INDEPENDENT MARKETING AND SALES REPRESENTATIVE AGREEMENT
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This Agreement is made and entered into this 29th day of February, 1996, by
and between CarroSELL, Inc. (the "Company") and Transportation Media Inc.
("TMI").
RECITALS:
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A. The Company has developed a proprietary baggage claim conveyor belt
display system known as CarroSELL(TM) (the "Product").
B. TMI owns and operates the static display advertising concessions at
many of the country's major airports and has many years of experience in
establishing and selling advertising through various media at airports.
C. The Company wishes to appoint TMI as an authorized United States
national marketing representative to assist it in placing its Product in various
airports, and, as its exclusive United States national sales representative, to
sell advertising space thereon, and TMI is willing to provide such services to
the Company, all on the terms and conditions set out herein.
AGREEMENTS:
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Now Therefore, in consideration of the premises and the mutual promises
contained herein, the parties agree as follows:
1. Appointment and Business Territory. The Company hereby appoints TMI,
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and TMI hereby agrees, to act for the Company as an authorized United States
national marketing and sales representative for (i) the Product, having the
exclusive right to promote the Product's introduction at TMI airports (as
defined below), and (ii) sales of advertising space on installed Product systems
("Advertising"), having the exclusive right to solicit and sell Advertising to
National Accounts and their advertising agencies. For these purposes, "National
Accounts" means entities having or representing other entities that have control
or authority over a national advertising budget for a product or service that is
simultaneously distributed in more than one (1) regional market. The foregoing
notwithstanding, in the event that the Product is installed at any non-TMI
Airport, TMI shall only have such rights to solicit and sell Advertising as the
Company has, but to that extent, TMI will have the exclusive rights provided for
above with respect to National Accounts. At all times hereunder TMI shall be an
independent contractor to the Company and no other relationship, such as
employer-employee, partnership, joint venture or otherwise, is intended.
2. Terms of Sale. All sales of Advertising shall be at such prices and on
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such terms as shall be established by and be acceptable to the Company, after
consultation with TMI. TMI shall have the authority to accept contracts in the
name and on behalf of the Company for sales of Advertising, to bill and collect
for all
such Advertising and to remit collected proceeds of all such billing (net of
TMI's commissions) to the Company and applicable advertising agencies. TMI will
use reasonable commercial efforts to collect amounts due for sales of
Advertising, but shall bear no ultimate credit responsibility for uncollected
amounts due from advertisers.
3. Responsibilities of TMI. TMI's duties under this Agreement shall be as
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follows: (a) TMI will use its best commercial efforts to adequately promote
sales of Advertising within the United States to National Accounts on a
continuing basis, in accordance with good business practices, and (b) TMI will
use its best commercial efforts to secure the introduction of the Product at the
following airports currently served by TMI-operated concessions: Chicago/O'Hare,
Atlanta/Hartsfield, Newark and Denver International, and all future airports
served by TMI (referred to herein as "TMI Airports"), as a subcontractor to TMI
under the terms of those concessions.
TMI acknowledges that the terms on which the Company is offered the
opportunity to participate as a subcontractor to TMI at TMI Airports must be
economically acceptable to the Company in its sole discretion.
4. Compensation. TMI shall be compensated for sales made under the terms
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of this Agreement as follows: For each initial contract of sale of Advertising
made to any advertiser, TMI shall receive 25% of the total invoice price of the
sale to the advertiser, excluding agency commissions and taxes, paid by the
advertiser with respect to such sale (the "Commission Base"); and for each
subsequent contract for sale of Advertising to any such advertiser, TMI shall
receive 20% of the Commission Base. Commissions due with respect to accounts
billed and collected by TMI may be deducted and retained by TMI as provided for
in paragraph 3, above. Commissions due with respect to collections made by the
Company shall be paid on a monthly basis, no later than the tenth (10th) day of
the calendar month following the Company's receipt of payments constituting part
of the Commission Base.
The foregoing notwithstanding, the parties acknowledge the Company's
relationship with certain "house accounts" with which it currently has contracts
for sale of Advertising. These "house accounts" are: MCI, Sky-Tel, Doubletree,
Avis, Samsonite and Citibank. TMI shall have no responsibility for initial
sales activities with respect to these "house accounts," but shall be
compensated for the initial exclusion of those "house accounts" from its
exclusive authority hereunder by being entitled to receive compensation at the
rate of 10% of the Commission Base derived from all contracts for sale of
Advertising heretofore made by the Company with any such advertiser.
In addition, exclusive sales responsibility for each of these "house
accounts" shall be turned over to TMI, and TMI shall be entitled to receive
commissions at the rate of 20% of the
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Commission Base from all subsequent contracts for sale of Advertising entered
into with such advertisers. Upon renewal or extension of existing contracts or
execution of new contracts, such advertisers will no longer be referred to as
"house accounts."
Further, the Company has made sales contacts with various advertisers who
are customers or clients of TMI at other venues or through other media. The
Company will turn over exclusive sales responsibility for these advertisers to
TMI, and TMI shall receive a commission at the rate of 20% of Commission Base
for all Advertising sales made to such advertisers.
The Company has also initiated sales contacts with various advertisers who
are not customers of TMI. The Company shall retain initial sales responsibility
for those accounts, and if sales contracts are consummated, TMI shall be
compensated, and assume subsequent responsibility, therefore to the same extent
as provided for "house accounts" above.
5. Incentive Equity Compensation. As an additional incentive to TMI, TMI
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will be issued 10,000 shares of the common capital stock of the Company's
parent, Continental Capital Corporation. Half of those shares will be issued
concurrently with the execution of this Agreement and the balance will be issued
on the first anniversary of this Agreement. TMI acknowledges that the shares
will be issued as restricted stock under state and federal securities laws and
TMI will agree to hold them pursuant to applicable restrictions. In addition to
the foregoing shares, TMI will be issued rights to purchase the following number
of shares, at the prices indicated, at any time during the term of this
Agreement, or any extensions hereof, and for a period of 60 days thereafter,
based on sales of Advertising effected during the initial 18 month term of this
Agreement:
5,000 shares at a strike price of $5.00 will be issued after TMI
sells $500,000 of Advertising, and
an additional 7,000 shares at a strike price of $4.75 will be
issued after TMI sells $1,500,000 of Advertising, and
an additional 9,000 shares at a strike price of $4.50 will be
issued after TMI sells $2,500,000 of Advertising, and
an additional 11,000 shares at a strike price of $4.25 will be
issued after TMI sells $3,500,000 of Advertising, and
an additional 13,000 shares at a strike price of $4.00 will be
issued after TMI sells $4,500,000 of Advertising, and
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an additional 15,000 shares at a strike price of $3.75 will be
issued after TMI sells $5,500,000 of Advertising, and
an additional 17,000 shares at a strike price of $3.50 will be
issued after TMI sells $6,500,000 of Advertising.
For all purposes of this Agreement, TMI shall be deemed to have effected a
"sale" of Advertising hereunder as and when and to the extent of payments
received by the Company for sales of Advertising hereunder. For purposes of the
stock option provisions hereof, TMI will receive credit only for the amount of
those "sales" dollars paid to the Company in the first 18 months of this
Agreement (whether from TMI-generated sales or sales initiated or consummated by
others, including the Company), but will be entitled to receive the sales
commissions provided for above on all "sales" contract dollars, whenever paid.
6. Company Responsibilities. Company shall have the following
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responsibilities: (a) provide TMI with sales and technical support and
information regarding the Product; (b) provide TMI with a reasonable amount of
literature pertaining to Company and to the Product; (c) inform TMI within a
reasonable time of any changes in the Product, or Advertising prices, terms of
payment, delivery schedules and/or Product Warranties; (d) compensate TMI in
accordance with this Agreement.
7. Term and Termination. This Agreement shall have an initial term of
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five (5) years from its effective date, and such term and each term subsequently
shall be automatically extended for successive one (1) year periods subject to
earlier termination if either party materially fails to perform its obligations
under this Agreement. In such event, this Agreement can be terminated following
thirty (30) days after delivery of a written notice specifying the material
performance failure; provided that the party so notified shall have a thirty
(30) day period to cure any such alleged failure of performance, unless the
failure is not such that can be cured in thirty (30) days and, in that event,
the Agreement will continue in force so long as such party takes steps within
the thirty (30) day period to commence the cure and the cure is in fact effected
within sixty (60) days of the notice.
8. Continuation of Compensation for Product Introduction at TMI Airports.
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Notwithstanding the purported termination of this Agreement for any reason,
including the expiration of the initial term or any extension term hereof, or
without a reason, in the event that TMI has theretofore been successful in
assisting the Company in introducing the Product for use in a TMI Airport, TMI
shall be entitled to receive commissions, at the rates and times provided for
herein, on all sales of Advertising for display in conjunction with the Product
at that TMI Airport for the longer of (i) five (5) years from the date of first
sale of Advertising for display in conjunction with the Product at that TMI
Airport, or
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(ii) the remaining term of TMI's display advertising concession rights at such
TMI Airport.
9. Proprietary Information and Non-Disclosure. Each party acknowledges
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that, in the course of performing its duties under this Agreement, it may obtain
information relating to the other party which is of a confidential and
proprietary nature ("Proprietary Information"). Such Proprietary Information may
include, but is not limited to, products, trade secrets, know-how, inventions,
techniques, processes, computer programs, schematics, data, customer lists,
financial information and sales and marketing plans. The parties and their
respective employees and agents shall at all times, both during the term of this
Agreement and after its termination, keep in trust and confidence all
Proprietary Information and shall not use such proprietary information disclosed
under this Agreement nor shall either party or its employees and agents disclose
any of such proprietary Information to any person without the other party's
prior written consent. Each party acknowledges that any such Proprietary
Information received by such party shall be received as a fiduciary of such
other party. Each party further agrees to immediately return to the other party
all Proprietary Information in such party's possession, custody or control in
whatever form held (including all copies of all written documents relating
thereto) upon termination of this Agreement or at any time, or from time to
time, upon the request of such other party.
10. Amendment and Assignment. This Agreement may be amended only in writing
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and only upon mutual consent of the parties. The terms and conditions of any
order placed through TMI as may conflict in whole or in part with the
provisions of this Agreement shall be of no force and effect whatsoever, and the
provisions of this Agreement shall be controlling in any such instance. This
Agreement may not be assigned by either party without the prior written consent
of the other.
11. Severability. If any term provision, covenant or condition of this
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Agreement is held by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of the provisions of this Agreement shall continue
in full force and effect and shall not be affected, impaired or invalidated in
any way.
12. Governing Law. The parties acknowledge that this Agreement has been
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made in the State of California and shall be governed and construed in
accordance with the laws of said State.
13. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement or the breach of this Agreement shall be settled by arbitration
at the offices of Company in accordance with the then-existing rules of the
American Arbitration Association, provided, however, that the arbitrator shall
not have the authority to change or revise any decision made by Company where,
by the terms of this Agreement, Company has been given sole discretion and
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provided further, that judgment upon the award rendered may be entered in any
court having appropriate jurisdiction.
14. Attorney's Fees. If any legal action is necessary to enforce the terms
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of this Agreement, the prevailing party shall be entitled to reimbursement of
reasonable attorney's fees in addition to any other relief to which he or it may
be entitled.
15. Notice. All communications, notices and demands of any kind which
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either party may be required or may desire to give or serve upon the other party
shall be made in writing and be delivered in person or by facsimile transmission
confirmed with a written notice mailed within one (1) day by, or by notice given
by, first class certified mail, postage prepaid, return receipt requested.
Notice shall be considered given when delivered in person or when transmitted by
facsimile or on the fifth (5th) day after being deposited in the United States
mail. Notices shall be addressed as follows unless either party gives notice to
the other party of a change of address:
CarroSELL, Inc. Transportation Media, Inc.
315 First Street, Suite U-190 710 North Dearborn Street
Encinitas, CA 92024-3555 Chicago, IL 60610-3818
Fax No.: (619) 632-8069 Fax No.: (312) 642-7378
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
CarroSELL, Inc. Transportation Media, Inc.
By: /s/ Paul Donner By: /s/ Tamee V. Riley
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Paul Donner, President Tamee V. Riley, President
CONFIRMATION, ACCEPTANCE AND AGREEMENT
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The undersigned, Continental Capital Corporation, being the parent
corporation of CarroSELL, Inc., a party to the foregoing Agreement, will derive
significant benefit from the existence and performance of the foregoing
Agreement and therefore, confirms, acknowledges and agrees to perform such
obligations as may be necessary in order to issue the shares and options, and
accept performance of option exercises, as are provided for in the foregoing
Agreement. The undersigned represents and warrants to Transportation Media, Inc.
that the shares and options provided for above ar duly authorized and available
for issuance and all corporate action necessary to effect such authorization has
been taken. The undersigned acknowledges that this undertaking constitutes a
significant portion of the inducement for Transportation Media Inc. to enter
into the foregoing Agreement and that Transportation Media Inc. is a direct
beneficiary of this
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undertaking and may look directly to Continental Capital Corporation for its
performance.
IN WITNESS WHEREOF, the undersigned has joined in and executed the
foregoing Agreement for purposes of confirming the foregoing this 29th day of
February, 1996, by signature of its duly authorized officer.
Continental Capital Corporation
By: /s/ SIGNATURE ILLEGIBLE
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Title: Chairman
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