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EXHIBIT 10.3.3
Information marked with "*****" has been omitted from the public filing and
filed separately with the Commission pursuant to a request for confidential
treatment filed by Easyriders, Inc.
[XX XXXXXXXXX & SONS COMPANY LETTERHEAD]
Paisano Publications, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000-0000
PROPOSAL FOR MAGAZINES September 11, 1996
DESCRIPTION
This Agreement covers the production by us of the annual requirements of
your publications, EASY RIDERS/V TWIN Magazines, TATTOO Magazine, IN THE
WIND Magazine, QUICK THROTTLE Magazine, SAVAGE Magazine, FLASH Magazine,
BIKER Magazine, AMERICAN RODDER Magazine, V. Q. Magazine, ROADWARE
Catalog, MAGALOG, RETAIL Catalog and CALENDAR(S) for a period of five
years. Commencement of production shall begin in 1996 and continue through
production of 5 years annual requirements for each title. There after this
Agreement shall remain in effect for additional twelve (12) month terms
unless either party provides notice of termination to the other party
ninety (90) days prior to the expiration of the initial term or any one
(1) year term thereafter.
It is further understood that from time to time you may acquire the right
to publish new titles, one shots, calendars and other publications (the
"New Title(s)". Should you require print and print-related services for
one or more New Titles during the term of this Agreement, you agree to
notify us. Provided we can produce the new Title(s) on equipment available
in our plant, on a schedule reasonably satisfactory to you, provided the
specifications fall within the parameters of the specifications as listed
in Exhibit C and new Title(s) are not currently produced by us, then such
New Title(s) will be deemed part of the "Work" described herein, and we
shall produce such New Title(s) on the terms and conditions set forth
herein for the remaining term of this Agreement.
TRIM SIZE, QUANTITY OF WORK TO BE PRODUCED, SPECIFICATIONS AND PRODUCTION
SCHEDULE
All work to be performed hereunder shall be in accordance with the
specifications set forth herein and in Exhibit C, and completed in
accordance with a production schedule which shall be submitted for your
approval.
If at any time you desire to make changes in the specifications (including
pages and count except those described in Exhibit C) set forth herein or
in the production schedule, we will cooperate with you in putting such
changes into effect within a reasonable period of time, provided such
changes do not have a materially adverse effect on our operations. In the
event any such change results in an increase or decrease in the cost of
performing the work, the prices for the work shall be adjusted to fairly
reflect such increase or decrease. In addition, should such change result
in our inability to use any materials on hand or ordered for you in the
production of your work, you will pay us reasonable costs associated with
such materials and their disposition.
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TRIM SIZE, QUANTITY OF WORK TO BE PRODUCED, SPECIFICATIONS AND PRODUCTION
SCHEDULE (continued)
It is agreed that you may have the european language editions of each of
the titles covered under this Agreement produced elsewhere. This will not
be considered a breach of this Agreement nor will it affect the prices in
Exhibit A provided your resulting production requirements remain within
the specifications as outlined in Exhibit C.
OVERTIME
If overtime is required to meet your delivery or quantity requirements, or
if you should change the delivery date, quantity requirements, or any
other specification that necessitates overtime after a production
schedule is agreed upon, we will use our best efforts to make any
necessary overtime available and will charge for such overtime at our then
current rates. If overtime is worked due to our internal scheduling
problems arising after a production schedule is agreed upon, and not
caused by your failure to comply with the production schedule, overtime
charges will not be made. No chargeable overtime will be worked without
your prior approval, and in the absence of such approval, delivery of the
work will be made as promptly as practicable consistent with our then
available capacity.
FORECAST
To assist us in providing for your requirements, you agree to submit a
forecast once every six (6) months showing the total requirements for work
hereunder, including count, number of pages, colors, copies to be bound
and delivery dates for each issue for the next twelve (12) months. We will,
within thirty (30) days of receipt of such forecasts, develop
manufacturing schedules for the production of the work based on the
forecasts you furnish. You will notify us as promptly as practical of any
significant change in forecasted requirements. It is our intent to provide
for any changes from your forecast whenever possible; however, an increase
in count or number of pages above that specified in the manufacturing
schedules developed from your forecasts will be subject to our ability to
obtain materials and to schedule the increased work.
PRELIMINARY OPERATIONS
You are to furnish material for offset preliminary work f.o.b. our plant of
manufacture in accordance with the production schedules in the following
manner:
Furnished Film
(A) All full page ads shall be furnished as screened offset film that are
in one piece, per color, per page, in good printing condition. Film
must have suitable register and platemaking marks, folio and color
identification within the untrim area of each page, and in all other
respects be to our specifications. Film having line or tone elements
taped, mounted or otherwise affixed to a carrier shall not be
considered as one piece film. Any alterations, corrections, splitting
of illustrations or of spread film and all adapting of film that have
been prepared for an untrim size that is different from that of these
pages will be extra.
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PRELIMINARY OPERATIONS (CONTINUED)
Ads should be accompanied by suitable OK'd Cromalin proofs or offset
progressive proofs made from that same film using AAAA/MPA Standard inks
and paper stocks specified for this job, and in all other respects to our
specifications. Film shall also be accompanied by authorized copy proofs
which shall be ozalid, dylux, velox or suitable proofs, identified as to
job name, issue, folio and color. Such authorized copy proofs shall be
furnished as one piece, per color, per page. All queries and the proof
itself must be initialed or stamped and dated to indicate your approval
and authorization to print.
For pages which you choose not to supply a Cromalin proof or progressive
proofs, we shall use our best efforts to provide a commercially acceptable
product based upon the guidance you provide. You agree to assume the risk
of any variation from desired copy match for all pages not accompanied by
suitable OK'd proofs.
We shall perform a mechanical check of furnished film which shall consist only
of checking for scratches or damage as a result of shipping and a visual
register check. In the event such check uncovers any defective film, we shall
notify you and you shall either:
1. Replace the defective film.
2. Give us your approval to run the film as is, or
3. Have us make corrections (if it is possible to do so) at an extra
cost to you.
(B) Partial page ads for combining with the edit portion of the page shall be
in all respects to our specifications.
(C) For ad pickups, you shall supply the original OK'd proof from the previous
time and tear sheet copy pasted down on the layout indicating the issue and
page number from which the ad can be picked up.
Four-Color Separations
All four-color is to be supplied as separations with color and folio clearly
identified within the untrim area of the film and in all aspects to our
specifications.
Mechanicals
For each page or pair of pages, you will furnish a pasted-up type mechanical
with all type and line elements in position, with the sole exception of artwork
requiring sizing or cropping. Elements not in position will be charged as
strip-ins.
A minimum of 5/16 inch must be maintained between trim edge and any type or
non-bleed artwork.
Layouts
A layout submitted in addition to or in lieu of the base mechanical must
clearly show the exact size, position and cropping of halftone copy and loose
line art. Four-color subjects and pickup artwork will be identified by stats
pasted down in position. Color breaks, screens, and reverses must be clearly
indicated on a tissue overlay.
Layouts must be exact in all dimensions and positions. (Type and line elements
submitted on a vinyl overlay with the layout instead of on the base mechanical
must be at printing size and accurately positioned.)
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PRELIMINARY OPERATIONS (CONTINUED)
Page Proofs
We will submit two sets of color-separated proofs of complete assembled
pages. These proofs will be produced from final printing film and will be
identified as to job name, issue, folio and color. We will inspect to
verify page elements for completeness, position, bleed, and trim margin.
(No proofreading of type.) We will stamp and our inspector will sign the
top sheet of each set of proofs to indicate as our authorized proof.
You will review these proofs for content and position, and answer all
queries. You will sign the top sheet of one set of proofs and return that
set to us as an OK-to-Print. You will retain the second set for reference.
Disposition and Storage
All material you furnish will be returned immediately after completion of
binding of the issue for which such material was used. All packing and
handling of such material will be billed as an extra charge. Such material
will be returned f.o.b. our plant of manufacture.
All furnished printing film and intermediate film produced by us may be
held in storage at no charge for a maximum of one year after completion of
binding of the issue for which such material was used. Additional storage,
if requested, will be billed as an extra charge.
If You Use A Desk Top System
For each page you will furnish us, on diskette or other electronic medium,
with a digital file, containing page geometry and text.
You will also furnish us with loose transparencies, which we are to scan,
random proof, and incorporate with your supplied file. You will also
supply a laser proof indicating size, position, orientation and crop of
each 4/c image.
Swatch matching or other deviation is additional. You will be charged
additionally for mechanical operations such as tints, colored or reverse
type and rules if they are not correctly designated on your file.
Silhouetting of photographs and creation of key-only shadows will be
performed by us and will be charged additionally. We will provide one
prepress color proof for your review and approval plus two sets of position
proofs for copy and margin OK. Any additional proofing will be charged as
an extra.
Any replacement files that we process due to changes that you have made,
or alterations that you request us to make, will be billed as incurred
based upon the point in the production cycle at which they occur. We will
retain final form pages, either as digital files or film, for a period of
three months after the data or film has been shipped to the printing
division. Storage for a longer period, if requested, will be charged as an
additional.
We will maintain a substantial library of Adobe and Bitstream fonts. If
you elect to use any font that is not in our library, we must reach prior
agreement on the font acquisition cost.
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PRELIMINARY OPERATIONS (CONTINUED)
Digital File Input for Computer To Plate Platemaking
(DIGITAL FILES -- QUARKXPRESS, Aldus Pagemaker or other off the shelf
DTP software):
For each page you will furnish us, on optical disk, removable hard
disk or other mutually acceptable electronic medium, with a complete
digital file, written in native application language, containing text
and page geometry with all trapping completed, with high resolution
images placed within or linked to picture boxes and ready to output
for platemaking in accordance with our specifications. File codes
will be provided that identify each folio. If multiple files are
transmitted across telephone lines via modem, an additional charge
may apply.
Along with the page document, you will supply a hard copy proof as a
verification of file contents as well as an authorized color proof
(random or final form) of sufficient quality to serve as press
guidance. Checking of files prior to output will be limited to a
cursory element check. No editing of images will be performed.
If you fail to supply required proofs, we will assume no
accountability for any missing or incomplete data, but we will
generate one color proofs from your files to serve as OK's for our
pressroom, and you will be charged additionally for those proofs.
Our prices are based on standard times for Raster Image Processing
and writing PostScript that have been established based on tests
performed on your supplied materials. If after each six month period
during the term of this Agreement, we determine that your pages
repeatedly exceeds that standard time due to unusually large image
files, the use of blends, extensive rotation and scaling, or for any
other reason, we will review our charges and mutually agree on
revised prices to reflect the changes in your pages and our then
current rates for computer operations.
If we are unable to output your files due to incorrect format,
damaged disk or other reason attributable to your files, you will
re-submit the files. We will charge additionally, at the current hour
rate for computer operations, for the initial effort to output
the file(s) and will apply the contract prices to processing of the
corrected files.
We will maintain a substantial library of fonts, but if you elect to
use any font that is not in our library, we must reach prior
agreement on the font acquisition cost.
It is understood that CTP technology continues to evolve and
improve. If during the term of this Agreement, there are significant
changes in the technology used by us or in the volume of CTP work we
are actually processing on existing systems, the benefits derived
from such technology charges or increased usage will be shared with
you, after allowance for our recovery of capital investment, start-up
and operating expenses.
OWNERSHIP OF FILM, COPY, PLATES, CYLINDERS, ETC.
Copy and any film furnished by you will be used solely for your work
and will remain your property. Film, electronic data files, prints,
reproduction mediums and plates made by us will be used solely for
your work but will remain our property.
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PRESSWORK
All forms are to be carefully made ready and printed by the web offset
process in uniform color using good grades of ink as follows:
Four-Color Cover Forms - in four-color process cover inks.
Four-Color Body Forms - in four-color process body inks.
One and Two-Color Body Forms - in black only or black and a second
nonmetallic color ink.
Self-cover forms may require the use of cover inks which will be invoiced
at the cover ink prices.
CUSTOMER FURNISHED PAPER
You shall furnish f.o.b. our plant of manufacture all paper required for
the printing of your publications outlined in Exhibit C in the weights,
kinds and sizes set forth herein or as we shall otherwise mutually agree
upon in accordance with a mutually agreeable delivery schedule and in
sufficient time to meet the production schedule. All paper furnished by
you shall be of good quality and with mechanical properties suitable for
efficient performance of the work for which it is intended.
Paper shall be delivered to us in rolls with cores to our specifications,
properly wrapped and wound with pasters plainly flagged. Returnable cores
shall be returned by us in accordance with your directions at your
expense. We shall reimburse you for the cost of any returnable cores
received by us for the work and not returned by us to the xxxxx from which
such cores were shipped.
Paper not conforming to specifications, concealed damage and defective
paper shall be rejected by us, reported promptly to you, and held for your
instructions as to the disposition thereof. Should you require us to use
defective paper or paper not conforming to specifications and should we
incur additional costs as a result of the use of such paper, we shall
charge you an amount fairly reflecting such additional costs. Without
limiting the foregoing, it is agreed that roll stock causing more than a
ratio of five (5) proven paper caused web breaks per one-hundred (100)
rolls of each type of stock and basis weight within a series identified as
a month's production of the mill shall not be considered of suitable
mechanical quality and that to the extent the paper falls below this
standard we shall be entitled to make an additional charge as aforesaid.
Should you furnish paper which is designed for use in another printing
process than that set forth in this Agreement, we will make every
reasonable effort to utilize such paper, it being understood that any
additional costs resulting from the use of such paper in producing an
acceptable product will be your responsibility.
We shall further submit to you written reports regarding any defective
paper or paper received in a damaged condition as soon as reasonably
practicable after the damage shall have been discovered. In the case of
any paper received in a damaged condition, we shall prepare affidavits
describing such damage for you. We shall give you all such assistance as
you may reasonably request to assist you in recovering for such damage or
defect.
CUSTOMER FURNISHED PAPER USAGE
We will provide a monthly usage statement of furnished paper.
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CUSTOMER FURNISHED PAPER ACCOUNTING
We shall make the first accounting of paper sixty (60) days after
completion of the December 1996 issue with respect to the paper consumed in
the production of your publications during such production period. Annually
thereafter, we shall make a similar accounting for all paper furnished by
you for publications produced and delivered during the preceding twelve
(12) month period. Said annual accounting is to be made available on or
about sixty (60) days after completion of the twelve (12) month period
during which time you shall supply us such information needed to determine
the average price of said paper. Should the total paper consumption during
any such period exceed the paper requirements specified herein, adjusted
for light and/or heavy paper, we shall pay you for such excess at the
average cost of said paper to you, provided such excess consumption shall
not be due to defects in the paper or to the condition in which it shall
have been delivered. Should the total paper consumption during any such
period be less than the paper requirements specified herein, adjusted for
light and/or heavy paper, you shall pay us an amount equal to the cost of
said paper so saved at the average cost of the paper used. The value of
underconsumption, if any, of one kind of paper shall be credited against
the overconsumption, if any, of other kinds of paper. Manufacturing waste
shall become our property.
CUSTOMER FURNISHED PAPER STORAGE
We shall provide storage space without additional charge for blank roll
paper stock delivered by you for the work under this Agreement for the
current issue in production or to be produced plus the next two succeeding
forecasted issues for all monthly titles. Therefore, the storage is not at
any time to exceed the amount equivalent to that used for printing three (3)
issues. For bimonthly and quarterly titles we shall provide storage space
without additional charge for blank paper stock delivered by you for the
work under this Agreement for up to sixty (60) days for the current issue
in production or to be produced. If you require storage space in excess of
that provided above we shall store up to a maximum of one half the
preceding amount of stock at our plant if space permits at the rates set
forth herein, or at the prevailing rates at another location including
applicable handling and freight.
DONNELLEY FURNISHED PAPER (Optional)
We shall supply paper necessary for the production of your publications in
the types and weights and at the prices and for the period of term of this
Agreement as we may mutually agree.
The price to be charged you for paper shall be our invoice cost (inclusive
of volume discounts earned to date) plus ***** percent (*****). Paper shall
be billed to you on our regular invoice for production under this Agreement
subject to our then current Terms of Payment as described herein.
The above shall reflect the then current commitment from our suppliers for
a specified period. Paper prices for the term of the Agreement not covered
above shall be mutually agreed upon.
Upon review of the price quotations Paisano Publications, Inc. shall
determine who is to furnish paper and for what length of time for the next
period of the term of this Agreement.
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DONNELLEY FURNISHED PAPER (OPTIONAL) (CONTINUED)
Provided however, it is agreed that paper ordered for work under this
Agreement by either party shall be used on a "first in" "first out"
basis. In addition, Paisano Publications, Inc. shall be responsible
for the cost of any materials on hand or ordered for them for the
production of their publications and will pay us for such materials
along with reasonable costs associated with such materials and their
disposition should they not be used in the production of the Paisano
Publications, Inc. publications.
BINDING, MAILING AND BUNDLING
We will gather, saddlewire stitch and trim flush three sides up to 20
sections (including cover) for delivery upon completion f.o.b. our
plant of manufacture.
We will gather, adhesive bind, affix a cover to the backbone and trim
flush three sides up to 36 sections. Each copy shall caliper between
.125" minimum and .500" maximum in thickness at the center of the
head or foot measured on the bound book before the cover is affixed.
It is understood that the first and last signatures of each copy
adhesive bound shall contain eight or more pages unless other
specifications and prices are manually agreed upon. Delivery of
copies will be upon completion f.o.b. our plant of manufacture.
All furnished card inserts, special inserts, subscription order cards
or other material furnished for binding shall be delivered f.o.b. our
plant of manufacture by you in time to meet the production schedule
and in a manner that we reasonably specify. Such furnished material
shall also conform to our specifications, (which we shall submit to
you) including size, which will permit inserting and binding
without undue interference with the normal performance of the machine
or extra costs will be charged i.e. makereadies and equipment
slowdowns. All such material shall be furnished to meet the net
quantity of copies ordered to be bound for the issue plus an
allowance for binding spoilage which we shall reasonably specify.
The prices for addressing and mailing herein apply to copies mailed
either second or third class.
Second class mailing is based on postal regulations and procedures in
effect as of this contract date which require mandatory ZIP Code
Sortation. If postal regulations or procedures change so as to
affect our costs for mailing the magazines as provided herein, the
prices shall be adjusted to fairly reflect any increase or decrease
in such costs. We shall be responsible for preparing and submitting
applicable Post Office form(s).
Third class mailing is based on postal regulations and procedures in
effect as of this contract date which require mandatory ZIP Code
sortation that will result in a minimum mail sack weight of 15 pounds
or 125 pieces. Use of optional ZIP Code sortation levels that result
in the minimum sack weight falling below 125 pieces or 15 pounds will
result in additional charges. If postal regulations or procedures
change so as to affect our costs for mailing the magazines as provided
herein, the prices herein shall be adjusted to fairly reflect any
increase or decrease in such costs. We shall be responsible for
preparing and submitting applicable Post Office form(s).
Copies to be mailed shall be addressed by affixing a paper address
label or printing by ink jet a label on the outside of the magazine
in a position mutually agreed to, subject to the limitations of the
equipment to be used for the work. You are to furnish all labels and
bag tags or mag tape in compliance with current Donnelley Label
Specifications and Graphic Communications Association Specifications,
in time to meet the mailing schedule, and sorted in accordance with
applicable postal mailing regulations and procedures
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BINDING, MAILING AND BUNDLING (continued)
including ZIP Code requirements and separated for sequence of mailing. All
labels and bag tags or mag tape for a given mailing lot shall be furnished
at one time. All supplied labels are to be imprinted with an indicator
which can be used in separating ZIP Codes. We shall place such subscription
copies in mail bags, affix the hasp tag and delivery shall be made f.o.b.
our plant of manufacture.
At such time that we establish a system for pooled mailing or second-class
mail (known as "co-mailing"), we shall offer to you the opportunity to
purchase such co-mailing services at a price no greater than that then
being offered to any of our other customers, which customers have work with
similar specifications (i.e., total quantities per year or as otherwise may
be mutually agreed upon), including mail break-up. If you agree to purchase
such co-mailing services, then such prices shall be added to Exhibit A
hereof and thereafter shall be subject to all terms and conditions of this
Agreement.
You shall be responsible, if necessary, for establishing an account at the
U.S. Post Office with sufficient funds to cover mailing.
Nothing herein contained shall require us to do any act in violation of the
United States Postal Laws, regulations or procedures.
The newsstand copies will be wrapped in bundles (up to 40# per bundle and
in accordance with our machine specifications) and tied both ways with
suitable strapping material. Your furnished labels will be affixed for
delivery f.o.b. our plant of manufacture.
You are to furnish a magnetic tape to our specifications of newsstand
counts by destination in lieu of labels for those copies to be shipped in a
newsstand pool. Labels will be produced by the ATRACS computer systems.
Late receipt or tape not to our specifications may result in extra charges.
Our prices are based on binding, mailing or bundling in a single lot per
issue. In the event you designate more than one binding, mailing or
bundling lot per issue, such additional work shall be charged for as an
extra.
Certain copies for miscellaneous distribution such as back issue copies,
expire copies, preferred lists or others that may be required from time to
time, shall be bundled, wrapped, packed or inserted into envelopes and
mailed or shipped as directed to you. We shall make a charge which shall
fairly compensate us for such work.
All postage, permits, freight or other charges shall be paid by you.
FREIGHT
We will arrange for shipment of your finished materials from our plant of
manufacture. You agree to pay all distribution charges, and we shall be
entitled to retain any brokerage commissions or other service charges
earned by us or our wholly owned subsidiaries.
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POOL FREIGHT
During the term of this Agreement, we will arrange to have the newsstand
bundle portion of your work shipped in our freight pool at *****/cwt.,
through December 31, 1996. Notwithstanding any other price adjustment
clause in this Agreement, the pool freight price shall be requoted in
September of each year, to become effective on January 1 of the following
year. You must participate in the freight pool for at least one year, and
may opt out of the pool by providing written notice to us at least ninety
(90) days prior to the end of any one-year term.
Notwithstanding the above, should there be a drastic change in the cost of
operating the pool due to (1) changes in governmental regulations or (2)
withdrawal of one or more of our customers from the pool, causing us to
lose ten percent (10%) or more of the tonnage upon which the pool freight
price was based, we shall be entitled to re-quote the price, or to
discontinue the pool. If we re-quote the price pursuant to the foregoing,
you shall have the right to withdraw from the pool by providing written
notice to us within thirty (30) days after announcement of the new price.
Any such withdrawal notice shall become effective sixty (60) days after
receipt.
In the event that we arrange for shipment of any of your finished
materials not included in the pool, we shall be entitled to retain any
brokerage commissions or other service charges earned by us or our
wholly-owned subsidiaries.
OVERRUNS AND UNDERRUNS
Variations in quantity of one percent (1%) less than quantities ordered
(no over allowed) will constitute acceptable delivery, and the price will
be adjusted at the under delivery per thousand copy price. If the work
involves more than one version, the under percent for each version shall
depend upon ordered quantity of that version, as separately quoted. There
will be no chargeable overrun. If printed quantities are more than one
percent (1%) below ordered quantities, we will notify you.
MATERIALS AND PURCHASED SERVICES
Unless otherwise provided, we will supply the materials (paper, ink,
binding materials, etc.) or purchased services specified herein or their
equivalents. It is understood and agreed that should we be unable to obtain
such materials or services or their equivalents in necessary quantities,
the parties shall select mutually agreeable substitute materials or
services. Should the use of such substitute materials or services increase
or decrease the cost of performing the work, the prices will be adjusted to
fairly reflect any such increase or decrease in cost. The unavailability of
materials or services will not be considered a breach of this Agreement.
Should any volume or trade discounts be earned on materials or services,
they will be retained by us. All scrap and by-products will become our
property.
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STORAGE
Unless otherwise specified, the prices in this Agreement contain no
storage of paper, other materials, work in process or finished goods
beyond the production schedule span. If you delay completion of the work
or postpone delivery of finished goods beyond the date specified in the
production schedule, or if your furnished materials arrive prior to the
dates specified in the production schedule, storage will be charged at the
prevailing rates for each month up to twelve months the finished goods,
work in process or furnished materials remain in our possession. Such rate
will be doubled for each month after the first twelve months of storage.
If, following the eighteenth month of storage we receive no direction from
you as to the disposition of the stored items, such items will be
destroyed.
Notwithstanding the above we shall store up to 1,000 copies of each issue
of each title for up to six months at no charge. If at the end of six
months there are remaining copies in storage we shall ship at your expense
500 copies to your specified destination and destroy the remainder.
EDITING OF COPY
The price quoted does not, unless otherwise stated, include the editing of
copy.
PRICES
You shall pay us for the work at the prices in effect pursuant to this
Agreement set forth in Exhibit A.
Such prices apply to all work as outlined in the clause entitled
Description on page one (1) of this Agreement regardless of the plant of
manufacture.
PRICE ADJUSTMENTS
The prices for direct materials (ink and paper) and any purchased services
stated in this Agreement are based upon the costs of materials and
purchased services (except pool paper) as of the date hereof, and will be
adjusted based upon actual changes in these costs which we shall
substantiate to your satisfaction. For purposes of adjusting the ink
prices herein it is agreed that we will base any such change upon the
average change in the then current prices of three major suppliers of ink
i.e. Flint Ink, Sun Chemical, and INX. Should any change become effective
after part of the work has been performed, such adjustments shall apply
only to that work produced after such change except as specifically
provided otherwise. Except as specifically provided otherwise, should any
volume or trade discounts be earned on materials or purchased services,
they shall be retained by Donnelley.
The manufacturing prices which include binding and disposition materials,
stated in this Agreement shall be adjusted on March 1 of each year during
the term ("the date of adjustment") as follows: In February of each year
during the term of this Agreement, Donnelley will calculate the percentage
of change in the Consumers Price Index ("the CPI") from the fifteenth
month preceding the date of adjustment to the third month preceding the
date of adjustment. Should this calculation show that there has been an
increase in the CPI, then effective on the date of adjustment, all of the
manufacturing prices shall be increased by eighty percent (80%) of the
percentage of increase in the CPI. Should this calculation show that there
has been no change in the CPI, or that the CPI has decreased, then no
change shall be made in the manufacturing prices for the next twelve
months. In such event, at the next date of adjustment at which the
foregoing
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PRICE ADJUSTMENTS (continued)
calculation indicates an increase in the CPI, the percentage of change
in the CPI for the purpose of determining the price adjustment
hereunder, if any, will be calculated from the CPI upon which the last
adjustment of manufacturing prices was based. For purposes of this
paragraph, the CPI means the Consumers Price Index (1982-84=100), all
Urban Wage Earners and Clerical Workers, U.S. City Average, published
monthly by the Bureau of Labor Statistics, U.S. Department of Labor.
If the CPI as defined is revised or discontinued, the calculation
described herein shall be made using the price index with which the
Bureau of Labor Statistics replaces it.
Any sales, retailers occupation, service occupation, value added or
use tax imposed on account of this transaction will be added as an
extra charge.
TERMS OF PAYMENT
Net cash 45 days from date of invoice.
DISPUTES
Should any portion of an invoice become disputed, you agree to pay the
undisputed portion according to its terms and you will notify us
promptly of the dispute. Both parties agree to use their best efforts
to resolve the disputed portion of such invoice within thirty (30)
days of learning of the dispute.
INTEREST AND COLLECTION COSTS
Our obligation to perform work hereunder is subject to prompt payment
of all invoices pursuant to the terms of this and other agreements we
may have with you. Should any invoice issued hereunder become past
due, you agree to pay interest at the rate of one and one-half percent
(1-1/2%) per month, or the lawful limit if less, on all amounts past
due. Progress billing of interest due or failure to xxxx for interest
due shall not constitute a waiver of our right to charge interest on
all amounts past due to the date payment is received.
If you fail to pay our invoice in accord with these terms, you agree
to pay all costs of collection, including but not limited to,
reasonable attorney's fees.
INTERIM BILLING
If you delay completion of manufacture beyond the period contemplated
by the production schedule or if partial shipment is made prior to the
completion of the entire quantity, interim billing may be made.
CREDIT REVIEW
The above provisions may be reviewed by us and should there be a
substantial adverse change in your credit standing with us we shall
notify you and meet with you to discuss any concerns we may have, or
in the event that you do not comply with terms of these provisions, we
will have the right to change terms of payment, and our obligation to
perform further work will be subject to reaching mutual agreement on
revised terms.
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LIEN ON PROPERTY
As security for payments of any sum due or to become due us under the
terms of this Agreement, we shall have the right, if necessary, to retain
possession of, and shall have a lien on all property owned by you and in
our possession, and all work in process and undelivered work.
BANKRUPTCY
If either party shall be adjudicated a bankrupt, institute voluntary
proceedings for bankruptcy or reorganization, make an assignment for the
benefit of its creditors, apply for or consent to the appointment of a
receiver for it or its property, or admit in writing its inability to pay
its debts as they become due, the other party may terminate this Agreement
by written notice. Any such termination shall not relieve either party
from any accrued obligations hereunder.
GUARANTEE AND LIMITATION OF LIABILITY
We will perform the work in a good and workmanlike manner and in
accordance with the specifications and production schedule. In the event
the work is defective or delayed due to our fault (including negligence),
we shall not be liable for special or consequential damages, including,
but not limited to, lost profits or business. Further, we shall not be
liable for any damages, whether direct or indirect, special or
consequential, associated with our shipment of any of your work on
contract or common carriers.
RESPONSIBILITY FOR SUBJECT MATTER
In furnishing us matter to reproduce or to have incorporated in the
completed product, you represent and warrant that none of such matter
(either as furnished to us by you or as altered by us at your direction)
infringes any copyright, is libelous, or otherwise violates the rights of
or will cause damage or injury to other persons, and you agree to
indemnify and save us harmless from all losses, damages and expenses,
including attorneys' fees, which we may suffer as the result of any claim
of such violation, damage or injury.
WORK STOPPAGES
Neither party shall be liable for delays or non-performance of this
Agreement occasioned by strikes, fires, accidents, or by causes beyond
their control including, but not limited to, the unavailability of
materials, purchased services, utilities or fuel. During such interruption
this Agreement shall continue in full force and effect and neither your
failure to provide material to us, nor our failure to produce work for you
during any such interruption shall be construed as a breach of this
Agreement. However, if any such interruption should occur, the other party
shall have the absolute right to make immediate arrangements for the
production of its work elsewhere (for you) or to take on other work (for
us) and shall not be liable to the other party for the removal of said
work or taking on the other work or for loss of profits or damage arising
from such removal or other production. You agree to return the work to us
at the termination of any interruption of work affecting us and further
agree not to enter into any agreements longer than reasonably necessary to
produce the work during an interruption of work affecting us.
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XX XXXXXXXXX & SONS COMPANY
Paisano Publications, Inc.
Page 14
September 11, 1996
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DISCONTINUANCE OF PUBLICATION
Should you decide to discontinue any of the publications covered under
this Agreement in any medium without publishing a successor, whether
titled the same or not, you shall use your best efforts to give us 90 days
advance written notice of such decision. Without limiting the foregoing,
you shall be obligated to pay for work done or in process. In addition,
you shall reimburse us for costs which we cannot avoid through reasonable
effort.
SALE OF PUBLICATION
If you shall propose to sell any of the publications covered under this
Agreement or any successor, whether titled the same or not, you shall give
us written notice not less than ninety (90) days prior to any contemplated
sale, stating the name of the prospective purchaser and the proposed date
of sale. Thereafter you shall keep us fully advised of the progress of any
such proposed sale and we shall keep such information confidential. Within
sixty (60) days after receipt of such notice, we shall advise you in
writing as to whether we will consent to an assignment of your rights and
obligations under this Agreement to the prospective purchaser. Our consent
shall be based upon the financial strength of the proposed purchaser and
shall not be unreasonably withheld. If we shall consent, you shall require
the purchaser concurrently with the consummation of such sale, to assume
all your obligations under this Agreement by an instrument in writing
satisfactory to us for a minimum period of one hundred and twenty (120)
days.
If we shall not consent to the assignment by you to such prospective
purchaser, this Agreement shall terminate upon the first to occur of the
following events: (i) the consummation of such sale, or (ii) the
expiration of one hundred and eighty (180) days after we advise you that
we will not consent to the proposed assignment, unless within such one
hundred and eighty (180) days period you notify us that you do not propose
to consummate such sale.
ASSIGNMENT
Neither party to this Agreement shall assign any right or rights hereunder
without the prior written consent of the other party, except that we may
assign payments due us to our wholly-owned subsidiaries without consent.
Subject to this consent, this Agreement shall inure to the benefit of and
shall bind the successors and assigns of the parties hereto.
INSURANCE
We will carry at our expense fire, sprinkler leakage and extended coverage
insurance, subject to the usual exclusions, limitations, and conditions of
such policies on the actual cash value of all our materials, work in
process, and all production completed and not shipped, and on the actual
cash value of all positives, copy, artwork, paper and other materials
furnished by you, while in our care, custody and control. If your property
is damaged as a result of an insured peril under the applicable insurance
policy, then, at our option, we will either replace your damaged property
or reimburse you for the actual cash value of the damaged property. If we
elect to reimburse you for the damaged property's actual cash value, the
amount payable to you shall be limited to the proceeds of such policy plus
any related deductible, if any, applied to the claim for damage to your
property. For positives and other media our insurance coverage and our
liability shall be limited to the cost of blank film or other media and
the cost of duplication from an original or other copy.
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PASSING OF TITLE
Title and possession shall pass to you upon delivery or upon the date of
final invoicing, whichever is earlier, f.o.b. our final plant of
manufacture.
GOVERNING LAW
This Agreement shall be governed by the laws of the State of California.
NO JOINT VENTURE
Nothing herein contained shall in any way constitute a partnership
between, or joint venture by, the parties hereto or be construed to
evidence the intention of the parties to constitute such. Neither of the
parties shall hold itself out contrary to the terms of this paragraph by
advertising or otherwise, and neither party shall be or become liable or
bound by any representation, act or omission whatsoever of the other party
contrary to the provisions of this paragraph.
EXHIBITS
This Agreement includes the following Exhibit(s) which are attached hereto
and made a part hereof:
EXHIBIT A - PRICE SCHEDULE
EXHIBIT B - PAPER REQUIREMENT
EXHIBIT C - TITLES AND SPECIFICATIONS
CAPTIONS
The captions on this Agreement have been placed thereon for the mere
convenience of the parties hereto, and shall not be considered in any
question of interpretation or construction of this Agreement.
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If this proposal meets with your approval, kindly sign below. This
proposal shall remain in effect for a period of thirty days from the date
hereof and is subject to the availability of equipment at the time the
approved proposal is submitted to us for confirmation. Following your
approval and upon confirmation by an officer of X. X. Xxxxxxxxx & Sons
Company, the approved proposal will then constitute a contract between us.
Respectfully submitted,
X. X. XXXXXXXXX & SONS COMPANY
By [SIG]
-----------------------------------------
Sales Representative
Approved:
By [SIG]
----------------------------------------
Authorized officer, partner, owner, etc.
Date September 20, 1996
