ex10_8.htm


     

    Exhibit
      10.8

    


    Time/Warner

    Retail
      – Sales & Marketing

    A
      Time/Warner Company

    Sports
      Illustrated Building

    135
      West
      50th Street,
      New York, New York 10020-1201

    


    


    AGREEMENT,
      dated as of November 24, 2006, (the “Effective Date”), between
TIME/WARNER RETAIL SALES & MARKETING INC. (formerly knows
      as Warner Publisher Services Inc.), a New York corporation (herein called
“TWR”), and SALON CITY INC., a Nevada corporation (herein
      called “Publisher”).

    


    
      	
              1.

            	
              DEFINITIONS:

            	
              As
                used in this agreement, the following terms shall have the following
                respective meanings:

            


    

    


    
      	
               

            	
              (a)

            	
              “Publications”
                shall mean that certain magazine entitled “Salon City” magazine, which
                shall be published bi-monthly, plus any special issues of “Salon City”
                magazine published annually, and any additional magazines and periodicals,
                including but not limited to organic start-ups, magazines or periodicals
                designated as extensions, “one-shots” (as defined in subparagraph (1)
                below) and any magazines or periodicals acquired from a third party,
                in
                each case, that TWR agrees to distribute pursuant to Section 2
                hereof.

            


    

    


    
      	
               

            	
              (b)

            	
              “Territory”
                shall mean the United States of America, the Commonwealth of Puerto
                Rico,
                the Dominion of Canada and foreign and domestic United States military
                bases.

            


    

    


    
      	
               

            	
              (c)

            	
              “Printer’s
                Completion Notice” shall mean a notice delivered to TWR and executed by
                the traffic manager or shipping manager of the Publisher’s printer for
                each issue of each Publication, specifying the number of copies of
                such
                issue shipped in accordance with TWR’s instructions, and the date of
                completion of such shipment.  Under no circumstances may a
                Printer’s Completion Notice be sent to TWR prior to the completion of
                shipping to the Publisher’s customers, whether or not an intermediary is
                used.

            


    

    


    
      	
               

            	
              (d)

            	
              “Net
                Sales” shall mean (with respect to each issue of each Publication) the
                number of copies of the Publications specified in each Printer’s
                Completion Notice (as the same may be modified or amended by additional
                information furnished by the printer or Publisher), less the number
                of
                copies of that issue returned to TWR pursuant to the provisions of
                paragraph 8 and less the number of copies of that issue lost or damaged
                in
                shipments to wholesale distributors per subparagraph
                3(c).

            


    

    


    
      	
               

            	
              (e)

            	
              “Cover
                Price” shall mean the suggested retail selling price of each Publication
                (as specified by Publisher on the cover of each copy thereof), as
                the same
                may be increased or decreased by Publisher during the
                Term.

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (f)

            	
              DELETED.

            


    

    


    
      	
               

            	
              (g)

            	
              “Customer
                Discount” shall mean the percentage off of the Cover Price of the
                Publications that Publisher directs TWR to provide to Publisher’s
                customers.  If Publisher and its customer(s) agree upon any
                change to the Customer Discount to be effective during the term of
                this
                agreement, Publisher shall give TWR not less than one hundred and
                twenty
                (120) days prior written notice of such
                change.

            


    

    


    
      	
               

            	
              (h)

            	
              “Final
                Billings” shall mean the Cover Price, less the Customer Discount,
                multiplied by the Net Sales and less TWR’s
                Commission.

            


    

    


    
      	
               

            	
              (i)

            	
              “On
                Sale Date” shall mean the date, as designated by Publisher, which each
                issue of the Publications is to be placed for initial sale at retail
                outlets.

            


    

    


    
      	
               

            	
              (j)

            	
              “Off-Sale
                Date” shall mean the date, designated by Publisher, for recall of issues
                of the Publications from sale at retail outlets, and provided, however,
                that the Off-Sale Date of any issue of a Publication shall not be
                later
                than one (1) day prior to the On Sale Date of the next succeeding
                issue of
                the same Publication.  The Off-Sale Date of “one-shots” shall
                also be determined by Publisher.

            


    

    


    
      	
               

            	
              (k)

            	
              (i)

            	
              “Term”
                shall mean the period commencing on the Effective
                Date,                    and
                continuing thereafter for a period of three (3) years.  The Term
                shall thereafter be automatically extended for successive three (3)
                year
                periods upon the same terms and conditions as herein contained, subject,
                however, to the right of either party, on prior written notice to
                the
                other party as provided below, to terminate the Term upon the expiration
                of the original Term or any renewal
                period.

            


    

    


    
      	
               

            	
              (ii)

            	
              The
                notice of termination shall be served not less than ninety (90) days
                prior
                to the end of the original Term or any renewal period in accordance
                with
                the provisions of paragraph 14 hereof.  The notice of
                termination shall be effective following distribution of the last
                issue of
                each Publication with an On Sale Date prior to the last day of the
                original term or renewal period than in effect.  The notice of
                termination shall specify the On Sale Date of the last issue of each
                Publication to be distributed under this
                agreement.

            


    

    


    
      	
               

            	
              (iii)

            	
              Notwithstanding
                termination of this agreement, this agreement shall continue in full
                force
                and effect after the termination date for the purpose of distributing
                such
                last issue(s), handling and crediting returns of unsold copies and
                effecting a final settlement of Publisher’s account.  TWR shall
                have the right, upon the giving by either party of such written
                termination notice, to suspend any further payments to or on behalf
                of
                Publisher and to withhold all further sums relating to the Publications
                until final settlement is effected, DELETED days after
                the Off-Sale Date of the last issue of the Publications distributed
                by TWR
                hereunder.  TWR shall be entitled to set up a reasonable reserve
                at that time for anticipated returns, and for all proper and reasonable
                charges or reimbursements due TWR pursuant to the terms of this
                agreement.

            


    

    


    
      	
               

            	
              (iv)

            	
              Notwithstanding
                anything to the contrary in this agreement, Publisher shall not be
                entitled to terminate this agreement if Publisher does not first
                reimburse
                TWR the full amount of any such
                indebtedness.

            


    

    


    
      	
               

            	
              (l)

            	
              “one-shots”
                shall mean magazines and periodicals with a frequency of less than
                four
                times annually.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (m)

            	
              “distribution”
                shall refer to the distribution of Publications, including regular
                and
                special issues, ultimately intended for single copy sale at newsstands
                and
                other retail outlets.  Other forms of the term “distribution”,
                including, but not limited to, “distribute”, “distributes” or
                “distributed” shall have a corresponding
                meaning.

            


    

    


    
      	
               

            	
              (n)

            	
              “special
                allowances” shall refer to any payments, deductions or allowances other
                than Customer Discount that Publisher agrees to pay to Publisher’s
                customers in connection with Publisher’s sale of the
                Publications.

            


    

    


    
      	
               

            	
              (o)

            	
              “TWR’s
                Commission” shall equal the sum of TWR’s Base Commission and the Incentive
                Fee (as defined in subparagraph 3(k) below).  Notwithstanding
                the foregoing, if Publisher ceases publishing the Publication and
                is not
                publishing any other Publication, then Publisher shall, on a prospective
                basis, no longer be obligated to pay TWR’s
                Commissions.

            


    

    


    2.           RIGHTS
      GRANTED:

    


    Publisher
      hereby grants to TWR, for the Term and throughout the Territory, the exclusive
      right to distribute the Publications (including any future Publications
      published by Publisher), and if during the Term, any person or entity affiliated
      with and/or controlled by Publisher or its officers, directors or major
      stockholders (collectively, “Publisher Affiliates”) shall publish any other
      magazines and/or periodicals, Publisher agrees that TWR shall be offered,
      exclusively, the right to distribute such magazines and/or
      periodicals.  If Publisher or a Publisher Affiliate shall be unable to
      reach an agreement as to terms with TWR for the rights described in the
      preceding sentence, Publisher or such Publisher Affiliate shall not grant such
      rights on terms equal to or less favorable than those offered by TWR, and shall
      give TWR the opportunity to acquire said rights on the best terms offered to
      Publisher or such Publisher Affiliate by any other distributor.  If
      TWR and Publisher or a Publisher Affiliate agree that TWR shall acquire said
      rights, then such new magazine and/or periodicals shall be distributed by TWR
      pursuant to the terms hereof, except as such terms mat be expressly modified
      or
      replaced in a fully-executed written amendment hereto.  The provisions
      of this paragraph 2 shall not apply to copies of the Publications furnished
      by
      Publisher or a Publisher Affiliate to individual subscribers.  For the
      avoidance of doubt, notwithstanding the foregoing, TWR shall have the right
      to
      refuse to distribute any Publication that Publisher or a Publisher Affiliate
      offers TWR the opportunity to distribute pursuant to this paragraph
      2.

    


    3.           THE
      PUBLISHER AGREES:

    


    
      	
               

            	
              (a)

            	
              To
                publish the Publications at the frequency specified in subparagraph
                1(a)
                (or, if no frequency is specified in subparagraph 1(a) for a Publication,
                at the frequency established when such Publication became a Publication
                pursuant to paragraph 2 hereof), and in substantially the same physical
                form (including, but not limited to, size, quality of paper and
                reproduction) and with editorial, creative and artistic elements
                at least
                equal to those in previous issues and to print on the cover of the
                Publications a UPC code including TWR’s bi-pad
                number.

            


    

    


    
      	
               

            	
              (b)

            	
              That
                upon receipt from TWR of the lists of wholesale distributors and
                the
                number of copies of each of the Publications to be shipped thereto,
                Publisher shall complete shipment to wholesale distributors in accordance
                with such lists far enough in advance of the On Sale Dates of the
                respective issues to enable distribution to and by wholesale distributors
                by the On Sale Dates.  Publisher shall pay all transportation
                charges relating to the shipment of the Publications to wholesale
                distributors.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (c)

            	
              That
                TWR may deduct from the payments due Publisher, as provided in subdivision
                9(b)(ii) hereof, all amounts attributable to copies of the Publications
                lost or damaged in shipment to wholesale distributors.  Subject
                to the provisions of paragraph 16 hereof, all such loss or damage
                adjustments made by TWR for the benefit of said wholesale distributors
                shall be conclusive on the question of loss and/or damage and binding
                upon
                Publisher.  TWR and Publisher shall assist one another in the
                handling of claims against carriers for copies of the Publications
                that
                are delayed, lost or damaged in
                transit.

            


    

    


    
      	
               

            	
              (d)

            	
              That
                TWR may allow wholesale distributors the privilege of returning all
                unsold
                copies of the Publications and receiving credit at the rate charged
                therefore, in accordance with the terms of paragraph 8
                hereof.

            


    

    


    
      	
               

            	
              (e)

            	
              That
                TWR may refuse to distribute any issues of Publications which, in
                its
                opinion, contain libelous, obscene or indecent matter; which infringe
                the
                copyright, right of privacy or publicity or any other right of any
                third
                party; which are unlawful; or which are refused use of the mails
                by postal
                authorities; or, in its sole discretion, TWR may elect to terminate
                this
                agreement with respect to the Publications concerned.  TWR shall
                have no obligation to review the content of any
                Publication.

            


    

    


    
      	
               

            	
              (f)

            	
              That
                TWR shall be permitted to conduct periodic field audits of Publisher’s
                customers on behalf of Publisher during the Term and that TWR shall
                be
                entitled to an audit fee for such services equal to
                DELETED percent of all funds recovered by TWR on behalf
                of Publisher as a result of such audit (the “Audit
                Fee”).  Publisher further agrees that TWR may deduct the Audit
                Fee from the payments sue Publisher, as provided in subdivision 9(b)(iii)
                hereof.

            


    

    


    
      	
               

            	
              (g)

            	
              To
                follow TWR’s “Terms for Access to Information Systems” attached as
                Annex A hereto.

            


    

    


    
      	
               

            	
              (h)

            	
              That
                if TWR incurs any expenses hereunder on behalf of Publisher or the
                Publications, then TWR may recover, pursuant to subdivision 9(b)(vii)
                hereof, any or all such expenses from any advances and/or payments
                due or
                becoming due to Publisher, or, at its option, may require Publisher
                to
                reimburse TWR by check within 10 days following TWR’s written request
                therefore.

            


    

    


    
      	
               

            	
              (i)

            	
              To
                provide TWR, on a timely basis, with written notice of all financial
                arrangements, whether written or oral, that Publisher agrees to with
                a
                wholesaler or retailer including, but not limited to Customer Direct
                and
                any Special Allowances.

            


    

    


    
      	
               

            	
              (j)

            	
              DELETED.

            


    

    


    
      	
               

            	
              (k)

            	
              DELETED.

            


    

    


    4.           TWR
      AGREES:

    


    
      	
               

            	
              (a)

            	
              To
                furnish shipping instructions and addressed labels to Publisher at
                a
                reasonable time prior to the scheduled shipping date for distribution
                of
                the Publications.

            


    

    


    
      	
               

            	
              (b)

            	
              To
                bill and collect all payments from Publisher’s
                customers.

            


    

    


    
      	
               

            	
              (c)

            	
              To
                make payments to Publisher as specified in paragraph
                9.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (d)

            	
              To
                consult with Publisher’s designated representatives, upon request, with
                respect to:

            


    

    


    
      	
               

            	
              (i)

            	
              The
                number of copies of each issue to be
                printed;

            


    

    


    
      	
               

            	
              (ii)

            	
              The
                number of copies of each issue to be allotted and shipped to each
                wholesale distributor;

            


    

    


    
      	
               

            	
              (iii)

            	
              The
                sales history of the Publications;
                and

            


    

    


    
      	
               

            	
              (iv)

            	
              The
                advertising and promotion campaigns for the
                Publications.

            


    

    


    
      	
               

            	
              (e)

            	
              To
                designate an employee of TWR as the non-exclusive account executive
                for
                the Publications.

            


    

    


    
      	
               

            	
              (f)

            	
              To
                render to Publisher a sales performance statement for each issue
                of the
                Publications showing, in summary form, the issue date, On Sale and
                Off-Sale Dates, number of copies distributed, returns accepted, Net
                Sales
                (in both numerical and percentage terms), and the sales trend of
                the
                Publications (a numerical comparison of Net Sales of that issue versus
                Net
                Sales of the previous issue and of the same issue one year earlier,
                to the
                extent that such Publication was sold one year
                earlier).

            


    

    


    
      	
               

            	
              (g)

            	
              To
                render to Publisher a payment statement for each issue of the Publications
                summarizing the appropriate calculations pursuant to this
                agreement.

            


    

    


    
      	
               

            	
              (h)

            	
              To
                use reasonable efforts to provide the services listed on Annex B
                hereto.

            


    

    


    
      	
              5.

            	
              TWR
                NOT A TRUSTEE:

            


    

    


    
      	
               

            	
              In
                no event shall TWR be obligated to segregate any of the sums collected
                by
                it hereunder from any of its other funds, nor shall TWR be considered
                a
                trustee, pledge holder or fiduciary of Publisher.  Publisher
                acknowledges and agrees that TWR shall be entitled to perform distribution
                and other services for other publishers regardless of whether such
                other
                publishers’ publications may be competitive with the Publications and that
                WTR and its affiliates currently do, or in the future may, publish
                publications similar to the
                Publications.

            


    

    


    
      	
              6.

            	
              RETAIL
                DISPLAY ALLOWANCES:

            


    

    


    
      	
               

            	
              (a)

            	
              TWR
                shall perform the work of receiving and collecting information from
                retail
                magazine dealers and issuing payments on behalf of Publisher for
                amounts
                due to them under any retail or checkout display allowance (“RDA”)
                programs conducted by the Publisher in reference to the Publications
                as
                previously authorized by Publisher in writing for each retail outlet
                or
                retail chain, as the case may be.  Such RDA payments shall be
                charged to the Publisher’s account and recovered and received by TWR as
                provided in subparagraph 1(k) and subdivision 9(b)(iv) hereof, at
                such
                time as TWR determines (whether such determination is based upon
                an
                estimate made by TWR or otherwise) that such dealers are entitled
                thereto,
                whether such payment is actually made by TWR at such time.  Any
                adjustments made by TWR regarding the amount of such allowances shall
                be
                credited or charged (as the case may be) to Publisher’s account at the
                time such adjustment is actually made by
                TWR.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (b)

            	
              In
                consideration of the services to be performed by TWR pursuant to
                this
                paragraph 6, TWR shall receive and RDA service fee of
                DELETED for each issue of the Publication(s) per retailer
                claim, which sum shall be recovered by TWR pursuant to subparagraph
                9(b)(iv) hereof.

            


    

    


    
      	
               

            	
              (c)

            	
              Publisher
                shall have the right, upon timely notice to TWR, to assume all obligations
                to perform all RDA services and issue all RDA
                payments.

            


    

    


    7.           CREDIT
      TO WHOLESALE DISTRIBUTORS:

    


    
      	
               

            	
              (a)

            	
              TWR
                will bill Publisher’s customers at the Cover Price of the Publications
                less the Customer Discount less Special
                Allowances.

            


    

    


    
      	
               

            	
              (b)

            	
              In
                the event Publisher’s customers make deductions from payments to TWR for
                adjustments to Customer Discount or Special Allowances not agreed
                to by
                the Publisher, TWR will notify Publisher of such adjustments and
                shall
                deduct from any payments to Publisher pursuant to subdivision 9(b)(v)
                hereof, the amount of such deductions.  Publisher may direct TWR
                to delay, reduce or suspend future shipments to the
                customer.

            


    

    


    
      	
               

            	
              (c)

            	
              Publisher
                agrees that TWR shall be entitled to make all decisions as to which
                customer to distribute the Publications to, and all credit and collection
                decisions with respect to wholesale distributors, including whether
                to
                stop or hold up shipment to delinquent or “un-creditworthy” accounts and,
                if practicable, to secure substitute accounts, except, in each case,
                if
                Publisher directs TWR otherwise as provided below.  TWR shall
                bear any losses from uncollectible amounts and all collection expenses
                (collectively, the “Credit Risk”), except as provided below.  If
                TWR determines, in its sole discretion, that a wholesale distributor(s)
                poses and unacceptable credit risk to TWR, TWR may provide notice
                to
                Publisher that TWR is no longer willing to accept the Credit Risk
                relating
                to Publications sent to such wholesaler distributor(s).  If
                Publisher desires to continue shipping Publications to such wholesale
                distributor(s) and is willing to accept the Credit Risk associated
                therewith, then Publisher shall provide notice ordering TWR to continue
                shipping Publications to such wholesale distributor(s) and indicating
                that
                the Publisher shall accept the Credit Risk relating to Publications
                sent
                to such wholesaler distributor(s), and any such losses sustained
                by TWR
                shall be charged to Publisher’s account and recovered by TWR as provided
                in subdivision 9(b)(v) hereof.  Nothing herein contained,
                however, shall require TWR to institute any legal action or collection
                proceedings.  Publisher agrees and acknowledges that TWR may, if
                there is a new or suitable substitute, recommend new or substitute
                accounts in place or of in addition to customers that TWR thinks
                are
                inadequate, an acceptable credit risk, or irregular in
                payments.  Publisher will adhere to TWR’s recommendation to
                change customers.

            


    

    


    
      	
               

            	
              (d)

            	
              Publisher
                acknowledges that it has significant knowledge about the wholesale
                magazine distribution industry and its participants and that it is
                aware
                that many wholesale distributors are currently under significant
                financial
                pressure and may currently be, or in the near future become, credit
                risks.  Publisher further acknowledges that, in the event TWR
                requests Publisher to stop or hold shipments as provided in subparagraph
                8(c) hereof, there is a substantial probability that wholesale
                distributors affected may constitute a substantial percentage of
                wholesale
                distributors and there may not be appropriate substitute
                distributors.

            


    

    


    8.           RETURNS:

    


    
      	
               

            	
              (a)

            	
              In
                determining the sum payable to Publisher, TWR shall be entitled to
                deduct
                returns of each issue of the Publications shipped to TWR from Publisher’s
                customers located in the Territory at any time within
                DELETED days of the Off-Sale Date of each such issue,
                but
                as to the last issue distributed to this agreement, or any one-shots
                or
                special issues, TRW may accept returns shipped at any time within
                DELETED days of the Off-Sale Date of such
                issues.  The aforesaid DELETED and
                DELETED day periods shall be subject to extension by
                reason of delay or delays resulting from the use of Reshipping/Direct
                Wholesaler Agencies (as that term is commonly understood in the magazine
                trade), in mail delivery, “acts of God”, or any other cause beyond the
                reasonable control of TWR, or with the Publisher’s consent.  The
                Publisher hereby acknowledges the TWR may, in its sole discretion,
                discontinue distribution of Publications to a wholesaler(s) in effort
                to
                minimize the number of returns that will occur after the
                DELETED or DELETED day period described
                above.

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (b)

            	
              If
                TWR receives returns of any issue hereunder after final settlement
                of such
                issue pursuant to subparagraph 8(a) hereof, TWR may deduct such returns
                at
                the rate charged therefore from any remittance becoming due Publisher,
                or,
                after termination of this agreement, the Publisher shall
                promptly  reimburse TWR upon receipt of TWR’s statement
                regarding such returns.

            


    

    


    
      	
               

            	
              (c)

            	
              TWR
                may accept returns of unsold copies of the Publications by means
                of front
                covers, headings, affidavits, or electronic notification in form
                satisfactory to TWR.  If Publisher shall request, in writing,
                full copy returns, TWR shall use its reasonable efforts to obtain
                same,
                and in such case, Publisher agrees to pay for return transportation
                and
                such handling charges as are required.  TWR shall furnish
                Publisher with returns statements which, subject to paragraph 15
                hereof,
                shall be accepted by Publisher as conclusive evidence thereof, and
                TWR is
                hereby authorized to destroy any and all front covers or headings
                representing such returns.

            


    

    


    
      	
              9.

            	
              PAYMENT
                TO PUBLISHER:

            	
              TWR
                shall make the following payments to Publisher with respect to each
                issue
                of the Publications.

            


    

    


    
      	
               

            	
              (a)

            	
              As
                an advance against any and all sums which may become payable to Publisher
                pursuant to subparagraph (b) with respect to each issue of the
                Publications:

            


    

    


    
      	
               

            	
              (i)

            	
              An
                amount equal to DELETED percent of TWR’s estimate of the
                Final Billings (determined in TWR’s sole discretion), for shipments into
                the Territory due DELETED days after the On Sale Date,
                but in no event earlier than DELETED days after receipt
                by TWR of the Printer’s Completion Notice, less an estimated or, to the
                extent determinable, the actual amount to cover the deductions specified
                in subdivisions 9(b)(ii)-9(b)(vii).

            


    

    


    
      	
               

            	
              In
                the event that Publisher and TWR do not agree as to the number of
                copies
                of each issue of the Publications to be allotted and shipped to each
                wholesale distributor, TWR may, thereafter, at its sole discretion,
                base
                the computation of the advances to become due to Publisher pursuant
                to
                this paragraph 9 on the number of copies of each issue of the Publications
                that TWR deemed appropriate to be allotted and shipped to each wholesale
                distributor, rather than the number actually printed and
                shipped.

            


    

    


    
      	
               

            	
              (ii)

            	
              An
                amount equal to DELETED percent of TWR’s estimate of the
                Final Billings (determined in TWR’s sole discretion),
                DELETED days after the Off-Sale Date of such issue, less
                the first advance and an estimate or, to the extent determinable,
                the
                actual amount of any unpaid deductible expenses provided for under
                subdivisions 9(b)(ii)-9(b)(vii) to the extent that such deductions
                have
                not previously been deducted and retained by
                TWR.

            


    

    


    
      	
               

            	
              (b)

            	
              An
                amount equal to the Final Billings shall be paid to Publisher one
                hundred
                twenty (120) days after the Off-Sale Date of that issue, less any
                of the
                following deductible expenses which have not been recovered by
                TWR:

            


    

    


    
      	
               

            	
              (i)

            	
              All
                sums advanced to Publisher pursuant to subparagraph (a)
                above;

            


    

    


    
      	
               

            	
              (ii)

            	
              All
                loss and damage adjustments pursuant to subparagraph 3(c)
                above;

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (iii)

            	
              The
                Audit Fee pursuant to subparagraph 3(f)
                above;

            


    

    


    
      	
               

            	
              (iv)

            	
              All
                RDA payments and RDA service fees pursuant to paragraph 6
                above;

            


    

    


    
      	
               

            	
              (v)

            	
              All
                uncollectible amounts, Special Allowances, deductions and other items
                properly chargeable to Publisher referred to in paragraph 7
                above;

            


    

    


    
      	
               

            	
              (vi)

            	
              The
                following Special Allowances which may be granted by
                TWR:

            


    

    


    
      	
               

            	
              1.

            	
              With
                respect to Reshipping Wholesaler Agencies (as the term is commonly
                understood in the magazine trade):

            


    

    


    
      	
               

            	
              A.

            	
              A
                charge of DELETED per cwt. on all non-second-class entry
                magazines for U.S. and Canada reshipping
                agencies.

            


    

    


    
      	
               

            	
              B.

            	
              A
                charge of DELETED per cwt. on all second-class entry
                magazines for U.S. and Canada reshipping
                agencies.

            


    

    


    
      	
               

            	
              2.

            	
              The
                charges referred to in subdivision A and B above are subject to change
                in
                proportion to any increase in the aforesaid
                rates.

            


    

    


    
      	
               

            	
              3.

            	
              A
                charge of DELETED will be made if an analysis of
                circulation by population for any Publication is requested and required
                for the Audit Bureau of Circulation report.  No charge will be
                made for the State Circulation analyses which are customarily made
                twice a
                year for the Publications; and

            


    

    


    
      	
               

            	
              (vii)

            	
              All
                other charges, payments or other reimbursements due TWR pursuant
                to the
                terms of this agreement.

            


    

    


    
      	
               

            	
              (c)

            	
              All
                payments will be made in U.S. dollars and will be based on the “exchange
                rate” in effect the month following the On Sale Date of the
                Publication.  The “exchange rate” will be calculated as the
                average of the daily spot rates of a nationally recognized bank during
                the
                one month period between the 15th
                day of each
                of the two preceding months.

            


    

    


    
      	
               

            	
              (d)

            	
              Nothing
                in this paragraph 9 shall be construed to limit any of the provisions
                of
                paragraph 8 of this agreement.

            


    

    


    
      	
              10.

            	
              CROSS-COLLATERALIZATION/OVERDRAFTS:

            


    

    


    
      	
               

            	
              The
                estimated Final Billings of each issue of all Publications distributed
                by
                TWR pursuant to this agreement shall be treated as a unit.  If
                the sum of advance payments made and the deductible expenses incurred
                by
                TWR pursuant to subdivisions 9(b)(ii) – 9(b)(vii) with respect to any
                issue of any Publication exceeds the estimated Final Billings for
                such
                issue (such excess is hereunder referred to as the “Overdraft”), the
                Overdraft may be deducted by TWR from any advance and/or payment
                of Final
                Billings which TWR may be required to make on any issue or issues
                of the
                same Publications, or any other publications, the distribution rights
                to
                which have been granted to TWR by Publisher or any affiliate, parent
                or
                subsidiary of Publisher pursuant to his or any other agreement, or
                shall
                be refunded or paid thereby immediately upon
                demand.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              11.

            	
              PUBLISHER’S
                WARRANTIES; INDEMNITY:

            


    

    


    
      	
              (a)

            	
              Publisher
                warrants and represents that:

            


    

    


    
      	
               

            	
              (i)

            	
              the
                rights herein granted to TWR have not been granted to any other person,
                firm or corporation; it has the right and authority to enter into
                this
                agreement and to perform its obligations hereunder, free and clear
                of any
                encumbrances; and there are no suits or proceedings pending or threatened
                against or affecting Publisher which, if adversely determined, would
                impair the rights herein granted to
                TWR;

            


    

    


    
      	
               

            	
              (ii)

            	
              it
                is duly organized and incorporated under the laws of the State of
                Nevada;

            


    

    


    
      	
               

            	
              (iii)

            	
              it
                is the sole and exclusive owner of the Publications and all rights
                therein;

            


    

    


    
      	
               

            	
              (iv)

            	
              the
                Customer Discounts and all pricing, discount, and allowance terms
                shall be
                in compliance with all applicable antitrust and trade laws in the
                territory; and

            


    

    


    
      	
               

            	
              (v)

            	
              the
                Publications and distribution of the Publications under this agreement
                will not violate any laws or rights of any third parties or
                entities.

            


    

    


    
      	
               

            	
              (b)

            	
              Publisher
                agrees to defend and indemnify TWR, its affiliates, and its and their
                officers, agents, representatives, customers and retailers against
                any
                damages, costs, expenses (including reasonable counsel fees), judgments,
                settlements, penalties, liabilities or losses arising out of (i)
                any
                claim, action or proceeding alleging copyright or trademark infringement,
                libel, obscenity, violations of the rights of privacy, publicity
                or any
                other rights of any person, or any federal, state or local statute
                or
                regulation, in connection with the title, cover, contents or advertising
                of the Publications, including, but not limited to, advertisements,
                illustrations, or photographs, or in the text thereof, or (ii) the
                breach
                or alleged breach of any of the foregoing representations or warranties
                by
                Publisher.  TWR and Publisher shall each, with all reasonable
                promptness, notify the other of any suit, proceeding, claim or demand
                brought in connection with the Publications. If any such suit, proceeding,
                claim or demand is brought against TWR, TWR may elect (i) to undertake
                the
                defense thereof at the Publisher’s expense or (ii) to notify the Publisher
                to undertake the defense thereof.  If TWR does so notify the
                Publisher, the Publisher shall undertake the defense at its own expense;
                and in such case, TWR may at its option join in the defense but at
                its own
                expense.

            


    

    


    
      	
               

            	
              (c)

            	
              During
                the pendency of any such suit, proceedings, claim or demand, TWR
                may
                withhold payments from Publisher, under this or any other agreement
                between Publisher and TWR, to the extent reasonably necessary to
                remedy
                any damage, cost, expense, settlement, judgment or liability which
                may
                result there from.

            


    

    


    
      	
               

            	
              (d)

            	
              The
                warranties and representations of Publisher hereunder shall, along
                with
                the indemnity, survive the termination of this
                agreement.

            


    

    


    
      	
              12.

            	
              EXTRAORDINIARY
                EVENTS – COMPUTATION OF NET
                SALES:

            


    

    


    
      	
               

            	
              In
                the event that a wholesale distributor or other customer of Publisher
                to
                which TWR distributes the Publication on Publisher’s behalf shall (a) take
                advantage of any federal or state insolvency law for relief of debtors,
                including reorganization, (b) cease its business operation, or (c)
                suffer
                a destruction of all or a portion of its inventory, including but
                not
                limited to destruction caused by fire, flood or theft, in any case,
                with
                the effect that such wholesale distributor or other customer shall
                not
                return all or a portion of its unsold copies of the Publications,
                TWR
                shall use the average Net Sales of the Publications as reported by
                such
                wholesale distributor or customer for the twelve (12) months (or
                such
                lesser period if applicable) prior to those months for which such
                wholesale distributor or customer failed to return unsold copies
                of the
                Publications, for determining the Net Sales of the Publications shipped
                to
                such wholesale distributor or customer for said
                months.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              13.   
                  

            	
              ASSIGNMENT:

            


    

    


    This
      agreement shall bind and inure to the benefit of the parties hereto and their
      respective successors and assigns, provided that no assignment of this
      agreement, voluntary of by operation or law, shall be binding upon either of
      the
      parties hereto without the prior written consent of the other, unless it is
      an
      assignment to a parent, subsidiary, affiliate, or as part of the sale or
      transfer of all or substantially all of such party’s
      assets.  Notwithstanding this, Publisher may sell, assign, transfer or
      otherwise dispose of its interest in any Publication or any trademark(s)
      associated therewith to any third party (whether by means of a sale of assets
      or
      equity) if such third party agrees in writing to assume and be bound by all
      the
      terms and conditions of the agreement to be performed by Publisher and prior
      to
      such sales, assignment, transfer or other disposition Publisher reimburses
      TWR
      the full amount of any indebtedness owed by Publisher to TWR; provided, however,
      that Publisher shall guarantee and remain responsible for the performance of
      all
      obligations hereunder with respect to such Publication, and that TWR shall
      have
      the right to terminate this agreement with respect to such
      Publication.

    


    14.        NOTICES:

    


    All
      notices which either party hereto is required or may desire to give to the
      other
      shall be given by addressing the same to the other at the address hereinafter
      set forth, or at such other address as may be designated in writing by any
      such
      party in a notice to the other given in the manner prescribed in this
      paragraph.  All such notices shall be sufficiently given when the same
      shall be deposited or addressed, postage prepaid, in the United States mail
      and/or when the same have been delivered, so addressed, by national courier
      system, and the date of the giving of such notice shall be three (3) business
      days after said mailing is sent by United States mail and, upon receipt, if
      sent
      by courier.  The addresses to which any such notices shall be given
      are the following:

    


    TO
      TWR:                                                                           TO
      PUBLISHER:

    


    Time/Warner
      Retail Sales & Marketing
      Inc.                            By
      all methods other than

    Attn:  President                                                                      Federal
      Express:

    135
      West
      50th Street,
      7th
      Floor

    New
      York,
      New York
      10020-1201                                          Salon
      City, Inc.

                        
      Attn: Steven G. Casciola

                        
      P.O. Box 2385

                        
      Beverly Hills, CA  90213

    


                         By
      Federal Express:

    


                        
      Salon City, Inc.

                        
      Attn: Steven G. Casciola

                        
      909 N. Palm Avenue,

            
      Suite 311

            
      West Hollywood, CA 90069

    


    15.       AUDIT
      RIGHTS:

    


    Publisher
      may, at its own, expense, audit books and records of TWR relative to the
      distribution of the Publications pursuant to this agreement at the place where
      TWR maintains such books and records in order to verify statements rendered
      to
      Publisher hereunder.  Any such audit shall be conducted only by a
      reputable public accountant during reasonable business hours in such manner
      as
      not to interfere with TWR’S normal business activities.  A true copy
      of all reports made by Publisher’s accountant shall be delivered to TWR at the
      same time such respective reports are delivered to Publisher by said
      accountant.  In no event shall an audit with respect to any statement
      commence later than twelve (12) months from the date of dispatch to Publisher
      of
      such statement nor shall any audit continue for longer than five (5) consecutive
      business days, nor shall audits be made hereunder more frequently than once
      annually, nor the records supporting any such statement be audited more than
      once.  All statements rendered hereunder shall be binding upon
      Publisher and not subject to objection for any reason unless such objection
      is
      made in writing stating the basis thereof and delivered to TWR within twelve
      (12) months from delivery of such statement or, if an audit is commenced prior
      thereto, within thirty (30) days from the completion of the relevant
      audit.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    


    16.       LIMITATION
      OF LIABILITY:

    


    NOTWITHSTANDING
      ANYTHING IN THIS AGREEMENT TO THE CONTRARY, UNDER NO CIRCUMSTANCES SHALL TWR
      BE
      LIABLE TO PUBLISHER FOR ANY LOST PROFITS OR SPECIAL, CONSEQUENTIAL, INDIRECT
      CIRCUMSTANTIAL, OR INCIDENTAL DAMAGES OF ANY KIND.  IN NO EVENT SHALL
      THE LIABILITY OF TWR HEREUNDER TO PUBLISHER FOR ANY REASON EXCEED TWR’S
      COMMISSION FOR THE PRECEDING TWELVE (12) MONTH PERIOD (OR SUCH LESSER PERIOD
      IF
      LESS THAN TWELVE (12) MONTHS OF THE ORIGINAL TERM OF THIS AGREEMENT HAS LAPSED);
      PROVIDED, HOWEVER, THAT THIS LIMITATION OF LIABILITY SHALL NOT IN ANY WAY LIMIT
      TWR’S LIABILITY TO THE EXTENT THAT THE LIABILITY IS CAUSED BY TWR’S WILLFUL
      MISCONDUCT.

    


    17.       INTERGATION;
      WAIVER; MODIFICTAION:

    


    This
      agreement constitutes the complete and entire understanding of the parties
      hereto concerning the subject matter hereof and supersedes any prior oral or
      written agreements, understanding and representations.  This agreement
      is not being executed in reliance upon any representation or warranty not
      expressly set forth herein.  No waiver, modification or cancellation
      of any term or condition of this agreement shall be effective unless executed
      in
      writing by the party charged therewith.  No written waiver shall
      excuse the performance of any act other than those specifically referred to
      therein.

    


      18.      NO
      PARTNER, ETC.:

    


    This
      agreement does not constitute and shall not be construed as constituting a
      partnership or joint venture between TWR and Publisher.  Neither party
      shall have any right to obligate or bind the other party in any manner
      whatsoever, except as otherwise specifically set forth herein, and nothing
      herein contained shall give, or is intended to give any rights of any kind
      to
      any third persons.

    


    19.       CONTRUCTION:

    


    This
      agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to agreements executed and fully performed
      therein.  It is agreed that New York courts (state and federal) only,
      will have jurisdiction over any controversies regarding this agreement; any
      action or proceeding which involves such a controversy will be brought only
      in
      those courts, in New York County.  Any process in any such action or
      proceeding may, among other methods, be served by delivery, certified or
      registered mail, national courier system or any other receipted form of
      delivery.  Any such delivery, mail service, courier service, or other
      receipted form of delivery shall be deemed to have the same force and effect
      as
      personal service within the state of New York.

    


    20.       FORCE
      MAJEURE:

    


    If
      because of  act of God; accident; fire; lockout; strike or other labor
      dispute; riot or civil commotion; act of public enemy or terrorism; law
      enactment, regulation, rule, order or act of government or governmental
      instrumentality (whether federal, state, local or foreign); or other cause
      of  a similar or different nature beyond the control of Publisher or
      TWR, the performance of Publisher’s or TWR’s obligations hereunder is delayed or
      prevented, such delay or prevention shall not be considered a breach of this
      agreement.

    


    21.       HEADINGS:

    


    The
      headings in this agreement are for convenience of reference only, and shall
      not
      limit or otherwise effect the meaning thereof.

    


    22.       CONFIDENTIALITY:

    


    Publisher
      agrees that this agreement contains confidential business terms and that
      disclosure thereof could be damaging to TWR.  Accordingly, Publisher
      agrees to treat this agreement as proprietary information and not to reveal
      any
      of the terms hereof to any third party, for any purpose unrelated to performance
      under this agreement, except upon TWR”S prior approval.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this agreement to be
      executed by their duly authorized officers as of the day and year first above
      written.

    


    
      	
               

            	
              SALON
                CITY, INC.

            	
              TIME/WARNER
                RETAIL

            

                                                                       
      SALES & MARKETING INC.

    


    


    
      	
              BY:
                /s/ Steven G. Casciola

            	
              BY:
                /s/ Robert J. Bedor

            	
               

            


    

    


    
      	
              TITLE:
                President / CEO

            	
              TITLE:
                EVP Client Marketing &

            


    

    
      	
               

            	
                          Business
                Development   

            


    

     

    
 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              ANNEX
                A

            


    

    


    
      	
               

            	
              TWR’s
                “Terms For Access to Information
                Systems”

            


    

    


    


    Publisher’s
      access to and use of TWR’s information systems and data is subject to the
      following terms and conditions:

    


    1.           Confidentiality:

    


    
      	
               

            	
              (a)

            	
              The
                information obtained from TWR’s information systems (other than
                information concerning Publisher’s own publications) and data, and the
                software, access codes and other devices and materials provided by
                TWR to
                Publisher to access such systems and data (collectively, the “Confidential
                Information”) contain confidential business terms, are otherwise
                confidential to TWR, and the disclosure thereof would be damaging
                to
                TWR.

            


    

    


    
      	
               

            	
              (b)

            	
              Any
                Confidential Information disclosed or  provided to Publisher, or
                any of its employees, directors, officers, affiliates, agents or
                other
                representatives (collectively, the “Representatives”) (i) shall be kept
                confidential by Publisher and its Representatives, (ii) shall not,
                without
                TWR’s prior written consent (unless such disclosure is required by
                applicable law or regulation and the procedures set forth in clause
                1 (f)
                below are followed), be disclosed, in whole or in part, by Publisher
                or
                its Representatives to any person or entity except as set forth in
                clause
                1 (c) below, and (iii) shall be used by Publisher and its Representatives
                solely to monitor and analyze key performance metrics and review
                general
                information pertinent to the magazine
                category.

            


    

    


    
      	
               

            	
              (c)

            	
              Publisher
                shall allow access to the information systems and disclose the
                Confidential Information only to such of its Representatives who
                need to
                know the Confidential Information for the sole purpose of monitoring
                and
                analyzing key performance metrics and who are informed by Publisher
                of the
                confidential nature of the Confidential Information.  In any
                event, Publisher shall be responsible for any breach of these Confidential
                Information provisions by Publisher or its
                Representatives.

            


    

    


    
      	
               

            	
              (d)

            	
              Except
                as permitted pursuant to clause 1 (f) below, without TWR’s prior written
                consent, Publisher and its Representative will not disclose to any
                other
                person the fact that it or they have access to TWR’s information systems
                or that the Confidential Information has been made
                available.

            


    

    


    
      	
               

            	
              (e)

            	
              Neither
                TWR nor any of its Representatives make any representation or warranty,
                express or implied, as to the accuracy or completeness of the Confidential
                Information.  Publisher agrees that neither TWR nor any of its
                Representatives shall have any liability to Publish or to any of
                its
                Representatives or any other person relating to or resulting from
                the use
                of the Confidential Information or any errors therein or omissions
                therefrom.

            


    

    


    
      	
               

            	
              (f)

            	
              If
                Publisher or any of its Representatives becomes legally compelled,
                in the
                written opinion of its counsel, to disclose any of the Confidential
                Information, Publisher shall immediately provide TWR with written
                notice
                thereof so that TWR may seek a protective order or other appropriate
                remedy and/or waive compliance with the applicable provisions of
                this
                agreement.  If such protective order or other remedy is not
                obtained, or TWR waives compliance with the applicable provisions
                hereunder, Publisher or its Representative(s), as the case may be,
                shall
                disclose only that portion of the Confidential Information which
                it is
                advised in writing by counsel is legally required to be disclosed
                and will
                cooperate with TWR to obtain an appropriate protective order or other
                reliable assurance that confidential treatment will be accorded the
                Confidential Information by such tribunal or other
                entity.

            


    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    2.           Systems
      and Data to be Accessed

    


    
      	
               

            	
              (a)

            	
              Publisher
                is authorized to access only the Web based Data Portal, with access
                to
                Publisher’s draw/sale data, display quality (DQI), rack data, RDA data,
                field force automation data, TWR MIS system data, POS data, competitive
                shares of market data, MSA data (for manually contracted wholesalers),
                and
                any additional information mutually agreed upon in writing, between
                the
                Publisher and WPS.  Neither Publisher nor any of its
                Representatives shall attempt to access any other systems, data or
                functions in TWR’s information
                systems.

            


    

    


    3.           Person
      Authorized to Access Systems and Data

    


    (a)        Only
      those individuals of Publisher and its Representatives specifically

    Authorized
      in writing by TWR to access
      the systems and data may do so.

    


    
      	
               

            	
              (b)

            	
              If
                Publisher or any of its Representatives who is granted access to
                TWR’s
                information systems or data (i) ceases to be a Representative of
                Publisher, or (ii) misplaces, loses or otherwise fails to maintain
                possession of its computer, software or access data or device, or
                any of
                the Confidential Information, Publisher will immediately notify the
                Time/Warner Retail Sales & Marketing Help Desk at (212)
                522-1681.

            


    

    


    4.           Security

    


    
      	
               

            	
              (a)

            	
              Publisher
                will access the systems and data in accordance with TWR’s instructions and
                requirements concerning data security, as amended from time to time
                by
                TWR.

            


    

    


    
      	
               

            	
              (b)

            	
              In
                order to ensure protective of the systems and data, Publisher shall
                implement and maintain appropriate security measures including technical,
                physical, and organizational controls to ensure the confidentiality
                and
                integrity of the systems and data.

            


    

    


    
      	
               

            	
              (c)

            	
              Publisher
                will immediately report any suspected or confirmed security incident
                involving the systems or data to TWR’s Director of
                Information

            


    

    Security
      by calling the Time Inc. Network Operations Center at (212) 522-7777 or another
      number specified by TWR.

    


    
      	
               

            	
              (d)

            	
              On
                an ongoing basis from time to time and upon reasonable notice to
                Publisher, TWR shall be entitled to perform, or to have performed,
                an
                information security review and audit on Publisher’s access and use of
                TWR’s information systems, as coordinated by TWR’s Director of Information
                Security.  Publisher shall implement any required controls as
                identified by such information security review and shall institute
                appropriate escalation procedures in order to enable an appropriate
                response in the event of a security
                incident.

            


    

    


    
      	
               

            	
              (e)

            	
              Publisher
                has standard security procedures in place and it will provide a copy
                of
                such procedures to all Representatives who are granted access to
                TWR’s
                information systems.

            


    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (f)

            	
              Neither
                Publisher nor any of its Representatives who are granted access
                to

            


    

    
      	
               

            	
              the
                information systems shall use software that is (i) not owned or validly
                licensed by such party, (ii) in violation of third party rights,
                including
                but not limited to copyrights, or (iii)
                illegal.

            


    

    


    
      	
               

            	
              (g)

            	
              Neither
                Publisher nor any of its Representatives who are granted access to
                the
                information systems shall attempt to scan TWR’s network or run any other
                diagnostic tools against any system on TWR’s network without the prior
                written approval of TWR’s Senior Director of Information
                Services.

            


    

    


    
      	
               

            	
              (h)

            	
              Publisher
                acknowledges that its access to and use of TWR’s information systems are
                subject to monitor by TWR and TWR’s policies of use (as same may be
                modified from time to time).

            


    

    


    
      	
               

            	
              (i)

            	
              Both
                Publisher and all of its Representatives who are granted access to
                the
                information systems shall have current anti-virus software installed
                on
                their computers.

            


    

    


    
      	
               

            	
              (j)

            	
              TWR
                will maintain current anti-virus software on its
                system.

            


    

    


    5.           Default

    


    
      	
               

            	
              (a)

            	
              TWR
                may immediately terminate Publisher’s authorization to access and use
                TWR’s systems and data if Publisher fails to comply with any of the terms
                hereof.

            


    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    ANNEX
      B

    


    Services

    


    


    
      	
              1)

            	
              Title
                Specifics Sales & Marketing Plan:  TWR, in
                conjunction with Publisher, shall develop and implement an annual
                sales
                and marketing plan incorporating both wholesale and retail objectives
                including:

            


    

    


    
      	
              ·  

            	
              Scheduling
                targeted distribution work for each Publication during the course
                of the
                year, including chain maintenance assignments as
                needed;

            


    

    


    
      	
              ·  

            	
              Scheduling
                targeted key account and wholesale assignments for each Publication;
                and

            


    

    


    
      	
              ·  

            	
              One
                formal semi-annual review of the agreed upon sales and marketing
                plan.

            


    

    


    
      	
              2)

            	
              On-Line
                Access:  TWR shall provide Publisher with on-line
                access to Publisher sales data, the Store Level Database and to other
                reports made generally available to TWR
                clients.

            


    

    


    
      	
              3)

            	
              Promotional
                Program:  Publisher shall provided TWR with written
                authorization of any promotion program it decides to participate
                in, and
                TWR shall assist Publisher in the execution of such
                programs.  TWR will make reasonable efforts to assist Publisher
                in determining additional copy requirements for promotional programs
                prior
                to the issue traffic date.  TWR will provide an analysis of the
                program’s results upon finalization of the issues involved using the Store
                Level Database.

            


    

    


    
      	
              4)

            	
              Newly
                Authorized Retailers:  Once TWR has actual knowledge of
                newly authorized retailers. TWR will promptly adjust its distribution
                to
                reflect such newly authorized retailers.  TWR will provide WSC
                Reports for all major chain
                authorizations.

            


    

    


    
      	
              5)

            	
              Wholesaler
                Performance Reporting:  TWR shall inform Publisher, on
                an issue-by-issue basis, of any withholding by a wholesaler distributor
                in
                TWR base cities via TWR’s Distribution Maintenance Report
                (“DMR”).  TWR shall use reasonable efforts to prevent
                withholding through corrective action and recommendations to
                Publisher.  Such issue-by-issue reports shall include
                Publishers’ distribution levels.  On-Sale Dates, dealer count,
                withholding information and ship/receipt
                irregularities.

            


    

    


    
      	
              6)

            	
              Wholesaler
                Share of Market Report:  TWR shall gather Publisher
                data and competitive sales data for each issue in each TWR base city
                for
                competitive titles that Publisher and TWR shall mutually select provide
                this data on agreed upon dates.

            


    

    


    
      	
              7)

            	
              Class
                of Trade Analysis:  TWR shall provide a class of trade
                analysis for each title one (1) time per calendar year on a date
                to be
                mutually agreed upon by TWR and
                Publisher.

            


    

     

    
      
        
        

      

      
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