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EXHIBIT 10.48
AGREEMENT
December 7, 1999
TALENT: XXXX XXX ("Xxx")
0000 Xxxxxx Xxx
Xxx Xxxxxxx XX 00000
XXXX XXX MEDIA, INC. ("SLM")
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx XX 00000
and
Branded Entertainment LLC ("Branded")
For the services of XXXXXXX XXXXX ("Xxxxx")
000 Xxxxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
PROPERTY: THE DC UNIVERSE INCLUDING ALL MAJOR DC CHARACTERS
SERVICES: FULL SCRIPT (INCLUDING SYNOPSIS, PLOT AND DIALOGUE)
(hereinafter "Script")
WORK: TWELVE (12) ISSUES OF APPROXIMATELY 48 STORY PAGES EACH;
PROJECTED TO BE INITIALLY PUBLISHED AS SIX ISSUES ON A
BIMONTHLY BASIS FOLLOWED BY GAP OF SUCH PERIOD AS THE PARTIES
MUTUALLY AGREE FOLLOWED BY ANOTHER SIX ISSUES TO BE PUBLISHED
ON A BIMONTHLY BASIS, ALL SUCH ISSUES TO BE PUBLISHED IN ONE OR
MORE FORMATS (hereinafter "Issue[s]") FOLLOWED BY ONE OR MORE
COLLECTED EDITIONS OF THE ISSUES (hereinafter "Collection[s]")
tentatively entitled "THE STANIVERSE" OR "IF XXXX XXX HAD
CREATED THE DC UNIVERSE" (hereinafter the "Title" which term
shall include any title under which the Work is ultimately
published)
The following shall constitute the complete and sole understanding and agreement
between Talent and DC Comics, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000 ("DC").
1. Engagement and Services:
(a) DC hereby engages Talent, as an independent contractor, to create
the Script for the Work, based upon the Property. Talent accepts such
engagement.
(b) Talent shall deliver the completed Script for each Issue to DC on a
schedule to be determined by DC and Talent with the understanding that the first
six (6) Issues are intended to be published between Fall, 2000 and the end of
2001, and subsequently to be collected and published in a single volume, and the
second six Issues to be published on such schedule as the parties shall mutually
agree and subsequently to be collected and published in a single volume.
(c) Talent further shall complete any revisions requested by DC as
expeditiously as possible but in any event by such date upon which the parties
expressly agree such revisions are to be delivered to DC.
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(d) DC's approval of any plot or synopsis of the Script in no way limits
DC's right to further revisions of any portion of the Script. An editor selected
by DC in consultation with Talent will be assigned to supervise and work with
Talent in the fulfillment by Talent of its obligations hereunder. Talent agrees
to cooperate with such editor and to respect DC's instructions, directions,
requests, rules and regulations including those involving artistic taste and
judgment.
(e) Talent shall cooperate with DC in the promotion, publicity and
advertising of the Work as published in Issues and Collection(s). In particular,
Xxx shall make a reasonable number of personal and media appearances to promote
the Work, provided that: (i) DC shall bear all reasonable expenses for such
appearances by Xxx who shall be permitted to travel first class and stay in
accommodations consistent with such accommodations as are afforded to DC's
Executive Vice President and Publisher traveling for business; (ii) DC shall
give Xxx reasonable notice of the dates and places of all proposed appearances;
and (iii) no appearances shall be required of Xxx in places other than in Los
Angeles, Chicago, or New York, or at the San Diego Comiccon.
(f) It is the express intent of the parties that the Work, and any
"Sequel" or "Crossover" to be written by Talent as provided in paragraphs 8 and
10 below, shall be written by Xxx with Xxxxx providing background assistance
based on Uslan's unusual familiarity and knowledge of both Xxx'x prior writing
and the Property. Notwithstanding the foregoing, provided the Work, any Sequel
or any Crossover is written under Xxx'x supervision and control, Xxx'x failure
to write all or any part of the same himself shall not be deemed to be a
material breach of this Agreement.
2. Compensation:
(a) On sales by DC of copies of Issues and/or Collections of the Work or
any other DC publication based on the Work, and on sales by DC of "Retail
Products" (as defined in Schedule A hereto) based on the Work, DC shall pay
Talent the applicable royalties in accordance with Schedule A.
(b) On sales of "Licensed Reprint Editions" as such term is defined in
Schedule B hereto, DC shall pay Talent the applicable share of revenues in
accordance with Schedule B.
(c) On licensed uses of the Work in film, television, publishing (other
than in Licensed Reprint Editions or Licensed Reprint Editions of Sequels),
promotions and merchandise, DC shall pay Talent the applicable share of revenues
in accordance with Schedule B hereto, provided such licensed use incorporates
Xxx'x name and/or the Title, or any other name or title that derives from Xxx'x
name or the Title. In the event such licensed use makes no use of Xxx'x name or
the Title, no consideration shall be due to Talent for such licensed use except
as may be otherwise provided in paragraph 6 below.
(d) In the event DC elects to create any promotional program based on
the Work utilizing Xxx'x name or the Title which program is intended by DC to
itself generate significant revenues in excess of the costs of conducting such
program, DC shall, in good faith, negotiate with Talent an appropriate royalty
to pay Talent therefor.
(e) DC shall divide and make all payments to be made to Talent hereunder
between Xxx, SLM and Branded as follows, or as Xxxxx may otherwise direct:
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(i) Branded: (A) Thirty Three and One-Third percent (33.33%) of
all amounts due to Talent for: (1) publications of the Work pursuant to Schedule
A; and (2) Licensed Reprint Editions of the Work pursuant to Schedule B; and (B)
Twenty Five percent (25%) of all other amounts due to Talent hereunder including
from publications of Sequels and Licensed Reprint Editions of Sequels; and
(ii) Xxx: as Xxx shall direct DC in writing; and
(iii) the balance to SLM.
(f) All payment(s) to Xxx, SLM or Branded hereunder shall constitute
good and valid discharges by DC in respect of DC's payment obligations to Talent
hereunder.
3. Representations and Warranties:
(a) Xxx, SLM, and Branded each represent, warrant and agree: that it is
free to enter into this Agreement and has the right to grant all rights granted
to DC hereunder; that except insofar as the Script may derive from the Property,
the Script created by Talent hereunder will be wholly original with Talent or in
the public domain throughout the world, and shall not infringe or violate any
copyright, trademark, right of privacy or publicity or any other right of any
person or entity, or defame and third party; and that Xxx, SLM and Branded will
each indemnify DC, its parent company, affiliated companies, assigns, licensees
and successors in interest and each of their officers, directors and employees,
from and against any and all claims, actions, damages, costs and expenses,
including attorneys' fees, arising out of any material breach of any of the
warranties made by it hereunder.
(b) DC shall indemnify Talent and Xxxxx against any and all claims,
actions, damages, costs and expenses, including attorneys' fees, which may arise
from Talent's use of material supplied to him by an officer or authorized
employee of DC for use in connection with the Script, including all uses of the
Property approved for publication by DC's editor assigned to the Work.
4. Ownership:
(a) The Work created hereunder has been specially commissioned by DC for
use as a contribution to a collective work, and constitutes a work made for hire
as that term is used in the United States Copyright Act of 1976. Talent
acknowledges that he has entered this agreement before commencing performance of
the services he has been engaged to perform hereunder. In the event the Work is
deemed not to be a work made for hire, then Talent hereby assigns to DC all
rights in the Work, effective as of the date of creation of such Work, including
copyright and any renewals, extensions or revivals thereof and trademark rights,
and all other rights to exploit the Work, in all media now or hereafter
existing, throughout the world in perpetuity. Upon DC's request, Talent shall
execute any additional documents necessary to evidence this assignment. DC shall
also have the right, but not the obligation, to use Talent's name, Xxx'x
approved likeness and Xxx'x approved biographical information in connection with
the Work and the advertising, promotion, and/or publicity therefor. The
inadvertent failure by DC to secure Xxx'x approval of his likeness or
biographical information hereunder shall not be a material breach of this
Agreement.
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(b) Talent acknowledges that the Work shall be derivative of
pre-existing material including, without limitation, the names and pictorial and
literary representations of fictional characters, companies, places and things
(the "Preexisting Material"); that DC owns or otherwise has rights in the
Preexisting Material; that Talent would be unable to produce the Work without
the Preexisting Material; and (iv) that Talent shall not have, acquire or claim
right or privilege to use any of the Preexisting Material except as provided
herein or as DC otherwise consents in writing. Talent further acknowledges that
DC may and regularly does assign, and has assigned, other artists, writers and
creators to do work based upon or incorporating the Preexisting Material and/or
related properties and that if any similarities appear between such other
artists, writers or creators' work and the Work it shall be purely coincidental
since both will have been based on the Preexisting Material. Talent hereby
waives any claim(s) for royalties or consideration of any kind or otherwise in
connection with any such similar works.
5. Incapacity; Force Majeure; Default:
(a) If Talent does not comply with its obligations hereunder by reason
of illness, incapacity or disability ("Incapacity"), DC may suspend the Services
hereunder and if such Incapacity continues for a period or periods aggregating
three (3) months, DC may terminate Talent's engagement hereunder.
(b) If publication of the Work shall be prevented or interrupted because
of "force majeure" (i.e. any unexpected or disruptive event sufficient to excuse
performance hereof as a matter of law), DC may suspend the Services hereunder
and if any such force majeure event should exceed three (3) months , DC may
terminate Talent's engagement hereunder.
(c) If Talent fails to perform Talent's obligations hereunder other than
by reason of Incapacity or Force Majeure, and Talent shall fail to remedy such
situation within thirty (30) days of written notice from DC, DC may terminate
Talent's engagement hereunder, and DC shall have the right, but not the
obligation, to engage another writer or writers to complete the Work. In such
event: (i) DC may reduce the royalties payable to Talent pursuant to paragraph 2
above for any Issues, the Scripts for which Talent started but did not complete,
by such amounts that DC has agreed to pay any other writer(s) engaged to
complete such Scripts; (ii) DC shall have no obligation to pay Talent any
compensation for any Issues for which Talent shall have not written the Scripts
hereunder; and (iii) for any Collected Edition(s), Licensed Reprint Edition(s)
and/or licensed or promotional use(s) of the Work, DC shall pay Talent based on
DC's pro-rata allocation among the final contributions made by Talent and by
such other writer(s) of the Work. Notwithstanding the foregoing, upon Talent's
receipt of written notice from DC as set forth above, Branded may propose to
remedy the situation by itself engaging another writer or writers to complete
the Scripts. In the event DC desires to complete the Work and shall approve of
Branded's proposed writer or writer(s), Talent shall engage such writers to
complete the Scripts pursuant to agreements approved by DC in advance in
writing, and DC's obligations to pay Talent as set forth herein shall remain in
full force and effect.
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6. Original Characters:
(a) In the event Talent introduces into the Work any fictional character
that qualifies as an "Original Character" as defined below, DC shall pay Talent
additional compensation for certain uses of such Original Character by DC in
accordance with Schedule C hereto. Notwithstanding anything to the contrary
herein or in Schedule C hereto, in the event that the terms of this Agreement
and/or the Schedules hereto can be construed or interpreted as entitling Talent
to compensation for both the use of the Work and the use of an Original
Character based on the same publication, retail product or licensed use, Talent
shall be entitled only to the applicable compensation due to him from the use of
the Work and not the Original Character.
(b) As used herein an "Original Character" shall mean a newly created
character first appearing in the Work that meets the following criteria:
(i) The character must have an original name that is not derived
from the name, nickname or any other identifier of any pre-existing DC character
or any other fictional element or property pre-existing in the "DC Universe" as
such term is commonly understood in the comic book industry;
(ii) The character must possess one or more original powers that
are not derived from, identical to or substantially, materially or confusingly
similar to any powers possessed by any pre-existing DC characters, it being
understood that possessing some powers similar to powers possessed by other DC
character(s) shall not disqualify a character from being deemed an Original
Character so long as such character possesses original powers in addition to
such pre-existing powers;
(iii) The character must wear an original costume that is not
derived from, identical to or substantially, materially or confusingly similar
to any costume worn at any time by any pre-existing DC characters, it being
understood that the use of any elements common to comic book characters'
costumes or apparel in general, such as a cape, boots or a mask, shall not
disqualify a character from being deemed an Original Character;
(iv) The character must fulfill an essential role in the plot
development and storyline of the Work, and such role must not presently exist in
the DC Universe. For example, a new Police Commissioner of Gotham City, a new
girlfriend of Superman, or a new Editor of the Daily Planet would not satisfy
this criteria; and
(v) The character must otherwise not be derivative of any past or
present DC characters, elements, or properties from DC mythology.
(c) DC shall determine whether a character first appearing in the Work
shall qualify as an Original Character in its sole good faith reasonable
discretion. In making such determination, DC shall give Talent the opportunity
to explain why Talent maintains such character should be treated as an Original
Character.
(d) DC acknowledges that satisfying the criteria necessary for a
character to qualify as an Original Character is a difficult test to meet. In
recognition thereof, DC agrees that if a character introduced into the Work by
Talent does not satisfy all of the Original Character criteria, but such
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character, in DC's sole good faith discretion, nevertheless meets the criteria
set forth below, DC shall pay Talent royalties on DC's exploitation of such
character calculated at a rate of twenty percent (20%) of the basic applicable
royalty rates for an Original Character as set forth in Schedule C hereto. A
character not qualifying as an Original Character hereunder may qualify for a
reduced royalty as set forth herein if it meets the following criteria:
(i) The character, including the name(s), costume, powers,
profession as may be applicable, literary and visual depictions thereof,
alter-ego as may be applicable, abstract personality traits, mannerisms, origin,
and background, must be sufficiently developed, concrete and distinctive such
that the character could readily be used as a lead character in another work of
fiction without significant additional character development;
(ii) The character must fulfill an essential role in the plot
development and storyline of the Work;
(iii) If all of the DC Universe-derived aspects of the character
were removed, the character would remain a whole, concrete and distinct
character that would be essentially the same character that appeared in the Work
even though such character might lack a name and/or some distinctive attire; and
(iv) No other comic book writer, artist (other than Talent's
collaborating artists in such character, if any) or creator shall have any
interest in, or colorable claim of creator credit, in whole or in part, in or to
such character.
7. Discount Sales to Talent: For a period commencing as of DC's initial
publication of the first Issue of the Work and ending twelve (12) months after
DC's initial publication of the last Issue of the Work, DC shall offer Talent
the opportunity to purchase from DC all DC publications comprising or based on
the Work and all Retail Products based on the Work, if any, subject to
availability and to such reasonable limitations as DC may impose, at such prices
below wholesale as the parties shall mutually determine. Talent shall use all
publications and Retail Products purchased by Talent hereunder solely for resale
as collectibles through a single website owned and operated by Talent. The
depiction of any DC properties on such website shall be in accordance with DC's
standard website guidelines.
8. Sequels and Prequels:
(a) In the event that DC, at any time, desires to publish a "Sequel", DC
shall give Talent, by written notice, the first option to write such Sequel on
substantially the same terms and conditions hereof. As used herein, the term
"Sequel" shall mean a comic book series featuring the same universe as portrayed
by Talent and/or all or some of the major characters as interpreted by Talent in
the Work and shall include both sequel and prequel storylines.
(b) Talent shall exercise its option hereunder by giving written notice
to DC of its desire to write the Sequel within thirty (30) days of Talent's
receipt of written notice from DC of DC's desire to publish such Sequel.
(c) If Talent is unable to or declines to write the Sequel or if Talent
fails to notify DC of its desire to write the Sequel within said thirty (30) day
period, DC shall be free to engage any third
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party to write the Sequel subject to the following:
(i) Talent, or Talent's representative, as the case may be, shall
have the right to withhold the use of Xxx'x name, the Title, and any other name
or title that derives from Xxx'x name or the Title, as the title or part of the
title of the Sequel. Talent, or Talent's representative, shall exercise such
right, if at all, by giving DC written notice of its exercise of such right
within thirty (30) days of: (A) the date Talent declines to write the Sequel, if
applicable; or (B) Talent's receipt of DC's written notice of DC's desire to
publish a Sequel if Talent is unable to write the Sequel. In such event, DC
shall be free to use any and all other elements of the Work in the Sequel
without any consideration due to Talent except as may be otherwise provided in
paragraph 6 above.
(ii) If DC uses Xxx'x name, the Title or any other name or title
that derives from Xxx'x name or the Title as the title or part of the title of
the Sequel, DC shall pay Talent royalties on its exploitation of the Sequel
calculated at a rate of thirty three and one-third percent (33 1/3%) of the
basic applicable royalty rates for the Work as set forth in Schedules A and B to
this Agreement.
(iii) Talent shall be deemed to be unable to write the Sequel if
Xxx is not able to render the services set forth in paragraph 1 above.
(d) In the event DC desires to publish one or more further Sequel(s) to
the Work, DC shall give Talent, by written notice, the first option to write any
such Sequel(s) on substantially the same terms and conditions hereof, provided,
however, that Talent shall have written the immediately preceding Sequel to the
Work.
(e) Talent shall exercise its option hereunder by giving written notice
to DC of its desire to write such further Sequel within thirty (30) days
following Talent's receipt of written notice from DC of DC's desire to publish a
such further Sequel.
(f) If Talent is unable to or declines to write any further Sequel or if
Talent fails to notify DC of its desire to write any Sequel within said thirty
(30) day period, DC shall be free to engage any third party to write such Sequel
and any subsequent Sequel subject to the following:
(i) Talent shall have the right to withhold the use of Xxx'x
name, the Title, and any other name or title that derives from Xxx'x name or the
Title, as the title or part of the title of the applicable Sequel. Talent, or
Talent's representative, shall exercise such right, if at all, by giving DC
written notice of its exercise of such right within thirty (30) days of: (A) the
date Talent declines to write the such Sequel, if applicable; or (B) Talent's
receipt of DC's written notice of DC's desire to publish such additional Sequel
if Talent is unable to write the second Sequel. In such event, DC shall be free
to use any and all other elements of the Work in the additional Sequel without
any consideration due to Talent except as may be otherwise provided in paragraph
6 above;
(ii) If DC uses Xxx'x name, the Title, or any other name or title
that derives from Xxx'x name or the Title as the title or part of the title of
the additional Sequel, and:
(A) Talent shall have elected not to write such Sequel
even though Xxx was, at such time, still writing professionally
on a continuing basis, DC shall pay Talent royalties on its
exploitation of such Sequel calculated at a rate of thirty three
and one-third percent (33 1/3%) of the basic applicable royalty
rates for the Work as set
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forth in Schedules A and B to this Agreement; or
(B) Talent shall have not written such Sequel because
Xxx had, at such time, ceased writing professionally, DC shall
pay Talent royalties on its exploitation of such Sequel
calculated at a rate of fifty percent (50%) of the basic
applicable royalty rates for the Work as set forth in Schedules
A and B to this Agreement.
(g) Notwithstanding the foregoing, DC shall have no obligation to
publish any Sequels to the Work.
(h) DC shall have the right to use elements of the Work and/or any
Sequel thereto in any DC publication that does not use Xxx'x name without
further consideration to Talent except to the extent DC may be obligated to pay
Talent consideration pursuant to paragraph 6 above.
(i) Talent acknowledges that his option rights to write Sequels
hereunder shall apply only to comic book series, and shall not apply to prose
novels, novelizations of comic book storylines, television productions, motion
pictures or any other media productions of the Work.
(j) DC agrees that even if Xxx is unable to l write a Sequel for any
reason or if Talent no longer has the option to write any Sequels hereunder at
such time as DC desires to publish a Sequel hereunder, DC shall nevertheless
give Talent written notice of its desire to publish such Sequel. Such notice
shall trigger Talent's right to withhold the use of Xxx'x name, the Title, and
any other name or title that derives from Xxx'x name or the Title pursuant to
paragraph 8(c)(i) or 8(f)(ii), respectively.
9. Internet Productions: In the event that DC desires to produce any
version of the Work for display, access and use online, beyond routine
promotional uses of the Work, and for which DC determines it must engage a
freelance writer(s), artist(s) or web page producer(s) or designers, DC shall
offer SLM the first opportunity to negotiate with DC to secure such engagement.
DC may limit the time period for such negotiation to be concluded as DC may
determine is appropriate in DC's sole good faith discretion, provided in no
event shall DC limit such negotiation period to less than five (5) business
days. In the event the parties shall fail to reach an agreement within the
applicable time period, DC shall be free to engage any third party to render the
applicable services hereunder, provided, however, that DC shall, if DC
determines it is appropriate in DC's sole discretion, offer Talent the
opportunity to better any offer received by DC from any third party to render
the applicable services.
10. Crossover Publications:
(a) In addition to Sequels, DC shall give due consideration to the
possibility of publishing crossover series with other publishers based on the
Work and other character universes created by Talent including those created by
Talent for SLM and/or Marvel Comics (a "Crossover").
(b) In the event that DC arranges to co-publish any such Crossover with
the respective third party owner of the character universe created by Talent DC
shall, subject to DC's agreement with such third party owner, give Talent, by
written notice, the first option to negotiate with DC to write the Crossover.
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(c) Talent shall exercise its option hereunder by giving written notice
to DC of its desire to write the Crossover within thirty (30) days of Talent's
receipt of written notice from DC of DC's desire to publish a Crossover. The
parties shall then negotiate in good faith the terms and conditions upon which
Talent shall write the Crossover - it being understood that the economic terms
of this Agreement shall not serve as precedent for any such deal.
(d) If DC and Talent shall fail to reach an agreement pursuant to which
Talent shall write the Crossover within thirty (30) days following DC's receipt
of written notice from Talent of Talent's desire to write the Crossover, or if
Talent is unable to write the Crossover or fails to respond to DC's written
notice of DC's desire to co-publish a Crossover within thirty (30) days of
Talent's receipt thereof, DC shall be free to engage any third party to write
the Crossover, subject to the following:
(i) Talent shall have the right to withhold the use of Xxx'x
name, the Title, and any other name or title that derives from Xxx'x name or the
Title, as the title or part of the title of the Crossover. Talent, or Talent's
representative, shall exercise such right, if at all, by giving DC written
notice of its exercise of such right within thirty (30) days of: (A) the date
Talent declines to write the Crossover; or (B) the date the parties otherwise
determine that Talent will not write the Crossover. In such event, DC shall be
free to use any and all other elements of the Work in the Crossover without any
consideration due to Talent;
(ii) If DC uses Xxx'x name, the Title, or any other name or title
that derives from Xxx'x name or the Title as the title or part of the title of
the Crossover, and:
(A) Talent shall have not written the Crossover even
though, at such time, Xxx was still writing professionally on a
continuing basis, DC shall pay Talent royalties on its
exploitation of the Crossover calculated at a rate of thirty
three and one-third percent (33 1/3%) of the basic applicable
royalty rates for the Work as set forth in the Schedules A and B
to this Agreement, as such rates may be pro-rated to account for
the other publisher's interest in the Crossover; or
(B) Talent shall have not written the Crossover and Xxx
shall have ceased writing professionally at the time DC shall
have engaged a writer to write the Crossover, DC shall pay
Talent royalties on its exploitation of the Crossover calculated
at a rate of fifty percent (50%) of the basic applicable royalty
rates for the Work as set forth in Schedules A and B to this
Agreement, as such rates may be pro-rated to account for the
other publisher's interest in the Crossover; and
(iii) Notwithstanding anything to the contrary herein, DC agrees
that it shall not co-publish any Crossover based on the Work and Marvel-owned
properties without Talent's prior written consent. Talent may condition such
consent on securing the right to write such Crossover on the same or better
terms as the terms set forth in this Agreement.
11. Publication: It is the express intent of the parties that DC publish the
Work as described above. Notwithstanding the foregoing, DC's failure to publish
all or any of the Work shall not be deemed to be a material breach of this
Agreement.
12. Credits and Author's Copies:
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(a) DC agrees to accord Xxx credit as writer of the Work on the cover
and credits page of each edition of the Work published by DC in a manner
consistent with DC's current credit practices and to accord Xxxxx credit in
substantially the following form "Project Initiated By Xxxxxxx Xxxxx" or a
similar descriptive term on the credits page of each edition of the Work
published by DC in substantially the same size and style type as Xxx'x credit
and otherwise in such manner as DC deems appropriate. DC shall require by
contract that any licensee of DC include similar credit provisions in any
licensed edition of the Work. DC shall accord Xxx and Xxxxx similar credits on
Sequels published by DC where applicable.
(b) DC shall use reasonable efforts to accord, or cause its licensees to
accord, Xxx and Xxxxx credits comparable to the credits set forth in the
preceding paragraph in connection with motion pictures, television productions,
direct-to-video productions, and Internet productions based on the Work as well
as other licensed uses of the Work where such credits are usual and customary
(but not on merchandise such as toys, games and clothing).
(c) Upon publication of the Work, DC agrees to provide Talent
collectively with one hundred (100) copies of each Issue and collected edition
of the Work free of charge, as follows: seventy-five (75) copies directly to Xxx
and twenty-five (25) copies directly to Branded.
13. Audit Rights: Talent may audit the books and records of DC solely in
order to verify statements issued to Talent hereunder. Any such audit shall be
at Talent's expense; provided, that if the audit reveals underpayments in excess
of ten percent (10%) DC shall reimburse Talent the reasonable costs thereof. Any
audit shall be conducted only upon reasonable notice by a certified public
accountant during regular business hours at DC's offices and in such manner as
not to interfere with DC's normal business activities. In no event shall an
audit with respect to any statement start later than twenty-four (24) months
after the date of that statement nor shall any audit continue for longer than
ten (10) consecutive business days, nor shall audits be made more frequently
than twice a year, nor shall the books and records supporting any statement be
audited more than once. All statements shall be binding upon Talent and not
subject to any claims or proceedings unless objection is made in writing stating
the basis thereof and delivered to DC within twenty-four (24) months of the date
of the statement to which objection is made, or if an audit is started within
that period, then within thirty (30) days of the completion of that audit.
14. Notices: All notices or payments which Talent may wish to serve or may
be required to serve on DC hereunder shall be in writing and shall be sent
prepaid by any receipted form of delivery at the address set forth above (or to
such other address as DC may specify by notice duly given); and, except as
otherwise provided in paragraph 1(f) above, all notices or payments which DC may
wish to serve or may be required to serve on Talent hereunder shall be in
writing and shall be sent to Branded prepaid by any receipted form of delivery
at the address set forth above (or to such other address as Branded may specify
by notice duly given) with a copy to Ziffren, Brittenham, Branca & Xxxxxxx LLP,
0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, XX 00000-0000 (Attention Xxxx Xxxxxxxxxx).
Notices shall be deemed given on the date of mailing thereof or if made by
personal delivery on the date thereof.
15. Time Warner Companies: In the normal course of its operations, DC does
business on an arm's length basis with other companies either wholly or
partially controlled by DC's corporate parent, Time Warner Inc. (the "TWI
Companies"). Talent agrees that DC may do business with
TWI Companies with respect to the Work and Talent shall not challenge such
dealings solely or
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mainly on the basis of the Companies' affiliation.
16. Miscellaneous:
(a) A waiver of any provision of this Agreement in any instance shall
not be deemed a waiver of such provision for the future, nor of any subsequent
breach thereof.
(b) In the event of any breach of this Agreement or any portion thereof
by DC, Talent's sole remedy shall be an action at law for damages, if any. In no
event shall Talent have the right to injunctive relief or to enjoin or restrain
or otherwise interfere with the publication or distribution of any materials
prepared hereunder or the exercise of any rights granted to DC herein and under
no circumstances shall any such breach entitle Talent to any reversion of
termination of DC's rights under this Agreement. In the event of any breach of
this Agreement or any portion thereof by Talent, DC's sole remedy shall be as
expressly set forth in this Agreement and/or shall be an action at law for
damages, if any. In no event shall DC have the right to injunctive relief to
force Talent to render any services for DC hereunder.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements executed and fully
performed therein. New York courts (state and federal) only will have
jurisdiction over the parties and any controversies regarding this agreement;
any action or proceeding which involves such a controversy will be brought only
in those courts, in New York County. In the event that any provision hereof
violates any present or future statute, law, ordinance or regulation, the latter
shall prevail and the Agreement shall be deemed modified to the extent required
by such statute, law, ordinance or regulation.
ACCEPTED AND AGREED: DC COMICS
By: /s/ Xxxx Xxx By: /s/ Xxxx Xxxxxx
------------------------------- -----------------------------------
Xxxx Xxx Xxxx Xxxxxx
Executive Vice President
and Publisher
XXXX XXX MEDIA, INC.
By: /s/ Gill Champion
-------------------------------------------
Title: Vice President/Chief Operating Officer
----------------------------------------
BRANDED ENTERTAINMENT LLC
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
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SCHEDULE A
ROYALTY PROVISIONS FOR DC EDITIONS
1. Definitions: Reference is made to the agreement to which this Schedule is
attached (the "Agreement"). Except as expressly set forth in this Schedule, all
defined terms in the Agreement shall have the same meanings when used herein.
For purposes of this Schedule A, the following definitions shall apply:
(a) "NET SALES" means DC's actual sales through its wholesale and retail
distribution channels of copies of DC publications and/or units of Retail
Products sold by DC, less: returned copies or units; damaged and/or lost copies
or units; and copies or units distributed as premiums or promotional materials
(such promotional materials to include but not be limited to the Work or
excerpts therefrom when used to promote, publicize and/or advertise the Work, DC
or DC's properties in general, and given away by DC to the trade or the public),
or copies or units sold to uncollectible accounts; or copies sold at discounts
in excess of seventy percent (70%) of cover price. Sales of additional printings
of any publication following its first printing, shall count as additional sales
of such publication.
(b) "ENTIRE STORY CONTENT" means one work occupying all of the story
content of a publication or retail product.
2. For publications: DC shall pay Talent a royalties as follows:
(a) On DC's sale of any Issue:
5.0% of the cover price on Net Sales of the first 200,000 copies of such
Issue; and 6.0% of the cover price on Net Sales of such Issue in excess
of 200,000 copies.
(b) On DC's sale of any Collection:
5.0% of the cover price on Net Sales of the first 100,000 copies of such
Collection; and 6.0% of the cover price on Net Sales of such Collection
in excess of 100,000 copies.
(c) On DC's sale of any other DC publication based on the Work such as
any DC-published original novel or novelization or a companion guide or a Who's
Who character reference to the Work:
5.0% of the cover price on Net Sales of such publication.
3. For Retail Products:
(a) With respect to any Retail Product based solely on the Work, DC
shall pay Talent a royalty of five percent (5%) of DC's Net Sales.
(b) With respect to any Retail Product under this paragraph not based
solely on the Work, see paragraph 5 below.
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4. Multiple formats: If the Work is published by DC in more than one format at
or about the same time, each with a different cover price, the Net Sales of the
initial print run of the format with the lower cover price shall be applied
toward the 200,000 copy threshold before Net Sales of the initial print run of
the format with the higher cover price shall be applied thereto.
5. Multiple works:
(a) General Rule: In the event that the Work is not the Entire Story
Content of a publication or the sole material on which a Retail Product is
based, DC shall pay Talent that proportion of royalties which the Work shall
bear to the Entire Story Content of the publication or that proportion of
royalties which the material from the Work on which a Retail Product is based
shall bear to the Retail Product as a whole, except as provided in paragraph
5(b) below.
(b) Minimum Royalty Rate for Use in Multiple Work: If the Work comprises
less than twenty-five percent (25%) but no less than ten percent (10%) of the
Entire Story Content of a publication or the material on which a Retail Product
is based, DC shall either first obtain Talent's consent, which shall not be
unreasonably withheld, or DC shall pay Talent the "Minimum Royalty Rate." As
used herein, "Minimum Royalty Rate" shall mean twenty-five percent (25%) of the
total royalties that Talent would receive if the Work constituted the Entire
Story Content of a publication or the sole material on which a Retail Product is
based. In the event DC obtains Talent's consent hereunder, DC shall pay Talent a
royalty calculated in accordance with paragraph 5(a) above.
(c) De Minimus uses: If the Work comprises less than ten percent (10%)
of the Entire Story Content of a publication or the material on which a Retail
Product is based, DC shall pay Talent that proportion of royalties which the
Work shall bear to the Entire Story Content of the publication or that
proportion of royalties which the material from the Work on which a Retail
Product is based shall bear to the Retail Product as a whole.
(d) Approval for Publication in Anthologies including other works:
Notwithstanding the foregoing, DC shall not reprint any Issue(s) or Collections
in an anthology or other collection of work that includes any publication other
than the Work or Sequel(s) to the Work without Talent's prior written approval,
which approval shall not be unreasonably withheld, delayed or conditioned.
Nothing herein, however, shall prohibit DC from: (i) reprinting excerpts from
the Work in other publications such as, without limitation, collections of art,
cover collections, or historical or scholarly works of non-fiction (e.g. books
about the history of DC Comics); or (ii) permitting international licensees from
publishing any Issue(s) or Collections in anthologies or other collections of
work including other publications.
6. Payments: For any publication or Retail Product sold by DC hereunder for
which DC assigns a "Final Sale" date, DC shall make any payment due under this
Schedule A not later than sixty (60) days after DC shall determine the "Final
Sale" of the respective publication or Retail Product. For publications or
Retail Products sold on a non-returnable basis only the Final Sale, if
applicable, shall be determined by DC not later than sixty (60) days after the
last announced on sale date for such publication or Retail Product. For
publications or Retail Products sold on a returnable basis, the Final Sale shall
be determined by DC not later than eight (8) months after the last announced off
sale date for such publication or Retail Product. For publications or Retail
Products sold primarily on a non-returnable basis but with returnable
distribution to retail chains, DC shall determine the
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Final Sale on the returnable distribution not later than eight (8) months after
each the announced on sale date of such publication or Retail Product. DC shall
make all payments due for any sales of any publication or Retail Product under
this Schedule A for which DC does not assign a Final Sale date on a quarterly
basis not later than ninety (90) days after the end of each quarter, provided,
however, that if any payment otherwise due Talent hereunder shall be in a sum of
less than fifty dollars ($50.00), DC may delay such payment until payments due
Talent hereunder shall total fifty dollars ($50.00).
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SCHEDULE B
LICENSED USE ROYALTIES
1. Definitions: Reference is made to the agreement to which this Schedule is
attached (the "Agreement"). Except as expressly set forth in this Schedule, all
defined terms in the Agreement shall have the same meanings when used herein.
For purposes of this Schedule B, the following definitions shall apply:
(a) LICENSED REPRINT EDITION: Any Work originally published by DC
which is reprinted in whole or in part, in any format, in any
language, released for sale through any distribution system by
a third party under license with DC that grants such party the
rights to publish and sell such edition anywhere in the world.
(b) NET RECEIPTS: All amounts actually received by DC in United
States Dollars (i.e. less any unrecouped foreign taxes, import
duties and/or currency exchange losses) from the licensing of
rights to the Work less, and bad debts and less all direct
costs incurred by DC. Notwithstanding the foregoing, with
respect to Licensed Reprint Editions only, direct costs shall
not include agency commissions, which shall be borne entirely
by DC.
2. Schedule of Payments:
(a) For each Licensed Reprint Edition of a Work which is distributed for
sale to the public, Talent shall be entitled to receive an amount equal to
Twenty Percent (20%) of DC's Net Receipts derived therefrom.
(b) For all licensed uses of the Work, other than as Licensed Reprint
Editions, including Xxx'x name or the Title, or any other name or title that
derives from Xxx'x name or the Title, Talent shall be entitled to receive an
amount equal to ten percent (10%) of DC's Net Receipts derived therefrom.
(c) Any advance against royalties paid to DC by a licensee shall be
considered received by DC when such amount is or becomes non-returnable.
(d) In the event that multiple works or multiple DC properties shall be
featured in any licensed use hereunder (and thereby have mixed Net Receipts) the
sums due hereunder shall be based on a pro-rata allocation by DC among all
respective works or DC properties.
3. Payments: DC shall make all payments due under this Schedule B on a quarterly
basis not later than ninety (90) days after the end of each quarter, provided,
however, that if any payment otherwise due Talent hereunder shall be in a sum of
less than fifty dollars ($50.00), DC may delay such payment until payments due
Talent hereunder shall total fifty dollars ($50.00). Upon Talent's written
request, DC shall nevertheless issue Talent an accounting for any such quarter.
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SCHEDULE C
ORIGINAL CHARACTER ROYALTIES
Reference is made to the agreement to which this Schedule is attached (the
"Agreement"). Except as expressly set forth in this Schedule, all defined terms
in the Agreement shall have the same meanings when used herein.
1. Original Publications: For each print publication published by DC for
sale to the general public which uses the Original Character's name as its title
or in its title (e.g. The Adventures of [Character Name]) and which features the
Character substantially as expressed in the Work) (a "New Work"), DC shall pay
Talent an amount equal to one percent (1.0%) of the cover price of the New Work
on Net Sales of such New Work.
As used herein, Net Sale(s) shall mean the number of copies or units which are
actually sold by DC through DC's wholesale and retail distribution channels less
the number of copies or units which are returned, damaged, lost, distributed by
DC as premiums or promotions and/or distributed to uncollectible accounts or
sold at discounts in excess of seventy percent (70%) of cover price. Sales of
additional printings of any Work following its first printing shall be accounted
for as additional sales of such Work.
2. Retail Products and Services: For each product other than a Work and/or
for each service produced by DC and distributed or rendered by DC itself for
sale to the public (and not by a licensee of DC) through DC's wholesale and
retail distribution channels (a "Retail Product or Service") which is based upon
an Original Character, Talent shall be entitled to receive an amount equal to
five percent (5%) of DC's Net Sales.
3. Licensed Uses:
(a) For each Licensed Reprint Edition of a New Work which is distributed
for sale to the public, Talent shall be entitled to receive an amount equal to
Ten Percent (10%) of DC's Net Receipts derived therefrom.
(b) For all licensed uses of an Original Character, other than in
Licensed Reprint Editions of New Works, Talent shall be entitled to receive an
amount equal to twenty-five percent (25%) of DC's Net Receipts derived
therefrom.
"Net Receipts" shall mean all amounts actually received by DC in United States
Dollars from the licensing of rights to the Character, less any unrecouped
foreign taxes, import duties and/or currency exchange losses, and less all
direct costs incurred by DC. Notwithstanding the foregoing, with respect to
Licensed Reprint Editions only, direct costs shall not include agency
commissions, which shall be borne entirely by DC. Any advance against royalties
paid to DC by a licensee shall be considered received by DC when such amount is
or becomes non-returnable.
8. Contingencies Affecting Royalties: In the event that DC determines that
any one of the following contingencies apply, then the royalties payable
hereunder may be reduced as follows.
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(a) Spin-Offs: In the event that DC uses or licenses the use of a
version of an Original Character that DC determines (i) consists primarily or
only of "Spin-Off Elements"; and (ii) is published under a substantially
different title than the Original Character's name (if published under any
title) or is not substantially as originally created and written or drawn by
Talent, then DC shall pay Talent royalties based upon DC's pro rata allocation
of the amounts set forth in paragraph above among all elements used as created
by Talent and all Spin-Off elements. The foregoing allocation (and all other
allocations) made by DC pursuant to this agreement shall be made in good faith
in DC's sole discretion.
As used herein, "elements" shall include without limitation characters,
stories, themes, titles, names, logos, devices, designs, locales, scripts,
artwork, and any portion of the foregoing. "Spin-Off Elements" shall mean
elements either (i) not created by Talent; or (ii) originally created by Talent
and later substantially changed or developed by another party.
(b) Commingling of Elements: In the event that DC uses or licenses the
use of an Original Character, or any element thereof, in combination and/or in
conjunction with any other property, including other characters, then DC shall
pay Talent royalties based upon DC's pro rata allocation of the amounts set
forth above among all such elements. Notwithstanding the foregoing, no royalties
shall be due for any Minor Use of an Original Character. As used herein, Minor
Use shall mean a use of an Original Character in another property, as in, for
example, multi property crossovers, guest appearances, occasional team-ups,
cameos and "Who's Who" or other index type listings, as those terms are commonly
used in the comic book industry.
(c) It is understood and agreed that in the event that the terms of the
Agreement to which this Schedule is attached and/or this Schedule C can be
construed or interpreted as entitling Talent to compensation for both the use of
the Work, as defined in the Agreement, and the use of an Original Character
based on the same publication, retail product or licensed use, Talent shall be
entitled only to the applicable compensation due to him from the use of the
Work, and in connection therewith, nothing in this Schedule C may be used to
reduce the royalties payable to Talent for the use of the Work as otherwise
provided in the Agreement and Schedules A and B to the Agreement.
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