EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 24b-2
Certain portions,
indicated by [***] of this exhibit have been
omitted
pursuant to a request for confidential
treatment under Rule 24b-2 under the
Securities Exchange Act of 1934. The omitted portions have been
filed separately
with the Securities and Exchange Commission.
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into at
Fort Washington, Pennsylvania as
of the 1st day of July, 2008 by and between KAPPA
PUBLISHING GROUP, INC., a
Delaware corporation, whose place of business is at 6198 Butler
Pike, Blue Bell,
Pennsylvania 19422 (hereafter referred to as PUBLISHER)
and KABLE DISTRIBUTION
SERVICES, INC., a Delaware corporation, whose place of
business is at Suite 4C,
14 Wall Street, New York, NY 10005 (hereafter referred to as
DISTRIBUTOR).
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, PUBLISHER and
DISTRIBUTOR are parties to an Amended and Restated
Distribution Agreement dated as of April 30,
2006, as amended (as so amended,
the "Original Distribution Agreement") which
provides for the distribution by
DISTRIBUTOR of PUBLISHER's titles; and
WHEREAS, PUBLISHER and DISTRIBUTOR
wish to amend certain provisions of the
Original Distribution Agreement; and
WHEREAS, PUBLISHER and
DISTRIBUTOR have agreed to amend and restate the
Original Distribution Agreement in its entirety to reflect
the changes required
by the parties; and
WHEREAS, PUBLISHER and
DISTRIBUTOR agree that the provisions of
this
Agreement shall apply solely to Publications
published by PUBLISHER and its
Affiliates.
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NOW THEREFORE, for and in
consideration of the mutual covenants herein
contained, and other good and valuable consideration,
the parties hereby agree
as follows:
1. DEFINITIONS
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(a) "Affiliate" of any Person
shall mean any other Person controlling or
controlled by or under common control with
such specified Person. For the
purposes of this definition, "control," when used with
respect to any specified
Person, shall mean the power to direct the management,
policies or investments
of such Person, directly or indirectly, whether through the
ownership of voting
securities, by contract or
otherwise, and the terms
"controlling" and
"controlled" shall have meanings correlative to the foregoing.
(b) "Average Net
Sale Percentage" with respect to
each issue of a
Publication shall mean the quotient of the Net
Billings with respect to the
Measurement Issues (determined by reference to the Settlement
Payment Publisher
Statements, as defined in Paragraph 15, or comparable
statements, as the case
may be, as referred to in the definition of Measurement
Issues) divided by the
Publisher's Gross Billings with respect to such
Measurement Issues (similarly
determined). When the context requires, Average
Net Sale Percentage shall be
calculated separately for one or more Distributor's
Sales Outlets, or for all
Distributor's Sales Outlets combined.
(c) "Change of Control" with respect to
any Person shall mean
(i)
That any "person" or "group" within the meaning of Sections
13(d)
and 14(d)(2) of the Exchange Act (x)
becomes the "beneficial
owner" as defined in Rule 13d-3
promulgated under the Exchange
Act of more than 50%, of the then outstanding voting
securities
of such Person, or (y) acquires by proxy, contract or
otherwise
the right to vote for the election of directors (or similar
such
managing individuals), for any merger or
consolidation of such
Person, or for any other matter or question more than 50% of
the
then outstanding voting securities of such Person; or
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(ii) That
during any period of twenty-four (24)
consecutive months
(not including any period prior to the date of this
Agreement),
Present Directors and/or New
Directors cease for any reason to
constitute a majority of the Board of
Directors (or similar
governing body) of such Person. For purposes of
the preceding
sentence, "Present Directors" shall mean individuals
who at the
beginning of such consecutive twenty-four
month period were
members of the Board of Directors (or similar governing body)
of
such Person and "New Directors" shall mean any
director whose
election by the Board of Directors (or similar governing body)
of
such Person or whose nomination for election by
such Person's
stockholders was approved by a vote of a least two-thirds of
the
directors then still in office who were Present Directors or
New
Directors.
(d) "Completion of
Shipping" with respect to each issue of a Publication
shall mean the date the PUBLISHER's printer
completed shipping all copies of
such issue to Distributor's Sales Outlets
in accordance with DISTRIBUTOR's
shipping instructions as stated on the Printer's Completion
Notice.
(e) "Cover Price" with respect to
each issue of a Publication shall mean
the suggested retail selling price of such issue specified on
the cover of each
copy thereof.
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(f) "Distributor's Estimated Final Net
Billings" with respect to each issue
of a Publication shall mean the product of the Average
Net Sale Percentage of
such Publication (using the Completion of
Shipping as the calculation date)
multiplied by the Publisher's Billing Price of such issue and
multiplied by the
number of copies of such issue
shipped in accordance with the
Printer's
Completion Notice; provided,
however, that Returns of issues
of such
Publication, the On-Sale Dates of which are prior to
those of the Measurement
Issues, which have not previously
been accounted for may be deducted in
computing Distributor's Estimated Final Net Billings. In the
event there are no
Measurement Issues of such Publication as of such
date, the Average Net Sale
Percentage for purposes of
determining Distributor's Estimated Final
Net
Billings shall mean the Average Net Sale Percentage of other
Publications which
have editorial content similar to that of the
Publication (e.g., all Word-Find
Publications, all Crossword Publications, or all Wrestling
Publications), and if
there are no such similar Publications, Average Net Sale Percentage
for purposes
of determining Distributor's Estimated Final Net Billings shall
mean the Average
Net Sale Percentage of all Publications with the same
publication frequency as
that of such Publication as of such Completion of Shipping,
and if there are no
Publications with the same publication frequency as
that of such Publication,
Average Net Sale Percentage for purposes of determining
Distributor's Estimated
Final Net Billings shall mean
the Average Net Sale Percentage
of all
Publications. When the context requires,
Distributor's Estimated Final Net
Billings shall be calculated separately for Foreign
Distributor's Sales Outlets
as a group and for non-Foreign Distributor's Sales Outlets as a
group.
(g) "Distributor's Sales Outlets" shall
mean customers of DISTRIBUTOR.
(h) "Effective Date" shall mean July 1,
2008
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(i) "Exchange Act" shall mean
the Securities Exchange Act of 1934, as
amended.
(j) "Exchange Rate" shall mean the
cash (as contrasted with the forward)
rate at which a currency other than U.S.
Dollars is convertible into U. S.
Dollars, as published in the Exchange Rates table
(or comparable table, if
renamed) of the Wall Street Journal,
or if such information is no longer
published in such newspaper, as published
by Telerate Systems, and if such
information is no longer published by
Telerate Systems, by such reputable
financial information publishing company as may
be mutually agreeable to the
parties.
(k) "Measurement Issues"
with respect to a calculation
date and a
Publication shall mean (i) the last three (3) issues of
such similarly priced
Publication if such Publication is published monthly or
more frequently, (ii)
the last two (2) issues of such similarly priced Publication if
such Publication
is published at least quarter annually but not as
frequently as monthly, and
(iii) the last issue of such similarly priced Publication if such
Publication is
published less frequently than quarter annually, in each such case
as to which a
Settlement Payment Publisher Statement
(as defined in Paragraph 15), or
comparable such statement if rendered by
another distributor or pursuant to
another distribution agreement, has been issued prior to such
calculation date.
In any case where Settlement Payment Publisher
Statements (or such comparable
statements as the case may be) for fewer than the indicated number
of issues are
available, the Measurement Issues
shall refer to such fewer issues as are
available"
(l) "Net Billings" with respect to
each issue of a Publication shall mean
Publisher's Gross Billings with respect to such issue, less
Return Credits with
respect to such issue.
(m) "Notice" shall mean a
communication between the parties which conforms
to the requirements of Paragraph 25.
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(n) "Off-Sale Date" with respect to each
issue of a Publication shall mean
the On- Sale Date of such Publication's
next issue, or such other date as
designated by PUBLISHER that all copies of
such issue are scheduled to be
removed from retail outlets for sale to the general public.
(o) "On-Sale Date" with respect to
each issue of a Publication shall mean
the date designated by PUBLISHER that such issue
is scheduled to be placed in
retail outlets for sale to the general public.
(p) "Outside Deadline
for Returns" with respect to each
issue of a
Publication shall mean [***] days after the
Off-Sale Date of such issue for
non-Foreign Distributor's Sales Outlets, and [***] days after
the Off-Sale Date
of such issue for Foreign Distributor Sales Outlets.
(q) "Person" shall mean an
individual, a corporation, a partnership,
an
association, a joint stock company, a joint
venture, an estate, a trust, an
unincorporated organization or a
government, governmental unit
or any
subdivision thereof or any other entity.
(r) "Printer's
Completion Notice" with respect to
each issue of a
Publication shall mean a notice delivered
to DISTRIBUTOR and executed by an
appropriate representative of the printer of such issue, which
shall specify the
number of copies of such issue
shipped in accordance with
DISTRIBUTOR'S
instructions, and the date of completion of such shipping.
(s) "Publisher's Billing Price" with
respect to each copy of each issue of
a Publication shall be in an amount
equal to [***] of Cover Price of all
Publications.
(t) "Publisher's
Gross Billings" with respect to
each issue of a
Publication shall mean the product of Publisher's Billing
Price with respect to
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such issue multiplied by the
number of copies distributed
hereunder in
accordance with the Printer's Completion Notice with respect to
such issue.
(u) "Publication(s)"
shall mean the title(s) listed on
Schedule "A"
attached hereto including any "one-shots," annuals or titles
derived therefrom,
as amended from time to time to include any
additional titles subsequently
covered by the terms hereof as provided herein or as
provided by agreement of
the parties.
(v) "RDA" shall mean a
retail display allowance offered by
PUBLISHER
pursuant to a program to
retailers engaged in the sale
of PUBLISHER's
Publication(s) for (i) each copy
sold of each Publication and/or (ii) a
specified position in a retailer sales fixture.
(w) "Returns" with respect to
each issue of a Publication shall mean any and all copies of such
issue returned
for credit by Distributor's Sales Outlets pursuant to Paragraph 9
hereof and for
which DISTRIBUTOR has issued such a credit.
(x) "Return Credit" with respect to each
issue of a Publication shall mean
the product of Publisher's Billing Price with respect to such
issue multiplied
by the number of Returns of such issue.
(y) "Territory" shall
mean the United States of America and
all its
possessions, all Army and Fleet Post Office
designations, and the Dominion of
Canada, and the rest of the world.
2. GRANT OF RIGHTS
---------------
(a) Except as otherwise provided
in subparagraph (b) of this Paragraph 2
PUBLISHER hereby gives and grants to
the DISTRIBUTOR, effective as of the
Effective Date and during the term
hereof the sole and exclusive right to
purchase from PUBLISHER and to resell and distribute
throughout the Territory,
the Publication(s). All purchases shall be subject
to DISTRIBUTOR's right to
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receive Return Credits for Returns as set forth in Paragraph 9
hereof.
(b) Notwithstanding the provisions
of subparagraph (a) of this Paragraph 2
to the contrary, PUBLISHER reserves the right to
(i)
Sell copies of the Publication(s) to subscribers at
subscription
prices;
(ii)
Distribute, give, or deliver to
individuals without cost or
compensation copies of any of the
Publication(s) as part of a
promotional campaign for such Publication(s); and
(iii) Sell
copies of the Publication(s), directly or
indirectly, to
chains of retailers not serviced by DISTRIBUTOR or
Distributor's
Sales Outlets on the Effective Date; provided, however,
that if
during the term hereof,
such service is commenced
to
substantially all of the
retailers in any such chain by
DISTRIBUTOR or Distributor's Sales Outlets, and
if DISTRIBUTOR
agrees, after deducting any RDA payment obligations with
respect
to each issue of each Publication sold at
such retailers, to
remit to PUBLISHER with respect thereto the same amount of
money
as PUBLISHER had been receiving with respect to such sales
prior
thereto, PUBLISHER shall
commence selling exclusively to
DISTRIBUTOR for resale to the retailers in such chain
or to the
Distributor's Sales Outlets for
ultimate resale to such
retailers, and pursuant to the terms
hereof (except as such
payment amount by DISTRIBUTOR to PUBLISHER may be
inconsistent
with that set forth on Schedule "A" attached hereto as
a result
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of the terms of this section (iii)) upon expiration of
any then
existing distribution agreement with respect to such chain(s)
of
retailers.
3. TERM AND EVENTS OF DEFAULT
--------------------------
(a) Except as otherwise provided in
subparagraphs (b), (d) or (f) of this
Paragraph 3, the term of this Agreement shall be for a period
commencing on the
Effective Date, and ending on June 30, 2011. The rights
and obligations of the
parties under this Agreement shall include and be
deemed to include all issues
of all Publication(s), the respective On-Sale
Date(s) of which occur prior to
the termination hereof ("Covered Issues"). Any and all of the
respective rights
and obligations of the PUBLISHER and DISTRIBUTOR
under this Agreement shall
survive its termination for the purposes of distributing
Covered Issues, and of
handling and crediting Returns and making payments, adjustments and
credits with
respect to Covered Issues. Termination of this
Agreement shall not affect any
right of either party to receive any money owed
by the other hereunder, the
amount of which shall be calculated in the manner
which would have otherwise
been required hereby, absent such termination.
(b) Notwithstanding any other
provision of this Agreement to the contrary,
either party may terminate this Agreement upon thirty
(30) days' Notice to the
other upon the occurrence or existence of an Event of Default by
the other party
of the type referred to in subparagraph (c)(i), (ii) or (vii)
of this Paragraph
3; or upon three (3) days' Notice to the other upon the
occurrence or existence
of an Event of Default by the
other party of the type
referred to in
subparagraph (c)(iii), (iv), (v), or (vi)
of this Paragraph 3, or upon the
failure of a party to pay an arbitration award within the time
period prescribed
in subparagraph 28(c).
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(c) For purposes of this
Agreement, each of the following events shall
constitute an Event of Default by the party as to
which such event refers or
pertains:
(i) any
representation or warranty made by such party herein or in any
written statement or
written representation shall prove to have
been
incorrect when made in any respect
material to this Agreement; or
(ii) Such
party shall fail to perform in any material
respect any
term, covenant or agreement
contained in this Agreement (other than those
set forth in Paragraph 15, those set forth
in subparagraph 24(b), and those
subject to a pending
dispute being resolved pursuant to the
terms of
Paragraph 28) on its part to
be performed or observed if such a failure
shall remain unremedied for [***]
days after Notice thereof from the other
party, unless such failure cannot
reasonably be expected to be remedied in
such [***] day period, in
which case such party shall fail within such
[***] day period to commence
such remedy and or proceed diligently with
respect thereto; provided,
however, that in no event shall any such cure
period extend beyond [***] days after such
Notice; or
(iii) Such
party shall generally be unable to pay its debts
as such
debts become due, or shall admit in
writing its inability to pay its debts
generally, or shall make a general
assignment for the benefit of creditors;
or a proceeding shall be
instituted by or against a party seeking
to
adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up,
reorganization, arrangement, adjustment,
protection, relief, or composition
of it or its debts under any law
relating to bankruptcy, insolvency or
reorganization or relief of
debtors, or seeking the entry of an order for
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relief or the appointment of a receiver,
trustee, or other similar official
for it or for any substantial part
of its property if any such involuntary
proceeding is not
dismissed within sixty (60) days; or such party
shall
take any corporate action to
authorize any of the actions set forth above
in this subsection (iii); or
(iv)
any judgment creditor shall have
commenced an enforcement
proceeding against such party pursuant to
a judgment or order of a court of
competent jurisdiction after
lawful service for the payment of money (not
fully covered by insurance) in excess of
Two Hundred Fifty Thousand Dollars
($250,000) which enforcement proceeding
was not stayed prior to the seizure
of any such party's assets,
which seizure was not reversed by the timely
filing of an appeal thereof. For purposes
of this section (iv) the creation
of a lien by entry of such a judgment or
order shall not itself constitute
such a seizure.
For purposes of
this Agreement, each of the following
events shall
constitute an Event of Default by
DISTRIBUTOR:
(v)
DISTRIBUTOR shall default, violate, or be in
breach of any loan
document which provides, or
which together with other such loan documents
provides, working capital or
accounts receivable financing for DISTRIBUTOR
or DISTRIBUTOR's business and such
default, violation, or breach results in
the termination of such
financing at a time when no such
replacement
financing or working
capital is available to DISTRIBUTOR
in amounts
comparable to that terminated;
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(vi) Each of
the events constituting an Event of Default as set forth
in subparagraph (e)(ii)(E) of this
Paragraph 3; and
(vii) DISTRIBUTOR shall fail
[***] times in any twelve (12)
consecutive month period to perform in any
material respect its obligations
set forth in subparagraph 24(b), and
such failure shall remain uncured for
[***] days after Notice thereof from
PUBLISHER; or DISTRIBUTOR shall fail
any single time to perform in
any material respect its obligations
set
forth in subparagraph 24(b) and as
to which DISTRIBUTOR shall have failed
to make reasonable efforts to
commence a cure thereof during the [***] day
period after Notice of such failure is
given by PUBLISHER to DISTRIBUTOR.
(d) Notwithstanding the provisions
of subparagraph (a) of this Paragraph 3
to the contrary, the term of this Agreement shall
be automatically extended
beyond the June 30, 2011 termination date referred to in
such subparagraph (a)
for an extension period of three (3)
years; provided, Publisher agrees in
writing to such extension 180 days prior to the
expiration of the then current
term.
(e) (i) Notwithstanding any language to
the contrary in the balance of this
Paragraph 3, PUBLISHER and
DISTRIBUTOR agree that the provisions of
this
subparagraph (e) shall exclusively govern with
regard to the procedures for
collection of any sum actually or allegedly due from
DISTRIBUTOR to PUBLISHER
under any of the provisions of this Agreement. Accordingly, no
alleged or actual
failure by DISTRIBUTOR to make any payment
to PUBLISHER shall in any manner
constitute an Event of Default except as provided
in section (ii)(E) of this
subparagraph (e).
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(ii) The
following procedures shall govern that portion of any Initial
Advance Payment, Settlement Payment,
or GST refund as to which there is no
dispute or contest between the
parties:
(A) If PUBLISHER shall not have received DISTRIBUTOR's
check in
the
amount determined by DISTRIBUTOR to be owed
to PUBLISHER as an
Initial
Advance Payment or as a Settlement Payment or as a
refund of
GST net of
deductions as solely determined by DISTRIBUTOR pursuant
to
the terms of
Paragraph 15, ("Missing Check") on or before the
[***]
business day after it was to have been paid in
accordance with the
provisions
of subparagraph 15(a)(i), 15(a)(ii), or 15(k) as applicable
(the
"Mailing Date"), PUBLISHER may give
Notice to DISTRIBUTOR
identifying
the Publication(s) and Mailing Date(s) for which there is
a Missing
Check ("Notice of Non-Receipt").
(B) If PUBLISHER shall not have received a
Missing Check on or
before the
[***] business day after its Mailing Date,
PUBLISHER may
give Notice
to DISTRIBUTOR of nonpayment with respect to such Missing
Check
("Notice of Non- Payment") on or after the [***]
business day
after the
giving of a Notice of Non-Receipt with respect thereto.
(C) DISTRIBUTOR shall wire funds to replace any Missing Check
on
or before
the second business day after the Notice of Non-Payment with
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respect to such Missing Check was given
to DISTRIBUTOR ("Delayed
Payment Date") unless such Missing Check
was actually received by
PUBLISHER on or before such Delayed
Payment Date and a receipt
therefor, signed by a PUBLISHER
representative, shall have been
obtained by
DISTRIBUTOR.
(D) If PUBLISHER shall have given
DISTRIBUTOR a Notice of
Non-Payment and a Notice of Non-Receipt
with respect to a Missing
Check, and
if DISTRIBUTOR shall fail to wire funds to PUBLISHER in the
amount of
such Missing Check on or before the Delayed Payment Date
in
accordance with the terms of subsection (C) of
this section (ii),
PUBLISHER
may give Notice to DISTRIBUTOR of the Final Opportunity
to
Cure Default
(the "Final Notice"). DISTRIBUTOR shall wire funds in the
amount of
the Missing Check on or before the [***] business day
after
the Final
Notice was given (the "Outside Date").
(E) It shall constitute an Event of Default, if
(x) PUBLISHER shall have given the
Notices required in
subsections (A), (B), and (D) of this
section (ii), and if
DISTRIBUTOR
shall fail to wire funds to PUBLISHER in the amount
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of a Missing Check as to which a Final Notice has been
given on
or before the Outside Date; or
(y) If in any consecutive
twelve (12) month period,
PUBLISHER shall have given the Notices required
in subsections
(A) and (B) of this section (ii) and DISTRIBUTOR
shall fail to
mail its check in the amount as an
Initial Advance Payment or as
a Settlement Payment or as a GST refund determined by
DISTRIBUTOR
to be owed PUBLISHER net of deductions as solely
determined by
DISTRIBUTOR pursuant to the terms
of Paragraph 15 on the
applicable Mailing Date or shall fail to wire funds to
PUBLISHER
to replace the amount of such Missing
Check on or before its
Delayed Payment Date (either such occurrence, a
"Late Payment
Event") a number of times equal to the greater of (I) the
number
of Publications covered by this Agreement on the day of the
Late
Payment Event, or (II) [***].
A Late Payment Event may not be counted towards an Event of Default
if PUBLISHER
did not send DISTRIBUTOR Notices of Non-Receipt and
Non-Payment related thereto
in accordance with the terms of this subparagraph (e). There shall
be rebuttable
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presumptions that a check payable to the order of
PUBLISHER which was produced
by DISTRIBUTOR in the ordinary course of its business
was actually mailed the
day of such production, and that a
negotiable check payable to the order of
PUBLISHER dated on or before the Mailing Date which
was actually received by
PUBLISHER within [***] business days of
the Mailing Date was mailed on the
Mailing Date.
(F) Notwithstanding the foregoing, in no circumstances shall
an Event of Default be deemed to have occurred unless the
Missing
Check is in the amount of [***] or more, in which case
any such
unpaid amount shall be governed by the terms of section (iii)
of
this subparagraph (e). Also, it shall not constitute an Event
of
Default if the amount shown to be due on a
Publisher Statement
(as hereinafter defined) is equal to the amount of
DISTRIBUTOR's
check
tendered to PUBLISHER in payment with respect thereto.
(iii) The following procedures shall govern
any payment as to
which there
is a dispute or contest between the parties. Any claim by
PUBLISHER
(A) that the amount paid by DISTRIBUTOR as an
Initial
Advance Payment or Settlement
Payment as reduced by
deductions taken therefrom by DISTRIBUTOR was incorrect;
(B)
that the information shown on a Publisher Statement
was incorrect;
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(C) that an Initial Advance Payment
or Settlement
Payment was not made because the
information shown on a
Publisher Statement was incorrect;
(D) that DISTRIBUTOR's demand for payment pursuant
to
subparagraph 15(e) or (h) is incorrect;
(E) for Missing Checks of less than [***] each or
(F) for any alleged non-payment by DISTRIBUTOR
other
than as provided in section (ii) of this subparagraph (e),
shall be subject to the dispute
resolution provisions of
Paragraph
28.
(iv) Each Notice given by PUBLISHER to
DISTRIBUTOR pursuant to
the terms of
this subparagraph (e) shall be clearly marked
with the
boldface legend,
"NOTICE PURSUANT TO NON-PAYMENT
PROCEDURES OF
DISTRIBUTION AGREEMENT"; shall not
be included with any other
information being communicated to
DISTRIBUTOR other than another
Notice
given pursuant to the terms of this subparagraph
(e); shall
identify the
Publications and Mailing Date to which it refers; and in
the case of
a Notice of Non-Payment and a Final Notice, the necessary
instructions by which DISTRIBUTOR is to wire the
necessary funds to
PUBLISHER. Notice failing to comply with the
terms of this section
(iv) shall
be deemed null and void and not to have been delivered
to
DISTRIBUTOR.
(f) Notwithstanding any other
provision of this Agreement to the contrary,
PUBLISHER may terminate this Agreement if
at any time during the term hereof
either
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(i) some or all of the voting securities of DISTRIBUTOR or all
or
substantially all of the assets of DISTRIBUTOR are sold to
(A) a distributor in the business of buying
magazines
from publishers for resale to, or acting as
an agent for
publishers in the sale or other distribution of
magazines
to, wholesalers or retailers of magazines (a
"Competitor")
or
(B) to a Person which is not a Competitor, but
which
has a net worth or shareholders, equity of less than
Thirty
Million Dollars ($30,000,000); or
(ii) DISTRIBUTOR merges or consolidates with or into
(A) any Competitor or
(B) any Person of the type described in
subparagraph
(f)(i)(B) of this Paragraph 3 . To terminate the
Agreement
pursuant to the terms of this subparagraph (f),
PUBLISHER
shall give Notice to DISTRIBUTOR of such
termination not
more than ninety (90) days after the date of any such
sale,
merger, or consolidation. Such Notice
shall specify a
specific
termination date (which may but
shall not be
required to be within such 90-day
period) not less than
fifteen (15) nor more than forty-five (45) days
after the
date of such Notice.
4. PUBLISHER REPRESENTATIONS
-------------------------
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(a) PUBLISHER represents and warrants that
(i) it is the sole and exclusive
owner of all rights, including
but not limited to, copyrights,
titles,
trademarks, tradenames, trade dress,
logos and formats, in and to
the
Publication(s) (collectively, the "Rights")and that the
Rights are not subject
to any liens or encumbrances of any nature other than
as set forth on Schedule
"C" attached hereto; (ii) the rights herein granted to DISTRIBUTOR
have not been
granted to any other person, firm, or corporation with respect to
any portion of
the term hereof; (iii) it has the right
and authority to enter into this
Agreement and to perform the obligations hereunder to be performed
by PUBLISHER;
(iv) there are no existing contracts, agreements or other
arrangements which in
any way whatsoever prevent or interfere with the PUBLISHER's making
and entering
into this Agreement or performing
hereunder; and (v) that to the best of
PUBLISHER's knowledge, there are no suits or
proceedings pending or threatened
against or affecting PUBLISHER which, if adversely
determined, would impair the
rights herein granted to DISTRIBUTOR or
prevent PUBLISHER from performing
hereunder.
(b) PUBLISHER represents and agrees
that all issues of the Publication(s)
shall conform substantially to the respective existing copies
thereof exhibited
by PUBLISHER to DISTRIBUTOR; provided, however,
that PUBLISHER may change the
size, page count, contents, format, or Cover Price of any
Publication from time
to time during the term hereof if PUBLISHER believes
that any such change will
inure to the best interests of any of the Publication(s) or of
PUBLISHER.
5. FIRST OPTION
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(a) DISTRIBUTOR shall have the first
option to purchase from PUBLISHER and
to resell and distribute any and all newly published periodicals or
publications
intended to be published by PUBLISHER during the term of
this Agreement on the
same terms and conditions as set forth in this Agreement.
DISTRIBUTOR shall also
have the first option to purchase from PUBLISHER and to
resell and distribute
any and all additional periodicals or publications
acquired by and intended to
be published by PUBLISHER during the term of this
Agreement, either (i) after
the expiration of any distribution contract with any
other party covering such
periodicals and publications and thereafter on the same terms
and conditions as
set forth in this Agreement or (ii) as set
forth in any other distribution
contract then in effect with any other distributor covering
the distribution of
such periodicals and publications until the expiration of its
then current term
and thereafter on the same terms and conditions as set forth in
this Agreement.
PUBLISHER shall promptly give DISTRIBUTOR Notice of its intention
to publish and
distribute any such additional periodicals or publications and
DISTRIBUTOR shall
within fifteen (15) days after receipt of
such Notice, advise PUBLISHER of
whether it is willing to distribute such additional periodicals or
publications.
If DISTRIBUTOR is willing to do so, each such periodicals or
publications shall
thereafter be deemed to be a Publication, and
shall be governed by the terms
hereof. If DISTRIBUTOR is unwilling to distribute such additional
periodicals or
publications, PUBLISHER shall have the
right and option to have each such
periodicals or publications thereafter
distributed by another distributor,
without liability to DISTRIBUTOR hereunder.
(b) In the event PUBLISHER
exercises its option to have the additional
periodicals or publications referred to in subparagraph (a)
of this Paragraph 5
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which DISTRIBUTOR is unwilling
to distribute, distributed by
another
distributor, and PUBLISHER receives on a net basis,
less for sale of issues of
such additional periodicals or
publications from such other
distributor
performing the same type of distribution services
than it would have received
from DISTRIBUTOR pursuant to the terms of this Agreement,
DISTRIBUTOR shall pay
such difference to PUBLISHER thirty (30) days after
DISTRIBUTOR's receipt of a
copy of each settlement statement
received by PUBLISHER from such
other
distributor, subject to DISTRIBUTOR's right to
audit same and being supplied
with all information reasonably necessary to
calculate and/or verify any such
sums owed. Notwithstanding the foregoing, no such sums shall be due
PUBLISHER
(i) if
the financial arrangements between
PUBLISHER and such other
distributor is the result of bad faith or
collusion between PUBLISHER and
such other distributor, or
(ii)
with respect to any time period after the
termination of this
Agreement.
When the term of any distribution agreements with any such other
distributor has
been completed and prior to any renewal or new term's
taking effect, if this
Agreement has not then been terminated, PUBLISHER shall again
offer DISTRIBUTOR
the right to distribute such additional periodicals or
publications on the same
terms and conditions as set forth in this Agreement, and if
DISTRIBUTOR remains
unwilling to distribute such additional periodicals or
publications, DISTRIBUTOR
shall continue to pay the amounts
required pursuant to the terms of this
subparagraph (b). If PUBLISHER fails
to offer DISTRIBUTOR the right to
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<PAGE>
distribute such additional periodicals or
publications(s) no sums shall be due
PUBLISHER pursuant to the terms of this
subparagraph (b) from and after the
termination date of such other distribution agreement.
6. NUMBER OF COPIES, FREQUENCY, AND COVER DESIGNATIONS
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(a) The number of copies of each
issue of each Publication to be printed
shall be as PUBLISHER and DISTRIBUTOR shall
mutually agree upon, and in the
absence of such agreement, the p
