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HomeMy WebLinkAboutAgenda - 01-24-2012 - 5g 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 24, 2012 Action Agenda Item No. � SUBJECT• Professional Services Agreement—Tourism Advertising by Clean Design ' DEPARTMENT: EDC —Visitors Bureau PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Laurie Paolicelli, 968-2060 Questions and Answers on New Advertising Agency Contract with Attachment A PURPOSE: To approve a professional services agreement for tourism marketing and advertising with Clean Design. BACKGROUND: At the February 16, 2011 Visitors Bureau Board of Directors meeting, and in accordance with Orange County's due diligence practices and procurement procedures, the Board of Directors discussed and approved the need to have advertising agencies bid on the tourism marketing campaign. The Board of Directors appointed a marketing committee for this task, and with the help of Orange County's Purchasing staff, sent out a request for qualifications (RFQ) to 15 marketing agencies. After the process closed, the marketing committee reviewed the RFQs, narrowing them down to nine candidates. On August 23, 2011 the nine agencies presented to the marketing committee and from there the committee narrowed the candidate agencies to four. At the September 21, 2011 Board of Directors meeting, the remaining four agencies presented to the full board, and by a majority vote, Clean Design was selected as the top agency. Other agencies considered were: Jennings (the incumbent agency), Lewis Advertising, Splinter Group and Craig Jackson and Partners. With the current marketing contract with Jennings & Co. ending December 31, 2011, it is the Visitors Bureau's intent to have Clean Design begin on February 1, 2012 through June 30, 2013. Each year the Board of Directors reviews and approves the scope of services and a separate marketing committee meets with the agency and executive director twice a year. The advertising scope includes creative development, on-line marketing and the use of paid advertising in newspaper, magazine and on-line sources. FINANCIAL IMPACT: Visitors Bureau funds totaling $150,000 have been budgeted for the remainder of fiscal year 2011-12. An additional $150,000 will be allocated from the 2012-13 fiscal year. 2 RECOMMENDATION(S): The Manager recommends the Board: 1. Approve the proposed agreement; 2. Authorize the Chair to sign the agreement; and 3. Approve the funds be encumbered out of 2011-2012 Visitors Bureau budget as originally approved. 3 Chapel Hill/Orange County Visitors Bureau 5oi Franklin Sueet ♦ Chapel Hill,North Carolina z75i6 Telephone: 9ig-968-zo64 ♦ Toll-free: 888-968-zo6o ♦ Fax: 9i9-968-zo62 E-maiL• �aolicelli(a)visitchapelhilLar� Q&A on the Visitors Bureau new advertising agencv choice.Clean Design 1. Why is the Visitors Bureau using an agency outside of Orange County for advertising? The Visitors Bureau's first choice was to buy local. For five years the Visitors Bureau contracted with Jennings on an annual e�enditure of approximately$300,000. This contract allowed Jennings to grow its business,employees and client base. During this second bid process,Jennings did not deliver a creative and strategic approach that the committee felt would deliver results. Also,Jennings creative was not increasing visitor inquiries and results. 2. The cost for Clean Design is double the cost for Jennings at$6,000 a month versus$3,000 a month. Why is this? . Jennings typically charges$10,000 a month but gave the services to the Bureau to elevate their client list and relied on e�rtensive mark-ups of 15% and higher on producNon and media. Most agencies are now re�erting to a formula wluch adds more fees to the monthly service fee because media buying and production,.are mercurial,with clients cancelling programs mid-year. Clean Design has adapted this approach. t�lso,Clean Design has assigned a travel professional to the accoun� Jennings,as it grew,changed its account management strategy and the Bureau was assigned a lunior account staff inember. This situation was not ideal for strategy and planning. � * Supporting tourism in Chapd Hill,Carrboro and Hillsborough North Carolina 4 Chapel Hill�Orange County Visitors Bureau 5oi Franklin Street ♦ Chapel Hill,North Carolina 27�6 Telephone: gi9-968-2064 ♦ Toll-free: 888-968-zo6o ♦ Fax: 919"968-2062 E-maiL• IpaolicelliCa�visitchapelhilLor¢ , 3. What is the strategy and next-steps for Clean Design? The company will embark on research,focus groups and analysis to determine the best strategic use of annual$250,000 advertising campaign. They will talk with hoteliers,the Friday Center, restaurants and facility managers to gather strategy and augment that with interviews with local government leadership such as Frank Clifton,Roger Stancil,elected officials and commerce � leaders. Upon completion of this assessment they will propose a strategy that they feel will bring results to Orange County's tourism industry. Clean Design has e�erience with this travel and tourism related work. �_ Fie' Edt�.,�Yew��. !f¢aY.'¢�� 7ook Hdp _ . ._.__ . ........... _..... ..:_.. .__ . .. __... __.... _ ._. . _ ..., .. . ...... .:.... _ _._.:_. _. � __.__. ._. �._. ._........... _. ..... ��.. ... .._ „ _._... �', - C � :� '_ naa•n,�.a�a�,v�.��d�n,��.nm+ {7 � � - '—�' , '.,4:,%hbs[Y�sied�Ge[hi9 Stnrted;�u:LMest Fkad�es . .. ... :::_ ....::. _:�� _..: �r'. e. �.; , �n .. . . .._pe D� deM Bnefs � � .i �:: . . . ... . .. .._... .. _ ... ...�_r� -., i ec�..,. � ' -- �::..,t ,�., ftr.�l�. ...ror.E-qc�..z,�������,� .�ti_ c:..C�='v-r:`�:s � . ._ . .... . .. ... - .. .�,;� '�. ,.�.._.,s.i .�� , ��?`����J►. � � 0�� ' -.. _E.e.,::- ,�v .,:.ti.. �5�►,�1 .:�:..; .. ,?::�� _ __ i r = .,; E .:�.,��r '. n R�£�+'�fltt _ Y'������� � b ._. ,�-_..,.,. �:."„�`>,.,� _ _ �� � t ... � . � ..._ �„�� �� � � � t�ss C. __ __ .,. . ...,��..,b �c �_ � ,� �� � t ° ��,, �, :�-r�,� 13�€t�s����4 _.,,� 7 .;�::.: e . , .;�, .cf- _. , „ _ ; , � �� n:.� ��r � _..�._..,.-. ._...,,�._..k..�l,.».�«,�..,..L.�,�..w.�._..�.��w� m.,.�z.,a�,,d y:.��.- .�ww.�_� � ..�_.._� �.�.�,-- Done - ; iii � J . ... . . �.. . . � Supporting tourism in Chapel Hill,Cazrboro and Hillsborough North Carolina � 5 [Departmental Use Only] TITLE Clean Design � FY 2012 NORTH CAROLINA SERVICES AGREEMENT OVER$90,000.00 RFP —WITH REIMBURSABLE EXPENSES ORANGE COUNTY This Services Agreement (hereinafter "Agreement"), made and entered into this 1 st day of January, 2012, ("Effective Date") by and between Orange County,North Carolina a body politic and corporate of the State of North Carolina (hereinafter, the "County") and Clean Design, (hereinafter,the "Provider"). WITNESSETH: That the County and Provider, for the consideration herein named, do hereby agree as follows: 1. Services a. Scope of Work. i) This Services Agreement ("Agreement") is for professional services to be rendered by Provider to County with respect to (insert type of project): Marketing Communications Management as provided in Attachment A. ii) By executing this Agreement, the Provider represents and agrees that Provider is qualified to perform and fully capable of performing and providing the services required or necessary under this Agreement in a fully competent, professional and timely manner. iii) Time is of the essence with respect to this Agreement. iv) The services to be performed under this Agreement consist of Basic Services, as described and designated in Section 3 hereof. Compensation to the Provider for Basic Services under this Agreement shall be as set forth herein. 2. Responsibilities of the Provider a. Services to be provided. The Provider shall provide the County with all services required in Section 3 to satisfactorily complete the Project within the time limitations set forth herein and in accordance with the highest professional standards. b. Standard of Care. i) The Provider shall exercise reasonable care and diligence in perforxning services under this Agreement in accordance with the highest generally accepted standards of this iype of Provider practice throughout the United States and in accordance with applicable federal, state and local laws and regulations applicable to the Revised July 2010 � 6 performance of these services. Provider is solely responsible for the professional ' quality, accuracy and timely completion and/or submission of all work related to the Basic Services. ii) Provider sha11 be responsible for all errors or omissions, in the performance of the Agreement. Provider shall correct any and all errors, omissions, discrepancies, ambiguities,mistakes or conflicts at no additional cost to the County. iii) The Provider shall not, except as otherwise provided for in this Agreement, subcontract the performance of any work under this Agreement without prior written permission of the County. No permission for subcontracting shall create, between the County and the subcontractor; any contract or any other relationship. iv) Provider is an independent contractor of County. Any and all employees of the Provider engaged by the Provider in the performance of any work or services required of the Provider under this Agreement, shall be considered employees or agents of the Provider only and not of the County,and any and all claims that may or might arise under any workers compensation or other law or contract on behalf of said employees while so engaged sha11 be the sole obligation and responsibility of the Provider. v) Provider agrees that Provider, its employees, agents and its subcontractors, if any, shall be required to comply with all federal, state and local antidiscrimination laws, regulations and policies that relate to the perfo�nance of Provider's services under this Agreement. vi) If activities related to the performance of this Agreement require specific licenses, certifications, or related credentials Provider represents that it and/or its employees, agents and subcontractors engaged in such activities possess such licenses, certifications, or credentials and that such licenses certifications, or credentials are current, active, and not in a state of suspension or revocation. 3. Basic Services a. Basic Services. i) The Provider shall perform as Basic Services the work and services described herein and as specified in the County's Request for Proposals (the "RFP") "RFP Number 5177 for "Tourism Marketing Campaign" issued April 21, 201 l, and the Provider's proposal, which are fully incorporated and integrated herein by reference together with Attachments Attachment A. (designate all attachments). In the event a term or condition in any document or attachment conflicts with a term or condition of this Agreement the term or condition in this Agreement shall control. Should such conflict arise the priority of documents shall be as follows: This Agreement, the County's RFP together with attachments, Provider's Proposal together with attachments. ii) The Basic Services will be performed by the Provider in accordance with the following schedule: (Insert task list and milestone dates) Revised July 2010 2 � Task Milestone Date 1. Research and analyusis of brand&visitor profile Jan-Mar 2012 2. Creative Development for logo,print ads, etc Apr-Jun 2012 3. Media placement, social media,travel promos Jul-Sep 2012 4. New Web Strategy Sep-Dec 2012. 5. Collateral,media& strategic travel campaign dev Jan-June 2013 6. NA . iii) Should County reasonably determine that Provider has not met the Milestone Dates established in Section 3(a)(ii), County shall notify Provider of the failure to meet the Milestone Date. The County, at its discretion may provide the Provider seven (7) days to cure the breach. County may withhold the accompanying payment without penalty until such time as Provider cures the breach. In the alternative, upon Provider's failure to meet any Milestone Date the County may modify the Milestone Date schedule. Should Provider or its representatives fail to cure the breach within seven(7) days, or fail to reasonably agree to such modified schedule, County may immediately terminate this Agreement in writing, without penalty or incurring further obligation to Provider. This section shall not be interpreted to limit the definition of breach to the failure to meet Milestone Dates. 4. Duration of Services a. Term. The term of this Agreement shall be from January l, 2012 to June 30, 2013. b. Schedulin�of Services i) The Provider shall schedule and perform his activities in a timely manner so as to meet the Milestone Dates listed in Section 3. ii) Should the County determine that the Provider is behind schedule, it may require the Provider to expedite and accelerate his efforts, including providing additional resources and working overtime, as necessary, to perform his services in accordance with the approved project schedule at no additional cost to the County. iii) The Commencement Date for the Provider's Basic Services shall be February 1, 2012. 5. Compensation a. Compensation for Basic Services. Compensation for Basic Services shall include all compensation due the Provider from the County for all services under this Agreement except reimbursable expenses as specified in section 5(c),below. The m�imum amount payable for Basic Services is Three Hundred thousand Dollars ($300,000.00). In the event the amount stated on an invoice is disputed by the County, the County may withhold payment of all or a portion of the amount stated on an invoice until the parties resolve the dispute. Pavment for Basic Services sha11 become due and pavable within thirt.y(30) days of a�roperlv submitted invoice. Revised July 2010 3 � b. Additional Services. County shall not be responsible for costs related to any services in addition to the Basic Services performed by Provider unless County requests such additional services in writing and such additional services are evidenced by a written amendment to this Agreement. c. Reimbursable Expenses Reimbursable expenses are in addition to the fees for Basic Services and are for the following expenditures to the extent reasonable and actually incurred by the Provider with respect to the Project: i) Actual expenditures for postage, reproductions, photography, and long distance telephone charges directly attributable to this Project. ii) The actual cost of reproduction of reports, plans and specifications excluding documents for exclusive use by the Provider. iii) The Provider shall not be entitled to any mark-up on actual expenses incurred, exce�pt as provided in Aitachment A. iv) Reimbursable expenses shall be compensated by the County along with invoices for Basic Services provided by Provider. Payment of Reimbursable Expenses shall be subject to Provider's timely submission of valid receipts for any such expenses and approval by the County. Any additional charges not specified herein, must be mutually agreed to in advance by County and Provider and documented in writing with a letter signed by authorized representatives for County and Provider and, subj ect to budgeted funds. 6. Responsibilities of the County a. Cooperation and Coordination. The County has designated the (Visitors Bureau Executive Director) to act as the County's representative with respect to the Project and shall have the authority to render decisions within guidelines established by the County Manager andJor the County Board of Commissioners and shall be available during working hours as often as may be reasonably required to render decisions and to furnish information. 7. Insurance a. General Requirements. The Provider shall purchase and maintain and shall cause each of his subcontractors to purchase and maintain, during the period of performance of this Agreement: i) Worker's Compensation Insurance for protection from claims under workers' or workmen's compensation acts; ii) Comprehensive General Liability Insurance covering claims arising out of or relating to bodily injury, including bodily injury, sickness, disease or death of any of the Provider's employees or any other person and to real and personal property including loss of use resulting thereof; Revised July 2010 4 1 9 iii) Comprehensive Automobile Liability Insurance, including hired and non-owned vehicles, if any, covering personal injury or death, and property damage; and iv) Professional Liability Insurance, covering personal injury, bodily injury and property damage and claims arising out of or related to the performance under this Agreement by the Provider or his agents, Providers and employees. b. Insurance Ratin�. The minimum insurance rating for any company insuring the Provider shall be Best's A. If the Provider does not meet the insurance requirements the Counry's Risk Manager must be consulted prior to finalizing this Agreement. c. Limits of Covera�e. Minimum limits of insurance coverage shall be as follows: 1NSURANCE DESCRIPTION MINIMUM REQUIRED COVERAGE • Worker's Compensation Limits for Coverage A- Statutory State of N.C. Coverage B - Employers Liability $500,000 each accident and policy limit and disease each employee • Commercial General Liability $1,000,000 Each Occurrence; $2,000,000 Aggregate. • Automobile Liability Combined Single Limit$500,000 • Professional Liability NOTE: Insert coverage limits required by Risk Mana�er if applicable. d. Additional Insured. All insurance policies (with the exception of Worker's Compensation and Professional Liability) required under this Agreement shall name the County as an additional insured party. Evidence of such insurance shall be furnished to the County, together with evidence that each policy provides the County with not less than thirty (30) days prior written notice of any cancellation, non-renewal or reduction of coverage. 8. Indemnity a. The Provider agrees to defend, indemnify and hold harmless the County from all loss, liability, claims or expense, including attorney's fees, arising out of or related to the Project and arising from bodily injury including death or property damage to any person or persons caused in whole or in part by the negligence or misconduct of the Provider except to the extent same are caused by the negligence or willful misconduct of the County. It is the intent of this provision to require the Provider to indemnify the County to the fullest extent permitted under North Carolina law. b. To the extent provided by.North Carolina law Countv a�rees to indemnifv Provider from and hold it hannless against anv and all losses claims dama�es, expenses and liabilities which Agency mav incur based on anv information and data concernin� Client or its products/services provided the advertisin� or promotional material involved in such Iosses claims dama eg s ex�enses or liabilities has been approved by the Countv Revised July 2010 5 � o for�ublication Count�does not waive its soverei�n immunitv bv enterin� into this A�reement and fullv retains all immunities and defenses provided bv law wrth respect to any action based on this A�reement. 9. Amendments to the Agreement ' a. Changes in Basic Services. Changes in the Basic Services and entitlement to additional compensation or a change in duration of this Agreement shall be made by a written Amendment to this Agreement executed by the County and the Provider. The Provider shall proceed to perform the Services required by the Amendment only after receiving a fully executed Amendment from the County. 10. Termination a. Termination for Convenience. This A�reement mav be terminated without cause by either party upon sixty(60) davs prior written notice. b. Com�ensation After Termination. i) In the event of termination, the Provider sha11 be paid that portion of the fees and expenses that it has earned to the date of termination, less any costs or expenses incurred or anticipated to be incurred by the County due to errors or omissions of the Provider. ii) Should this Agreement be terminated, the Provider shall deliver to the County within seven (7) days, at no additional cost, all deliverables including any electronic data or files relating to the Project. c. Waiver. The payment of any sums by the County under this Agreement or the failure of the County to require compliance by the Provider with any provisions of this Agreement or the waiver by the County of any breach of this Agreement shall not constitute a waiver of any claim for damages by the County for any breach of this Agreement or a waiver of any other required compliance with this Agreement. 11. Additional Provisions a. Limitation and Assignment. The County and the Provider each bind themselves, their successors, assigns and legal representatives to the terms of this Agreement. Neither the County nor the Provider shall assign or transfer its interest in this Agreement without the written consent of the other. b. Governin� Law. This Agreement and the duties, responsibilities, obligations and rights of respective parties hereunder shall be governed by the laws of the State of North Carolina. c. Dis�ute Resolution. Any and all suits or actions to enforce, interpret or seek damages with respect to any provision of, or the performance or non-performance of, this Agreement shall be brought in the General Court of Justice of North Carolina sitting in Orange County,North Carolina. It is agreed by the parties that no other court sha11 have Revised July 2010 6 11 jurisdiction or venue with respect to such suits or actions. The Parties may agree to nonbinding mediation of any dispute prior to the bringing of such suit or action. d. Entire Agreement. This Agreement, together with the RFP and its attachments and the Proposal and its attachments, represents the entire and integrated agreement between the County and the Provider and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both parties. Modifications may be evidenced by facsimile signatures. e. Severabilitv. If any provision of this Agreement is held as a matter of law to be unenforceable, the remainder of this Agreement shall be valid and binding upon the Parties. f. Ownershi� of Work Product. Should Provider's performance of this Agreement generate documents, items or things that are specific to this Project such documents, items or things shall become the property of the County and may be used on any other project without additional compensation to the Provider. The use of the documents, items or things by the County or by any person or entity for any purpose other than the Project as set forth in this Agreement sha11 be at the full risk of the County. g. Non-A�nro�riation. Provider acknowledges that County is a governmental entity, and the validity of this Agreement is based upon the availability of public funding under the authority.of its statutory mandate. In the event that public funds are unavailable and not appropriated for the performance of County's obligations under this Agreement, then this Agreement shall automatically expire without penalty to County immediately upon written notice to Provider of the unavailability and non-appropriation of public funds. It is expressly agreed that County shall not activate this non-appropriation provision for its convenience or to circumvent the requirements of this Agreement, but only as an emergency fiscal measure during a substantial fiscal crisis. In the event of a change in the County's statutory authority, mandate and/or mandated functions, by state andlor federal legislative or regulatory action, which adversely affects County's authority to continue its obligations under this Agreement, then this Agreement shall automatically terminate without penalty to County upon written notice to Provider of such limitation or change in County's legal authority. h. Conflict. In the event of a conflict between the provisions of this A�reement and Attachment A the terms of this A�reement shall prevail. i. Notices. Any notice required by this Agreement shall be in writing and delivered by certified or registered mail,return receipt requested to the following: Orange County Provider's Name&Address Attention: Laurie Paolicelli Clean Design 501 W. Franklin Street 8081 Arco Corporate Dr. Chapel Hill,NC 27516 Suite 100 Revised July 2010 7 12 Raleigh,NC 27617 IN WITNESS WHEREOF, the Parties, by and through their authorized agents, have hereunder set their hands and seal, all as of the day and year first above written. ORANGE COUNTY: PROVIDER: CLEAN DESIGN By: By: Bernadette Pellissier, Chair Natalie Perkins, President Orange County Board of Commissioners Attest: Donna Baker, Clerk to the Board [SEAL] This instrument has been approved as to technical content. Laurie Paolicelli, Department Director This instrument has been pre-audited in the manner required by the Local Government Budget , and Fiscal Control Act. ' Office of the Finance Director ' This instrument has been approved as to form and legal sufficiency. Office of the County Attorney Revised July 2010 $ 13 ATTACHMENT - A Form 32-A I PROFESSIONAL SERVICES AGREEMENT FOR MARKETING COMMUNICATIONS MANAGEMENT This Agreement, effective the first day of January 2012 and ending the last day of June 2013 by and between Clean Design, 8081 Arco Corporate Drive, Suite 100 Raleigh, NC 27617 and the Chapel Hill/Orange County Visitors Bureau(CHOCVB), 501 West Franklin Street,Chapel Hill, NC, 27516 ("Ciient"). WITNESSETH THAT: WHEREAS,Agency is in the business of providing professional services in the areas of marketing, advertising and other communications services and desires to perForm such services for Client, and WHEREAS, Client desires to engage Agency to perform these communication services for Client, NOW, THEREFORE, the parties hereby agree and bind themselves as follows: ARTICLE I RETAINING AGENCY Client hereby retains Agency to serve as the Marketing Communications Agency for the product or service noted above and outlined in the RFP (Request for Proposal) that the CHOCVB issued, and Agency hereby accepts such relationship and agrees to carry out the communications function and to use its professional talent antl expertise to promote Client's product or service to the best of its ability. ARTICLE II DUTIES OF AGENCY 2.01 Agency shall coordinate a Marketing Communications program on behalf of the Client. 2.02 Agency shall select or advise the client on the different kinds of advertising to use. 2.03 Agency shall be primarily responsible for developing the concept and design of advertising, web design and other marketing communications assignments. 2.04 Agency shall produce or arrange for the production of advertising. Agency shall cause the production to be completed in a finished and usable form for the media being employed and, in the case of collateral,the appropriate form for outside suppliers to complete. � 2.05 Agency shall place, or arrange for the placement of, the advertising on radio or television stations or in newspapers, magazines or other media through an agency purchase of the time or space in the media to display the advertising. 2.06 As assigned, the Agency shall develop and implement social media strategy & support and conduct or coordinate market research on behalf of the Client. 2.07 Agency shall assign an Account Manager to service the Account. The Account Manager shall be available to the Client on a regular and reasonable basis for conferences. 2.08 Agency management shall meet with the Client on a basis deemed mutually agreeable by the Client and the Agency. 14 ARTICLE III CLIENT DUTIES 3.01 Client shall make available to Agency the staff members and other resources necessary for Agency to fuifill its obligations on a reasonable basis. 3.02 Client shall review materials submitted by Agency in a timely manner and, upon approval, will sign off on all plans and materials. This written approval acknowletlges that Client assumes final responsibility for content and proofing. ARTICLE IV AGENCY COMPENSATION 4.01 Agency is to be remunerated by Client by a combination of a monthly fee (AMF), media commissions and hourly charges. A fee of$6,000 per month shall be paid as the AMF. The monthly fee is billed at the beginning of each month for which the services are performed. The monthly fee is compensation for the overall management of the account; including strategic planning, documentation of activities, budget planning/monitoring, campaign creative concepts (both traditional and digital), campaign creative execution (design and copywriting), communications action plan and social media strategy/execution. 4.02 As to advertising production, public relations activities and market research, each job shall be the subject of a written estimate. Client may be invoiced upon estimate approval if the vendor requires a deposit. The balance is billed upon completion of the job. 4.03 Any development and/or provision of tangible personal property to Client by Agency will be the subject of separate agreement. 4.04 Media that is purchased on behalf of Client will be billed at Agency's cost with a 10% mark-up or commissions. Other outside expenses will be passed along to the client with NO mark-up, these may include but aren't limited to; purchase of printing services, custom and stock photography, free-lance illustration, broadcast/audio/video talent or. Agency shall be paitl at cost for travel and other out-of-pocket expenses directly related to the Account Management and to individual jobs. 4.05 Any media wherein Agency is liable for the payment of same for Client's account shall be paid for by the Glient in full prior to the closing date for such media. aftar �n �aT A service charge of 1.5% per month (18% per annum) will be charged on amounts outstanding past 30 days. 4.07 Client agrees to pay Agency's collection and legal expenses including reasonable attorney's fees if it defaults under the payment provisions set forth in this Agreement. C' ° � 15 ARTICLE V TERM AND TERMINATION 5.01 This Agreement shali be effective for a period of eighteen (18) months from the date first ���, appearing above and automatically renews for additional 12-month periods on each anniversary date. This ! Agreement may be amended, modified and extended by the mutual written consent of the Client and � Agency. I 5.02 During the initial or any renewal Term, both Client and Agency shall be entitled to terminate this agreement upon sixty(60)days prior written notice to the other. 5.03 Upon termination of this Agreement for any reason Client's files and property held by Agency shall be retumed to Client provided Client has complied fully with Article IV herein. I I 5:04 Client may suspend or cancel any advertising space or time,mechanicals, sales promotions or merchandising job after preparation of same has begun by Agency, provided, hawever, that Client shall reimburse Agency for all completed stages of production and all cancellation charges which may be assessed Agency by the Media, such as short rate reflecting frequency discounts or printing preparation charges. Client shall also reimburse Agency for all labor charges expended in pursuit of authorized assignments not completed at the time of cancellation, including outside charges such as typesetting, photography, press time, etc. i � � ARTICLE VI I SPECIAL PROVISIONS 6.01 All written notices shall be deemed given when deposited in the United States mail, postage '' prepaid, addressed to the other party at the address set forth in the preamble of this agreement, or at such other address as has been communicated to the other party in writing. 6.02 Client agrees to indemnify Agency from and hold it harmless against any and all losses, claims, damages, expenses or liabilities which Agency may incur based on any information and data concerning Client or its products/services, provided the advertising or promotional material involved in such losses, claims, damages,expenses or liabilities has been approved by Client for publication. 6.03 No provision or clause of this Agreement shall be deemed modified, altered, deleted, released or waived except by a writing signed by each of the parties hereto. 6.04 Governing Law. The nature, validity, and effect of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of North Carolina. 6.05 Entire Agreement. This Management Agreement constitutes the entire agreement befinreen the parties hereto and no modification hereof shall be effective unless made by a supplemental agreement in writing executed by all of the parties hereta IN WITNESS WHEREOF, the parties hereto have cause this instrument to be duly executed by their duly authorized officers where applicable and sealed as of the date first above written.