CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
EXHIBIT 10.32
MC941121LD
Page 1 of 19
ADVERTISING/MARKETING AGREEMENT
WITNESSETH:
That in consideration of the agreements expressed herein, AT&T
Communications, Inc. - Business Communications Services ("AT&T") having an
office at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000 and Xxxxxxx
Xxxxxxxx Xxxxxxxx Inc., a corporation of the Commonwealth of Massachusetts
("Agency"), having an office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, do hereby agree as follows:
ARTICLE 1 - AGENCY SERVICES
The Agency shall act as AT&T's advertising/marketing agency in the planning,
preparing, and placing of such advertising/marketing, as may be requested by
AT&T. The Agency shall perform other services as AT&T may request, as outlined
in Article 30, subject to mutual written agreement of the parties.
Agency shall devote its best efforts on behalf of AT&T to farther AT&T's
interests and shall reasonably endeavor in every proper way to make AT&T's
advertising/marketing and associated efforts, for which the Agency is herein
responsible, successful. To accomplish the foregoing, Agency specifically agrees
that its services shall include but not be limited to the following:
X. Xxxxxxxxx and maintaining, with AT&T's consent executive strategic
input and review, an account management group, creative, systems and
fulfillment, research and analysis, teleservices marketing, partnership
marketing, production, media and traffic teams necessary to service the
AT&T account;
B. Provide direct marketing services, including the creation, production
and placement, insertion or distribution of direct mail and direct
response advertising.
C. Attending meetings, as requested by AT&T, with AT&T's staff and
periodic meetings with AT&T's top management;
D. Familiarizing itself with the business of AT&T, its products and
services, and the industry in which AT&T operates; and analyzing the
present and potential advertising/marketing opportunities for such
products and services so as to provide AT&T with marketing and
advertising counsel, including specific advertising/marketing
objectives, strategies and plans for reaching AT&T's business
objectives;
E. Preparing layouts, copy, artwork, scripts and storyboards and furnishing
other elements and materials to be used in finished advertisements for
all media and promotions to be used by AT&T;
MC941121LD
Page 2 of 19
F. Advising AT&T of the availability of all broadcast, publication and out-
of-home media which can appropriately be used to advertise AT&T products
and services; and developing media plans suitable for AT&T;
G. When publications media are to be used, arranging for insertions and
checking the advertisements in accordance with mutually acceptable
practices for date, appearance, position, size, quality and mechanical
reproduction;
H. When broadcast media are to be used, arranging for the programs,
commercials, time and talent, and plan; rendering all services necessary
for the proper and efficient use of the media; auditing the audience
share of broadcasts and verifying the broadcasts in accordance with
mutually acceptable practices for time, accuracy and other related
factors;
I. When outdoor posters, carcards, painted boards and other media are to
be used, arranging for displays and verifying in accordance with
mutually acceptable practices for date, appearance, position, site,
workmanship and mechanical reproduction;
J. Supervising the production of all finished advertising and marketing
material;
X. Xxxxxxxxxxx, arranging and contracting for any special talent required,
with AT&T's approval, and for all photography, models, special effects,
layout, artwork and for all printing for use in the
advertising/promotions program; and making appropriate arrangements for
tax withholdings from talent;
L. Analyzing advertising, marketing and consumer research to aid AT&T in
developing advertising strategy and developing and evaluating AT&T's
advertising and media;
M. Conducting and analyzing competitive advertising tracking.
The above services shall be performed to the satisfaction of AT&T, shall be
performed in accordance with the highest professional standards and shall be in
accordance with such requirements or restrictions as may be lawfully imposed by
governmental authority. Services not completed to the reasonable satisfaction of
AT&T shall be reperformed at no cost to AT&T.
ARTICLE 2 - APPROVALS BEFORE COMMITMENT
No commitment of any kind shall be made by the Agency on behalf of AT&T unless
specifically authorized in writing by AT&T, except as provided in Article 3
(Estimates).
The Agency shall submit concepts, scripts, print copy and other materials as
early as possible to AT&T for internal review and required legal and technical
approval, and when appropriate to the networks' Broadcast
MC941121LD
Page 3 of 19
Standards Departments, for specific approval prior to initial photographing,
broadcasting, telecasting, or print production of commercials or print
advertisements.
Agency shall contract with suppliers of media and such contracts shall provide
that Agency shall be solely liable for payment of media for time and/or space
costs incurred on behalf of AT&T from and after the time at which AT&T shall put
Agency in funds for payment thereof, and that all billing shall be sent to the
Agency.
ARTICLE 3 - ESTIMATES
The Agency shall furnish to AT&T, in writing and in advance, labor fee and a
cost estimate of all expenditures in connection with all services and projects
recommended by Agency or requested by AT&T. Prior to undertaking such projects
or committing AT&T's funds, Agency shall obtain written authorization from
AT&T. Agency shall furnish revisions of these estimates when changes in costs
are anticipated in excess of ten percent (10%), plus or minus. Each estimate as
approved by AT&T shall be executed by both parties. Approved estimates shall
constitute the only authorization for the Agency to take any action, make any
commitments or expend any money. In those situations where time or circumstances
will not permit specific prior written authorization, commitments not to exceed
$50,000 may be made with oral approval, provided such approval shall be
confirmed by an approved written estimate no later than ten (10) working days
thereafter.
ARTICLE 4 - DISCOUNTS
Agency shall obtain all prompt payment or other similar discounts available to
it from media and other suppliers from which it makes purchases in the
performance of the services hereunder. When Agency receives a cash discount,
rebate, frequency discount, volume discount, promotional consideration, or other
similar credit from such media or other suppliers, AT&T shall receive full
allowance for each such amount, provided Agency, after timely notification,
receives payment from AT&T within the applicable discount period.
ARTICLE 5 - ANNUAL REVIEW
An annual review shall take place during the first quarter (January - March) of
each calendar year for the review of the previous year's performance, to be
attended by appropriate AT&T management representatives and by Agency management
and senior members of the AT&T agency group. The purpose of this review is for
AT&T to present its evaluation of Agency performance to Agency and for Agency to
present its evaluation of AT&T management to AT&T, for AT&T and Agency to
mutually agree on any corrective action that may be needed and for AT&T and
Agency to set annual objectives.
MC941121LD
Page 4 of 19
ARTICLE 6 - DEFINITIONS
A. "Gross Revenue" as used herein shall mean the total amount of compensation,
exclusive of pass-through costs, the Agency receives from AT&T for a
advertising/marketing services performed after reconciliation and any
rebates or supplementary fees are paid.
B. "Annual Salary" as used herein shall mean annual base salary, excluding
bonuses. It does not include employer paid FICA, insurance and medical
benefits its or payments into retirement plans.
C. "Direct Salaries" as used herein shall mean [***]
1. [***]
[***]
Total number of hours worked on Agency business means [***]
2. At AT&T's option, such option to be obtained by the Agency in writing
from AT&T, AT&T may elect to "buy-out" designated individuals. For those
individuals bought out by AT&T, AT&T shall be responsible for that
person's total annual base salary, excluding bonuses.
D. "Indirect Salaries" as used herein shall mean [***]
E. "All Other Expenses (ACE)" as used herein shall mean all other allowable
expenses allocable to AT&T and shall include:
1. Other salaries that can be directly allocable to the AT&T account that
are not included in direct salaries as defined in Section C above.
2. Payroll Related Expenses such as employer paid FICA, insurance and
medical benefits.
3. Employer payments into ERISA-approved retirement plans.
4. Indirect Costs which include indirect salaries, agency overhead costs
(e.g., space and facilities, professional fees and general corporate
expenses). Donations are not to be included in Indirect Costs.
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
MC941121LD
Page 5 of 19
For purposes of compensation computation as set forth in Article 7, All
Other Expenses are equal to [***]
F. "Direct Client Service Expenses" as used herein shall include out-of-pocket
expenses of Agency employees related to the AT&T account.
G. "Total Costs" as used herein shall equal [***]
H. "Profit Before Taxes" as used herein shall mean [***]
ARTICLE 7 - AGENCY COMPENSATION
A. Agency compensation for the calendar year shall be computed as follows:
1. During the last quarter of the previous calendar year, AT&T and the
Agency shall meet to determine:
a. The account staffing (including all functions as defined in Article
6, Paragraph C) for the AT&T account for the next calendar year.
b. The aggregate Direct Salaries, as defined herein, of the agreed upon
account staff.
2. The fee for the calendar year is then [***]
3. For 1994 the yearly fee is [***]. For each subsequent year, the
yearly fee shall be mutually agreed upon by the parties in writing and
attached as an amendment hereto.
B. [***] The specific criteria for evaluation shall be mutually agreed
upon by the parties. However, the yearly Agency evaluation as performed by
AT&T shall be at the sole discretion of AT&T.
1. At the end of each calendar year, the Agency shall submit to AT&T actual
Direct Salaries as defined herein, and a computation of Profit Before
Taxes according to the formula:
Profit = [***]
2. Based on the Agency evaluation as decided by AT&T, the Agency shall be
allowed:
a. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "unacceptable."
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
MC941121LD
Page 6 of 19
b. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "fully meets."
c. [***] profit (expressed as a percent of Total Costs) if
Agency evaluation is rated "exceeds."
d. [***] profit (expressed as a percent of Total Costs) if Agency
evaluation is rated "far exceeds."
Agency shall use its best effort to provide actual Direct Salaries, actual
All Other Expenses and Profit calculations within sixty (60) days of the end
of the calendar year but in no event later than ninety (90) days after the
end of the calendar year, so that reconciliation can be made. Agency agrees
to keep accurate books of account and records, in accordance with generally
accepted accounting principles, concerning all transactions hereunder,
including documentation supporting all charges and including out-of-pocket
expenses. An independent certified public accounting firm of the Agency's
choice and at the Agency's expense shall annually review the Agency's
books of account and records and shall certify that the bills to AT&T and
actual Direct Salaries and Profit computations are accurate and in
accordance with the definitions set forth in this Agreement. Verification of
Direct Salaries shall be performed as outlined in Schedule I, attached
hereto and made a part hereof. This audit privilege shall include access by
the independent auditors to individual payroll and personnel records. Said
books of account and records (excluding individual payroll and personnel
records) shall be preserved and maintained by Agency and kept available for
inspection by AT&T for at least three (3) years from the end of each
accounting period.
C. AT&T shall pay the Agency on dates to be mutually agreed upon by the
parties.
D. If for any reason Agency anticipates exceptional increases in Direct
Salaries during any quarter of the year, a meeting between Agency and AT&T
shall be called by the Agency to discuss what action should be taken while
still providing AT&T with needed services.
E. If for any reason AT&T expects the advertising/marketing budget to decline
or increase significantly above or below the anticipated budget for the
year, AT&T will notify Agency of this change as soon as possible.
F. AT&T agrees to reimburse the Agency directly for reasonable Direct Client
Service Expenses, including travel and living expenses authorized by AT&T
and incurred in connection with this Agreement. Reimbursement for travel and
living expenses shall be in accordance with the following guidelines:
1. Transportation
a. Airline Tickets - Agency will be reimbursed for air fare that has been
purchased at coach fare for domestic travel (business class is allowed
for international flights over six (6) hours in
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
MC941121LD
Page 7 of 19
duration). Agency employees may not request specific flights/carriers or
arrange/alter travel plans to obtain airline promotional benefits. Agency
employees traveling under first class status will be responsible for the
expense difference incurred. The ticket stub must be presented and relate
directly to the AT&T assignment. Reimbursement will not be made for the
purchase of travel insurance.
b. Reasonable taxi, bus, rail or car rental expenses will be reimbursed along
with associated receipts from tolls, tips, and parking fees will be
reimbursed by AT&T. Reimbursement for car rental expenses will be made upon
presentation of a car rental agreement/receipt. Car rentals must be
contracted at the lowest available rate and in the compact/subcompact
category where possible, unless special requirements dictate otherwise, in
which cases AT&T prior approval is required. For more than two people, a
mid-size rental is acceptable, however, names of the people must be
indicated on the car rental receipt.
AT&T will not reimburse car rental refueling charges.
Cab fares for "late nights" (after 8PM) are billable.
c. A mileage allowance, as approved yearly by the IRS, will be reimbursed to
Agency employees who use their own personal automobiles for services
provided on behalf of AT&T. Allowable mileage is determined by deducting the
normal commuting mileage.
When traveling, use public transportation as a first choice, personal car as
a second choice, and car rental as the last choice.
2. Lodging and Meals - Maximum of $150.00/day hotel allowance for domestic
travel, unless special requirements dictate otherwise, in which case AT&T
prior approval is required. Lower rates should be used if available. Agency
shall only invoice hotel expenses that are directly related to the work
performed under this Agreement. Expenses incurred at hotels for AT&T
business-related services (fax, typing, photocopying) are reimbursable.
AT&T will reimburse the Agency for meal expenses not exceeding $65.00 per
day, per person, which shall include room service and gratuities. Business
lunches are billable (only if an AT&T employee is present). Overtime meals
are not billable.
3. Business Calls - Business calls made on AT&T's behalf while staying
overnight are billable. Calls must list reason and person called and be on
the AT&T Network. Personal calls are not billable.
4. Personal Expenses - AT&T will not reimburse personal expenses of Agency
employees. If expenses of a personal nature (i.e., hotel/ship purchases,
alcoholic beverages, telephone and long
MC941121LD
Page 8 of 19
distance charges, in-room movies, sundry items, etc.) are charged
against the room, the amount will be deducted from the invoice presented
to AT&T. For trips which extend beyond five (5) days, reasonable valet
and laundry charges will be reimbursed. AT&T will reimburse reasonable
gratuities.
5. Magazines/Newspapers/Books are not billable unless specifically
requested, in writing, by AT&T.
E. Services provided by Agency employees - For services requested by AT&T,
the Agency shall provide, as a maximum, the following number of people:
Maximum Number of People
a. Location Shoots 3
b. Press Runs 1
c. Strategy Meetings *
d. Review Meetings *
e. Research Meetings (Focus Groups) *
* Agency shall obtain prior approval from AT&T regarding the number of
people to attend.
The Agency shall submit copies of all hotel bills and other reimbursable
expenses along with the associated charge receipt(s). Expenses shall be
billed at cost and invoices for all reimbursable expenses shall list the
date(s), company, person(s) visited and business purpose for the expense.
ARTICLE 8 - DURATION
The term of this Agreement shall begin on January 1, 1994 and shall continue
until terminated by either party for their convenience by giving ninety (90)
days written notice or as otherwise provided herein.
After expiration of the period of notice, no rights or liabilities shall arise
out of this relationship, regardless of any plans which may have been made for
future advertising promotions, except that: (1) if AT&T terminates, any non-
cancelable contracts made on AT&T's authorization (or any uncompleted work
previously approved by AT&T either specifically or as part of a plan, and still
existing at the expiration of the period of notice), which contracts were not or
could not be assigned by the Agency to AT&T or AT&T's assignee, shall be
carried to completion by the Agency and paid for by AT&T; and (2) if Agency
terminates, it shall be similarly responsible for any non-cancelable contracts
unless AT&T chooses to assume such contracts. Upon termination of this
Agreement, the Agency shall transfer, assign, and make available to AT&T, all
property and materials in the Agency's possession or control belonging to and
paid for by AT&T, and all information regarding AT&T's advertising. The Agency
also agrees to give all reasonable cooperation towards transferring, with the
approval of third parties in interest, all assignable reservations, contracts
and agreements with advertising media, or others, for advertising space,
MC941121LD
Page 9 of 19
broadcast time or materials yet to be used and all rights and claims thereto and
therein, upon being duly released from the obligation thereof. Upon termination,
unused advertising/promotional plans and ideas prepared by the Agency for AT&T
prior to the date of termination shall remain AT&T's property.
Except as otherwise specifically set forth, all the rights and liabilities of
the parties arising out of this Agreement shall cease on the date of
termination.
ARTICLE 9 - BILLING AND PAYMENT
A. Agency's bills for space in publications, outdoor and carcard advertising,
and radio and TV time and talent shall be rendered to AT&T in sufficient
time to afford AT&T a reasonable opportunity to remit funds to enable Agency
to pay charges incurred for AT&T's account on their due dates, and AT&T
agrees to pay such bills within the time herein specified for payment.
Agency's bills for other items will be rendered to AT&T from time to time;
unless otherwise specified, such bills will be due and payable within
thirty (30) days from date thereof. Agency shall submit all media and other
invoices in time for AT&T to obtain customary cash discounts. All bills
submitted to AT&T by Agency shall be net of all commissions and/or markups.
All non-media billing charges shall be in accordance with Schedule II,
attached hereto and made a part hereof. In no event shall AT&T be liable for
media or non-media bills unless the Agency submits such bills to AT&T within
three (3) months from the date in which costs were incurred.
B. Receipt or acceptance by AT&T of any statement or invoice furnished pursuant
hereto or any sums paid by AT&T hereunder shall not preclude AT&T from
questioning the correctness thereof within two (2) years of the year in
question, and if any inconsistencies or mistakes are discovered in such
statements or payments, they shall be immediately rectified and prompt
adjustments and corresponding payments shall be made to compensate thereof.
C. AT&T agrees to pay any "short rates" with which AT&T is justly charged by
the media placed on AT&T's behalf by Agency for any premature termination
of a contract that is caused by AT&T. Agency shall pay any "short rates"
with which AT&T is charged by media for any premature termination of a
contract that is caused by Agency.
The Agency shall submit invoices for all work performed under this Agreement.
Invoices against this Agreement shall indicate the work performed for which
billing is rendered, shall be in accordance with approved estimates and shall be
submitted in duplicate.
MC941121LD
Page 10 of 19
ARTICLE 10 - NOTICES
Any notice or demand which under the terms of this Agreement or under any
statute must or may be given or made by Agency or AT&T shall be in writing and
shall be given or made by telegram, telex, confirmed facsimile or by certified
or registered mail.
Such notice or demand shall be deemed to have been given or made when sent by
telegram, telex, or facsimile or when deposited, postage prepaid in the
U.S. mail.
ARTICLE 11 - TITLE
A. Except as set forth in Paragraph C below, all creative work and work
products, including, but not limited to, advertising and/or marketing plans,
media plans, ideas, and advertising materials developed by the Agency, or on
Agency's behalf, for AT&T in connection with this Agreement, and any and all
copyrights therein are hereby assigned and agreed to be assigned by Agency
to AT&T and shall be and will remain the exclusive property of AT&T, which
may use any of such as it deems appropriate. All such work and work products
shall be considered "works made for hire" to the extent allowed by law.
Agency shall acquire for AT&T from Agency subcontractors or others all such
assignments, rights and covenants, and will furnish AT&T with all such
documentation, as, any of them, are needed in AT&T's reasonable opinion to
assure vesting in it of title to, and unrestricted ownership rights in, such
work, work products and copyrights, and to perfect the enforceability of
such copyrights.
Should the Agency desire to use material developed for AT&T for another
client or for other business reasons it may request AT&T's permission to do
so. Granting of any such permission shall be at AT&T's sole discretion.
B. If Agency furnishes AT&T with materials previously copyrighted by Agency and
not originally prepared hereunder, Agency hereby grants and agrees to grant
to AT&T unrestricted, non-exclusive, royalty-free licenses for all purposes
under any and all copyrights in such materials, with the unrestricted right
to grant such sublicenses under those licenses as AT&T may see fit, to the
extent that such materials are used in conjunction with any of the work and
work products referred to in Paragraph A of this Article.
C. If AT&T has consented to the inclusion of materials owned or copyrighted by
others, or in which other rights may be claimed by others (and there shall
be no such inclusion without AT&T's prior consent), then the Agency shall
notify AT&T of the scope of the rights and permissions the Agency intends to
obtain with respect to such materials and shall modify the scope of same as
requested by AT&T. Copies of all rights and permissions clearly identifying
the included works to which they apply shall be supplied to AT&T prior to
program completion.
MC941121LD
Page 11 of 19
D. Agency warrants the originality of the work prepared for AT&T hereunder
(except if such work is in the public domain) and its disclosure to AT&T
exclusively and that, except as provided in Paragraphs B and C above, no
portion of the material prepared for AT&T under this Agreement is derived
from copyrighted material.
E. Agency undertakes that no part of the creative work or work products
developed for AT&T in connection with this Agreement, whether or not
copyrightable, shall be disclosed to any persons or used by the Agency to
produce creative materials for any persons other than AT&T without the
express written permission of AT&T.
F. Agency shall retain all materials for two years or for such longer period as
is necessary for purposes of carrying out Agency's obligations hereunder
after which time they will be returned to AT&T, placed in public storage at
AT&T's expense, or destroyed as requested by AT&T. Agency shall safeguard
and be responsible for all materials entrusted to it by or on behalf of AT&T
and shall return such materials to AT&T upon request of AT&T, and, in any
event, as soon as practicable upon termination of this Agreement. Agency
shall provide copies of materials requested by AT&T to the extent necessary
for AT&T to litigate or negotiate claims or to handle proceedings before
regulatory agencies.
ARTICLE 12 - USE OF INFORMATION
Except under the conditions stated in the next sentence, any materials and/or
information furnished or disclosed by AT&T or developed by the Agency hereunder
is the property of and shall be deemed confidential to AT&T and shall be
surrendered to AT&T at the conclusion of this Agreement, or shall be destroyed
if AT&T shall so direct in writing. Unless such information or materials were
previously known to the Agency free of any obligation to keep it confidential,
or is subsequently made public by AT&T or by a third party having a legal right
to make such disclosure, it shall be held in confidence by the Agency, shall be
used only for the purposes hereunder, and may be used for other purposes only
upon such terms and conditions as may be mutually agreed upon in writing.
ARTICLE 13 - EXCLUSIVITY AND RESERVATION OF RIGHTS
A. For the duration of this Agreement, including the period of notice prior to
its effectiveness of termination, Agency and any of its constituent
companies anywhere in the world shall not undertake any work for any of the
following companies: Ameritech, Bell Atlantic, Bell South, British Telecom,
IBM, MCI, NYNEX, Pacific Telesis, Southwestern Bell, Sprint or US West.
B. Further, Agency and any of its constituent companies shall not work for
other companies that compete with any AT&T unit unless Agency receives
written approval from AT&T and the following three (3) conditions are met:
MC941121LD
Page 12 of 19
1. The non-AT&T business is not competitive with the AT&T account handled
by the Agency.
2. A "virtual wall" is erected so that none of the people working
on AT&T's business share any information with people working on the
competitive account.
3. The Agency understand that if the competitive company shifts its focus
and strategy to become a strategic competitor, the Agency must then
choose to work only for AT&T or the competitor.
ARTICLE 14 - AGENCY'S INFORMATION
No specifications, drawings, sketches, models, samples, tools, computer or other
apparatus programs, technical or business information or data, written, oral or
otherwise, furnished by Agency to AT&T under this Agreement, or in contemplation
of this Agreement, shall be considered by Agency to be confidential or
proprietary unless subject matter so furnished is owned by AT&T as defined and
provided under the Article 11 (Title) or Article 12 (Use of Information),
contained herein.
ARTICLE 15 - INDEMNIFICATION/INFRINGEMENT
The Agency agrees to indemnify and save harmless AT&T, its subsidiaries,
affiliates and its customers and their officers, directors, employees successors
and assigns (collectively referred to as "AT&T") from and against the following
claims, losses, suits, demands, or liens:
A. Any tortious act, omission, or statement of the Agency or any person
employed by or under contract with the Agency that results in
injury (including death), loss or damage to any person or property,
including libel, slander, and defamation;
B. Injuries or death to persons or damage to property, including theft, in any
way arising out of or occasioned by, caused or alleged to have been caused
by or on account of the performance of the work or services performed by
Agency or persons furnished by Agency, except to the extent such injury or
damages are caused by AT&T's sole negligence or willful misconduct;
C. Any failure on the part of the Agency to satisfy all claims for labor,
equipment, materials and other obligations relating to the performance of
the work hereunder;
X. Xxxxxx, unfair competition, plagiarism, idea misappropriation under implied
contract;
E. Assertions under Worker's Compensation or similar acts made by persons
furnished by Agency or by any subcontractor, or by reason of any injuries to
such persons for which AT&T would be responsible under Worker's
Compensation or similar acts if the persons were employed by AT&T;
MC941121LD
Page 13 of 19
F. Any failure by the Agency to perform Agency's obligations under this clause
or, Article 16 (Insurance); and
G. Any act of infringement of any patent, trademark, or copyright; any title,
slogan, or other trademark; or any unauthorized use of trade secret or other
proprietary interest, except where such infringement or unauthorized use
arises solely from Agency's adherence to AT&T's written instructions which
are so specific as to directly cause said infringement or unauthorized use,
in which case AT&T shall so indemnify Agency; provided however, if such
instructions specify (1) commercial material which is available on the open
market or is the same as such material or (2) material of Agency's origin,
design or selection, and the adherence to such instructions results in the
infringement or unauthorized use, then Agency shall indemnify AT&T for any
such infringement or unauthorized use.
However, the indemnification in (A) shall not apply to claims for loss or damage
to property arising solely from Agency's reasonable reliance upon the accuracy,
completeness and propriety of information furnished by AT&T concerning its and
its competitors organization, products, industry and services in developing or
producing work or work products under this Agreement.
Each party shall defend or settle, at its own expense, any action or suit
against the other for which it is responsible hereunder and shall reimburse the
other for reasonable attorneys' fees, interest, costs of suit and all other
expenses incurred by the other in connection therewith. Each party shall notify
the other promptly of any claim for which the other is responsible hereunder and
shall cooperate with the other in every reasonable way to facilitate the defense
of any such claim.
ARTICLE 16 - INSURANCE
Agency shall maintain during the term of this Agreement (1) Worker's
Compensation insurance as prescribed by the law of the state or nation in which
the work is performed; (2) employer's liability insurance with limits of at
least $300,000 for each occurrence; (3) comprehensive automobile liability
insurance if the use of motor vehicles is required, with limits of at least
$1,000,000 combined single limit for bodily injury and property damage for each
occurrence; (4) Comprehensive General Liability ("CGL") insurance, including
Advertiser's Liability and Blanket Contractual Liability and Broad Form
Property damage, with limits of at least $5,000,000 combined single limit for
personal injury and property damage for each occurrence. All CGL insurance shall
designate AT&T as an additional insured for work Agency performs for AT&T.
Agency shall cause its subcontractors to maintain insurance similar in form and
account as AT&T shall approve, which approval shall not be reasonably withheld.
All such insurance must be primary and required to respond and pay prior to any
other available coverage.
Agency agrees that Agency, Agency's insurer(s) and anyone claiming by, through,
under or in Agency's behalf shall have no claim, right of action or right of
subrogation against AT&T and its customers based on any loss
MC941121LD
Page 14 of 19
or liability insured against under the foregoing insurance. Agency shall furnish
prior to the start of work certificates or adequate proof of the foregoing
insurance. AT&T shall be notified in writing at least thirty (30) days prior to
cancellation of or any change in the policy.
ARTICLE 17 - RELATIONSHIP
The Agency shall exercise full control and direction over the employees of the
Agency performing the work covered by this Agreement. Any changes in personnel
performing services for AT&T that may be reasonably requested by AT&T through
its authorized representative shall be made promptly.
Neither the Agency nor its employees or agents shall be deemed to be AT&T's
employees or agents, it being fully understood that Agency employees are
entitled to no benefits or compensation from AT&T. It is understood that the
Agency is an independent contractor for all purposes and at all times. The
Agency is wholly responsible for withholding and payment of all applicable
federal, state and local income and other payroll taxes with respect to its
employees, including contributions from them as required by law. Agency agrees
to indemnify, defend and hold AT&T harmless from any claims made by Agency
employees or former Agency employees, their heirs or assigns, against AT&T for
direct compensation, including salaries and bonuses, or for any benefits such as
medical, dental, life insurance or pension benefits.
ARTICLE 18 - SUBCONTRACTS
The Agency shall be responsible for informing subcontractors of their
responsibility to protect any confidential and proprietary information included
in any work subcontracted hereunder, and Agency shall undertake all necessary
precautions to insure that each subcontractor is in compliance with this
Article. This Agreement is not intended to create any legal rights or interests
as to persons not directly a party hereto. In accordance with this
understanding, Agency shall remain fully, directly and solely responsible for
all expenses it incurs of any nature whatsoever and shall indemnify, defend and
hold AT&T harmless from any and all claims made against AT&T by persons not a
party to this Agreement for non-payment of such expenses (except those incurred
as an authorized and disclosed advertising agent for AT&T in connection with
approved work or services performed or purchases made hereunder).
If Agency elects to subcontract out any work, then the Agency shall request
competitive quotations from a minimum of three vendors when the subcontracted
work is estimated to exceed $20,000. The quotation process shall be
administered by the Agency and contracts awarded by the Agency, but only with
the prior concurrence of AT&T. Copies of the quotations shall be submitted to
AT&T for review and approval prior to the award of a contract. In the event a
selected vendor cannot perform, the Agency shall select another vendor upon
notification to and approval by AT&T. The Agency shall not fragment any
subcontracted work to avoid the obligation to obtain quotations.
MC941121LD
Page 15 of 19
ARTICLE - 19 USE OF AT&T'S NAME, LOGO, AND MARKS
All use of AT&T's name, logo and marks shall be in strict conformance with any
written BCS, Corporate or other guidelines provided by AT&T and shall be
approved in advance by AT&T.
ARTICLE 20 - AUDIT
Agency shall maintain accurate and complete records including a physical
inventory, if applicable, of all costs incurred under this Agreement in
performing the services covered by this Agreement, including the costs of labor
(other than individual salaries and bonuses of agency employees), equipment,
materials, and other disbursements. These records shall be maintained in
accordance with recognized commercial accounting practices so they may be
readily audited and shall be held until costs have been finally determined under
this Agreement and payment or final adjustment of payment, as the case may be,
has been made. Agency shall permit AT&T or AT&T's representative to examine and
audit these records on reasonable notice. Audits shall be made not later than
two (2) calendar years after the end of the year in question.
ARTICLE 21 - ASSIGNMENT
The Agency shall not assign any right under this Agreement (excepting monies due
or to become due), subcontract any work or delegate any other obligations to be
performed or owed under this Agreement without the prior written consent of
AT&T. Any attempted assignment or delegation in contravention of the above
provisions shall be void and ineffective. Any assignment of monies shall be void
and ineffective to the extent that (1) Agency shall not have given AT&T at least
thirty (30) days prior written notice of such assignment or (2) such assignment
attempts to impose upon AT&T obligations to the assignee additional to the
payment of such monies, or to preclude AT&T from dealing solely and directly
with Agency in all matters pertaining to this Agreement including the
negotiation of amendments or settlements of charges due. All work performed by
Agency's subcontractor(s) at any time shall be deemed work performed by the
Agency.
ARTICLE 22 - TAXES
AT&T shall reimburse Agency only for the following tax payments with respect to
transactions under this Agreement unless an exemption applies: state and local
sales and use taxes, as applicable. Taxes payable by AT&T shall be billed as
separate items on Agency's invoices and shall not be included in Agency's
prices. AT&T shall have the right to have Agency contest any such taxes that
AT&T reasonably deems improperly levied, at AT&T's expense and subject to its
direction and control.
MC941121LD
Page 16 of 19
ARTICLE 23 - COMPLIANCE WITH LAWS
Agency and all persons furnished by Agency shall comply at their own expense
with all applicable federal, state and local laws, ordinances, regulations and
codes, including identification and procurement of required permits,
certificates, licenses, insurance approvals and inspections, in performance
under this Agreement. Agency agrees to indemnify AT&T and its customers for any
loss or damage that may be sustained by reason of any failure to do so.
ARTICLE 24 - PUBLICITY, ADVERTISING
The Agency agrees not to advertise, promote, make use of any identification of
AT&T or publicize matters relating to the services performed under this
Agreement or to mention or imply any relationship or connection with AT&T in
such advertising, promotion or publicity without the prior written consent of
AT&T. The term "identification" includes any trade name, trademark, service
mark, insignia, symbol, or any simulation thereof, and any code, drawing,
specification, or evidence of AT&T's inspection. This article does not modify
Article 12 (Use of Information).
ARTICLE 25 - WAIVER
The failure of either party at any time to enforce any right or remedy available
to it under this Agreement with respect to any breach or failure by the other
party shall not be construed to be a waiver of such right or remedy with respect
to any other breach or failure by the other party.
ARTICLE 26 - SEVERABILITY
In the event that any one or more of the provisions contained herein shall for
any reason be held to be unenforceable in any respect under the laws of any
state, or of the United States of America, such unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall then be
construed as if such unenforceable provision or provisions had never been
contained herein.
ARTICLE 27 - SURVIVAL OF OBLIGATION
The obligations of the parties under this Agreement that by their nature would
continue beyond the termination, cancellation or expiration of this Agreement,
including by way of illustration only and not limitation, those in the clauses
in Article 23 (Compliance With Laws), Article 16 (Insurance), Article 15
(Indemnification/Infringement), Article 12 (Use of Information), shall survive
termination, cancellation or expiration of this Agreement.
MC941121LD
Page 17 of 19
ARTICLE 28 - CHOICE OF LAW
The construction, interpretation and performance of this Agreement shall be
governed by the laws of the State of New Jersey, excluding its choice of law
rules.
ARTICLE 29 - RELEASES VOID
Neither party shall require (1) waivers or releases of any personal rights or
(2) execution of documents, which conflict with the terms of this Agreement from
employees, representatives or customers of the other in connection with visits
to its premises and both parties agree that no such releases, waivers or
documents shall be pleaded by them or third persons in any action or proceeding.
ARTICLE 30 - SPECIAL SERVICES
At the request of AT&T, Agency may be asked to perform the following special
marketing communications services:
A. Create and produce sales promotion and collateral material.
B. Develop new product or service concepts and test marketing of new products
and services.
C. Conduct special advertising or market research.
D. Provide publicity and public relations services.
E. Provide specialized advertising services such as classified and recruitment
advertising.
F. Manage print media contracts and maintain total AT&T print data base.
G. Negotiate services for print media.
H. Negotiate services for media appearing outside the United States
(international).
I. Design services including packaging, trademarks and corporate identity
programs.
J. Stage and conduct sales, marketing positioning, sporting or other events and
meetings.
K. Design and prepare exhibits for trade shows or other venues.
L. Prepare visual presentation materials.
M. Produce television and/or radio programming other than commercials, or print
materials which are not advertising.
MC941121LD
Page 18 of 19
For any special services requested by AT&T and performed by Agency, compensation
shall be mutually agreed upon in writing prior to the start of work.
ARTICLE 31 - NONEXCLUSIVE RIGHTS
It is expressly understood and agreed that this Agreement does not grant to the
Agency an exclusive right or privilege to provide any and all of the services
described in this Agreement which AT&T may require. It is, therefore, understood
that AT&T may contract with other agencies for the procurement of the same or
comparable services.
ARTICLE 32 - CHANGES IN, TERMINATION, OR SUSPENSION OF PARTICULAR WORK
AT&T may, at any time, by written notice, advise the Agency of AT&T's intent to
make changes in, additions to, or deductions from, the work on any specific
program under an approved estimate. If such intended changes cause an increase
or decrease in the amount or character of the services to be rendered under this
Agreement, or in the time required for its performance, the Agency shall
promptly so advise AT&T, specifying the impact of such change on the approved
estimates. Thereafter, if AT&T elects to make such change, an equitable
adjustment to all appropriate terms and conditions, including the amount to be
paid to the Agency and the time for performance shall be made and this Agreement
shall be modified accordingly in writing. Notwithstanding anything contained in
this Article 32 to the contrary no change shall have the effect of reducing the
required ninety (90) days notice of termination.
ARTICLE 34 - ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Agency and AT&T
relating to the subject matter hereof and shall not be modified or rescinded in
any manner except by a writing executed by both parties. Other than as expressly
provided herein, both the Agency and AT&T agree that no prior or contemporaneous
oral representations form a part of their agreement. Additional or different
terms inserted in this Agreement by Agency, or deletions thereto, whether by
alterations, addenda, or otherwise, shall be of no force and effect, unless
expressly consented to by AT&T in writing. The provisions of this Agreement
supersede all contemporaneous oral agreements and all prior oral and written
quotations, communications, agreements and understandings of the parties with
respect to the subject matter of this Agreement.
It is agreed and understood that Agreement Number AD911475LD executed on May 7,
1991 shall be deemed terminated, superseded and replaced by the terms and
conditions of this Agreement effective January 1, 1994.
MC941121LD
Page 19 of 19
WITNESS WHEREOF, the Agency and AT&T have executed this Agreement in duplicate
on the day and year below written.
AT&T COMMUNICATIONS, INC.
XXXXXXX XXXXXXXX XXXXXXXX INC. BUSINESS COMMUNICATIONS SERVICES
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------- ------------------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxxx
SVP & Chief Financial Officer - Director
------------------------------- ------------------------------------
(Name & Title Typed or Printed) (Name & Title Typed or Printed)
October 11, 1995 September 11, 1995
------------------------------- ------------------------------------
(Date) (Date)
MC941121LD
Schedule I
SCHEDULE I
[***] (3 pages)
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
MC941121LD
Schedule II
Page 1 of 5
SCHEDULE II
NON-MEDIA BILLING SCHEDULE
Net out-of-pocket ("Net O-O-P") as used in this Schedule II shall mean the
amount of money the Agency pays to outside suppliers on behalf of AT&T based on
an authorized estimate.
X. Xxxxxxx for Publication Advertising and Outdoor Advertising
1. Preparation of rough layouts and copy No Charge
2. Production of comprehensive layouts:
- purchased from outside suppliers Net O-O-P
- produced by Agency personnel Quoted in advance
3. Type composition, printing, engraving,
electrotypes, finished art, photographs,
photostats and other reproduction mats,
stereotypes, quantity proofs:
- purchased from outside suppliers Net O-O-P
- produced by Agency personnel Quoted in advance
4. Endorsement fees, testimonials, etc. Net O-O-P
5. Fashion Coordination performed by:
- studio and/or stylist Net O-O-P
- Agency personnel (Competitive Fee
Schedule) Net O-O-P
6. Travel expenses of Agency personnel to Net O-O-P
supervise production, obtain testimonials
and otherwise directly attributable to
specific publication and outdoor
advertising
7. Supervision and checking No Charge
MC941121LD
Schedule II
Page 2 of 5
8. Talent for use in test and/or finished Net O-O-P
advertising
9. Production of test advertisements Net O-O-P
10. Research and licensing costs for stock Net O-O-P
photography
11. Location scouting Net O-O-P
12. All other elements required to produce Net O-O-P
publications and outdoor advertising
not referred to above
B. Charges for Broadcast Advertising
1. Preparation of copy and rough storyboards No Charge
by Agency for the Agency's presentation
of creative executions
2. Regular storyboards and reproduction
copies of all regular storyboards and
animatics:
- purchased from outside suppliers Net O-O-P
- produced by Agency Quoted in advance
3. Talent for use in programs and Net O-O-P
commercials when separately contracted
for the Agency
4. Packaged shows and films Net O-O-P
5. Programs and scripts by outside Net O-O-P
speciality writers or producers
6. Music rights, jingles, prize money, Net O-O-P
dramatic literary or musical adaptions
or arrangements
MC941121LD
Schedule II
Page 3 of 5
7. Previewing, auditioning, selecting, No Charge
negotiating, contracting of programs
and talent
8. Producer's charges for filming, taping Net O-O-P
or recording commercials
9. Film production charges, studio and Net O-O-P
equipment rentals, scenery, props and
costumes and location scouting
10. Fashion Coordination/hair and makeup:
- by Agency personnel No Charge
- by studio and/or stylist Net O-O-P
11. Release prints and duplicate tapes for Net O-O-P
distribution
12. Distribution of release prints and Net O-O-P
duplicate tapes
13. Motion picture, slide and slidefilm Net O-O-P
processing
14. Checking, including air checks No Charge
15. Endorsement fees, testimonials, etc. Net O-O-P
16. Travel expenses of Agency personnel to Net O-O-P
supervise production or expenses otherwise
directly attributable to specific
commercial production
17. Music production associated with creative Net O-O-P
presentation, demos and test ads
18. Talent, including voice over, associated Net O-O-P
with creative presentations, demos and
test ads
MC941121LD
Schedule II
Page 4 of 5
19. Closed captioning expenses Net O-O-P
20. All production costs for rough or test Net O-O-P
productions
21. All other elements required to televise or
broadcast television or radio commercials
and not referred to above:
- purchased from outside suppliers Net O-O-P
- produced by Agency No Charge
C. Postage, Express and Freight and Sales Taxes
1. Incidental to normal business routine No Charge
between Agency and client home office
2. Shipment of advertising materials to Net O-O-P
suppliers, media, etc.
3. Sales Taxes Net O-O-P
D. Telephone, Teletype, Telegraph and Facsimile
1. Incidental to normal business routine No Charge
between Agency and client home office
2. Attributable to unusual service or to the Net O-O-P
production of specific advertising
projects
E. Research
1. All research conducted by Agency unless No Charge
authorized by client
2. All media research normally provided by No Charge
agencies
MC941121LD
Schedule II
Page 5 of 5
3. Test materials Net O-O-P
4. Travel for Agency personnel to supervise, Net O-O-P
participate in and observe the research
F. Free-Xxxxx Creative/Technical Talent Net O-O-P
MC941121LD
Amendment No. 1
Page 1 of 1
ADVERTISING/MARKETING AGREEMENT AMENDMENT
AGREEMENT NUMBER: MC941121LD
AMENDMENT NUMBER: 1
AGENCY: XXXXXXX XXXXXXXX XXXXXXXX INC.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Advertising/Marketing Agreement MC941121LD dated October 11, 1995 between
AT&T Communications, Inc. - Business Communications Services and Xxxxxxx
Xxxxxxxx Xxxxxxxx Inc., is hereby amended as follows:
Effective January 1, 1995, Article 7, Section A.3. is deleted in its entirety
and replaced with the following:
Article 7.A.3
For 1995 the yearly fee is [***]. For each subsequent year, the yearly
fee shall be mutually agreed upon by the parties in writing and attached as
an amendment hereto.
ALL OTHER TERMS AND CONDITIONS TO REMAIN UNCHANGED
Accepted:
XXXXXXX XXXXXXXX AT&T COMMUNICATIONS, INC.
XXXXXXXX INC. BUSINESS COMMUNICATIONS SERVICES
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxxxxxx - Director/Adv.
--------------------------------- ----------------------------------
(Name & Title-Printed) (Name & Title-Printed)
11/27/95
--------------------------------- ----------------------------------
(Date) (Date)
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.
