EXHIBIT 10.3
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XXXXXX-XXXXXXXX SOUTHWEST
June 1, 2000
Xx. Xxxxx X. Xxxxxx
President & CEO
The Publishing Company of North America
186 P.C.N.A. Parkway
Xxxx Xxxxx, Florida 32744
Dear Xxxxx:
We are delighted to have been chosen the advertising agency for your
Xxxxxxxxx.xxx venture. We are anxious to get started and we are sending this
letter of agreement for the project we discussed.
Scope of Work
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XxXxxx-Xxxxxxxx will provide the following services:
1. Develop a communications strategy, including the proprietary
XxXxxx-Xxxxxxxx strategic tools - the Brand Footprint(TM)and Selling
Strategy(TM).
2. Explore multiple creative avenues, including a spokesperson and assist
in hiring spokesperson and creating storyboards should one be selected.
3. Upon agreement to a creative direction, write and produce the TV and
radio commercials including billboard advertising if appropriate.
4. Design a media kit template, including some inexpensive packaging and
some blank letterhead to be used for enclosures
5. Design identity package
6. Create a CD ROM that will include a filmed introduction, the TV spots
and a filmed conclusion
7. Design a logo/identity package
8. Xxxxxxxxx.xxx shall have the right to select all outside vendors
including a director and post-production personnel
FEES
The manpower fee to deliver the above services is $512,206. We are willing to
accept 33% or $169,028 in PCNA unregistered common stock ( the "Stock") with
piggy-back registration rights, and $343,557 in cash. The Stock will be earned
in three equal, consecutive monthly payments, beginning June 30, 2000. The
number of shares of Stock shall be determined based upon the average of the
daily closing prices as reported by Nasdaq for the month then ended, less a 20%
discount. The unregistered shares of Stock shall have piggyback registration
rights as specified in Exhibit A.
o Please understand that the fees cover only agency time; all out-of-pocket
costs will be billed to you at cost.
o The fee has been discounted to accommodate your request to keep startup
costs low. We offer this discount because we will be conducting the media
planning and placement for a period of one year
after the creative is completed. Should you decide to use a firm other than
XxXxxx-Xxxxxxxx to plan or place media, during the one-year period after
the creative is completed, there will be an additional fee charged of
$200,000. XxXxxx-Xxxxxxxx'x media fees will be within industry standards.
Further, if for some reason you were not to place media, this fee would not
be charged.
TERMS
o All fees must be paid in advance of work commencing.
o Out-of-pocket costs will be paid on the vendor's terms. It has been our
experience that most expect dot.coms to pay cash in advance, and in
television production, pre-payment is standard practice for all
clients.
o Out-of-pocket costs will be estimated and presented for approval before
work commences. No out-of-pocket costs will be assessed without
approval.
o This project is expected to take no more than three months to complete.
I hope you find these fees and terms agreeable. If you do, please sign the
document as indicated below. If you have any questions or issues, please call me
as soon as possible to resolve. As media becomes a more immediate issue, we will
look to create a more ongoing, long-term agreement between our two companies.
We are thrilled to be working with you and anxious to get started. Thank you for
selecting us as your agency. I assure you that Xxxxxxxxx.xxx will get the best
of what we have to offer.
Best regards,
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Executive Vice President
General Manager
Terms Accepted:
/s/ Xxxxx X. Xxxxxx
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Xxxxx Xxxxxx
President & CEO
The Publishing Company of North America
REGISTRATION RIGHTS AGREEMENT
This Agreement is entered into as of this 1st day of June, 2000 by and
between The Publishing Company of North America, Inc., a Florida corporation
(the "Company") and XxXxxx-Xxxxxxxx Southwest ("Holder").
WHEREAS, Xxxxxx has agreed tp perform corporate and investor relations
services and agreed to receive common stock of the Company (the "Common Stock")
pursuant to that certain agreement (the "Agreement") by and between the Company
and the Holder as of June 1, 2000; and
WHEREAS, the Company has agreed to xxxxx Xxxxxx piggyback registration
rights with respect to the Common Stock purchased.
NOW, THEREFORE, in consideration of the Holder's execution of the
Agreement, the Company agrees as follows:
1. Definitions.
In addition to terms defined herein, the following
definitions apply:
a. The terms "REGISTER", "REGISTERED"and "REGISTRATION"
refer to a registration effected by preparing and
filing a registration statement in compliance with
the Securities Act of 1933, and the declaration or
order of the effectiveness of such registration
statement.
b. The term "REGISTRABLE SECURITIES" means the shares
of common stock of the Company owned by Xxxxxx .
c. The term "SECURITIES ACT" means the Securities Act of
1933, as amended.
2. Company Registration.
a. PIGGYBACK. If at any time or from time to time, the
Company shall decide to register any of its Common
Stock, either for its own account or the account of a
security holder or holders, in a registration
statement covering the sale of Company's Common Stock
under the Securities Act, the Company will: (1)
promptly give to Holder written notice thereof (which
shall include a list of the jurisdictions in which
the Company intends to attempt to qualify such Common
Stock under the applicable blue sky or other state
securities laws if the Common Stock is not a "covered
security" within the meaning of the National
Securities Markets Improvement Act of 1996); and (2)
include in such registration statement (and any
related qualification under blue sky laws) all the
Registrable Securities specified in a written
request, made within 30 days after receipt of such
written notice from the Company, except as set forth
in Section 2 b. below.
b. UNDERWRITING. In the event that the registration
statement filed pursuant to Section 2 shall be for an
underwritten public offering, the right of Holder to
registration pursuant to Section 2 shall be
conditioned upon the Holder's participation in the
underwriting and the inclusion of such Xxxxxx's
Registrable Securities in the underwriting to the
extent provided herein. The Holder proposing to
distribute its Common Stock through such underwriting
shall (together with the Company and any shareholders
distributing their Common Stock through such
underwriting) enter into an underwriting agreement in
customary form with the managing underwriter or
underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this
Section 2, if the managing underwriter determines
that marketing factors require a limitation of the
number of shares to be underwritten, the managing
underwriter may limit the number of Registrable
Securities to be included in the registration and
underwriting, or may exclude the Registrable
Securities entirely from such registration and
underwriting. The Company shall so advise the Holder
and the number of shares of Registrable Securities
that may be included in the registration and
underwriting shall be allocated among the Holder and
any other selling shareholders in proportion
(excluding warrants or their equivalent issued to the
underwriter of a registered public offering which may
be included in their entirety), as nearly as
practicable, to the respective amounts of securities
entitled to inclusion in such registration held by
the Holder and such selling shareholders at the time
of filing the registration statement. If the
Registrable Securities are excluded, no securities
may be sold for the account of any shareholders or
securityholders. If the Holder disapproves of the
terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company
and the underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall
not be transferred in a public distribution prior to
90 days after the effective date of the registration
statement relating thereto.
3. Expenses of Registration. Except as provided herein, the
Company shall pay all expenses incurred in connection with a
registration pursuant to Section 2 hereof. Expenses incurred
in connection with any registration or qualification pursuant
to this Agreement include, without limitation, all
registration, filing, and qualification fees, printing
expenses, fees and disbursements of counsel for the Company,
and expenses of any special audits incidental to or required
by such registration; provided, however, that such expenses
shall not include fees of legal counsel to the Holder, selling
expenses of the Holder, or underwriting fees, discounts, or
commissions relating to Registrable Securities.
4. Registration Procedures. In the case of each registration or
qualification effected by the Company pursuant to this
Agreement, the Company will keep Holder advised in writing as
to the initiation of each registration or qualification and as
to the completion thereof. The Company will use its best
efforts to:
a. keep such registration and qualification effective
for a period of 60 days or until the Holder has
completed the distribution described in the
registration statement relating thereto, whichever
first occurs; and
b. furnish such number of prospectuses and other
documents incident thereto as Xxxxxx from time to
time may reasonably request.
5. Indemnification.
a. The Company will indemnify Holder, each of the
Holder's officers and directors, and each person
controlling such Holder, with respect to such
registration or qualification effected pursuant to
this Agreement, and each underwriter, if any, and
each person who controls any underwriter of the
Registrable Securities held by or issuable to Holder,
against all claims, losses, damages, and liabilities
(or actions in respect thereto) arising out of or
based on any untrue statement or alleged untrue
statement of a material fact ("Untrue Statement")
contained in any prospectus, offering circular or
other document (including any related registration
statement, notification or the like) incident to any
such registrations or qualification, or based on any
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading ("Omission"), and will reimburse Holder,
each of the Holder's officers and directors, and each
person controlling Holder, each such underwriter and
each person who controls any such underwriter, for
any legal and any other expenses reasonably incurred
in connection with investigating or defending any
such claim, loss, damage, liability or action.
Provided, however, the Company will not be liable in
any such case to the extent that any such claim,
loss, damage or liability arises out of or is based
on (i) any Untrue Statement or Omission based upon
written information furnished to the Company by an
instrument duly executed by Holder or an underwriter
specifically for use therein, (ii) failure to
register or qualify the Common Stock under any state
securities law or (iii) the failure of an
underwriter, broker-dealer sales or agent to be
registered under any state securities laws (clauses
(i), (ii) and (iii) are collectively, the "Excluded
Provisions").
x. Xxxxxx will, if Registrable Securities held by or
issuable to such Holder are included in the Common
Stock as to which such registration or qualification,
is being effected, indemnify the Company, each of its
directors and officers who sign such registration
statement, each underwriter, if any, of the Company's
Common Stock covered by such a registration
statement, and each person who controls the Company
and each underwriter within the meaning of the
Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof)
arising out of or based on any Excluded Provisions.
c. Each party entitled to indemnification under this
Section 5 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as
to which indemnity may be sought and shall permit the
Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at
such party's expense. No Indemnifying Party, in the
defense of any such claim or litigation, shall,
except with the consent of the Indemnified Party,
consent to entry of any judgment or enter into any
settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all
liability in respect to such claim or litigation. If
the Indemnified Party fails to execute a release or
other settlement agreement under circumstances where
all of the conditions of the preceding sentence have
been met, the Indemnifying Party shall have no
further obligation to the Indemnified Party pursuant
to this Agreement or otherwise.
6. Information by Holder. The Holder of Registrable Securities
included in any registration shall (i) furnish to the Company
such written information regarding such Holder and the
distribution proposed by such Holder as the Company may
request in writing and as shall be required in connection with
any registration, qualification, or compliance referred to in
this section, and (ii) execute an agreement in customary form
as to compliance with Regulation M promulgated under the
Securities Exchange Act of 1934.
7. Rule 144 Reporting. With a view to making available to the
Holder the benefits of certain rules and regulations of the
Securities and Exchange Commission (the "SEC") which may
permit the sale of the Registrable Securities to the public
without registration, the Company agrees when required by law
to:
a. Make and keep public information available as those
terms are understood and defined in SEC Rule 144;
b. Use its best efforts to file with the SEC in a timely
manner all reports and other documents required of
the Company under the Securities Act and the
Securities Exchange Act of 1934;
c. So long as you own Registrable Securities to furnish
to Holder forthwith upon its request a written
statement by the Company as to its compliance with
the reporting requirements of said Rule 144 and of
the Securities Act and the Securities Exchange Act of
1934, a copy of the most recent annual or quarterly
report of the Company, and such other reports and
documents so filed by the Company as you may
reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such
securities without registration.
8. Assignability. This Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the
parties hereto.
9. Governing Law. This Agreement and any dispute, disagreement,
or issue of construction or interpretation arising hereunder
whether relating to its execution, its validity, the
obligations provided herein or performance shall be governed
or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
10. Amendment. Any modification, amendment or waiver of this
Agreement or any provisions hereof shall be in writing and
executed by the Company and Holder.
11. Conflict. In the event of any conflict between the terms of
this Agreement and any other agreement describing the
registration rights, the terms of this Agreement shall
control.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written.
The Publishing Company of
North America, Inc.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
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XxXxxx-Xxxxxxxx Southwest
/s/ Xxxxxxx Xxxxx By: /s/ Xxxx Xxxxxxx
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Authorized Signature
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