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MUTUAL SALES REPRESENTATION AGREEMENT

Sales Agreement

MUTUAL SALES REPRESENTATION AGREEMENT | Document Parties: GLOBAL TRAFFIC NETWORK, I | Metro Networks Communications, Limited Partnership | Canadian Traffic Network ULC | Metro | CTN You are currently viewing:
This Sales Agreement involves

GLOBAL TRAFFIC NETWORK, I | Metro Networks Communications, Limited Partnership | Canadian Traffic Network ULC | Metro | CTN

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Title: MUTUAL SALES REPRESENTATION AGREEMENT
Governing Law: New York     Date: 12/16/2005
Law Firm: Global Traffic Canada, Inc.    

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                                                                    Exhibit 10.6

 

                                                               EXECUTION VERSION

 

                      MUTUAL SALES REPRESENTATION AGREEMENT

 

     THIS MUTUAL SALES REPRESENTATION AGREEMENT dated November 9, 2005 (this

"Agreement"), is entered into by and between Metro Networks Communications,

Limited Partnership, a Delaware limited partnership, ("Metro") and Canadian

Traffic Network ULC, an Alberta business corporation (the "CTN"). Each of Metro

and CTN are referred to herein as a "party" and collectively, as the "parties."

Capitalized terms used in this Agreement and not defined in the text thereof

shall have the meaning set forth in Annex A hereto.

 

     WHEREAS, each of the parties is a leading provider of traffic and

information reports to its Affiliates conducting its operations, in the case of

Metro, primarily in the United States and, in the case of CTN, primarily in

Canada;

 

     WHEREAS, the parties desire to enter into a mutually agreeable arrangement

to provide them with a significant opportunity to increase their advertising

sales by utilizing the domestic resources of the other party;

 

     WHEREAS, in order to realize such synergies, CTN desires to engage Metro,

and Metro desires to engage CTN, to act as its non-exclusive sales

representative for sales of commercial inventory on the other party's respective

network ("Advertising Time") and for such other services and responsibilities as

specified in this Agreement; and

 

     WHEREAS, each party desires to act as the other's non-exclusive sales

representative upon the terms and provisions and subject to the conditions set

forth herein.

 

     NOW, THEREFORE, for good and valuable consideration, the receipt and legal

adequacy of which is hereby acknowledged, and intending to be legally bound

hereby, the parties agree as follows:

 

     1. ENGAGEMENT. Pursuant to the terms and conditions of this Agreement, each

party hereby agrees to use its reasonable efforts to sell the Advertising Time

of the other party to advertisers whose principal place of business is located

in Seller's Territory during the Term. For purposes hereof, the United States

shall be the territory of Metro for selling CTN's Advertising Time (the "Metro

Territory") and Canada shall be the territory of CTN for selling Metro's

Advertising Time (the "CTN Territory" and with the Metro Territory, the

"Territories"; each, a "Territory"). When a sale involves Advertising Time in

both Territories, such sale shall be referred to as a "Mutual Sale."

 

     2. ACTIVITIES; OBLIGATIONS. Each party hereto agrees that with respect to

its own Territory, it shall undertake the following activities and have the

following responsibilities and obligations:

 

          2.1 It shall use its reasonable efforts to sell Advertising Time in

its Territory.

 

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          2.2 It shall be solely responsible for invoicing its advertisers for

the Advertising Time it sells on a monthly basis, upon the later of (i) 15 days

after the end of the standard broadcast month or (ii) seven (7) days after its

receipt of Affidavits of Performance from Seller, and shall use its commercially

reasonable efforts to collect all amounts due thereunder on an expeditious

basis.

 

          2.3 It alone shall bear full responsibility for any bad debts or

partial payments or other risk of loss resulting from the sale or broadcast of

Advertising Time on its network.

 

          2.4 It shall furnish and retrieve Affidavits of Performance from its

Affiliates for Advertising Time broadcast on its network and provide such

Affidavits of Performance and any other customary documentation reasonably

requested by Seller, to the Seller in such format and at such times as

reasonably requested by Seller.

 

          2.5 All sales of Metro's Advertising Time by CTN in the CTN Territory

("CTN US Sales") shall be subject in all respects to Metro's standard terms and

conditions, as such may be modified from time to time, in the sole discretion of

Metro. Metro may at any time reject any order of a CTN US Sale for any

commercially reasonable reason. Once a CTN US Sale is approved, a confirmation

order setting forth the terms and conditions of such sale, as determined by

Metro in its sole discretion, shall be executed by Metro and Seller.

 

          2.6 All sales of CTN's Advertising Time by Metro in the Metro

Territory ("Metro Canada Sales") shall be subject in all respects to CTN's

standard terms and conditions, as such may be modified from time to time, in the

sole discretion of CTN. CTN may at any time reject any order of a Metro Canada

Sale for any commercially reasonable reason. Once a Metro Canada Sale is

approved, a confirmation order setting forth the terms and conditions of such

sale, as determined by CTN in its sole discretion, shall be executed by CTN and

Seller.

 

          2.7 In addition to the foregoing, when there exists an opportunity for

a Mutual Sale, the parties shall cooperate to the extent practicable to make

such sale. Once the sale is made, each party shall be responsible for such

actions and obligations with respect to its Territory as described herein.

 

     3. COMPENSATION.

 

          3.1. In consideration of the services to be provided by the parties

hereunder, each party shall be compensated with a monthly fee (the "Monthly

Fee") in an amount equal to 15% of Collections. In the case of CTN US Sales, CTN

shall remit to Metro 85% of Collections received by CTN in the CTN Territory in

a standard broadcast month, and retain the balance as its Monthly Fee. In the

case of Metro Canada Sales, Metro shall remit to CTN 85% of Collections received

by Metro in the Metro Territory in a standard broadcast month, and retain the

balance as its Monthly Fee. Within 60 days of each standard broadcast month,

each party shall remit such Collections due to the other party as described in

this Section along with a

 

 

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monthly report detailing its sales of Advertising Time and Collections for such

broadcast month, including any uncollected amounts.

 

          3.2 Notwithstanding the expiration or termination of this Agreement,

if at the end of the Term, any funds are owing to a party but have not yet

collected, Seller shall continue to use its commercially reasonable efforts to

collect such funds and shall remit to the other 85% of the Collections related

to the sale of the other party's Advertising Time which occurred on or prior to

the expiration of the Term. Any advertiser contract for the purchase of

Advertising Time in the Territories entered into during the Term, which extends

beyond the Term, shall be honored by the parties and the parties shall be

compensated their respective Monthly Fee and Collections thereon.

 

          3.3 Except as expressly provided otherwise in this Agreement, each

party shall bear all costs and expenses incurred by it under this Agreement.

 

     4. AUDIT RIGHTS. In order for the parties to confirm compliance by the

other with the terms and provisions of this Agreement, each party shall have the

right, during regular business hours and upon reasonable prior written notice to

the other party, but no more frequently than once during any twelve (12)-month

period, to examine, at the requesting party's sole cost and expense, appropriate

portions of the other party's books and records for the sole purpose of

confirming the performance of the other party's obligations under this

Agreement. If, after any such examination, the requesting party believes it is

entitled to be paid any additional amount by the other party it shall notify the

other party in writing (the "Deficiency Notice"), which notice shall include the

written results of the requesting party's examination, whereupon the parties

shall negotiate in good faith and use their best efforts to resolve the dispute.

If the parties' investigation reveals an underpayment of amount, such amount

shall be paid in full promptly. If such dispute is not resolved within 45 days

after the delivery of the Deficiency Notice, either party may request

non-binding mediation or arbitration prior to pursuing legal action.

 

     5. NON-COMPETE. During the Term, neither CTN, ATN, GTC nor GTN

(collectively, the "CTN Parties") shall compete with Metro or any of its

Affiliated Entities in the United States, including, without limitation, in any

of the following: (i) the management or operation of a traffic, news, weather,

sports, entertainment or other information report gathering or broadcast

service; (ii) soliciting Sponsors and dealing with accounts with respect

thereto; (iii) soliciting Business Affiliates to enter into any contract or

arrangement with any person or entity to provide traffic, news, weather, sports

or other information report gathering or broadcast services; (iv) the sale or

packaging of Competitive Broadcast Advertising Vehicles; or (v) forming or

providing operational assistance to any business or a division of any business

engaged in the foregoing activities. Further, none of the CTN Parties, nor any

of their respective Affiliated Entities, shall (i) sell Advertising Time for any

direct or indirect competitor of Metro or any of its Affiliated Entities or (ii)

permit any of their Advertising Time to be sold directly or indirectly to

Traffic.com, Inc. or its Affiliated Entities or Clear Channel Communications,

Inc. or its Affiliated Entities. Except as set forth above, the parties

acknowledge that CTN generates the majority of its revenue from the sale of

Advertising Time and accordingly, the parties agree that

 

 

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CTN may solicit in the United States and elsewhere sales of Advertising Time to

be broadcast in Canada and that such activity shall not be considered a

restricted activity for purposes of this Section 5.

 

     6. CONFIDENTIALITY.

 

          6.1. Each of the parties shall retain in confidence and not disclose

to any third party any information provided by the other which is designated as

confidential or proprietary ("Confidential Information"). Confidential

Information shall be used by the parties solely with respect to the purposes of

this Agreement. The following information is expressly designated as

Confidential Information: pricing terms; names and identifying information of

existing and potential clients; employee lists; marketing and sales methods and

technologies; sales and expense data; trade secrets; market information;

business plans and fiscal projections.

 

          6.2. Notwithstanding anything herein to the contrary, Confidential

Information shall not include information that (i) is published or otherwise

publicly known at the time of its disclosure or becomes publicly known through

no fault or breach of this Agreement by the party receiving such information

hereunder; (ii) is lawfully received by the receiving party from a third party

who may such information without restriction and owes no fiduciary duty of

confidentiality to the disclosing party; (iii) was already known by the

receiving party prior to its receipt of the information without an obligation of

confidentiality and is provable by documentation to such effect; (iv) is

independently developed by the receiving party without reference or access to

such information; or (v) is required to be disclosed pursuant to any applicable

law, rule or regulation, court order, subpoena or similar judicial or regulatory

process; provided, that, in the case of clause (v), the receiving party shall

give the disclosing party prompt prior notice of the intended disclosure to

provide the disclosing party with the opportunity to seek a protective order or

other appropriate remedy.

 

          6.3. The parties hereto agree that the remedy


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