Exhibit 10.7
REPRESENTATION AGREEMENT
This agreement dated as of January 1, 1997 between ABC New Media
Sales ("ABC"), a division of ABC, Inc., and Food Court
Entertainment Network, Inc. ("you"), shall set forth the terms
and conditions pursuant to which you shall appoint ABC as the
exclusive advertising sales representative for Cafe USA.
For good and valuable consideration the receipt of which is
hereby acknowledged, you and ABC hereby agree as follows (the
"Agreement"):
1. APPOINTMENT
(a) Subject to the terms and conditions of this Agreement,
you hereby appoint ABC as Cafe USA's exclusive
advertising sales representative in all forms of
television media (the "Media") throughout the World
(the "Sales Area").
(b) You hereby grant to ABC the power, either in your name,
on your behalf, or in ABC's name, to take and do such
action, and to make, sign, execute, acknowledge,
deliver, and record any and all instruments or
documents which ABC may deem necessary to perform the
services relating to the representation of Cafe USA in
the sale of advertising in the Media provided such
instruments or documents have been approved by you or
are similar to previous instruments or documents
approved by you. All advertising hereunder shall be
subject to the standards and policies of Cafe USA,
which standards and policies specifically exclude the
advertising of spirits, tobacco, political, religious
and birth control advertising.
(c) All third parties purchasing advertising hereunder
pursuant to subparagraph (b) above shall be subject to
your credit approval, which approval shall be based on
pricing and terms and conditions previously approved by
you and provided to ABC on or before the effective date
hereof.
(d) In the event you decide to sell television advertising
outside of Cafe USA or if you decide to sell audio-
visual advertising in any other media ("Additional
Media,"), you agree that ABC shall have the right to
sell the Additional Media pursuant to the terms
hereunder provided you agree, in good faith, that ABC
is suitable to sell such Additional Media.
2. SERVICES
ABC hereby accepts the appointment under Paragraph 1 hereof
and agrees to solicit, promote, negotiate and enter into
agreements with respect to the sale of Cafe USA commercial
advertising inventory in the Media (the "Commercial
Inventory"). ABC's will make the New Media sales force
available to perform the services described in the foregoing
sentence, which sales force is currently comprised of one
(1) Director and three (3) account executives in New York,
one (1) manager in Chicago and one (1) manager in Los
Angeles. The Director shall keep the Cafe USA Sales Manager
apprised of all sales efforts hereunder. ABC agrees to
discuss with you any change in the assignment of the
foregoing sales force prior to making any such change.
3. TERM
(a) The term of this Agreement shall commence on the date
hereof and shall continue in effect for a period of six
(6) years (each twelve-month period, beginning with the
foregoing commencement date, shall be referred to
herein as a "Contract Year").
(b) Notwithstanding subparagraph (a) above, ABC shall have
the right to terminate this Agreement upon ninety (90)
days written notice for a period of thirty (30) days
after the end of the second Contract Year and each
Contract Year thereafter, and you shall have the right
to terminate this Agreement upon thirty (30) days
written notice for a period of thirty (30) days after
the end of (i) the second Contract Year if less than
sixty percent (60%) of the Commercial Inventory has
been sold during such second Contract Year and (ii) the
fourth Contract Year if less than seventy-two percent
(72%) of the Commercial Inventory has been sold during
such fourth Contract Year.
(c) Commencing at least six (6) months prior to the
expiration of the term hereof, you and ABC agree to
negotiate exclusively for a period of ninety (90) days
(the "Negotiation Period"), with respect to the terms
and conditions on which ABC may continue as your
exclusive advertising sales representative as described
hereunder. It is expressly understood that you shall
not have any discussions or negotiations whatsoever
with any third party at any time during the Negotiating
Period with respect to the advertising sales
representation of Cafe USA.
4. CONSIDERATION
(a) Commission:
In consideration of the services to be performed by ABC
described in Paragraph 2 hereof, you shall pay to ABC
the following commission on the "Net Advertising
Revenue," as such term is defined in subparagraph (c)
below (the "Commission") during each Contract Year
hereof:
(i) On the first Fifteen Million Dollars ($15,000,000)
of Net Advertising Revenue, fifteen percent (15%);
(ii) On Net Advertising Revenue greater than Fifteen
Million Dollars ($15,000,000) and less than or
equal to Thirty Million Dollars ($30,000,000), ten
percent (10%); and
(iii) On Net Advertising Revenue greater than Thirty
Million Dollars ($30,000,000), seven and one-half
percent (7.5%).
(b) Guaranteed Commission:
You hereby agree to pay ABC the one-time amount of One
Hundred Thousand Dollars ($100,000). ABC hereby
acknowledges the receipt of Seventy-Five Thousand
Dollars ($75,000) of such one-time amount and you agree
to pay the balance thereof upon the full execution
hereof. The foregoing amount shall be considered
guaranteed commission and you shall be entitled to
recover such amount from the first One Hundred Thousand
Dollars ($100,000) of Commissions due to ABC pursuant
to subparagraph (a) above during the first year hereof.
(c) Net Advertising Revenue:
"Net Advertising Revenue," as used herein, shall be
defined as all monies actually received by you with
respect to any of the Commercial Inventory sold or
placed by either you or ABC during the term hereof and
for a period of one (1) year thereafter, less monies
credited for refunds and less actual agency commissions
paid with respect to such Commercial Inventory.
(d) Collections:
You shall be responsible for all billing and the
collection of all amounts due in connection with the
sales of the Commercial Inventory and ABC shall have no
liability therefor.
(e) Reports and Payment:
At the end of each calendar month during the term
hereof, you shall each deliver ABC a statement setting
forth the name of each advertiser that purchased
Commercial Inventory, the gross revenue and Net
Advertising Revenue received from such advertiser and
the Commissions due ABC with respect to such calendar
month. You agree to pay any and all Commissions due
ABC within ten (10) days after the completion of each
such month based upon the total Net Advertising Revenue
derived during such month. ABC shall have the right to
audit and examine your books, at its own expense, with
respect to the Commercial Inventory in this Agreement,
during reasonable business hours upon five (5) days
notice no more than twice each Contract Year.
(f) ABC Commercial Spots
You agree to provide to ABC, its Parent, or any
entities related thereto (the "Related Entities") one
(1) thirty-second (-:30) commercial spot for use by any
of the Related Entities, which spot shall run on Cafe
USA during each standard advertising spot cycle. In
addition to the foregoing, you agree to provide the
Related Entities with a twenty percent (20%) discount
on all additional commercial spots purchased by any of
the Related Entities.
5. COVENANT NOT TO COMPETE
ABC agrees that during the term hereof and for a period of
one (1) year thereafter, ABC shall not engage in or
represent a third party in the field of advertiser supported
television solely distributed within shopping malls;
provided, however, the foregoing restriction shall not apply
in the event you terminate this Agreement pursuant to
subparagraph 3(6) above or in the event of a termination of
this Agreement due to a breach by you. Notwithstanding
anything to the contrary contained herein, nothing shall
prevent ABC from providing sales services and representation
for Channel M.
6. PROMOTION/RESEARCH
(a) You agree to use your best efforts to promote and
advertise Cafe USA in a manner commensurate with
television programmers, distributors, and exhibits in
commercial sponsored television. All costs and
expenses with respect to the foregoing promotion and
advertising shall be incurred by you and you agree to
consult with ABC with respect to such promotion and
advertising. ABC shall have the right, but shall have
no obligation, to provide additional promotional and
advertising support at its expense.
(b) You agree to perform and incur all cost for all
reasonable research necessary for sales purposes, which
research shall include, but not be limited to, (i) two
(2) Xxxxxxx studies per Contract Year to verify
compliance and traffic and (ii) volumetric studies as
needed (approximately five (5) per contract year). You
agree to consult with ABC with respect to such research
and to provide ABC with the results of such research on
a timely basis throughout the term hereof.
7. INDEMNIFICATION
(a) You agree to indemnify and hold ABC, ABC, Inc. and its
affiliates and subsidiaries and their officers,
directors, and agents harmless from and against any and
all claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) arising out of
your performance hereunder, your performance or failure
to perform in connection with your obligations arising
out of; agreements entered into by ABC on your behalf
provided such agreements have been approved by you or
are similar to previous agreements approved by you; the
breach of any representation and/or warranty hereunder,
or any other claim arising out of this Agreement. ABC
shall promptly notify you by telecopy, receipt
confirmed, or registered mail of any claim or suit
which may be filed and shall not admit any liability or
compromise with respect to any suit without first
obtaining your consent in writing, which consent shall
not be unreasonably withheld or delayed.
(b) ABC agrees to indemnify and hold you, your parent and
its affiliates and subsidiaries and their officers,
directors, and agents harmless from and against any and
all claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) arising out of
ABC's performance hereunder or ABC's breach of any
representation and/or warranty hereunder. You shall
promptly notify ABC by telecopy, receipt confirmed, or
registered mail of any claim or suit which may be filed
and shall not admit any liability or compromise with
respect to any suit without first obtaining ABC's
consent in writing, which consent shall not be
unreasonably withheld or delayed.
8. MISCELLANEOUS
(a) Amendment; Binding Agreement; Assignment
This Agreement shall be binding upon and shall inure to
the benefit of the undersigned parties and their
respective successors and permitted assigns. No
assignment of this Agreement, whether by operation of
law or otherwise, shall be made by either party.
Notwithstanding the foregoing, (i) ABC shall have the
right to assign this Agreement and all its rights and
obligations hereunder to any party acquiring ABC's
business or to any entity controlling it, controlled by
it or under common control with it and (ii) you shall
have the right to assign this Agreement, and all your
rights and obligations hereunder, provided you obtain
ABC's prior written approval, which approval shall not
be unreasonably withheld.
(b) Independent Contractors:
You and ABC are independent contractors and nothing
herein creates the relationship of principal and agent,
employer and employee, partners or joint venturers.
You agree that all contracts, express or implied, of
employment for your personnel shall be made by you as
principal and that there will be no liability
whatsoever on ABC's part with respect to such
contracts.
(c) Waiver:
The failure of either party at any time to require
performance by the other party of any provision hereof
shall in no way affect the full right to require such
performance at any time thereafter, nor shall the
waiver by either party of a breach of any provision
hereof be taken or held to be a waiver of any
succeeding breach of such provision or as a waiver of
the provision itself.
(d) Separability:
If any provision of this Agreement or the application
thereof to any person or circumstances shall to any
extent be held to be invalid or unenforceable, the
remainder of the Agreement, or the application of such
provisions to persons or circumstances as to which it
is not held to be invalid or unenforceable, shall not
be affected thereby, and each provision shall be valid
and be enforced to the fullest extent permitted by law.
(e) Entire Agreement:
This Agreement contains the entire understanding of the
parties and supersedes all previous verbal and written
agreements on the subject thereof.
(f) Governing Law:
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding please
indicate your consent by signing in the space provided below.
ACCEPTED AND AGREED: Very truly yours,
FOOD COURT ENTERTAINMENT ABC NEW MEDIA SALES
NETWORK, INC.
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxx Xxxxxxx
Xxxxx X. Xxxxxxx, President Xxxx Xxxxxxx, President
Chief Executive Officer
