Onsert Agreement - American Society for Psychoprophylaxis In Obstetrics Inc. (ASPO/Lamaze) and Lifetime Institute for Family Education inc.
ONSERT AGREEMENT
This Onsert Agreement ("Agreement") is entered into between the
AMERICAN SOCIETY FOR PSYCHOPROPHYLAXIS IN OBSTETRICS, INC., a New York
corporation ("ASPO/Lamaze") and LIFETIME INSTITUTE FOR FAMILY EDUCATION, INC., a
Connecticut corporation ("Lifetime") effective as of December 7, 1992.
In consideration of the mutual promises contained herein, and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree to cooperate in an onsert program in accordance with the
terms and conditions set forth below.
1. Lifetime Responsibilities.
(a) Lifetime will solicit manufacturers for a program (the "Onsert
Program") whereunder onserts (as defined herein) will be included in connection
with Lamaze Parents' Magazine or any supplements thereto (collectively "LPM")
distributed by Lifetime. The term "Onserts" as used herein shall mean product
sheets, product brochures, coupons, samples or other advertising any of which is
distributed with LPM outside the magazine either within a shrink wrap around the
magazine or within a separate bag. In addition, there shall be included within
the definition of "Onserts" any product sheets, product brochures, coupons,
samples or other advertising, which is inserted (but not bound) within the LPM
(collectively "inserts"), but only to the extent that such inserts exceed two
(2) in number.
(b) Lifetime will charge manufacturers a fee, based on industry
standards within the reasonable determination of Lifetime. Such fees shall be
disclosed to ASPO/Lamaze.
(c) Lifetime shall be responsible for billing and collecting said
fees from manufacturers on a timely basis.
(d) Lifetime will provide ASPO/Lamaze with a detailed report of all
Onsert Program revenues.
(e) ASPO/Lamaze shall have the right to pre-approve any and all
participating manufacturers prior to their inclusion in the program, said
approval to be governed by Paragraph 4 hereinbelow.
(f) Lifetime shall pay ASPO/Lamaze a license fee in accordance with
Paragraph 3 hereinbelow.
(g) Lifetime shall bear all expenses in connection with the
materials, printing and mailing of the onserts.
(h) Lifetime shall indemnify ASPO/Lamaze and its officers,
directors, committee members, and staff for any and all losses and expenses
(including without limitation reasonable attorneys' fees) incurred by any of
them as a result of the inclusion of the Onserts with LPM.
<PAGE>
2. ASPO/Lamaze Rights and Responsibilities.
(a) ASPO/Lamaze will provide its name and goodwill to the Onsert
Program, subject to ASPO/Lamaze approval of manufacturers, products and onserts.
Neither Lifetime nor participating manufacturers shall state or imply that the
manufacturers or the products themselves have been approved or endorsed by
ASPO/Lamaze. Lifetime's contracts with participating manufacturers shall
prohibit such manufacturer from claiming or implying any ASPO/Lamaze or Lamaze
approval or endorsement of the manufacturer or its product(s).
(b) Where ASPO/Lamaze has approved a participating manufacturer in
accordance with the procedures hereinbelow, it shall cooperate with Lifetime by
speaking with such manufacturer, upon Lifetime request, to explain the mission
and activities of ASPO/Lamaze.
(c) ASPO/Lamaze shall be paid a license fee in accordance with
Paragraph 3 hereinbelow.
(d) ASPO/Lamaze shall have the right to approve or disapprove of any
manufacturer (and product) participating in the Onsert Program, as well as the
onsert itself, in accordance with Paragraph 4 hereinbelow.
(e) ASPO/Lamaze shall have the right once every six months during
reasonable business hours and upon at least one week's notice to Lifetime, to
review all Lifetime books and records necessary to confirm the accuracy of the
license fees owed and paid to ASPO/Lamaze hereunder.
3. Fees and Payments.
(a) Lifetime shall pay to ASPO/Lamaze a license fee equal to six
percent (6%) of the gross revenue received by Lifetime from the Onsert Program.
Such gross revenue shall include all revenue received by Lifetime from the
advertiser for (i) the inclusion of the Onserts with LPM, (ii) any responses
returned by recipients of the Onserts, and (iii) any coupons, samples or other
advertising materials sent to such recipients as a result of their responses.
(b) Where a manufacturer has placed advertising in LPM (or other
publication or video through Lifetime) in addition to the Onsert to be included
with LPM, Lifetime shall make a fair and reasonable allocation of revenue
received from such manufacturer for magazine (or such other publication or
video) advertising as opposed to Onserts, and such allocation shall be disclosed
to ASPO/Lamaze.
(c) ASPO/Lamaze shall only be entitled to a license fee based upon
gross receipts actually received by Lifetime.
(d) Lifetime shall pay license fees to ASPO/Lamaze for each Onsert,
within thirty (30) days of Lifetime's receipt of the manufacturers' payment
attributable to a particular Onsert(s).
2
<PAGE>
4. ASPO/Lamaze Approval of Participating Manufacturers, Products and
Onserts.
(a) ASPO/Lamaze will have the right to approve or reject all
participating manufacturers, products, and/or onserts in accordance with this
Paragraph 4. The approval process will be as follows:
i) Lifetime will submit to ASPO/Lamaze a list of potential
participating manufacturers and covered products, which
Lifetime believes are appropriate for inclusion in the
program. Lifetime will use as a guide, the types of
sponsors who have been included in LPM. Additions to
the list may be made at any time prior to finalization
of each issue of LPM.
ii) ASPO/Lamaze shall notify Lifetime of approval or
rejection within ten (10) days of its receipt of such
request. ASPO/Lamaze shall use essentially the same
criteria which it used for judging the acceptability of
advertisements in LPM when ASPO/Lamaze owned such
magazine. ASPO/Lamaze will not unreasonably withhold
approval. However, ASPO/Lamaze does have the right to
withhold approval of any manufacturer or product where
ASPO/Lamaze determines that such manufacturer and/or
product are clearly offensive, unsafe or unsound,
misleading, or contrary to the philosophy, standards or
mission of ASPO/Lamaze.
iii) ASPO/Lamaze will have the right to review and approve
any statements or claims made on or in connection with
Onserts. All such Onserts and statements will be
presented to ASPO/Lamaze, and ASPO/Lamaze shall either
approve or reject such Onserts and statements within
ten (10) days of ASPO/Lamaze's receipt of same. Again,
ASPO/Lamaze may not unreasonably withhold approval, but
may withhold approval for the same grounds set out
above for withholding approval of manufacturers or
products.
5. Funding and Expenses.
Lifetime will absorb all its start up and ongoing expenses related to
Onsert sales, plus all its costs associated with the production, duplication and
distribution of such Onserts.
6. Term.
This contract will be effective for five (5) years from the effective
date hereof; except that Lifetime may terminate this contract earlier if it
determines that the Onsert Program is not economically feasible. In addition, in
the event that all of the stock in Lifetime or all or substantially all of the
assets of Lifetime are transferred to an Unrelated Person or Unrelated Entity,
either party may terminate this Agreement within thirty (30) days of such
transfer. Lifetime shall give ASPO/Lamaze prior written notice of such a
transfer. An Unrelated Person is such if neither he or she nor any of his or her
family members has a direct or indirect ownership interest in Lifetime in excess
of five percent (5%). An Unrelated Entity is such if neither it nor
3
<PAGE>
Lifetime have a direct or indirect ownership interest in the other in excess of
five percent (5%) and if there is no common ownership between such entity and
Lifetime in excess of five percent (5%).
In the event of termination or expiration of this contract, ASPO/Lamaze
shall continue to be paid license fees based on gross revenues received by
Lifetime attributable to the Onsert Program. During the term of this Agreement
and in the event of termination or expiration of this Agreement, as long as the
August 2, 1990 Loan/Activity Agreement and the August 2, 1990 LPM Agreement
between ASPO/Lamaze and Lifetime continue in effect, neither Lifetime nor
ASPO/Lamaze shall engage in any similar onsert program for consumer-oriented
publications, except within each other.
7. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of
Connecticut.
(b) Any disputes under this Agreement shall be submitted to
arbitration in Philadelphia, Pennsylvania in accordance with the rules of the
American Arbitration Association.
(c) This Agreement shall not be assignable by either party except
that ASPO/Lamaze may assign its rights and obligations under this Agreement to a
controlled subsidiary thereof for tax purposes.
(d) This Agreement is the sole understanding between the parties
concerning the Onset Program, and may only be modified by a writing signed by
both parties.
AMERICAN SOCIETY FOR PSYCHOPROPHYLAXIS
AND OBSTETRICS, INC.
Date: 12/9/92 By: /s/ Judith Lothian
---------------------------- -----------------------------------
Title: President
-----------------------------------
LIFETIME INSTITUTE FOR FAMILY
EDUCATION, INC. (Successor in interest to
Medical Communications Corporation)
Date: 12/7/92 By: /s/ David Diamond
---------------------------- -----------------------------------
Title: President
-----------------------------------
4