DISTRIBUTION AGREEMENT
Exhibit
10.2
The
Distribution Agreement (the "Agreement") is entered into as of March 2007 (the
"Execution Date") but effective as or January 1, 2007 (the Effective Date")
between Platinum Studios, Inc. ("Platinum") and Top Cow Productions, Inc. ("Top
Cow"), with reference to the following:
WHEREAS,
Top Cow is party to a print-publishing distribution agreement with Image Comics,
Inc. ("Image"), which is a party to a Sales Agent Agreement with Diamond Comic
Distributors, Inc. ("Diamond");
WHEREAS.
Platinum and Top Cow desire to enter into an agreement pursuant to which Top
Cow
will cause the distribution of certain of Platinum's comics and graphic novels
through Diamond's agreement with Image, all under the terms and conditions
set
forth below;
1. (a) Top
Cow shall distribute printed copies of Platinum's comic-hook and graphic-novel
properties that have been designated by Platinum and approved by Top Cow ("Comic
Properties") through Diamond (via the Image's agreement with Diamond) during
the
Term (defined
below), which approval shall not be unreasonably withheld; provided
that,
if at anytime during the Term, the majority of Top Cow's own titles arc
solicited in a section of previews other than the Image section, then Top Cow
shall provide Platinum with the similar placement through Diamond (but
subordinate to Top Cow's own titles) that Top Cow receives for its own titles.
Comic Properties shall include, without limitation, Platinum's "Kiss" Comic
Properties ("Kiss Tides"). As part of its services hereunder, Top Cow shall
provide the services listed in Exhibit ''A" attached hereto. Platinum grants
to
Top Cow all rights necessary (whether under copyright, trademark, or otherwise)
to perform all of Top Cow's obligations hereunder.
(b) If,
at any time during the 'Xxxx, Top Cow enters into an agreement to distribute
all or substantially all of its printed comics to the "direct market" through
channels other than Diamond ("Other Distribution Channels"), Platinum shall
have
the option to have the Comic Properties distributed through such Other
Distribution Channels, as well, on terms to be negotiated in good
faith.
2. Top
Cow
shall not be obligated to distribute hereunder more than 60 Comic Properties
per
year ("Comics Titles Maximum"), excluding variant-cover and limited editions
of
Comic Properties ("Variant Covers"). Notwithstanding the foregoing, Top Cow
shall also distribute hereunder up to 24 Kiss Titles ("Kiss 'Titles Maximum")
per year.
(b) Subject
to timely delivery, Top Cow's approval as set forth in Section
(a)
above, and no more than one full-page per item, and provided Platinum shall
solicitat least two titles for the month in question, Top Cow shall provide
two
full pages in Diamond's "Previews" catalogue (the "Diamond Catalogue") each
month of the Term for Comic Properties solicitations.
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3.
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During
the Term:
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(a) .1-op
Cow shall he responsible for arranging the printing of all Comic Properties
listed with Diamond pursuant hereto at prices at least equal to the prices
charged by the same printer for Top Cow's own regular titles, but Top Caw's
obligations extend only to standard printing, and do not include enhanced
versions (such as, without limitation, 3D effects, foils, or other special
effects);
(b) Top
Cow
shall provide to Platinum at no additional charge forty-four (44) standard-sized
pages of standard comic-book lettering (no obligation to hand letter) per month
of the Term for Comic Properties.
(c) Top
Cow shall be responsible for collecting, either directly or via
Image,
all
monies payable to Platinum by Diamond for sales of Comic Properties and
Ancillary Products hereunder; but Top Cow shall have no obligation to litigate,
w arbitrate, or to use third-party collectors:, provided, however, that Top
Cow
covenants and agrees to employ the general level of efforts to collect monies
payable to Platinum hereunder as it uses to collect monies payable directly
to
Top Cow for Top Cow's own properties from Image and/or Diamond.
4. Top
Cow shall be entitled to receive the following:
(a) $3,000.00
for each Comic Property listed with Diamond (the "Listing
Fee"),
provided that no Listing Fee shall be payable for variant covers of a Comic
Property listed with Diamond. The Listing xxx for a Comic Property shall he
due
and payable to Top Cow as of the date that Diamond publishes its preview book
listing such Comic Property.
(b) ten
percent (10%) of Net Revenues, defined below ("Top Cow Receipts");
"Net Revenues" shall mean the gross revenues paid or credited by Diamond to
Image or Top Cow for sales of Comic Properties and Variant Covers ("Gross
Revenues") less only
(A)
the
actual, documented, out-of-pocket
printing eosts,
(B)
Diamond's
direct marketing set-vices
costs which are incurred at the request of Platinum; (C) audit and other
documented collection costs (pro-rated); (D) the Listing Fee, but only if not
previously paid by Platinum as set forth in Section 4 (a) above; (E) other
directly related costs incurred by Top Cow or Image in connection with the
Comic
Properties that have been approved by Platinum (the "Costs"). Top Cow does
not
represent or warrant that there will he any Net
Revenues; and
(c) a
nonrefundable fee of Fifty Thousand US Dollars (US $50,000) (the "Distribution
Fee") payable on the execution hereoll The timely receipt of portion of this
fee
shall be a condition precedent to the continuing effectiveness of any of Top
Cow's obligations hereunder.
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(d) Not
more frequently than once per calendar month, Top Cow shall provide
Platinum with an invoice for Costs not recouped from Gross Revenues, if any,
together with any appropriate documentation. Platinum shall remit payment to
Top
Cow for such recouped Costs within thirty days following receipt of such
invoice. Any disputes shall be resolved via arbitration as set forth in Section
11(c) below.
5. (a) Within
thirty days of receipt by Top Cow of Gross Revenues (either
directly
from Diamond or from Image), Top Cow shall remit to Platinum 90% of Net Revenues
(the "Platinum Receipts") derived from those Gross Revenues
hereunder.
(b) Within
thirty (30) days of the end of each calendar month during the Term and, to
the
extent applicable, following any expiration or termination of this Agreement,
Top Cow shall provide to Platinum a written report of all Net Revenues received
by image and/or 'Fop Cow during said calendar month, together with a.
calculation of the Platinum Book Receipts and Platinum Product Receipts due
thereon, including all deductions made for Costs broken out on a title-by-title
and product-byproduct basis (each, a "Monthly Fee Report").
Simultaneously with the delivery of the Monthly Fee Report to Platinum. Top
Cow
shall remit to Platinum the Platinum Book Receipts and the Platinum Product
Receipts shown on such Monthly xxx Report to he due and owing to Platinum,
less
any Platinum Book Receipts and/or Platinum Product Receipts already paid by
Top
Cow in respect of such Monthly Fee Report pursuant to Section 5(a) above. All
amounts payable hereunder are to be in United States Dollars.
(c) Audit
Rights. Platinum shall have the right during the Term and, to the extent
applicable, following any expiration or termination of this Agreement, at its
own expense and during reasonable business hours, to have an independent
certified public accounting firm examine the relevant books and records of
account of Top Cow regarding Net Revenues, Platinum Receipts, Top Cow Receipts,
listing Fees and Costs, to determine whether appropriate accounting and payment
of Platinum Receipts has been made under the Monthly Fee Reports; provided
that
Platinum shall be prohibited from exercising such inspection rights (i) with
respect to Platinum Receipts payable under any Monthly Fee Report more than
eighteen months following delivery of such Monthly Fee Report to Platinum;
and
(ii) more often than once each twelve-month period. If any such audit accurately
discloses that Top Cow underpaid Platinum Receipts due hereunder, then absent
any dispute by Top Cow, Top Cow covenants and agrees to pay Platinum, within
five (5) business days of such disclosure, an amount equal to the deficient
amount disclosed by such audit. If the amount of additional Platinum Receipts
shown by such audit to be owed by Top Cow for such time period shall be in
amount in excess of ten percent (10%) of the aggregate amount of Platinum
Receipts actually paid by Top Cow during the same time period (and also not
less
than $5,000), then Top Cow shall reimburse Platinum for all costs and expense
incurred in conducting such audit within ten days of submission to Top Cow
of a
written invoice for all such costs and expense. In the event of any dispute
under this Section, the parties shall submit to binding arbitration as sct
forth
in Section I 1(d) hereof within sixty days of such dispute arising.
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6. (a) The
term
of
this Agreement (the "Term") will commence on the Effective
Date and will continue for one year, unless earlier terminated pursuant to
the
provisions of Section 6(h) below. For purposes of clarification, Platinum shall
be prohibited from submitting solicitations to Top Cow hereunder if such
solicitations would appear in the Diamond previews catalogue after December
31, 2007.
(b) The
Temi may be terminated by either party hereto in accordance with the
following;
(i) upon
thirty days prior written notice detailing a material breach of this Agreement
that remains uncured for said thirty-day period;
(ii) immediately
upon
(A) Image
or any
party hereto filing a voluntary petition in bankruptcy or insolvency or
petitions for reorganization under any bankruptcy law;
(B)
Image
or
any party hereto consenting or being subject to an involuntary petition
in bankruptcy or if a receiving order is made against it under applicable
bankruptcy legislation;
(C) an
order,
judgment or decree by a court of competent jurisdiction, upon the application
of
a creditor, being entered approving a petition seeking reorganization or
appointing a receiver, trustee or
liquidator of all or a substantial part of the assets of Image or any
party hereto and such order, judgment, or decree continues in effect for a
period of thirty (30) consecutive days;
(iii) upon
at
least ninety (90) days prior
written notice to the other party here, without cause; or
(iv) if
either
party ceases to conduct business.
7. The
provisions of Section 8, 9 and 11 shall survive any termination or expiration
of
this
Agreement.
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8. (a) Top
Cow hereby represents and warrants to Platinum that
(i)
it is
fully authorized
to execute this Agreement and perform its obligations hereunder in accordance
with its terms,
(ii)
the
execution and performance of this Agreement by Top Cow does not and will not
conflict with or violate the terms of any other agreements by which lop Cow
is
or may he hound; and
(iii)
'l'op Cow has the power, ability and authority to cause the listing of Comic
Properties through Image's agreement with Diamond and the collection of Net
Revenues form Diamond directly or through Image and the remittance of the Net
Revenues as required hereunder.
(b) By
Platinum.
Platinum hereby represents and warrants to Top Cow that
(i)
it is
fully authorized to execute this Agreement and perform its obligations hereunder
in accordance with its terms,
(ii)
the
execution and performance of this Agreement by Platinum does not and will not
conflict with or violate the terms of any other agreements by which Platinum
is
or may be bound and Platinum's execution and performance hereof shall not
violate any law, rule, or governmental regulation; (iii) neither the
distribution of Platinum's Comic Properties
as
contemplated hereunder nor the performance by Platinum of its obligations
hereunder, will violate or infringe any third party rights or interest; (iv)
all
the rights herein licensed to 'fop Cow are clear and unencumbered, and that
there are no actions or claims pending or threatened in connection therewith;
and (v) Top Cow shall have no obligation or liability whatsoever (e.g. to pay,
to report, or otherwise) to any third party, whether artists, writers, other
contributors, licensors, or owners as a result of its actions hereunder. In
connection herewith, Platinum covenants and
agrees to add Top Cow as
an
additional named insured under it Errors and Omissions Policy.
9. Subject
to the terms and conditions of this Agreement, (I) each party ("Inticmnitor")
agrees to defend, hold harmless, and indemnify the other party, its employees,
directors, officers and agents ("Indemnitee(s)") from and against all claims,
actions, damages, and/or liabilities, together with any and all losses, lines,
penabies, costs, and expenses, including, without limitation, attorneys' fees
and expenses or penalties imposed by governmental entities (collectively, the
"Liabilities") by reason of or resulting from any breach by Indemnitor of any
of
the provisions of this Agreement or any action or inaction of Indemnitor or
its
directors, officers, employees and agents that is illegal or constitutes gross
negligence or intentional misconduct in the performance of Indemnitor's
obligations under this Agreement; provided, however, that Inderrmitor's
liability to an Indemnitee under this Section shall be reduced to the
extent, and in the proportion, that such I ,iahilities have been proximately
caused by any Indemnitee's negligence, recklessness, or intentional misconduct
provided that Top Cow shall have
no
duty to investigate, review, or inquire about any Comic Property.
10. The
relationship of the
parties
established by this Agreement is that of independent contractors,
and nothing contained in this Agreement should he construed to give either
party
the power to
(i)
act
as an agent or
(ii)
direct or control the day-to-day activities of the other All financial and
other
obligations associated with each party's
business
are the sole
responsibility of that party.
I
I. (a) Any
notice required or permitted to be given under this Agreement will be
effective if it is in writing and sent by prepaid certified or Express mail,
or
insured or overnight courier (i.e., FedEx, UPS, or XXXX), return receipt
requested, to the appropriate party at. the address set ihrth below and
with the appropriate postage affixed or costs prepaid. Either party may change
its address for receipt ornotice by notice to the other party in accordance
with
this Section. Notices are deemed given two business days following the date
of
mailing or one
business day following delivery to a courier.
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To
Platnum:
Attention:
Xxxxx Xxxxxxxxx, President 00000 X. Xxxxxxx Xxxx., xxXxxxx Xxx Xxxxxxx. XX
00000
Fax:
(000) 000-0000
With
a
copy to:
Tide%
Pretsky, Executive VP, Business Affairs & (ieneral Counsel Platinum Studios,
Inc.
00000
X.
Xxxxxxx Xxxx., 141'
Floor Xxx Xxxxxxx, XX 00000
Fax:
(000) 000-0000
To
Top Cow:
Top
Cow
Productions, Inc.
Attention:
Xxxx
Xxxxxxx
00000
Xxxxx Xxxxxx Xxxx,, Xxxxx 000 Xxx Xxxxxxx; XX
00000
Fax:
(000) 000-0000
With
a
copy sent concurrently to:
Law
Offices of Xxxxxx X. Xxxxxx XX, P.C. 0000X Xxxxx Xxxxxx Xxxxxxxxx,
#000
Xxxx Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
(a) Other
than payment of the Distribution Fee, nonperformance of either party will be
excused to the extent that performance is rendered impossible by strike, Fire,
flood, governmental acts, orders, restrictions, or any other reason where
failure to perlbrrn is beyond the control and not caused by the negligence
of
the non-performing party.
(b) This
Agreement shall be governed by and construed in accordance with the laws of
the
Stale ot.California,
without
giving effect to provisions related to choice of laws or conflict
or
laws.
(c) Any
dispute regarding any aspect of this Agreement or any act which allegedly has
or
would violate any provision of this Agreement or any law (hereinafter "Arhitral
Dispute") shall be submitted to arbitration in Los Angeles County, California,
and selected in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as the exclusive remedy for any such claim or Arbitral
Dispute. The decision of the arbitrator shall be final, conclusive and binding
upon the parties. Should any party to this Agreement pursue any Arbitral Dispute
by any method other than said arbitration
(except as required by law), the responding party shall be entitled to
recover from the initiating party all damages, costs, expenses and attorneys'
fees incurred as a result of such action.
(d) The
prevailing party in any action or Arhitral Dispute arising from or relating
to
this Agreement or a dispute between the parties is entitled to recover its
costs, including reasonable attorney foes, in addition to any other relief
to
which it may be entitled. Any party in whose favor a judgment
ur
d;1,eeis.on
has been
entered
shall
also
he entitled
to recovery of its attorney's lees
and
costs in enforcing such judgment or
decision.
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(f) The
waiver by either party of any breach of this Agreement does not waive
any
other breach. The failure of any party to insist on strict performance of any
covenant or obligation under this Agreement will
not
be a waiver of such party's right to demand strict compliance in the future,
nor
will the same be construed as a novation of this Agreement. If
any
part of this Agreement is unenforceable, the remaining portions of this
Agreement will remain in full force and effect. The parties have had an equal
opportunity to participate in the negotiation and drafting of this Agreement
and
the attached schedules and exhibits. No ambiguity will be construed against
any
party based upon a claim that that party drafted the ambiguous language.
Whenever required by context, a singular number will include the plural, the
plural number
will include
the singular, and
the
gender of any pronoun will include all genders
(g) This
Agreement, including any exhibits and schedules referred to herein, is the
final
and complete expression of all agreements between these parties and supersedes
all previous oral
and written agreements
regarding
these matters. It may be changed only by a written instrument signed
by
the party against whom
en
liffcemeni is sought.
(h) The
Agreement may be executed in counterparts,
each of which
will be deemed an original, but all of which taken together will
constitute but one
and the same
instrument. The
Agreement may be executed and delivered by facsimile or PDF and the
parties agree
that such execution and delivery will have the same force
and
effect as delivery of an original document with original signatures, and that
each party may use such electronic signatures as evidence of the execution and
delivery of this Agreement by all parties
to
the same extent that an original signature could he
used.
(i) Neither
party may assign its rights
and
obligations under
this
Agreement without
the written consent of the other, except pursuant
to a
merger, acquisition, or sale of
all or
substantially all of its assets,
Subject
to the foregoing, this Agreement will be binding upon
and inure to the benefit of the parties and their successors and assigns.
Any Assignee shall
execute a counterpart of this Agreement
and
deliver it to the other party within
Fifteen days
of the assignment.
TOP
COW P1 S 1NU.
President: IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
written above
| PLATINUM STUDIOS, INC. | |||
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Date
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By:
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/s/ Xxxxx Xxxxxxxxx | |
| Xxxxx Xxxxxxxxx | |||
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President
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EXHIBIT
A
ADDITIONAL
SUPPORT SERVICES
*Trafficking
of print quotes from Quebecor and other printers
* Coordination
of files and press time with Quebecor and other printers
* Coordination
of marketing services as
they apply directly to
Diamond Comic Distributors
* Access
to
al] Diamond Comic Distributors marketing and other services at Image's preferred
rates
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*
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Coordination
of marketing services as they apply to direct-market retailers
Facilitation or Diamond
order codes for all product
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*
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Facilitation
of
UPC codes
for all product
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*
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Coordination
olPRIs (Print Run, Instructions) between Image and
Diamond
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