EXHIBIT 10.36
[THIS AGREEMENT NOW BETWEEN XXXXXX CIRCULATION COMPANY AND FIRESTONE PUBLISHING,
INC., AS ASSIGNEE OF DUGENT PUBLISHING CORP.]
XXXXXX CIRCULATION COMPANY
DISTRIBUTION AGREEMENT
DATED APRIL 22, 1983
Between Xxxxxx Circulation Company, 00 Xxxxxxxxx Xxxxx, Xxxx Xxxxxxxx, Xxx
Xxxxxx 00000 (hereinafter called "Xxxxxx") and Xxxxxx Publishing Corp., 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxx 00000 (hereinafter called
"Publisher").
1. Xxxxxx shall be the exclusive distributor in the United States, Canada and
overseas of all present and future publications published by Publisher, its
subsidiaries or affiliates at any time during the term of this agreement,
(hereinafter called "Publications").
2. The initial Publications to be distributed under this agreement, the
initial issues thereof to be so distributed and the frequency of publication
(monthly, bi-monthly or annual, etc.) are as follows:
GENT MONTHLY
CAVALIER MONTHLY
NUGGET BI-MONTHLY
DUDE TEMP'LY SUSPENDED
3. Publisher warrants and represents to Xxxxxx the following:
(a) Publisher is the owner of (i) each of the titles to the Publications
covered by this distribution agreement, (ii) the logos and/or (iii) trademarks
to be used in connection with such Publications and there are no liens or
encumbrances on those titles, logos and trademarks;
(b) Publisher has the ability and authority to deliver to Xxxxxx without liens
or encumbrances, sufficient copies of each issue of the Publications covered by
this agreement in salable condition to comply with the terms contained herein;
(c) Publisher has the full right, power and authority to enter into this
agreement and neither the execution or delivery of this agreement nor the
consummation of the transactions contemplated by this agreement shall constitute
or result in a breach of any agreement to which the Publisher is a party.
(d) Upon completion and delivery of each issue of each Publication covered by
this agreement, Publisher will own or control to the fullest extent permitted by
applicable law all rights of whatsoever kind and character in and to: (i) the
title of the Publication, (ii) its logo, (iii) trademark, (iv) copyright for
each issue and (v) the material contained in each issue, without any mortgages,
liens or encumbrances of any kind and without rights being in other persons not
party hereto;
(e) Upon completion and delivery of each issue of the Publications covered by
this agreement, nothing contained in each of such issues will be grounds for an
action either to prevent distribution thereof or for damages by reason of the
fact that the material contained therein is libelous, slanderous, obscene,
invades any right of privacy, a violation of any copyright or other personal or
property rights or for any other reason whatsoever; and
(f) Publisher will regularly issue each issue of the Publications covered by
this agreement during the term of this agreement and any renewal thereof and
will cause its printer(s) to send to Xxxxxx written notice confirming that all
copies of the respective issues of each Publication have been printed and
shipped to Xxxxxx' customers in accordance with the galleys prepared by Xxxxxx
pursuant to paragraph 7 (hereinafter such notice shall be referred to as "Notice
of Completion of Shipment").
4. If Publisher desires to change the frequency of publishing issues of any
Publications, it shall notify Xxxxxx at least 60 days before the proposed
shipping date of any affected issue. Publisher will supply to Xxxxxx a schedule
of shipping and on-sale dates for each issue of the Publication at least six (6)
months in advance of the on-sale date and at such times thereafter as requested.
5. The colophon of the Xxxxxx Circulation Company shall be printed on the
cover of each magazine distributed by Xxxxxx hereunder. The Publication's code
number assigned by Xxxxxx shall also appear on each cover. The print order for
distributions hereunder will be mutually agreed upon by Xxxxxx and Publisher,
providing, however, that if Publisher and Xxxxxx do not agree, then Xxxxxx shall
not be required to advance to Publisher any money on only those additional
copies of the print order that Xxxxxx does not agree to under Paragraph 11
hereof. Publisher hereby authorizes Xxxxxx to adjust claims made by any of
Xxxxxx' customers for delivery shortages or damages to copies of the issues of
the Publications and agrees to pay to Xxxxxx on demand all such shortages and
damage allowances granted by Xxxxxx to its customers and wholesalers.
6. Publisher shall be responsible for shipping and traffic costs (including,
without limitation, import and other duties) incurred, other than in-house costs
of Xxxxxx' traffic department, to ship copies of the Publications to all
customers of Xxxxxx located throughout the world.
7. Individual shipments to Xxxxxx' customers and wholesalers shall be
specified on a galley which, with the Publisher's cooperation, Xxxxxx shall
supply to the Publisher sufficiently in advance so that shipments can be
prepared and shipped to arrive at customers' and wholesalers' warehouses
approximately ten (10) days prior to the Publications' on-sale dates. Any cost
incurred for reshipping copies at Publisher's request while a Publication is on
sale will be borne by Publisher. All copies of Publication shall be fully
returnable. Publisher will accept whole copies, front covers, headings, Xxxxxx'
certification or wholesalers' affidavit statements as the basis for the
adjustment of unsold copies covered by such acceptance. Should publisher require
whole copy returns, notice of the quantities and full return address must be
supplied to Xxxxxx at least fifteen (15) days prior to off-sale date. Xxxxxx
will use it; best efforts to comply with Publisher's request for whole copy
returns, for which Publisher shall pay Xxxxxx the actual charge made by its
customers and wholesalers, and pay all freight, shipping and other charges
incurred by Xxxxxx (or Xxxxxx' agents) in connection therewith. Publisher shall
bear the risk of loss for all copies of Publications until the time they are
received by Xxxxxx' customers and during any time they are being returned or
reshipped at Publisher's instructions. Publisher shall keep all returned whole
copies from entering the stream of commerce for at least 180 days after off-sale
date, except to fill subscriptions and mail order requests, or such other sale
as is mutually agreed upon.
8. Publisher authorizes Xxxxxx to offer on Publisher's behalf, a Retail
Display Allowance ("RDA") to any retailer which engages in the sale of
Publications and agrees to be bound by the terms of Publisher's RDA program.
Publisher further warrants that it will give notice at least once a year to
retailers of the availability of this allowance. Publisher hereby authorizes
Xxxxxx to charge against the account of Publisher, Xxxxxx' expense for
administering this plan and a Retail Display Allowance of $.15 of the cover
price of each copy of the monthly Publications to the extent that uch Retail
Display Allowance shall become payable by Xxxxxx.
9. Publisher shall pay Xxxxxx for its distribution services (a) 6% of cover
price of each copy of each Issue of the three titles: Gent, Cavalier, Nugget and
each of their specials and (b) 7% of cover price on all new title Publications
sold through primary wholesalers (the "distribution fee"). Xxxxxx' distribution
fee for sale through Xxxxxx' Specialty Sales Operation (sales to retail accounts
and secondary wholesalers) will be the difference between the amount per copy
remitted to Publisher for sales to primary wholesalers and the price per copy
charged accounts serviced by the Specialty Sales Operation, as provided on
Attachment A.
10. For all copies distributed in certain wholesaler areas as listed on
Attachment "B" and other such areas as may be so classified from time to time by
Xxxxxx, Xxxxxx will xxxx Publisher and Publisher shall pay to Xxxxxx such
additional amounts per copy as shown on the attachment hereto.
Payment to Publisher for copies of Publications sold other than in the United
States will be paid by Xxxxxx to Publisher in United States funds at the
exchange rate Xxxxxx is charged by its banks.
11. Xxxxxx shall advance to Publisher, providing Publisher does not then owe
Xxxxxx any monies under this agreement, the following amounts at the following
times with respect to each issue of each Publication distributed hereunder:
(a) FIRST ADVANCE: An amount equal to the printer's xxxx and the xxxxxxx'x
xxxx.
(b) SECOND ADVANCE: 75% of Xxxxxx' ENS less any previous advance(s) and
Xxxxxx' distribution fee paid 60 days after on sale if a monthly frequency; 90
days after on sale if a bi-monthly frequency or less.
(c) THIRD ADVANCE: 100% of Xxxxxx XXX less any previous advance(s) and Xxxxxx'
distribution fees paid 70 lays after off sale if a monthly frequency; 90 days
after off sale if a bi-monthly frequency or less.
12. A. Final Settlement for each issue of each Publication distributed hereunder
shall be made 180 days after off-sale date; but Publisher agrees to accept
returns thereafter until 360 days after off-sale date and hereby authorizes
Xxxxxx to (i) charge such returns against any other open or subsequent issues Of
Publications or (ii) xxxx the amount of such returns to Publisher for payment
within five (5) days.
B. The balance due to Publisher, or overadvances due to Xxxxxx, as the case
may be, as of Final Settlement, shall be determined by multiplying the price per
copy charged by Xxxxxx to its customers and wholesalers by the number of copies
sold and not returned and subtracting therefrom to the extent same have not been
previously paid, (i) the fees of Xxxxxx for distribution, (ii) all other costs,
expenses and charges for which Publisher is responsible under the terms of this
agreement, and (iii) all other costs, expenses, and charges incurred by Xxxxxx
on behalf of Publisher.
C. Publisher's suggested price per copy to Xxxxxx' customers and wholesalers
will be the cover price less those discounts as described on Attachment A and B.
Any exceptions shall be mutually agreed upon.
D. (i) The fees of Xxxxxx for distribution, (ii) all other costs, expenses
and charges for which Publisher is responsible under the terms of this agreement
and (iii) all other costs, experses and charges incurred by Xxxxxx on behalf of
Publisher, shall be paid by Publisher to Xxxxxx within five (5) days after
notification by Xxxxxx or at the option of Xxxxxx may be deducted from any
advances or payments due Publisher on any issue of any Publication distributed
hereunder.
E. Regardless of (i) the Xxxxxx' on-going method for accounting for copies
received, copies unsold and copies sold, (ii) the basis for any advances made by
Xxxxxx to Publisher, be it upon draw, copies shipped, estimated net sales or
otherwise, or (iii) any other provision in this agreement, the obligation of
Xxxxxx to make payment to Publisher shall be basel solely upon the calculation
made upon Final Settlement pursuant to subparagraph B of this Paragraph 12.
F. The Final Settlement for each issue of each Publication shall be shown by
a written statement prepared by Xxxxxx, setting forth the totals of all items
debited and credited and the resultant balance and Publisher agrees to accept
such statement as an account stated and the items therein enumerated as true and
correct, except as to any specific item or items to which Publisher may object
in writing within forty-five (45) days from the date of the mailing of such
statements.
13. In the event a retailer, wholesaler or other customer of Xxxxxx shall take
advantage of any federal or state insolvency statute or shall cease its business
operation with the effect that such retailer, wholesaler or other customer shall
not return its unsold copies of the Publication(s); Xxxxxx shall use the average
net sale of the Publication(s) as reported by such retailer, distributor or
customer for the twelve (12) months (or lesser period if applicable) prior to
those months for which such retailer, wholesaler or customer shall not have
submitted unsold copies of the Publication(s). This average shall be used in
determining and computing the net sales of the Publication(s) shipped to such
retailer, wholesaler or customer for said months.
14. If for any reason, Xxxxxx makes an overadvance or overpayment to
Publisher, on any one or more issues of any Publications it distributes for
Publisher, such overadvance or overpayment, at the option of Xxxxxx, shall (i)
be deducted by Xxxxxx from any subsequent advances or payments due on any issue
of any Publication which Xxxxxx distributes for Publisher or (ii) be paid to
Xxxxxx within five (5) days after Xxxxxx' demand for payment. In any event, any
and all such overadvances and overpayments shall promptly be remitted by
Publisher to Xxxxxx upon termination of this agreement or at such time as Xxxxxx
shall have discontinued distributing any Publication or issue for Publisher for
any reason whatsoever.
15. At no cost to Publisher, Xxxxxx shall give such space as it deems
reasonable in its house magazine and/or bulletins for the promotion of the
Publications. However, the cost of all special promotions authorized by
Publisher shall be borne by Publisher. Publisher agrees that in all trade press
advertising pertaining to single copy circulation, it will include a phrase
substantially as follows: "Exclusively (Internationally) distributed by Xxxxxx
Circulation Company, West Xxxxxxxx, New Jersey".
16. Publisher shall indemnify and hold harmless Xxxxxx, its parent,
subsidiary or affiliated corporations, their officers, agents, representatives
or any of its customers, wholesalers, and their respective retailers against any
loss, damages, fines, judgments, expenditures or claims including counsel fees,
legal expenses and other costs, actually incurred by them or any of them
in connection with the distribution of any Publications, or any issue thereof,
or any promotional material provided by Publisher, when same is questioned or
objected to by public authorities, or other authorities, or in defending or
settling any claim, civil action or criminal prosecution against them or any :)f
them arising out of the use of the title of said Publication or the contents and
printed matter, including advertisements, pictures or
photographs contained in the covers or any page of said Publication, or in any
supplementary or other proceeding or action. Should any such event occur, and
Publisher will be given both prompt notice of such event and a reasonable
opportunity to approve selection of counsel and fee arrangements or arrange for
same itself, provided such selection by Publisher is acceptable to
Xxxxxx and such acceptance will not be unreasonably withheld by Xxxxxx, and if
Publisher does not make arrangements for indemnification satisfactory to Xxxxxx
then Xxxxxx may retain a reasonable reserve from any monies payable to Publisher
hereunder as security for this indemnity provision. Publisher will name Xxxxxx
as an additional named insured under any publisher's liability insurance carried
by Publisher, if any, and will deliver a certificate of such insurance to
Xxxxxx.
17. (a) Xxxxxx shall not take title to any of the copies of any of the issues
of any of the Publications covered by this agreement and, for all purposes
covered by this agreement, the parties mutually understand and agree that Xxxxxx
is acting as an agent for the sale of such copies of such Issues of such
Publications on behalf of Publisher as its principal, except as specified at
subparagraph (b) of this paragraph.
(b) All monies paid by, or due and owing from Xxxxxx' customers and
wholesalers for copies of Publications not returned to Xxxxxx, are and shall at
all times belong to and remain the absolute property of Xxxxxx, it being
distinctly understood and agreed by the parties that the obligation of Xxxxxx to
rake any remittances to Publisher under the terms of this agreement is that of
the obligation of a debtor to a creditor only. Xxxxxx alone shall xxxx its
wholesalers and customers for such monies and Xxxxxx alone shall have the right
to demand payment or institute legal proceedings for collection thereof.
18. The term of this agreement shall be for six (6) years commencing the last
day of the month that the last of the titles provided for in Attachment A go on
sale. This agreement shall be renewable for additional three (3) year terms
automatically, unless advance written notice is given by either party to the
other at least ninety (90) days prior to the commencement of the following
renewable term. Provided, however, (a) that this agreement may be terminated by
Xxxxxx at any time in its entirety or with respect to any particular issue of
any Publication, upon notice to Publisher should any issue of any Publication,
in the sole judgment of Xxxxxx, be deemed to be libelous, obscene or indecent,
or contain any facts or statements which are untrue or Publisher fails to abide
by the specific terms of this agreement, copy allotment, payment of its shipping
costs or frequency of issue or (b) that any ninety (90) day notice not to renew
given by Publisher shall not be operative if at the end of the then existing
term, or renewal-term, Publisher shall owe any monies to Xxxxxx.
In the event that this agreement is not renewed, Xxxxxx has the right to
withhold any or all advances (as described in Paragraph 11) on the last issues
of any Publications to be distributed under this agreement. Such withholding
shall be limited in amount and time to that amount and time necessary for Xxxxxx
to determine whether there exists any overpayments for prior issues of
Publications distributed and all other costs, expenses or charges incurred by
Xxxxxx on behalf of Publisher, and in no event shall be beyond the Final
Settlement date of the last issue of any Publications distributed hereunder.
19. Publisher agrees not to assign this contract or any part thereof, without
first obtaining the consent of Xxxxxx to such assignment. Publisher agrees that
any assignment of an advance or payment hereunder shall be made only on a form,
satisfactory to Xxxxxx, which shall include the executed acknowledgment of any
assignee that, among other things, such assignee shall be subject to all rights
that Xxxxxx shall have against the Publisher.
20. Xxxxxx shall have the unqualified right to refuse to distribute any titles
published by Publishers not listed in Attachment A, in which event, Publisher
shall be free to distribute said title through other means of distribution.
21. For purposes of this agreement, the "On-Sale" date shall mean the date a
Publication is placed on sale to the public and the "Off-Sale" date shall mean
the date that Publisher and Xxxxxx agree that a Publication should be removed
from such sale.
22. Notwithstanding anything contained in this agreement, Xxxxxx shall not be
obligated to make any payments hereunder, and shall consider it to be a material
breach of this agreement, unless all copies of each issue of the Publication are
printed and shipped by Publisher's printer(s) to Xxxxxx' customers in accordance
with the galleys prepared by Xxxxxx pursuant to Paragraph 7 on the date provided
in the Notice of Completion of Shipment sent to Xxxxxx by Publisher's
printer(s).
23. This agreement sets forth the understanding of the parties with respect to
the distribution of Publications and may not be amended except in writing signed
by the parties and shall be binding upon the parties, their respective
successors and assignees; and, in particular, this agreement shall be binding
for its terms upon any transferees, successors or assigns of Publisher who shall
publish any of the Publications, it being the intent of the parties that this
agreement run with and apply to all Publications. This agreement is to be signed
in two counterparts, both of which shall be deemed to be originals.
/S/ /S/
DUGENT PUBLISHING CORP (PUBLISHER) XXXXXX CIRCULATION COMPANY
