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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
