*A*C, then MAI shall promptly pay
any underpayment.
7. Term of the Agreement.
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7.1. The initial term of this Agreement shall commence as of
April 15, 1996, and shall continue through and including
December 31, 1998, unless sooner terminated as provided in
this Agreement. At the end of the initial term, the
agreement shall automatically be renewed for an additional
three (3) year period, unless either party has notified the
other in writing of its intention not to renew by no later
than October 1, 1998.
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7.2. For any renewal term, in the event that Gross Sales hereunder
are less than the Threshold Amount, as defined in Section 4.1
above, with respect to any given calendar year, G*A*C shall
have the right to terminate this Agreement by giving at least
sixty (60) days notice of such termination at any time after
the calendar year then expiring.
7.3. Upon the termination of this Agreement for any reason, if
G*A*C (or its designee) shall collect Gross Sales derived
from any contracts obtained by MAI during the term of this
Agreement, G*A*C shall pay MAI the appropriate percentage (as
determined under Section 4.3) of the Adjusted Gross Sales
after deductions permitted herein (if any) and for which MAI
shall continue to perform services, and MAI shall turn over
all relevant records to G*A*C relating to the Network or sale
of Advertisements. Each party agrees to cooperate during a
transitional period from one sales organization to another.
8. Rights of G*A*C to Hire Other Sales Representative.
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(a) Notwithstanding any other provision of this Agreement, if the
notice referred to in Section 7.1 is given by either party, G*A*C shall have the
right at any time thereafter to hire another representative to sell advertising
on its behalf prior to the termination of the Agreement. Such other
representative may begin such activities immediately, provided that the
advertising to be sold by it shall only be for periods on or after January 1,
1999.
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(b) MAI shall not be G*A*C's exclusive sales representative with
respect to those accounts listed and described on Schedule A attached hereto and
made a part hereof. In addition, MAI shall have the non-exclusive right to sell
Advertisements for use on G*A*C's World Wide Web site, currently located at
xxx.xxxxxxxxxxxx.xxx. In addition, MAI shall have the non-exclusive right to
sell specific "per inquiry" advertising with the prior approval of G*A*C.
9. Meetings. The parties shall meet four (4) times each' calendar
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year during the term of this Agreement for the purpose of reviewing the -
performance of MAI and the working relationship of the parties.
10. Representations. Warranties and Indemnification. Each party
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hereby represents and warrants that it has the full power and authority to enter
into this Agreement and to perform its obligations hereunder. G*A*C will use its
best efforts to obtain all releases, authorizations, consents and waivers
necessary for authorization to broadcast the material to be included in the
Network. G*A*C hereby agrees to indemnify MAI from and against any claims made
for unauthorized use by any persons, their heirs, assigns and the estates of any
such persons, whose names, voices or material are to be included in the Network,
and from and against any other losses resulting from a breach by G*A*C of these
representations and warranties. Each party hereby agrees to indemnify and hold
harmless the other party from and against any and all claims finally
adjudicated, arbitrated or settled with the consent of both parties (which
consent may not be unreasonably withheld), and any and all expenses (including
reasonable attorneys' fees), damages, causes of actions and losses, arising out
of a breach of any agreements, warranties or representations made by the
indemnifying party.
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11. General.
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11.1. Notices. All notices and documents desired or required to
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be given to either party hereunder must be in writing and
shall be deemed given on the date received, via express or
certified mail, return receipt requested, or the date
telexed or telefaxed, all charges prepaid, to the other
party's respective address set forth above or to such
other address as either party shall designate to the other
in writing. All statements and payments required to be
given to G*A*C hereunder shall be remitted to the address
set forth below or to such other address as G*A*C shall
designate in writing. A courtesy copy of all notices to
MAI shall be sent to Xxxxx Xxxxxxx, Esq., Pirro, Collier,
Xxxxx, Xxxxxxx & Xxxx, 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, and all notices to G*A*C are to be
sent to 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attn: Vice President and General Manager, with a courtesy
copy to General Counsel, at the same address.
11.2. Assignment. Without the consent of MM, G*A*C shall have
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the right to assign this Agreement to (i) any party
acquiring all or a substantial portion of its assets,
whether by merger, consolidation or otherwise, and (ii) to
any affiliate of G*A*C, Any other assignment shall require
the consent of MAI, which consent shall not be
unreasonably withheld.
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MAI may not assign this Agreement without the consent of
G*A*C, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, G*A*C may terminate this
Agreement on sixty (60) days prior written notice
following notification to it that the right to elect a
majority of the Board of Directors of MAI is no longer
held by either Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxxxxx or both
of them.
11.3. Arbitration. Any dispute arising between the parties to
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this Agreement shall be submitted to and resolved by
binding arbitration in New York City and in Denver,
Colorado, in accordance with the rules of the American
Arbitration Association then in effect. The site of such
arbitration shall shift every six months, with the first
site being New York City.
11.4. Entire Agreement: Relation of the Parties. This Agreement
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expresses the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes
any and all former agreements and understandings, whether
oral or written, relating to the subject matter hereof. No
amendment or modifications may be made except in a writing
signed by the parties hereto. No waiver of default by
either party shall constitute a waiver of any other
default whether or not similar. Nothing contained in this
Agreement shall be construed to constitute either
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party the employee, agent, partner or joint venturer of
the other, it being understood and agreed that the
relationship of the parties is that of independent
contractors. This Agreement shall be construed in
accordance with the laws of the State of Colorado
applicable to agreements entered into and wholly performed
therein.
MEDIAAMERICA, INC.,
a New York corporation
By: /s/ Xxx Xxxxxxxxxx
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Xxx Xxxxxxxxxx
Chairman
GREAT AMERICAN COUNTRY, INC., a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
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SCHEDULE A
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