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EXHIBIT 10.6
NETWORK RADIO SALES REPRESENTATION AGREEMENT
THIS AGREEMENT made and entered into this 15th day of November 1996, between
AudioNet, Inc., a Delaware corporation ("Supplier) and Premiere Radio Networks,
Inc., a Delaware corporation ("Representative").
APPOINTMENT AND TERM
1. Supplier appoints Representative as its exclusive national representative
for the sale of network radio broadcast time ("Inventory") to [*] acquired
by Supplier from its Internet services provided to radio stations,
provided, however, that Supplier may sell Inventory to [*] if (i) the
advertisements aired using such Inventory sold by Supplier are not of the
same copy or substantially the same copy as [*] radio commercials aired by
said advertiser, and (ii) such advertisements aired using Inventory sold by
Supplier reference the Internet. The foregoing restriction shall not apply
to advertising copy created as a result of Supplier's collaboration with an
advertiser to create copy which references the Internet for use on
Supplier's Internet services and such copy is thereafter used on the radio.
This Agreement shall be for a period of thirty-six (36) months beginning
January 1, 1997 and ending on December 31, 1999, and shall automatically
renew for successive one-year terms unless terminated by either party on
sixty (60) days notice. All sales of Inventory made by Representative on
behalf of Suppliers to advertisers who are not [*] shall be on a
non-exclusive basis. [*] provided, however, that if Representative fails to
sell at least [*] of the Qualified Inventory available for resale during
the first year of this Agreement by the first anniversary date of the
Agreement, this exclusivity provision and Supplier's obligation [*] shall
automatically terminate. Qualified Inventory shall be defined as contiguous
blocks of at least seven minutes per week of non-preemptible 6:00 a.m. to
12:00 midnight radio station commercial inventory. Subject to the provision
in the first sentence of this Paragraph 1, Supplier shall have the right to
sell any Inventory including Qualified Inventory to [*] in the event it
remains unsold by Representative after fourteen (14) days prior to
broadcast air date.
SCOPE OF SERVICES
2. Representative shall use commercially reasonable efforts to effect national
sales and sell radio broadcast time on the Inventory on terms subject to
the approval of Supplier prior to booking. Supplier agrees to cooperate to
the extent necessary
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with Representative and to supply Representative with all current
information relating to Supplier, including its staff, radio station
affiliations and similar matters necessary to effect such sales.
Representative shall cooperate with Supplier and provide Supplier with
services, facilities and personnel to carry out the terms of this
Agreement.
AREA OF SERVICE
3. Representative shall function under this Agreement in the radio markets of
[*].
COMPENSATION
4. Supplier shall pay Representative a commission for all sales of the
Inventory made by the Representative during the term hereof, including any
extension of this Agreement. The commission paid to Representative shall be
[*] of net revenues provided that in the event of barter sales, (i.e.
non-cash), the commission paid to Representative shall be [*] of the net
barter revenues actually collected by Representative on behalf of the
Supplier from sales of Inventory. Supplier shall have the option to not
participate in any barter sales. "Net revenues" shall be defined as
[*]. The term "net barter revenues" shall mean the [*]. Commissions payable
with respect to net revenues shall be paid in cash; commissions payable
with respect to net barter revenues shall be paid in barter.
Representative shall ▇▇▇▇ and collect on behalf of Supplier, and send
Supplier by the fifteenth of each month following the broadcast month, a
detailed statement of actual commercials broadcast in that broadcast month
along with all amounts collected and accounts receivable credited that are
applicable to the Inventory. Representative shall first deduct from said
collected amounts the commissions due to Representative as determined under
Section 4 above and shall then pay to Supplier an amount equal to the
remainder.
5. [*] Any Commission paid or payable to Representative or any agency with
respect to the sale of such Inventory shall be appropriately adjusted
such that Supplier pays no commissions with respect to the rebates,
credits or refunds.
6. Supplier acknowledges that the network radio inventory is sold in packages
encompassing several programs and services together. Supplier agrees that
the Inventory will be sold in conjunction (packaged) with other program
and/or services inventory. The valuation allocated to the Inventory shall
be based on
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its Arbitron Average Quarter Hour ("AQH") audience contribution to the
package as compared to the audience level of the other inventory packaged
along with it. For example, if the AQH audience level of the Inventory
represents 20% of the total audience of the network on a particular
advertiser buy, then the Inventory shall be allocated 20% of that network
buy. Example: if the Inventory is packaged with PNI inventory, and the
Inventory represents 200,000 of the 1,000,000 total AQH, then the Inventory
shall be allocated 20% of the revenues on that particular buy.
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OTHER PROVISIONS
7. Supplier shall have the right to audit Representative's financial records
concerning this Agreement twice in any twelve month period, upon one week's
written notice, and provided that said audit is conducted during normal
business hours. Representative shall cooperate fully with such audit and
shall make its officers and employees available to the Company's auditors.
8. No waiver by Representative or Supplier shall be effective unless made in
writing and signed by it. No representations are made except as expressly
set forth herein. This is the only Agreement concerning the subject matter
hereof between the parties. It may not be changed or terminated except in
writing signed by both parties.
9. This Agreement shall be binding upon and inure to the benefit of all
successors and assigns of the parties hereto; provided, however, that
neither party shall assign their rights and/or obligations hereunder to any
third party without the prior written consent of the other except for
assignments to entities controlling, controlled by or under common control
with such party, and except in connection with a sale of substantially all
of the assets of the assigning party.
10. This Agreement shall be construed and enforced in accordance with the laws
of the State of New York as if this Agreement were made and to be performed
entirely within New York.
11. The terms of this Agreement shall be held strictly confidential and may not
be disclosed without the prior written consent of both parties.
12. (a) All disputes between the Supplier and Representative arising out of or
in connection with the execution, interpretation and performance of this
Agreement (including the validity, scope and enforceability of this
arbitration provision) shall
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be solely and finally settled by arbitration. The arbitration proceedings
shall be held in New York, New York and shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration
Association ("AAA Rules"). The arbitration shall be governed by the
provisions of the Federal Arbitration Act unless otherwise provided herein,
and shall be conducted by a sole arbitrator appointed by the American
Arbitration Association (the "Arbitrator"). In case of conflict between the
AAA Rules and this Agreement, the provision of this Agreement shall govern.
All arbitrations commenced with respect to this Agreement shall be
consolidated for hearing before a sole Arbitrator as prescribed herein.
(b) If a party hereto determines to submit a dispute for arbitration
pursuant to this Paragraph 12, such party (the "Petitioner") shall furnish
the party with whom it has the dispute (the "Respondent") with a dated,
written statement (the "Arbitration Notice") indicating (i) such party's
intent to commence arbitration proceedings, (ii) such nature, with
reasonable detail, of the dispute, and (iii) the remedy such party will
seek. A copy of the Arbitration Notice shall be concurrently provided to
the AAA along with a copy of this Agreement and a request to appoint an
Arbitrator.
(c) At any time within 40 days after the date of the Arbitration Notice,
the Petitioner and Respondent can make discovery requests of the other in
any form permitted under the United States Federal Rules of Civil
Procedure. The recipient of a discovery request shall have 10 days after
the receipt of such request to object to any or all portions of such
request and shall respond to any portions of such request not so objected
to within 20 days of the receipt of such request. All objections shall be
in writing and shall indicate the reasons for such objections. The
objecting party shall insure that all objections and responses are received
by other parties within the above time periods. Any party seeking to compel
discovery following receipt of an objection shall file with the other
parties and the Arbitrator a motion to compel, including a copy of the
initial request and the objection. The Arbitrator shall allow five days for
responses to the motion to come before ruling. Claims of privilege and
other objections shall be determined as they would be in United States
federal court in a case applying New York law.
(d) Hearings must commence no later than the 83rd day following the date of
the Arbitration Notice and such hearings shall be conducted for no more
than five days, unless otherwise agreed by the parties or ordered by the
Arbitrator.
(e) Each of the Petitioner and Respondent shall submit a brief, outlining
each party's claim for relief or defense to any claim, to the other and to
the Arbitrator on or before the 10th day following the last day of the
hearing. Reply briefs must be exchanged and submitted to the Arbitrator on
or before the 20th day following the last day of the hearing. The
Arbitrator shall render the decision that, in its judgment, is most
consistent with the terms of this Agreement and applicable law.
(f) The foregoing time periods and procedural steps may be modified or
extended by agreement of the parties or by the Arbitrator in its discretion
to the extent it deems necessary to prevent fundamental unfairness;
provided that at all times the Arbitrator shall be mindful of the parties'
desire for the most expeditious possible
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resolution of their disputes; and provided further, that a final decision
of the Arbitrator shall be rendered within 120 days of the Arbitration
Notice.
(g) To the extent permissible under applicable law, the parties hereto
agree that the award of the Arbitrator shall be final and shall be subject
only to the judicial review permitted by the Federal Arbitration Act.
Judgment on the arbitration award may be entered and enforced in any court
having jurisdiction over the parties or their assets. It is the intent of
the parties that the arbitration provisions hereof be enforced to the
fullest extent permitted by applicable law. In no event shall any demand
for arbitration be made after the date that institution of legal or
equitable proceedings based upon the claim, dispute or other matter would
be barred by the applicable statute of limitations or otherwise barred by
this Agreement.
(h) The Arbitrator may not award punitive damages and the parties hereby
irrevocably waive any right to punitive damages.
13. Notices shall be sent to each party as follows:
TO SUPPLIER TO REPRESENTATIVE
AudioNet, Inc. Premiere Radio Networks, Inc.
Attention: ▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Agreed to and Accepted:
AudioNet, Inc. Premiere Radio Networks, Inc.
By /s/ ▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer ▇▇▇▇▇ ▇▇▇▇▇▇, President
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EXHIBIT A
[PREMIERE LETTERHEAD]
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