Time/Warner Retail – Sales & Marketing A Time/Warner Company Sports Illustrated Building
Exhibit
10.8
Time/Warner
Retail
– Sales & Marketing
A
Time/Warner Company
Sports
Illustrated Building
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▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
AGREEMENT,
dated as of November 24, 2006, (the “Effective Date”), between
TIME/WARNER RETAIL SALES & MARKETING INC. (formerly knows
as Warner Publisher Services Inc.), a New York corporation (herein called
“TWR”), and SALON CITY INC., a Nevada corporation (herein
called “Publisher”).
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1.
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DEFINITIONS:
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As
used in this agreement, the following terms shall have the following
respective meanings:
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(a)
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“Publications”
shall mean that certain magazine entitled “Salon City” magazine, which
shall be published bi-monthly, plus any special issues of “Salon City”
magazine published annually, and any additional magazines and periodicals,
including but not limited to organic start-ups, magazines or periodicals
designated as extensions, “one-shots” (as defined in subparagraph (1)
below) and any magazines or periodicals acquired from a third party,
in
each case, that TWR agrees to distribute pursuant to Section 2
hereof.
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(b)
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“Territory”
shall mean the United States of America, the Commonwealth of Puerto
Rico,
the Dominion of Canada and foreign and domestic United States military
bases.
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(c)
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“Printer’s
Completion Notice” shall mean a notice delivered to TWR and executed by
the traffic manager or shipping manager of the Publisher’s printer for
each issue of each Publication, specifying the number of copies of
such
issue shipped in accordance with TWR’s instructions, and the date of
completion of such shipment. Under no circumstances may a
Printer’s Completion Notice be sent to TWR prior to the completion of
shipping to the Publisher’s customers, whether or not an intermediary is
used.
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(d)
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“Net
Sales” shall mean (with respect to each issue of each Publication) the
number of copies of the Publications specified in each Printer’s
Completion Notice (as the same may be modified or amended by additional
information furnished by the printer or Publisher), less the number
of
copies of that issue returned to TWR pursuant to the provisions of
paragraph 8 and less the number of copies of that issue lost or damaged
in
shipments to wholesale distributors per subparagraph
3(c).
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(e)
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“Cover
Price” shall mean the suggested retail selling price of each Publication
(as specified by Publisher on the cover of each copy thereof), as
the same
may be increased or decreased by Publisher during the
Term.
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1
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(f)
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DELETED.
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(g)
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“Customer
Discount” shall mean the percentage off of the Cover Price of the
Publications that Publisher directs TWR to provide to Publisher’s
customers. If Publisher and its customer(s) agree upon any
change to the Customer Discount to be effective during the term of
this
agreement, Publisher shall give TWR not less than one hundred and
twenty
(120) days prior written notice of such
change.
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(h)
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“Final
▇▇▇▇▇▇▇▇” shall mean the Cover Price, less the Customer Discount,
multiplied by the Net Sales and less TWR’s
Commission.
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(i)
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“On
Sale Date” shall mean the date, as designated by Publisher, which each
issue of the Publications is to be placed for initial sale at retail
outlets.
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(j)
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“Off-Sale
Date” shall mean the date, designated by Publisher, for recall of issues
of the Publications from sale at retail outlets, and provided, however,
that the Off-Sale Date of any issue of a Publication shall not be
later
than one (1) day prior to the On Sale Date of the next succeeding
issue of
the same Publication. The Off-Sale Date of “one-shots” shall
also be determined by Publisher.
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(k)
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(i)
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“Term”
shall mean the period commencing on the Effective
Date, and
continuing thereafter for a period of three (3) years. The Term
shall thereafter be automatically extended for successive three (3)
year
periods upon the same terms and conditions as herein contained, subject,
however, to the right of either party, on prior written notice to
the
other party as provided below, to terminate the Term upon the expiration
of the original Term or any renewal
period.
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(ii)
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The
notice of termination shall be served not less than ninety (90) days
prior
to the end of the original Term or any renewal period in accordance
with
the provisions of paragraph 14 hereof. The notice of
termination shall be effective following distribution of the last
issue of
each Publication with an On Sale Date prior to the last day of the
original term or renewal period than in effect. The notice of
termination shall specify the On Sale Date of the last issue of each
Publication to be distributed under this
agreement.
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(iii)
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Notwithstanding
termination of this agreement, this agreement shall continue in full
force
and effect after the termination date for the purpose of distributing
such
last issue(s), handling and crediting returns of unsold copies and
effecting a final settlement of Publisher’s account. TWR shall
have the right, upon the giving by either party of such written
termination notice, to suspend any further payments to or on behalf
of
Publisher and to withhold all further sums relating to the Publications
until final settlement is effected, DELETED days after
the Off-Sale Date of the last issue of the Publications distributed
by TWR
hereunder. TWR shall be entitled to set up a reasonable reserve
at that time for anticipated returns, and for all proper and reasonable
charges or reimbursements due TWR pursuant to the terms of this
agreement.
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(iv)
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Notwithstanding
anything to the contrary in this agreement, Publisher shall not be
entitled to terminate this agreement if Publisher does not first
reimburse
TWR the full amount of any such
indebtedness.
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(l)
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“one-shots”
shall mean magazines and periodicals with a frequency of less than
four
times annually.
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2
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(m)
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“distribution”
shall refer to the distribution of Publications, including regular
and
special issues, ultimately intended for single copy sale at newsstands
and
other retail outlets. Other forms of the term “distribution”,
including, but not limited to, “distribute”, “distributes” or
“distributed” shall have a corresponding
meaning.
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(n)
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“special
allowances” shall refer to any payments, deductions or allowances other
than Customer Discount that Publisher agrees to pay to Publisher’s
customers in connection with Publisher’s sale of the
Publications.
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(o)
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“TWR’s
Commission” shall equal the sum of TWR’s Base Commission and the Incentive
Fee (as defined in subparagraph 3(k) below). Notwithstanding
the foregoing, if Publisher ceases publishing the Publication and
is not
publishing any other Publication, then Publisher shall, on a prospective
basis, no longer be obligated to pay TWR’s
Commissions.
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2. RIGHTS
GRANTED:
Publisher
hereby grants to TWR, for the Term and throughout the Territory, the exclusive
right to distribute the Publications (including any future Publications
published by Publisher), and if during the Term, any person or entity affiliated
with and/or controlled by Publisher or its officers, directors or major
stockholders (collectively, “Publisher Affiliates”) shall publish any other
magazines and/or periodicals, Publisher agrees that TWR shall be offered,
exclusively, the right to distribute such magazines and/or
periodicals. If Publisher or a Publisher Affiliate shall be unable to
reach an agreement as to terms with TWR for the rights described in the
preceding sentence, Publisher or such Publisher Affiliate shall not grant such
rights on terms equal to or less favorable than those offered by TWR, and shall
give TWR the opportunity to acquire said rights on the best terms offered to
Publisher or such Publisher Affiliate by any other distributor. If
TWR and Publisher or a Publisher Affiliate agree that TWR shall acquire said
rights, then such new magazine and/or periodicals shall be distributed by TWR
pursuant to the terms hereof, except as such terms mat be expressly modified
or
replaced in a fully-executed written amendment hereto. The provisions
of this paragraph 2 shall not apply to copies of the Publications furnished
by
Publisher or a Publisher Affiliate to individual subscribers. For the
avoidance of doubt, notwithstanding the foregoing, TWR shall have the right
to
refuse to distribute any Publication that Publisher or a Publisher Affiliate
offers TWR the opportunity to distribute pursuant to this paragraph
2.
3. THE
PUBLISHER AGREES:
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(a)
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To
publish the Publications at the frequency specified in subparagraph
1(a)
(or, if no frequency is specified in subparagraph 1(a) for a Publication,
at the frequency established when such Publication became a Publication
pursuant to paragraph 2 hereof), and in substantially the same physical
form (including, but not limited to, size, quality of paper and
reproduction) and with editorial, creative and artistic elements
at least
equal to those in previous issues and to print on the cover of the
Publications a UPC code including TWR’s bi-pad
number.
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(b)
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That
upon receipt from TWR of the lists of wholesale distributors and
the
number of copies of each of the Publications to be shipped thereto,
Publisher shall complete shipment to wholesale distributors in accordance
with such lists far enough in advance of the On Sale Dates of the
respective issues to enable distribution to and by wholesale distributors
by the On Sale Dates. Publisher shall pay all transportation
charges relating to the shipment of the Publications to wholesale
distributors.
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3
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(c)
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That
TWR may deduct from the payments due Publisher, as provided in subdivision
9(b)(ii) hereof, all amounts attributable to copies of the Publications
lost or damaged in shipment to wholesale distributors. Subject
to the provisions of paragraph 16 hereof, all such loss or damage
adjustments made by TWR for the benefit of said wholesale distributors
shall be conclusive on the question of loss and/or damage and binding
upon
Publisher. TWR and Publisher shall assist one another in the
handling of claims against carriers for copies of the Publications
that
are delayed, lost or damaged in
transit.
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(d)
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That
TWR may allow wholesale distributors the privilege of returning all
unsold
copies of the Publications and receiving credit at the rate charged
therefore, in accordance with the terms of paragraph 8
hereof.
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(e)
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That
TWR may refuse to distribute any issues of Publications which, in
its
opinion, contain libelous, obscene or indecent matter; which infringe
the
copyright, right of privacy or publicity or any other right of any
third
party; which are unlawful; or which are refused use of the mails
by postal
authorities; or, in its sole discretion, TWR may elect to terminate
this
agreement with respect to the Publications concerned. TWR shall
have no obligation to review the content of any
Publication.
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(f)
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That
TWR shall be permitted to conduct periodic field audits of Publisher’s
customers on behalf of Publisher during the Term and that TWR shall
be
entitled to an audit fee for such services equal to
DELETED percent of all funds recovered by TWR on behalf
of Publisher as a result of such audit (the “Audit
Fee”). Publisher further agrees that TWR may deduct the Audit
Fee from the payments ▇▇▇ Publisher, as provided in subdivision 9(b)(iii)
hereof.
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(g)
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To
follow TWR’s “Terms for Access to Information Systems” attached as
Annex A hereto.
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(h)
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That
if TWR incurs any expenses hereunder on behalf of Publisher or the
Publications, then TWR may recover, pursuant to subdivision 9(b)(vii)
hereof, any or all such expenses from any advances and/or payments
due or
becoming due to Publisher, or, at its option, may require Publisher
to
reimburse TWR by check within 10 days following TWR’s written request
therefore.
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(i)
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To
provide TWR, on a timely basis, with written notice of all financial
arrangements, whether written or oral, that Publisher agrees to with
a
wholesaler or retailer including, but not limited to Customer Direct
and
any Special Allowances.
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(j)
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DELETED.
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(k)
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DELETED.
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4. TWR
AGREES:
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(a)
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To
furnish shipping instructions and addressed labels to Publisher at
a
reasonable time prior to the scheduled shipping date for distribution
of
the Publications.
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(b)
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To
▇▇▇▇ and collect all payments from Publisher’s
customers.
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(c)
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To
make payments to Publisher as specified in paragraph
9.
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(d)
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To
consult with Publisher’s designated representatives, upon request, with
respect to:
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(i)
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The
number of copies of each issue to be
printed;
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(ii)
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The
number of copies of each issue to be allotted and shipped to each
wholesale distributor;
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(iii)
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The
sales history of the Publications;
and
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(iv)
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The
advertising and promotion campaigns for the
Publications.
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(e)
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To
designate an employee of TWR as the non-exclusive account executive
for
the Publications.
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(f)
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To
render to Publisher a sales performance statement for each issue
of the
Publications showing, in summary form, the issue date, On Sale and
Off-Sale Dates, number of copies distributed, returns accepted, Net
Sales
(in both numerical and percentage terms), and the sales trend of
the
Publications (a numerical comparison of Net Sales of that issue versus
Net
Sales of the previous issue and of the same issue one year earlier,
to the
extent that such Publication was sold one year
earlier).
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(g)
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To
render to Publisher a payment statement for each issue of the Publications
summarizing the appropriate calculations pursuant to this
agreement.
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(h)
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To
use reasonable efforts to provide the services listed on Annex B
hereto.
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5.
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TWR
NOT A TRUSTEE:
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In
no event shall TWR be obligated to segregate any of the sums collected
by
it hereunder from any of its other funds, nor shall TWR be considered
a
trustee, pledge holder or fiduciary of Publisher. Publisher
acknowledges and agrees that TWR shall be entitled to perform distribution
and other services for other publishers regardless of whether such
other
publishers’ publications may be competitive with the Publications and that
WTR and its affiliates currently do, or in the future may, publish
publications similar to the
Publications.
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6.
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RETAIL
DISPLAY ALLOWANCES:
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(a)
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TWR
shall perform the work of receiving and collecting information from
retail
magazine dealers and issuing payments on behalf of Publisher for
amounts
due to them under any retail or checkout display allowance (“RDA”)
programs conducted by the Publisher in reference to the Publications
as
previously authorized by Publisher in writing for each retail outlet
or
retail chain, as the case may be. Such RDA payments shall be
charged to the Publisher’s account and recovered and received by TWR as
provided in subparagraph 1(k) and subdivision 9(b)(iv) hereof, at
such
time as TWR determines (whether such determination is based upon
an
estimate made by TWR or otherwise) that such dealers are entitled
thereto,
whether such payment is actually made by TWR at such time. Any
adjustments made by TWR regarding the amount of such allowances shall
be
credited or charged (as the case may be) to Publisher’s account at the
time such adjustment is actually made by
TWR.
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(b)
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In
consideration of the services to be performed by TWR pursuant to
this
paragraph 6, TWR shall receive and RDA service fee of
DELETED for each issue of the Publication(s) per retailer
claim, which sum shall be recovered by TWR pursuant to subparagraph
9(b)(iv) hereof.
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(c)
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Publisher
shall have the right, upon timely notice to TWR, to assume all obligations
to perform all RDA services and issue all RDA
payments.
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7. CREDIT
TO WHOLESALE DISTRIBUTORS:
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(a)
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TWR
will ▇▇▇▇ Publisher’s customers at the Cover Price of the Publications
less the Customer Discount less Special
Allowances.
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(b)
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In
the event Publisher’s customers make deductions from payments to TWR for
adjustments to Customer Discount or Special Allowances not agreed
to by
the Publisher, TWR will notify Publisher of such adjustments and
shall
deduct from any payments to Publisher pursuant to subdivision 9(b)(v)
hereof, the amount of such deductions. Publisher may direct TWR
to delay, reduce or suspend future shipments to the
customer.
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(c)
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Publisher
agrees that TWR shall be entitled to make all decisions as to which
customer to distribute the Publications to, and all credit and collection
decisions with respect to wholesale distributors, including whether
to
stop or hold up shipment to delinquent or “un-creditworthy” accounts and,
if practicable, to secure substitute accounts, except, in each case,
if
Publisher directs TWR otherwise as provided below. TWR shall
bear any losses from uncollectible amounts and all collection expenses
(collectively, the “Credit Risk”), except as provided below. If
TWR determines, in its sole discretion, that a wholesale distributor(s)
poses and unacceptable credit risk to TWR, TWR may provide notice
to
Publisher that TWR is no longer willing to accept the Credit Risk
relating
to Publications sent to such wholesaler distributor(s). If
Publisher desires to continue shipping Publications to such wholesale
distributor(s) and is willing to accept the Credit Risk associated
therewith, then Publisher shall provide notice ordering TWR to continue
shipping Publications to such wholesale distributor(s) and indicating
that
the Publisher shall accept the Credit Risk relating to Publications
sent
to such wholesaler distributor(s), and any such losses sustained
by TWR
shall be charged to Publisher’s account and recovered by TWR as provided
in subdivision 9(b)(v) hereof. Nothing herein contained,
however, shall require TWR to institute any legal action or collection
proceedings. Publisher agrees and acknowledges that TWR may, if
there is a new or suitable substitute, recommend new or substitute
accounts in place or of in addition to customers that TWR thinks
are
inadequate, an acceptable credit risk, or irregular in
payments. Publisher will adhere to TWR’s recommendation to
change customers.
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(d)
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Publisher
acknowledges that it has significant knowledge about the wholesale
magazine distribution industry and its participants and that it is
aware
that many wholesale distributors are currently under significant
financial
pressure and may currently be, or in the near future become, credit
risks. Publisher further acknowledges that, in the event TWR
requests Publisher to stop or hold shipments as provided in subparagraph
8(c) hereof, there is a substantial probability that wholesale
distributors affected may constitute a substantial percentage of
wholesale
distributors and there may not be appropriate substitute
distributors.
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8. RETURNS:
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(a)
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In
determining the sum payable to Publisher, TWR shall be entitled to
deduct
returns of each issue of the Publications shipped to TWR from Publisher’s
customers located in the Territory at any time within
DELETED days of the Off-Sale Date of each such issue,
but
as to the last issue distributed to this agreement, or any one-shots
or
special issues, TRW may accept returns shipped at any time within
DELETED days of the Off-Sale Date of such
issues. The aforesaid DELETED and
DELETED day periods shall be subject to extension by
reason of delay or delays resulting from the use of Reshipping/Direct
Wholesaler Agencies (as that term is commonly understood in the magazine
trade), in mail delivery, “acts of God”, or any other cause beyond the
reasonable control of TWR, or with the Publisher’s consent. The
Publisher hereby acknowledges the TWR may, in its sole discretion,
discontinue distribution of Publications to a wholesaler(s) in effort
to
minimize the number of returns that will occur after the
DELETED or DELETED day period described
above.
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(b)
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If
TWR receives returns of any issue hereunder after final settlement
of such
issue pursuant to subparagraph 8(a) hereof, TWR may deduct such returns
at
the rate charged therefore from any remittance becoming due Publisher,
or,
after termination of this agreement, the Publisher shall
promptly reimburse TWR upon receipt of TWR’s statement
regarding such returns.
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(c)
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TWR
may accept returns of unsold copies of the Publications by means
of front
covers, headings, affidavits, or electronic notification in form
satisfactory to TWR. If Publisher shall request, in writing,
full copy returns, TWR shall use its reasonable efforts to obtain
same,
and in such case, Publisher agrees to pay for return transportation
and
such handling charges as are required. TWR shall furnish
Publisher with returns statements which, subject to paragraph 15
hereof,
shall be accepted by Publisher as conclusive evidence thereof, and
TWR is
hereby authorized to destroy any and all front covers or headings
representing such returns.
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9.
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PAYMENT
TO PUBLISHER:
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TWR
shall make the following payments to Publisher with respect to each
issue
of the Publications.
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(a)
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As
an advance against any and all sums which may become payable to Publisher
pursuant to subparagraph (b) with respect to each issue of the
Publications:
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(i)
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An
amount equal to DELETED percent of TWR’s estimate of the
Final ▇▇▇▇▇▇▇▇ (determined in TWR’s sole discretion), for shipments into
the Territory due DELETED days after the On Sale Date,
but in no event earlier than DELETED days after receipt
by TWR of the Printer’s Completion Notice, less an estimated or, to the
extent determinable, the actual amount to cover the deductions specified
in subdivisions 9(b)(ii)-9(b)(vii).
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In
the event that Publisher and TWR do not agree as to the number of
copies
of each issue of the Publications to be allotted and shipped to each
wholesale distributor, TWR may, thereafter, at its sole discretion,
base
the computation of the advances to become due to Publisher pursuant
to
this paragraph 9 on the number of copies of each issue of the Publications
that TWR deemed appropriate to be allotted and shipped to each wholesale
distributor, rather than the number actually printed and
shipped.
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(ii)
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An
amount equal to DELETED percent of TWR’s estimate of the
Final ▇▇▇▇▇▇▇▇ (determined in TWR’s sole discretion),
DELETED days after the Off-Sale Date of such issue, less
the first advance and an estimate or, to the extent determinable,
the
actual amount of any unpaid deductible expenses provided for under
subdivisions 9(b)(ii)-9(b)(vii) to the extent that such deductions
have
not previously been deducted and retained by
TWR.
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(b)
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An
amount equal to the Final ▇▇▇▇▇▇▇▇ shall be paid to Publisher one
hundred
twenty (120) days after the Off-Sale Date of that issue, less any
of the
following deductible expenses which have not been recovered by
TWR:
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(i)
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All
sums advanced to Publisher pursuant to subparagraph (a)
above;
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(ii)
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All
loss and damage adjustments pursuant to subparagraph 3(c)
above;
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(iii)
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The
Audit Fee pursuant to subparagraph 3(f)
above;
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(iv)
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All
RDA payments and RDA service fees pursuant to paragraph 6
above;
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(v)
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All
uncollectible amounts, Special Allowances, deductions and other items
properly chargeable to Publisher referred to in paragraph 7
above;
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(vi)
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The
following Special Allowances which may be granted by
TWR:
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1.
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With
respect to Reshipping Wholesaler Agencies (as the term is commonly
understood in the magazine trade):
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A.
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A
charge of DELETED per cwt. on all non-second-class entry
magazines for U.S. and Canada reshipping
agencies.
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B.
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A
charge of DELETED per cwt. on all second-class entry
magazines for U.S. and Canada reshipping
agencies.
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2.
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The
charges referred to in subdivision A and B above are subject to change
in
proportion to any increase in the aforesaid
rates.
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3.
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A
charge of DELETED will be made if an analysis of
circulation by population for any Publication is requested and required
for the Audit Bureau of Circulation report. No charge will be
made for the State Circulation analyses which are customarily made
twice a
year for the Publications; and
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(vii)
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All
other charges, payments or other reimbursements due TWR pursuant
to the
terms of this agreement.
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(c)
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All
payments will be made in U.S. dollars and will be based on the “exchange
rate” in effect the month following the On Sale Date of the
Publication. The “exchange rate” will be calculated as the
average of the daily spot rates of a nationally recognized bank during
the
one month period between the 15th
day of each
of the two preceding months.
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(d)
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Nothing
in this paragraph 9 shall be construed to limit any of the provisions
of
paragraph 8 of this agreement.
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10.
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CROSS-COLLATERALIZATION/OVERDRAFTS:
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The
estimated Final ▇▇▇▇▇▇▇▇ of each issue of all Publications distributed
by
TWR pursuant to this agreement shall be treated as a unit. If
the sum of advance payments made and the deductible expenses incurred
by
TWR pursuant to subdivisions 9(b)(ii) – 9(b)(vii) with respect to any
issue of any Publication exceeds the estimated Final ▇▇▇▇▇▇▇▇ for
such
issue (such excess is hereunder referred to as the “Overdraft”), the
Overdraft may be deducted by TWR from any advance and/or payment
of Final
▇▇▇▇▇▇▇▇ which TWR may be required to make on any issue or issues
of the
same Publications, or any other publications, the distribution rights
to
which have been granted to TWR by Publisher or any affiliate, parent
or
subsidiary of Publisher pursuant to his or any other agreement, or
shall
be refunded or paid thereby immediately upon
demand.
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11.
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PUBLISHER’S
WARRANTIES; INDEMNITY:
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(a)
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Publisher
warrants and represents that:
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(i)
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the
rights herein granted to TWR have not been granted to any other person,
firm or corporation; it has the right and authority to enter into
this
agreement and to perform its obligations hereunder, free and clear
of any
encumbrances; and there are no suits or proceedings pending or threatened
against or affecting Publisher which, if adversely determined, would
impair the rights herein granted to
TWR;
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(ii)
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it
is duly organized and incorporated under the laws of the State of
Nevada;
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(iii)
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it
is the sole and exclusive owner of the Publications and all rights
therein;
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(iv)
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the
Customer Discounts and all pricing, discount, and allowance terms
shall be
in compliance with all applicable antitrust and trade laws in the
territory; and
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(v)
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the
Publications and distribution of the Publications under this agreement
will not violate any laws or rights of any third parties or
entities.
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(b)
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Publisher
agrees to defend and indemnify TWR, its affiliates, and its and their
officers, agents, representatives, customers and retailers against
any
damages, costs, expenses (including reasonable counsel fees), judgments,
settlements, penalties, liabilities or losses arising out of (i)
any
claim, action or proceeding alleging copyright or trademark infringement,
libel, obscenity, violations of the rights of privacy, publicity
or any
other rights of any person, or any federal, state or local statute
or
regulation, in connection with the title, cover, contents or advertising
of the Publications, including, but not limited to, advertisements,
illustrations, or photographs, or in the text thereof, or (ii) the
breach
or alleged breach of any of the foregoing representations or warranties
by
Publisher. TWR and Publisher shall each, with all reasonable
promptness, notify the other of any suit, proceeding, claim or demand
brought in connection with the Publications. If any such suit, proceeding,
claim or demand is brought against TWR, TWR may elect (i) to undertake
the
defense thereof at the Publisher’s expense or (ii) to notify the Publisher
to undertake the defense thereof. If TWR does so notify the
Publisher, the Publisher shall undertake the defense at its own expense;
and in such case, TWR may at its option join in the defense but at
its own
expense.
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(c)
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During
the pendency of any such suit, proceedings, claim or demand, TWR
may
withhold payments from Publisher, under this or any other agreement
between Publisher and TWR, to the extent reasonably necessary to
remedy
any damage, cost, expense, settlement, judgment or liability which
may
result there from.
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(d)
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The
warranties and representations of Publisher hereunder shall, along
with
the indemnity, survive the termination of this
agreement.
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12.
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EXTRAORDINIARY
EVENTS – COMPUTATION OF NET
SALES:
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In
the event that a wholesale distributor or other customer of Publisher
to
which TWR distributes the Publication on Publisher’s behalf shall (a) take
advantage of any federal or state insolvency law for relief of debtors,
including reorganization, (b) cease its business operation, or (c)
suffer
a destruction of all or a portion of its inventory, including but
not
limited to destruction caused by fire, flood or theft, in any case,
with
the effect that such wholesale distributor or other customer shall
not
return all or a portion of its unsold copies of the Publications,
TWR
shall use the average Net Sales of the Publications as reported by
such
wholesale distributor or customer for the twelve (12) months (or
such
lesser period if applicable) prior to those months for which such
wholesale distributor or customer failed to return unsold copies
of the
Publications, for determining the Net Sales of the Publications shipped
to
such wholesale distributor or customer for said
months.
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9
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13.
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ASSIGNMENT:
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This
agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no assignment of this
agreement, voluntary of by operation or law, shall be binding upon either of
the
parties hereto without the prior written consent of the other, unless it is
an
assignment to a parent, subsidiary, affiliate, or as part of the sale or
transfer of all or substantially all of such party’s
assets. Notwithstanding this, Publisher may sell, assign, transfer or
otherwise dispose of its interest in any Publication or any trademark(s)
associated therewith to any third party (whether by means of a sale of assets
or
equity) if such third party agrees in writing to assume and be bound by all
the
terms and conditions of the agreement to be performed by Publisher and prior
to
such sales, assignment, transfer or other disposition Publisher reimburses
TWR
the full amount of any indebtedness owed by Publisher to TWR; provided, however,
that Publisher shall guarantee and remain responsible for the performance of
all
obligations hereunder with respect to such Publication, and that TWR shall
have
the right to terminate this agreement with respect to such
Publication.
14. NOTICES:
All
notices which either party hereto is required or may desire to give to the
other
shall be given by addressing the same to the other at the address hereinafter
set forth, or at such other address as may be designated in writing by any
such
party in a notice to the other given in the manner prescribed in this
paragraph. All such notices shall be sufficiently given when the same
shall be deposited or addressed, postage prepaid, in the United States mail
and/or when the same have been delivered, so addressed, by national courier
system, and the date of the giving of such notice shall be three (3) business
days after said mailing is sent by United States mail and, upon receipt, if
sent
by courier. The addresses to which any such notices shall be given
are the following:
TO
TWR: TO
PUBLISHER:
Time/Warner
Retail Sales & Marketing
Inc. By
all methods other than
Attn: President Federal
Express:
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Salon
City, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By
Federal Express:
Salon City, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15. AUDIT
RIGHTS:
Publisher
may, at its own, expense, audit books and records of TWR relative to the
distribution of the Publications pursuant to this agreement at the place where
TWR maintains such books and records in order to verify statements rendered
to
Publisher hereunder. Any such audit shall be conducted only by a
reputable public accountant during reasonable business hours in such manner
as
not to interfere with TWR’S normal business activities. A true copy
of all reports made by Publisher’s accountant shall be delivered to TWR at the
same time such respective reports are delivered to Publisher by said
accountant. In no event shall an audit with respect to any statement
commence later than twelve (12) months from the date of dispatch to Publisher
of
such statement nor shall any audit continue for longer than five (5) consecutive
business days, nor shall audits be made hereunder more frequently than once
annually, nor the records supporting any such statement be audited more than
once. All statements rendered hereunder shall be binding upon
Publisher and not subject to objection for any reason unless such objection
is
made in writing stating the basis thereof and delivered to TWR within twelve
(12) months from delivery of such statement or, if an audit is commenced prior
thereto, within thirty (30) days from the completion of the relevant
audit.
10
16. LIMITATION
OF LIABILITY:
NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, UNDER NO CIRCUMSTANCES SHALL TWR
BE
LIABLE TO PUBLISHER FOR ANY LOST PROFITS OR SPECIAL, CONSEQUENTIAL, INDIRECT
CIRCUMSTANTIAL, OR INCIDENTAL DAMAGES OF ANY KIND. IN NO EVENT SHALL
THE LIABILITY OF TWR HEREUNDER TO PUBLISHER FOR ANY REASON EXCEED TWR’S
COMMISSION FOR THE PRECEDING TWELVE (12) MONTH PERIOD (OR SUCH LESSER PERIOD
IF
LESS THAN TWELVE (12) MONTHS OF THE ORIGINAL TERM OF THIS AGREEMENT HAS LAPSED);
PROVIDED, HOWEVER, THAT THIS LIMITATION OF LIABILITY SHALL NOT IN ANY WAY LIMIT
TWR’S LIABILITY TO THE EXTENT THAT THE LIABILITY IS CAUSED BY TWR’S WILLFUL
MISCONDUCT.
17. INTERGATION;
WAIVER; MODIFICTAION:
This
agreement constitutes the complete and entire understanding of the parties
hereto concerning the subject matter hereof and supersedes any prior oral or
written agreements, understanding and representations. This agreement
is not being executed in reliance upon any representation or warranty not
expressly set forth herein. No waiver, modification or cancellation
of any term or condition of this agreement shall be effective unless executed
in
writing by the party charged therewith. No written waiver shall
excuse the performance of any act other than those specifically referred to
therein.
18. NO
PARTNER, ETC.:
This
agreement does not constitute and shall not be construed as constituting a
partnership or joint venture between TWR and Publisher. Neither party
shall have any right to obligate or bind the other party in any manner
whatsoever, except as otherwise specifically set forth herein, and nothing
herein contained shall give, or is intended to give any rights of any kind
to
any third persons.
19. CONTRUCTION:
This
agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to agreements executed and fully performed
therein. It is agreed that New York courts (state and federal) only,
will have jurisdiction over any controversies regarding this agreement; any
action or proceeding which involves such a controversy will be brought only
in
those courts, in New York County. Any process in any such action or
proceeding may, among other methods, be served by delivery, certified or
registered mail, national courier system or any other receipted form of
delivery. Any such delivery, mail service, courier service, or other
receipted form of delivery shall be deemed to have the same force and effect
as
personal service within the state of New York.
20. FORCE
MAJEURE:
If
because of act of God; accident; fire; lockout; strike or other labor
dispute; riot or civil commotion; act of public enemy or terrorism; law
enactment, regulation, rule, order or act of government or governmental
instrumentality (whether federal, state, local or foreign); or other cause
of a similar or different nature beyond the control of Publisher or
TWR, the performance of Publisher’s or TWR’s obligations hereunder is delayed or
prevented, such delay or prevention shall not be considered a breach of this
agreement.
21. HEADINGS:
The
headings in this agreement are for convenience of reference only, and shall
not
limit or otherwise effect the meaning thereof.
22. CONFIDENTIALITY:
Publisher
agrees that this agreement contains confidential business terms and that
disclosure thereof could be damaging to TWR. Accordingly, Publisher
agrees to treat this agreement as proprietary information and not to reveal
any
of the terms hereof to any third party, for any purpose unrelated to performance
under this agreement, except upon TWR”S prior approval.
11
IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers as of the day and year first above
written.
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SALON
CITY, INC.
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TIME/WARNER
RETAIL
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BY:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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BY:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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TITLE:
President / CEO
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TITLE:
EVP Client Marketing &
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Business
Development
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12
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ANNEX
A
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TWR’s
“Terms For Access to Information
Systems”
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Publisher’s
access to and use of TWR’s information systems and data is subject to the
following terms and conditions:
1. Confidentiality:
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(a)
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The
information obtained from TWR’s information systems (other than
information concerning Publisher’s own publications) and data, and the
software, access codes and other devices and materials provided by
TWR to
Publisher to access such systems and data (collectively, the “Confidential
Information”) contain confidential business terms, are otherwise
confidential to TWR, and the disclosure thereof would be damaging
to
TWR.
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(b)
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Any
Confidential Information disclosed or provided to Publisher, or
any of its employees, directors, officers, affiliates, agents or
other
representatives (collectively, the “Representatives”) (i) shall be kept
confidential by Publisher and its Representatives, (ii) shall not,
without
TWR’s prior written consent (unless such disclosure is required by
applicable law or regulation and the procedures set forth in clause
1 (f)
below are followed), be disclosed, in whole or in part, by Publisher
or
its Representatives to any person or entity except as set forth in
clause
1 (c) below, and (iii) shall be used by Publisher and its Representatives
solely to monitor and analyze key performance metrics and review
general
information pertinent to the magazine
category.
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(c)
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Publisher
shall allow access to the information systems and disclose the
Confidential Information only to such of its Representatives who
need to
know the Confidential Information for the sole purpose of monitoring
and
analyzing key performance metrics and who are informed by Publisher
of the
confidential nature of the Confidential Information. In any
event, Publisher shall be responsible for any breach of these Confidential
Information provisions by Publisher or its
Representatives.
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(d)
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Except
as permitted pursuant to clause 1 (f) below, without TWR’s prior written
consent, Publisher and its Representative will not disclose to any
other
person the fact that it or they have access to TWR’s information systems
or that the Confidential Information has been made
available.
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(e)
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Neither
TWR nor any of its Representatives make any representation or warranty,
express or implied, as to the accuracy or completeness of the Confidential
Information. Publisher agrees that neither TWR nor any of its
Representatives shall have any liability to Publish or to any of
its
Representatives or any other person relating to or resulting from
the use
of the Confidential Information or any errors therein or omissions
therefrom.
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(f)
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If
Publisher or any of its Representatives becomes legally compelled,
in the
written opinion of its counsel, to disclose any of the Confidential
Information, Publisher shall immediately provide TWR with written
notice
thereof so that TWR may seek a protective order or other appropriate
remedy and/or waive compliance with the applicable provisions of
this
agreement. If such protective order or other remedy is not
obtained, or TWR waives compliance with the applicable provisions
hereunder, Publisher or its Representative(s), as the case may be,
shall
disclose only that portion of the Confidential Information which
it is
advised in writing by counsel is legally required to be disclosed
and will
cooperate with TWR to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be accorded the
Confidential Information by such tribunal or other
entity.
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13
2. Systems
and Data to be Accessed
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(a)
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Publisher
is authorized to access only the Web based Data Portal, with access
to
Publisher’s draw/sale data, display quality (DQI), rack data, RDA data,
field force automation data, TWR MIS system data, POS data, competitive
shares of market data, MSA data (for manually contracted wholesalers),
and
any additional information mutually agreed upon in writing, between
the
Publisher and WPS. Neither Publisher nor any of its
Representatives shall attempt to access any other systems, data or
functions in TWR’s information
systems.
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3. Person
Authorized to Access Systems and Data
(a) Only
those individuals of Publisher and its Representatives specifically
Authorized
in writing by TWR to access
the systems and data may do so.
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(b)
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If
Publisher or any of its Representatives who is granted access to
TWR’s
information systems or data (i) ceases to be a Representative of
Publisher, or (ii) misplaces, loses or otherwise fails to maintain
possession of its computer, software or access data or device, or
any of
the Confidential Information, Publisher will immediately notify the
Time/Warner Retail Sales & Marketing Help Desk at (▇▇▇)
▇▇▇-▇▇▇▇.
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4. Security
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(a)
|
Publisher
will access the systems and data in accordance with TWR’s instructions and
requirements concerning data security, as amended from time to time
by
TWR.
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(b)
|
In
order to ensure protective of the systems and data, Publisher shall
implement and maintain appropriate security measures including technical,
physical, and organizational controls to ensure the confidentiality
and
integrity of the systems and data.
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(c)
|
Publisher
will immediately report any suspected or confirmed security incident
involving the systems or data to TWR’s Director of
Information
|
Security
by calling the Time Inc. Network Operations Center at (▇▇▇) ▇▇▇-▇▇▇▇ or another
number specified by TWR.
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(d)
|
On
an ongoing basis from time to time and upon reasonable notice to
Publisher, TWR shall be entitled to perform, or to have performed,
an
information security review and audit on Publisher’s access and use of
TWR’s information systems, as coordinated by TWR’s Director of Information
Security. Publisher shall implement any required controls as
identified by such information security review and shall institute
appropriate escalation procedures in order to enable an appropriate
response in the event of a security
incident.
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(e)
|
Publisher
has standard security procedures in place and it will provide a copy
of
such procedures to all Representatives who are granted access to
TWR’s
information systems.
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14
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(f)
|
Neither
Publisher nor any of its Representatives who are granted access
to
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the
information systems shall use software that is (i) not owned or validly
licensed by such party, (ii) in violation of third party rights,
including
but not limited to copyrights, or (iii)
illegal.
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(g)
|
Neither
Publisher nor any of its Representatives who are granted access to
the
information systems shall attempt to scan TWR’s network or run any other
diagnostic tools against any system on TWR’s network without the prior
written approval of TWR’s Senior Director of Information
Services.
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(h)
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Publisher
acknowledges that its access to and use of TWR’s information systems are
subject to monitor by TWR and TWR’s policies of use (as same may be
modified from time to time).
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(i)
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Both
Publisher and all of its Representatives who are granted access to
the
information systems shall have current anti-virus software installed
on
their computers.
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(j)
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TWR
will maintain current anti-virus software on its
system.
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5. Default
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(a)
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TWR
may immediately terminate Publisher’s authorization to access and use
TWR’s systems and data if Publisher fails to comply with any of the terms
hereof.
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15
ANNEX
B
Services
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1)
|
Title
Specifics Sales & Marketing Plan: TWR, in
conjunction with Publisher, shall develop and implement an annual
sales
and marketing plan incorporating both wholesale and retail objectives
including:
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·
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Scheduling
targeted distribution work for each Publication during the course
of the
year, including chain maintenance assignments as
needed;
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·
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Scheduling
targeted key account and wholesale assignments for each Publication;
and
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·
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One
formal semi-annual review of the agreed upon sales and marketing
plan.
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2)
|
On-Line
Access: TWR shall provide Publisher with on-line
access to Publisher sales data, the Store Level Database and to other
reports made generally available to TWR
clients.
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3)
|
Promotional
Program: Publisher shall provided TWR with written
authorization of any promotion program it decides to participate
in, and
TWR shall assist Publisher in the execution of such
programs. TWR will make reasonable efforts to assist Publisher
in determining additional copy requirements for promotional programs
prior
to the issue traffic date. TWR will provide an analysis of the
program’s results upon finalization of the issues involved using the Store
Level Database.
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4)
|
Newly
Authorized Retailers: Once TWR has actual knowledge of
newly authorized retailers. TWR will promptly adjust its distribution
to
reflect such newly authorized retailers. TWR will provide WSC
Reports for all major chain
authorizations.
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5)
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Wholesaler
Performance Reporting: TWR shall inform Publisher, on
an issue-by-issue basis, of any withholding by a wholesaler distributor
in
TWR base cities via TWR’s Distribution Maintenance Report
(“DMR”). TWR shall use reasonable efforts to prevent
withholding through corrective action and recommendations to
Publisher. Such issue-by-issue reports shall include
Publishers’ distribution levels. On-Sale Dates, dealer count,
withholding information and ship/receipt
irregularities.
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6)
|
Wholesaler
Share of Market Report: TWR shall gather Publisher
data and competitive sales data for each issue in each TWR base city
for
competitive titles that Publisher and TWR shall mutually select provide
this data on agreed upon dates.
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7)
|
Class
of Trade Analysis: TWR shall provide a class of trade
analysis for each title one (1) time per calendar year on a date
to be
mutually agreed upon by TWR and
Publisher.
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16