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This Advertising Agency Agreement
("Agreement") is made and effective this [Date],
by and between [Advertiser]
("Advertiser") and [Agency]
("Agency").
Agency is in the business of providing
advertising agency services for a fee.
Advertiser desires
to engage Agency to render, and Agency desires to render to Advertiser,
certain advertising agency services, all as set forth.
NOW, THEREFORE, in
consideration of the mutual agreements and covenants herein contained
the parties hereto agree as follows:
1. Engagement.
Advertiser engages
Agency to render, and Agency agrees to render to Advertiser, certain
services in connection with Advertiser's planning, preparing and
placing of advertising for certain of Advertiser's products as follows:
A. Analyze Advertiser's
current and proposed products and services and present and potential
markets.
B. Create, prepare
and submit to Advertiser for its prior approval advertising ideas
and programs.
C. Prepare and submit
to Advertiser for its prior approval estimates of costs and expenses
associated with proposed advertising ideas and programs.
D. Design and prepare,
or arrange for the design and preparation of, advertisements.
E. Perform such other
services as Advertiser may request from time to time such as, but
not limited to, direct mail advertising preparation, speech writing,
publicity and public relations work, market research and analysis.
F. Order advertising
space, time or other means to be used for publication of Advertiser's
advertisements, at all times endeavoring to secure the most efficient
and advantageous rates available.
G. Proof for accuracy
and completeness of insertions, displays, broadcasts, or other forms
of advertisements.
H. Audit invoices for
space, time, material preparation and charges.
2. Products.
Agency's engagement
shall relate to the following products and services of Advertiser:
[Products]
3. Exclusivity.
Agency shall be the
[Exclusive or Non-Exclusive] advertising agency in
the United States for Advertiser with respect to the products described
in Section 2 above.
4. Compensation.
A. Agency shall receive
an amount equal to [Media Commission Rate]
of the gross charges levied by media for advertising placed therewith
by Agency pursuant to this Agreement; and [Non-
Media Commission Rate] after volume discount, of the
charges of suppliers of services or properties, such as finished
art, comprehensive layouts, type composition, photostats, engravings,
printing, radio and television programs, talent, literary, dramatic
and musical works, records and exhibits, purchased by Agency on
Advertiser's authorization during the term of this Agreement; provided
that:
(i) No percentage
will be added to Agency charges for packing, shipping, express,
postage, telephone, telex, fax, travel expenses and other out of
pocket expenses of Agency personnel; and
(ii) Agency's commission
for outdoor advertising will be the standard rate allowed advertising
agencies when such rate is less than [Outdoor
Advertising Commission Rate].
B. For those items
where Agency is not compensated on a commission basis, Advertiser
shall pay Agency on an hourly basis for services provided hereunder.
The rate will be determined by the type of services provided and
the person or persons providing such services, but in no event shall
the rate exceed [Maximum Hourly Rate] per hour. Advertiser may elect
in advance to be charged on this hourly rate basis. If Advertiser
fails to notify Agency of its choice, it shall be presumed that
Advertiser elected to be charged on an hourly rate basis.
C. In the event that
Agency undertakes, at Advertiser's request subject to Advertiser's
prior approval, special projects such as those described in Section
1.F above, Agency shall prepare an estimate of total charges for
any such special project, including therein any charges for materials
or services purchased from outside sources. In the event that Advertiser
elects to proceed with the special project based upon Agency's estimated
cost, Agency shall perform the services with respect to such special
project at its estimated cost, subject to modification as mutually
agreed by the parties.
D. For any special
project or other services provided by Agency pursuant to this Agreement
upon which the parties have not agreed as to charges, Advertiser
shall pay Agency at its regular hourly rates, not to exceed [Dollar
Amount] per hour.
E. Advertiser shall
not be obligated to reimburse Agency for any travel or other out-of-pocket
expenses incurred in the performance of services pursuant to this
Agreement unless expressly agreed by Advertiser in advance.
5. Billing.
A. Agency shall invoice
Advertiser for all media costs where possible in advance of Agency's
payment date to allow for prepayment by the Advertiser so that Advertiser
may receive the benefit of any available prepayment or similar discount.
For any media purchase or service for which Agency is not entitled
to a commission, Agency shall ensure that the charges to Advertiser
are net of all agency commissions and discounts.
B. Charges for production
materials and services shall be billed by Agency upon completion
of the production job or, if cash discounts are available, upon
receipt of the supplier's invoice.
C. On all outside purchases
other than for media, Agency shall attach to the invoice proof of
the supplier's charges.
D. All cash discounts
on Agency's purchases including, but not limited to, media, art,
printing and mechanical work, shall be available to Advertiser,
provided that Advertiser meets Agency's requisite billing terms
and there is no outstanding indebtedness of Advertiser to Agency
at the time of the payment to the supplier.
E. Rate or billing
adjustments shall be credited or charged to Advertiser on the next
following regular invoice date or as soon as otherwise practical.
F. Invoices shall be
submitted in an itemized format and shall be paid by Advertiser
within thirty (30) days of the invoice date.
6. Competitors.
During the term of
this Agreement, Agency [May Not]
accept employment from, render services to, represent or otherwise
be affiliated with any person, firm, corporation or entity in connection
with any product or service directly or indirectly competitive with
or similar to any product or service of Advertiser with respect
to which the Agency is providing any service pursuant to this Agreement.
7. Cost Estimates.
Agency shall not commence
work on any project pursuant to this Agreement without first estimating
costs for preparation, including copy, service, layout, art, engraving,
typography, processing, paste up and production. After determining
the estimated cost, completion of the work shall be subject to Advertiser's
prior approval.
8. Audit Rights.
Agency agrees that
following reasonable prior notice any and all contracts, agreements,
correspondence, books, accounts and other information relating to
Advertiser's business or this Agreement shall be available for inspection
by Advertiser and Advertiser's outside accountants, at Advertiser's
expense.
9. Ownership
and Use.
A. Agency shall insure,
to the fullest extent possible under law, that Advertiser shall
own any and all right, title and interest in and to, including copyrights,
trade secret, patent and other intellectual property rights, with
respect to any copy, photograph, advertisement, music, lyrics, or
other work or thing created by Agency or at Agency's direction for
Advertiser pursuant to this Agreement and utilized by Advertiser.
B. Upon termination,
Advertiser agrees that any advertising, merchandising, package,
plan or idea prepared by Agency and submitted to Advertiser (whether
submitted separately or in conjunction with or as a part of other
material) which Advertiser has elected not to utilize, shall remain
the property of Agency, unless Advertiser has paid Agency for its
services in preparing such item. Advertiser agrees to return to
Agency any copy, artwork, plates or other physical embodiment of
such creative work relating to any such idea or plan which may be
in Advertiser's possession at termination or expiration of this
Agreement.
C. Materials and advertisements
created by Agency pursuant to this Agreement may be used by Advertiser
outside the United States without additional compensation, provided
that Advertiser shall be responsible for any additional expense
associated with such use, such as charges for translation and amounts
due talent. Agency's obligations in Section 10.A. above shall not
apply with respect to any such foreign use.
10. Indemnification
and Insurance.
A. Agency shall indemnify
and hold Advertiser harmless with respect to any claims, loss, suit,
liability or judgment suffered by Advertiser, including reasonable
attorney's fees and costs, based upon or related to any item prepared
by Agency or at Agency's direction, including, but not limited to,
any claim of libel, slander, piracy, plagiarism, invasion of privacy,
or infringement of copyright or other intellectual property interest,
except where any such claim arises out of material supplied by Advertiser
and incorporated into any materials or advertisement prepared by
Agency. Agency agrees to procure and maintain in force during the
term of this Agreement, at Agency's expense, an advertising agency
liability policy or policies having a minimum limit of at least
[Insurance Policy Amount] ,
naming Advertiser as an additional insured and loss payee under
such policy or policies.
B. Advertiser agrees
to indemnify and hold Agency harmless with respect to any claims,
loss, liability, damage or judgment suffered by Agency, including
reasonable attorney's fees and court costs, which results from the
use by Agency of any material furnished by Advertiser or where material
created by Agency or at the direction of Agency subject to the indemnification
in subsection A. above is materially changed by Advertiser. Information
or data obtained by Agency from Advertiser to substantiate claims
made in advertising shall be deemed to be "material furnished by
Advertiser to Agency".
C. In the event of
any proceeding, litigation or suit against Advertiser by any regulatory
agency or in the event of any court action or other proceeding challenging
any advertising prepared by Agency, Agency shall assist in the preparation
of the defense of such action or proceeding and cooperate with Advertiser
and Advertiser's attorneys.
11. Term.
The term of this Agreement
shall commence on [Start Date]
and shall continue in full force and effect until terminated by
either party upon at least ninety (90) days prior written notice,
provided that in no event (except breach) may this Agreement be
terminated prior to [Earliest End Date].
The rights, duties and obligations of the parties shall continue
in full force during or following the period of the termination
notice until termination, including the ordering and billing of
advertising in media whose closing dates follow then such period.
12. Rights Upon
Termination.
A. Upon termination
of the Agreement, Agency shall transfer, assign and make available
to Advertiser all property and materials in Agency's possession
or subject to Agency's control that are the property of Advertiser,
subject to payment in full of amounts due pursuant to this Agreement
B. Upon termination,
Agency agrees to provide reasonable cooperation in arranging for
the transfer or approval of third party's interest in all contracts,
agreements and other arrangements with advertising media, suppliers,
talent and others not then utilized, and all rights and claims thereto
and therein, following appropriate release from the obligations
therein.
13. Default.
In the event of any
default of any material obligation by or owed by a party pursuant
to this Agreement, then the other party may provide written notice
of such default and if such default is not cured within ten (10)
days of the written notice, then the non-defaulting party may terminate
this Agreement.
14. Notices.
Any notice required
by this Agreement or given in connection with it, shall be in writing
and shall be given to the appropriate party by personal delivery
or by certified mail, postage prepaid, or recognized overnight delivery
services.
If to Advertiser:
[Advertiser]
[Advertiser's
Address]
If to Agency:
[Agency]
[Agency's
Address]
15. Headings.
Headings used in this
Agreement are provided for convenience only and shall not be used
to construe meaning or intent.
16. Final Agreement.
This Agreement terminates
and supersedes all prior understandings or agreements on the subject
matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.
17. Governing
Law.
This Agreement shall
be construed and enforced in accordance with the laws of the state
of [State of Governing Law].
IN WITNESS WHEREOF,
the parties hereto have executed this Advertising Agency Agreement
as of the date first above written.
[Advertiser]
Signature Block [Agency]
Signature Block
[Advertiser]
Signature Block [Agency]
Signature Block
[Advertiser]
Signature Block [Agency]
Signature Block
[Advertiser]
Signature Block [Agency]
Signature Block
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