Exhibit 10.6
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.
SALES REPRESENTATION AGREEMENT
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This Agreement dated and effective as of December 1, 1995, between
MEDIAAMERICA, INC., a New York corporation ("MAI") and XXXXX SATELLITE NETWORKS,
INC., a Colorado corporation ("JSN"). The parties hereto agree as follows:
1. Engagement. Pursuant to the terms and conditions of this Agreement,
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JSN hereby engages MAI as JSN'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 ad sales for the Network. The Territory shall be
limited to the United States only and the engagement of MAI is likewise
limited to 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. radio broadcasting 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 JSN.
2. The Network. The Network to be represented by MAI hereunder is
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titled "Xxxxx Satellite Network" which is currently comprised of eight (8)
24-hour per day, satellite delivered radio formats: CD Country, US Country,
Adult Hit Radio, Good Time Oldies, Soft Hits, FM Lite, The Word-in-Music and Z-
Net. Additional 24-hour per day formats are projected to become part of the
Network. JSN shall promptly advise MAI of any additional such formats or changes
to the formats and broadcast times/dates. This Agreement does not apply to
programming which is not a 24-hour per day format. The inclusion of any such
other programming herein shall be made only by express
agreement of the parties; it being understood that in any event the commission
rate of MAI with respect thereto shall not exceed ***.
3. Parties' Obligations.
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3.1. MAI shall render its services hereunder with respect to all
advertising time 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 JSN personnel. JSN will
provide adequate staff to act as a liaison with its
affiliated radio stations which receive the Network.
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 JSN in its sole discretion. MAI
shall furnish to JSN 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
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is after this Agreement terminates or is to terminate
(whether by expiration of its term or as a result of
notice) without first receiving the written consent
of JSN.
3.2.3 MAI will perform for JSN the functions of
trafficking (scheduling) JSN inventory.
3.3. No less frequently than monthly, or as dictated by
advertisers, MAI will secure, obtain and collect all
affidavits of performance from all radio stations
broadcasting the Network in the Territory. These affidavits
of performance will be made available to JSN on at least a
monthly basis. JSN shall cooperate in the enforcement of
compliance by the stations with their obligations to
promptly submit such affidavits and to adhere to applicable
scheduling requirements.
3.4. MAI will provide information on sales to JSN as each sale is
made. The JSN log will close at 5 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 JSN. Complete logs for each broadcast week will be
furnished by MAI to JSN one week in advance on the Monday
preceding the Monday on which the broadcast begins.
3.5 MAI shall by notice advise JSN at least ten (10) days before
entering into any agreement to render services
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comparable to those of MAI under this Agreement to any
provider of twenty-four hours per day music formats to
radio stations. Such notice shall identify the contracting
party and shall confirm that MAI will observe the provisions
of Sections 4.7 and 4.8 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 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
commissions (not to exceed 15 percent) actually paid by MAI to
unaffiliated third parties.
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 JSN.
4.3. As compensation for its services under this Agreement, MAI shall
receive (a) *** of all collected Adjusted Gross Sales for
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Advertisements booked and run for December 1995; (b) *** of all
collected Adjusted Gross Sales for Advertisements booked and run for
the twelve month period January 1, 1996 to December 31, 1996. If
Adjusted Gross Sales for such twelve month period exceed ***, the
rate will be *** with respect to the amount in excess of ***; (c) ***
of all collected Adjusted Gross Sales for Advertisements booked and
run for the twelve month period January 1, 1997 to December 31, 1997.
If Adjusted Gross Sales for such twelve month period exceed the
greater of *** or *** of the Adjusted Gross Sales for calendar 1996,
the rate will be *** with respect to the amount in excess of the
greater of *** or *** of the Adjusted Gross Sales for calendar 1996,
and (d) *** of all collected Adjusted Gross Sales for the remaining
period of this Agreement.
4.4. MAI shall account to JSN 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 JSN's share of Adjusted Gross
Sales on a weekly basis for checks that were received by MAI that
week. Copies
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of corresponding advertiser/ad agency checks will be forwarded to JSN
along with JSN's share of Adjusted Gross Sales. A complete, detailed
accounts receivable report will be forwarded to JSN 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
4.1 above and which, if received and collected, it shall remit to JSN
pursuant to this Agreement MAI shall receive such funds in trust for
and on behalf of JSN. MAI 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. MAI shall not *** to other 24-hour satellite delivered formats ***.
4.7. MM will not provide to any other program producer any sharing
arrangement or participation based on advertising time contributions
made by its clients that is more favorable than is provided to JSN
under this Agreement, including the allocation of any bonuses with
respect to the inventory made available by JSN; provided that the
foregoing shall not apply to the arrangement between MAI and EFM.
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4.8. 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 JSN 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 JSN for a period of one (1) year from the
termination of this Agreement.
6. Books and Records. JSN shall have the right to examine all of MAI's books,
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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 JSN vis-a-vis
others pursuant to Section 4.8, 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 JSN's examination of MAI's books and
records reveals an underpayment to JSN, then MAI shall promptly pay any
underpayment.
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7. Term of the Agreement.
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7.1. The term of this Agreement shall commence as of December 1, 1995, and
shall continue for a period of 2 1/2 years, ending on May 31, 1998,
unless sooner terminated as provided in this Agreement.
7.2. In the event that Gross Sales hereunder are less than $7,800,000 with
respect to calendar year 1996, JSN shall have the right to terminate
this Agreement by giving at least sixty (60) days notice of such
termination at any time after December 31, 1996 and before February
28, 1997. If no such notice is given before February 28, 1997, such
right to terminate shall be void.
7.3. Upon the termination of this Agreement for any reason, if JSN (or its
designee) shall collect Gross Sales derived from any contracts
obtained by MAI during the term of this Agreement, JSN shall pay MAI
the appropriate percentage (as determined under Section 4.3 or
Section 4.4) 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 JSN relating to the
Network or sale of Advertisements. Each party agrees to cooperate
during a transitional period from one sales organization to another.
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8. Rights of JSN to *** Sales Representative.
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(a) Notwithstanding any other provision of this Agreement, if JSN
terminates this Agreement under Section 7.2, JSN shall have the right, at any
time after the notice referred to in Section 7.2 is given, to *** prior to the
end of the sixty day notice period, provided that the *** shall only be for
periods after the end of such sixty day period.
(b) Notwithstanding any other provision of this Agreement, JSN shall
have the right at any time after January 31, 1998, and upon notice to MAI, to
*** prior to June 1, 1998. Such *** may *** immediately, provided that the ***
shall only be for periods on or after June 1, 1998.
9. Meetings. The parties shall meet four (4) times each calendar year
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during the term of this Agreement for the purpose of reviewing the performance
of MAI and the working relationship of the parties. Two of such meetings shall
be held in Denver, Colorado and two in New York City. Meetings shall be held
approximately quarterly, with the exact time and place of each meeting to be
determined by the parties.
10. Representations, Warranties and Indemnification. Each party hereby
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represents and warrants that it has the full power and authority to enter into
this Agreement and to perform its obligations hereunder. JSN 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. JSN
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
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Network, and from and against any other losses resulting from a breach by JSN 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.
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 below or to such
other address as either party shall designate to the other
in writing. All statements and payments required to be
given to JSN hereunder shall be remitted to the address
set forth below or to such other address as JSN shall
designate in writing. A courtesy copy of all notices to
MAI shall be sent to Xxxxx Xxxxxxx, Esq., Collier, Cohen,
Crystal & Xxxx, 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
000x0-00x0, and all notices to JSN are to 0000 X. Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, with a courtesy copy to
General Counsel, at the same address.
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11.2. Assignments. Without the consent of MAI, JSN 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 JSN. Any other assignment shall require
the consent of MAI, which consent shall not be
unreasonably withheld. MAI may not assign this Agreement
without the consent of JSN, which consent shall not be
unreasonably withheld.
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, according to the rules of the American
Arbitration Association. 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 amendments 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
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Agreement shall be construed to constitute either 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. XXXXX SATELLITE NETWORKS, INC.
00 Xxxx 00xx Xxxxxx 0000 Xxxx Xxxxxxx Xxxxxx
00xx Xxxxx Xxxxxxxxx, XX 00000
Xxx Xxxx, XX 00000
By:/s/ Xxx Xxxxxxxxxx By:/s/ Xxxx Xxxxxxxxxx
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Xxx Xxxxxxxxxx Xxxx Xxxxxxxxxx
Chairman Vice President/General Manager
19233
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