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EXHIBIT 10.6
ADVERTISING SALES REPRESENTATIVE AGREEMENT
This Advertising Sales Representative Agreement ("Agreement") is made
and entered into as of this 8th day of May, 2001 ("Effective Date"), by and
between NTN Communications, Inc., a Delaware corporation ("COMPANY"), and Baron
Enterprises, Inc., a California corporation ("REPRESENTATIVE").
RECITALS
1. A glossary of terms used with initial capital letters and other
terms defined for purposes of this Agreement is set forth in Exhibit "A" at the
end of this Agreement and is incorporated by reference into the Agreement.
2. COMPANY produces and programs two-way (interactive) entertainment
and operates an interactive network in the United States that broadcasts
multi-player, multi-platform programming to group viewing locations, interactive
cable networks, online services and the Internet.
3. The Advertising Services covered by this Agreement are more
particularly described on Exhibit "A".
4. REPRESENTATIVE desires to serve as independent sales representative
for the Advertising Services.
NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Agreement, the parties agree as follows:
1. Appointment. Subject to the terms and conditions of this Agreement,
COMPANY grants to REPRESENTATIVE the exclusive right to solicit orders for
Advertising Services from: i) advertisers within the non-"food and beverage"
industry other than those identified in Exhibit "B"; from Media; and from any
other advertiser to whom COMPANY grants REPRESENTATIVE solicitation rights in
writing during the term of this Agreement. All contracts for Advertising
Services are subject to, and not valid and binding in the absence of, prior
written approval by an officer of the COMPANY.
2. Relationship of the Parties. REPRESENTATIVE is not an employee,
partner or co-venturer of COMPANY for any purpose, and shall act only as an
independent contractor. REPRESENTATIVE shall adhere to COMPANY's Standards of
Usage for Authorized Representatives. REPRESENTATIVE shall be solely responsible
for the method, manner and means of its performance in compliance with this
Agreement. REPRESENTATIVE is not required to work any particular number of hours
per week or work on any particular days. REPRESENTATIVE does not have any
authority, and shall not hold itself out as having authority, either express or
implied, to make any commitment or representation on behalf of COMPANY or incur
any debt or obligation on behalf of COMPANY.
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3. Term. The term of this Agreement shall be one (1) year, commencing
April 2, 2001, and ending on April 1, 2002, unless sooner terminated in
accordance with this Agreement.
4. Compensation.
4.1 COMPANY shall pay REPRESENTATIVE as compensation a
commission at the Commission Rate applied to Net Advertising Revenues resulting
from Advertising Contracts solicited solely by REPRESENTATIVE and included in
the invoiced amount, and after deducting any discounts, credits or offsets, if
any.
4.2 REPRESENTATIVE shall be granted, as of the April 2, 2001
commencement of the Term, a warrant to purchase 20,000 shares of NTN common
stock at a price of $0.50 per share, exercisable by REPRESENTATIVE for a period
of three (3) years through and including April 1, 2001 (the "Warrant"). The
Warrant shall vest and become exercisable as to one-twelfth (1/12th) of the
total shares of common stock issuable thereunder on the last business day of
April 2001 and each month immediately thereafter, subject to REPRESENTATIVE's
continuous representation of COMPANY as set forth herein.
4.3 If the Agreement is terminated by COMPANY or expires
without renewal, COMPANY shall pay to REPRESENTATIVE a commission at the rate of
fifteen percent (15%) of Net Advertising Revenue received by COMPANY for any
Advertising Contract solicited solely by REPRESENTATIVE, existing at the time of
termination or expiration, that renews during the twelve (12) month period
immediately subsequent to expiration or termination of the Advertising Contract
(the "Surviving Commission"). In the event this Agreement is terminated by
REPRESENTATIVE, no Surviving Commission will be payable hereunder.
4.4 REPRESENTATIVE shall be entitled to no other compensation
or consideration for the performance of REPRESENTATIVE hereunder.
Notwithstanding any other provision of this Agreement, REPRESENTATIVE shall not
be entitled to any compensation from COMPANY in respect of any Advertising
Contracts to the extent that the compensation from the advertiser to the COMPANY
under such Advertising Contract is in the form of in-kind or trade credit and
not cash.
4.5 Commissions shall be paid within thirty (30) days of the
date of any COMPANY invoice for Net Advertising Revenues or upon payment of
invoice, whichever occurs first. With each commission payment, COMPANY will
provide to REPRESENTATIVE a written accounting of all Advertising Contracts for
which commissions are being paid, including the client's name, and the invoice
number, and the rate of commission for each order, and information concerning
any reductions offset against the commissions or billed to REPRESENTATIVE.
4.6 If any advertiser fails to pay an invoice within ninety
(90) days after the date due, then COMPANY may deduct commissions previously
paid on account of such invoiced Advertising Services from currently payable
commissions. If the invoice is subsequently collected, COMPANY shall repay the
commission, less COMPANY's cost of collection.
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4.7 If the Agreement is terminated or expires, the Agreement
shall remain applicable to all Advertising Contracts solicited by REPRESENTATIVE
and accepted by the COMPANY prior to the effective date of termination.
4.8 COMPANY shall pay to REPRESENTATIVE $5,000 per month as a
recoverable advance against commissions to be earned (the "Monthly Advance"), up
to a maximum aggregate of $60,000 per year (the "Annual Draw"). COMPANY shall
pay any and all commissions pursuant to Section 4.1 hereof against the Annual
Draw first; thereafter, the Monthly Advance will resume at such time as the
Monthly Advance times the number of months lapsed since the commission was
earned is equal to or greater than the commission paid. Partial months shall be
prorated. Such advances shall be paid on or before the 15th day of each month in
which due. Any amount paid hereunder shall be offset against any commissions
owed to REPRESENTATIVE. In no event shall advances paid hereunder exceed $60,000
per year. In the event commissions equal or exceed $60,000 during any one (1)
year period, COMPANY shall no longer be obligated to pay to REPRESENTATIVE the
monthly advance pursuant to this Section 4.7. COMPANY reserves the right, in its
sole discretion, to modify the amount of the advance paid against commissions
upon thirty (30) days' prior written notice to REPRESENTATIVE.
5. Duties of REPRESENTATIVE. REPRESENTATIVE shall have the following
duties and obligations:
5.1 REPRESENTATIVE shall exercise its best efforts vigorously
and effectively to market and promote the sale of the Advertising Services.
5.2 REPRESENTATIVE shall cooperate fully with COMPANY in the
development and implementation of a sales and marketing program for the
Advertising Services. Without limiting the foregoing, REPRESENTATIVE shall
advise COMPANY on issues relating specifically to the provision of Advertising
Services to advertisers in the non-"food and beverage" industry and related
industries. REPRESENTATIVE shall provide a written analysis of marketing
opportunities for Advertising Services to the non-"food and beverage" industry
on or before March 1 of each year during which this Agreement is in effect.
5.3 REPRESENTATIVE shall have the authority to employ such
sales personnel as REPRESENTATIVE deems proper to solicit sales for the
Advertising Services. Such sales employees shall be employees of REPRESENTATIVE,
to be paid by REPRESENTATIVE, and not employees or agents of COMPANY. All sales
personnel are subject to the terms and conditions of this Agreement.
REPRESENTATIVE shall maintain in effect Worker's Compensation Insurance in
accordance with applicable law.
5.4 REPRESENTATIVE shall submit the form and content of any
advertising containing COMPANY's name or Marks or containing representations or
depictions of any of the Advertising Services to COMPANY for approval prior to
any release, publication, dissemination or use.
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5.5 REPRESENTATIVE shall at all times act in a manner
consistent with the highest standards of fair trade, fair competition and
business ethics. REPRESENTATIVE shall obtain COMPANY's prior written approval of
all means, methods and materials used by REPRESENTATIVE to promote COMPANY and
Advertising Services to third parties including but not limited to advertisers
and advertising agencies.
5.6 REPRESENTATIVE shall not, nor shall it permit any of its
affiliates to, engage in the marketing, promotion or sale of any services,
regardless of price, which are competitive with or in any manner similar to the
Advertising Services except as authorized in writing by COMPANY. Nothing herein
shall preclude REPRESENTATIVE from marketing or promoting the sale of any
services that are not competitive with the Advertising Services.
5.7 REPRESENTATIVE shall not make any representations or
warranties on behalf of COMPANY.
5.8 REPRESENTATIVE shall bear all its expenses for the
operation of its offices and its activities under this Agreement. COMPANY shall
not be required to furnish any facilities, materials, equipment, supplies or
services to or for REPRESENTATIVE. Without limiting the foregoing, COMPANY may,
without being contractually bound to do so, provide REPRESENTATIVE with such
materials as it may deem in its sole and absolute discretion to be of assistance
to REPRESENTATIVE in the solicitation of Advertising Services pursuant to this
Agreement.
5.9 REPRESENTATIVE shall comply with all applicable laws and
regulations, including employment related laws, and shall obtain and maintain
any and all permits, certificates, licenses or insurance necessary for the
proper conduct of its duties and obligations under this Agreement.
5.10 Upon request, and not less than once per calendar month,
REPRESENTATIVE shall report to COMPANY sales forecasts and other information
relating to pending or projected solicitations for purchases of Advertising
Services.
5.11 Upon request, REPRESENTATIVE shall furnish to COMPANY its
financial statements in sufficient detail to establish REPRESENTATIVE's ability
to perform under this Agreement.
5.12 REPRESENTATIVE shall maintain records of all its
activities with respect to the solicitation of Advertising Contracts and the
performance of Advertising Services and the records shall be open for inspection
and copying by COMPANY upon reasonable notice.
5.13 REPRESENTATIVE shall hold itself out to the public as
being independent of COMPANY.
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6. Cooperation with other Advertising Sales Representatives.
REPRESENTATIVE understands that COMPANY may retain one or more other advertising
sales representatives for purposes of soliciting purchases of Advertising
Services from advertisers who are not in the non-"food and beverage" industry.
REPRESENTATIVE agrees that the terms of this Section 6 shall govern its
relationship with any OTHER REPRESENTATIVE during the term of this Agreement.
7. Sales. COMPANY shall have the sole right to establish prices,
discounts, specifications and terms governing the sale of the Advertising
Services, all of which may be changed from time to time without notice to
REPRESENTATIVE.
8. Credit. COMPANY shall have the sole right of customer credit
approval or credit refusal in all cases.
9. Handling and Acceptance of Offers. REPRESENTATIVE shall submit all
offers to purchase Advertising Services to COMPANY within two (2) business days
following receipt of the offer. All offers shall be subject to acceptance or
rejection by COMPANY, which acceptance or rejection shall be communicated in
writing to REPRESENTATIVE for delivery to the offeror. COMPANY shall use
reasonable efforts to respond to any offers made through REPRESENTATIVE as soon
as practicable. COMPANY reserves the right to refuse any business for any good
faith business reason.
10. Invoices and Collections.
10.1 COMPANY shall submit invoices for the sale of the
Advertising Services directly to the advertiser, with a copy to REPRESENTATIVE
if any commission is payable. COMPANY shall receive all payments from
advertisers and REPRESENTATIVE shall not collect or receive payments unless
specifically authorized in writing by COMPANY to do so. REPRESENTATIVE shall
immediately forward to COMPANY any remittances in any form, which it receives
from advertisers.
10.2 REPRESENTATIVE shall not make any allowances or
adjustments in accounts with advertisers.
11. Intellectual Property.
11.1 REPRESENTATIVE acknowledges that the Marks are owned
solely and exclusively by COMPANY and that nothing contained in this Agreement
shall give to REPRESENTATIVE any right, title or interest in the Marks and that
REPRESENTATIVE's use of the Marks shall inure only to the benefit of COMPANY.
11.2 REPRESENTATIVE shall not use any Marks except for the
purpose of fulfilling its duties under this Agreement and in a manner authorized
in writing by COMPANY. REPRESENTATIVE shall not use the name "NTN Network" or
any of the Marks as part of a trade
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name, service mark, business name, trade style, fictitious business name or
d.b.a. or for other similar purposes.
11.3 REPRESENTATIVE agrees that it shall not seek or obtain
any registration of the Marks (including any colorable imitations, translations
or transliterations thereof) in any name or participate directly or indirectly
in such registration without COMPANY's prior written consent. REPRESENTATIVE
further acknowledges and agrees that if it has obtained or obtains in the future
any such right, title or interest it will do so as an agent and for the benefit
of COMPANY. REPRESENTATIVE further agrees to execute any and all instruments
deemed by COMPANY, and/or its respective attorneys or REPRESENTATIVEs, to be
necessary to transfer such right, title or interest to COMPANY.
11.4 REPRESENTATIVE agrees, during and after the term of this
Agreement, not directly or indirectly (by causing others or otherwise) to take
any action challenging or opposing, or raise any questions concerning, the
validity or ownership of the Marks, or any other trademarks, service marks or
other intellectual property owned by COMPANY.
11.5 REPRESENTATIVE shall be vigilant in detecting any
possible infringements, counterfeiting, or other claims or actions in derogation
of any Marks by any third parties and to inform COMPANY promptly of any such
infringement, claim or action; provided, however, REPRESENTATIVE shall not take
any action on account of such infringement, claim or action and shall have no
right to determine whether any action is taken.
11.6 If REPRESENTATIVE, alone or with others, develops any
written material pertaining to the Advertising Services or COMPANY which may be
copyrighted, it shall assign all right to obtain such copyrights to COMPANY.
REPRESENTATIVE further agrees that such material shall be deemed "made for hire"
under U.S. law, thereby vesting ownership in COMPANY.
11.7 Before or during the term of this Agreement,
REPRESENTATIVE may or will be made aware of confidential information of COMPANY
relating to the Advertising Services, this Agreement, or present or anticipated
products, processes, know-how, customers, sales, business affairs, contractual
arrangements, pricing or other financial information, identities of employees,
agents or REPRESENTATIVE or similar information. During and after the term of
this Agreement, REPRESENTATIVE agrees to maintain in strict confidence and not
to disclose, except to employees of REPRESENTATIVE who must have access to the
information to perform duties hereunder, any confidential information.
REPRESENTATIVE shall take every reasonable precaution to protect the
confidentiality of the confidential information, consistent with the higher of
the standard of care that REPRESENTATIVE exercises with respect to its own
confidential information or the standard of care that an ordinarily prudent
business would exercise to protect its own confidential information. Information
shall be considered confidential if COMPANY so informs REPRESENTATIVE or if
REPRESENTATIVE knew or reasonably should have known that the information was
confidential.
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12. Termination.
12.1 Either party shall have the right to terminate this
Agreement for cause, prior to the expiration of the term hereof, upon the
occurrence of any of the following events:
12.1.1 Breach or default by the other of any of the
terms, obligations, covenants, or representations of warranties under the
Agreement, which is not cured within thirty (30) days following notice of the
breach or default from the non-defaulting party.
12.1.2 The other party is declared insolvent or
bankrupt, or makes an assignment for the benefit of creditors, or a receiver is
appointed, or any proceeding is demanded by, for, or against the other under any
provision of the Federal Bankruptcy Act or any amendment thereof.
12.2 Either party may terminate the Agreement for its sole
convenience by giving to the other party not less than thirty (30) days' notice
in writing of its intention to terminate the Agreement on the date specified in
the notice.
12.3 COMPANY may terminate this Agreement on notice to
REPRESENTATIVE if, in the reasonable and good faith opinion of COMPANY,
REPRESENTATIVE experiences a material adverse change in its organization or
operation which makes it unlikely that REPRESENTATIVE can adequately perform its
duties pursuant to this Agreement.
12.4 Promptly upon expiration of the term or other termination
(for any reason) of this Agreement, REPRESENTATIVE shall immediately and forever
thereafter cease to solicit offers to purchase Advertising Services or to
represent in any manner that it is an advertising sales REPRESENTATIVE of or
otherwise associated with COMPANY. Upon termination, REPRESENTATIVE shall
deliver to COMPANY any promotional, advertising or other materials that relate
to COMPANY or the NTN Network. COMPANY shall not be liable to REPRESENTATIVE for
any loss to REPRESENTATIVE of present or prospective profits from sales,
investments or goodwill resulting from the termination of the Agreement. Section
11 shall survive termination of this Agreement.
13. General.
13.1 REPRESENTATIVE indemnifies, defends and holds COMPANY and
directors, officers, shareholders, employees and agents harmless from and
against any and all liability, loss, cost, damage or expense, including
attorneys' fees and disbursements, arising from REPRESENTATIVE's activities or
REPRESENTATIVE's failure to comply with this Agreement or applicable law.
13.2 Neither party shall be liable to the other party for
damages caused by a delay or failure of performance, other than a failure timely
to pay money, resulting directly or indirectly from any cause beyond its
reasonable control.
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13.3 COMPANY shall be entitled to assign any or all of its
rights or delegate any or all of its duties under this Agreement. REPRESENTATIVE
shall not assign (by operation of law or otherwise) any of its rights or
delegate any of its duties under this Agreement without the prior consent of
COMPANY. This Agreement is binding upon and shall inure to the benefit of the
parties and their respective successors and permitted assignees.
13.4 Any notice, request, demand, or other communication
required or permitted under this Agreement, shall be in writing and shall be
deemed to be properly given (i) if personally delivered; (ii) three (3) days
after deposit in the mails if mailed by certified or registered air mail,
postage prepaid; or (iii) twenty-four (24) hours after being sent by facsimile
with confirmation sent as provided in (ii) above, addressed or transmitted as
set forth on the signature page, or to such other address or facsimile number as
from time to time may be given in the manner permitted above.
13.5 Each number and gender used in this Agreement shall be
deemed to include each other number and gender as the context may require. The
headings contained in this Agreement shall not constitute a part thereof and
shall not be used in its construction or interpretation.
13.6 If any provision of this Agreement is found by any
arbitrator or court of competent jurisdiction to be invalid or unenforceable,
such provision shall be deemed to be modified to the minimum extent necessary to
cause it to be valid and enforceable and its invalidity or unenforceability
shall not affect the other provisions of this Agreement, which shall remain in
full force and effect.
13.7 This Agreement may be amended or modified only by a
writing executed by both parties.
13.8 This Agreement shall be construed and governed in
accordance with the internal laws of the State of California.
13.9 Any controversy or claim arising out of this Agreement,
including claims arising under statutory or common law, or including any
controversy or claim as to arbitrability or rescission, shall be settled by
binding arbitration before a single arbitrator selected through American
Arbitration Association. The arbitration hearing shall be conducted in San Diego
County, California. Any judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The arbitrator shall not
under any circumstances have any authority to award punitive, exemplary, or
similar damages.
13.10 Either party may pursue equitable remedies including
specific performance of this Agreement or preliminary or permanent injunctions
against the breach of this Agreement in any court having jurisdiction thereof
without resort to arbitration. REPRESENTATIVE acknowledges that there will be no
adequate remedy at law for its failure to comply with the terms of this
Agreement and agrees that COMPANY shall have the right to have
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any breach of this Agreement remedied by equitable relief, without the necessity
of COMPANY posting any bond or proving any damages. For this purpose,
REPRESENTATIVE hereby consents to be subject to the jurisdiction of the Superior
Court of the State of California for San Diego County.
13.11 This Agreement contains the entire agreement between the
parties relating to the subject matter of this Agreement. All other oral or
written contracts and agreements (including agreements arising by course of
dealing, trade usage or course of performance) between the parties which relate
thereto are hereby terminated.
13.12 Each party warrants and represents that it has the power
to enter into this Agreement and perform in accordance with the provisions
hereof and that the execution and performance of the Agreement has been duly and
validly authorized in accordance with all applicable laws and governing
instruments.
13.13 No waiver of any breach of any of the provisions of this
Agreement shall be construed to be a waiver of any succeeding breach of the same
or any other provision.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"COMPANY": "REPRESENTATIVE":
NTN COMMUNICATIONS, INC. BARON ENTERPRISES, INC.
A Delaware corporation a California corporation
By /s/ Mark deGorter By /s/ Barry Bergsman
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Mark deGorter Barry Bergsman
Title: President & COO Title: President
The NTN Network
Address: 415 Denslow Avenue
Address: 5966 La Place Court Los Angeles, CA 90049
Carlsbad, CA 92008 Phone:
Phone: (760) 438-7400 Fax:
Fax: (760) 929-5293
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EXHIBIT "A"
GLOSSARY OF TERMS
1. "Advertising Contract" means an agreement between the COMPANY and an
advertiser for the provision of Advertising Services.
2. "Advertising Services" means advertising, sponsorships and other
marketing opportunities produced for and broadcast on the NTN Network to
hospitality venues or ntn.com only but not to commercial online services or
other cable, telephone or satellite networks.
3. "Commission Rate" means 35% of Net Advertising Revenues.
4. "Marks" means "NTN Network" as shown in U.S. Trademark Registration
No. 2,252,866 granted on June 15, 1999, and in related foreign registrations and
applications, each whether alone or in combination, and any other trademarks
used now or in the future with COMPANY services or broadcast content; provided,
however, that the appearance and/or style of the Marks may vary from time to
time as specified by COMPANY in its sole discretion without affecting this
Agreement.
5. "Net Advertising Revenues" means, with respect to any Advertising
Contract, the dollar amount of any invoice submitted by the COMPANY to an
advertiser less (i) the amount of such invoice allocable to any on-site
marketing activities or any research, design, production, mechanical
distribution or related services preformed by COMPANY and (ii) the amount of
fees or commissions payable by the COMPANY to any advertising agency
representing such advertiser which are payable from the invoiced amount.
6. "NTN Network(R)" means the two-way interactive entertainment
programming broadcast by the COMPANY to multi-player group viewing locations in
hospitality venues, the Internet commercial online services and other cable,
telephone and satellite networks.
7. "Standards of Usage" provides that NTN Authorized Representatives
(independent hospitality division sales support and advertising sales
representatives) are responsible for providing their own letterhead, business
cards and other corporate identity materials which must exhibit the
nomenclature, "Authorized Representative", in conjunction with the NTN corporate
logo. The NTN logo may not be used without also using REPRESENTATIVE'S own
company logo to ensure that their business' independent status is apparent to
the customer in all materials. The NTN logo must appear no larger than 1/2" in
width on REPRESENTATIVE'S business cards, letterheads and envelopes.
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ACKNOWLEDGMENT OF RECEIPT
The undersigned hereby acknowledges receipt of a signed copy of the
Advertising Sales Representative Agreement dated as of May 8, 2001 between NTN
Communications, Inc. and Baron Enterprises, Inc.
BARON ENTERPRISES, INC.
By: /s/ BARRY BERGSMAN
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BARRY BERGSMAN
President
Date: 5/9/01
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