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EXHIBIT 10.47
SALES REPRESENTATIVE AGREEMENT
THIS SALES REPRESENTATIVE AGREEMENT (the "Agreement") made this 16th day
of August 2000, by and between Intervisual Books, Inc., a California corporation
(hereinafter referred to as "IBI"), and Xxxxxx Xxxx (hereinafter referred to as
"REP"), is made with respect to the following facts:
A. IBI is engaged in the manufacture, distribution and sale of books,
interactive toys and playsets and the sale and distribution of video cassettes
and DVDs and other products.
B. REP desires to be engaged as an independent sales representative for
the promotion and sale of Advertising Materials (as defined below) on the terms
and conditions set forth in this Agreement.
C. IBI desires to engage REP for such services.
IN CONSIDERATION OF THE FOREGOING and of the mutual promises and
covenants hereinafter contained, the parties agree as follows:
1. Definitions. For purposes of this Agreement only, the terms
hereinafter set forth shall have the following meanings:
a. The term "Advertising Materials" means magazine
inserts, sales aids, marketing and promotion materials, catalogs, advertising
premiums and packaging materials.
b. The term "Client" means a company that produces
Advertising Materials which are represented by IBI.
c. The term "sole discretion" means the sole subjective
judgment of IBI, provided that such judgment is made on a
commercially-reasonable basis.
2. Appointment. IBI hereby appoints REP, and REP does hereby
accept such appointment to act as IBI's exclusive sales representative for the
promotion of and soliciting of orders for Advertising Materials on the terms
contained herein.
3. Finder's Fee. REP shall be entitled to a finders fee for
acting as IBI's non-exclusive acquisition agent for new products of a type not
traditionally sold or carried by IBI as provided for in this Section 3. The
finders fee for each such new product acquired by IBI with the direct and active
assistance of REP shall be three percent (3%) of the gross sales proceeds
received by IBI for a particular product for sales
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made during the one-year period beginning on the date the first payment is
received.
4. Term. The term of this Agreement will end on May 11, 2002,
unless sooner terminated under the provisions below.
5. Undertakings of REP. REP represents, warrants and undertakes
all of the following:
a. To diligently sell and promote the sale of
Advertising Materials for IBI and its Clients and to promote the good will, name
and interest of IBI and Advertising Materials produced or developed by IBI;
b. To maintain familiarity with the financial condition
of customers, their current and prospective requirements, and promptly notify
IBI of any information coming into REP's possession which may be helpful to IBI
or its Clients or which tends to or might affect the credit granted to a
customer;
c. To immediately forward to IBI for acceptance by IBI
or its Clients all orders taken by REP for Advertising Materials;
d. To actively solicit business for Advertising
Materials and to service the customers who purchase Advertising Materials, all
or upon such prices, terms, conditions and policies as are established from time
to time by IBI;
e. To comply promptly with all IBI's requirements for
reporting the activities of REP; and
f. To immediately forward to IBI all inquiries received
from customers.
Notwithstanding anything to the contrary in this
Agreement, REP may act as an independent sales representative for his own
account with respect to other products; provided, however, in no event may REP
represent any product that conflicts with or competes directly or indirectly
with any of the products created, manufactured, or distributed by IBI.
6. Materials furnished by IBI. IBI shall, from time to time,
furnish REP with such samples of products and such literature, advertising
materials, report forms and other materials as IBI deems appropriate for use by
REP in the solicitation of business for Advertising Materials and to service
such customers. All such materials furnished by IBI to REP shall be returned to
IBI upon termination of this Agreement and in as good condition as when received
by REP, with allowance for ordinary wear and tear.
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7. Determination of Policy. IBI shall furnish to REP from time
to time information showing the Advertising Materials produced, distributed or
represented by IBI, the prices at which such items may be quoted, the terms of
sales, the sales policies of IBI and/or Clients with respect thereto, and the
time, manner or method of reporting by REP to IBI, all of which shall be within
the sole discretion of IBI or its Clients as the case may be. Such information
may be changed and modified from time to time, in whole or in part, by IBI or
its Clients, and REP agrees to conform to and abide by all such terms,
conditions, policies, methods and reporting requirements.
8. Orders. All orders taken by REP shall be forwarded
immediately to IBI. With respect to such orders, the following provisions shall
apply:
a. No order taken by REP shall be binding upon IBI or
IBI's Clients until and unless the same is approved by IBI (or the Client, if
necessary) and accepted in writing.
b. Each order for Advertising Materials shall be at the
prices and on the terms then applicable under the IBI's policies.
c. IBI and each Client reserve the right in their sole
discretion to decline to accept any order obtained by REP, to discontinue the
performance of any phase of its business or its entire business, to allocate its
business among customers during any period of shortages, or to cancel any
previously accepted order, in whole or in part, all without such Client or IBI
incurring any liability whatsoever to REP hereunder.
9. Commissions. IBI agrees to pay to REP, and REP agrees to
accept, as full and complete payment for all services rendered by REP and for
all duties, obligations and liabilities assumed by REP, commissions on sales of
Advertising Materials determined and payable as follows:
a. Commissions shall be computed as a percentage of the
gross profit actually realized by IBI ("Commission Rate") based upon a sliding
scale depending on the "Actual Profit Margin" on each sale as follows:
Actual Gross Profit Margin Realized Commission Rate
Below 20% To be negotiated case-by-case
20% - 29.9% 10.00%
30% - 32.4% 11.25%
32.5% - 34.9% 12.50%
35% - 37.4% 13.25%
37.5% and above 15.00%
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The Commission payable to REP shall be the product of the Actual Gross Profit
Margin Realized by IBI on the sale of particular Advertising Materials
multiplied by the applicable Commission Rate. Actual Gross Margin is defined as
the amount invoiced by the Company, less the cost invoiced to the Company by the
supplier, less any freight paid by the Company.
b. Commissions are earned when, and to the extent, the
Company receives payment from the purchaser of the Advertising Materials.
c. IBI shall periodically advise REP of orders accepted
or rejected, shipments made and payments received.
d. For one year following the termination of this
Agreement, REP shall be entitled to earn a commission on those sales of
Advertising Materials directly resulting from REP's activities, even though such
sale occurs after the termination of this Agreement. For this purpose, a "sale"
shall be deemed to be made when an order is accepted, even though payment upon
which the commission is earned is received after the one-year post-termination
period; provided, however, that commissions shall only become payable for
qualifying sales to the extent that payment from the customer is received by
IBI.
10. Payment of Commissions and Finders Fees. Commissions and
finders fees due to REP shall be paid on the 25th day of each and every calendar
month during the term hereof. Payment of commissions and finder's fees shall be
made under the formulas described above, for payments received by IBI from
purchases of Advertising Materials, within the preceding calendar month, reduced
by the advances, if any, made by IBI to REP for such month and any
reimbursements owing by Rep to IBI as a result of returns or allowances.
11. Audit. REP shall have the right to designate a certified
public accountant to inspect and review of the IBI's books and records relating
to the computation of the commission and finders fees, provided that such
accounting firm will hold such records in confidence except as necessary to
report to both Parties on the results of the audit. Such audits shall be
conducted during normal business hours on at least ten (10) days written notice,
and shall be limited to no more than two audits during each 12-month period. If
an inspection shows that IBI's calculation of the fees has understated the
amount due by more than ten percent (10%) for any period, IBI will pay, in
addition to the amount due, the accounting firm's fees for such audit unless the
error and its discovery resulted from a good faith difference between the
Parties as to how to interpret the Agreement. Each party shall retain all
records relating to its performance of its obligations for at least two (2)
years.
12. Termination. The term of this Agreement shall continue until
terminated on the occurrence of any of the following events:
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a. By either party, upon the expiration of the initial
term of this Agreement or any annual one-year period thereafter; or
b. By either party without cause on thirty (30) days'
written notice to the other. (If this agreement is terminated by IBI without
cause, then IBI agrees to consider any request made by the REP to remove
restrictions on the ability of the REP to compete with IBI. All requests for
consideration must be made in writing and included a description of the business
the REP would like to participate in. IBI agrees to negotiate in good faith and
not to unreasonable withhold its approval), or
c. On thirty (30) days' written notice in the event of a
breach or default by the other party in the performance of any of its
obligations under this Agreement; or
d. By IBI or REP, without notice, in the event of REP's
death, IBI's dissolution or the insolvency of either, or the commencement of any
bankruptcy, receivership, or similar type proceedings against IBI or REP.
13. Delays. IBI shall not be deemed in default under any of the
terms and conditions of this Agreement where delays or inability to perform are
occasioned by strikes, boycotts, war, lock-outs, shortages, acts of God,
governmental regulations, or other occurrences beyond the control of IBI or its
Clients. In no event shall IBI or a Client have any liability or obligation to
REP by reason of such delays.
14. REP as Independent Contractor. It is specifically understood
and agreed that REP is acting as an independent contractor hereunder and that
REP is not an agent, partner, or co-venturer of IBI or any of its Clients. In
this connection, it is specifically understood and agreed:
a. REP does not have, nor shall he hold himself out as
having, the power to make commitments or bind IBI or any Client in any way, nor
in any way attempt to pledge credit or extend credit in IBI's or Client's name;
b. REP's business expenses, including but not limited to
those incurred for traveling, maintenance, entertainment, office, clerical,
employee wages, and all other selling and operating expenses that may be
incurred by REP, shall be the responsibility of REP;
c. REP shall provide, at his own expense, adequate
equipment and facilities to perform his obligations hereunder; and
d. REP shall be responsible for all taxes arising out of
the terms of this Agreement and REP's engagement by IBI.
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Nothing contained herein shall be deemed to prevent or
prohibit IBI from furnishing facilities and support under any separate agreement
or undertaking to reimburse REP for any specific expenditure, provided all of
the following conditions are met:
(i) Prior to incurring such expenditure, REP advised IBI
of the item contemplated, the reasons therefor, and the maximum cost thereof;
(ii) A duly authorized officer of IBI has approved in
writing such item and the maximum amount authorized therefor;
(iii) After incurring such expenditure for such
authorized item, REP furnishes IBI with sufficient vouchers and evidence of the
actual costs incurred by REP for such duly approved item; and
(iv) The amount reimbursed shall in no event exceed the
maximum amount originally authorized.
15. Miscellaneous Provisions. The following additional
provisions shall apply:
a. Assignability. Neither this Agreement nor any rights
and obligations covered by it are transferable or assignable, in whole or in
part, by REP, either voluntarily, involuntarily, or by operation of law, without
the prior written consent of IBI first had and obtained. This Agreement, and any
right covered thereby, may be assigned by IBI to any successor of IBI, or that
portion of IBI's business covered by this Agreement.
b. Changes or Alterations. No change, addition or
modification to this Agreement shall be effective unless and until the same is
in writing and properly executed by the parties hereto.
c. Notices. Every notice, consent, approval or other
communication (sometimes referred to as "notice") which either party is
respectively required or desires to give or make or communicate to another party
shall be in writing and made by delivery personally or by mailing by registered
or certified mail, first class postage and fees prepaid, return receipt
requested, to the address set forth on the signature page hereof, or at such
other address or addresses as any party hereto may designate from time to time
by notice given as herein provided.
d. Severability. If any provision of this Agreement or
the application of such provision to any person or circumstance shall be held
invalid by a final judgment or a court of competent jurisdiction, the remainder
of this Agreement and the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
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e. Completeness of Agreement. There are no
understandings, representations, conditions, warranties and covenants which are
not contained in this Agreement. This Agreement supercedes and cancels all
previous contracts, arrangements, or understandings that may have existed or may
exist between the parties.
f. Attorneys' Fees. In the event of any dispute arising
out of the subject matter of this Agreement, the prevailing party shall be
entitled to recover from the nonprevailing party its costs and expenses
(including reasonable attorneys' fees) incurred in arbitrating or otherwise
resolving such dispute.
g. Effectiveness of Agreement. This Agreement shall not
become effective until accepted by IBI by a duly authorized officer at its
office in Los Angeles, California.
h. Actions. IBI and REP shall have a duty to act in a
commercially reasonable manner and to behave toward one another in good faith
and with fair dealing in the execution of their responsibilities hereunder.
IN WITNESS WHEREOF, the parties have hereunto set their hands the day
and year first above set forth.
INTERVISUAL BOOKS, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: CEO
REP
/s/ Xxxxxx Xxxx
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XXXXXX XXXX
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